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MMR’s Housing Boom Defies Rising Property Prices

Prashant Thakur, Regional Director & Head – Research, ANAROCK Group

The residential real estate market in Mumbai Metropolitan Region (MMR) has witnessed a surge in home buying activity in recent times. This trend might seem counterintuitive considering the relentless rise in property prices in the region.

However, there’s more to the story than just affordability. Here’s a closer look at how the MMR residential market performed in 2023 and the factors fuelling its housing boom.

MMR Residential Real Estate Snapshot:

  • The MMR housing market holds the top position in both supply and demand, with new launches of approx. 1.57 lakh units in 2023 and sales at approx. 1.53 lakh units – both at all-time high levels.
  • Both housing supply and sales in MMR have been on an upward trajectory since 2020. New launches and housing sales in 2023 surged 27% and 40% annually when compared to 2022.
  • MMR witnessed a 15% growth in average property prices – from approx. INR 11,890 per sq. ft. in 2022 to approx. INR 13,700 per sq. ft. in 2023.
  • Mumbai emerged as MMR’s undisputed champion in 2023 with the highest year-on-year jump in housing sales compared to 2022. Mumbai’s peripheral western suburbs are seeing a protracted housing boom, with sales skyrocketing by a whopping 82% compared to last year.
MMR Market20222023% Rise in Housing Sales
Navi Mumbai18,45024,20031%
Mumbai Sub-Market20222023% Rise in Housing Sales
Peripheral Central Suburbs30,70042,90040%
Mumbai Central Suburbs14,40019,10033%
Peripheral Western Suburbs10,20018,60082%
South Central Mumbai5,7006,50014%
Mumbai Western Suburbs15,60023,10048%
Mumbai Others2002000%

Source: ANAROCK Research

Factors fuelling MMR’s Housing Boom:

  • Strong Economic Outlook: MMR is the financial and commercial powerhouse of India, attracting a vast talent pool seeking better career prospects and a higher standard of living. This demographic contributes significantly to the real estate sector of MMR, driving demand for housing.
  • Infrastructure Development: The government’s push for infrastructure development in the MMR is another major driver. Improved connectivity through new highways, metro lines, and upcoming projects like the Navi Mumbai International Airport, Mumbai Coastal Road Project, and establishment of a new city ‘Third Mumbai’ are enhancing the overall quality of life. This is incentivizing buyers to invest in micro-markets that will benefit from better infrastructure in the future.
  • Increased Focus on Homeownership: The pandemic has accentuated the importance of owning rather than renting homes. People seek a sense of security and stability after the uncertainties of recent years. This shift in preferences, combined with a growing middle class aspiring for homeownership, are adding to the demand for residential properties in MMR.
  • Fear of Missing Out (FOMO): The consistent property price appreciation in MMR has instilled a fear of missing out (FOMO) among buyers. They believe that delaying purchase will only lead to steeper prices later. This perception, vouchsafed by past trends, is leading them to enter the market even at current high property prices.
  • Investment Potential: Real estate in MMR has historically proven to be a high-yield investment. Investors see property as a hedge against inflation and a source of stable rental income. With the expectation of continued economic growth in Mumbai, the potential for capital appreciation also remains high, making MMR an attractive investment proposition.
  • Wide Range of Options: The rise of fractional real estate investments is providing alternative investment opportunities for those seeking exposure to the luxury real estate market without directly buying the entire properties.
  • A Constantly Evolving Market:  The MMR market is constantly transforming, offering an increasingly wider range of property options. From smaller, affordable apartments to luxurious high-rises, there are options in for budgets and lifestyles. This caters to the diverse needs of today’s homebuyers and is driving the housing boom in MMR.