Price Definition Of ₹45 Lk For Affordable Housing Needs To Be Revised Higher: Keystone Realtors

Summary

In a discussion on Mumbai's real estate market, Bman Risa Mirani, Chairman and Managing Director at Keystone Realtors, emphasizes the robust sales in February with over 11,500 registrations. Despite concerns over stock market fluctuations, he notes that real estate remains resilient, especially in mid-range properties priced around 5 CR. Pricing growth is expected to be moderate at 6-9%, with some micro-markets seeing higher spikes. He also highlights challenges in affordable housing, citing the outdated 45 lakh cap and the need for better infrastructure and connectivity to unlock potential in emerging areas like D and T. The market’s outlook remains optimistic, though adjustments in government policy are needed.

Takeaways

• 😀 Mumbai real estate market remains resilient despite fluctuations in the stock market, with strong registration numbers in February (11,500+ registrations).
• 😀 The impact of stock market declines on luxury real estate is minimal, as demand for high-value properties (e.g., 5 CR INR homes) remains strong.
• 😀 The real estate market in Mumbai continues to see healthy sales with a preference for mid-range priced homes, especially those priced around 5 CR INR.
• 😀 February’s real estate registration numbers were slightly lower than January, but a longer working month would have resulted in higher sales and revenue.
• 😀 Price growth in Mumbai's real estate market is expected to remain between 6-9%, following a steady increase in the past year.
• 😀 Developers are prioritizing velocity (the speed of sales) over price hikes, focusing on sustainable growth rather than inflation-driven price surges.
• 😀 The affordable housing market is facing challenges due to limited margins for developers, which reduces the incentive to build in this sector.
• 😀 The affordable housing cap (set at 45 lakhs in 2017) is outdated and should be adjusted for inflation, ideally being increased to around 80 lakhs.
• 😀 Improved infrastructure and transportation, such as better connectivity between suburban areas and commercial hubs, are vital for the growth of affordable housing markets.
• 😀 Developers are optimistic about the potential for growth in emerging markets, especially in regions with improved infrastructure and commercial development, which could lead to more affordable options.

Q & A

How did Mumbai's real estate market perform in February 2025?

Mumbai recorded over 11,500 property sale registrations in February, indicating a robust and resilient real estate market despite concerns about stock market performance.

Is there any noticeable impact of stock market declines on the luxury real estate sector?

Despite expectations that a decline in the stock market might reduce demand for luxury properties, the data does not suggest any significant impact on the luxury real estate sector, as transactions have remained healthy.

What factors might influence Mumbai's real estate market in the future?

The market's future performance is influenced by factors like price trends, inventory levels, infrastructure development, and government policies on affordable housing.

What price range is seeing the most activity in Mumbai's real estate market?

Homes priced around 5 CR are currently the most actively sold properties in Mumbai, indicating a solid demand in the mid-range price segment.

What was the price growth trend in Mumbai real estate in 2024, and what is expected for 2025?

In 2024, Mumbai saw a price increase of 6-9%, with some micro-markets experiencing higher price spikes. In 2025, the expectation is for a similar growth pattern, with prices likely to continue rising in the 6-9% range.

What factors are keeping real estate prices in check in Mumbai?

The focus on robust velocity of sales rather than just price increases, along with the current inventory overhang and developers' efforts to keep prices affordable, is helping to keep prices in check.

How does Mumbai's inventory overhang impact pricing trends?

With about 18 months of unsold inventory, the market could see some price increases, but they are expected to be localized to certain micro-markets. On a larger scale, prices are expected to increase at an inflationary rate of 6-8%.

Why is the affordable housing segment facing challenges in Mumbai?

The affordable housing segment is facing challenges due to low profit margins for developers, and the 45 lakh cap on affordable housing, which was set in 2017, is outdated considering inflation.

What changes are being suggested to improve the affordable housing market?

It is suggested that the affordable housing criteria be adjusted to account for inflation and regional price differences. Additionally, the 45 lakh cap on affordable housing needs to be raised to better reflect current market conditions.

How is infrastructure development influencing affordable housing in Mumbai?

Improved infrastructure and transportation connectivity, particularly in suburban areas like D and I, are expected to support the growth of affordable housing by making these areas more accessible and desirable for homebuyers.