Govt Policies & Housing Premiums Under Spotlight in Latest Mumbai Realty Report

Mumbai / November 14, 2024: 1 Finance, a leading financial services institution, and NAREDCO Maharashtra NextGen released a comprehensive research report on Greater Mumbai’s real estate market at Excelerate 3.0. The report highlights the significant transformation of India’s residential real estate sector, shaped by economic factors, regulatory changes, and evolving consumer preferences. Key findings from the report include the average price per square foot (PSF) in Greater Mumbai stands at Rs 32,150, approximately 29% of homes sold in Greater Mumbai are priced above Rs 2 crore and affordability for the affluent-middle class is the lowest among top cities in Greater Mumbai, NAREDCO Maharashtra said in a statement.

The event was attended by key industry leaders and dignitaries, namely Dr. Niranjan Hiranandani, Chairman, NAREDCO National, Rajan Bandelkar, Vice-Chairman, NAREDCO National, Prashant Sharma, President, NAREDCO Maharashtra, Ridham Gada, President, NAREDCO Maharashtra NextGen, Rajesh Doshi, Secretary, NAREDCO Maharashtra, among other industry leaders.

While the challenges in Greater Mumbai’s real estate market are evident, it is crucial to view real estate investment through a broader lens. Real estate, as an asset class, has consistently delivered competitive returns compared to other traditional investments such as equities, debt, and gold. Over the past decade, real estate (including rental yield) has provided an average return of 12%, which is comparable to gold and higher than debt, which averaged 7%. Furthermore, real estate offers unique advantages that set it apart from traditional investments, providing a balance of returns and security, making it an ideal asset for diversification, the statement added. 

 For people looking to buy homes in Greater Mumbai, the key lies in thorough research, a long-term perspective, and an understanding of the local market dynamics. By focusing on high-potential micro markets, leveraging the inherent advantages of real estate, and aligning with reputable developers, they can own a home in Greater Mumbai while potentially reaping the rewards of this enduring and multifaceted investment option, NAREDCO added. 

Commenting on the unveiling of the research report, Prashant Sharma, President, NAREDCO Maharashtra, said, “The report makes a compelling case for regulatory reforms, including the rationalism of premiums and streamlining of approval processes. To succeed, we need strong collaboration between the public and private sectors. NAREDCO Maharashtra is committed to working closely with government bodies, financial institutions, and other stakeholders to create a more efficient and inclusive real estate ecosystem. Our focus remains on driving the ‘Housing for All’ and ‘Affordable Housing’ initiatives.”

Sharing his vision through this report, Keval Bhanushali, Co-founder & CEO at 1 Finance, said, “We are proud to introduce India’s first unbiased real estate price indices for top cities. At 1 Finance, we believe that real estate advisory should be standard practice in India’s financial planning ecosystem. Our goal is to elevate real estate to its rightful place as a legitimate investment class, alongside other traditional options. This report is a significant step towards that objective, offering a comprehensive view of the market that will benefit homeowners, developers, and policymakers alike.”

Ridham Gada, President, NAREDCO NextGen Maharashtra said, “This research highlights the pressing affordability challenges in Greater Mumbai’s real estate market. To address these, we need a collaborative approach between developers, policymakers, and financial institutions. NAREDCO Maharashtra NextGen is committed to driving innovation, supporting regulatory reforms, and advocating for affordable housing to ensure Mumbai remains a thriving global metropolis with accessible homeownership for all.”

The affordability issue in Greater Mumbai, stemming from high property prices, is deeply intertwined with government policies and premiums. These policies, while intended to regulate development and generate revenue for urban infrastructure, have inadvertently contributed to affordability challenges, especially in Mumbai’s context. This has not only driven up property prices but also led to a significant reduction in apartment sizes, impacting the quality of urban living, the statement added. 

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