How infra projects have led to Navi Mumbai’s real estate boom

Today, as it takes only 30 minutes to travel between Ulwe and south Mumbai through Atal Setu, a sharp scale-down from the earlier two hours, this part of the Mumbai Metropolitan Region (MMR) has become a lucrative playing field for real estate barons

MUMBAI: Panvel resident Renuka C is looking to buy a 1BHK in Ulwe, around 13 kms away from her present residence, measuring no more 450 sq ft, but finds the price of around ₹60 lakh for an apartment that size prohibitive. She does not have the luxury of time as property prices in the area, which was not a destination of choice for home buyers until recently, are skyrocketing.

Mumbai, India - Oct. 23, 2024: A view of the infrastructure at Ulew in Navi Mumbai, near Mumbai, India, on Wednesday, October 23, 2024. (Photo by Satish Bate/ Hindustan Times) (Hindustan Times)

The once sleepy villages of Ulwe, Uran, Palaspe, Dronagiri and Pushpak Nagar, spread out around the Atal Setu, Navi Mumbai International Airport (NMIA) and Jawaharlal Nehru Port, are no longer neglected areas of Navi Mumbai. In fact, since the Atal Setu opened in January, property prices in the five areas have increased by 8-10%, surpassing ₹1 crore.

Today, as it takes only 30 minutes to travel between Ulwe and south Mumbai through Atal Setu, a sharp scale-down from the earlier two hours, this part of the Mumbai Metropolitan Region (MMR) has become a lucrative playing field for real estate barons. The state government has added to the optimism of growth with a plan for a ‘Third Mumbai’ at the Ulwe end of Atal Setu, the country’s longest sea-bridge.

Real estate rates are predicted to rise further over the next few months as NMIA inches closer to commercial operations by March 2025. Property prices have also risen, said Kapoor, owing to the suburban railway network connecting CSMT with Ulwe-Dronagiri being completed.

Soon, finding affordable housing for the middle-class, such as Renuka, will become as much a challenge as it is elsewhere in suburban Mumbai.

Rise of the neo-suburbs

The development of neo suburbs started in the late 2000s with discussions to create NMIA and the Mumbai Trans Harbour Link (MTHL) -- now called Atal Setu – in the corridors of power. This prompted chief players of the real estate industry to rush and acquire land, irrespective of the size, from original inhabitants of the villages, to build and sell 320-350sqft “affordable” houses, recalled Kapoor. The buying frenzy peaked when the City and Industrial Development Corporation (CIDCO) in 2007-2008 put up a signage stating, ‘Site for International Airport, Navi Mumbai.’

Skeletal RCC structures soon mushroomed -- at Ulwe around 2009-2010, followed by Dronagiri in 2013-2014 along with CIDCO’s conceptualisation of Pushpak Nagar. By 2018, Palaspe, on the outskirts of Panvel, started grabbing attention.

Among the first buildings at Ulwe was Unnati under CIDCO’s affordable housing scheme. Located in Sector 19A, construction of the 42-building housing complex comprising 1,344 tenements began in 2008. The 330sqft, 370sqft and 452.35sqft houses for the economically weaker section and low-income group were priced between ₹4.5- ₹8.5 lakh.

Less than a decade later, despite poor maintenance, the smallest flat at Unnati today costs between ₹42 lakh and ₹45 lakh.

During Ulwe’s real estate mania, every second or third shop housed property consultants. “Many locals made a quick buck and changed their career around the Covid-19 pandemic or moved to other moolah-raking micro markets such as Dronagiri, Pushpak Nagar and Palaspe,” said AK Srivastava, an Ulwe resident. Pushpak Nagar, Dronagiri, and Palaspe are about 10-20 km away from Atal Setu.

While the proximity of the sea bridge to Mumbai serves as an attraction for home buyers, although the average price of a house in Dronagiri, Pushpak Nagar, Palaspe, and townships 13 km away from the Panvel railway station, have touched or surpassed ₹1 crore.

Nothing less than a crore

A few township projects near Rasayani, on the old Mumbai-Pune highway, such as Hiranandani Fortune City (HFC), Wadhwa Wise City (WWC) and The Highlands Godrej City (THGC) in Rees, Vardoli and Thombrewadi villages respectively are selling houses upwards of ₹1 crore by marketing them as being located in Panvel. (See box.)

