New launches in the Mumbai residential market increased by 33%, from  4,616 units in Q1 2021 to 6,143 units in Q2 2021, as per a recent study by JLL. While sales in the  city remained at similar levels of Q1 2021, transactions were concentrated in the price segment of Rs 50 lakh to Rs 1 crore, which accounted for 40% of the sales during the quarter.
  
Eastern suburbs accounted for the majority of new launches with 25%, followed by Western  suburbs II (comprising Malad, Kandivali, Borivali and Dahisar) with 22%. In terms of sales, Thane and Navi Mumbai combined reported close to 50% of sales. When compared to Q1 2021 capital value of residential units in the city remained stable in Q2 2021.
 
Mumbai – trends in launches and sales

 
Further, most of the new launches in Mumbai were in the affordable and mid segment (ticket size  upto Rs 2 crore) and formed 84% of the launches during the quarter. In sync with demand,  developers are expected to focus on these price segments.
 Karan Singh Sodi, Regional Managing Director, JLL India said, “The increase in sales  presents clear signs of demand and buyer confidence coming back to the market. This has been  on the back of historically low home loan interest rates, stagnant residential prices, lucrative  payment plans and freebies from developers and government incentives such as the reduction of  stamp duty.”
Karan Singh Sodi, Regional Managing Director, JLL India said, “The increase in sales  presents clear signs of demand and buyer confidence coming back to the market. This has been  on the back of historically low home loan interest rates, stagnant residential prices, lucrative  payment plans and freebies from developers and government incentives such as the reduction of  stamp duty.”
Mumbai has consistently been the largest contributor to sales over the past five quarters and the  trend continued in Q2 2021 as well. Almost one-third of the sales volume was contributed by the  city during the quarter.
  
Residential sales across the top seven cities in Q2 (April-June) 2021 increased by 83% as  compared to Q2 2020, across the top seven cities. According to JLL’s Residential Market Update  – Q2 2021 released recently, this was mainly due to low base effect, less stringent lockdowns,  and accelerating vaccination drives during Q2 2021, demonstrating improved resilience in the  market. During the first wave of Covid-19, residential sales dropped by a record 61% quarter on-quarter to 10,753 units in Q2 2020. However, the impact of the second wave has been limited  with sales in Q2 2021 dipping by 23% to 19,635 units.
Samantak Das, Chief Economist and Head Research and REIS, India, JLL said “The  residential sector displayed improved resilience in Q2 2021 when compared to Q2 2020. There is  no denying the fact that the second Covid-19 wave dented the market following a good recovery  curve. However, the impact was muted when compared to the same period last year. Most of the  changes observed in the sector have been structural in nature and demand for homes is only  expected to increase. The RBI is expected to hold policy rates at the existing historically low  levels, while prices will remain mostly range bound. The resultant affordable buoyancy will  continue to attract fence sitters and serious homebuyers,”.
 
“If the downward trajectory in Covid-19 cases is sustained, the sector is expected to make a  healthy recovery in the second half of 2021,” he added.
 
Established developers will continue to run the show
Structural reforms within real estate in the last few years started the process of weeding out  smaller, unorganised developers from the market. The Covid-19 pandemic tilted the scale  further in favour of established developers. Homebuyers have also become even more cautious  in affecting their home purchase decisions. There is an increased preference and willingness to  pay a premium for projects by developers with an established track record.
 
New launches expected to go up in H2 2021
On average, new launches of more than 35,000 units were witnessed every quarter between Q1  2019 and Q1 2020. In the Covid-era (Q2 2020 – Q2 2021), this has decreased to approximately 23,000 units.
  
Sustained growth of the sector in the second half of 2021
 
There is no denying the fact that the second Covid-19 wave dented the market following a good  recovery curve. However, the impact was muted when compared to the same period last year. Most of the changes witnessed in the sector have been structural in nature and demand for  homes is only expected to increase. Importantly, lockdown restrictions across cities are being  eased and the vaccination drive is gathering pace. If the downward trajectory in Covid-19 cases  is sustained, the sector is expected to make a healthy recovery in H2 2021.