PG190958 Mumbai Snehal PDF

MUMBAI- REAL ESTATE DYNAMICS
Introducing the city:
Mumbai is capital city of Maharashtra and known as finance capital of India. The city evolved
with amalgamation of seven islands to form the current shape constituting southern part of Mumbai
at present and termed as Island city. Suburbs are the extended part of the islands collectively known
as Greater Mumbai. These suburbs are divided into two regions i.e. western and eastern. Over a
period of time, these suburbs have evolved as the core business centers and key residential
destinations of Greater Mumbai. The island city and the suburbs together are governed by Municipal
Corporation of Greater Mumbai with total area 467.19sq.km. The 2011census population is
1,24,42,373 and projected population by MMR for the city in 2021 is 1,27,86,692
Real Estate trends:
Mumbai contributes 2.5% to India’s GDP and real estate plays a crucial role in Mumbai’s
economy according to Anarock economic report 2017. Unfortunately, 2019 was a dull year for real
estate as the sector continued to suffer due to the prolonged crisis in the NBFC sector. Developers
continued to launch compact homes to get the ticket size right. Over a 5-year period between 2014
and 2019, the average size of apartments has reduced by 25%. These compact homes dominated the
launches with 61% with ticket size 7.5million in second half of 2019 according to Knight Frank
Research. Western suburbs have emerged as highest contributor in Launches in recent years.2020
has been impacted at high rate with pandemic crisis. “Launches which stood at 14,332 units in Q1
2019 units declined by 18% y-o-y to 11,743 units in Q1 2020. Although projects were launched in
the first two months of the quarter, the complete halt in launch activity in the last month of the
quarter led to the overall dip in new launches.” (JLL Report2020). On the demand side, overall sales
in the Mumbai residential market fell by 19% in Q1 2020. The unsold inventory in the Mumbai region
continued to rise with the market overtaking Delhi NCR in terms of the quantum of unsold units.
Mumbai accounts for majority of the locked-in capital. RBI’s intervention to provide a 3-month
moratorium on all term loans by financial institutions will alleviate short-term liquidity concerns and
Real Estate trends and Micro

markets in the city:
help developers survive in these uncertain times. Least absorption of housing units is observed in
South Mumbai due to extremely high prices. The eastern and western suburbs are preferred with
good connectivity and affordable prices for MIG.
Provision in DP2034 to boost real estate:
“In order to revitalise Mumbai’s economic potential, there is a need to give a concerted push
to new development while also seeking to redevelop private housing societies, cessed buildings,
slums & MHADA colonies. The newly framed development plan (DP) emphasises sustainable
development by striking a balance between the city’s economic growth, protecting the environment
and ensuring social justice for its citizens.” (Cushman Wakefield Report). The housing gap for the
Economically Weaker Section (EWS) and Low-Income Group (LIG) population is enormous and that
has led to the creation of slum clusters in prime areas within Mumbai. To accommodate future
housing needs and offer a better dwelling experience to the slum and residents, the city needs to
create adequate affordable housing stock. DCPR 2034 has proposed several new approaches to
create affordable housing stock through partnership such as:
• Inclusionary Housing Policy

• RDDP Affordable Housing Scheme on
• Special Development Zones (SDZ)
• Reserved Affordable Housing Plots
Incentives for development and redevelopment:
The FSI depends on road widths with updated DCPR 2034. In the new DCPR 2034, the base
FSI has not been altered; however, additional FSI is granted through Premium FSI and TDR. The
loading of TDR and premium FSI in the island city has been allowed, provided the plot is served by
road width of more than 9m. This makes the Island City micro market lucrative for redevelopment of
old dilapidated buildings which are in need of an upgrade along with creating adequate accessibility
and public amenities. Restrictions due to heritage precinct and coastal zone regulations prevent
utilization of Zonal Basic FSI. Thus, TDR generation will continue from the Island City and at the same
time, larger plots on wider roads will benefit from the TDR loading. DCPR 2034 is carrying forward
the means to convert Industrial to Residential/Commercial use with a higher degree of incentives, to
provide enhanced impetus to commercial and residential developments with the current needs
geared towards them. Housing policy for cotton textile mills and the accommodation reservation
policy are likely to create a supply pipeline of affordable housing and public amenities, thus keeping
the social mix intact. The majority cessed buildings are present in Ward B, C D & E with areas such as
Tardeo, Grant Road, Girgaon, Bhuleshwar, Pydhoni, Bhendi Bazaar, Sandhurst Road, Chira Bazar,
Nagpada likely to see a redevelopment drive. Some projects are already underway such as
reconstruction of BDD Chawls at Worli & Naigaon and projects in Parel. DCPR has reduced the
consent criteria for redevelopment of private housing societies and buildings under the Maharashtra
Housing and Area Development Authority (MHADA) 70% members’ consent – for private co-
operative housing societies. 51% members’ consent – for land owned by public authority /MHADA.
Though this move seems welcoming the projects can be stalled due to filed litigations of by the
tenants without consent.
Conclusion:
The absorption rate of properties is reducing every year with high unaffordable ticket prices
resulting in unsold inventory. The COVID crisis has further worsen the situation of the projects under
construction and may result in slight decrease in prices of ready properties reducing the percentage
of unsold inventory. The redevelopment policies are likely to encourage affordable housing for all
income groups and boost the real estate sector along with quality of life.
References
2018, Anarock, The Peripheries – Greater Mumbai's future Suburbs
2019, Knight Frank, India Real Estate Residential and Office July-December
2020, JLL, India Real Estate Market Update Q1 2020 April RESIDENTIAL
Cushman Wakefield, DCPR 2034: Unleashing Mumbai’s Economic Potential
2018, MMRDA, Mumbai Metropolitan Region Report

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MUMBAI- REAL ESTATE DYNAMICS

Introducing the city:

Real Estate trends:

Real Estate trends and Micro

Provision in DP2034 to boost real estate:

• Inclusionary Housing Policy

Incentives for development and redevelopment:

2018, Anarock, The Peripheries – Greater Mumbai's future Suburbs

Cushman Wakefield, DCPR 2034: Unleashing Mumbai’s Economic Potential

2018, MMRDA, Mumbai Metropolitan Region Report

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