By Dhaval Ajmera

In recent years, Mumbai’s real estate market has witnessed a notable shift from renting to buying homes. This transformation reflects changing demographics, evolving economic dynamics, and shifting consumer preferences, all of which are reshaping the city’s housing landscape. Post 2020, the way people perceived homeownership has evolved massively, thus redefining the approach of the masses towards owning a house rather than renting one.  

Sense of security 

Owning a home brings along with a sense of security, especially during unprecedented scenarios like the pandemic. As a result, many people who used to rent a home have made the move to invest in one. As per a report from NoBroker, 65 percent of people were contemplating buying a house in 2023 over renting. 

Changing demographics and economic landscape 

One of the key drivers behind the shift from renting to buying homes in Mumbai is the changing demographics of the city’s population. With a growing middle-class income and increasing urbanisation, more individuals and families are aspiring to own their own homes rather than rent. The desire for homeownership is fueled by factors such as stability, security, and the sense of pride associated with owning a property. Furthermore, Mumbai’s evolving economic landscape has contributed to the shift towards homeownership. Favorable government policies such as incentives for first-time homebuyers and easier access to housing finance have made purchasing property more attractive and feasible for many individuals. Additionally, the city’s robust job market and steady economic growth have bolstered confidence among prospective homebuyers, encouraging them to invest in real estate as a long-term asset. 

Also read: Mumbai’s realty market to drive India’s real estate growth – Here’s why

Rising property prices and rental rates 

Another factor driving the shift from renting to buying homes in Mumbai is the steady increase in property prices and rental rates. In recent years, the city has witnessed significant appreciation in real estate values,  making it increasingly expensive to rent a home. As a result, many renters are exploring the option of buying property as a more cost-effective and financially prudent alternative in the long run. Moreover, the availability of affordable housing schemes and government-backed initiatives aimed at promoting homeownership such as Pradhan Mantri Awas Yojana (PMAY) and Maharashtra Housing and Area Development Authority (MHADA) projects have further incentivized individuals to transition from renting to buying homes. 

Changing lifestyle preferences and aspirations 

One of the major factors that has taken shape, notably post-COVID is the changing lifestyle preferences and aspirations towards homeownership in Mumbai. As the city’s population becomes more affluent and cosmopolitan, there is a growing demand for quality housing that offers modern amenities, convenience,  and a higher standard of living. Many individuals view owning a home as a symbol of success and achievement, aligning with their aspirations for a better quality of life for themselves and their families. Moreover, the pandemic has highlighted the importance of having a secure and stable living environment,  prompting many renters to reconsider their housing choices and prioritise homeownership as a means of securing their future amidst uncertain times rather than shifting from time to time.

Also read: Registration of properties in Mumbai city rises 8 percent to 14,150 units this month: Report 

Investment potential and wealth creation 

Investment potential and wealth creation opportunities also contribute to the shift from renting to buying homes in Mumbai. Real estate has long been considered a lucrative investment avenue, offering the potential for capital appreciation, rental income, and wealth accumulation over time. With property prices in Mumbai continuing to rise steadily, many individuals view homeownership as a means of building equity and securing their financial future. Furthermore, favorable tax incentives and capital gains exemptions for homeowners, coupled with historically low interest rates on home loans, make purchasing property an attractive investment proposition for many prospective buyers. 

In addition to these factors, the impact of the pandemic has shifted buyers’ perceptions. It prompted many to recognize the importance of owning a home for security, rather than relying on renting and provided an opportunity for individuals to accumulate initial investment funds, thanks to incentives and lowered interest rates, thereby stimulating demand for home purchases. This trend was further bolstered by the availability of spacious homes, coupled with the savings accrued from reduced social activities during the pandemic. As the city continues to grow and develop, industry stakeholders have adapted to these changing dynamics and started catering to the evolving needs and aspirations of prospective homebuyers.  

Ultimately, several variables such as shifting demographics, growing real estate values, shifting lifestyle preferences, and investment potential, are responsible for the transition in Mumbai’s real estate industry from renting to purchasing.

(The author is Director, Ajmera Realty and Infra India Ltd. Views expressed are the author’s own and not necessarily those of financialexpress.com.)