Will Cabinet's approval of new Metro corridors impact real estate markets in Thane and Pune?

August 20th, 2024

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The approval of two Metro projects in Pune and Thane is expected to lead to growth in real estate markets in both the cities

The Union Cabinet recently approved two metro rail projects in Maharashtra's Thane and Pune. The two Metro rail projects worth over ₹15,000 crore are expected to give a boost to the real estate markets in both the cities, said real estate experts.

In Thane, the cabinet approved a 29-km long ring corridor that will run along the periphery of the west side of the city and will have 22 stations. The network will be flanked by the Ulhas River flowing on one side and the Sanjay Gandhi National Park [SGNP] on the other, the government said in a statement.

The corridor connects major business hubs and would provide an effective transport option for a large section of employees and is likely to be completed by 2029.

How will the Ring Metro impact the Thane real estate market?

The current per sq ft rate in Thane is around ₹10,000 per sq ft to ₹25,000 per sq ft depending on the location. Rental values in Thane are between ₹20,000 to ₹45,000 per month for a 2 BHK, said local brokers.

With the satellite city near Mumbai already having two Metro corridors, the third proposed ring Metro corridor is expected to boost the realty market there, they said.

"Prices increased by almost 10-20% after the construction of the earlier Metro corridor along Ghodbunder Road. With the Metro corridor now expected to expand towards Bhiwandi, Kalyan from Thane, the residential and commercial prices may witness a further increase," said Mihir Doshi, a real estate consultant active in the area.

This 29-km connector that is proposed is different because it is a ring Metro corridor similar to a ring road. It is expected to connect Old and New Thane and also areas around Thane railway station, leading to enhanced connectivity. It may also lead to increase in real estate prices, especially after old buildings in Thane go under redevelopment once the ring corridor is operational, he added.

Sales in the Mumbai Metropolitan Region (MMR), that also includes Thane, increased by 5% to touch 1.32 lakh in FY24 from 1.25 lakh in FY23. Unsold inventory too went up by 5% in MMR to touch 6.05 lakh in FY24 from 5.76 lakh in FY23, according to data shared by CREDAI-MCHI, the apex body of the real estate sector and CRE Matrix, a real estate consultancy firm in July 2024.

The Thane real estate market witnessed a 9% increase in sales while launches went down by 36% and unsold inventory dipped by 2%, the report showed.

Impact of the new Metro corridor on Pune’s real estate market

Along with Thane, the Union Cabinet on August 16 also approved the Swargate to Katraj underground metro line. This is an extension of the existing Pune Metro Phase-I project. This will be known as the Line-l B extension and will span 5.46 km. It will include three underground stations, connecting key areas such as Market Yard, Bibwewadi, Balaji Nagar, and the Katraj suburbs, said the government statement.

According to experts, the extension will improve connectivity between North Pune and South Pune and it is set to be completed by February 2029.

The new Metro connector may lead to growth in economic activity in and around South Mumbai, said experts.

Property prices in Katraj currently hover around ₹6,000 per sq ft and a 2 BHK apartment in the area is available for a monthly rent of around ₹20,000 to ₹25,000 per month, said local brokers.

"The approval of the new Metro corridor will boost connectivity between Hinjewadi and South Pune. Every major transit infrastructure project boosts real estate markets in that particular area and this Metro project extension is no exception. Currently, we are seeing up to 7% capital value appreciation in Pune, and infrastructure projects can help to surpass this annual appreciation number. In fact, once the project gets operational and citizens experience its usefulness, capital values may be much higher than the current levels," said Aditi Watve, City Lead, Capital Markets, Pune, at ANAROCK Group.

Vimal Nadar, Senior Director and Head of Research, Colliers India, said that the Thane integral ring metro rail project is expected to significantly improve connectivity within Thane as it will connect key residential and commercial hubs including Navpada, Wagle Estate, Hiranandani Estate, Kolshet.

“It will ease commuting as the metro will serve as an effective internal mode of transport and decongest several areas within Thane. This metro network will act as a catalyst in the growth of established residential and office markets, thus appreciation in capital values and rentals over time,” he said.

Source: hindustantimes.com

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