Alia Bhatt To Zaheer Khan’s House-Hunt Drives Mumbai’s Luxury-Home Boom

A tax cut, record-low lending rates and a fall in prices during the pandemic have spurred a boom in Mumbai's struggling luxury homes market.

The wealthy are purchasing high-end apartments in some of the toniest locations in the nation's most expensive city for real estate. Recent buyers, according to property portal zapkey.com, include actors Alia Bhatt, Janhvi Kapoor and Hrithik Roshan, former Indian cricketer Zaheer Khan and actor wife Sagarika Ghatge, cricketer Shreyas Iyer, and HDFC Group veteran Keki Mistry.

Total value of luxury units—each worth at least Rs 5 crore (nearly $700,000)—sold in some of the micro-markets of Mumbai surged 226.7% over a year earlier in October-December, according to data analysed by Propstack. It more than doubled in Nepean Sea Road, surged fourfold in Lower Parel, threefold in Worli and fivefold in Bandra.

The city's well-heeled started piling into the housing market after the pandemic stalled business activity, bringing down prices. They were also drawn by Maharashtra's decision to cut stamp duty nearly by half to 2-3% of the property value to aid developers already grappling with a prolonged slowdown. A fall in lending rates after the central bank pumped liquidity to cushion a contracting economy also drove demand for the real estate sector. Or as Sandeep Reddy, co-founder of Propstack, put it: the luxury market “has moved from a Test match to a T20”.

According to data collated by zapkey.com based on registration documents, the Motilal Oswal family trust bought an apartment worth Rs 101 crore on Peddar Road in December.

Hrithik Roshan in October bought a 38,000 square-feet property in Mannat Apartments along Juhu-Versova Link Road for Rs 97.5 crore. Hasit Ashwin Dani, a member of the Asian Paints Ltd. promoter group, bought a Rs 95-crore home on Carmichael Road.

Actor Amrita Puri—daughter of Aditya Puri, former chairman of HDFC Bank Ltd.—purchased a Rs 50-crore apartment in Lodha Seamont, Malabar Hill; while Mistry, HDFC Ltd. vice-chairman, purchased a flat worth Rs 41.23 crore in November at K Raheja's Raheja Artesia project in Worli.

Mistry's office said he booked the apartment in 2016 and a significant amount was paid upfront. The flat has only been registered now, it said.

Iyer confirmed over the phone that he purchased the flat. Apoorva Mehta, chief executive officer of Karan Johar's Dharma Productions, a noted Bollywood film producer, declined to comment.

BloombergQuint awaits response to queries emailed to Motilal Oswal trust, and publicists and managers for Roshan, Bhatt, Kapoor, and Puri. Khan didn't take calls or respond to text messages. Dani wasn't reachable and emailed queries to his father Ashwini Dani didn't elicit a response.

“The impact of Covid has been minimal on the rich. Their income has not been affected that much and on the other hand there have been cost benefits like price cut, stamp duty reduction, lower interest rates,” Reddy said. “This makes the environment really conducive for them to buy.”

The Lodha Group saw higher demand for its luxury and premium homes, clocking about Rs 1,000 crore worth of bookings in October-December, according to its statement. Prashant Bindal, chief sales officer, said the walk-ins at its luxury properties rose 20% over pre-Covid levels.

“There has been a distinct inclination towards ready homes. With the prevalent work-from-home culture, there is also an increasing demand for larger homes, with units having gardens and decks emerged as the best-performing category,” Bindal said in the statement, attributing the surge to lower lending rates and stump the duty cut. “We're quite optimistic for the momentum to continue in the upcoming quarter as well.”

Ashish Dhami, senior vice-president, sales and marketing (residential) at K Raheja Corp, said the developer's two luxury projects in Mumbai—Artesia at Worli and Vivarea at Mahalaxmi—feature among the top-selling projects by value in the Mumbai region. “Artesia in fact ranks among the top five.”

Transcon Developers, with luxury projects in the city's western suburbs, has seen the conversion rate—site visits to buying—double over the pre-pandemic level to 20%. Rishi Todi, director at Transcon, said the company plans to launch the second phase at one of the sites.

While developers are optimistic about growth sustaining, a recovery in the economy may eventually prompt the central bank to roll back some of the liquidity measures, including increasing benchmark rates. Moreover, Maharashtra's stamp duty cut is only valid till March 31.

That's why Reddy cautioned that it may be tough to predict if the momentum will continue.