homereal estate NewsMumbai’s real estate market booming with sharp rise in sale of luxury apartments
Mumbai’s real estate market booming with sharp rise in sale of luxury apartments
Real estate in Mumbai has been a topic of interest for many investors and analysts lately. The realty market in the city is still active and adapting to changing needs. While there may be some slowdown in the affordable segment, the upper end of the market is growing, and sales have picked up
India's financial capital, Mumbai is witnessing a boom real estate market amidst some challenges. Interest rates are going up consistently and now the budget has capped capital gains from sales at Rs 10 crore, probably restricting the desire for over Rs 10 crore properties. The latest Knight Frank report shows that property registrations in February were 11 percent lower than the year ago, February 2022.
However, real estate in Mumbai has been a topic of interest for many investors and analysts lately. The realty market in the city is still active and adapting to changing needs. While there may be some slowdown in the affordable segment, the upper end of the market is growing, and sales have picked up across the city. With redevelopment expected to continue in the next ten years, it will be interesting to see how the market evolves and adapts to changing needs and trends.
In an interview with CNBC-TV18, Niranjan Hiranandani, MD of Hiranandani Group said that people in the higher segment of the market do not look at tax breaks as an issue for transaction closure. This could suggest that despite the pandemic's economic impact, high-net-worth individuals are still willing to invest in the Mumbai real estate market. However, Hiranandani also said that there is a little slowdown in the affordable segment. This could be due to the current economic climate, which has left many people struggling to make ends meet.
He said, “In the case of the middle and higher segment, there has been an increase in registrations, which means that those people who can afford it and for whom the interest is not a significant cost in terms of it are still closing the transaction.”
Another trend that Hiranandani observed is that redevelopment has started and will continue to do so. This may be a sign that the market is adapting to changing needs, such as increased demand for sustainable and modern housing options. He also predicted that the next ten years will be the phase of redevelopment for Mumbai, indicating a long-term trend in the market.
Meanwhile, Gulam Zia, Senior Executive Director of Knight Frank, said that the upper end of the market has grown to 8-10 percent from 1-2 percent, indicating a shift towards luxury and high-end properties. However, Zia also stated that the volume of less than Rs 1 crore apartments in Mumbai has shrunk massively. This suggests that there may be a shift in the market towards higher-value transactions.
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“The lower end is affected (by interest rate hikes) and that is why it is showing, at least in the Mumbai market it is pretty deep an impact from almost half of the market to 1/3rd it has shrunk, as far as the absolute below Rs 1 crore or the lower end affordable housing is concerned. The shrinkage is very evident,” said Zia.
According to Abhinav Joshi, Head of India, Middle East and North Africa at CBRE, sales have picked up across Mumbai by 5-10 percent. This is a positive sign for the market, indicating that despite the pandemic, demand for real estate in Mumbai remains strong. Joshi also noted that positive sentiment has been seen in the real estate market in Mumbai in the last two years. This could be a sign that the market is stabilizing and recovering from the pandemic's initial shock.
For more details, watch the accompanying video
(Edited by : Abhishek Jha)
First Published: Mar 2, 2023 6:18 PM IST
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