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Experts: Supreme Court verdict won’t bring down realty prices

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The Supreme Court’s judgment removed the forest tag from vast acres of land in suburban Mumbai, giving relief to 5.5 lakh affected persons. But it may not help ease the property market, say real estate experts.

Experts said unwittingly judicial pronouncements and changes in government policies have affected property prices. “Whenever prices start plummeting, some court order or government policy pronouncements stop the prices from falling,” said Pankaj Kapoor, managing director of Liases Foras, a Mumbai-based real estate research firm.

The opening up of land should bring down prices but since there are other factors at play, the reduction may not happen. “Also, the government has raised the ready reckoner rate and no property can be sold below this government-determined rate,’’ Kapoor added.

Real estate experts blamed the state and centre governments for the sorry state of the city’s housing market. Despite a slowdown, the state government increased  ready reckoner (RR) rate by 20%. “The rise in RR rate will help the state government to mop up more revenue. In the process, the government is pushing up realty prices. Some big developers, who do not want property prices to come down, are hand in glove with the government,” said a real estate expert.

Several banks which had earlier blacklisted projects on forest land will now do a rethink.

Sunil Mantri, managing director of Mantri Group and chairman of NAREDCO, said the verdict will stabilise realty market but prices will not come down. “The verdict will open huge tracks of land for construction. But, several hiccups need to be addressed,” he added.

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