The poll results may have been declared in Maharashtra but the new government is yet to take charge. Once it does, it has a mammoth task of reviving the Mumbai realty market which has been slow for the past couple of months. Till September 2014, demand has been stable in the real estate Mumbai market while addition to supply has been limited. In the first half of 2014, the numbers of residential units constructed in the city were 17,500. Prior to the elections, the Maharashtra government had adopted a few measures to restructure the realty market such as increasing the floor space index or FSI for residential properties, removing the “heritage” tag from Chembur to allow redevelopment and declaring the salt pan area in Waddala as a residential property area. Roughly 266 files were cleared by the department concerning FSI and land use policies.
Experts opine that the succeeding Government of Maharashtra would have to review some of the clearances passed by the erstwhile government to make them friendlier for the development of realty in Mumbai. Infrastructural projects such as widening of roads and expansion of Metro Railway and Mono Rail have to be undertaken for improving access to Thane and Navi Mumbai. The measure taken to increase the floor-space index for residential properties has met with scepticism from various quarters as the pressure of population in Mumbai is too high and may elevate per square feet rate above Rs 1 lakh for certain areas. Affordable housing should be the mantra of the new government especially targeted towards the low and middle income housing group.
Currently the real estate in Mumbai is stable, although it is yet to pick up. The mechanism of price correction has already been put into force in the city. The stock of property inventory in Mumbai can take up to 3 years to be cleared. Developers have slowed down construction, waiting for the market to pick up.
The faster the new government takes charge, the more would be the benefit to the realty Market. There are certain state laws governing Mumbai realty which, if modified or eliminated, could boost real estate considerably. The combined effect of Diwali and the Maharashtra poll results may help to buoy the real estate market. The festival period is considered to be an auspicious time for people to buy property and favourable poll results would certainly boost buyer interest in the market.
A faction of developers opine that the real estate market in Mumbai would not be swayed over by the poll results because buyers hardly consider the government in house as a deciding factor for purchasing residential and commercial properties.
Participants of the real estate market in the financial capital of the country agree that there will be negligible effect on the Mumbai realty market in the short term. However, once favourable policies for boosting commercial and residential real estate are undertaken, property dealings in Mumbai would pick up pace.