Mumbai Real Estate: A 50-Year Transformation

Mumbai Real Estate: The journey of Mumbai’s real estate sector over the past five decades mirrors the transformation of the city itself—from a simple, relationship-driven market to a complex, high-stakes industry shaped by scale, finance, and rapid urbanisation.

Speaking about his decades-long experience in a conversation with Zee Business, veteran developer Vijay Wadhwa traced the evolution of the sector from the late 1960s, when he entered the business at just 17, to the present day of mega townships and multi-million square foot developments.

From small margins to massive scale

In the early years, real estate in Mumbai was a modest business. Margins were as low as Rs 7 per square foot, and transactions were driven largely by trust and personal relationships. “There was no big capital. Even small profits felt significant because we had never seen money before,” Wadhwa recalled. Over time, however, the industry expanded dramatically. Today, developers handle projects spanning millions of square feet, backed by institutional funding, complex financing structures, and large-scale planning.

The shift after liberalisation

A major turning point came in the 1990s with economic liberalisation, which opened the doors for private developers and accelerated urban growth. The city began to expand beyond its traditional core, giving rise to multiple micro-markets—from Bandra and Khar to Thane and beyond. Mumbai, once seen as a single entity, gradually fragmented into self-contained zones where residents live, work, and socialise within limited geographic areas.

From homes to financial assets

One of the most significant shifts, according to Wadhwa, is the changing perception of housing itself. Earlier, homes were built primarily for living. Today, they are often treated as financial assets, with developers and investors focusing heavily on valuation, quarterly sales, and scale. “People are chasing numbers—how much was sold, how much valuation increased—but not enough attention is being given to planning and quality,” he said.

The cost of rapid expansion

The demand for fast growth has also created its own set of problems. Delays in project completion, regulatory issues, and funding problems are some of the common problems faced by the industry. Wadhwa pointed to approval delays, policy changes, and cash flow pressures as key reasons behind stalled projects. He also noted that over-expansion—launching multiple projects simultaneously—often leads to execution challenges. Financing models like subvention schemes have raised concerns regarding the transfer of risks to the homebuyers, especially in cases where projects are delayed or developers default.

The rise of the ‘concrete jungle’

As Mumbai’s skyline has grown denser, concerns about the quality of living have intensified. Wadhwa highlighted that many modern developments prioritise visual appeal over livability. “Most people focus on elevation, but for us, elevation is a by-product. The real focus should be on healthy living,” he said. He emphasised the importance of natural light, ventilation, and air quality—factors he believes are often overlooked in the race to maximise space and profits. “If a home needs artificial lighting throughout the day, it means it has not been planned properly,” he added.

Climate and planning concerns

Going forward, environmental factors such as sea level rise and flooding are coming up as major factors in real estate planning. Wadhwa explained how real estate developers need to consider the long-term effects of climate change, especially in coastal cities such as Mumbai. The importance of scientific studies and planning in terms of elevation in large townships to reduce future risks was cited by Wadhwa.

Technology enters the sector

While the industry has traditionally relied on experience-based learning, technology is now beginning to play a larger role. There is a growing adoption of technology such as artificial intelligence within organisations, across functions such as legal, accounting, and project management. According to Wadhwa, this shift is essential to improve efficiency and adapt to the growing complexity of the business.

The road ahead: A call for balance

Despite the sector’s growth, Wadhwa stressed the need for a more balanced approach—one that prioritises quality, sustainability, and customer well-being over sheer scale. “Real estate is not just about building structures. For a buyer, it is a dream and an emotional investment. Developers have a responsibility to deliver healthy, livable homes,” he said. He also called for better urban planning, including the development of schools, hospitals, and public infrastructure alongside residential projects—particularly in emerging areas like Navi Mumbai.

A 50-year transformation

From bicycle rides in a small town to building millions of square feet in India’s financial capital, Wadhwa’s journey reflects the broader evolution of Mumbai’s real estate landscape. While Mumbai’s real estate has grown in size, scope, and scale over the past 50 years, the challenge for Mumbai, which is still growing, is how to achieve growth without sacrificing quality of life. As Wadhwa summed up, “Earn money, but also take care of people’s health—that is the real responsibility.”