As I mentioned in my column from February 2023, “The slowdown in Mumbai real estate is here,” the real estate boom in Mumbai ended in early 2023. After that, sales have continued at a consistent run-rate of approximately 10,000 registrations per month on average (with reconstruction units accounting for about 25% of total registrations). The October–December 2023 holiday season was anticipated to be quite exciting, however it was not as anticipated. Why?
There are several variables at work. Between August 2020 and December 2022, the pent-up demand for homes was fully satisfied, which was followed by a 5X increase in the number of launches in numerous micromarkets. Selling under-construction projects is always difficult in a market where confidence is lacking, like Mumbai, but the problem has been made worse by intense competition and inflated costs. This will probably lead to individual builders selling fewer units per project (even if overall demand will probably stay the same). This is because the business primarily depends on customer advances to pay roughly 40–50% of project costs.
What next?
Branded players should do better: the typical Mumbai home buyer has really low expectations, as harsh as that may sound. He has high expectations, but he understands that in most situations, he can’t expect anything more than a seamless transition into his new house. He gets hope from branded athletes that all of his aspirations would come true on schedule. Therefore, even at higher pricing, branded players in underserved markets will prosper. For instance, Godrej’s project in the serene Chembur bungalow land owned by Raj Kapoor, Rustomjee’s seafront project at Bandstand (Bandra), etc.
