Cannot achieve affordable housing with ‘business as usual’ approach: Maharashtra CM Fadnavis tells realtors

Maharashtra CM Fadnavis noted that despite incentives, home prices have continued to increase

Devendra Fadnavis, the chief minister of Maharashtra told Mumbai’s top real estate developers during an event that governments as well as realtors will not be able to push for affordable housing in the city with the ‘business-as-usual’ approach, as triggers like big-ticket infrastructure projects as well as reduction in construction premiums have not resulted in home prices falling, but instead have only gone higher.

CM Fadnavis was addressing an event organised by CREDAI-MCHI, the developer lobby group CREDAI's chapter for the Mumbai metropolitan region over the weekend.

"For the last ten years, we have done all the things that you (the developers) said will improve affordable housing, but prices have not reduced. This is not a complaint, but you demanded that premiums be reduced, but when we did so, we saw that home prices did not reduce. We thought that if we built the Coastal Road and Atal Setu, home prices will reduce, but prices reached the skies due to the Coastal Road...If we have to improve affordable housing in real terms, we have to bring in different interventions. We can't do it with a business-as-usual approach," Fadnavis said during his address. Real estate companies in Mumbai pay a construction premium to civic authorities, also known as development charge, for the right to various construction activities.

The Chief Minister added property prices rising is not necessarily an adverse outcome as more capital gets injected into the economy.

Across major global cities, Mumbai has recorded one of the fastest growth in residential prices, according to property consultants. A recent report by Knight Frank showed that Mumbai's housing prices rose by 8.7 percent on-year during the April-June quarter, ranking sixth out of the 46 major residential markets tracked in the report.

According to a report by EY and CREDAI, the share of real estate in India's gross domestic product is expected to reach around 18 percent by 2047.