Navigating the state of real estate ahead of the 'Third Mumbai'

The residents of Meera Angan can easily observe the infrastructural development unfolding in Ulwe right from their windows. Living in this residential building in Sector 2 of Ulwe, near the Bamandongri railway station, has made them witnesses to the construction of the Navi Mumbai International Airport, which began with the demolition of nearby hillocks two years ago. While the residents are pleased to witness the progress in their region, a lingering concern in the back of their minds revolves around the potential increase in rental and lease costs. This apprehension has resurfaced with the inauguration of the Mumbai Trans-Harbour Link, the country's longest sea bridge, reducing travel time between the central parts of the city and Navi Mumbai from two hours to just 20 minutes.

A window in the Meera Angan building in Ulwe overlooking the hills and hillocks being destroyed for the airport. 

As the Mumbai Trans-Harbour Link (MTHL), also known as the Atal Bihari Vajpayee Sewri-Nhava Sheva Atal Setu, prepares to open for commuting on January 13, and the Navi Mumbai International Airport gears up to initiate operations by December this year, these projects are viewed as major twin connectors linking Mumbai. They serve as the pillars laying the foundation for the concept of 'Third Mumbai,' a state-approved plan to construct a new metropolis. This, in turn, is expected to fuel a surge in the property market of Navi Mumbai and its adjoining areas.

In an interview with Local Samosa, Satish, the manager of Meera Angan, denies any immediate rise in rental prices for the residents but hints at expected increases in the future. Meanwhile, a resident of the building, speaking on the condition of anonymity, acknowledges rumors of potential rental hikes circulating for a few months.

Speculations of demand in residential housing 

Source Mumbai Trans-Harbour link to connect central Mumbai and Navi Mumbai reducing the travel time to 20 minutes. 

Irrespective, the real estate market has opened up for speculation, with old players in the market trying to understand the changes and demands. According to Arpit Agarwal, the owner of Sunny Real Estate Consultants, who has been in the industry for the last 30 years, the demand for houses in Navi Mumbai has increased in the last one and a half years. 'We have mediated in selling 30-40 units (inclusive of residential and commercial properties), compared to 15 units almost one and a half years ago,' he says. The areas garnering the attention of buyers, according to him, are mainly Ulwe and Pushpak Nagar due to the construction of the new airport. 'The speed of the airport construction might be slower than expected due to political hurdles, but people are buying houses in these areas for future investments,' he adds.

Discussing housing in the 'affordable segment,' Agarwal expresses the opinion that both Ulwe and Pushpak Nagar are in demand, with the average range going up to Rs 45-70 lakh for 1 BHK and Rs 80 lakh to Rs 1 crore or more for 2 BHK. This represents an increase of almost 10-15%, compared to the time 'when development projects were not in the limelight.' Similarly, he suggests that areas like Nerul and Seawoods are significant residential preferences.

Highlighting the surging demand in the rental market in Navi Mumbai, Sumit Jaiswal from Sunshine Real Estate notes a 15-20% rental increase already, in addition to the usual 2-25% yearly hike, in a few areas due to ongoing development projects. 'There is a strong demand, and prices are already exceeding the budgets of many looking to buy 'affordable houses' or even rent one,' he says, adding that people are venturing beyond areas like Panvel and Taloja in search of affordable housing, while rents in areas like Ghansoli are already reaching Rs 50,000.

Spur in demand for commercial spaces

Picture used for representation purposes. 

While Jaiswal, who runs the real estate consultation firm from Sanpada, describes the demand as a 'yearly phenomenon' and mentions that the impact of projects like the MTHL and the airport might take a year to be visible in the real estate market, he affirms that the demand for commercial spaces has been observable since the announcement of these projects and has increased in the last two years. 'Maharashtra Industrial Development Corporation (MIDC) areas in Navi Mumbai are becoming hotspots for commercial activities,' he says. Emphasizing the same, Jaiswal notes that the price ranges between Rs 65 lakh to Rs 70 lakh for commercial spaces in some areas of Navi Mumbai.

Mayur Singh, the owner and Legal head of Nerul-based Sky Properties, adds that many renowned names in the hospitality sector, such as Mariott or Hyatt, have established dedicated spaces for commercial establishments in the MIDC areas in the recent past, likely boosting the commercial market here in Navi Mumbai.

'It is stagnant'

However, Singh also presents the opposite side of the story, mentioning that the demand and, hence, the supply in the real estate segment have been stagnant for the past one and a half years. 'The real estate encountered a boom post-lockdown as people were out of their homes and wanted to buy and invest. We observed demand until it reached the point of stagnation one and a half years ago,' he says. Citing the reason for the same, Singh, who has been in the business for more than 20 years, notes that the crippled condition of the job market in India has not only affected the real estate market but also the entire economy. 'The lower number of house registrations in the registrar's office reflects the low demand in the real estate market in Navi Mumbai,' he adds.

Source The basic layout of the Navi Mumbai International Airport. 

According to Singh, the impact of the development projects has not become visible as of yet. He says, 'These projects, referring to the Navi Mumbai International Airport and the MTHL, were announced years ago, and people were aware of them, yet we did not record the expected demand for houses here in Navi Mumbai. This suggests the low purchasing power of customers.'

On the other hand, Singh mentions that areas like Nerul already have residential housing costs ranging from 1.3 to 2.5 crores for a 1 BHK, whereas houses made by the City and Industrial Development Corporation of India (CIDCO) are 'fairly affordable,' averaging around Rs 70 lakh in areas like Sector 11 or 15 of Nerul. 'The cost of CIDCO houses was comparatively less when the idea to relocate people to Navi Mumbai was conceived. Now, it is experiencing hikes as even these locations have become 'prime,'' he says.

In times when the state is revisiting plans to meet the expanding demands of Mumbai and Navi Mumbai and divert them towards the sprouting 'Third Mumbai' with developmental projects, the major areas expected to see a spark in real estate prices, according to Mr. Singh, would be Uran, Ulwe, Dronagiri, and adjacent areas. Meanwhile, how much purchasing power people, especially those seeking affordable housing, allows them to participate in the boom will be interesting to observe.