In the second quarter of the fiscal year 2023-24, the Mumbai real estate market witnessed a supply of 9,489 residential units. Notably, the first ten months of 2023 saw a total of 1.04 lakh property registrations. October, marking the commencement of the festive season with Navratri, recorded a remarkable 20 percent increase in property registrations compared to October 2022.
In Q2FY23-24, the Mumbai real estate market reported a supply of 9,489 residential units.
Several factors have contributed to the vibrant real estate market during this festive season
Here are five reasons why the real estate market is sparkling this festive season.
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Upgrades to Larger Apartments: Post the Covid-19 pandemic, there has been a nationwide trend of homebuyers upgrading to more spacious apartments. In Mumbai, the launch ratio of 1 BHK units decreased to 29 percent in 2023 from 34 percent in 2019. Meanwhile, 2 BHK units maintained a consistent ratio of 38 percent, and 3 BHK apartments saw an increase to 15 percent in 2023 from 11 percent in 2019. This shift indicates that residents of 1 BHKs are upgrading to 2 BHKs, and 2 BHK owners are moving to 3 BHKs, as per registration data from the Maharashtra Real Estate Regulatory Authority (MahaRERA).
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Redevelopment Initiatives: Post the Covid-19 period, there was a surge in redevelopment projects in Mumbai. The Maharashtra government’s approval of a 50 percent discount on premiums paid by real estate developers for various permissions incentivized redevelopment efforts. Approximately 20 percent of the total monthly property registrations involve Permanent Alternate Accommodation Agreements (PAAAs) related to redevelopment projects in Mumbai.
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Stable Home Loan Interest Rates: The Mumbai real estate market observed a stability in home loan interest rates throughout FY2023. This stability has instilled optimism among homebuyers, particularly in the affordable segment, where the majority of residential deals are priced at Rs 2.50 crore and below. The assurance of stable interest rates has further strengthened the housing market sentiment.
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Rise in High-Value Transactions: There has been a notable increase in the registration of properties valued at Rs 1 crore or more. This segment accounted for approximately 56 percent of registrations between January and October 2023, up from 50 percent during the same period in 2020. High-value transactions, exemplified by developments like the Hiranandani Group’s sales of luxury apartments in Powai, have contributed significantly to this trend.
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Festive Season Surge: The festive season, starting with Navratri in October, witnessed a surge in property registrations. Mumbai reported 4,594 units registered during the nine days of Navratri in 2023, marking a 37.4 percent YoY growth from the previous year. This festive season rush further bolstered the real estate market, reflecting the buoyant spirit among homebuyers.
