1. Introduction to Matunga East, Mumbai Real Estate Market

Matunga East holds a special place in the real estate market of Mumbai. Ethnic demographics represent the old, culture-rich Iranian population of the city. Apart from the high cultural significance of the first new development project of Matunga on the erstwhile land, it has a few things going in its favor. The area is about 15 minutes from Shivaji Park, Dadar, and the proposed Nana Sunkersett Garden. This neighborhood is home to the Matunga Central and Western Railway stations. With King’s Circle and Dadar, as well as the Expressway at a close distance, it has good connectivity to BKC, South and Central Mumbai, and the South-Ex. On the amenities front, the Sahakar Plaza is currently the most popular mall in this neighborhood. Matunga houses a sizable commercial and semi-commercial cluster, with many office tenants comprising Gujarati wholesalers from nearby Dadar market and jewelers from this community too.

Matunga is one of the earliest planned areas of Mumbai and is renowned for its low building stock. Near the old buildings, there is a non-impeding flight area lane, but this restricts real estate development to some extent while insulating this micro-market somewhat from the noise. Very few projects are developed here, with a minuscule inventory of a few more under-construction projects. Interestingly, land rates have shot up much faster than home prices. With some of the current occupiers likely to be long-term holders, it might substantially affect the capital upside for future developments over the next 2 to 3 years.

The retail property transaction activity in this area is not very active. One can also notice that some office properties feature extensively across housing ads, making this a predominantly market. The average property prices are skyrocketing across Mumbai. The average property rate in Matunga is Rs 38,067 per square foot, and the annual property price appreciation is averaging 2.5% to 3.5% over the last 5 years for completed projects. Even pre-sales offer margins of between 18% to 22% currently. For these reasons, one cannot be faulted for entering such a premium residential micro-market. This is a locality that professional designers tend to invest in.

2. How does the real estate market in Matunga East compare to other areas in

Is the Matunga East real estate market better than other areas? Our real estate market is on par with localities such as Cuffe Parade, Worli Sea Face, Nepean Sea Road, Gamdevi, Bandstand, Bandra, Marine Drive, Prithvi Theatre, Khar, Worli, Walkeshwar Road, and Breach Candy. It is substantially better in comparison with localities such as Seven Bungalows, Carter Road, Peddar Road, Colaba, Kemps Corner, S.V. Road, Bandra, Pali Hill, Prabhadevi, Lower Parel, and Wadala. In comparison to the general performance of the real estate market a decade back, we are doing as follows: How is the Matunga East market doing in terms of growth rate, investment value, micro factors such as infrastructure, connectivity, perceptive appeal, and future potential compared to other areas? How is the real estate market in Matunga East doing in terms of growth rate, competitiveness, location, prevalent capital value structure, demand for its property compared to that of other properties, preferability over other areas, and considerable appreciable price increases? Real estate looks clearly bright; however, it is not the brightest. We stand at 6.5, which means we are in the top 30%. Homebuyers are so impatient that they would just snap up anything that comes on the market. This is a significant problem in Matunga East. There is a lot of demand, but there is little give and take. The egos of home seekers are at stake, due to which very few deals happen. In general, the market is really supported by lots of inaction. Market properties would sell as soon as they are listed. Listing some bad property may only attract its owner. Is it better than other localities?

3. Trends in Residential and Commercial Real Estate in Matunga East

Residential and commercial real estate markets have been impacted due to shifts in trends away from traditional office, home, and storefront spaces. As Matunga East redevelops and repurposes historically underutilized land parcels, commercial and residential property types available for sale or lease in our neighborhood are increasingly apartments and office spaces evacuated and sold by cooperative housing societies. The per sq. ft. rental rates for commercial real estate in Matunga East increased by 3.86% annually.

Matunga Area’s 91st ranking is a 58.57% increase from our 50th ranking in 2010. Real estate data includes the five most searched localities, ranging from semi-furnished to fully furnished apartments. One BHK configuration apartments attract more searches compared to two BHK apartments. This number makes up 8.97% of the total. The property prices of mid-range apartments increased over 6% in 2021, giving rise to an increase in the Gross Rental Yield of one, two, four, and five BHK apartments in our neighborhood. Thus, showcasing a trend in a preference for larger apartments in Matunga East. While these numbers may fluctuate based on economic, demographic, and social factors, these trends can be used to predict future patterns of investments in residences and offices in Matunga East. In 2022, the dominant trend of capital appreciation and low rental yields is projected to continue.

