Navi Mumbai Airport: Will property prices rise again?

[] With the Navi Mumbai International Airport scheduled to be commissioned by 2019, will the property market in the city witness a turnaround? We examine the ground realities.

Ritwik Jain, a software analyst, invested in a 2BHK flat in Ulwe five years ago, hoping to get good returns on his investment. However, even after trying for the past two years, he has not been able to find a buyer for his flat. “Due to delays in the construction of the airport, the market is not picking up in the area. When I bought the property, the local agents told me that I would get nearly 40% ROI,” he laments.

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For investors like Jain, there is now a ray of hope, as the Maharashtra cabinet has given its approval for a request for proposal (RFP) for the proposed international airport at Navi Mumbai. A time period of five months, has been fixed at present, for issuing tenders and the letter of intent and work order would be given after five months.

Making progress

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“Narendra Modi’s new governance programme – Proactive Governance and Timely Implementation (Pragati) – is clearly at work here,” feels Ramesh Nair, COO, business and international director, JLL India. “Navi Mumbai’s proposed international airport has finally got the last pending approval. The City and Industrial Development Corporation (CIDCO) has handed over 250 hectares of land, in lieu of 108 acres of mangroves that will be taken over for the project. In the latest development, the environment ministry made a key exemption, by waiving an earlier requirement that a mangrove sanctuary be created by the airport’s developers,” he elaborates.

Developers and government officials are positive about the realty market’s growth, once the Navi Mumbai international airport becomes functional in 2019. “Completion, or nearing completion, of the social infrastructure projects boost positive sentiment. It will increase the number of home buyers in this zone,” maintains Ashish Raheja, managing director of Raheja Universal.

Hurdles remain

However, property consultants from the area point out that the region is facing a recession. Developers have executed several standalone projects near UIwe and Dronagiri, with prices ranging from Rs 4,500 per sq ft to Rs 6,500 per sq ft. According to Nilesh Ambekar, an agent in Ulwe, there are fewer queries for standalone projects, as more people seem to prefer large township projects with better amenities. “Owing to the lack of social and physical infrastructure, end-users who intend to move in immediately, are hesitant to buy properties here,” he explains.

CIDCO, on its part, is planning to develop a ‘smart city’, Navi Mumbai Airport Influence Notified Area (NAINA), comprising of 30 towns around the airport. A press release by the Maharashtra Government, states that the city will focus on work areas pertaining to education, entertainment, medicine, logistics, commerce, science, industry, etc. and the government has already notified an area of 600 sq km for it.

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Will prices rise again?

According to a report by local real estate consultants, buyers from Mumbai and Navi Mumbai have started investing in properties in the area. Besides infrastructure developments, they are motivated by the prospect of companies setting up their base in the area and hope that the employees will buy or rent properties here.

“The new international airport has contributed to the inflated prices of real estate,” states Rajesh Prajapati, managing director of Prajapati Constructions, adding that prices of residential properties will rise further, as the airport materialises. “The international airport, which is expected to be functional by 2019, and the Mumbai trans-harbour link, are likely to be the game changers, for development of commercial property in Navi Mumbai,” he says.

Further appreciation in capital values will be linked to the progress of other proposed infrastructure projects, such as the Nhava Sheva-Sewri sea link, the Belapur-Taloja metro link, the Nerul-Uran rail link and various upcoming railway stations near Ulwe and Uran. “Navi Mumbai is quite vibrant, as there are a lot of opportunities that are evolving for home buyers, as well as developers,” concludes Dipesh Bhagtani, executive director of Jaycee Homes.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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