While some reports have predicted correction in Mumbai realty market, Babulal Varma, Managing Director of Omkar Realtors & Developers assert that rising demand and low availability of ready-inventory will make Mumbai the most sought-after property market in 2011. In an exclusive interview with Ravi Sinha, Varma says the space available and costs per sector in the city is different vis-à-vis other metros, and developers with good inventories will definitely profit from this year. Excerpts of the interview:
Q: How do you see Mumbai realty market shaping up in the year 2011?
The year 2011 looks promising for the real estate segment. This year, the residential segment will see many green projects being initiated. The ultra luxury and ultra affordable segments will also see heavy emphasis given the increased demand in these segments. There will also an increase in commercial spaces, considering the need posed by the SME segment.
Q: JLLM, Fitch and Cushman & Wakefield predict price correction in the year. Your take on that.
Mumbai is India’s most densely populated city. Thus the space available and costs per sector in the city is different vis-à-vis other metros. In the last 18 months, property prices across Mumbai and Delhi have firmed up, in the light of recent developments; the industry is expecting a price correction later in the year. However, we feel that if a property is developed as per the customer preferences, it will generate a good response irrespective of prices or recession. Thus the price movement is expected to stabilize in long run.
Q: Do you think there are pockets that will see correction, or there will be a general slowdown in the city and outskirts?
The current prices exceeding ’07 peaks in certain micro-markets and hence price correction will occur to encourage affordability. As mentioned earlier, since affordable housing and commercial properties for the SME sector, will be buzzwords for demand creation, correction pertaining to these segments is expected.
Q: Do you agree with the view that Mumbai realty market is slated for oversupply this year and the fierce competition will turn the market into buyers market?
Rising demand and low availability of ready-inventory will make Mumbai the most sought-after property market in 2011. Developers with good inventories will definitely profit from this year, given improved economic activity has now started narrowing the gap between supply and demand in this city.
Q: Any launches that you have planned for this year?
Omkar is planning to launch 6-8 projects in the commercial as well residential segments. Omkar is all set to develop projects having an area of about 20 million sq. ft. in the Mumbai Metropolitan Region (MMR) with specific focus on the island city and the sub-urban districts over a five year horizon.
Q: Any corrective measures that you have planned/you will think of in the case of market correction?
As Omkar, we are just trying to match customer expectations. As I mentioned earlier, if the product developed is in sync with the industry trends, consumer requirements, with best in class design and amenities, it does get a good response and same has been showcased by Omkar in the peak of the 2008 recession, where our then ongoing project in Vile Parle, got an overwhelming response.
Q: Any learning curve coming out of the market crash in the last 2-3 years?
At Omkar, asset value appreciation is intrinsic to the overall functioning of the organization. Even in the peak of recession of 2008, our then ongoing project at vile parle witnessed an overwhelming response. This success has brought to light the core fact that the demand for any project is governed by the right location with the right pricing. The other tangible would include the design & amenities that further fruitify an individual’s decision to invest.
