BJP's Maharashtra Triumph: What's Next for Mumbai's Real Estate?
Mumbai's real estate sector is set to see significant changes following the BJP's victory in Maharashtra. Experts discuss potential reforms and challenges in the affordable housing and infrastructure sectors.
Mumbai Real EstateBjp VictoryAffordable HousingInfrastructure DevelopmentSlumfree CityReal Estate MaharashtraNov 25, 2024
Irani emphasized that Mumbai faces significant challenges with its slum areas, and the BJP's commitment to creating a slum-free city is a key focus. He outlined three ways the government could support affordable housing
First, he suggested reviving rental housing schemes. 'Around the world, you see cities developing on the back of good housing created by the government and then run by private enterprises on a rental housing model. This is very possible for Mumbai,' he said. These schemes would involve the government building housing units, which would then be managed and operated by private enterprises.
Second, Irani stressed the importance of incentivizing development in peripheral areas like Navi Mumbai, Vasai, and Dombivli. These areas are becoming more accessible due to improved infrastructure. He proposed measures such as reduced stamp duties or tax benefits to encourage affordable housing projects. 'By making these areas more attractive, we can reduce the pressure on the core city and provide more affordable options,' he noted.
Lastly, he pointed out that taxes currently account for up to 32% of a home’s value in Mumbai, inflating costs for buyers. Rationalizing these taxes could make housing more affordable. 'If the government can reduce the tax burden, it will directly benefit homebuyers and make housing more accessible,' he explained.
Irani also expects policy changes that will allow for better development, especially in the redevelopment space in Mumbai. 'We need to focus on integrating old buildings with new infrastructure to create a more sustainable and livable city,' he said.
Gulam Zia, Senior Executive Director at Knight Frank India, believes that Maharashtra is poised to regain its industrial focus, which had been lacking in recent years. From an investor's perspective, Zia advises against residential real estate, particularly in the mid-to-upper housing segments. 'Prices have already risen to unreasonable levels, making it a less attractive option for investors,' he noted.
Instead, he recommends focusing on commercial real estate in Mumbai and Pune, which continue to offer robust opportunities for investors. 'Commercial properties in these cities are seeing steady growth and provide a better return on investment,' he said.
In conclusion, the BJP's victory in Maharashtra presents a new landscape for the real estate sector. With a focus on affordable housing, infrastructure development, and slum rehabilitation, the government has the opportunity to make significant strides in improving the quality of life for Mumbai's residents.
Frequently Asked Questions
What are the key challenges facing Mumbai's real estate sector after the BJP's victory?
Key challenges include addressing slum areas, improving affordable housing, and enhancing infrastructure development.
How can the government support affordable housing in Mumbai?
The government can support affordable housing by reviving rental housing schemes, incentivizing development in peripheral areas, and rationalizing taxes.
What is the role of peripheral areas like Navi Mumbai, Vasai, and Dombivli in Mumbai's real estate sector?
Peripheral areas are becoming more accessible due to improved infrastructure. The government can incentivize development in these areas through reduced stamp duties or tax benefits.
Why is reducing taxes important for affordable housing in Mumbai?
Taxes currently account for up to 32% of a home’s value in Mumbai, inflating costs for buyers. Reducing these taxes can make housing more affordable.
What are the investment opportunities in Mumbai's commercial real estate sector?
Commercial properties in Mumbai and Pune are seeing steady growth and offer better returns on investment compared to residential properties in the mid-to-upper segments.
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