mum­bai con­tin­u­ing ex­pen­sive Prop­erty mar­ket

Realty Plus - - Region Focus -

• Is­land City: With lim­ited hor­i­zon­tal ex­pan­sion pos­si­ble, ver­ti­cal growth is the only way for­ward and this pushes up the cost. Fur­ther­more, the new de­vel­op­ments by way of re­de­vel­op­ment or Slum Re­ha­bil­i­ta­tion pro­grams are costly op­tions.

Reg­u­la­tions: The FSI/FAR of 1.33 is ridicu­lously low which is lim­it­ing the con­struc­tion po­ten­tial. Mum­bai Coastal Reg­u­la­tion Zone (CRZ) re­stric­tions too ob­struct the land avail­able for con­struc­tion.

RERA: With in­tro­duc­tion of RERA, small de­vel­op­ers will ei­ther cease to launch new projects or car­tel with large de­vel­op­ers to com­plete ex­ist­ing ones thereby re­duc­ing the sup­ply of projects and push­ing the rates higher.

• Re­stric­tive Prac­tices: Due to the lock-in pe­ri­ods and ex­or­bi­tant trans­fer fees by de­vel­op­ers, in­vestors are un­able to sell the as­sets for 24 - 36 months. This leads to lower ef­fec­tive sup­ply and in­crease in prices over time.

Global De­mand: With in­ter­na­tional com­pa­nies open­ing of­fices in the city, there is a per­pet­ual de­mand for high­end real-estate and branded res­i­dences that add to the rise in the real-estate prices.

NRI Des­ti­na­tion: NRI com­mu­nity gen­er­ally makes a long term in­vest­ment for fu­ture self-con­sump­tion. The as­set gets locked up for a num­ber of years and lim­its the float­ing stock avail­able for sale.

• De­mand & Sup­ply

Eco­nom­ics: The phe­nom­e­nal 35% in­crease in prop­erty rates over the pe­riod of June 2013 to March 2017 are a di­rect fac­tor of de­mand and sup­ply mech­a­nism and mar­ket forces.

vipul Pa­tel, Founder Mort­gage­world

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