New Housing Supply in Mumbai Driven by Societies

Mumbai is about to witness a comprehensive housing revolution with more than 44,277 new houses worth Rs.1,305 billion set to arise from society redevelopment schemes by 2030, says Knight Frank India's latest report.

Since 2020, 910 housing societies have entered into redevelopment agreements, releasing close to 327 acres within the area of the Municipal Corporation of Greater Mumbai (MCGM).

The Western Suburbs, led by Borivali, Andheri, and Bandra, dominate the scene, generating 73 percent of the new supply, or more than 32,000 units.

“This change is a structural shift in how Mumbai is going to develop. But it is essential for both developers and societies to arrange finances wisely and provide proper buffers." stated Shishir Baijal, Chairman & MD, Knight Frank India. 

Key highlights:

• Over 44,277 new homes worth Rs.1,305 billion are expected from society redevelopment projects in Mumbai by 2030, with 910 societies signing agreements since 2020
• The Maharashtra government is projected to earn Rs.6,500 crore from free sales, Rs.6,525 crore in GST, and Rs.7,830 crore through stamp duty over the next five years
• Redevelopment deals mostly involve small plots under 0.49 acres, with long project timelines and rising member demands posing sustainability challenges

The state government will benefit immensely Rs.6,500 crore through free sales, Rs.6,525 crore as GST, and Rs.7,830 crore through stamp duty in five years.

But the market is at a "point of inflection," with overheated prices and rising member demands threatening sustainability. More than 80 percent of redevelopment transactions are on land parcels less than 0.49 acres, with challenges in land aggregation and project duration usually 8 to 11 years.

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Gulam Zia, Knight Frank Senior ED, suggested developers keep area-sharing to a limit: "Limit it to 30 to 35 percent for markets priced below Rs.40,000 per sq. ft., and not more than 50 percent even in ultra-premium areas." With 1.6 lakh societies older than 30 years, Mumbai's redevelopment is in infancy stages but set to transform the city by 2030.