The most competitive year in Mumbai real-estate space is set to begin

The second reason is the opportunity to see multiple offerings and perhaps spot an unknown one.

The turnout this time was steady and strong in both the exhibitions. Boman Irani, the affable boss of CREDAI-MCHI and the promoter of Rustomjee, told me: “The turnout in 2022 was the highest in the last eight years.” Hence, while there seems to be clear dampeners in sentiment, it has not yet materially translated into action.

I could see six broad trends at these venues.

Supply rush: Data from municipal corporations clearly indicated that approvals for new projects are rising 5x-6x due to FSI discounts last year. Now they all seem to be hitting the market. It was common to see small- and mid-level developers with more upcoming projects than they have executed in the past 5-7 years. Such voluminous supply will create its own demand. However, scattered demand can hurt a large basket of developers.

Sales cycle: One of the consequences of new supply is that the sales cycle for builders is poised to widen as customers have more options to scan before making a decision. Earlier, if a customer had five projects to choose from, this year, he will have 12-15. That means a longer period for him to see multiple projects and thereafter negotiate with his short-listed ones – eventually extending the sales cycle for developers.

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Ticket size: A majority of the developers are counting on psychologically attractive ticket sizes to attract buyers. That overpowers every other feature in a project. Most of them have offerings in the range of Rs 80 lakh – Rs 1.3 crore in modest locations. The ticket size is down due to homes becoming smaller and there is aggressive pricing by developers.

Limited schemes and offers: I was surprised that more developers did not offer payment schemes which made it easier for home buyers to take a decision. Only a handful of builders had schemes to mitigate the concerns of most first-time home buyers: How do you pay rent + EMI at the same time? One little known developer, Raghav Group, offered home buyers a fixed rental from the time of booking till the time of possession – and appeared to have derived traction from buyers.

Branded developers sitting lazy, non-branded one lacking coherent strategy: It has been a strong show for branded developers in the past five years as wary customers look for credible builders to buy apartments. The ease in sales is showing in the body language of the sales staff of most branded developers.

On the other hand, unbranded developers have come only mildly prepared. In the absence of any serious positioning, most Tier 2/3 builders are poised to slug it out in the market on the back of mere pricing and ticket size. Players like Ajmera Realty, Prescon (both driven by young hands) are attempting to separate themselves from the rest with interesting product pitches.

Home buyers are open to giving everyone a chance: This is perhaps a reflection of the recent discipline by builders, because of which stalled projects have considerably reduced, but home buyers today are open to giving everyone a chance. Offerings are being scanned across the board, irrespective of the name of the developer. It’s hard to overstate this, but I suspect the next three years are a golden opportunity for developers who want to break out in the Mumbai real-estate space. I expect at least 5-7 developers to become household names if execution is done diligently and greed is kept under check.

All in all, the Mumbai real-estate space is set to see its most exciting year in at least a decade. Consumers will have choices like never before. Choose wisely.