The last few days of 2014 saw a big change when the new chief minister (CM) was sworn-in. Due to the impending elections, the previous government put all big infrastructure projects on a fast track. As a result the impact was visible in the fall of 2015, when the vision and the mission started taking shape.
In short, this year Mumbai market saw the after effects of 2014, when several new infrastructure projects such as double deck flyover, monorail and the metro got operational. This obviously also impacted the property market at various fronts which includes not just the property prices, locations but also the flow of demand and supply.
40% increment in ready reckoner rates
Like every year, the beginning of 2015 saw a hike in the ready reckoner rates that made home buyers feel the pinch of expensive realty of Mumbai. Premium residential localities such as Worli and areas near the Bandra-Kurla Complex were among the places where rates have increased by 30-40 per cent. While the average hike across the city was between 15 and 20 per cent for 2015, the highest increase was about 40 per cent.
Slew of new infra projects took shape
As the new government took charge, the first thing that the CM did was to put the development of the Navi Mumbai International Airport on a fast track. As the construction was stalled due to land acquisition issue, the judiciary cleared the deck and gave a go ahead to CIDCO to develop the same. The deadline given is 2019.
Impact: With little work being done on ground, it might further get delayed.
Coastal roads project is another big ticket infrastructure development that caught the fancy of the urban planners. These roads are planned to connect Nariman Point with the extended Western Suburbs.
Impact: If materialised, it would bring down traffic congestion on the Western Express Highway. This would also impact the property markets of the extended suburban areas such as Mira Road, Bhayander, Malad and Borivali due to easy and swift connectivity to the town area. Currently the local train network is the fastest medium to travel to South Mumbai, which remains crowded round the clock.
For 2016: Expansion of monorail and development of Thane metro were also on the cards but remained at the planning stage.
Unsold inventory crossed 70,000
As per Jones Lang LaSalle Incorporated, the total unsold stock in Mumbai reached 77,000 in 2015 with 60 per cent of the total properties priced above Rs 1 crore. In fact the number of project launches also fell as compared to the previous year.
Impact: Since builders want to reduce the existing inventory, they chose to sell it by introducing various deals and offers. However, as per experts, the transactions did not pick up - neither on Gudi Padwa nor during the Diwali festival, which left property developers high and dry.
For 2016: The market is expected to remain subdued for the next six months as well, opines Samrantak Das, Chief Economist and National Director at Knight Frank India.
Smart city initiatives
Greater Mumbai, Navi Mumbai and Thane are the three locations shortlisted for the 100 Smart Cities project.
Impact: This would include redevelopment, retrofitting and development of existing infrastructure in Greater Mumbai while for Thane it would be including factors like communication and mobility, energy efficiency, green buildings and transportation.
For 2016: With a vision of enabling convenience in the affordable regions of the Mumbai Metropolitan Area, various municipal authorities are working on proposals which have been submitted to the centre for review. Other than this, the Kalyan-Dombivli belt is also planned as the Bandra Kurla Complex like commercial space.
Development Plan 2034 went awry
The Municipal Corporation of Greater Mumbai came out with the Development Plan 2034 early this year. However, things went awry when citizens, stakeholders and urban planners cried foul because of numerous errors and misses. The reason why the draft development plan was heavily criticised was its failure to address issues like affordable housing, lack of open spaces in the city, transit oriented densification, differential FSI and infrastructural development to support the rising population. Hence the government rejected the piece and guided the corporation to come up again with a draft development plan. The year 2016 would hopefully see a better version of the development plan.
State regulatory body
The Maharashtra government is all set to form a regulatory body as the cabinet has given nod to the Real Estate Regulatory Bill 2015, with certain amendments and changes. This regulatory bill mandates to register real estate developers and contractors under a competent authority. Without such registration, developers and contractors will not be granted permission to conduct business. This would prevent buyers to fall into the trap of fraud developers and realtors, especially in areas which are early in the development cycle and have projects in the under-construction phase.
The year 2015 is ending on a hopeful note that with the coming of 2016, the real estate sector would see better days. The much awaited Real Estate Regulatory Bill will be tabled soon while the city would have its new development plan, affordable housing policy and smart infrastructure. The year seemed not so good for Mumbai realty but there is always light at the other side of the tunnel and 2016 is expected to find it!
Source: magicbricks
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501, 5th Floor, Plot No - A-123/4,
Odyssey IT Park, Road No. 9,Wagle Estate
Thane (W) - 400 604, Maharashtra, India
Mobile : (+91) 9833 4583 23 E-mail: mchithane@gmail.com
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