Analysis of the Indian residential market in the period after the global financial crisis reveals that 263,000 housing units were sold in the country in 2015, which is 27% less than the 2010 figure. Of the top eight cities, Mumbai saw its share of housing sales shrink from 30% in 2010 to 24% in 2015. Similarly, based on the office space demand the city saw its share dwindle from 26% to 18% during this period.
Considering that Delhi, Bengaluru, Hyderabad, Chennai and Pune also vie for a share in corporate investment, Mumbai’s loss is others’ gain. Even Delhi and Bengaluru, the major cities, fared better than Mumbai. Between 2010 and 2015, Bengaluru witnessed its share of housing sales climb steadily from 8% to 20% on the back of the office demand share remaining steady at 27%.
The chief factors driving these cities are infrastructure development and a steady supply of relatively inexpensive real estate – the key enablers of business. In contrast, Mumbai is known for being the country’s most expensive property market, and high real estate costs are stifling businesses and individuals alike. With a space-starved peninsular geography, increased infrastructure development appears the best solution to augment the supply of affordable real estate and sustain the city’s growth.
Accordingly, unprecedented investment is now committed for Mumbai’s infrastructure, with a target to complete the projects within an ambitious time frame.
The upcoming U.S.$2.6bn Mumbai Trans Harbour Link (MTHL) is a 22-km, six-lane sea bridge connecting Mumbai to its satellite city, Navi Mumbai. This project will link a residential market costing U.S.$443 per sq ft to another at U.S.$52 per sq ft. Similarly, the upcoming 36 km Coastal Road, running along the city’s coastline, will be a first of its kind controlled access highway providing high speed connectivity between the north–south corridors of the city. The residential price gradient along the Coastal Road is U.S.$192 per sq ft to U.S.$1,107 per sq ft. Both projects are scheduled to be completed by 2019.
In the case of the metro rail network, the city has seen the implementation of a single, 11.40-km east–west corridor, which took around seven years to build. By contrast, two north–south corridors, spanning a 35-km route, have been envisaged with a target completion date of 2019. The residential price gradient along this metro corridor ranges from U.S.$177 per sq ft to U.S.$266 per sq ft. Implementing these beacon projects on time would cover some lost ground, paving the way for Mumbai’s return to the numero uno position.