by datta Nighut 
Mumbai Real Estate market, a cornerstone of India’s economic landscape, is navigating a complex phase in 2025. Despite concerns about oversupply and sluggish demand in certain pockets, Boman Irani, Chairman and Managing Director of Keystone Realtors (Rustomjee Group), remains optimistic about the Mumbai Metropolitan Region (MMR).
In a recent interview, Irani shared his insights on the market’s performance, the impact of infrastructure developments, and the challenges facing affordable housing. This article explores his perspective, offering a deep dive into MMR’s real estate trends and what lies ahead for developers and homebuyers.
A Resilient Market with Steady Demand
Mumbai’s real estate market has shown resilience despite a slight dip in property registrations. In February 2025, the city recorded 11,820 registrations, down from 12,055 in February 2024—a 7% decrease attributed to two fewer working days.
However, Irani argues that this dip is misleading. When extrapolated for a full month, registrations would have reached approximately 12,647, surpassing last year’s figures. Moreover, the total value of registrations surged to ₹9,918 crore in February 2025, up from ₹8,885 crore the previous year, signaling higher property values and robust demand for premium homes.
Residential properties accounted for 80% of these registrations, with larger apartments (1,000–2,000 square feet) seeing a dramatic increase in demand, rising from 8% to 13% of the market share. Conversely, smaller units (below 500 square feet) dropped from 48% to 38%, highlighting a shift toward spacious, aspirational homes in MMR’s upscale areas. Irani attributes this trend to two factors: a lack of new affordable housing supply and developers’ pivot to higher-margin, premium projects.
Infrastructure: A Catalyst for Growth
Irani is particularly enthusiastic about MMR’s infrastructure advancements, which he believes will drive real estate growth. The Navi Mumbai International Airport, set to commence operations in May 2025, is a game-changer. With its first commercial flight already landed, the airport is expected to create 50,000 direct jobs and, by Irani’s estimate, up to 300,000 indirect jobs, boosting demand for housing in peripheral areas like Navi Mumbai, Vasai, and Dombivli.
Other projects, such as the coastal road extending from Versova to Kandivali and the upcoming port developments, are enhancing connectivity across MMR. South Mumbai, long stagnant with minimal new developments, is now attracting attention.
Developers like Keystone are eyeing redevelopment projects for buildings over 50 years old, offering residents modern lifestyles and rejuvenated structures. Areas like Chembur, well-connected and increasingly popular, are also witnessing a surge in buyer interest.
Irani credits the Maharashtra government’s infrastructure push, led by Chief Minister Devendra Fadnavis, for creating “favorable winds” for development. The Western Belt, from Versova to Bandra, is emerging as a preferred location, with potential growth extending to Borivali as connectivity improves. These developments are not only opening new micro-markets but also ensuring MMR remains India’s financial powerhouse.
The Affordable Housing Conundrum
While luxury and mid-mass segments thrive, affordable housing faces significant challenges. Irani highlights a supply-side bottleneck, driven by high government premiums and the lack of Goods and Services Tax (GST) benefits for projects priced below ₹45 lakh. “If I’m paying super-heavy premiums and not getting GST advantages, developers working on a cost-plus model won’t find affordable housing viable,” he explains.
This has led many developers to exit the affordable segment, reducing supply and pushing buyers toward pricier options. Irani notes that the ₹3–7 crore price range, particularly around ₹5–5.5 crore, has become the “sweet spot” for Mumbai buyers seeking well-located homes with modern amenities, good schools, hospitals, and entertainment options. Areas like Bandra, Chembur, and the Western Belt are seeing strong demand for such properties.
To address this, Irani advocates for government support, such as reduced premiums and revised GST policies, to make affordable housing attractive for developers. Keystone has ventured into this space with a project in Dombivli, leveraging the area’s connectivity to Thane and the broader MMR metro network. Irani believes the Bombay-Dombivli-Thane triangle, bolstered by Bhiwandi’s growth as a logistics hub, will emerge as a new growth center, offering opportunities for affordable and mid-mass housing.
Supply and Demand Dynamics
Concerns about an “egregious” supply of new projects in Mumbai over the next 24 months are overblown, according to Irani. He points out that new launches are actually down, with many announced projects still in the planning or approval stages.
“Lots of tie-ups and public notices appear in the papers, but until these become reality, the market remains balanced,” he says. This suggests that fears of oversupply may be premature, particularly as demand for premium and mid-mass homes remains steady.
However, Irani acknowledges that certain pockets may face oversupply, particularly in areas with concentrated luxury developments. Developers are responding with flexible payment plans, such as buy-now-pay-later schemes, to stimulate demand. Homebuyers, in turn, have more room to negotiate, especially as developers face cash crunches and year-end financial pressures.
Cost Pressures and Industry Shifts
Rising input costs are a concern for the industry, with construction costs increasing by 5–7% annually due to inflationary pressures. However, the bigger challenge is labor availability. With workers moving to other industries, the real estate sector is the second-largest employer of category three and four labor.
To address this, developers are adopting mechanized solutions, such as pre-cast yards, to build homes faster with less reliance on manual labor. This shift could increase costs in the short term but improve efficiency over time.
Irani also calls for a reduction in premiums, particularly for commercial projects, to make Mumbai more attractive for businesses. He cites the post-COVID period when reduced premiums led to a record ₹15,000 crore in BMC collections, compared to the usual ₹5,000 crore, proving that lower premiums can boost both supply and affordability.
Beyond MMR: A Strategic Expansion
While MMR remains Keystone’s primary focus, Irani is open to exploring opportunities in nearby regions like Pune, Nagpur, and Nashik. The Mumbai-Pune belt, in particular, is attractive for second-home developments, which could transition into primary residences in 15 years as infrastructure improves. Irani sees land investments in these areas as a prudent strategy, offering high returns for investors.
Keystone’s portfolio spans affordable homes starting at ₹50 lakh to ultra-luxury assets worth ₹100 crore, allowing the company to cater to diverse market segments. This flexibility, combined with a focus on redevelopment—16 of Keystone’s 19 projects since going public in 2022 are redevelopment-focused—positions the company as a market leader in MMR.
Outlook for 2025
Irani is bullish on Keystone’s performance, targeting ₹4,000 crore in pre-sales for FY26, building on a strong FY25 where the company surpassed its ₹3,000 crore guidance. With a pipeline of projects worth ₹16,000 crore and a focus on mid-mass and aspirational segments, Keystone is well-poised for growth.
For homebuyers, the message is clear: focus on well-located properties with strong developer credentials, negotiate wisely, and consider emerging micro-markets like Dombivli and South Mumbai. For developers, balancing supply, managing costs, and advocating for policy reforms will be key to thriving in MMR’s dynamic market.
Mumbai’s real estate sector, fueled by infrastructure and demand for quality homes, is set for steady growth in 2025. As Irani aptly puts it, “MMR is a fantastically deep and wide market,” offering opportunities for those who navigate it strategically.
