MHADA cuts home prices as demand soars for affordable housing

MHADA has slashed prices by over Rs 1 lakh. Representation pic

It has been observed that every time the Maharashtra Housing and Area Development Authority (MHADA) announces a lottery, the number of applications exceeds the number of available houses. In 2023, MHADA received over one lakh applications for 4000 affordable homes, while in August 2024, it received more than 30,000 applications for 2000 affordable homes. However, in December 2024, this streak stopped after the authorities received only 10,000 applications for over 14,000 houses announced in October 2024.

These houses are constructed in various parts of Mumbai and its neighbouring areas, such as Virar-Bolinj, Khoni-Kalyan, Shirdhon-Kalyan, Gotheghar-Thane, and Bhandarli-Thane. Of these, the ones that have been built in Khoni and Shirdhon, received the fewest applications. The reason behind vacant houses was due to lack of basic facilities; however, things remain the same even after several facilities have now been provided. The deadline to apply for these houses was also extended to December 24, 2024. However, as of June 21, 2025, only 4200 tenements have been sold, out of the 12,201 houses available at both locations.

MHADA explains

Despite several efforts by MHADA such as street plays and setting up information kiosks at 29 locations across the city to promote this scheme and boost sales, it has been observed that the houses here are not being sold.

When mid-day asked for the reason, MHADA's Konkan Board Chief Officer Revati Gaikar explained, "These houses have been launched under the Pradhan Mantri Awas Yojana (PMAY) scheme. Most of the applicants under PMAY are unskilled labourers and daily wage earners or those with new jobs. This makes it difficult for them to get home loans. While we received excellent responses for our 2018 and 2021 PMAY houses, the flats in Khoni and Shirdhon are vacant because the beneficiaries did not qualify according to the PMAY conditions."

Gaikar further said that as the PMAY scheme is jointly implemented by the Centre and State governments, hence it is not possible to relax certain conditions. "Big or nationalised banks generally hesitate to sanction a home loan when applications are received from low-income groups, as the risk of them defaulting on the loan is high, and generally, they do not have anything to keep the mortgage. A person having an annual family income of a maximum of R6 lakh a year is seen as a high-risk applicant, and thus most banks prefer to not sanction their housing loans," said a chief manager (home loan) of a bank.

Now that MHADA has announced a reduction in the price of these houses, the authorities are confident that more applications will pour in. "The problem of electricity and water supply has been solved by providing both facilities through the MSRDC and MIDC pipeline. Apart from this, we have decreased the price of houses at Shirdhon by R1,43,404 and Khoni by Rs 1,01,800. The new prices of the houses now stand at Rs 19,28,742 and Rs 19,11,700, respectively. We are also developing mixed amenities such as a multi-purpose hall, a gym, and supermarkets for daily-needs products in the vicinity, along with having plans to provide schools and hospitals within the projects, which will also help attract more buyers," said Gaikar.

As of now, MHADA does not plan to make these houses available for buyers of other categories. "Based on our previous experience with lotteries and sales, we are confident that these houses will completely sell out soon, as demand continues to rise," concluded Gaikar.