Niranjan Hiranandani forecasts historic growth in Maharashtra real estate, powered by policy clarity

Economic Times

21-05-2025

"Whether a private developer who does redevelopment or is going for slum rehabilitation is able to make affordable housing in a city like Mumbai?," says Niranjan Hiranandani, Hiranandani Group.
ADVERTISEMENT After a long 18 years, finally the Maharashtra housing policy is going to be passed. Tell me, is it going to go far enough in addressing the state's massive housing shortfall, especially when it comes to the affordable segment?
Niranjan Hiranandani: Let me tell you it is unprecedented. It is unbelievable. It is fantastic. The vision and the statement is out of the world. This is an equivalent amount which the prime minister had done when he first became the prime minister under the PMAY scheme. He had talked of 70,000 crores of rupees under the PMAY scheme for the whole of India.
Now Mr Devendra Fadnavis now on this new policy is talking about 70,000 crores of investment direction for the purposes of Maharashtra alone, so that is a big statement. Number two, they are talking about every segment of society in terms of doing it, whether it is slums, whether it is rehab, whether it is inclusive housing, whether it is green buildings, whether it is residential in the industrial areas where there will be walk to work, all these factors are taken into consideration for the purposes under the new policy.
So, fantastic policy, fantastic comprehensive thing whatever it is. However, he has not left it to chance. What has he done? He said I am making an information portal under AI which will monitor everything that is going to be done.
So, it is not just a statement of fact that he is doing but he is probably making a road map which will actually be monitored in his state of things as he does in the case of infrastructure projects, the war room which he has put when he first became the chief minister and did the Atal Bridge, the coastal road 300 kilometres of metro. Now, housing seems to be the new focus which he is also talking about. So, three things – one, size and scale including every aspect of society, including industrial, including inclusive housing, looking at every aspects of housing which is to be done and monitoring it carefully to the finish.
ADVERTISEMENT A combination of events I have not heard from Maharashtra for a long period of time on the housing side, never. So, it is unprecedented and fantastic. If it actually gets executed, there will be a paradigm in respect of homes and housing in Maharashtra in the next five years.
But also, you have been quite vocal about the need for affordable housing. So, will this policy bring back the momentum for private capital and institutional investments into affordable housing because, of late, we have seen a lot of these real estate developers exit this segment, but do you think that this policy offers assurance and incentives to the private developers to now is the time to make a comeback?
Niranjan Hiranandani: Yes and no. Yes, because a lot of incentives are being given for the purposes of affordable and inclusive housing. So, yes, that direction will be there. But whether private players will be able to make affordable housing or not, that depends on other policies. So, for example, the ready reckoner rate in Mumbai is so high, so high, and that it is unable to get the additional FSI on redevelopment at a reasonable rate.
ADVERTISEMENT So, whether a private developer who does redevelopment or is going for slum rehabilitation is able to make affordable housing in a city like Mumbai? Answer is no. But with government incentives which obviously will follow for the purposes of this area of segment of society, maybe it will change, but they will have to relook at a lot of additional FSI charges which are now being levied by the state government, the stamp duty, other development charges which are levied by the corporation and state government also. So, then only affordable housing can be done by the private sector. But obviously, government's intent in order to do this irrespective of whether it will be done through the private sector or the government sector is to be seen depends on how they implement the policy and the changes they make which are consequent and necessary to implement the policy if they want the private sector to do it.
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Also, want to get your view on how this policy is going to affect a land bank development in the city. Do you think this is going to help unlock land for mass housing projects in key regions like MMR and Pune because that is also one of the focus areas that the policy aims to achieve?
Niranjan Hiranandani: 100%, it will definitely make a difference because ultimately land has been made available because that is in the periphery of Mumbai, periphery of Pune. We have a large number of land and land banks which can be developed into it.
ADVERTISEMENT Government is also working on all those schemes. If you see the plan for Mumbai 3.0 around Mumbai area where we have the airport, where we have the MTHL, where we have the Panvel-Karjat railway line coming up in the next two years, plus the elevated road from Chirle to the Pune Highway. All these factors will actually go in for a huge amount of development. Also, Navi Mumbai, Panvel area will get a huge boost. Also, the periphery of Pune especially on the direction on the Mumbai side of it will get a bigger boost because the new airport is coming. So, the opening of the new airport will also bring the new airport on this side of Pune. So, this development is definitely going to happen, but we are looking forward to consequential policies in terms of taxes and additional FSI rates and charges which are very high at this point of time, but the answer is yes affordable housing will get created in the periphery of both these areas.
We understand that the policy has big goals and as much as it is a welcome step for Maharashtra real estate. Help us understand if you see any on ground challenges in the execution of this policy.
Niranjan Hiranandani: It is very simple. If there were not challenges, there would not be a need for a policy of this kind. There are so many challenges. 50% of my population of Mumbai lives in jhopadpatti, that itself is a big challenge. The growth of Mumbai and periphery is going to be there. But remember one thing, this year you are going to see the highest growth of real estate in the history of India. The growth is estimated to be 25% growth in the year 2025. This has been confirmed by various authorities. We have just seen reports of various IPCs also talking about it.
So, the Mumbai, Pune, MMR region is going to attract a lot more construction and development only because infrastructure is being developed in a very holistic way by Maharashtra government. This leadership is second to none and you will see a 25% growth in this region in the year 2025, this is my guesstimate. We could definitely cross 20%, but it could be 25.