Mumbai residential launches down 10% to 16,106 units in Q4

Over a fifth of the launches were from Navi Mumbai and Eastern suburbs.

According to a report by Cushman and Wakefield, in Q4 2023, Mumbai’s residential sector witnessed a launch of 16,106 units, 10% lower than the previous quarter and near similar levels last year.

Navi Mumbai and Extended Eastern Suburbs submarkets were primary contributors to the quarterly launches, with a 21% share each.

Here’s more from Cushman and Wakefield:

Western Suburbs and Thane submarkets also had a considerable share of 18% each. New launches in prominent township projects drove quarterly launches in Thane and Extended Eastern Suburbs submarkets, accounting for over 60% of each submarket volume.

The annual launches in the year 2023 stood at 72,600 units, a 12% dip from 2022 record high levels. Close to 60% of the annual launches were concentrated in the Extended Eastern Suburbs (27%), Western Suburbs (16%) and Thane (16%) submarkets. In the previous year, Western and Eastern suburbs were the top contributors.

The year 2023 witnessed a growing trend in redevelopment projects within Western Suburbs, Western Suburbs Prime and South Central, largely driven by improved connectivity prospects by metro and upcoming infrastructure projects (Metro Line 3 Phase I and the coastal road)

Mid segment dominated quarterly launches

Mid (59%) and High-end (22%) segments drove quarterly launch activity. Mid-segment launches were driven by markets such as Thane, Eastern and Extended Eastern Suburbs. High-end supply was largely distributed across Western Suburbs, Navi Mumbai and Thane submarkets. For the full year, midsegment launches dominated with close to 60% share.

High-end & Luxury segment launches witnessed a robust 84% rise compared to last year while the affordable segment witnessed a 14% drop. Supply for high-end & luxury is expected to rise in the near term across suburban and south-central submarkets of the city.

Quoted capital values continue to rise

The rise in the number of redevelopment projects has led to increased demand for rental homes, particularly in Western Suburbs where rents have risen by 5-6% on a q-o-q basis. On the back of robust demand trends, capital values in South and South Central submarkets witnessed a rise of 6% on a q-o-q basis.

Quoted capital values in other submarkets have improved by 3-5% on a quarterly basis. This upward trend in the capital values is expected in the near term as infrastructure upgrades and connectivity enhancements (Metro Line 3 and coastal road projects) proceed in the south and western suburban areas of the city.

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Here’s a rundown of Brisbane’s residential market performance in Q3

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Here’s a rundown of Brisbane’s residential market performance in Q3

New apartment supply remains very low in 2024.In a recent report, JLL said buyer sentiment in the existing housing market in Brisbane has stayed strong, underpinned by a strong inflow of people into the region and also by a lack of available stock in many areas that is keeping competitive tensions high.“New apartment demand is particularly constrained by a lack of available stock, particularly for mass market projects. Sales of luxury apartment projects remain stronger, underpinned by downsizers that continued to be buoyed by strong price growth in existing properties,” the report said.Here’s more from JLL:New apartment supply in Brisbane completions will be higher in 2024 than over recent years, but remains very low. Development conditions remain tough and even securing a builder is a challenge due to so much infrastructure and Olympic work in the pipeline.Rental vacancy remained a low 1.1% in September 2024 (SQM Research). Vacancy has now been around 1% for several years and with little supply relief on the horizon there is unlikely to be much change any time soon.Strong price growth starts to moderateBrisbane existing apartment prices have surged over the past year on the back of limited supply of both new and existing stock and pushed by rising build costs. Nevertheless, the pace of growth is starting to slow.Rents have also surged in Brisbane on the back of tight vacancy the past few years. Nevertheless, affordability is now stretched across many parts of the market and this is increasingly seeing rental growth stall in recent months.Outlook: Supply deficits to buildWhile underlying apartment demand is likely to continue to lift, ongoing tough development conditions will keep new supply levels low, and the supply shortfall is likely to grow increasingly wide.Stretched affordability is likely to remain the only constraint on rents and prices in the near term and the moderation of price growth is likely to continue. However, the increasing supply deficit will likely still support further robust growth over the medium term.Note: Brisbane Residential refers to Inner Brisbane apartments.

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