The State of Mumbai’s best-connected suburb: Chembur

There is no location in Mumbai that has gained as much prominence as the eastern suburb of Chembur in the last 8 years. After excruciating delay, Prithviraj Chavan in 2013 finally managed to see through the completion of the Eastern Freeway. It provided easy and fast connectivity to key nodes with its ending at South Bombay. Then last year – we saw the unveiling of the BKC Connector that would provide the shortest gateway into the new commercial business district – Bandra Kurla Complex. Notwithstanding efforts by government agencies to mess it up, connectivity to other locations like Navi Mumbai and Thane is still smooth. The monorail between Chembur and Jacob Circle is not of much importance and has to be one of the worst planned infrastructure projects of all time – but for what little it is worth; it helps the locality. In short – with regards to connectivity Chembur is an animal of little comparison today in Mumbai.

It is wrong to peg Chembur as a monolith. In itself it is a location with wide divergences in prices and buyer profile. There are chaotic areas like P. Lokhande Marg that have projects priced at around INR 15k/square feet. And then there are quaint areas with good connectivity like Diamond Garden and Union Park that often quote at over INR 30k/sqft. At a personal level I opted to stay in Chembur between 2016-19 after abandoning my hunt in trafficked locations of Bandra and Khar. After a long search I finally decided on a street along Diamond Garden. It was a very calm and green location with little commercial activity except for the dozens of bank offices and ATM’s that are on the strip of land called Central Avenue Road.

There are three features to note about the Chembur real estate market

  • It is primarily a redevelopment market with smaller buildings, bungalows or slums getting converted into projects
  • Until the entry of Godrej with its RK Studios project, it is a market that had no large branded player. It is dominated by developers like Kukreja, Tridhaatu, SKG, Sabari etc. Hiranandani did a project there many years back and it is a pity for Chembur that he didn’t do more
  • Given the paucity of large land parcels – there are few projects that have a meaningful number of amenities. It does have a wide range of clubs/gymkhanas for different segments – from the efficient Club Emerald to the bustling Chembur Gymkhana to the exclusive Bombay Presidency Golf Club

I did a few channel checks and visited Chembur recently. Here are my findings

  • Prices have dropped between 10-15% at a median level. And distressed properties are available at a discount of over 20%.
  • Primary deals are also seeing aggressive pricing. Until it stretched itself too thin, Tridhaatu Developers offered superior quality at a high premium to the market. Now given the environment – it is also aggressive in its pricing
  • SRA projects are seeing attention. Ruparel executed one recently with the Orion. Spenta is executing a large SRA project Alta Vista – only time will tell if it can replicate its South Bombay record in the suburbs.


  • Most redevelopment projects that are being firmed up between societies and developers will almost certainly get renegotiated. If not renegotiated – my best wishes to the developers. For owners of buildings looking to get redeveloped – I will repeat my principle in selecting developers “RARELY is the highest bid – the best bid.”
  • During its launch Godrej RK Studios had priced itself at a comfortable 20% premium. With prices of neighbouring projects falling and RKS holding on, the premium has now widened to Oberoisque levels of 30%-35%. I mean no offense to Godrej, but there is no developer except Oberoi and Hiranandani who can garner demand at that level of premium consistently. (And even Oberoi will be tested in two of his under-construction projects)

View on the market

  • It is now an overwhelming consensus call that real estate prices in Mumbai are unlikely to rise. Even most developers have stopped spinning that story. I don’t disagree. But here is my view. With the fate and pace of the Mumbai Metro completion now uncertain – Chembur will retain its appeal due to its connectivity to key locations. Hence whenever the downcycle and COVID-19 does stabilize – markets like Chembur will recover earlier than most others. It will be a gainer for the worst reason in decadent cities – terrible infrastructure and poor connectivity for the other localities.

Does Mumbai have enough people to buy its expensive apartments?

Why Mumbai real estate is in a crisis? 

  • Average cost of a new apartment: INR 1.5 crore to INR 2 crore
  • Downpayment of 30% by the home buyer
  • Home loan of atleast INR 1 crore
  • EMI of approximately INR 75k

How many households can afford paying an EMI of INR 75k?

  • ~ 15,000 households pay rent between INR 50,000/month – INR 100,000 month
  • ~ 20,000 households pay rent in excess of INR 50,000/month. These households can stretch themselves and instead  purchase an apartment
  • ~ 60% of rental agreements involve a rent of less than INR 25,000/month
  • Leakages exist in rental data: Many do rental agreements for multiple years, few don’t even do agreements,  some pay a component in cash etc
  • Assuming these leakages, yet number that can afford a home will not exceed 50,000 households
  • First-home buyer demand impacting replacement and upgrade demand
  • Trend moving towards ready and resale apartment
  • Unsold primary inventory of over 100,000 units

Is it a surprise that Mumbai real estate is in a structural crisis?


Monthly Rent < 25k 25k – 50k 50k – 100k > 100k
2017 81,127 43,284 10,361 3,682
2018 1,08,256 51,706 11,935 4,254
2019 1,13,569 61,895 15,749 4,872

Source: CRE Matrix

The 4,389 luxury apartments in Central Mumbai that need to be sold

No other micro-market in India has as much supply of luxury real estate as the belt of Central Mumbai. 12 projects alone have supply and upcoming supply of 8,796 units. Only 4,407 units have been booked according to data by RERA. The unsold 4,389 units have an inventory of 7.18 million square feet. Prices in that market have  been on a downward slide but at an average price of INR 40,000/sqft, that means an inventory of almost INR 30,000 crore needs to be sold. It won’t be easy. Excess supply and  congestion have created a mismatch that will not be plugged in a hurry. Moreover there are additional new projects scheduled for commencement in that belt. Prominent among them is an upcoming slum rehabilitation project by Godrej Properties.

Details of 8 key projects in Central Mumbai

Project Name Total units Unsold units Unsold sqft
Lodha Park 2,581 747 10,04,818
Piramal Mahalaxmi 1,228 817 9,05,895
Monte South 648 373 5,06,134
Rustomjee Crown 708 420 7,19,153
Piramal Aranya 1,077 713 7,68,662
Omkar 1973 136 71 2,42,874
Raheja Imperia 263 131 2,10,067
Raheja Artesia 189 121 3,91,459

Source: RERA, BHKVoice