PRICE-CAPACITY MISMATCH

Industry experts believe the underwhelming response is due to a cost-market mismatch — the homes on offer are too expensive for the class of people who are allowed to apply for them. Rajesh Prajapati, founder of Prajapati Constructions explained the math: For the EWS category, CIDCO has priced homes between Rs 25 lakh and Rs 48 lakh, but the income cap for applicants is Rs 6 lakh annually, or Rs 50,000 per month. Many buyers in this segment would find it difficult to buy at these price points, creating a mismatch between the pricing and the financial capacity of the targeted demographic.

Additionally, the massive supply — the sheer number of homes available — may have reduced the urgency among potential buyers.

LACK OF CUSTOMISED SOLUTIONS

Also, unlike private developers, CIDCO’s bureaucratic structure and lack of flexibility in payment terms may have deterred some buyers who prefer direct access to developers and customised solutions based on their individual requirements.

Another key issue is the increasing number of private housing options in Navi Mumbai, driven by the development of the New International Airport and other private projects. Private developers offer more choices, including larger homes with better amenities, which has diminished the appeal of CIDCO’s smaller, more basic units.

This is an archive article published on February 5, 2025

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22K buyers for 26K homes: Why has CIDCO’s mass housing scheme in Navi Mumbai seen a poor response?

Officials say this is the first time in recent lotteries that the number of final participants is less than the number of housing units on offer. One reason could be that the units are too expensive for the target group. What else could be responsible?

CIDCO, a town planning and development company that is fully owned by the Maharashtra government, offered 26,000 affordable homes under its ‘My Preferred Home’ mass housing scheme in Navi Mumbai, but received only 22,000 confirmed buyers.

Written by: Sweety Adimulam

3 min readMumbaiFeb 5, 2025 11:45 AM IST First published on: Feb 5, 2025 at 08:01 AM IST

The City and Industrial Development Corporation of Maharashtra (CIDCO) is facing the unusual situation of having fewer confirmed buyers than the number of homes it has put on offer in Navi Mumbai. CIDCO will announce the results of the lottery – which has limited value in this situation of supply outstripping demand – for the flats on February 15.

What has happened, and why?

The housing scheme and the numbers

CIDCO had earlier held a lottery for 7,849 homes located in the Ulwe node, a suburb of Navi Mumbai, which had received a good response. Officials said this is the first time in recent lotteries that the number of final participants is less than the number of housing units on offer.

CIDCO received more than 1 lakh initial applications for the 26,000 homes, but only 22,000 went on to make the earnest money deposit (EMD) — a critical step for confirming serious interest. The deposit varies from Rs 75,000 for the Economically Weaker Section (EWS) category to Rs 1.25 lakh for the Lower Income Group (LIG).

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CIDCO has explained that many applicants submit multiple applications to increase their chances of selection. However, only those who are genuinely interested follow through with the EMD payment.

Why the lukewarm response to scheme

01
PRICE-CAPACITY MISMATCH
Industry experts believe the underwhelming response is due to a cost-market mismatch — the homes on offer are too expensive for the class of people who are allowed to apply for them.

Rajesh Prajapati, founder of Prajapati Constructions explained the math: For the EWS category, CIDCO has priced homes between Rs 25 lakh and Rs 48 lakh, but the income cap for applicants is Rs 6 lakh annually, or Rs 50,000 per month. Many buyers in this segment would find it difficult to buy at these price points, creating a mismatch between the pricing and the financial capacity of the targeted demographic.
02
OVERSUPPLY
Additionally, the massive supply — the sheer number of homes available — may have reduced the urgency among potential buyers.
03
LACK OF CUSTOMISED SOLUTIONS
Also, unlike private developers, CIDCO’s bureaucratic structure and lack of flexibility in payment terms may have deterred some buyers who prefer direct access to developers and customised solutions based on their individual requirements.
04
CHOICES ELSEWHERE
Another key issue is the increasing number of private housing options in Navi Mumbai, driven by the development of the New International Airport and other private projects. Private developers offer more choices, including larger homes with better amenities, which has diminished the appeal of CIDCO’s smaller, more basic units.

What has CIDCO done to attract buyers?

The agency has extended the application deadline several times, with the final date set for January 31, 2025. To spread the word, CIDCO also took part in the Navi Mumbai Property Exhibition from January 24-27, 2025.

The mass housing scheme of 26,000 units is part of the Pradhan Mantri Awas Yojana (PMAY), the central government’s flagship affordable housing scheme. Prices start at Rs 25 lakh for EWS homes and go up to Rs 97 lakh for LIG homes.

CIDCO may need to recalibrate its pricing strategy and offer more flexibility to stay competitive in a market brimming with alternatives. The mass housing scheme is an important step towards addressing Mumbai’s housing challenges, but its success will likely depend on how well CIDCO adapts to evolving market dynamics and buyer preferences.

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