Some of Mumbai’s biggest property developers such as Lodha, Oberoi Realty and Wadhwa say they have done record home sales in recent months, at a time when the property segment in the country’s commercial capital is going through a prolonged slowdown. Prices have stagnated since 2014.
According to online real estate entity PropTiger, home sales across the top nine cities in the September quarter (second one of the financial year or Q2) increased by 12 per cent over a year before. Mumbai, Pune and Bengaluru contributed 57 per cent to the total absorption (21, 19 and 17, respectively).
Lodha, largest developer by home sales, said it posted sales of Rs 800 crore from projects such as Palava, Altamount, New Cuffe Parade and Amara.
“In terms of project contribution, Palava’s GoldenTomorrow pre-launch witnessed overwhelming response from customers, accounting for bookings worth above Rs 700 crore till date. Lodha Altamount continues to outperform market expectations by record sales. In September, we sold three floors at the uber-luxury project, generating bookings worth Rs 185 crore,” said Prashant Bindal, chief sales officer, Lodha Group.
Lodha expects sales of Rs 10,500 crore in FY17, about 63 per cent higher than the previous year. Bindal said they’d enhanced a go-to-market strategy, which focuses on parallel sales across every market and every project, rather than depending on a particular project launch or activation. “In addition, we are using big data, based on our in-depth consumer research, which allows us to customise our offerings real-time,” he said.
For instance, its Central Mumbai project, earlier designed to have only three-bedroom homes, now has a combination of two, three and four-bedroom homes. Oberoi Realty posted a threefold jump on a yearly basis in residential sales in the second quarter, at Rs 504 crore.
“Our iconic development, ‘Three Sixty West’ continues to receive a remarkable response. We are also pleased to announce that the show apartments of ‘Sky City’, Borivali and ‘Esquire’, Oberoi Garden City-Goregaon are ready for viewing and are again receiving an unprecedented response,” said head Vikas Oberoi.
Wadhwa Group, one of Mumbai’s largest real estate developers, said sales were up 43 per cent in Q2, after 20 per cent growth in Q1. With sale of about 250 units in the financial year’s first half (H1), the group has achieved 90 per cent the total volume of FY16. Two of their luxury projects, Atmosphere and Elite, have sold 81 and 120 units, respectively, in H1. Upcoming luxury projects W54 and 25 South have also found clients, with six units already sold for each, it said.
Navin Makhija, managing director, said: “We are now aggressively looking at new projects. As our sales growth has been good this year, we are looking to shift our focus to the acquisition of land banks as well.”
Experts, however, say only affordable homes and projects where construction is visible are selling. “In Mumbai, apartments between Rs 70 lakh to Rs 1.5 crore are selling. But, some sort of construction should be visible at the site,” said Balaji Raghavan, head, real estate practice, IIFL. Sumit Jain, national director at Colliers International, said the credibility of developers, quality of construction, support infrastructure, implementation capability and timely delivery are paramount. Hence, demand for leading brands is sustainable, even when momentum seems low in these markets, he said.
“In such scenarios, buyers don’t mind over-stretching their budget to accommodate the choicest apartment offered by leading brands, thereby mitigating the risk of delayed delivery in possession or non-possession.”
Jain said real demand from end-users would increase steadily for affordable projects. “With announcement and initiation of infra projects, the supply should spiral in the outskirts; this is potential offering that’s up for taking for the leading brands. However, investors might find little or no interest in these projects, which might hold prices,” he said.
Developers would need to look to cater to the choicest brackets instead of focusing on luxury projects only, he added. Another Mumbai-based developer said it would take at least two years for the property market to completely recover.