MIDDAY EXPLAINS: What’s driving the boom in Mumbai's western suburb real estate?

Year after year, Mumbai reigns supreme in India's real estate market. The first half of 2024 marked a milestone for Mumbai's real estate, achieving the highest half-yearly sales volume since H1 2012 (with 47,259 units sold), when compared to other metro cities like Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, NCR and Pune, as reported by Knight Frank's recent study, 'India Real Estate: Residential and Office Market.'

Demand for commercial and residential properties is rising in Mumbai's western suburbs, especially in areas like Andheri, Borivali, Bandra and Peripheral western suburbs. What factors are fueling this surge? Midday spoke with realty experts who take us through the key drivers behind the growing interest in Mumbai's Western suburbs.

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Celeb investments in Western suburbs
Mumbai's western suburbs rapidly emerge as a goldmine for real estate developers. Sandeep Ahuja, CEO of BKC-based residential group Atmosphere Living, tells Midday how a key driver of this trend is the growing phenomenon of celebrity investments in areas such as Bandra, Lokhandwala and their surrounding areas.
"Spacious living is preferred by high-end buyers, with the 2,000-4,000 sq. ft. range drawing the most attention," he informs.

Celebrities are increasingly investing in residential properties, shares Ahuja, as evidenced by Dinesh Vijan's purchase of a 9,000-square-foot house in Bandra for Rs 103 crore and Amitabh Bachchan's acquisition of two apartments in Mumbai's Borivali area for Rs 7 crore. This trend continues, with Alia Bhatt's production business purchasing a 2,497-square-foot flat in Bandra for Rs 38 crore and John Abraham acquiring a 5,000-square-foot villa in Khar for Rs 70 crore.

IGR data (Govt. of Maharashtra) accounts for high-profile transactions by film stars such as Abhishek Bachchan, Ajay Devgn, Kajol, Kartik Aaryan and Sara Ali Khan, who invested a combined total of about Rs 150 crore in commercial properties in the western suburbs in 2023.

Impact on property pricing
Dhaval Ajmera, director of Ajmera Realty & Infra India Ltd, corroborates a similar trend he is noticing among film stars. "Amitabh Bachchan's newly acquired office spaces in the Signature Building off Veera Desai Road in Andheri West have shot up the land prices in the surrounding areas. Other notable personalities actively acquiring luxury properties in the western suburbs include Ranveer Singh, Hrithik Roshan, Rani Mukerji, Alia Bhatt, Disha Patani and Janhvi Kapoor," he adds.

"The influx of Bollywood A-listers into these neighbourhoods has generated a perception of exclusivity, thereby elevating demand for properties. This heightened demand is further amplified by a shortage of new luxury apartments. Ongoing redevelopment projects necessitate the demolition of older buildings, resulting in a temporary lag in the availability of new housing options. Consequently, the market is experiencing an imbalance where the number of buyers outpaces the properties available, driving property prices upwards," explains Ahuja.

He notes that the surge is more pronounced in the luxury market, where sales of flats costing more than Rs 10 crore increased by 8 percent in the first half of 2024 compared to the same period in 2023. "The luxury real estate sector in India has seen a huge surge, with sales of houses valued at Rs 50 crore or more increasing by 55 percent in 2023. Ranveer Singh recently sold two properties in Goregaon for Rs 15.25 crore, confirming the celebrity investing trend."

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Why are western suburbs attractive?

Knight Frank's report makes two observations:
• This shift towards the West is driven by a combination of factors, including a favourable economic climate, rising disposable income, a growing preference for larger homes and a sense of urgency among buyers to invest in property before prices rise further
• Improved infrastructure and connectivity in western suburbs are increasingly attractive to homebuyers seeking a better quality of life at a lower cost.

Ajmera states that the western suburbs of Mumbai are particularly attractive to celebrities and high-profile buyers due to their blend of urban conveniences and scenic coastal surroundings. The region offers excellent connectivity, upscale residential options, top-tier educational institutions and a vibrant social scene, making it a preferred choice for those seeking a luxurious yet accessible lifestyle.

Projects like the Jogeshwari Vikhroli Link Road (JVLR) and the upcoming Goregaon Mulund Link Road (GMLR) are set to further enhance accessibility, reducing travel times and bolstering connectivity across the city.

The presence of green spaces such as Sanjay Gandhi National Park and Aarey Milk Colony adds to its allure, providing a connection with nature amid a bustling metropolis. Moreover, as the Western Suburbs evolve into thriving commercial hubs complementing nearby districts like Bandra Kurla Complex (BKC) and Lower Parel, they attract not only residents but also commercial investments.

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The shift in customer preferences for larger units has created a clear opportunity for developers. But how much does it translate for a common man is left to be seen? Over-congestion, round-the-year construction and infrastructural strain have made Mumbai a challenging city to reside in. Traffic jams and noise pollution are daily hurdles with basic amenities often falling short of the burgeoning population's needs.

Needless to say, the focus is on targeting high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs). Ahuja opines that developers need to switch gears on redevelopment projects and produce a new supply of luxury flats offering distinguished amenities and security elements to increase the appeal of these developments.

"Strategic positioning is crucial for maximising the potential of these developments. Areas like Worli, which continues to be the most preferred location for luxury buyers, provide a strong foundation for development. Additionally, up-and-coming areas such as Santacruz, Goregaon East, Lokhandavala, Andheri, Malad, Borivali, Kandivali etc here too that are witnessing a surge in luxury property sales, present exciting opportunities," he adds.

By aligning with the celebrity effect, addressing the limited supply and catering to buyer preferences for spacious living in prime locations, developers can unlock the immense potential of Mumbai's western suburbs and establish a strong foothold in this thriving luxury market.

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