After a prolonged slowdown, affordable housing in Mumbai's real estate sector is showing recovery from a slump, particularly in the under INR 30 lakh segment. A study by Liases Foras reported a 41% growth in this segment during the March-June 2024 quarter, with an increase in activity in peripheral areas like Vasai-Virar, Boisar, and Dombivli. Despite new projects and government incentives like the Pradhan Mantri Awas Yojana, awareness and implementation challenges continue to persist. Experts predict a potential 'V' shaped recovery pattern, but brokers in key areas note that sales are slower than expected due to a lack of scheme awareness.
In Mumbai, affordable housing in the real estate sector is beginning to recover after a long period of slowdown. A report by real estate research firm Liases Foras revealed that the housing segment priced below INR 30 lakh saw a 41% growth in the March-June quarter. Most of this growth occurred in the outer areas of the Mumbai Metropolitan Region, such as Vasai-Virar, Boisar, Titwala, Dombivli, Ambarnath, Palghar, and Panvel.
However, affordable housing remains scarce in the main city. Even though the Maharashtra Housing and Area Development Board (MHADA) recently offered homes priced below INR 45 lakh in areas like Wadala, Kurla, Vikhroli, and Antop Hill, these units were only available through a lottery system on 8th August. Pankaj Kapoor, the director of Liases Foras, stated that if the current trend continues, the sector could experience a 'V' shaped recovery, indicating a rapid rebound after a decline. He noted that this growth might be linked to recent budgetary measures by Finance Minister Nirmala Sitharaman aimed at reviving the sector. Although it is too soon to determine the exact reasons for the recovery, Kapoor acknowledged that affordable housing is gaining momentum.
Between March and June 2024, a total of 6,675 low-income housing units were launched, with 2516 in the northeast region and 1807 units in Palghar-Boisar. Titwala East, despite being a smaller area, also saw significant new developments. Sales for the quarter grew by 8%, and 84 new projects were launched by top local developers of Dream Homes, Vansh Developers, Avyu Buildcon Pvt Ltd, Sun Homes and Saphale Land Developers LLP.
Jash Panchamia, a partner at Suraksha Group, confirmed these findings. He reported that his company received 6,500 bookings in their 362 acre Vasai township project under the Pradhan Mantri Awas Yojana (PMAY) scheme, between March and May 2024. This was largely due to the government expanding eligibility criteria for economically weaker sections- from the previous annual income of 0 to INR 3 lakh to 0 to INR 6 lakh. This drew buyers who could avail of bank loans to purchase the 30-sq mt units priced at approximately INR 22.5 lakh
Kapoor highlighted that the revival of the Credit Linked Subsidy Scheme (CLSS) has proven to be an attractive option for low-income buyers, both within the Pradhan Mantri Awas Yojana (PMAY) and the open market. The scheme offers them an upfront discount of nearly INR 2.70 lakh on their EMIs and purchases, along with a flat INR 1,000 stamp duty. However, some local brokers in the Vasai-Virar and Boisar-Palghar regions have a different perspective. They feel that banks have not yet received the necessary government orders or funds to start implementing the schemes. Dr. Prashant Thakur, the head of research at the ANAROCK Group, explained that the city is experiencing a dichotomy.
On one hand, affordable housing is gaining traction in the city's periphery, catering to the unorganized sector. On the other hand, the land parcels in the island city and close suburbs remain out of reach for this segment, as they are prohibitively expensive.
In summary, the affordable housing segment in Mumbai is showing signs of revival, particularly in the outer regions of the Mumbai Metropolitan Region, driven by government interventions and schemes, while the central city continues to face a mismatch between demand and supply in the affordable housing market.
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