Luxury real estate demand may see moderation in near future
The luxury real estate segment is likely to plateau in the near-future and affordable housing may take off as the new government takes charge, said Pankaj Kapoor, founder and managing director of real estate research firm Laisas Foras. Niranjan Hiranandani, the managing director and co-founder of Hiranandani Group, said the new government should take steps to ensure affordable housing is possible in cities such as Mumbai. “Today, almost 50 percent of the cost of the house is in government taxes, charges for development, floor space index and goods and services tax. As far as affordable housing is concerned in Mumbai and the suburbs, these taxes need to come down otherwise it is just not possible. Affordable housing doesn’t exist because the government charges are just too high,” Hiranandani told CNBC-TV18. On the real estate outlook of the financial capital of the country, Hiranandani said he is upbeat and believes change in political composition in both Maharashtra and the country, following the outcome of the Lok Sabha elections 2024, will not have any impact. Apart from the state, the Central government also has prioritised infrastructure of Mumbai. He said, “… the central government’s commitment for the city includes bullet train, Delhi-Mumbai industrial corridor… if you look at Mumbai separately, in the next two years 330 km of metro will be coming up, we have a coastal road going to be delivered in the next three months and we have a cross harbour link, which is opening a new scope of development in the city.” The support will be there as far as affordable housing is concerned despite INDIA bloc getting a higher number in the state, he said.Moreover, Hiranandani believes that the new government, which will take charge after the upcoming Maharashtra elections, will prioritise slum redevelopment. With the kind of mandate the Prime Minister Narendra Modi-led government at the Centre received, Kapoor believes affordable segment is likely to get a boost. However, he also noted that investment in infrastructure is unlikely to slowdown despite the less-than-expected mandate for the saffron party.
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