How was Mumbai Metropolitan Region real estate in 2016
Mumbai like the rest of the nation had an exhaustive year in the real estate sphere. The early months of 2016 saw only a spoonful number of property transactions. However, as the year progressed, there were ample progressive initiatives which benefitted the stakeholders.
Remembering 2016, as it was
Trickling sales number never seemed to have fettered the city’s enthusiasm. This could be because it always has growing job opportunities and every year somehow flexes its already burdened land assets to accommodate the migratory populace. As such, consumer demand for houses is a constant feature in its real estate.
It is anticipating around 16 million sq ft of fresh office space by the end of next year. Before this year completes, another 8.5 million sq ft space will be added. New offices means new workforce which in turn means more demand. The capital as well as the rental market around these office spaces will get a boost once they get operational. Similarly, Navi Mumbai saw a positive streak in the form of a rise for Grade-A office space. Many tech start-up ventures, MNCs, IT and telecom companies are opting to setup their base or extending their operations here.
The key aspects of Mumbai real estate this year were:
1. The state government allowed construction work on building projects between 6 am and 10 pm. This extended work hours will accelerate project work, thus putting to rest disputes between consumers and developers. The Consumer Protection Act will take care of on delayed deliveries
2. The redevelopment policy bonanza for old and dilapidated buildings to the suburbs was extended. Under modified DCR 33 (7) (a) scheme for redevelopment, many dilapidated suburban buildings got an FSI of 3. Two-thirds of Kamathipura will witness cluster redevelopment
3. Earlier this year, BMC agreed to build on 67% of the city’s no-development land. Land owners will be allowed to keep 50% of the permitted FSI (almost 3), while the remaining 50% will be reserved for affordable housing and creating social amenities
4. For the first time, BMC started building assisted living (old-age homes), rental housing for women and child care centres
5. MHADA offered close to 972 affordable houses in areas such as Tungwa Pawai, Goregaon and old Magathane
6. The PWD approved the BMC’s coastal road project to shift tetra pods from Worli to Marine Drive alignment to the proposed coastal road. Other upcoming projects are the Metro 7, Metro 2B, and Metro 4 corridors
7. BMC transferred 17 land parcels to the Mumbai Metro Rail Corporation for construction of the 32 km Mumbai Metro III
8. MoEF granted approval to the 22 km Sewri-Nhava Sheva Mumbai Trans Harbour Link will displace the stress on urban habitation in South Mumbai
9. Mumbai Port Trust freed 150 hectares from its land parcel for infrastructure projects such as entertainment hubs and all weather marina project. Sanjay Bhatia, MD, MbPT shared, “Mumbai will also become the gateway for international cruise ships"
The key aspects of Navi Mumbai real estate this year were:
1. To push sales CIDCO had put up 380 unsold flats (MIG and HIG) at four of its housing schemes in Kharghar and Ulwe for sale. These flats are priced at 2014 rates, compared to private builders, who have increased their prices by 15-20%
2. NAINA or the New Airport Influence Notified Area’s stymied growth is finally back on tracks. With the State’s Forest Ministry clearance, developers, high-net worth investors, land speculators and real estate agents are buying up plots in bits and pieces from the locals
3. Reactivation initiatives of the Mumbai Trans Harbour Link or the Sewri-Uran Sea Link is underway. The Jawaharlal Nehru Port Trust is doubling its capacity to handle large ships
4. The civic water supply department cut over 7000 identified illegal water connections. Ghansoli topped the list with 2,030 illegal connections and all illegal connections have been snapped in Belapur, Nerul, Vashi and Airoli
5. NMMT rolled out 15 extra buses on the Mhape Kalyan and Dombivili route from the industry hub of Mhape junction following the joint drive against illegal transport vehicles
The key aspects of Thane real estate this year were:
1. In the last few months, 2 developer associations have signed a MoU to build 5.69 lakh affordable dwelling units across MMR. Despite the six percent increase in the ready reckoner rate, Thane will get a good number of affordable residences
2. The development authorities have planned a monorail network to serve as a feeder system to a Metro project planned. The MMRDA has finalised a Metro corridor, extending from Wadala to Kasarvadavali on Ghodbunder Road
3. MMRDA approved Metro IV project that connects Thane to Wadala via LBS Road and the Eastern Express Highway. The 32-km stretch will cost Rs 14,549 crore.
4. Many reputed developers chose Thane for their construction and offered amenities which are lavish - lush open air sky gardens at terrace level, which double up as fitness zones and open air ‘sky communities’ – large double heighted community congregation areas - at intermediate levels, etc.
5. Infrastructure upgrades: The Panvel-Bhimashankar-Chakan Highway, Neral-Badlapur Highway, Majiwada Junction Flyover, and Ghodbunder Road
Closing property prices of MMR
Mumbai, Navi Mumbai and Thane showed a rise in property prices at the end of the year 2016. Due to demonetization, there has been a fall in consumer demand. Most of them are in a ‘wait and watch’ mode, hoping the New Year will usher in lower property prices. For potential buyers of LIG and MIG properties, it might be a little disappointing to know that property prices might remain the same. Demonetization will affect prices of luxury and premium properties which has a high margin.
The supply across the MMR saw a dip. Navi Mumbai and Thane saw development on Affordable Housing front. Many private developers partnered with the government in this initiative.
Niranjan Hiranandani, president NAREDCO West and MD, Hiranandani Group said that Affordable Housing has more potential than can be imagined. Simplification and reduction of taxation can create millions of houses that a common can buy. He mentioned, “We support our Prime Minister’s call of Housing for All where there is a need to build more than two crore houses. Developers face hurdles in terms of land, environment and other issues by activists who hamper development and create impediments which contradict the very purpose of affordable housing. We need to create this as a housing revolution, call this our kranti. We can do it, every county in the world is doing it, and India can do it.”
As mentioned before, Thane also saw a spurt of luxury properties during the year. This indicates that increasingly residential demand of modest units are moving towards the metropolitan regions as the rates prevailing in Mumbai are not budget-friendly.
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