- Housing launches in Mumbai declined 38% in the first half of 2014 compared to the same period in the previous year, while housing absorption declined 25%. However, launches and absorption are forecast to increase 10% and 49% respectively in the second half of 2014. - The demand-supply gap has led to a large inventory of over 213,000 unsold housing units. The time taken to liquidate this inventory has more than doubled from 5 quarters to 12 quarters over the last two years. - Peripheral areas like Central Suburbs and Western Suburbs continue to be the largest markets, though their share of new launches has declined. The unsold inventory is highest in the expensive South Mumbai market, though it accounts

1. India Real Estate Outlook
January – June 2014

2. MUMBAI

3. 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

4. Demand & Supply Trend
10,000
15,000
20,000
25,000
30,000
35,000
No. of units
Launches
Absorption
Residential Market
New launches dipped by 22% between Q4 2011 and Q2 2014
Absorption has shrunk by 28%

5. 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. of Quarters
QTS – Time period taken to liquidate the unsold inventory at the sales velocity of last 8 quarters
Residential Market

6. 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
`/sq ft
No. of units
Launches
Absorption
Wt. Avg. Price (RHS)
Residential Market

7. 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

8. 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

9. 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

10. 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
Age of Inventory
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

11. 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

12. 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

13. 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