The Magic Mantra that is impacting the real estate scenario in Mumbai and the Mumbai Metropolitan Region is the slew of infrastructure projects which have been speeded up or newly launched by the state government.
By Dr Niranjan Hiranandani
The Magic Mantra that is impacting the real estate scenario in Mumbai and the Mumbai Metropolitan Region (MMR) is the slew of infrastructure projects which have been speeded up or newly launched by the state government. The vision of Chief Minister Devendra Fadnavis is reflected in the different infrastructure projects which will make commute a breeze and open new areas in the periphery of Mumbai region. Top of the mind recall would be projects like the proposed internal 6 metro routes which will add 170kms of railway lines, high speed railway corridors, coastal roads, Mumbai –Trans Harbour Link, new international airport in Navi Mumbai, the RO -RO ferry linkage for SoBo and Alibaug, waterways linkage connecting Borivali to Thane creek.
These projects are focused on easing congestion and opening up new avenues of transport and communication across the MMR. The obvious gainer in these connectivity-plus infrastructure projects will be the home seeker, one who is looking for affordable housing. These infrastructure projects will open up new real estate micro-markets, and locations apt for affordable housing projects to flourish. It is not just housing which will gain, enhanced connectivity will provide new work spaces in locations which will offer affordable price-points, where job creation opportunities will move, grow and flourish, as a result of the enhanced connectivity options.
Over the past few years, we have seen how such infrastructure developments across the region impact economic growth and pave the way for job creation, what were ‘remote pockets’ when viewed from the perspective of the ‘developmental stretch’, which morphed into potential real estate markets which grew. So, the Jogeshwari – Vikhroli Link Road created an artery which fed SEEPZ with human resources, enabling it to grow faster. It also ensured growth of Powai as a IT and ITeS hub. The Jogeshwari -Kanjurmarg Metro project, which will positively impact small pocket areas, will witness spur in housing demand. Similarly, the Navi Mumbai International Airport project shall provide growth potential to locations in the periphery of Panvel. The Trans-Harbor Link (Sewree-Nhavaseva cross Harbour Bridge) will open up the hinterland of Raigad to business opportunities in SoBo.
An ambitious initiative of PM Narendra Modi ‘Housing for All by 2022’ is expected to have a positive impact and deliver better scenario in the sector. It is among the most ambitious initiatives by PM Modi. In support to this, Finance Minister Arun Jaitley has come up with positive initiatives announced in the union budget 2017 which includes subvention in home loans taken for buying affordable homes. Rural fund allocation under PMAY has been raised from Rs 15,000 cr to Rs 23,000 cr, with the target to build 10mn homes by 2017-18. Also, we need to factor in the positive impact of funding for Infrastructure development having almost doubled from Rs 9,850 crore ($ 1.5 bn) P.A.; FDI related reforms having shown improved inflows touching a record $43bn in FY17; FDI Investment in real estate sector being $5.7 bn; PE Funding stood at $ 32 bn, according to the 2016 World Investment Report prepared by UN. In light of these, the Realty Index has improved by over 50 per cent.
According to a report by CLSA India, a $1.3-trillion housing boom is set to be the country’s next growth driver. It is expected to add 60 million new houses during the 6 yrs beyond 2018, while also creating 2 million jobs annually. Overall, with the economy moving upward, this reflects positivity in the real estate industry. This also indicates ‘pull’ factor for sales of affordable housing. The Indian economy is set to grow at 7.5 % to become the 4th largest ($ 3.5 trillion) economy in world by 2022. Good signals are being observed in the micro markets witnessing high number of enquiries and these will definitely result in dream homes becoming real soon.
All this will work in concurrence with these infrastructure projects, which will ensure not just economic growth and opening up of new job creation hubs, but also drive the future success story of affordable housing, effectively ensuring that home seekers in Mumbai and the MMR will finally be able to see their dream homes become a reality.
(The author is President, NAREDCO-West)