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An Overview of the Mumbai Real Estate Market

If we talk about the Mumbai real estate market then we should know that Mumbai is one of the most profit-making real estate markets in India. Famous for its glitz and glamour, Mumbai is home to the world's most expensive real estate. For years, people not only from India but from all over the world come to this place in search of accommodation.

As the population of Mumbai grows, the demand for properties for sale in Mumbai increases. Real estate prices rise rapidly due to land shortages and high demand.

Today, Mumbai's real estate market is worth more than 810 crore. Some key facts about the market:

    • Property prices in Mumbai are among the highest among major cities in India. The average price in prime areas is more than ₹49,500 per sq. ft.

    • At any given time, there are over 500,000 units under construction in Mumbai real estate.

    • Mumbai has on average 8-10% luxury real estate housing.

    • The average apartment size has declined, with many projects focusing on compact 1BHK and 2BHK units.

Despite the ups and downs over the years, Mumbai's real estate market has remained healthy. Factors such as rising incomes, rapid urbanization, infrastructure development, and employment creation will continue to boost demand.

Why Invest in Mumbai Real Estate Market?

Due to its solid fundamentals, Mumbai has emerged as one of India's top real estate investment destinations. Here are some of the key reasons to invest in Mumbai property:

    • Strong Demand: Mumbai is India's most populous metropolis with more than 2.3 Crore residents. Additional migration into the city continues unabated, increasing demand for housing.

    • Employment hub: As the financial capital and home to major corporations, Mumbai accounts for the highest employment generation in India. This results in increased demand for housing from working professionals.

    • Lack of land: Mumbai is built on a long, narrow peninsula. In which there is minimal scope for horizontal expansion. This shortage of land further pushes real estate prices higher.

    • Good rental yields: Rental yields on residential properties in Mumbai generally vary by 3-5% depending on the location. This is higher than the yields in other metro cities.

    • Future Capital: Property prices in Mumbai have shown a compound annual growth rate of 8-12% over the last decade. Strong fundamentals indicate that prices will continue to rise.

    • Amenities: Mumbai offers high-quality urban infrastructure, connectivity, healthcare, education and entertainment. This provides better quality and needs of life.

    • Transit-oriented development: The upcoming metro rail network and infrastructure projects are set to boost the reality of suburban areas.

In short, Mumbai offers an attractive proposition for real estate investors looking for rental income and long-term capital gains. The market offers higher yield and growth compared to other asset classes.

Types of Properties in the Mumbai Real Estate Market

There are a lot of residential and commercial property options in the real estate market of Mumbai. Here are some of the major types of properties available:

Flats and Apartment

Apartments and flats make up the majority of Mumbai's residential property. Configuration options include:

    • 1 BHK apartments – one-bedroom units suitable for single people

    • 2 BHK Apartment – Best for nuclear families with two bedrooms

    • 3 BHK Apartments – Spacious units with three bedrooms suitable for joint families

    • 4 BHK and 5 BHK Units – Luxury Large Size Apartments

Independent House / Villas

Independent houses and Villas provide an intermediate private space option between flats and bungalows. They come with 2-3 floors, a small private garden and parking. A sea-facing villa can cost more than ₹100 crore. There are many independent house projects in areas like Lokhandwala and Versova of Mumbai.

Commercial Shops

High-street retail spaces are available across Mumbai suburbs. Additionally, branded retail chains prefer setting up shops in malls developed by firms like Phoenix Mills.

Office Space

There are Grade A commercial buildings in BKC and Nariman Point CBD in Mumbai. There is demand for office spaces from corporates, banks, and financial institutions. Top developers like Indiabulls, Oberoi, and Godrej develop commercial real estate.

Builder Floors

Builder floors offer more customization options and flexibility than other apartment units. Key features of Builder Floors include – more spacious room sizes, higher floor heights, customized interiors, and premium amenities like private lifts/lifts, terraces, modular kitchens, etc.

Mumbai Real Estate Investment Analysis

For property investors, Mumbai offers attractive rental income and capital appreciation prospects. Here's an analysis:

Rental Income

The rental income of Mumbai residential properties is higher than other major Indian cities. Here are some indicative yield categories according to the 2023 survey:

    • South Mumbai – 3-4%

    • Central Suburbs – 3.5-4.5%

    • Western Suburbs – 4-5%

This is due to strong demand from business travelers, the cinema industry, and rental professionals. Luxury apartments see higher yields.

Capital Appreciation

Over the last decade, residential real estate prices in Mumbai have witnessed a CAGR of 8-12% depending on the micro-market. Underlying solid demand and limited land supply will likely keep prices rising.

Some luxury apartment projects have given returns as high as 25-30% CAGR (Compound annual growth rate) in 5-7 years. However, investors should take note of short-term corrections from time to time.

Breakeven Period

At prevailing purchase prices and rental income, the breakeven period for residential real estate investment in Mumbai is generally 20-25 years.

However, significant capital appreciation allows investors to realize an earlier profit on a sale. Properties in South Mumbai and central suburbs have shorter breakeven periods.

Return on Investment

Considering rental income and capital gains, the estimated ROI on Mumbai residential real estate over a ten-year period is between 10-15% after taxes and maintenance costs.

However, ROI can vary significantly depending on project location, developer reputation, entry price, and holding period.

Future of Mumbai Real Estate 

Because of demographic trends and strong economic fundamentals, Mumbai's real estate is growing very rapidly.

Population Growth

According to the Census of India, Mumbai's population is estimated to reach 33 million by 2035. Additional migration to the city for job opportunities will further increase housing demand.

Infrastructure Projects

Mumbai offers a few great upcoming projects like the Mumbai Trans Harbor Sea Link, Mumbai-Ahmedabad Bullet Train Corridor, Coastal Road so on which will significantly improve connectivity and accessibility. This will open up new areas for real estate development.

Commercial Development

The growth of the service sector and efforts to develop Mumbai as an international financial hub are attracting corporates. The resulting increase in demand for office space will give a boost to residential realty.

Suburban Development

With higher prices in the city, areas like Thane, Navi Mumbai, and Kalyan-Dombivli in the Mumbai Metropolitan Region will see increased activity, especially in affordable and mid-segment projects.

policy support

Government initiatives such as reducing stamp duty and developing rental housing will boost real estate in the sales and rental sectors.

In short, Mumbai's real estate story has a long growth trajectory supported by demography, urbanization, infrastructure, employment generation, and supportive policies.


This concludes our comprehensive guide on investing in the Mumbai real estate market. Also, we have discussed all the aspects of Mumbai real estate in this blog.

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