Today, prices have stabilised in the real estate sector, and the demand for homes has also picked up on the back of a strong economy and a stable job market. There was a sharp decline in the demand for residential housing, particularly in the premium housing segment, in the recent past. Initially, market experts predicted that this phase being witnessed in the real estate sector would pass by within a year; however, several homebuyers are still anticipating a price correction in the premium segment.
|Mr Shailesh Sanghvi
In Mumbai, space and availability of land continue to be inhibiting factors in the development and expansion of the real estate sector. The island city too faces numerous limitations, many of which are imposed by CRZ laws. The redevelopment proposal initiated by the Maharashtra government through publicprivate partnership has caused lot of delays in obtaining approvals, thereby further increasing overhead costs. Apart from all this, the city has the lowest FSI in the world—two on average and a maximum of four—which also negatively impacts developers.
Today, the size of the housing industry is worth INR 50,000 cr. and it is set to grow to INR 2,50,000 cr. in the next three years. The demand for high quality and affordable housing in Mumbai is on an all-time high in recent years due to rapid urbanisation brought on by the growing population in the city and rural-urban migration. The other major factor is the burgeoning middleclass growth that is being propelled by rising income levels. With the country’s income pyramid adapting to accommodate this fastgrowing segment, the sprawling middle-class is seen as a primary driver for the emergence and expansion of the affordable housing sector.
Affordable housing beyond the MMR region can successfully cater to the housing needs of Mumbai’s surging population and help to bridge the demand-supply gap.
Swinging by the Suburbs
Extensive market surveys and in-depth analysis of the city will indicate that post the development boom in the Western suburbs, the Central suburbs will take centre stage in terms of their potential to meet the exploding housing demand. Kalyan, Titwala, Vasind, Shahpur and Asangaon are a few extended suburbs that will witness rapid real estate and infrastructure development in the coming months. These developments will not only will help to modify the existing skyline of the region, but also augment and change the lifestyle of existing and future residents, thereby redefining the standards of living. Among all these areas the Asangaon-Vasind region has been in the limelight because of its connectivity with the financial hub of the state. These areas have large land parcels that can be tapped to explore opportunities for developing satellite townships and gated communities
For instance, Asangaon is located 85 km from the northern suburbs of Mumbai, and has witnessed a great demand for housing from firsthome seekers across the city. The Shahpur and Asangaon region is currently governed by a Gram Panchayat, which will soon be changed to a Nagar Palika, or a small-scale municipality. The level of infrastructure in Asangaon is acceptable, considering the size and scale of the town’s population. The region, at present, has private and public hospitals and several primary schools catering to the needs of existing residents. The true advantage of Asangaon lies in the ample supply of affordable homes is this area in relation to the consistent economic and mcommercial growth and employment opportunities within a radius of 20 km.
The region has over 200 industrial units extending from Kalyan, to Bhiwandi, to Shahpur, providing employment opportunities for people in the adjoining areas. There has been a significant rise in the level of economic activity and development in Asangaon and its neighbouring towns over the past decade, creating a strong demand for affordable housing in this area. Accessibility to Asangaon by railway from Mumbai’s central suburbs is very strong, with trains arriving at, and departing from, the railway station at 15-minute intervals. Asangaon provides a greener and cleaner way of life to its residents, and is also increasingly popular as an investors’ destination. By road, Asangaon can be reached from the Mumbai-Nashik highway, off the Kalyan-Biwandi bypass road. There are regular State Transport buses from Mumbai, Thane, Kalyan and Bhiwandi plying to the location. Vasai Road will soon emerge as an economic hub—the area will be easily accessible from Asangaon. These factors will not only increase the demand for housing in this region, but will also escalate the property rates substantially over the next few years. On an average, thousands of commuters travel to and from the Kalyan-Asangaon belt.
Considering the stimulus that has been provided to the realty sector, especially in the affordable residential segment, the onus now lies on the developers to not only leverage these benefits to derive maximum returns on projects, but also to ensure that these benefits are shared equally with the customer—only this will truly make the concept of affordable housing a sustainable reality. The aim is to not just fulfil a basic need, but also to provide buyers with a conducive and a healthy environment to live in. Armed with government support and the required finance, developers can be committed partners to provide the country with the type of housing it requires at very reasonable costs.
The author is the Director of Sanghvi Group of Companies