A large chunk of land will now be open to the construction of houses in Mumbai.
The new Development Plan for Mumbai that allows development on salt pan land and non-development (ND) zone land will help to create 20 lakh houses in the city. The additional supply is likely to have a positive impact on property prices in the metropolis.
According to a senior government official, the new provisions have been made with the aim to increase the number of houses that can be constructed. "If there is more supply, then it will impact property prices by default. With the approval of the new development plan for Mumbai, that allows for development on salt pan land, no development zones, and the redevelopment of BDD chawl in Dharavi, it has created the possibility for an estimated 20 lakh houses. A large chunk of land will now be open to the construction of houses in Mumbai. We want to see the common man fulfilling his dream of owning a house," said an official from the urban development department.
Manohar Shroff, vice president, Maharashtra Chamber of Housing Industry (MCHI), Navi Mumbai, said that the ample supply will surely have an impact on the market. "This is true for any industry run on demand and supply. If there is more supply, then the property prices will come down. Now too, developers are ready to negotiate if buyers are serious. If a large sale happens, it will surely help developers to make a tangible profit," said Shroff.
Pankaj Kapoor, MD, Liases Foras, a real estate research firm, welcomed the state government's decision. "In Mumbai, availability of land is the major factor behind prices. If the land is easily available then the prices will surely start plummeting. Besides, the government should also ensure that the premium on floor space index (FSI) is also reduced. It should be feasible for developers to buy FSI and TDR in the market, only then will they be able to take new projects in hand. However, the current scenario is good for developers to take up projects," said Kapoor, and added that the move is likely to rationalise prices. "The average FSI in Mumbai should be at least 4 against the earlier one. More FSI will create more houses. It will help meet the demand to construct 20 lakh houses," said Kapoor.
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