Mumbai’s housing societies are enjoying their day in the sun. More societies come up for sale at three to four times their market value.
Mumbai’s housing societies are enjoying their day in the sun.
After Khiranagar in Santacruz, Tata Colony in Bandra-Kurla Complex and Bharatiya Bhavan Cooperative Housing Society in Khar, more societies are coming up for sale at three to four times their market value. And, realty experts say, this upward swing in sellers’ fortunes is going change the map of the city.
“The trend has changed overnight. A seller is being paid three or four times the market value of his property, which he would never have dreamt of,” says Pranay Vakil, chairman of real estate consultants Knight Frank. “We are currently handling 23 societies across the city.”
Commercial complexes in the neighbourhood have hiked the prices of residential properties as well. “The Bangurnagar housing society in Malad is the next to be redeveloped. It is next to Inorbit mall; there is more scope for commercial activity, raising the prices of societies here,” says Deeip Shyam Arora, vice-president, sales and marketing, RNA Builders NG.
This boom is taking place in suburbs from Bandra to Borivali, where transfer of development rights (TDR) loading has been permitted. This has freed up dilapidated buildings and previously saturated or unaffordable areas for redevelopment.
“But this can happen only on two conditions: it needs to be a commercial or retail zone, and TDR loading should be allowed. Since conversion costs are very high, these conditions have to be met for a takeover,” says Vakil.
“It is a win-win situation. Residents are getting more money to vacate houses while builders are getting prime property,” says Sanjeet Narian of property consultants Narians Corp. He adds, “It is a seller’s market. A builder is willing to pay more than the market price for a plot and the developer will put in extra so that he can expand.”
“The developer improves the quality of a place so the people who opt to stay get new houses, more benefits and a better standard of living,” adds Bhupesh Jain, MD of Earth group of companies, a property developer. “As for the builder, he earns more than his capital which appreciates in a short time. This also benefits the municipal authorities and government as taxes increase and they get more revenue.”
Experts, however, caution that the trend will last only till the retail boom does. “There will be more supply of quality space, which will impact prices. But if the retail market slackens, the trend will fade,” said Sanjay Dutt, executive director of realty consultants Cushman and Wakefield. There is another problem. The redevelopment bug is expected to affect the city’s already stumbling sewage and water systems and power grid.
For the time being, however, it seems to be mostly good news. And even if the Maharashtra government cannot turn Mumbai into a Shanghai, it looks like Mumbai’s developers will.
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