Maharashtra Chief Minister Devendra Fadnavis stated that major infrastructure projects and lower premiums did not lower home prices. Instead, prices increased. He spoke to top real estate developers in Mumbai. Fadnavis mentioned that a typical approach will not create affordable housing. He noted that big projects and reduced construction fees did not make homes cheaper. In fact, they made prices go up.
Fadnavis was speaking at an event by CREDAI-MCHI. This group represents developers in the Mumbai region. He said, “We did what you suggested for affordable housing for ten years. Prices never dropped.” He added, “You asked for lower premiums. We reduced them, but home prices climbed higher.” He also said, “We thought projects like the Coastal Road and Atal Setu would reduce prices. But prices soared because of the Coastal Road.” He concluded, “To truly improve affordable housing, we need different solutions. We cannot continue with the same old methods.” In Mumbai, developers pay fees to city authorities for construction rights.
The Chief Minister also commented that rising property prices are not entirely bad. They can bring more money into the economy.
Property consultants report that Mumbai has seen rapid growth in home prices. It ranks among major global cities. A recent Knight Frank report showed Mumbai’s housing prices rose 8.7% in one year. This was during the April-June quarter. Mumbai ranked sixth out of 46 markets studied.
A report by EY and CREDAI predicts real estate’s share of India’s GDP. It could reach about 18% by 2047.