A decade-long analysis of Mumbai's real estate market reveals a surprising trend: suburbs outpace the city's main island in property price growth. With negligible increases or even stagnation in apartment prices from 2013 to 2023, Mumbai's expensive real estate market has cooled. In contrast, other Indian cities have seen robust property price growth. Regulations like the city's DCPR 2034, increasing available floor space, are likely to maintain this stability. However, certain suburbs have demonstrated slightly better price appreciation, outperforming the main island city, signaling a shift in investment strategies in India's priciest real estate market.
Over the last decade, Mumbai, widely known for being India's priciest real estate market, has experienced a negligible increase or in some cases, a stagnation in apartment prices from 2013 to 2023, according to an analysis by real estate research firm Liases Foras. Surprisingly, suburbs of Mumbai have demonstrated a more significant price appreciation in contrast to the city's main island.
While luxurious apartments and penthouses selling at record prices in Mumbai do capture the limelight, the underlying statistics tell a different story. Flats bought within the last ten years and resold a few years later have yielded minimal returns. The study from Liases Foras points out that the average property price in the Greater Mumbai region and Mumbai Metropolitan Region (MMR) has fallen by 1% over the decade. The per-square-foot cost went from INR 18,845 in 2013 to INR 18,708 in 2023, indicating a 1% decrease.
In stark contrast, real estate markets in other parts of India have flourished. Hyderabad's property prices almost doubled with a 98% increase, followed by appreciation of 63% in NCR, 58% in Ahmedabad, and 38% in Bengaluru. Chennai, Kolkata, and Pune also showed healthy growth rates of 35%, 37%, and 20% respectively.
An independent evaluation conducted by TOI corroborates this trend. It assessed multiple high-end properties across south, central, and suburban Mumbai, revealing interesting insights. For example, a leading Bollywood actress purchased a flat in Bandra (East) in 2015 for INR 31.48 crore and sold it in 2022 for a mere INR 32.5 crore. Similar marginal gains were observed in other regions like Worli Naka and Breach Candy.
A key factor contributing to this scenario is the city's new development control and promotion regulation (DCPR 2034), which has allowed a further increase in the floor space index (FSI) in all housing schemes. This increase in available area is expected to keep property prices stable in the foreseeable future.
However, it's important to note that certain suburban areas of Mumbai showed slightly better price appreciation. For instance, an apartment in Andheri (new D N Nagar) sold for INR 13 crore in 2015 and appreciated to INR 15.5 crore in 2022. Likewise, other suburbs like Oshiwara and Bandra Reclamation also recorded some increases.
Despite the city's main island's sluggish growth, the outskirts of Mumbai witnessed a higher increase in property prices. Navi Mumbai and the extended western suburbs beyond Dahisar demonstrated a noteworthy growth of almost 50% in the past decade.
In conclusion, Mumbai's main island city has displayed a marked slowdown in property price appreciation over the last decade, with suburban areas outpacing it. Analysts and developers suggest that recent regulatory changes and price corrections could alter this trend in the future, impacting investment strategies in India's most expensive real estate market.
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