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MHADA lowers cost of flats in Mumbai by 25%-30% after poor sales

Hit by poor sales, the Maharashtra Housing and Area Development Authority (MHADA) on Friday announced it will reduce by 25% to 30% the prices of the 1,194 apartments it plans to sell in a lottery draw in the next few months.

mumbai Updated: Oct 13, 2018 00:16 IST
Naresh Kamath
Naresh Kamath
Hindustan Times
Mumbai news,Mumbai housing,MHADA flats
(HIndustan Times)

Hit by poor sales, the Maharashtra Housing and Area Development Authority (MHADA) on Friday announced it will reduce by 25% to 30% the prices of the 1,194 apartments it plans to sell in a lottery draw in the next few months.

MHADA president Uday Samant said it was imperative to lower prices to attract buyers. “We want to offer MHADA houses at affordable rates, and we are doing everything to cut the costs,” he said. After the reduction, a MHADA apartment in Lower Parel which earlier cost ₹1.40 crore will now be priced at ₹99 lakh, Samant said. MHADA sells apartments at subsidised rates, as it is a government agency with its own land bank. This means, spending on acquiring land is negligible compared to the private market, where land price keeps property rates high.

As a result, MHADA houses have been in great demand — in the past 10 years, 14.13 lakh people have applied to buy 23,742 houses that were put up for sale. But , over the past few years, the rising cost of flats have meant fewer people are signing up to buy them.

For instance, the cost of flats sold under the high-income group category has crossed ₹1 crore.

In 2009, 4.30 lakh people applied for 3,863 houses put on sale under the lottery scheme, but by 2016, only 1.30 lakh applied for 4,275 houses.

“Land cost is the highest component in any real estate project,” said real estate expert Ajay Chaturvedi. “Despite MHADA having its own land, the prices of apartments are almost as high as what private builders charge. MHADA needs to lower prices significantly if it wants to provide low cost housing,” said Chaturvedi.

The move to reduce the prices was also triggered by how 29 of the 36 lottery winners for apartments in Lower Parel returned their apartments because they were too small, but priced exorbitantly high. These apartments were between 363sqft and 475sqft but were sold for ₹1.42 crore and ₹1.96 crore respectively.

The lottery is scheduled for the end of 2018 for houses in Antop Hill, Sion’s Pratiksha Nagar, Mankhurd, Tagore Nagar at Vikhroli, Pant Nagar at Ghatkopar, Sahakar Nagar at Chembur, Siddharth Nagar at Goregaon and Parel.

First Published: Oct 13, 2018 00:16 IST