Affordable Housing Trends in MMR –

Comparison of peripheral Mumbai, Navi

Mumbai and Thane

Overview

Housing is considered one of the basic necessities of life. However, in tier-I cities

such as Mumbai and Delhi, where the prices are sky-rocketing, affording a house for

most middle-class families is slowly becoming a distant dream. Mumbai is currently

considered one of the most expensive cities in the world in terms of housing, where a

typical 1,000-sq-ft apartment may easily cost more than Rs 1.5 crore in Mumbai

suburbs such as Andheri or Bandra. The present affordability range in Mumbai is Rs

65-80 lakh, which is deduced based on the income level and housing expenditure of

an average individual in Mumbai.

Mumbai has a good supply of projects, both ready to occupy and under-construction.

Mumbai has an inventory overhauling of 48 months. There are more than 2,90,000

residential units under construction in Mumbai. Yet, most of the inventory is unsold,

as most of them are beyond the affordability range of an average middle-class family.

The gap between the demand and supply of affordable units in the city is also huge

due to various costs involved in the construction as well as land values in the city.

In such a scenario where affordability has become the need of the hour, there are few

places in Mumbai that still offer housing in the affordable range. There are three

major regions currently offering housing units in the range of Rs 60-80 lakh. They are

periphral Mumbai such as Dahisar, Mira Bhayander and Bhandup, areas of Navi

Mumbai and areas of Thane.

a) Peripheral Mumbai

While in Southern Mumbai, most of the western suburbs have gone well beyond the

affordable range and with increasing connectivity and infrastructure, the eastern

suburbs too are going beyond the affordable range. There are however, few suburbs

on the peripheries of Mumbai that offer houses in the range of Rs 65-80 lakh. Some

of these suburbs include Dahisar, Mulund, Bhandup, Mira Bhayander and Mira Road.

The primary reason for the lower cost of houses in these areas is the distance from

the central business districts (CBD) such as Bandra-Kurla Complex (BKC), Colaba and

Churchgate. Another reason for the lower costs is the lesser infrastructure such as

highways, flyovers, electricity and water as well as social amenities in these areas

compared to the prime localities in Mumbai.

The most common configuration of properties available in peripheral Mumbai in the

budget of Rs 60-80 lakh are 2BHK apartments. The average covered area of these

apartments is in the range of 820-1,200 sq. Ft.

b) Navi Mumbai

Navi Mumbai is witnessing an improved connectivity to Mumbai suburbs with the

help of several bridges such as Airoli Bridge and Sion-Panvel Expressway. There are

certain infrastructure projects that are proposed to reduce the connectivity problem

to the CBDs such as the Mumbai Trans-Harbour Link (MTHL). Navi Mumbai is also

witnessing a good improvement in civic infrastructure, social amenities as well as

employment opportunities due to the upcoming SEZs in areas such as Kharghar,

Ulwe and Kalamboli. As such, several areas have also slowly gone beyond the

affordable range.

There are, however, certain areas that still lack a good connectivity to Mumbai.

These areas are still a witnessing a slow growth primarily due to the low property

values here and the proximity to the proposed Navi Mumbai International Airport.

Some of these areas include Kharghar, New Panvel, Taloje and Kalamboli.

The most common configuration in these areas are 2BHK apartments with covered

area in the range of 1,000-1,250 sq. ft. There are also few 3BHK apartments available

for this budget with a smaller covered area. Trends also show that most of these

apartments are available at a slightly higher ticket size of Rs 70-80 lakh.

c) Thane

Thane is a part of Mumbai Metropolitan Region (MMR). Most of the residential

projects in Thane are in the affordable range as it is well connected to Mumbai and

yet, far from the Mumbai suburbs and CBDs. Some of the fast growing areas in Thane

are areas in Thane West, Pokhran Road and Ghodbunder Road.

The most common configurations available in this region are 2BHK apartments with a

built up area in the range of 790-1,075 sq. ft. Pokhran Road witnesses more 1BHK

apartments with covered area of 550-650 sq. ft. This is because most of the projects

on Pokhran Road lie closer the Eastern Express Highway (EEH) and command a higher

property value.

The following graph gives a comparison of the configurations available in these

different regions of Mumbai.

Peripheral Mumbai Thane Navi Mumbai

0

10

20

30

40

50

60

70

73 1

1015

65

1 04

House Configurations in MMR

1BHK

2BHK

3BHK

Areas in MMR

No

. of u

nits

Fig i): Comparison of configurations across different MMR regions (Source: CommonFloor listing

data)

Fig i) shows that as one comes closer to the Mumbai suburbs, the budget size

increases, slowly moving away from the affordable range. There are also fewer

apartments in the affordable range. This means that the available configurations of

apartments also varies depending on the distance of the area from the Mumbai

suburbs. For example, peripheral Mumbai and Thane almost have no 3BHK

apartments in the affordable range, while parts of Navi Mumbai witness a few 3BHK

apartments in this budget range.