4. What are the factors driving demand for residential properties in Matunga East?

Matunga East is a premium property destination with exclusive residences. It is home to many schools, colleges, hospitals, and temples. The locality is connected by five railway lines and roadways to different parts of North and South Mumbai, including the eastern and western suburbs. A significant number of working-class people prefer to stay in Matunga East due to its accessibility to public transportation and various other reasons. Matunga East is an old and established residential area. Various amenities such as swimming pools, educational institutes, hospitals, and so on are easily accessible.

It is a well-known fact that demand is generated from local buyers, who might sell their older house to occupy a better and newer unit at a different location, including local upgraders. Working people employed as clerks, office bearers, floor managers, inspectors, due to job nature and family education, prefer schools and colleges nearby. The locality is also visited by the elderly. The preferences may vary for each group or within the same group. In general, local demand depends on whether the local infrastructure is in vogue or not. The fourth question must be analyzed in consideration of the surrounding sub-localities as well. Both supply and demand must be analyzed in comparison. Market analysis will shed more light on this. It is necessary to present recent data on this topic. If investment is the aim, then the investor should also be concerned with projected plans for redevelopment in the surrounding areas.

5. What is the average price range for residential properties in Matunga East?

The average price of residential properties in Matunga East is of great importance to prospective residential property buyers. In 2022, on average, Matunga East properties were sold at a price of 7.72 lacs per square foot (psf). Additionally, this year’s selling price statistics represented an 8.75 percent upsurge over last year’s average selling price of 7.11 lacs psf. With all this in mind, it is advisable to explore the below current and past price trend histories in order to gain a clearer understanding of the entire price spectrum specific to Matunga East in 2022.

Price History 2022: Average Selling Price of 7.72 lacs psf 2021: 7.11 lacs psf Price Variation 100 70 0% 1 to 2 BHK While this year’s data reveals an upward pricing trend of 8.75 percent over last year, the variation in average prices is most striking when compared to 2021 prices.

The average price of a 1 BHK, in particular, was identified as the lowest available price variation on account of economic fluctuations and buyer sentiments. Such variations were found due to the demand and supply ratio of residential properties fluctuating in 2022. This resulted in a price depreciation of 0 percent from the previous year on 3 to 4 BHK residences, as well as a price appreciation of 10 percent on 1 to 2 BHK options. Major lifestyle, commercial, and business amenities, as well as the geographical and locational advantages, contribute to the exceptional price range, which is also influenced by the types of properties in question. They vary from a 1 BHK residence at 3.3 to 3.24 crores to a 2.5 to 3 BHK residence at 17 crores. Prices are also largely based on the size of the properties. The residential properties in Matunga East range in size from 440 sqft to 440 sqm.

6. What is the current status of new residential projects in Matunga East?

It’s a ray of new hope for the Chinese investors or residential buyers to plan a successful new residential project in Matunga East in Mumbai. Let us work to present to you a detailed new residential project.

At the moment, the new residential projects underway and completed are already in the developments. There are quite a few new residential projects built in recent months. Some of the popular new residential projects include Neumec Elegance, Girivan, Khodare Maharaja Shahumaharaj Ltd, Khodare Maharaja Shahumaharaj Jalsampada, and Khodare Maharaja Shahumaharaj Ltd.

Rapid broadband and new long-term residential construction in cities are considerably impacting the price and sale of property in Matunga East. The key developers of the Matunga East real estate are Serenity Apartments, Sethia Infrastructure, Neumec Group, Eversmile, Jai Mata Di Real Estate, Reliance Group, Bhoomi Group, Goenka Estate Agency, Mangal Murti Developers, Rizvi Estates, Orris Infra Group, Veekay Group, Sumantra Developers, Uma Associates, Arch Realty, Spenta Builders, Brinda Developers, Shree Raval Developers, Saket Sree, and HBS Realtors. They have come to showcase their new residential projects and are just a few minutes away. The most popular project in the city has already been introduced by a number of them. There are 4 Matunga East new residential projects currently in progress and there are also 2 Matunga East new residences that are coming up. A very desirable neighborhood with 26 residential communities is Matunga East. HomesFrame has evaluated this environment for the household appeal. So, if you are new to your neighborhood or intend to stay, you should closely analyze them.

