Mumbai, the financial capital of India, has been experiencing a remarkable surge in real estate development in recent times. The city offers a variety of properties for homebuyers, ranging from affordable housing to luxury apartments, from suburban townships to central skyscrapers. The real estate market in the city presents a variety of commercial and residential offerings and investment opportunities to the homebuyer and the investor. Let us take a look at the factors that are powering this growth and future potential.
Factors behind the real estate boom in Mumbai
The real estate boom in Mumbai can be attributed to several reasons. One of the main factors is the increasing demand for housing from the growing population. The improving infrastructure and connectivity have also played a significant role. Additionally, the rising income and purchasing power of middle-class homebuyers and a demand for better quality of life and amenities have contributed to the boom. The availability of attractive financing options from banks and home financing companies, flexible payment plans, and low-interest rates have also been significant factors. Furthermore, the emergence of new and innovative projects from reputed builders and developers delivering state-of-the-art design, construction, and services has added to the growth of the real estate industry in Mumbai.
Residential properties in demand
Emerging from the pandemic, Mumbai’s housing market has made a phenomenal trend reversal, with more people keen to buy houses than ever before. The reverse migration of homeowners from the more established southern Bombay to the central and western suburbs is driving demand. Another salient trend that is emerging is the rise of integrated neighbourhoods. Integrated neighbourhoods in Mumbai are attractive to homebuyers because they offer luxury, comfort, convenience, and safety. They have offices, schools, cafes, restaurants, hospitals, malls, and parks within the premises. They also offer spacious homes, green landscaped areas, community areas, and modern amenities.
Infrastructure-powered development
The spectacular infrastructural work undertaken by the local and state governments has provided real estate a much-needed impetus.
The new international airport in Navi Mumbai is near completion, and work on the Mumbai Trans Harbour Link, the introduction of new metro lines, the renovation of the metro and suburban rail stations, work on the Sahar Elevated Access Road (connecting the Western Express Highway and the Chhatrapati Shivaji International Airport) etc., have given several micro markets in the city a much-needed fillip. The western suburbs, Navi Mumbai, and parts of the central suburbs have become preferred real estate destinations due to the interest shown by the local authorities in the timely completion of the development work.
Commercial and mixed development
Mumbai is a dynamic city that attracts various stakeholders in the commercial and mixed real estate development sector. As the financial hub of India, Mumbai has a high demand for quality spaces for office, retail, and residential purposes. With innovation, collaboration, and sustainability, real estate developers in Mumbai have been successfully creating and delivering value for all. The sale of commercial spaces in Mumbai has increased in recent years. The average price for commercial properties in business areas such as Andheri East, Goregaon, Bandra, Nariman Point, and Santacruz West ranges from INR 35,000 to INR 66,000 per square foot.
NRI investment destination
With the global market facing a possible recession, Non-Resident Indian (NRI) investment in Indian real estate has reached an all-time high. Recent news reports suggest that the share of NRI investors in premium and luxury real estate sales has doubled since the start of the pandemic. Before 2020, NRI sales constituted about 10 per cent of total real estate sales in India, but this figure has now reached about 20 per cent by the first half of 2023. The cities of Mumbai and Delhi have been the preferred destinations for Indians residing abroad to purchase luxury apartments, villas, condominiums, and flats in their homeland.
Domestic real estate investment trends
The domestic financial markets continue to remain very volatile, making real estate an excellent investment option for the average investor. According to a Frank Knight report, Mumbai is expected to witness the highest growth in luxury and prime residential property by the year 2024.
With equity, bullion, and forex investments remaining unreliable, investors are finding real estate in Mumbai a consistent source of asset appreciation and rental income. However, those looking to earn income and increase cash flow through renting and leasing property prefer investing in 1 BHK for sale in Mumbai, while those looking for a better lifestyle are increasingly opting for luxury residences in the city and its suburbs.
