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When it comes to demand for housing in the Mumbai Metropolitan Region (MMR), a clear dichotomy comes to light. One set comprises of the privileged HNIs, who seek uber-luxury homes, while the other set, comprising the majority, seek affordable housing. Surprisingly though, there is one thing that is common between both buyers – they seek more than the typical stand-alone buildings. They prefer to live in gated communities, which provide not just a home but a lifestyle. Even the most budget-conscious home buyer, is interested in the amenities that a developer is providing and features like a gym, swimming pool, children’s play area, commercial retail outlets, etc., play an important role in the decision in favour of a project.
Land availability in the MMR
Given this scenario, the main issue facing developers in Mumbai and Thane, is the paucity of land parcels that can accommodate the demands of home buyers for elevated lifestyle projects. In Mumbai, the land mass is about 603 sq kms and its buildable area is estimated at just about 200 sq kms. In Mumbai, effectively, only 40% of the land is built-up area, while the remaining comprises of coastal zones, parks, road and rail networks, etc. Mumbai also suffers from rampant unplanned construction, which has resulted in over-congested ‘ghetto’ like areas, which present a nightmare when it comes to redevelopment. The land area of Thane is even smaller, at about 147 sq kms. The city of lakes boasts of wide open roads, excellent urban planning and infrastructure, which, while making for pleasant living conditions but also tends to reduce the buildable area.
Supply of land in the MMR and its impact on the type of real estate development
Old mill lands in Mumbai and land parcels owned by business conglomerates, do come up for sale in the MMR but these are limited and developers who are investing hundreds of crores in purchasing land, prefer to build luxury projects rather than budget homes, to earn good returns on investment.
Areas in the MMR where land parcels are still available
A township project, which has reasonable price points in the range of Rs 1 crore for a 2BHK, is indeed in a rare find in places like Thane today. Of course, developers are exploring other areas like Kalyan, Palghar, Ambarnath, Boisar, etc., where large land parcels are still available. However, while the projects may be excellent in execution and planning, the downside remains that the infrastructure in these areas may not be good, making life there a bit cumbersome, given the lack of employment opportunities, education and health facilities close to home and other issues that residents typically face.
Here again, Thane is at an advantage, as major infrastructure projects like the metro rail, highways, etc., are underway and will improve connectivity. Moreover, with more offices opening or relocating to Thane, there is an increasing trend towards the creation of clusters of economic activity. The ‘walk-to-work’ concept is gaining prominence, which will further improve the quality of life in Thane.
What should buyers of affordable housing do?
Developers continue to face the dilemma of finding adequate-sized land parcels for their projects in Mumbai and Thane and home buyers face the tough choice of paying a high premium for a 2BHK in the MMR, or going further from the city, into areas that are not well-developed. The important thing that home buyers need to keep in mind, is that given the scarcity of land, prices, especially for affordable homes whose demand is high, are going to rise and they would do well to invest now, while such homes are still within their budget.
(The writer is president and CEO, Rustomjee Urbania)