Why Are Navi Mumbai Real Estate Prices Rising?

The satellite town of Navi Mumbai is an experiment in urban planning that many economists expected to fail; the success rate of such experiments has been quite low, they argued. The reasons are fairly obvious. When governments and local authorities build satellite cities to decongest the heart of a city, it does not happen quite the way they want it to be. Jobs and residences will be dispersed farther than they should be because many people who live in the satellite city work in the city core, and vice versa. This will lead to further congestion on roads and raise commute time. Built-up area of the city will be spread over a large area, as it is in Mumbai today.

Proving them wrong

However, the real estate price trends in Navi Mumbai are proving the naysayers wrong. The uncultivated land near Navi Mumbai in Pushpak Nagar in Dapoli is being sold for large amounts of money. The area is near the proposed Navi Mumbai airport. Real Estate developers, investors, high-networth individuals (HNIs) and property advisors are buying large tracts of land to gain from the rising real estate prices.

Though city planning organisation Cidco pegged the selling price of land at Rs 10 crore per acre, authorities expect the price of land to rise to Rs 60 crore per acre after the airport becomes operational. When the body acquired land from farmers, it allocated land to them for building houses. The body promised that 12.5 per cent of the plot will be allocated for housing elsewhere in the city, with all necessary infrastructure. It later raised this from 12.5 per cent to 22.5 per cent.

Here's a look at why real estate prices in Navi Mumbai are rising:

Navi Mumbai is one of the rare possible areas of urban extension in land-scarce Mumbai. However, what prevents it from achieving its full potential is that transportation networks are not fully adequate. For example, if the Mumbai Trans Harbour Bridge were built, the commute time from Navi Mumbai to South Mumbai would drop significantly. Even though a study on the bridge was undertaken as early as 1962, it was not clear until recently when the bridge would be built. There are proposals to connect the MTHL Bridge to the Navi Mumbai International Airport. 

The Markhurd-Malapur Rail Link and the Vashi (Creek) Bridge connect Navi Mumbai to central areas of the city. Until recently, there were no ways to connect Navi Mumbai to prime areas of the city. 

The Navi Mumbai International Airport (NMIA) is one of the largest greenfield airports in the world. According to a PropTiger DataLabs report on Navi Mumbai, it is expected that NMIA will lead to nearly 1.4 lakh jobs directly and nearly 2 lakh jobs indirectly. This will raise the demand for real estate in these areas. The demand for housing will also rise, because people who work in Navi Mumbai will drive up demand for residential real estate.