A majority of the 2030 houses listed for sale by MHADA are priced above Rs 34 lakh, while the prices of houses in the higher income group have crossed into crores. Even a Mumbaikar from the lowest income bracket, with an income of up to Rs 6 lakh, cannot afford a house worth Rs 34 lakh. Consequently, MHADA, which claims to be a government organization providing affordable housing, is facing criticism from all sides.
Among the houses built by MHADA, the most expensive one is priced at Rs 1 crore 78 lakh, targeted at the high-income group. This raises questions about how an applicant from the lowest income group can afford a house priced at Rs 29 lakh, which is the minimum. Concerns are also being raised about whether banks will grant loans under such circumstances. Despite this, MHADA has defended the housing prices, with a MHADA official claiming that the prices of MHADA houses are lower than the market rate and, in some instances, about 30 to 40 percent less than the prevailing market value.
In contrast, house prices in Mumbai city often run into crores. The market value of these homes can be double the ready reckoner rates. Private builders frequently list their properties at higher prices. MHADA officials argue that their houses, despite being considered unaffordable by many, are comparatively cheaper than private builders' offerings. They noted that although the area of the houses in Mumbai city is small, the prices are high, with costs determined by the locality.
How is a house priced?
The value of the houses is determined by the total cost of the housing projects, taking into account factors such as rising prices of raw materials, cement rates, ready reckoner rates, and locality. MHADA engineers finalize the housing prices based on these criteria.
One example is the "Pradhan Mantri Awas Yojana" house priced at Rs 34 lakh. This scheme provides a subsidy of Rs 2.5 lakh—Rs 1 lakh from the state government and Rs 1.5 lakh from the central government. There are houses available under this scheme in Goregaon. Last year, these homes cost Rs 30 lakh, and this year, they are priced at Rs 34 lakh, inclusive of the subsidy.
Prices lower than the market price
There is a significant difference between the price of a MHADA house and that of a private builder's house in Goregaon, where it is challenging to find a home under Rs 1 crore. If a house is available in Goregaon for Rs 34 lakh, it is considered affordable compared to the market price. For someone with an income of Rs 6 lakh, MHADA houses can be seen as affordable, costing five or six times their income. In summary, MHADA house prices are lower than market prices, making them relatively affordable options for many prospective buyers.