The Rise of the Western Suburbs of Mumbai

The property market of Mumbai has always been a strange animal. Its intensity and capacity has waxed and waned over the years, always being volatile but at the same time flexible and also at the times, sluggish for various reasons.

Mumbai’s Track Record
Many years ago, due to the market pressures on areas in south Mumbai, buyers of residential and commercial property began to find the suburbs of Bandra, Khar, Santa Cruz and Vile Parle as a more affordable option to the highly priced realty of south Mumbai. This caused prices in these places to sky-rocket soon making real estate in those areas as expensive as South Mumbai. Property experts draw attention to the fact that the realty prices in Mumbai, over the past decade or two, has not only doubled in most areas but in certain places increased four-fold. However, in the last two years the market has stagnated with hardly any interest being shown by buyers due to the astronomical rise in prices and the dwindling cash-flows in the market.

Changing Scenario
This led to buyers and investors taking a fresh look at real estate projects in the suburbs beyond Andheri and Jogeshwari. For people working in areas near the Bandra Kurla Complex, buying a home in those areas was out of their reach. Vikas Patil, who works in a private bank at BKC had this to say, “I searched for a flat nearby my place of work, but soon realized that it was beyond my means. I also discovered that if I moved towards Malad and Kandivali, I could afford a house in an upcoming locality. I finally settled for an under-construction flat in Malad with many amenities in the vicinity.” The many new projects coming up in these parts of the suburbs are enabling new house buyers with plenty of choice in the price band of their choosing. This is evident from the first quarterly report of Liases Foras on the property markets of Mumbai, which echoes the sentiments of the market. There is a vibrant dynamism in the market of these western suburb areas. Shveta Jain, managing director, residential properties, Cushman and Wakefield says, “Since 2015, the three markets of Malad, Kandavali and Borivalli, have witnessed steady increase in capital values. However, in the current scenario of muted demand, developers have extended provisions such as no extra floor rise charge, exemption from car-park charges etc, in the recently launched projects. Such exemptions have been witnessed in these markets, especially over three-four quarters, in order to generate a higher interest from home buyers.” It is note-worthy that in these areas of Malad, Kandavali, Borivali and even Dahisar many new launches are taking place in the budget and luxury segments, signifying the changing preferences of home buyers in Mumbai.

Enhanced Infrastructure
Experts familiar with the changes in the sentiments and dynamics of these areas point to the rapidly changing infrastructure in Mumbai which is enabling people to access areas across Mumbai with relative ease of travel. Infrastructural projects like the Bandra-Worli Sea Link, the SCRL and the JVLR, the Eastern Freeway and the Ghatkopar- Versova Mumbai Metro Rail link, with its upcoming phases, all are influencing the new home buyer’s decision. According to Hiral Sheth, director, Sheth Creators, “At present, the western suburbs are the current favourite because of them garnering tremendous attention by the buyers with investors almost flocking to the market, thus proving their consistency and stability. Due to the flawless connectivity, open spaces and availability of integrated community townships in the vicinity, the western suburbs have been topping the charts. A blend of a strategic location, a well developed infrastructure and stupendous connectivity to other parts of Mumbai, is adding on to the benefaction.” He finds support in Manju Yagnik, vice-chairperson, Nahar Group who concurs, “Today, people prefer to live in the suburbs primarily due to the affordability factor, coupled with a luxurious lifestyle, more open spaces, better ambience but most importantly, due to their close proximity to their workplaces.”

The Road Ahead
More and more commercial establishments and offices are moving to the suburbs in search of more affordable space as they expand and widen their commercial activities. As upgrading on scale in their earlier office spaces of south Mumbai and other uptown properties would not be cost-effective, it seems prudent to shift to more affordable venues. It is evident from the increased commercial activities in and around BKC and Andheri as businesses realize the affordability of commercial as well as residential properties in these areas. These factors have enhanced their reputation as business centers due to the increased infrastructural improvements of the SCLR and JVLR and Mumbai Metro connectivity. Ramesh Nair, COO and international director, JLL India says, “An increased supply in any area helps to moderate the pricing, as buyers have a larger bandwidth of projects to choose from. In such a scenario, developers must remain competitive with their pricing. In a city where affordability is constantly challenged by high-ticket sizes, an increased competition among developers works in favour of the buyers and helps keep the market lively.”

Needless to add, the house owners of these areas and localities are ecstatic with their choices as the increase in value of their property has proved them right. They look forward to increase in valuation of their properties in the days to come.