Mumbai’s real estate landscape is undergoing a dramatic transformation, with "one in every three homes now being sold from a redevelopment project", according to financial advisor Akshat Shrivastava. But while these projects bring in new, taller structures, they also pose significant infrastructure challenges and drive up property prices.
Redevelopment in Mumbai follows a simple pattern: "old buildings are demolished, and new, taller structures replace them". This not only increases the supply of homes but also puts additional strain on the city’s already burdened infrastructure.
Mumbai is running out of vacant land, making redevelopment the primary way to accommodate the city’s growing housing needs. Older, dilapidated buildings are being demolished and replaced with high-rises. However, roads, drainage, and public transport struggle to keep up.
“If the city can’t handle critical infra issues like water, garbage collection, traffic, etc., new taller buildings will bring in more infra pressure,” Shrivastava pointed in a tweet Sunday.
Despite the increase in housing supply, prices are "not dropping" as one might expect in a traditional supply-demand scenario. Instead, "units in redeveloped projects are released in phases" and sold at significantly higher rates than older properties.
“Ideally, with new developments and more supply of homes, the prices should fall. But real estate does not work like that,” Shrivastava explained.
Properties in these projects often command a premium—"as much as 1.5 times higher than older homes", making housing less affordable. Despite the massive redevelopment projects, Mumbai remains one of the most expensive and unaffordable cities in India. The average home prices for a decent apartment is upwards of Rs 2 crore.
For buyers, this means "paying more for homes that will eventually face worsening infrastructure issues". While redevelopment revitalises aging neighborhoods, the pressure on roads, water supply, and public services continues to grow unchecked.
“People end up buying more expensive homes, which— in the long term— will face higher infra challenges and poorer quality of life,” Shrivastava concluded.