An industry insider told HT, “Both locations and prices are out of sync right now, and developers are struggling to make sales.” He added, they periodically face resource-crunch as people are unwilling to travel this far to the project site.

A similar situation prevails in Ulwe, Pushpak Nagar, Dronagiri and Palaspe with developers seeking over ₹1 crore for homes in the range of 600-1,000sqft carpet area.

“Between 2013-2015, developers sold flats in Ulwe in the range of ₹4,000 to ₹4,800 per sqft depending on the size of the project, floor rise and amenities provided,” said Akshay Kharat, an Ulwe based realty consultant. This price was exclusive of costs such as development charges, parking, legal costs, registration, stamp duty, etc. Put together, 1BHK was available for around ₹20-22 lakh. Almost a decade later, the same in the resale market is fetching ₹45 to 50 lakh.

Realty players said Ulwe, Dronagiri, Palaspe and Pushpak Nagar are investor-driven real estate markets. “There continues to be immense housing stock for investors, many are likely to sell after the Navi Mumbai airport becomes operational as valuation appreciation is anticipated,” Kharat said.

The state government has also initiated plans to create a third Mumbai that is set to transform Ulwe, Pen, Panvel, Uran, Karjat and Navi Mumbai Airport Influence Notified Area (NAINA). “The future is in areas beyond the present Navi Mumbai,” said Niranjan Hiranandani, chairman of National Real Estate Development Council (NAREDCO) and managing director of Hiranandani Group.

Even though areas beyond Panvel are a mix of forests, industrial zones, villages, national highways and resorts, township projects by Hiranandani, Godrej and Wadhwa, located as far as 12-15 km from Panvel railway station, continue to be sold.

“When Panvel experienced a real estate boom in the late 2000, owing to the proposed airport and Atal Setu, developers and overseas financial institutions scooped up land in areas along the Old Mumbai Pune Highway for high prices,” said Kapoor. “The boom didn’t sustain due to lack of connectivity. So, land was resold, further escalating its cost. As a result, developers who acquired land will not sell flats below a certain price. Additionally, large realty companies with the financial wherewithal will hold on to the project even if sales are slow.”

If Kapoor and others from the real estate industry are to be believed, the hysteria around the neo suburbs is unlikely to stagnate, reinforced by year-on-year numbers.

“Currently, a 350-450 sqft 1BHK in Dronagiri, Palaspe and Pushpak Nagar carry the same price range. Ulwe is on the higher side because of its proximity and connectivity with Atal Setu,” said Raajesh Prajapati, co-founder and director, Prajapati Group, a Panvel-based developer with projects across Navi Mumbai.

Prajapati has also witnessed a rise in enquiries and sales from Pune-based investors, “from those who have work commitments in Mumbai”.

Mumbai-Navi Mumbai equaliser

Nasreen Dadan has been house hunting since 2022. Residing in Panvel for the last 17 years, the four-storey building she lived in is set to be redeveloped. Just over a year ago, the 44-year-old moved into a spacious 2.5BHK in a recently constructed high rise. While her budget for a 1,000-odd sqft house is between ₹60-85lakhs, the price on offer in areas such as Ulwe, Palaspe, New Panvel, Old Panvel and Kalamboli is ₹1.20 crore.

“Why should I pay ₹1.20 crore for a flat when plots a few hundred metres ahead are available for ₹45- ₹50 lakh. Buying a plot and constructing a villa will be more economical,” said Dadan. “A flat closer to Mumbai is also an option. My husband travels a minimum of two hours each direction to reach his workplace in Andheri east.”

Home buyers like Dadan have a point. Within Mumbai, a 2BHK in Goregaon’s Siddharth Nagar is being sold for ₹1.35 crore in Infinity Siddhivinayak, a redevelopment project, while a 3BHK in the One Vikhroli project in Kannamwar Nagar is available for ₹1.37 crore. In MMR, a 2 BHK’s price at Kalpataru Srishti Namaah, Mira Road, is ₹1.18 crore, and 2BHK at Rustomjee La Vie at Majiwada, Thane is being sold for ₹1.27 crore onwards.

Prajapati noted, various infra developments have led to a price parity between multiple suburbs of Mumbai, Mira Road and Thane with Navi Mumbai suburbs.