On the contrary, they have hinted at a marginal rise of 3 to 5% in the future. Property experts, however, believe the rates will fall by at least 30%.
If you are looking for a house and were waiting for a correction in property prices, there is bad news as the members of Maharashtra Chamber of Housing Industry (MCHI), an umbrella body of builders, have refused to slash property rates. On the contrary, they have hinted at a marginal rise of 3 to 5% in the future. Property experts, however, believe the rates will fall by at least 30%.
MCHI has blamed the government and BMC for the exorbitant property rates in the city citing various reasons. They say that the stamp duty, and cost of cement, steel, bricks, and labour has gone up drastically. To add to these, there is acute land constraint and its prices have increased by 300 to 500 times in the last five years. “To get approval for a proposal, it takes at least two years.
The developers have to run from pillar to post to get the file cleared, resulting in a delay in the project. We take into account this delay period while deciding property prices. The developers take huge loans and these delays lead to increase in rates. Hence, there is no scope to reduce prices,” said Sunil Mantri, president of MCHI.
“Even redeveloping old buildings requires hundreds of government approvals, apart from dealing with agitations by NGOs and court battles. Unless the land prices come down, it is very difficult for us to reduce prices,” said a developer requesting anonymity.
Deepak Goradia, secretary of MCHI and MD of Dosti Realty Ltd, said the government and National Textiles Corporation (NTC) have been releasing only small chunks of land for sale, leading to a land crunch. “Why can’t they sell larger portions of land to reduce prices? The housing industry is based on demand and supply. If there is adequate supply, property prices will surely come down,” said Goradia.
“The government wants to earn huge revenue by selling small pieces of land, increasing stamp duty and registration fee, imposing various taxes and increasing the ready reckoner rate. And then they ask us to construct affordable houses. How is it possible?” The developers observed that their profit margin has come down by 25 to 30%.
Boman Irani, managing director of Rustomjee developers said that MCHI has organised a property exhibition from April 14 to 17. “We have asked developers participating in exhibition to display approval letters such as commencement certificate and fire department NOC at the entrance of their stalls.”
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