Nearly half of 22k units supplied since ’13 in south-central zone remain unsold

The luxury residential property market of south-central Mumbai, which had emerged as an alternative to the country’s most expensive micromarket of south Mumbai, has been hit by oversupply. The south-central area, which is the erstwhile mill zone, encompasses the neighborhoods of Worli, Lower Parel, Mahalaxmi, Tardeo and Prabhadevi. While developers are trying to resize and reprice their offerings downward, buyers focused on the area are spoilt for choice.

The Mumbai Metropolitan Region (MMR) saw new supply of nearly 27,000 units between 2013 and the first quarter of 2019 of properties priced at Rs. 4 crore and upward. Of this, south-central Mumbai accounted for 81%, or 22,000 units, according to Anarock Property Consultants data. Thanks to skyrocketing prices, infrastructure woes and a demand-supply mismatch, south-central Mumbai now has total unsold stock of nearly 11,000 units, half the stock launched since 2013. “With fewer takers, too much supply and property prices that remain astronomically high even after downward revisions, the unsold inventory in this part of Mumbai will obviously take much longer to clear than that in less tony areas,” said Anarock chairman Anuj Puri. One of the possible reasons for the overhang is size at the higher end compared with other hot spots such as Khar, Ville Parle, Bandra, Sion and Santa Cruz, he said. Apartments in south-central Mumbai start at as low as 800 sq ft carpet area and go all the way up to 4,500 sq ft. In other localities, the minimum carpet area is 1,150 sq ft while the maximum is around 3,500 sq ft. So prices can be as high as Rs. 80 crore in south central against Rs. 15 crore in other luxury areas. Also, most of the developers hit the market almost simultaneously. “Had the supply been more staggered, absorption could certainly have been healthier,” said a realty developer. “In an effort to maximise FSI (floor space index) and TDR (transfer of development rights), many builders have come up with high-rises in areas such as Lower Parel, leading to a glut of luxury apartments.”