How Is Mumbai's Real Estate Affecting India's GDP?

During the recent World Economic Forum in Davos, several top economists and analysts described India as a "bright spot" in the global economy. Though fears of a worldwide recession and fiscal downturn have cast a gloom over several economies, the 'India growth story' has been going strong. It is anticipated that India will become the world's third-largest economy by the year 2035 and is making rapid strides towards the USD 10 trillion mark. Analysts and industry experts back home believe that much of this growth shall be fuelled by a boom in the real estate sector.

The Resurgence of Real Estate

The COVID-19 pandemic pulled the brakes on the growth of real estate in the country. With construction nearly grinding to a halt, the economic lull caused by the pandemic and subsequent lockdown also made homebuyers remain cautious in their outlook. The recovery story, however, has been a very optimistic one. The demand for residential properties in cities like Mumbai, Delhi, Hyderabad, and Bengaluru has been driven by the increase in hybrid working scenarios in most large corporations. In addition, attractive incentives offered by developers looking to clear out their inventory have helped pique homebuyer interest. A recent report shows that the Indian real estate market size is expected to reach nearly USD 1 trillion by 2030. The sector's contribution to the GDP is currently pegged at 6% and is set to increase to 13% by 2025.

Spotlight on Mumbai

There is little doubt that the Mumbai real estate market is set to expand at an unprecedented rate and is the key to unlocking this phenomenal growth in the sector. Nearly 50% of all homebuying activity in 2022 was recorded in Mumbai and Delhi. The rapid expansion of the city limits and the rise of the suburbs has made Mumbai a prime real estate hub in the country.

Factors contributing to mumbai's real estate boom

• With a population of nearly 27 million people, the city of Mumbai is the financial and entertainment capital of India. Hundreds and thousands of people come to the city each year to build their careers and lives. It is not surprising that the demand for housing has only been on the rise over the years.
• Some of the top real estate developers in India are based in Mumbai. Top-notch quality, delivery guarantees, and a host of luxurious amenities and facilities are expected from the houses and flats on sale in Mumbai. Owning a residential property is every Mumbaikar's dream.
• The infrastructural spending of the government machinery has made intra-city commuting quick and comfortable. Besides the ever-expanding metro and suburban network, projects like the Mumbai Trans Harbour Link and the expansion of the peripheral ring roads have helped the city and its suburbs grow closer. This, in turn, has led to a boom in housing demand in suburban areas.
• Innovation and technology have also played a significant part in Mumbai's real estate upswing. Leveraging such technology, Blox offers apartments directly from developers and makes homebuying seamless and stress-free. With virtual site visits and personalised guidance to prospective homeowners, Blox is helping Mumbaikars experience a transformed home-buying experience.

Assessing the true impact of Mumbai's real estate on the national GDP will require a focused study. However, this is clear – the growing demand for more and better residential projects in Mumbai and the Mumbai Metropolitan Region (MMR) is sure to contribute towards expanding the national GDP. Real estate developers in the city are certainly excited and optimistic about the long-term outlook.