Mumbai real estate set to experience a fierce price battle in 2022

The momentum of India’s most expensive real estate market is currently at its best. As predicted by real estate gurus, the Mumbai real estate sector is at an all-time high. The total number of registrations done in January in Mumbai were 8000 while the number was around 10,000 in February which is 1.6 times higher than the 5-year average. For the state of Maharashtra, registrations in January were 13% above the long-term average

As a result of government initiatives, developers have seen their project costs drop significantly. The consequence of this was a three to four times increase in revenues for the municipal corporation as compared to the last 5 years. Developers were able to build over 150 million square feet with the help of the municipal corporation.

Mumbai accounts for 10 per cent of national property volumes and 23 per cent of national property sales. In the latest report by UBS India, the city accounts for 33 per cent of the country’s profits, of Rs 69,100 crore and 23 per cent of Rs 3,24,200 crore in annual sales revenues; and about 10 per cent or 38 million square feet of 393 million square feet of supply by 2021.

This boom in the Mumbai market is acting like a powerful engine for the national real estate market and is helping it to recover from the effects of the pandemic. The consistent demand is fueling the recovery in the financial epicenter of the country. 

Experts believe that there will be an increase in the number of new constructions and a surge in the property prices as well. The growth curve will be led by A-list builders. It is also believed that while the big developers will control the market prices the smaller scale builders will have to face the consequences of the fierce price battle. “While the key builders will be able to largely hold on to their prices, it is certain that a price battle will have to be fought by 80% of the developers.” said a developer based in the city. The developers will also face building challenges as many of them have taken more number of projects than they can handle due to cost cutting by the government.

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