Real Estate Sector Scenario Looks Bleak in Navi Mumbai
The once hyped Navi Mumbai, as the destination for real estate, is now seeing a downturn in the real estate industry as the number of people who want to purchase properties here are declining. This downturn comes as a result of setback in key infrastructure projects. The market which saw at least one deal a month, has hardly seen any deals in a long time now.
Navi Mumbai was primarily designed to decongest Mumbai. It was designed to be the largest planned city in the world with a total area of approximately 345 sq-km. The City and Industrial Development Corporation (CIDCO) had carved out 14 townships with an intention of facilitating comprehensive development. The Central business district (CBD) which is one of the largest commercial areas in Maharashtra is in Belapur in Navi Mumbai. It is easily accessible from Mumbai and other parts of Navi Mumbai through roads and railway network. Navi Mumbai also has a current population of 2.6 million which continues to grow.
Reason for reducing demand for properties in Navi Mumbai
One of the main reasons for increasing demand for localities in Navi Mumbai were the proposed infrastructure projects such as the Mumbai Trans-Harbor Link (MTHL) between Sewri and Nhava, and the Navi Mumbai International Airport. Areas such as Ulwe, Kamothe, Dronagiri, New Panvel, Kharghar and Kalamboli were hyped as markets for affordable housing having huge potential for infrastructure growth. Investors also saw ample scope for real estate price appreciation. The prices at which properties are being sold are at least 20% higher than what they normally should be.
However, the current situation of the proposed infrastructure projects is uncertain as the projects are facing several bottlenecks. The MTHL project which would significantly reduce commute time between South Mumbai and Navi Mumbai failed to attract bidders for the third time in a row. The Navi Mumbai International Airport is facing problems with land acquisition. This uncertainty of the infrastructure projects has put prospective buyers on the back foot.
Experts say that properties in areas like Panvel and Ulwe were over hyped in terms of perception, while there was nothing much in terms of infrastructure, transport, schools or social amenities. While price factor was one of the major drivers for real estate in Navi Mumbai, localities such as Nerul and Panvel had almost become as expensive as other Mumbai suburbs.
While experts claim that there are corrections in property pricing beginning in some places in Navi Mumbai due to the lack of demand and availability of land, developers are unwilling to slash property prices as they claim that prices are still affordable in Navi Mumbai compared to Mumbai suburbs. Some developers are presently absorbing the high input and construction costs, which they later intend to pass on to the consumer.
There is currently a huge number of unsold houses in Navi Mumbai. There are about 15,400 unsold flats in areas such as Taloja, Ulwe, kalamboli, Karanjade, Kamothe, Airoli and so on. There are also about 11,000 unsold flats in Panvel. According to experts, it may take a minimum of 18 months to clear the inventory pile-up with the current pace of absorption.
