Affordable Housing Is Destroyed': Hiranandani and Lodha on Mumbai Homes

Two of Mumbai's best-known developers used a panel at the News18 Rising Bharat Summit to describe an affordability crisis, according to Business Today reports on November 2 and 3.

What did Abhinandan Lodha say?

Lodha said buying a home in Mumbai has become nearly impossible for young professionals, even those who earn well, because of soaring land prices, construction costs and government levies. To show costs can come down, he cited a project at Nayagaon (Naigaon) near Mumbai where his company used technology and changed its sales and marketing strategy, and said it cut its overall project cost by 22%.

What did Niranjan Hiranandani say?

Hiranandani warned that affordable housing is in crisis, calling it a destroyed segment, and pointed to government-related costs as a driver of Mumbai's property prices. He proposed rental housing as a practical alternative and said tax rebates could attract developers, banks and financial institutions to build it. He argued that companies and trusts could provide service housing.

How does it fit with the data?

FICCI-Anarock found affordable homes fell to 14% of new supply from 25%, while high-end and luxury homes rose to 45%. CREDAI has said a new affordable housing policy is expected within about six months and wants the Rs 45 lakh price cap removed. In Mumbai, October registrations rose 9% to 12,690 and stamp duty rose about 13%, showing demand is strong at the price points that are selling.

 

What should we make of the proposals?

Rental housing needs land, tax incentives and long-term returns, which developers have found hard to earn. Cost cuts of 22% on one project are an example, not an industry norm.

What to watch

The affordable housing policy expected within months, and whether rental housing incentives are included.