mumbai continuing expensive Property market
• 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