Having lived in Mumbai all my life prior to coming to Pittsburgh, I have been able to closely observe the development that has taken place in the city and its consequent impact on the people. Being an architect, the issue of housing in the city particularly interests me.
Mumbai is one of India’s fastest growing cities. The financial capital of the country, which generates 6.16% of the country’s total GDP is commonly known as the “city that doesn’t sleep”. Globalization has transformed Mumbai into a hotbed of economic activity. Several infrastructure improvement projects are being proposed such as a swanky new International airport, a metro line etc. Such projects give an impetus to the real estate development in the city. The base prices of land property automatically increases, for example around the proposed airport prices went up by about 20-25%.
India still being a developing country, most projects take a long period of time to be successfully executed. It raises many questions in the minds of both investors as well as users.
- When is the right time to buy?
- When is the right time to sell? Will my property appreciate? Is the expectation of the appreciation worth the wait?
- What if the project doesn’t materialize? What will the investment be worth? Will the decision of investing here prove to be a wrong one?
- Developers who have vacant apartments are in a fix whether to sell their property at lower rates in order to generate some income as compared to no income.
By the end of 2014, 57,000 lakh houses were unsold in Mumbai. A major reason for this was because a number of housing projects had been launched regardless of the declining sale of houses due to the exorbitant property prices. This inventory backlog would easily take two to three years to clear, assuming no new units are built. However builders have to announce new launches in order to manage their business and ensure cash flows.
In the process of wanting to achieve great milestones and making Mumbai a world class city, the planning officials have only doubled a problem that already persists in the city. There is a dearth of affordable living but at the same time there is a surplus of expensive vacant apartments. While the intention is good, the poor vision and lack of efficient implementation of the city officials is harming the city instead of paving the path to success.
The dynamic nature of Mumbai is counter weighted with an increasing social inequality. The extent of housing disparity and unplanned growth clearly affects the city’s overall productivity and competitiveness. The city needs a major upheaval of government framework who can recognize and work towards fixing the problems that are mounting in the city. Attention needs to be given to major infrastructure projects and delays need to be avoided in order to reap maximum benefits. Most importantly, solutions need to be sought for the citizens of Mumbai, because as Shakespeare has said “What is a city, but the people; True the people are the city.”