Impact of Infrastructure Projects on Property Prices

HISTORY

Over the last 15 years (2009-2024), the Goregaon East micro-market, where Oberoi Elysian is situated, has undergone a significant transformation, evolving from a largely residential and semi-commercial zone into a highly sought-after premium residential and business hub. In the early part of this period (2009-2013), property values saw steady appreciation, driven by improving connectivity via the Western Express Highway (WEH) and the growing commercial footprint of nearby NESCO IT Park and other business centers. Mid-luxury and luxury segments began to gain traction as professionals sought quality housing closer to their workplaces. The period between 2014-2016 witnessed strong growth, partly fueled by the announcement and subsequent progress of infrastructure projects like the Mumbai Metro Line 7 (WEH-Dahisar E), which significantly enhanced future connectivity prospects. This led to a re-rating of Goregaon East as a premium address. While demonetization (2016) and RERA implementation (2017) introduced a phase of market consolidation and temporary slowdown, established developers with strong financial backing and quality projects, like Oberoi Realty, continued to command premium and saw relatively stable demand. The latter half of the decade (2018-2020) saw sustained, albeit moderate, appreciation as infrastructure projects neared completion. The COVID-19 pandemic (2020-2021) initially caused a dip in sentiment, but the subsequent desire for larger homes, better amenities, and ready-to-move-in or near-completion luxury projects led to a strong rebound, particularly in the premium segment. From 2022 onwards, Goregaon East has experienced robust appreciation, fueled by the operational Metro Line 7, enhanced social infrastructure, and the general upswing in Mumbai's real estate market. Projects from reputable developers in this locality have typically outperformed the broader market, with average appreciation for luxury 3BHK/4BHK properties in prime pockets likely ranging from 8-12% annually over this 15-year period, factoring in market cycles and considering the substantial base effect from a decade and a half ago. Oberoi Elysian, as a high-end offering from a marquee developer, would have benefited immensely from this market maturation and premiumization trend.

FUTURE PROSPECTS

The future prospects for property appreciation in Goregaon East, specifically for a premium project like Oberoi Elysian, over the next 5 years (2025-2030) are highly positive, underpinned by several strong growth factors, while acknowledging certain risks.

Growth Factors:

1. Unmatched Connectivity: The operational Metro Line 7 has already significantly reduced commute times, and its continued integration with the wider Metro network will further solidify Goregaon East's position as a well-connected hub. The upcoming Goregaon-Mulund Link Road (GMLR) is a game-changer, promising seamless East-West connectivity, which will enhance accessibility to Thane and Navi Mumbai, unlocking new demand drivers.

2. Commercial Hub Proximity: Goregaon East remains strategically located amidst major commercial centers like NESCO IT Park, Bandra-Kurla Complex (BKC) (via WEH and Metro), and Film City. The continued expansion of these business districts ensures a steady influx of high-net-worth individuals seeking premium residences nearby.

3. Developed Social Infrastructure: The locality boasts a mature ecosystem of international schools, multi-specialty hospitals, high-street retail, and entertainment options. This established social infrastructure enhances the liveability quotient, attracting families and professionals.

4. Developer Reputation & Project Quality: Oberoi Realty's brand equity and commitment to quality, as demonstrated by Oberoi Elysian, ensure a strong resale value and premium pricing. Such projects often act as benchmarks, appreciating faster than the average market.

5. Limited Premium Inventory: While new projects emerge, truly large-scale, integrated luxury developments by established players in prime locations are becoming rarer. This scarcity will drive up the value of existing high-quality assets like Oberoi Elysian.
   Risk Factors:

6. Interest Rate Fluctuations: Any significant upward movement in home loan interest rates could impact buyer affordability and temper demand in the luxury segment.

7. Economic Headwinds: A major global or domestic economic slowdown could affect job security and investor sentiment, leading to a cautious approach towards large real estate investments.

8. Oversupply in specific segments: While less likely for ultra-luxury projects by top developers, an oversupply of generic luxury apartments in the broader Mumbai market could create competitive pricing pressures.
   Forecast: Considering the robust infrastructure pipeline, sustained commercial growth, established social amenities, and the premium nature of Oberoi Elysian, a steady appreciation in capital values is projected. The luxury segment in Mumbai continues to witness strong demand from end-users and long-term investors. We forecast an average annual appreciation of 7-10% for Oberoi Elysian over the next five years (2025-2030), with potential for higher gains if the GMLR completion significantly enhances demand and if the broader economic conditions remain favorable. The project's premium positioning and the developer's brand will likely insulate it from minor market fluctuations and ensure sustained investor confidence.