Thane: The Affordable Alternative for Mumbai's Home Buyers
Mumbai is brutal for people with a salary of less than Rs 6 lakh per year. The struggle is daily and savings are negligible,” said my wife to her colleague. My wife is a human-resources professional handling recruitment for a multi-national corporation. Her statement is a cruel truth about life in Mumbai. This affordability challenge has triggered a movement wherein the young no longer see the city as a career option. The famed migration from all of India to Mumbai has disappeared to a large extent. That migration is finding itself in cities like Bengaluru, Gurgaon, or Hyderabad.
But there is another migration that is underway. The migration from Mumbai to neighboring Thane. As much as 33 per cent of new home buyers in major Thane projects are from Mumbai, according to real estate database firm Zapkey. Over a decade ago, the very thought of moving from Mumbai to Thane would be treated with disdain. For many, Mumbai was the city, while Thane was perceived as a small-town. Thane got its first big push between 1995 and 2000 when a skilled bureaucrat T Chandrashekhar was the municipal commissioner. Road infrastructure was boosted with a speed and quality that no bureaucrat has managed afterwards. A war against illegal construction was waged and won. That gave Thane a foundation for an infrastructure leapfrog.
Today, the shift from Mumbai to Thane appears logical for one simple reason: Value for money. Average home prices in congested Mumbai are over Rs 33,000/sq ft. Even at that price point, the housing options for many are in old standalone buildings without any amenities or open spaces. In comparison, average prices in the rapidly developing Thane are Rs 18,000/sq ft. At that price point, the options are littered with new and large gated communities that have a host of amenities inside them. With major builders operating in a disciplined manner in Thane, home prices have remained attractive for a meaningful section of buyers.
Two types of buyers are rushing in. The first category are renters in Mumbai who now want to buy a home. Given that EMI is generally three times the rent of the same home, this category cannot afford to buy the same home they are renting in Mumbai. To own a home, they need to go elsewhere, and that location is increasingly turning out to be Thane. The economics make it comfortable. The rent of their Mumbai home is almost equal to the EMI of their Thane home. The second category of buyers are those who stay in old standalone buildings in Mumbai but want to upgrade to a gated community/township lifestyle. They have given up on the hope of the municipal corporation providing them clean streets, gardens, or walkable footpaths. They believe in trusting a private builder as a more efficient municipal corporation. A gated community in Mumbai is preferred but the options are either limited or very expensive. With that in mind, their choice is Thane.
The drawbacks of living in Thane are clear. While homes are there in abundance, offices are not. Commute to Mumbai for work is necessary for a large section of people. The commute is driven on road transport as railway connectivity is a challenge. There is only one railway station in Thane. I suspect this will change in the coming decade. Thane has built enough of a large population over the past two decades for companies to now set up offices there. That transition will happen gradually, and an environment will develop where a meaningful number of Thane residents will also work in Thane. For them, Mumbai as a city will matter lesser and lesser over the years. A salary of Rs 6 lakh per year may be brutal in Mumbai. But it may just be enough in Thane.
