Smaller, but more affordable houses are driving homebuyers out of Mumbai and towards Thane and Navi Mumbai

Smaller, but more affordable houses are driving homebuyers out of Mumbai and towards Thane and Navi Mumbai, a real estate survey has found. The findings come as a boost for builders, buyers and the realty sector, which has been on a downward spiral for months.

The survey, by real estate research firm Liases Foras, found areas like Thane and Navi Mumbai were becoming increasingly popular with homebuyers, as apartments cost less than Rs 50 lakh. Between January and March this year, 11,980 apartments were sold, compared to 10,997 in the last three months of 2017.

Meanwhile, in Mumbai city, sales and launches have dropped. Only 5,163 apartments were sold between January and March 2018, down from 5,854 in the last quarter of 2017. There were fewer launches — 3,698 compared to 5,538 in the same period.

So, what makes Mumbai’s periphery more appealing?

Pankaj Kapoor, CEO of Liases Foras, said, “Many developers are building smaller apartments, resulting in reduced prices. They are also offering finance schemes.”

Builders, too, have noticed the trend. In the first three months of 2018, there were more launches in the Mumbai Metropolitan Region — 9,134 apartments — compared to 4,650 in the last three months of 2017.

The Maharashtra Chambers of Housing Industry (MCHI-CREDAI) said affordable housing was driving the whole scenario. “Buyers are getting subsidies from the government through the Pradhan Mantri Awas Yojana scheme for affordable houses, and even builders are getting incentives,” said Manohar Shroff, vice president, MCHI-CREDAI, Navi Mumbai. “This is boosting the peripheral realty market.”

The real estate sector, over the past few years, has been witnessing a recessionary phase. Builders raised realty prices to unaffordable levels, forcing buyers to postpone plans. Further, the Reserve Bank of India, as a cautionary exercise, laid down stringent lending norms and increased interest rates on home loans. However, both prices as well as interest rates on home loans are gradually coming down