7. What is the occupancy rate for residential properties in Matunga East?

What is the occupancy and approximate absorption of residential properties in Matunga East? How do you expect it to increase in the future? Additionally, factors like location, favorable investment opportunities, promotion of employment, and facilities in the area impact the demand for properties here. Being a cosmopolitan area with easy connectivity to most work areas, the area has seen a fairly stable absorption of properties.

Tenant preference and occupancy give us a better idea. In 2001-2004, the demand was mainly for 2-3 bedroom investment-class properties. Occupancy during this time was 97-98%, and the starting rent varied between Rs. 80,000 and 1.25 lakhs. In 2010-2014, there was an increase in the number of people from the banking and IT sectors opting for 1.5 or 2 BHKs on a rental basis. Rental rates started at Rs. 35,000 for a decent 1-bedroom rental. During March 2015, people were able to demand an increase of about 10-15% over the market rates due to the lack of rental flats. During July 2017-2022, with the interest of people being attracted towards cheaper flats, we are seeing a demand for 3 BHKs becoming less than the demand for bigger flats.

The demand for the purchase of 1.5 and 2 BHKs has increased. I am told that other than demand, property availability and rates are the most important factors to consider when analyzing real estate. Comparing the occupancy with my other market analysis, it is one of the least vacant residential properties. Overall, my view has been that Matunga is a buyer and more investor-friendly market. It relatively takes some time to buy or sell flats here. Thus, the tentative available numbers are not very high. We will respond to you after we discuss your requirements to quote the exact numbers. I hope the above helps you look at the occupancy of Matunga properties.

8. What are the major challenges facing the real estate market in Matunga East?

The real estate market in Matunga East, Mumbai, has remained stable for some time now. However, there are challenges assessing the long-term prospects of investments in the area. Some of the major regulatory hurdles include infrastructural woes and development bottlenecks. Additionally, there is limited scope for taking up large-scale infrastructure projects due to space constraints. Fluctuations in local real estate markets raise questions about the long-term safety and appreciation potential of such assets. The local municipal and ward-level policies play an important role in the dynamics of a particular region. The location has its own spatial hierarchy, some of which are due to historical reasons, while others are due to topography and water linkages. Matunga East has its hierarchical location in Mumbai city. The designation of the area as a heritage precinct has put further constraints on development in the area. What works in favor of the location is the price point compared to a location like Dadar.

The entire physical transformation that was supposed to occur in Matunga East has not really happened. This is the critical challenge that the real estate market in Matunga East faces. The real estate prospects of a region are largely driven by the push and pull of happenings in its surrounding locations. Naturally, the fundamental demand drivers that favored Matunga East could dry up in the near future. A major factor that works in its favor over and above other locations is the limited availability of good properties. Even in the existing developed precincts of Matunga East, one will see that the availability of second-hand sales stock is very low. The list of cons for the area actually starts when we talk about the difficulties related to street parking that local businesspeople face. In addition to this, the appreciation in the locale is very meager, as the infrastructure story for Dadar did not pick up.

9. How has the real estate market in Matunga East evolved over the past decade?

A decade is a long enough stretch to peruse and understand the phenomenon of the journey of the evolving real estate market in Matunga East. To be able to do so, one has to clear up the lens to keep in mind that all the changes have been so rapid, and it is really difficult to imagine the extent of all these historical transformations as one saw the times changing.

There have been several historical surges and dampenings during the journey of Matunga East; the reasons may be the economic surges that we have all seen currently taking place, digressing from the policy paralysis. It was the chilling boomerang effect of slow and sluggish policy paralysis that had choked the developers in pulling their stakes back, setting them back from launching bigger residential projects in Matunga East. As the IT and BPO sectors began to creep into other areas of Mumbai, the Matunga of today has started to see a proliferation of luxury homes.

