Sales of residential units in Mumbai rose 37 percent from the previous year to 51,390 in 2022, led by demand for mid-segment housing, notwithstanding more expensive home loans, according to a report by real estate data and analytics firm PropEquity.
Mumbai’s western suburbs made up the bulk of the demand, which outweighed new launches. In terms of new launches, the city experienced a 26 percent increase in 2022 at 46,900 units compared to the preceding year. The inventory overhang was 14 months at the end of 2022, based on current sales rates.
The demand came in the face of rising home loan rates, which have increased since the Reserve Bank of India (RBI) embarked on monetary policy tightening in May 2022 to combat accelerating inflation. The RBI’s key repo rate, at which it lends short-term funds to commercial banks, has since increased 2.5 percentage points to 6.5 percent, causing homebuyers’equated monthly instalments to rise.
“Mumbai has seen its highest levels of home sales in 2022 when compared to the last five years even as the home loans were becoming more expensive. This speaks of the resilience of the property market in the financial capital of the country,” said Samir Jasuja, founder and Managing Director of PropEquity.
“The real estate market in the city is expected to thrive in the near future on the back of dynamic new offerings from real estate companies and huge appetite among the customers. New benchmarks are being written in the property market of Mumbai, which augers well not just for the city, but for the industry as a whole across the country,” Jasuja added.
The share of mid-segment properties, with a price tag of Rs 1-2 crore per unit, was the largest in both new launch and sales categories. Share of the affordable housing segment was 28 percent and that of the luxury segment 26 percent among new launches. As far as sales are concerned, the share of the affordable category was 27 percent and the luxury segment 28 percent, the report said.
The weighted average price of homes sold in 2022 increased by 2 percent to Rs 19,092 per sq. ft. compared to 2021. The average price of new launches in 2022 moved up by 3 percent to Rs 17,922 per sq. ft. This can be attributed to a constant influx of people to the city from other parts of the country and scarcity of vacant land parcels for new property development.
"Mumbai has always been a key market for us, and the customers’ confidence is a reflection of the increasing demand for sustainable and integrated developments by reputed developers. And as evidenced by the report, the city has achieved its highest home sales in the last five years. This reflects the growing confidence of homebuyers in the city's economic potential and underscores the city's status as a prime destination for real estate investment," said Shiwang Suraj, founder and director of InfraMantra.