An Evaluation of price trends in residential real estate sector in Andheri East,A pre and post COVID evaluation

Real Estate

The real estate business was previously faced a significant drop in the Stock market crash of 1929 and the great depression in the US. One more such example is the change in the Banking act of 1933 and the change in the National housing act of 1934. The above example shows how the real estate business got affected by the International market changes and market crashes. But this market has faced some disturbances in the Covid period started as Covid 19, but lasted for more than 2 years which was a man-made disaster? if true!.

By 2021, The global Real estate market was valued at $28917.7 billion which is projected to reach at $48923.3 billion by 2031 while the Indian real estate market is expected to reach 1 Trillion market size by 2030, up from  US $200 billion in 2021. By 2025 Indian real estate business will contribute 13% to countries GDP. India's global real estate transparency index ranking improved by 5 positions and was seeded as Rank 34 from 39. In 2021, the securities and exchange board of India reduced its minimum application value for real estate investment trusts from rs 50,000  to 10,000-15,0000 to make the market more accessible.

Let us now evaluate the real estate market in Andheri east, The property rate in Andheri east (Mumbai)

is around rs 10,857 - 36,500 per sq ft, while the average property rate is 20,043 as of 2022. The first wave of covid 19 hit a significant drop in market valuation. After the first wave, Mumbai is trying to recover its position by employing attractive schemes and getting great support from Government bodies. In September 2020, The Maharashtra government its stamp duty due to which there was a record registration and put real estate back on track. The real estate business was always seen and known for its bounce-back records by employing attractive low-interest rates and government incentives.

If we analyze the demand and supply report of the CRE matrix for the last few years, the picture will be more clear. 

According to the report, In 2017 Andheri (MUMBAI) there was a demand of 1.25 mn sqft and the supply was 1.11 mn sqft with 24.8% vacancy. This is almost two years before the covid situation. Now at The beginning of Covid, such that 2019, There was a demand of 1.96 mn sqft while the supply was 0.21 mn sqft with 19.0% vacancy. So the data depicts that there was an increase in demand while there was a huge decline in the supply. The third data is after two years of the covid situation. In 2021, when the country has witnessed two or three covid waves already, there was a demand of only 1.04 mn sqft and the supply was 0.08 mn sqft. Now if we compare the data of 2021 with 2020 where demand was 0.66 mn sqft and supply was almost tend to 0 mn sqft, will come to know that the situation started recovering. But Andheri along with other Indian Real estate markets has to wait for more so that The market to set back its Real position

Price Trends For the last few years in Andheri Residential real estate sector.

In the year 2020, when covid was at its peak the price range in Andheri east was rs (1550 - 43667) per sqft with a drop of 16.1% rate compared to previous years. In the year 2021 when the country started recovering from the covid situation, the average buy price was rs 20,100 while avg rate for a 2BHK rental home was rs 39,400. The price trend shows that although there is still time for the real estate market to come on track but, still the situation is not pathetic anymore.