Livestock, agriculture, industrial belt, textiles, pharmaceuticals, and now IT and BPO are all backdrops of Matunga East that one knows of today. For various reasons, mainly the business shifting, the changing trends of financiers, the changing business environment, and the developing infrastructure—transportation and announced infrastructure developments like the metro—the cost of real estate has plunged or risen less in some places where there were real estate transactions. Then, from a less rising curve to an upsurge, and then again the stabilization cycle of today during the decade has grabbed the real estate market. The possibilities of increased market attractiveness of properties in Matunga, however, led many residents of Mumbai’s old bungalows to sell them to builders and reinvest in more luxurious flats in Matunga, but the profits of such endeavors were short-lived due to the early crashes in the market that trailed the changes of yesteryears. And the only lesson that one could make out loud and clear from the fact is that an increase in the number of floors in the buildings will, in all probability, increase profit margins. Thus, it can be clearly said that the eight years of yesteryears were in favor of some and not in favor of others.

10. What impact has the pandemic had on the real estate market in Matunga East?

The housing market all across India took a big hit with the onset of the pandemic during March 2020. There was a huge supply of unsold properties – new apartments and properties constructed or under construction. Things, however, did start looking up towards the end of 2020, and this trend has continued during 2021. This situation could change over the year; hence, it all depends on when you are checking these findings.

Many people have now found that they can work remotely for their employer, which is not based in India, and hence have the freedom to work from a location that is not in very close proximity to the employer’s office. What therefore used to be one of the critical deciding factors in their choice of house – the distance from the workplace – has now reduced significantly or become irrelevant. With good internet bandwidth, they can work from different time zones and manage to balance their client meetings and any live discussions or requirements to be physically present in the office.

In terms of the demand and prices of real estate, in 2020, the supply increased; however, with not many investors coming forward to buy the houses, the pressure at the level of the supply chain affected the prices to some extent. The higher demand for properties with the flexibility to work in a remote mode has also led to an increase in the prices in these areas.

11. What are the growth prospects for the real estate market in Matunga East in the coming years?

11. What are the growth prospects for the real estate market in Matunga East in the coming years? How will the price points be affected? What are the upcoming projects in which one can invest and earn substantial returns over time?

There is no doubt that the next 2-3 years will be the recovery period for the real estate market in India. Factors such as most economic activities returning to normal and the vaccines for this virus being distributed have given confidence to investors. In the Mumbai Metropolitan Region, developers are again taking risks to start new projects as well as restart delayed projects. There will be renewed demand for both residential and commercial properties. Matunga will be the biggest beneficiary since it falls under the Central Area. The growth in the Central Area may be flat in the short term, but it is the most resilient in the long term. The heart of Mumbai city — South Mumbai, with prestigious places, is expected to see growth. The growth expectation in the next 2-3 years is feasible given the infrastructure developments taking place in the area. Property rates in the Central Area are influenced by investor sentiment since South Bombay consists mostly of leasehold properties. Their per square rates are low, but in pure rupee terms, they command a significant premium and yield a much higher return on investments. However, there is no escaping the negative impact of national policies or market sentiments.

Matunga East has a unique blend of a commercial hub and residential space. Both Chattopadhyaya and Parsi Colony, as well as the King’s Circle area, are dominated by a very affluent population with high disposable income. The working population has a very high disposable income per capita. Commercial property inquiries are increasing in theaters, and any new developments are anticipated. This is an area where people are mindset-oriented, and they own all the cinemas on rent. The number of inquiries for existing cinemas is remarkable and increasing daily. The showroom spaces that can be built and rented to multinational companies with attractive facades are in higher demand and command comparatively higher rates than residential properties. Vacancies in shop spaces have dropped post-April due to some construction activities or legal disputes. However, they may again be leased at a much higher rate. It is a very good area for investment in commercial property as well as residential properties. Many schools and colleges in this area are either looking to relocate or are being updated. The demand for smaller areas that school groups can cater to has increased over the last 4-5 years with the ban on donations.