Mumbai's Water Crisis Threatens Construction Timelines and Home Deliveries

Amid unprecedented heat, delayed rains, and water levels at dams being at historic lows, the Brihanmumbai Municipal Corporation (BMC) has imposed significant restrictions on water supply. Real estate analysts warn that homes scheduled to be delivered this year may face delays, as construction sites are expected to be significantly impacted by the civic body's rationing of water.

The most significant impact will be on crucial functions in the building process such as plastering and labor, as BMC-supplied water is used by on-site workmen at construction projects. The need to secure alternative sources can affect the productivity of the workforce, experts say.

"The restrictions will inevitably have implications for the real estate sector. Construction activities such as concreting, curing, plastering, and finishing works are dependent on a reliable water supply. Any prolonged disruption could impact project schedules, increase construction costs, affect labor productivity, and delay the delivery of homes and infrastructure projects," said Kamlesh Thakur, president of NAREDCO Maharashtra and co-founder and managing director of Srishti Group.

The BMC has imposed a 10 percent water cut within its 437 square km jurisdiction since May 15, and with effect from June 17, it has also suspended water supplies to construction sites and stopped issuances of fresh connections to such sites. The country's richest civic body has blamed the El Nino phenomenon for the declining water levels in seven dams that primarily supply water to the city, with a weaker monsoon expected this year. Mumbai requires around 4,664 million liters of water a day (MLD), but currently receives around 4,100 MLD from its primary sources.

Additionally, industrial, commercial, and sports facilities face a 20 percent cut in supplies, and supplies to all swimming pools have been suspended. While most civic bodies in the Mumbai metropolitan region (MMR) have not faced similar water cuts, residents in some parts of the metropolis have complained of low supply, including days of no supply, in areas such as the eastern parts of Navi Mumbai (under Panvel Municipal Corporation).

According to research from property consultancy Anarock, around 1.43 lakh homes are scheduled for delivery in the BMC limits this year, out of a total of 2.07 lakh units across the MMR. The new restrictions in the BMC jurisdiction can affect completions in some micro-markets.

"The direct construction disruption from BMC’s water curbs can impact various Mumbai city micro-markets - specifically the South Mumbai, BKC, Andheri, Borivali, and Mulund belts," said Prashant Thakur, executive director and head of research & advisory at Anarock Group. Thakur added that with supply chains still recovering in the wake of the Iran War, more delay in rains could force other civic bodies in the region to impose restrictions similar to those of the BMC. This could broaden the number of units affected and bring about completion misses similar to those during the COVID-19 pandemic.

"If the monsoon situation worsens and other civic bodies in MMR follow BMC’s lead - and given the continued supply chain disruptions from the West Asia conflict - the H2 2026 delivery numbers across MMR could come under meaningful pressure. It could echo the pandemic-era miss, when only 46 percent of planned completions were actually delivered," Thakur stated.

A total of 6.86 lakh housing units are under construction in the MMR, of which the BMC area has 5.15 lakh units. The large inventory of units at the delivery and construction stage is amidst an unsold inventory of more than 1.86 lakh units in MMR, out of which around 1.40 lakh units are located within the BMC area.

Developers are not fully dependent on water from the BMC, according to industry experts, with the civic body supply primarily directed towards potable water requirements for labor and staff. Many project sites include borewells dug to secure groundwater supplies. Due to the city's coastal location, a significant part of the groundwater is not potable, due to the intrusion of seawater, making it ideal for non-drinking uses, such as construction and gardening.

However, experts have warned that increasing concretization and erratic rainfall are causing the rapid depletion of groundwater levels, prompting developers to dig deeper, up to seven to eight meters in the central and western suburbs, according to experts. This has prompted developers to use recycled water from various sources, including their own project sites.

"Many developers have prepared themselves with contingency plans that include the utilization of recycled water, efficient water usage during construction, and procurement from approved and authorized sources so as to mitigate any adverse effect caused by restrictions. It is not expected that there will be a challenge in the short term," said Amit Jain, chairman and managing director of Arkade Developers.