Demand for luxury homes grows greatly in south Mumbai

Mumbai has predominantly been a prime choice for homebuyers due to its advanced infrastructure and dynamic lifestyle. However, in the past few years, the real estate sector of Mumbai was dwindling with a growing unsold inventory and unfinished projects due to a lack of funds.

The main factor behind this crisis was the set of reforms introduces by the government, such as GST, demonetization, and changes in property taxes. However, it is to be noted that these reforms were aimed at the growth of the economy in the long run, along with which, the real estate would have improved too. But the short-term ill effects have badly affected the industry, partly by the decrease in the purchasing power of potential buyers.

Due to the constantly falling economic condition, the number of bookings and purchases of homes decreased greatly, leading to a cash crunch for the developers. Without sufficient funds, a number of projects have been stalled, and as a result, banks have grown wary of funding housing projects, followed by the non-banking finance agencies. The developers of property in Mumbai have, as a result, falling in a tough spot where the expenditures are far higher than the funding.

However, the government has started taking measures to revive the declining real estate industry of the country. A funding window of INR 25,000 crore has already been announced for the stalled projects. Moreover, NRIs are now finding interest in the Indian real estate and have started investing in properties in Mumbai.

The main reason behind this is the increased transparency in the real estate industry of India. Previously, the developers used to hold an advantageous position and the NRIs often fell into unfavourable situations. While in some cases the properties weren't delivered timely, in other cases there were problems due to shady activities developers to trick the buyers into paying up more than they should.

With the reforms in recent years and the establishment of RERA, the situation has changed. The real estate sector has become a more reliable and safer field to invest in, and the NRIs are gradually gaining confidence. Thus, although there has been a fall in the number of domestic buyers for flats in Mumbai, the overall sales have started improving.

The prices of homes in Mumbai are expected to rise steeply in the coming years. Although this might sound like bad news to buyers, it is to be noted that this would benefit the investors who are planning to buy an residential apartment in Mumbai now. As the prices would increase, resale values and rental income from these properties would be lucrative. Thus, Mumbai is recovering well from the crisis in the real estate sector. The industry likely has a bright future up ahead.