“1 in 3 homes sold in Mumbai comes from rebuilding, but at what price …”: Checking the reality of the real estate expert
The Mumbai real estate landscape is going through a dramatic transformation, “one in every three homes now sold by a renewal project”, according to financial adviser Aksat Srivastava. But while these projects carry new, higher structures, they also pose significant infrastructure challenges and raise real estate prices.
Re -development in Mumbai follows a simple scheme: “Old buildings are demolished, and new, higher structures replace them.” This not only increases the supply of homes, but also puts an additional load on the already loaded city infrastructure.
Mumbai expires on vacant land, which is the primary way to adaptable to growing housing needs in the city. Older, dilapidated buildings are demolished and replaced with high. However, roads, drainage and public transport are struggling to continue.
“If the city cannot cope with critical infra problems such as water, collecting garbage, traffic, etc., new higher buildings will bring more pressure on infra,” said Frivastava on Sunday.
Despite the increase in housing supply, prices are not “falling”, as can be expected in the traditional offer scenario. Instead, “units in renovated projects are released in stages” and sold with significantly higher rates than older properties.
“Ideally, with new developments and more supply of homes, prices should fall. But real estate is not working that way, “explained Srivastava.
The properties in these projects often command a premium – “even 1.5 times higher than older homes”, making housing less acceptable. Despite huge renovation projects, Mumbai remains one of the most expensive and inaccessible cities in India. The average prices of a decent apartment home are up to 2 crowns.
For buyers, this means “pay more for homes that will eventually face deterioration of infrastructure problems”. While renovation revitalizes the aging of settlements, road pressure, water supply and public services continues to grow unchecked.
“People end up buying more expensive homes, which – in the long run – will face higher challenges in infra and poorer quality of life,” Hrivastava concluded.
