Mumbai Real Estate: Oversupply in Pockets, but Brand Strength Drives Sales

Mumbai-based real estate developer Lodha Developers' CEO and MD, Abhishek Lodha, has said that while certain pockets of Mumbai are seeing heavy redevelopment, leading to oversupply, the overall sales performance and buyer interest remain robust. This is primarily due to the strength of the Lodha brand and its ability to deliver high-quality projects on time.

We believe that while there are pockets of oversupply in Mumbai, the demand for the kind of product that we do and the lifestyle standards that we offer is really strong, Lodha said. On the demand side, we see footfalls and conversions remaining steady through the course of the last few quarters and in line with what we would have expected at the start of the year. On the reasoning for it, because one hears about the fact that there is, in pockets of Mumbai, lots of redevelopment happening and therefore, the fact that oversupply could be happening in pockets, he added during a recent earnings call.

I think it really is underlining the fact that our sales performance as well as these walk-ins and conversions are all driven by the strength of the brand and the execution capability to deliver good quality product on time, he said. He expects the market to continue consolidating, with top-quality developments and leading brands emerging as the winners. And we expect that this consolidation in the marketplace of the better-quality product and the best brands winning out is likely to continue, he told investors during the Q3FY26 call.

Responding to a question on weakening sales volumes at the industry level, Abhishek Lodha said while he had not studied the exact causes of the decline, he had observed two key trends. Firstly, the market is increasingly consolidating around well-established developers, as buyers seek the assurance of high-quality products from trusted brands. Secondly, the entry-level affordable housing segment, homes priced below ₹75 lakh, has seen a decline in both supply and sales. This segment, which once drove volumes though not overall value, has moderated over the past two to three years.

Lodha noted that since his company has consciously moved away from this segment, it has not impacted their performance, but the broader industry has seen a moderation in volumes even as overall transaction values continue to rise. One very clearly is that the market is moving towards the best placed players, because consumers who are buying want the assurance of getting a high quality product and from the best brands. I think the other side is that at the very bottom end of the market, homes below ₹75 lakhs, I think there has been a decline in both supply as well as in sales in that sort of entry-level affordable housing segment, Lodha said.

That segment used to be a big driver of volumes, not of value, which is the reason why you're seeing that value is continuing to move up, but volumes have moderated at an industry level. Because we have consciously sort of moved away from that segment over the last 2, 3 years, we haven't seen the impact of that, but there is definitely moderation in that segment, he added.

Lodha Developers on January 28, reported a 1 per cent increase in its consolidated net profit to ₹956.9 crore in the third quarter of this fiscal year. Its net profit stood at ₹944.4 crore in the year-ago period. The company's total income rose to ₹4,775.4 crore in the October-December period of 2025-26 fiscal from ₹4,146.6 crore in the corresponding period of the preceding year.

Areas like Borivali, Andheri, Bandra, Malad, Ghatkopar, and Mulund have the highest number of redevelopment projects, according to data from Knight Frank India, a real estate consultancy. According to a report by PropTiger, while housing sales across the top eight cities fell 12% to 3,86,365 units in 2025 from 4,36,992 units in 2024, the three major southern cities, Bengaluru, Hyderabad and Chennai, together recorded a 15% rise in sales last year to over 1.33 lakh units, driven by improved supply and robust demand. However, housing sales in the Mumbai region fell 26 per cent to 1,05,595 units from 1,43,487 units.