Oversupply in Mumbai luxury market

Oversupply of premium houses is looming large on Mumbai’s skyline as slew of luxury homes make way into the market with the recovery of the economy.

Developers are now dreaming of making the former textile hub in Central Mumbai - Lower Parel into a super–luxury residential address for the country’s super-rich.

Lower Parel is expected to see over 10 million sq ft of residential supply in the next three to four years, according to Religare Capital Markets.

Whenever developers see demand in one area, they launch projects there. But when the projects get completed, the demand may not be there.

According to estimates, about 7,000 new luxury apartments are expected to be available in the city in within a year, for over Rs4.7-crore each.

On Tuesday, the Lodha group announced a 117-storied residential tower, World One, touted as the world’s tallest residential tower, on the defunct Shreeniwas Mills plot in Lower Parel. DLF, the country’s largest developer, is planning to launch Mumbai’s largest luxury residential project with a built-up area of 4.5 million sq ft, where it is building three towers of 90 floors each. The entire project is expected to have around 1,000 apartments in a price range of Rs5-10 crore.

Pricing will be the key in selling such apartments. While Lodha did selective marketing of its World One project among its old customers at Rs25,000 a sq ft, DLF is also expected to sell the apartments in the similar price range.