Infrastructure Holds Key to Mumbai’s Real Estate Growth
Mumbai, the financial capital of the country, continues to grow every day. However, infrastructure has not kept pace with the city’s overall growth. In order to sustain this growth, the government and the local bodies need to lay greater emphasis on the infrastructure in the city. Good infrastructure, thus, will be one of the key drivers for the city’s real estate growth in the future.
Key driver for real estate
Infrastructure is one of the key drivers for real estate growth in any city. People look for good connectivity and future appreciation prospects before buying a property in a particular location. While several infrastructure projects are proposed by the government and local authorities, timely completion of these builds confidence in the investors.
A location focused only on residential segment and little commercial options don’t sustain for a long time. Similarly, a commercial hub with little residential development will cause problems for employees who prefer to stay in the vicinity to reduce commuting time. Poor or delayed infrastructure growth will eventually reduce investment potential of the location.
Current infrastructure
Mumbai attracts thousands of immigrants every day who come here in search of jobs. However, the city has been unable to keep up with its growing population. There are several areas that are densely populated and see frequent traffic congestions. There are very few improvements in the road network. Cancellation and delays of several important infrastructure projects have impacted the city’s real estate growth.
Mumbai faces several infrastructure-related problems in fringe areas. While there is a huge potential for real estate development in these areas, there is no necessary infrastructure in place. Except for Thane and Navi Mumbai, all outlying areas such as Mira-Bhayandar, Kalyan-Dombivli, Vasai-Virar and Ambarnath-Badlapur suffer from a serious infrastructure deficit. Most areas lack proper roads, water and electricity supply, schools, hospitals, public transport, sewage systems, etc. They do not have strong economic drivers that encourage implementation of infrastructure projects.
The municipal corporations are also not equipped to handle the continuous demand for proper facilitation in their jurisdictions. Plans are in place, but, there has been no implementation.
Improving infrastructure
A solution for the infrastructure deficit problem can be found if city municipal corporations work together with the state government to deploy various infrastructure projects. But, the issue lies in the bureaucratic disconnect – the assignment of responsibility for implementation and timely completion of these projects. There is also the question of funding. If it is to be raised through Public Private Partnership (PPP), local bodies are not sufficiently empowered to launch such initiatives.
Ongoing infrastructure projects
The Maharashtra government and MMRDA are now focusing on improving the city’s infrastructure by improving connectivity to different parts of the city. MMRDA has implemented the Kherwadi Flyover and the Chembur-Santacruz Link road to reduce the traffic congestion in the city. Projects such as Eastern Freeway have improved connectivity to Lower Parel, Wadala and the Bandra Kurla Complex (BKC) from Navi Mumbai and Chembur. The freeway is expected to be further expanded till Ghatkopar. This will improve access from the eastern suburbs while reducing the congestion in areas such as Chembur, Sion, Dadar, etc.
The first phase of the Mumbai monorail, which will be operational soon, will improve connectivity to growing areas such as Chembur and Wadala. The Mumbai Metro will also improve connectivity while reducing traffic congestion. There are projects such as the business hub at Wadala proposed to support Bandra-Kurla Complex. This will help in decentralizing and decongesting business districts, ensuring traffic flows that are spread out. It will also reduce the strain on the existing infrastructure.
The all-round development of infrastructure requires time. But, it lends maturity to the real estate market in a locality while ensuring sustained price growth over a longer time period.
