Declining Home Ownership: Why Fewer People Are Buying Homes in Mumbai
The dream of owning a home is fading in Mumbai, with a significant drop in sales and a shift towards renting. Experts weigh in on the reasons behind this trend.
Real EstateMumbaiHome OwnershipRentingEconomic RecessionReal Estate MumbaiJul 09, 2025
There has been a 25 percent decline in sales when compared to the number of houses sold in April-June last year. One of the main reasons for this decline is the concern that the international conflict situation will lead to an economic recession. However, experts in the field say that this is not the only problem.
Another observation is that people are hesitant to spend their entire savings on a house and pay EMIs throughout their lives. The real estate expenses in cities like Mumbai are significantly higher than in cities in Kerala. Those in the real estate sector expect that sales will increase following the Reserve Bank of India's reduction in the repo rate. Meanwhile, the number of people renting buildings is increasing significantly in Mumbai.
Rental rates in Mumbai have surged with the opening of Metro 3. Rents for residential complexes and office spaces have increased by up to 20 percent. The increase in rents is close to 30 percent compared to the figures from the last three years. It is estimated that this rate hike, which has started in Mumbai, will gradually spread to other metro cities.
The shift from buying to renting is also influenced by the changing lifestyle preferences of the younger generation. Many young professionals prefer the flexibility and lower financial burden of renting. This trend is expected to continue as economic uncertainties persist and the cost of living in major cities continues to rise.
Frequently Asked Questions
What is the main reason for the decline in home sales in Mumbai?
The main reason for the decline in home sales in Mumbai is the concern that the international conflict situation will lead to an economic recession. Additionally, people are hesitant to spend their entire savings on a house and pay EMIs throughout their lives.
How much have rental rates increased in Mumbai?
Rental rates in Mumbai have increased by up to 20 percent, with the overall increase being close to 30 percent compared to the figures from the last three years.
What is the impact of the Reserve Bank of India's reduction in the repo rate on the real estate market?
The Reserve Bank of India's reduction in the repo rate is expected to boost sales in the real estate sector by making loans more affordable and attractive for potential buyers.
Why are more people in Mumbai choosing to rent rather than buy homes?
More people in Mumbai are choosing to rent due to the flexibility and lower financial burden it offers, especially in the context of high real estate expenses and economic uncertainties.
How does the cost of living in Mumbai compare to other cities in India, such as Kerala?
The cost of living in Mumbai, particularly in terms of real estate expenses, is significantly higher compared to cities in Kerala. This disparity influences people's decisions to rent or buy homes.
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