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Mumbai's ever-evolving skyline mirrors its unyielding ambition, yet behind the glitz lies a real estate sector grappling with financial unpredictability, policy instability, and bureaucratic hurdles. Despite contributing significantly to India's GDP, developers face higher borrowing rates, fluctuating premiums, and prolonged approval processes. Experts have urged the formal recognition of real estate as an industry, alongside regulatory stability, transparent approvals, and full digitisation to ensure investor confidence and market reliability in the long run.
Mumbai's skyline reflects relentless ambition-from the gleaming towers of Worli to bustling housing clusters in Dombivli and the thriving corporate corridors of BKC. Yet beneath this progress lies an industry burdened by uncertainty, affecting developers, investors, and homebuyers alike. Advertisement
Although the real estate sector contributes over seven percent to India's GDP and sustains millions of livelihoods, it continues to lack the recognition and predictability enjoyed by other industries. Developers undertaking large-scale office projects in BKC reportedly face lending rates two to three percent higher than industrial borrowers of similar scale. With limited access to structured insurance, long-term bonds, and risk mitigation mechanisms, the need to classify real estate as a formal industry remains crucial for stable financing and global competitiveness.
Financial unpredictability extends beyond lending. A premium residential project in Andheri, launched at INR 18,000 per square metre in 2021, was later sold at INR 24,000 within two years, despite being RERA-registered, according to public reports. Such price swings disrupt project budgets and erode buyer confidence. Proposals to freeze premiums for RERA-registered developments could ensure financial consistency and restore consumer trust.
Frequent policy changes have further complicated long-term projects. Major mixed-use and redevelopment schemes typically span eight to twelve years, but repeated revisions to FSI, TDR, and development charges have led to redesigns and renegotiations. Between 2018 and 2023, Mumbai experienced four significant regulatory changes, adding delays and financial strain. A long-term stability framework, similar to Singapore's Urban Redevelopment Authority or Dubai's single-window approval model, could safeguard ongoing projects from abrupt policy shifts.
Approval delays also remain a pressing concern. Despite partial digitisation, developers continue to face months-long waits for layout approvals, IODs, and commencement certificates. A mid-sized Malad project, as publicly reported, was delayed by over eight months for an IOD, resulting in idle finance costs exceeding INR 10 crore. Linking rebates or incentives to timely approvals could promote accountability and efficiency across departments.
The persistent issue of informal verbal instructions further adds to the chaos. Developers often encounter inconsistent guidance that disrupts planning and compliance. In contrast, Dubai's single-window RERA model provides real-time assistance through digital kiosks, ensuring transparency and timely execution. Logging all departmental instructions digitally, along with timestamps, could help Mumbai emulate this clarity.
Moreover, while agencies like MCGM and MHADA have partially digitised approval systems, physical document submissions continue to hinder progress. Developers involved in SRA projects across Bandra and Khar reportedly had to refile hundreds of pages due to inconsistent departmental references. Establishing a fully integrated digital platform that connects fire safety, environment, and occupancy approvals could streamline the process, minimise manual intervention, and enhance accountability.
Recognising real estate as a formal industry, stabilising project premiums, ensuring long-term policy consistency, and digitising all approval processes are essential to restore trust and efficiency. When governance becomes predictable and transparent, developers gain confidence, investors find security, and homebuyers are better protected-allowing Mumbai's growth story to continue with greater stability and fairness.
Disclaimer:
The views, opinions, and information expressed in this article are solely those of the author and do not necessarily reflect the views of Prop News Time. The content has not been independently verified or endorsed by Prop News Time. Readers are advised to exercise their own discretion and seek professional advice if required.
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