(Mumbai, India) – Mumbai’s real estate market continues to exhibit resilience in 2023, albeit with a more moderate growth trajectory compared to the high-flying years of 2021 and 2022. According to Maharashtra government data analyzed by Knight Frank India, a real estate consultancy firm, Mumbai is expected to witness a 3-5% increase in property registrations by year-end, translating to roughly 1,22,035 registrations compared to the previous year.
Premiumization Takes Center Stage:
A defining trend in 2023 is the surge in demand for luxury properties. Homes priced between Rs 3 crore and Rs 7 crore have witnessed a significant uptick, now claiming 30-35% of total residential property registrations, a notable increase from previous years. This shift reflects buyer preferences for upgrades, with many transitioning from smaller apartments to larger units. Developers in the western suburbs report brisk sales of 3-6 crore apartments, outpacing the demand for more affordable options in the Rs 1-2 crore range.
Steady Rise in Premium Segment:
The overall market premiumization is further substantiated by the rising share of property registrations valued at Rs 1 crore and above. This segment accounted for 57% of registrations in 2023, compared to 54% in 2022, highlighting a consistent preference for higher-value properties.
Revenue Generation Soars:
The robust sales activity has translated into a substantial increase in revenue for the government. Property registrations in Mumbai generated Rs 9,937 crore between January and November 2023, a 23% jump compared to the Rs 8,066 crore collected during the same period in 2022. This upward trend is expected to continue, with Knight Frank India anticipating a 22-25% increase in total revenue collected for the year compared to 2022.
Challenges and Outlook:
While the Mumbai market remains buoyant, a potential concern lies in the impact of rising interest rates on the affordable housing segment. Developers acknowledge a possible slowdown in sales for apartments priced in the Rs 1-2 crore range. However, the positive momentum in the luxury segment and optimism surrounding economic recovery are expected to fuel continued growth in 2024. Developers foresee sales remaining on a similar trajectory as 2023, with some expecting to complete the sale of 70% of their inventory by year-end.