The approximate land value in peripheral areas of Mumbai range from Rs

5,500-18,300 per sq. ft. The approximate land value in Thane is between Rs

4,200-15,000 per sq. ft, whereas the approximate land value in Navi Mumbai is in the

range of Rs 3,100-10,500 per sq. Ft.

Bigger apartments in Navi Mumbai

From the data available at CommonFloor, it is also found that as one goes away from

the suburbs, the dimensions of the available properties slowly increase. This is best

illustrated with a graph as shown below.

Peripheral Mumbai Thane Navi Mumbai

0

200

400

600

800

1000

1200

1400

430

600 600

1225

1098

1275

875 900

1095

Apartment sizes

Minimum

Maximum

Average

Areas in MMR

Pro

pe

rty d

ime

nsio

ns

Fig ii) Property dimensions (in sq. ft) in the three regions of MMR (Source: CommonFloor listing

data)

It can be seen from the graph that the minimum, average and maximum built-up area

of properties slowly increase as one goes further from Mumbai towards Thane and

parts of Navi Mumbai such as Taloje, Kharghar and Panvel.

Supply and absorption

The following table gives the supply and absorption data of 1, 2 and 3BHK units

across the various regions of peripheral Mumbai, Thane and Navi Mumbai.

Area No. of projects Completed

projects

Ongoing projects Total Units Units absorbed Percentage units

absorbed (%)

Peripheral

Mumbai

1352 842 489 164314 65364 39.78

Thane 524 368 118 72266 49502 68.5

Navi Mumbai 1064 785 255 115352 43949 38.1

Table 1: Supply and absorption of units across three different regions in MMR

One may see at the outset from Table 1) that though peripheral Mumbai has more

number of projects going on, the absorption rate is less than that of Thane. It also has

a higher absorption rate than Navi Mumbai. This is because, the property rates in

peripheral Mumbai are higher than that of Thane while the infrastructure is far better

than that of Navi Mumbai, as several parts of Navi Mumbai are newly developed.

Areas in Navi Mumbai such as Kharghar and New Panvel see a lower absorption due

to the lesser infrastructure development there. Thane enjoys a good absorption rate

due to its proximity to Mumbai suburbs as well as the lower capital values compared

to Mumbai.

The graph below shows the total percentage of units launched across the three regions

in MMR in the last decade. There were a total of 3,51,932 units launched in these

three regions since 2009.

Fig iii) Percentage of units launched in peripheral Mumbai, Thane and Navi Mumbai (SOurce:

Various sources)

The graph below gives a detailed idea about the yearly supply of units across the three

different regions of MMR over the last five years.

Fig iv) Graph showing launch of housing units across three regions since 2009

46%

21%

33%

Percentage Units Launched

Peripheral Mumbai

Thane

Navi Mumbai

Peripheral Mumbai Thane Navi Mumbai

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

3046

94438818

9778

7676

5105

6184

6128

8746

5649

5703

7754

14777

7253

20843

Launch of housing units

Yr 2013

Yr 2012

Yr 2011

Yr 2010

Yr 2009

MMR regions

La

un

che

d u

nits

The graph shows that peripheral Mumbai and Thane witnessed a good number unit

launches in the years 2009 and 2010, while Navi Mumbai witnessed lesser launches.

However, the scenario suddenly changed after 2011, where both peripheral Mumbai

and Thane witnessed a drop in unit launches while Navi Mumbai saw significant

increase in unit launches.

One may infer that this is due to the increasing land values in peripheral Mumbai and

Thane, compared to that of Navi Mumbai.

Future prospects of affordable housing in Mumbai

Currently, the entire Mumbai market is witnessing a very slow movement in terms of

housing projects. At the same time, areas outside Mumbai, especially areas in Navi

Mumbai such as Kharghar, Kamothe, Ulwe and Panvel are witnessing a good growth

primarily due to their affordability.

The lack of good infrastructure in areas such as Taloje, New Panvel and Kalamboli

may be a slight dampener at the moment. Yet, with the land value in Mumbai and

Thane going beyond the range of affordability and the growing infrastructure in Navi

Mumbai, these areas are continuously witnessing purchases from home buyers. As

such, one can look towards areas of Navi Mumbai at the moment for affordable

housing for few more years.