India Real Estate Outlook January – June 2014

MUMBAI

Launches (units)

Absorption (units)

Weighted Avg Price (` per sq.ft.)

Jan-June 2014 35,512 -38% Y-o-Y

July-Dec 2014 (E) 57,333 10% Y-o-Y

2014 Year End (E) 92,845 -15% Y-o-Y

Jan-June 2014 31,210 -25% Y-o-Y

July-Dec 2014 (E) 48,812 49% Y-o-Y

2014 Year End (E) 80,022 8% Y-o-Y

June 2014 7,382 8% Y-o-Y

2014 Year End 7,798 10% Y-o-Y

Residential

Market Overview

Demand & Supply Trend

Long-term Moving Average Trend

10,000

15,000

20,000

25,000

30,000

35,000

No

. o

f u

nit

s

Launches

Absorption

Residential Market

New launches dipped by

22% between Q4 2011 and

Q2 2014

Absorption has shrunk by

28%

Unsold Inventory Level - QTS

The demand-supply gap has created

a pile-up of 2,13,742 unsold units

The QTS ratio has more than

doubled in the last ten quarters, from

being 5 in Dec 2011 to 12 in June

2014

While the inventory two years ago

was mainly on account of under-

construction projects, the share of

ready-possession projects is rising

this time around

-

2

4

6

8

10

12

14

No

. o

f Q

uart

ers

QTS – Time period taken to liquidate the unsold inventory at the sales velocity of last 8 quarters

Residential Market

H2 2014 Forecast

H1 2014 demand slowed by 25% as

compared to H1 2013, launches

dipped by 38%

New launches and absorption

projected to increase by 10% and

49% respectively in H2 2014

Forecasted price increase for the

entire year (2014) is 10.1%

Although 2014 would witness a decline of 15% in new launches to 92,845

housing units, it would be a trend reversal year for absorption, which will

increase by 8% to 80,022 units

Launches and Absorption Trend

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

0

10000

20000

30000

40000

50000

60000

70000

80000

`/s

q f

t

No

. o

f u

nit

s

Launches Absorption Wt. Avg. Price (RHS)

Residential Market

New Launch Analysis

Peripheral Central Suburbs

continue to be the biggest micro-

market in terms of launches in H1

2014 despite a decrease in share

Peripheral Western Suburbs and

Western Suburbs together saw an

increase in the share of new

launches

Micro-market Split of Units Launched

42%

12%

11%

19%

7%

7% 2%

0%

H1 2013

25%

19%

19%

11%

11%

9% 6%

0%

H1 2014

Peripheral Central

Suburbs

Western Suburbs

Peripheral Western

Suburbs

Central

Suburbs

Central

Mumbai

Navi Mumbai

South

Mumbai

Thane

Residential Market

57,007 35,512

Ticket Size Analysis

Peripheral Central Suburbs

continues to remain a market for

the middle class with more than

half of launches under `5 mn

ticket size in H1 2014

Micro-market wise Ticket Size Split of Launched Units in H1 2014

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<2.5 mn 2.5-5 mn 5-7.5 mn 7.5-10 mn 10-20 mn >20 mn

Peripheral Central

Suburbs

Western Suburbs

Peripheral Western

Suburbs

Central

Suburbs

Central

Mumbai

Navi Mumbai

South

Mumbai

Thane

Central Mumbai with 36% share

was the largest contributor to

the more than ` 20 mn.

category

Residential Market

Absorption Analysis

Peripheral Central Suburbs

continues to be the biggest

micro-market in terms of

absorption in H1 2014

The share of Peripheral Western

Suburbs increased from 20% to

25%

Navi Mumbai’s share of

absorption in the MMR has

declined from 21% to 15%

Micro-market Split of Units Absorbed

33%

20%

21%

11%

6%

6% 3% 0%

H1 2013

38%

25%

15%

10%

6% 5% 1%

0%

H1 2014

Peripheral Central

Suburbs

Western Suburbs

Peripheral Western

Suburbs

Central

Suburbs

Central

Mumbai

Navi Mumbai

South

Mumbai

Thane

Residential Market

41,377 31,210

Micro Market Health

Age of Inventory compared to QTS

Navi Mumbai has an unsold

inventory of 9 quarters. Its age of

inventory at 8 quarters is also the

lowest in comparison with all the

other markets

5

8

11

14

17

20

5 8 11 14 17 20

Ag

e o

f In

ven

tory

QTS

Peripheral Central

Suburbs

Western Suburbs

Peripheral Western

Suburbs

Central

Suburbs

Central

Mumbai

Navi Mumbai

South

Mumbai

Thane

The most expensive South Mumbai

market fares the worst, with an 18-

quarter inventory that has remained

in the market for 15 quarters. The

quantum of inventory, however, is the

lowest in this market

Residential Market

Price Movement Price range in H1 2014 (per sq.ft.) 12-month change 6-month change

CENTRAL MUMBAI

Lower Parel 24,000–36,000 6% 1%

Worli 31,000–50,000 -3% -13%

CENTRAL SUBURBS

Ghatkopar 12,000–22,000 24% 18%

Mulund 10,000–14,000 -4% -5%

Powai 13,000–20,000 20% 9%

NAVI MUMBAI

Panvel 4,500–6,500 6% 4%

Kharghar 6,500–9,500 15% 6%

Vashi 10,000–15,000 -7% 1%

PERIPHERAL CENTRAL SUBURBS

Badlapur 2,800–3,500 6% 2%

Dombivali 4,500–6,000 8% 2%

PERIPHERAL WESTERN SUBURBS

Mira Road 5,500–7,500 0% 1%

Virar 4,500–5,500 0% 2%

Residential Market

Price Movement

Price range in H1 2014 (per sq.ft.) 12-month change 6-month change

SOUTH MUMBAI

Tardeo 40,000–60,000 8% 4%

THANE

Ghodbunder Road 6,000–10,000 5% 2%

Naupada 13,000–18,000 14% 4%

WESTERN SUBURBS

Andheri 14,000–20,000 9% 1%

Bandra (W) 40,000–60,000 16% 0%

Borivali 11,000–15,000 4% 1%

Dahisar 8,000–10,000 13% 3%

Goregaon 13,000–15,000 4% 2%

Residential Market

Key Takeaways

Demand within MMR dropped by a whopping 25% in H1 2014 in comparison to H1

2013

The QTS ratio for the MMR has more than doubled in the last 10 quarters, from

being 5 in December 2011 to 12 in June 2014

4 important infrastructure projects in Mumbai may re-define the property market

dynamics of the entire metropolitan region

Although 2014 would witness a decline of 15% in new launches, it would be a

trend reversal year for absorption, which will increase by 8%

Residential Market