According to the firm, MMR is the largest residential real estate market among the top seven cities in India, accounting for 25% of the area sold in FY23 and is expected to maintain its leadership position in FY24.
Residential area sold in the Mumbai Metropolitan Region is expected to grow by 8-9% year-on-year (y-o-y) in FY24, supported by continued end-user demand and healthy affordability, the rating firm ICRA said on Tuesday.
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According to the firm, MMR is the largest residential real estate market among the top seven cities in India, accounting for 25% of the area sold in FY23 and is expected to maintain its leadership position in FY24.
“Notably, healthy residential sales and calibrated launches resulted in a decadal low unsold inventory of 182 million sq ft as of June 2023 and represented 28% of the total unsold inventory in the top seven cities,” it said.
The average selling prices in MMR have increased at a CAGR of 4.3% between FY20 and FY24, which is lower than the average rise in prices of the top seven cities at 6.6% during this period, it said.
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ICRA expects the average selling prices to increase by 3-5% in FY24 in the MMR market.
Tushar Bharambe, asistant vice president, and sector head at ICRA, said: “During FY23, the overall sales in the MMR market (151 million sq ft) outstripped the fresh launches added during the year (141 million sq ft), with a replacement ratio of 0.9 times. ICRA estimates the replacement ratio to remain around one time in FY2024.”
The sustenance of healthy sales velocity, along with the calibrated launches, led to a significant improvement in years-to-sell to 1.2 years as of June 2023 from 2.8 years in June 2020. ICRA expects new launches in MMR to be around 145 million sq ft in FY2024, while the years-to-sell are expected to remain around 1-1.2 years as of March 2024, he said.
Bharambe added that the housing sales in the MMR market seems to be predominantly leaning towards homes in the middle-income segment with the ticket size ranging between Rs 1 to 3.5 crore. This segment has seen a steady gain in its share in the overall sales to 35% in Q1 FY2024 from 26% in Q4 FY2020. The luxury segment (ticket size of above Rs 3.5 crore) has also witnessed an increase in its share to 10% from 7% during the same period. ICRA expects the trend in sales of mid-income and luxury segments to continue with aspiration for home ownership and upgrade among buyers., he said.
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Bharambe said that housing sales in the MMR market seem to be predominantly leaning towards homes in the middle-income segment with the ticket size ranging between Rs 1 to 3.5 crore.
“The segment has seen a steady gain in its share of overall sales, increasing to 35% in Q1 FY2024 from 26% in Q4 FY2020. The luxury segment (ticket size of above Rs. 3.5 crore) has also witnessed an increase in its share, rising to 10% from 7% during the same period. ICRA expects the trend in sales of mid-income and luxury segments to continue, driven by aspiration for home ownership and upgrades among buyers,” he said.
