Mumbai's Real Estate Market Navigates Monsoon Challenges and Post-Pandemic Trends
The Mumbai real estate sector has felt the impact of the persistent monsoon rains and subsequent waterlogging. Traditionally, the period between July and August witnesses a dip in walk-ins and transactions. This seasonal slowdown is punctuated by the festive period of Ganesh Chaturthi, which usually sparks renewed activity in the market.
“Compared to other quarters of the year, housing sales typically decline during the monsoon season (July-September). This has less to do with a real decline in demand and more to do with potential homeowners’ incapacity to visit possible properties during rainy seasons, which significantly impair Mumbai’s mobility” said Rajkumar Singh, Head of Residential Services (West), ANAROCK Group, a real estate consulting firm.
This traditional lull is further influenced by the preference of many homebuyers to make purchases during the festive season between October and December, considered an auspicious period. ANAROCK Group's Rajkumar Singh highlighted this trend, referencing the lower sales figures observed in the third quarter (July-September) of 2019 compared to other quarters.
Sales Trends and Post-Pandemic Recovery
Historical data reveals a clear pattern. In 2019, the Mumbai Metropolitan Region (MMR) saw sales of 17,180 units in Q3, considerably less than the approximately 24,000, 21,630, and 18,320 units sold in Q1, Q2, and Q4, respectively. The post-COVID-19 period, however, tells a different story. A surge in pent-up demand revitalized the market. In 2022, Q1, Q2, Q3, and Q4 witnessed sales of 29,130, 25,785, 26,400, and 28,148 homes respectively in the MMR.
According to data from Knight Frank India, a well-known real estate consultancy, property registrations in Mumbai for 2023 followed a similar trend, with 31,836 units in Q1, 30,656 units in Q2, 31,817 units in Q3 and 32,598 units in Q4. This demonstrates that the pandemic era's pent-up demand and market uptick have defied the typical monsoon slowdown. While real estate agents observed lower transaction volumes during the July-August monsoon period, the overall market remained robust.
Impact of Waterlogging on Property Values
Experts also pinpoint waterlogging as a critical factor influencing Mumbai real estate prices. The disruption caused by waterlogging affects not only daily life but also the real estate market and rental yields. Properties located in flood-prone or waterlogged areas often experience a price reduction of 10%-20%, an aspect buyers leverage during negotiations.
“A buyer will work hard to negotiate a 5% to 20% discount on the property price if he or she is buying or renting an apartment in an area prone to waterlogging,” a property consultant from Mumbai’s suburbs who wished to remain anonymous said.
Areas like Gandhi Market in Sion, Hindmata near Dadar, Nana Chowk in Grant Road, Milan Subway in Vile Parle, and Dahisar subway are particularly susceptible to this issue, impacting property values.
Weather Advisory and Future Outlook
The India Meteorological Department (IMD) has issued a yellow alert for Mumbai, forecasting heavy rainfall until July 24th. With over 1,000 mm of rain already recorded in the past two weeks, the impact on the Mumbai market is constantly being reevaluated. This combination of seasonal trends, post-pandemic recovery, waterlogging, and ongoing weather conditions shapes the landscape of the Mumbai real estate sector.