Mumbai’s property market is showing mixed signals as overall registrations remain robust while the affordable housing segment continues to shrink, according to Gulam Zia, Senior Executive Director of Knight Frank India, a privately-owned property consultancy.

The numbers in Mumbai are holding steady—despite global headwinds and wealth effects seen in equity markets, the residential transaction figures have not shown any significant slowdown, Zia remarked.

In February, Mumbai recorded over 12,000 property sale registrations, with daily closures exceeding 430 units. Zia noted that while many analysts paint a bleak picture of the sector, “Mumbai’s numbers have been consistent for the last 2 to 2.5 years and are even inching up month on month.” However, he cautioned that the overall positive trend masks deeper issues within the market’s structure.

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The most alarming signal, according to Zia, is the decline in the affordable housing segment. “Mumbai is one market where affordable housing, which was below ₹1 crore, even below ₹50 lakh, was selling the maximum in terms of absolute numbers. The share of that segment is shrinking much faster. It is barely 25%, which used to be 29% – almost 20% shrinkage we are looking at as far as that segment is concerned,” he explained.

The contraction in affordable housing is compounded by a reduction in new launches in the segment, suggesting that both resale and supply sides are under pressure.

Adding to the complexity, rental rates in redevelopment areas have surged. “Rent increase, especially in Mumbai market, is more because of the redevelopment projects that have been launched in last year and a half or two. People who have been living there earlier would immediately scout for properties on rent for two years, three years, four years, as long as the developer takes to rebuild that complex,” Zia said, highlighting that the rental market is particularly sensitive to these structural shifts.

Beyond residential trends, Zia’s insights extend to other real estate segments. While retail properties, such as malls, appear stagnant with persistently high vacancy rates, the office sector tells a different story.

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Office space demand in India is on an upswing, he noted, referencing historic absorption rates—with over 70 million square feet of office space leased last year and continued strong performance in January and February.

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