Buyers in Mumbai may soon be able to buy property at lower prices as per reports. This is because the Mumbai real estate market may be heading for a correction on account of the Mumbai Development Plan 2034 which has opened up a whopping 3, 700 hectares of prime land parcels in the city which were previously labelled as NDZ (no-development zone). These parcels have been allocated for residential real estate development. Buyers can now expect availability of 30 sq. m housing units at prices between Rs. 60-75 lakhs. In the future, more affordable housing units will be added to the overall real estate inventory of the city and hence there may be a correction of 10-15% in housing prices. However, this will only happen in case the higher FSI (Floor Space Index) which has been promised for 16 years, comes at prices which are more rational. More than 3, 000 hectares will be available for the development of affordable homes and an extra 300 hectares of salt pans will also be unlocked for affordable housing projects. Close to 10 lakh affordable homes are targeted for development by the year 2034. The blueprint also scales up the FSI to 5 from 1.33 earlier in case of commercial properties. This is now 2.5 for suburbs in Mumbai as well. Real estate developers feel that Mumbai properties may be cheaper, particularly in the suburbs. The FSI increase and 10 lakh affordable home blueprints will help in correcting property prices. This may boost the affordable housing segment with homes sized between 30-60 sq. m and prices for these may go below Rs. 75 lakhs as per reports. According to experts, the mid and low end housing segments may benefit in the near future. As per current demand levels, prices are already expected to correct. The city has already witnessed a price correction of 20% in the previous year and this may be 10% in the near future as per experts. Supply will increase due to the Development Plan and this may put a downward pressure on pricing of properties. In case FSI comes at a rational price point, overall real estate prices may correct between 10-15% over a sustained time period. The office leasing demand will remain steady and capital values and rental values for the commercial segment should remain steady as well.
Real estate prices heading for correction in Mumbai?
