The Mumbai real estate market appears to be heading for an upswing after experiencing somewhat tepid activity in recent months. There has been a notable surge in sales during March 2012. Property registrations reached 5,776, marking a substantial 37% increase from the 3,639 registrations recorded in February 2012.
Furthermore, the launch of at least 50 projects over the past three months further emphasizes the optimistic outlook within the real estate sector. Developers are expressing considerable enthusiasm regarding these encouraging trends observed in recent months.
Bharat Mody, CFO of Hubtown Limited, stated, "The recent registration data is certainly encouraging, and we are hopeful of numbers getting better from here on." Diipesh Bhagtani, Executive Director of Jaycee Homes Ltd, echoed a similar sentiment, noting, "It’s always good news when we see higher number of registrations and project launches." Developers attribute this positive trend to a combination of factors. The festive period in March has significantly contributed to boosting sales in the residential market, according to developers.
Shailesh Sanghvi, Director of Sanghvi Group of Companies, commented: "Auspicious occasions such as Gudi Padwa, Akshya Tritya, and Dhanteras give an impetus to booking of flats. As Gudi Padwa fell in the month of March, this worked as a major driver for property registrations. With several developers attracting homebuyers with significant discounts and incentives the trend will continue to prevail since it is the most favourable day to purchase the flat or to perform their Graha Pravesh puja. On this festive occasion there is an affirmative sentiment in people and more prospects are keen to buy, a discount offer helps them to take the decision faster, releasing some monetary burden.” Mr. Sanghvi further mentioned that bonuses and a thriving job market have bolstered positive market sentiment. Mody pointed out that the improvement primarily stems from resale properties rather than new purchases. He added, “Therefore, things will significantly change only if situation on pending approvals improves drastically. That will create fresh supply in the market and ease the upward pressure on prices and will prove to be win-win for government, home-buyers and developers.”
Also, developers suggest that the implementation of the new Development Control Rules (DCR) in January played a vital role in boosting sales. Real estate experts observe that the recent wave of project launches following the introduction of the new DCR in January 2012 appears to have fueled the recovery. “Developers and customers are now certain of what they are buying and investing into. Also, we have made it mandatory for developers to sell flats on carpet pricing, leaving no dispute on clarity of areas.”
The Reserve Bank of India (RBI) decision to cut interest rates for the first time in three years after a series of 13 increases totaling 375 basis points since mid-March 2010 also contributed to the increased purchasing activity. On April 17, the RBI reduced the repurchase rate from 8.5 percent to 8 percent. Notably, residential home sales in Mumbai rebounded from a three-year low in the quarter ending in March.