What's Next for Mumbai's Real Estate Sector After BJP's Maharashtra Win?
Experts suggest focusing on commercial real estate in Mumbai and Pune, which offer robust opportunities for investors. Affordable housing and infrastructure challenges remain key areas for the new government to address.
Real EstateMumbaiBjpAffordable HousingCommercial Real EstateReal Estate PuneNov 25, 2024
Boman Rustom Irani, Chairman and Managing Director at Keystone Realtors, emphasized that Mumbai faces significant challenges, particularly with its slum areas. He highlighted the BJP's commitment to creating a slum-free city as a key focus for the new administration.
Affordable Housing Solutions
Irani outlined three ways the government could support affordable housing in Mumbai
1. Reviving Rental Housing Schemes Irani suggested reviving rental housing schemes where the government builds the housing and private enterprises manage and operate them. “Around the world, you see cities developing on the back of good housing created by the government and then run by private enterprise on a rental housing model. That is very possible for the city of Mumbai,” he said.
2. Incentivizing Development in Peripheral Areas He emphasized the importance of incentivizing development in peripheral areas like Navi Mumbai, Vasai, and Dombivli, which are becoming more accessible due to improved infrastructure. Measures such as reduced stamp duties or tax benefits could encourage affordable housing projects in these areas.
3. Rationalizing Taxes Irani pointed out that taxes currently account for up to 32% of a home’s value in Mumbai, significantly inflating costs for buyers. Rationalizing these taxes could make housing more affordable.
Industrial Focus and Commercial Real Estate
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, citing high prices in the mid-to-upper housing segments.
“Prices have already risen up, especially in the mid to upper end, beyond any reasonability. Hence, any investment perspective for residential real estate is definitely out of question,” he noted.
Instead, Zia recommended focusing on commercial real estate in Mumbai and Pune, which continue to offer robust opportunities for investors. The improved infrastructure and growing demand for office spaces in these cities make them attractive investment options.
Looking Ahead
The new government's focus on policy reforms and infrastructure development could significantly impact Mumbai's real estate sector. Addressing the challenges of affordable housing and slum areas, while leveraging the potential of commercial real estate, could pave the way for a more balanced and sustainable real estate market in the region.
Keystone Realtors is a leading real estate development company in Mumbai, known for its innovative housing solutions and commitment to urban development. Knight Frank India is a prominent real estate consultancy firm, providing comprehensive services in the commercial and residential real estate sectors.
Frequently Asked Questions
What are the key challenges faced by Mumbai's real estate sector?
Mumbai's real estate sector faces significant challenges such as high property prices, especially in the mid-to-upper segments, lack of affordable housing, and the presence of slum areas.
What are the three ways the government can support affordable housing in Mumbai?
The government can support affordable housing by reviving rental housing schemes, incentivizing development in peripheral areas, and rationalizing taxes to make housing more affordable.
Why is the focus on commercial real estate recommended by experts?
Experts recommend focusing on commercial real estate in Mumbai and Pune due to the high prices in residential segments and the robust opportunities offered by these cities in terms of office spaces and improved infrastructure.
What is the BJP's commitment to Mumbai's real estate sector?
The BJP's commitment to Mumbai's real estate sector includes a focus on creating a slum-free city and implementing policy reforms to address affordable housing and infrastructure challenges.
What are the expected policy changes in the real estate sector post the BJP's win in Maharashtra?
Post the BJP's win in Maharashtra, the expected policy changes include initiatives to support affordable housing, rationalize taxes, and incentivize development in peripheral areas to improve the overall real estate market.
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