According to the notification the government has reduced premium FSI and fungible area cost by 10 per cent for residential development.
Housing experts say that the newly released Development Control and Promotion Regulations 2034 (DCPR 2034) will reduce the total project of constructing a building by five to six per cent. However, they aren't sure whether this benefit will be passed on to the home buyers. Earlier this week, the government came out with a notification regarding the release of the same.
According to the notification the government has reduced premium FSI and fungible area cost by 10 per cent for residential development. While earlier landowner was supposed to pay 60 per cent of the land ASR (annual schedule of rates) to government agencies, now they would need to pay 50 per cent of the land ASR value. The revised decision of the government would bring down total project cost by at least 5 per cent to 6 per cent. This is what Liases Foras a real estate research firm says
When asked Pankaj Kapoor, Managing Director of Liases Foras, will the reduction in project cost-benefit home buyers, he said, "Yes, should, but unlikely builders will pass on. But it will help to improve their (builders) margins which are in stress. Whether these benefits would be passed on to homebuyers is yet to be seen and we will come up with our analysis after a while."
Knight Frank an international Property Consultants in its report on DCPR 2034 says that the DCPR has altered its definition of carpet area from the one defined by The Maharashtra Ownership Flat Act (MOFA) and has adopted RERA's definition of carpet area. Aligning to a uniform definition will help reduce ambiguity amongst buyers.
Shishir Baijal, Chairman & Managing Director, Knight Frank India said, "With the release of DCPR 2034, the last level of uncertainty has ended. The developer community can now progress with confidence. The policy provides clarity and focus for future development of Mumbai. The development plan (DCPR 2034) is a crucial policy which can shape the future of our city, hence, it should be given paramount importance. The current DCPR 2034 has several positives and is a step in the right direction, however, we believe that there will be areas to work on further. On the residential front, measures such as opening up of land for promoting affordable housing and unification of carpet area definition will prove to be a boon for home-buyers. All in all, the current DCPR 2034 has something to offer to all stakeholders and we are optimistic that it will have far-reaching implications on Mumbai's growth over the next two decades."
Even developers sound happy about the new DP. Aditya Kedia, Managing Director, Transcon Developers, "The new DP has cleared a lot of ambiguity that was there in old DP. It's a step towards the Prime Minister's vision of ease of doing business. Now the process of permissions shall become faster and help the industry."
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