Mumbai Witnessing Growth In Resale And Compact Housing Market

Mumbai Witnessing Growth In Resale And Compact Housing Market

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The residential sector in Mumbai is maturing with fast changing demands of the buyer segment in this city. Along with a slew of project launches and an improved market sentiment, the buyers in Mumbai and its suburbs are now shifting towards resale properties and lower ticket sized assets. A barefaced reasoning to this shift is a continual hike in the value of fresh properties and the availability of cheaper assets in the secondary/resale market in Mumbai.  

As witnessed, the mid-income group of home aspirers are now settling for compact homes, available in the resale market across regions like Powai, Wadala and Thane. Comparatively cheaper in the secondary market, resale properties have emerged as a prudent option for buyers who don’t wish to move away from city limits. Furthermore, resale properties are also attracting investors for robust rental incomes.

As recounted by Livemint, leading developer groups like Hiranandani Constructions Pvt. Ltd and Lodha Developers Ltd have caught the pulse of demand in realty market today. Such captains of realty development are now developing mid and small sized dwellings with contemporary amenities to attract a larger base of buyers belonging to the not so affluent segment.

Interestingly, the size of 1&2 BHK apartments are now being reduced to suit the budget of the dominant segment in the buyer’s market. This dominant segment comprises of salaried professionals, retired officials and people who aspire to diversify their investment portfolio with new investments that could fetch recurrent rental/lease incomes and capital appreciation in the future.

As discussed above, the increased traction in resale, rental and lower ticket size apartments testifies a revival in Mumbai realty market. Realty ecosystem in Mumbai is now, reviving with improved sentiment amongst the buyer, investor and developer segments. Based on current property trends, the near future for real estate sector looks promising in the Mumbai Metropolitan Region. This region which has time and again topped the wish list of home aspirers in India is now set to become the arena for hyper growth in resale, rental and smaller assets’ market. 

Investors Abroad: Destination Next For Indian Realty

The spell of speculative and twitchy stance in the Indian real estate market seems to be ending now. Finally the time for hyper traction in housing segment has arrived and realty domain is witnessing the much awaited restoration. The builder-buyer sentiment as picked up post general elections and budget 2014-15, which is now at work for sprawl of construction across the country.

As reported by The Financial Express, leading property funds in India a re now the recipients of tranches from overseas. The funders abroad, are now conceding to improved economic outlook in India which has a special stress on the development and expansion of housing facilities and supportive infrastructure.

The current year has recorded reassuring investments from foreign private equity players who have sited immense potential of return on their investments in the commercial and residential domain in India. Buying stakes in underdevelopment commercial/residential properties has been conventionally opined to be the best offering of Indian realty market.

With a new government at center and its focus on developing 100 smart cities and affordable housing, the foreign investors are now safely banking upon the reassured future returns, riding on their investments in the current day. Foreign investors are leaning more towards the residential sector which has been known for its ever sustained demand, a subsequence of tremendous pressure on limited availability of land tracts in urban regions across the country.

Not to overlook, in the past few months, Indian realty as a brand has gained remarkable recognition in the overseas property market. Leading developer groups in India have been in news for their strategic takeovers of prime properties in cities like London and other major metropolitans around the world.

Around this time, the most crucial fillip to realty sector has come from political stability, established after the majority government taking charge of core economic affairs at the center. Considering the positive market sentiment and enhanced brand recognition in the present day, the near future looks promising for a significant growth and development of India realty market across its subsectors. 

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REITs..What is in there for common man?

The real estate market is yet again the prime focus for investors diverging from various other conventional markets. The signs of revival in realty market are prominent with increasing enquiries of available residential/commercial assets and new launches by developer groups. Along with the increasing traction on ground, the realty market has yet another reason to cheer in the present day.

The REITs have been qualified with final guidelines issued by SEBI, the stock market regulator in the country. As we know, REITs are just another type of mutual funds which instead of stock trading, channelize the pooled investments into property market. Given a go-through by the budget 2014 and SEBI, REITs are instilling faith amongst common/individual investors in the real estate sector and its prospects of growth.

As reported by The Economic Times, REITs will enable the common buyers to invest in currently available office space and hence pump in considerable amount of funds in the cash starved realty domain. Most importantly, REITS are the platform for common man to embark on the journey of monetization in the real estate sector which has so far been way beyond the reach for them.

REITs and the Common Man:

• No more barrier of a massive down payment to invest in real estate sector. With REITs, mid-income individuals will also be able to invest as SEBI guidelines have brought the minimum investment threshold to a bare INR 2 lac
• For common man, now real estate will be an opportunity for investment and hence the diversification of their investment portfolio will be easier and prudent. REITs will enable the trade participation of a larger base of investors belonging to various categories of fortune
• Being a regulated mechanism for investments, REITs will no longer let the common man be dependent on whims of builder groups and rather reassure them with bargaining power against the developers
• By far, the ROI in real estate was solely dependent on the level of value appreciation for one or two assets owned by single owners/investors. However, REITs will let the investors hedge their investments while it is invested in multiple projects of various segments/asset classes  
• As performed in the developed markets, REITs will bring in a venue of regular income for investors as the asset value/rentals increase in tandem with inflation. This would do away the perception of a long gestation period required for monetization in the realty sector

As witnessed, market experts envision the future of realty sector to be a win-win arena for both the developer and buyer segments. The developers are expected to be relived with enhanced cash flow as a subsequent of more investors diverging towards real estate sector. On the other hand, the buyer segment also gets their share of profits with easy and regulated investments in the real estate sector which remained out of bounds for common man till date. 

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