Mumbai is one of the most crowded cities in the country and there is a piece of good news for its real estate industry since now more land will be freed up for developing homes. This will be a major relief for real estate developers who are burdened with inventory and also planners who wish to improve the city’s infrastructure. The Cabinet in Maharashtra has permitted construction on industrial sites which are unused across cities which includes Mumbai. This will free up land for more projects under PMAY (Pradhan Mantri Awas Yojana). Some of the land will also be allocated for developing business complexes and apartment complexes at prevailing market rates. However, present owners will have to shell out surcharge to the government at 40% of the cost of the land.
This will help in infusing new housing inventory into the Mumbai real estate market after the redevelopment push for 20, 000 (approximately) old structures in the city. The latter was possible through the lowered requirement of consent and higher FSI for developers. There are also possibilities of land being freed up from salt pans for housing purposes. As per studies, Mumbai’s industrial land spans a whopping 5, 540 acres. Several industrial units have now shifted elsewhere or have shut down over the years. There is land owned by the Godrej Group along the vital Eastern Express Highway while state-run company Richardson & Cruddas Limited has land in Byculla which are some of the unused industrial sites in the city as per experts.
There is land in Thane owned by Raymond Limited and several medium-sized industrial plots in the entire Thane-Kalwa zone. There are other industrial zones in Nagpur and Pune which could also be tapped in the future as per reports. This move comes amidst a major outstripping of supply of housing units in comparison to demand post demonetization, RERA and GST. Almost half of a whopping 50, 329 housing units as per studies out of total unsold inventory registered in May, 2017, was not sold till early October. 50% also found no takers out of a total of 1.80 lakh units spread across Mumbai and Thane.
Prices are still sky-high in Mumbai and any average 1 BHK apartment goes for anything close to Rs. 65 lakh if it is in the suburbs while prices can touch Rs. 3.5 crore if it is in the city as per reports. Most new projects will be tapping the affordable housing segment. There were several proposals sent to the Government by owners of these land parcels for renting/selling/donating them and hence this decision was taken by the State Cabinet. The affordable home sales will take place via the Maharashtra Housing & Area Development Authority or MHADA using the lottery system. This new move may open up land for several affordable housing projects within the city itself instead of outskirts and neighboring micro-markets as per experts.