Never has there been more focus on the end users – even in Mumbai, which is the priciest real estate market in India – than in recent months, especially in light of the post-demonetization reality and RERA. While many developers in the city are trying to right-price and right-size their offerings to suit the end users’ requirements, some have gone ahead and started launching compact housing projects across key suburbs of Mumbai.
The aim behind launching such projects appears to be two-fold:
1) to improve their own cash flows as there is a lot of latent demand in this category and 2) to attract home buyers wanting to live within Mumbai city limits with compact apartments suiting their budgets. Recent projects launched in precincts like Goregaon, Malad, Kandivali, Kanjurmarg, Chembur and Mulund point towards this emerging trend. A few top developers with proven track records have also entered into this segment recently.
Home buyers looking to book in these upcoming projects, however, are advised to carry out their due diligence as location, amenities and a developer’s compliance with the real estate regulator still remain important factors. Here is a low down of some key precincts that have an upcoming supply of compact homes so that buyers can compare living across these areas of Mumbai.
A scoring matrix (see below) has been used to rank select comparable precincts which have supply of apartments with lesser than 500 sft carpet area coming up. Resultantly, Goregaon, Malad and Kandivali have been chosen from the western suburbs while Kanjurmarg and Mulund are their eastern counterparts. More points have been given to precincts with higher supply in this new product category and having good existing as well as upcoming physical and social infrastructure.
Connectivity to key business districts of SBD North (i.e. Andheri) and SBD-BKC (i.e. the de-facto CBD of Mumbai) has been obviously considered. Better score has been given to precincts with higher supply of the popular 1BHK configuration. Similarly, suburbs providing lower entry points to home buyers and those with lower average base ticket size were ranked higher as that is a sign of higher affordability for most home buyers.
The study reveals that given these parameters, the best suburb to get one’s own compact house is Malad, with a 4.1 average score. It not only has a good supply coming up in this category but also gives lowest entry points for buyers among all these precincts. Moreover, it enjoys good connectivity to SBD North, SBD BKC and office locations in adjacent Goregaon apart from itself being an office location. A good social infrastructure exists here and physical infrastructure, too, has improved.
Among the developers that have announced compact homes’ projects in Malad, Omkar and Godrej are the top ones that stand out for their brand name and track record. In Kandivali and Mulund, developers such as Gundecha, Nirmal Lifestyle, among others, are active in this segment.
Will compact housing help Mumbai’s buyers and developers?
Mumbai has always been ahead in terms of product-level offerings in its residential market. In fact, it can be called a ‘lab’ for Indian residential realty as trends in this city seem to catch on popular imagination in other metros and tier-II cities. Challenges in terms of land prices and construction costs have led leading developers in Mumbai to adopt innovative marketing campaigns and project as well as product-level innovation. Developers in other cities often replicate the successful ways of their Mumbai counterparts.
Moreover, with slower sales seen in the bigger ticket sizes in recent months and demand for apartments priced under INR 1 crore remaining intact in the city, it makes good business sense for developers to offer this new product category. Housing has, and will always, remain a basic need, and with rapid urbanisation, more people are going to buy their own house. Moreover, with benefits for both the key stakeholders – i.e. buyers and developers – of compact homes, this product category will see the most action in years to come.
For buyers, it promises a coveted city address. Having one’s own house within the city limits is far more important for many residents than having a bigger apartment farther up in the distant suburbs as they can save time in commuting to and from office every day. Apartments priced under INR 1 crore may mean higher purchasing power for those end users who are otherwise unable to buy their dream home within city limits. Compact homes promise them all this – within their budget.