Property Developers in Mumbai Focusing on Smaller Apartments

Smaller homes are being considered by many property buyers in Mumbai. This is because 3 and 4BHK properties in Mumbai have become unaffordable for many. Even a 2BHK apartment in some posh areas of Mumbai is out of the reach of middle-income buyers.

Considering the growing demand for affordable units, many property developers in Mumbai are focusing on construction of smaller apartments. They are reducing the average size of apartments for reducing per unit cost.

According to the industry experts, developers are coming up with new offerings in order to attract fresh customers to their projects. They are taking advantage of the demand in the affordable segment, offering 1BHK units to cater to middle-income buyers or investors. As per a report published by JLL India, in the last five years, the average size of an apartment in Mumbai has seen a decrease of 26.4%.

The demand for 1BHK homes have shot up also because maintaining a 3 or 4BHK apartment gets as expensive as buying it. As per a PropTiger report, smaller, 1BHK units accounted for approximately 22% of the total residential property sales in FY16. It was in cities like Mumbai, Pune and Bengaluru where demand for such units was mostly concentrated.

Another important factor due to which developers are focusing on building smaller units are- new incentives. The government has announced new incentives to developers as well as home buyers. There are service tax exemptions on affordable homes of up to 60 square meters constructed by state or central government, including private public partnership.

A significant number of new residential property in Mumbai belongs to the smaller, more affordable segment. If you have been planning to buy a home in Mumbai or to make an investment on a budget, you can look for a small, affordable option.

Are there Buyers for New Residential Property in Mumbai

According to Mumbai real estate report, developers are launching new projects in the city; however, buyers are delaying the purchase of new residential property in Mumbai due to skyrocketing rates.

Some property portals said in a report that an inventory pile-up of 46 months is being seen in the MMR (Mumbai Metropolitan Area) because customers continue to delay their buying decisions. The rates have shot up in certain areas, especially due to the initiation of certain infrastructure projects by the government, such as the clearance of Navi Mumbai Airport and the Coastal Road Project from Nariman Point to Kandivali.

As per reports, Mumbai will be developed as an animation industry hub by the Maharashtra government, which is expected to drive the demand for residential as well as commercial properties in the city. An additional 200% FSI (Floor Space Index) will be provided for IT parks which will bring down the rental rates for commercial properties in Mumbai.

Currently, the top property investment destinations in the city are Kalyan, Panvel, Ulwe, Sanpada, Kamothe, Kharghar, Mira Road, Nalasopara, Dombivli. Demand for residential real estate has grown in Panvel due to the approval of an elevated railways line from CST to Panvel. The six lane road is expected to reduce the time it takes to commute from Panvel to CST. Kalyan has also emerged as a sought-after destination for realty investment. Property rates in this region went up by 12% in the last two years.

Many buyers prefer buying a house in Mumbai that is under construction phase. This is because an under construction property is available at a low rate compared to a ready-to-possess property. As per the property portal survey, 76% home buyers in Panvel prefer to buy an under construction property.