In the coming years, Metro rail corridors will criss-cross the city, improving connectivity and thereby real estate prices in better-connected parts. But for now, amid an already dull real estate market in the financial capital, the construction phase of the routes has led to the opposite.
“The city had been anyway witnessing a dip in real estate prices. The inconvenience caused due to the construction activity of the Metro corridors has led to a further dip. In the last three to four years we have seen prices dropping by 20-25 per cent, but marking a final blow in the real estate market for the city in the last one year with the construction activity in full swing, the prices have seen a decline of at least 8-10 per cent,” says Gulam Zia, Executive Director at real estate consultancy Knight Frank India.
Especially in South Mumbai, residents and brokers are jittery about the toll of the construction activity on the real estate market. “With the Central Business Districts (CBDs) moving out of South Mumbai to suburbs in areas such as BKC, the value was already dropping over the last few years. With the Metro construction coming into South Mumbai, it has further reduced values,” adds Zia.
At Cuffe Parade, once among the country’s most expensive real estate, since work started on the Colaba-Bandra-SEEPZ corridor, real estate agents have seen prices slide rapidly.
“There has been a 50 per cent drop in prices here over the last six years but just in the last six months we have seen the prices coming down from Rs 70,000 per sq ft to Rs 45,000-Rs 50,000 per sq ft. With the Metro work going on here, the local people do not want to live here. Now we only have people from Delhi or other areas taking houses here as they do not know much about the noise at the Metro sites,” says Sandesh Bhai, a real estate broker in Cuffe Parade.
Pervin Jehangir, a resident of Jupiter Apartment at Cuffe Parade, says she was shocked that an area like Cuffe Parade, which has always had a booming housing market, saw such a dip in prices. “The rates have gone down by almost 25 per cent to 30 per cent,” she says.
Experts say the dip is only temporary, exacerbated by the noise and lack of parking and road space on barricaded sections. But those trying to rent out apartments or sell are an unhappy lot.
“However, it is not a long-term trend and, in the long run, it will be good for Mumbai. Once the construction is complete it will provide good connectivity and people will want to buy houses there. The impact is more in the western suburbs than in South Mumbai,” said Niranjan Hiranandani, president of the National Real Estate Development Council (NAREDCO).
Ajay Jain, Joint MD of Sun Capital, agreed that the temporary inconvenience has led to people shifting their offices or homes. “However, it is a temporary move and it has had very little impact on the market,” he said.
Zia, however, believes the spiral could last longer. “People prefer to live in South Mumbai due to the accessibility and convenience of transport. With the Metros coming up the travel experience will improve in the far suburbs, the land parcels away from the city will become more accessible and people will prefer to live in those areas. The better infrastructure will keep real estate prices in check in South Mumbai. We have seen this in cities like Ahmedabad and Hyderabad where with better infrastructure the prices do not move,” Zia says.
But it’s not just the temporary realty market dip that has residents worried. The Metro 3 construction work has also has an impact on businesses and commercial establishments across the 33.5-km alignment of the route.
For nearly three months now, Sanjay Tambe of Om Jewellers in Dadar has stopped putting his jewellery on display at his store. He has also sent most of his staff home — with no customers to serve there is no work. With Gokhale Road barricaded for the construction of Metro 3, his shop front is almost entirely blocked, the narrow access causing his business to take a major hit.
“Our business has seen a dip of at least 99 per cent since the barricades were put up here in December. There is no point in displaying the jewellery when there are no customers. They are simply gathering dust. Not only has the barricade reduced the width of the footpath by more than half, it has also created a dead end at my shop. Customers do not want to walk through the whole mess to access the shop. The only customers we have are the old ones who call us and get jewellery delivered to their home,” says Tambe. Other commercial establishments nearby also complain of massive losses. Noticing a dip in footfall at a private bank, the branch manager decided to send his staff to nearby residences in search of new customers. The construction of the Metro 3 Mumbai Central station in front of the Maratha Mandir cinema hall has led to reduced ticket sales at the iconic theatre — with the front entry closed by the barricades, theatre-goers find it difficult to reach the venue.
“We have seen at least a 10 per cent dip in sales since the construction began a year ago. We had to keep guards outside to guide people to the back entry of the theatre,” says Manoj Desai, Executive Director of Maratha Mandir. A similar issue is faced by Samrat Restaurant in Churchgate, the entry to which has also been narrowed by barricades for construction of the Churchgate Metro station. Its adjoining bakery, 210 degrees, has also seen a drop in customers. A manager at the restaurant says, “Before the Metro construction work began, college students and other customers would visit 210 like any other cafe. But for the last six months, because of the noise, customers have stopped hanging out at 210. They visit and parcel their food.” Samrat itself has seen a drop in business because the visibility of the restaurant is poor and parking outside is now difficult.
Representatives of the Mumbai Metro Rail Corporation said they do not wish to comment on the subject.