Affordable housing is the single-largest segment to witness positive market sentiment in Mumbai and MMR.
When it comes to buying a house, all that always matters the most is the location. However, in metropolitan like Mumbai, what really matters is the size of the house, largely because it has a direct correlation with the price-point. Principally, housing in Mumbai city, suburbs and across the Mumbai Metropolitan Region (MMR) is categorized into two segments, ‘high-end’ and ‘budget’. In both segments, the defining factor is the price-point and as most of the Mumbai’s population comprises working population, the demand for low-budget homes have ruled the roost.
Besides as, Indian real estate is going through a paradigm shift that began with demonetisation, the legislation on Benami properties, Goods and Services Tax (GST) and now, the implementation of RERA the focus of homebuyers has shifted to what is defined as ‘Affordable Housing’- which very simply translates into compact 1 BHK flats and Studio Apartments. According to a recent research quoted in media reports reflects the recent movement in the housing market across Mumbai and the MMR largely driven by bookings and sales in this segment.
Given this, new projects offering compact 1 BHK flats and Studio Apartments are coming up in real estate markets like Thane and Panvel, where projects are being designed in accordance with the parameters set by the Central government for affordable Housing.
It is not just mass housing at cheap rates that will work; there are specific reasons why only some locations are witnessing the largest chunk of such new project launches. The most important is enhanced connectivity, which will follow as a result of on-going infrastructure development. This will change the centre-point of Mumbai’s real estate; effectively taking it through the MMR. So, the buzz-word is ‘enhanced connectivity’, through options including the Sewree-Nhava trans-harbour link, the ferry service with Ro-Ro facility that will link South Mumbai with Navi Mumbai and Alibaug; the coastal road in Mumbai and suburbs being among them. The Alibaug – Virar Multi-modal corridor, enhanced passenger services between Mumbai CST and Panvel as also allowing passenger traffic on the Panvel – Karjat section are among the railway-based enhancements. The new international airport in Navi Mumbai as also the other projects for Mumbai and its peripheral areas will, in the near future, make these locations advantageous to affordable home seekers. So, enhanced connectivity will drive home seekers to opt for homes in locations like Thane and Panvel, given how easy it will become accessing work locations or job centers.
From compact 1 BHK flats to Studio Apartments, Mumbai’s housing will grow along the Affordable Housing track; in locations like Thane and Panvel, the sizes will be a bit bigger – 60 square meters carpet area, as opposed to 30 square meters carpet area within Mumbai. And there’s a reason why: the Union Finance Minister in his Budget speech mentioned Affordable Housing and declared benefits for the same; the Indian Government went on to define Affordable as Housing that comprised 30 square meters carpet area in the four Metro Cities including Mumbai; and 60 square meters carpet area in the rest of the country. So, if you were to look at the advantages, benefits and subvention/ subsidy aspects, an Affordable House in Mumbai’s suburb of Mulund was one that was 30 square meters carpet area, in the next railway station neighboring Mulund-Thane – it would comprise 60 square meters carpet area. So, it will be the home seeker’s choice as regards ‘affordable homes’. And yet, this will spur construction and gradually, there will be a new centre-point as regards Mumbai’s residential realty.
Given this shift that will occur vis-à-vis the centre-point for Mumbai’s residential real estate, we will also witness new commercial real estate growth across Mumbai and the MMR, be it retail, academic, medical care as also, work spaces. Growth in residential real estate will boost commercial real estate. In Thane, we have witnessed India’s largest IT work space deal through the TCS project, one which promises to make Thane among the most attractive locations for corporate entities across Mumbai to centralize far-flung office spaces and relocate. For those corporate entities looking at growth a couple of years down the line, new developing areas like Panvel are ideal options. So, Mumbai and the MMR will witness new locations which will grow in terms of work spaces, which in turn will also push demand for residential spaces. So, we should in witness in coming days a scenario where some micro-markets will witness an affordable homes-driven residential realty growth, in turn impacting commercial real estate growth; while in other locations, enhanced work-spaces will turn fuel higher demand for affordable residential real estate.
Recent research quoted in media reports mentions good sales being observed in the micro markets especially in the affordable segment. The industry is witnessing high number of enquiries and these will definitely result in leads becoming closures soon. Affordable Housing is a segment where sales are gradually picking up. Post the slow-sown in real estate sales after demonetization, home seekers across Mumbai and the MMR have started taking positive decisions, especially as regards affordable homes. The Government has taken up initiatives for speedier transmission of RBI rate cuts to home buyers, the rate cuts being announced by banks and HFCs will enhance the positive sentiment-and we should see affordable housing picking up through not just 2017, but also in upcoming years, bringing back positive sentiment for real estate in Mumbai and the MMR.
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