All roads in the construction industry will soon be leading to the north of the city.
The state government’s recent decisions regarding increasing floor space index (FSI), easing of Coastal Regulatory Zone (CRZ) rules and redevelopment of the Bandra Government Colony, will ensure a fresh supply of homes in a couple of years. The state has also decided to give buildings built before 1969 higher FSI for redevelopment.
Real estate experts say considering the limitations of the island city, the suburbs are the best destination to create adequate housing stock. “The island city has no space considering the dense population and old infrastructure that is now crumbling,” said Sukhraj Nahar, director, Nahar Group, which is building a township at Powai. He said the suburbs have always been an attractive option because real estate rates are comparatively lower here.
Developers have also welcomed the decision to amend the Mumbai Metropolitan Regional Town Planning Act to allow more FSI for a premium. Rajesh Vardhan, Managing Director, Vardhaman Builders called it a step forward. “Increased FSI is a positive step as it has a corresponding effect on the number of flats,” said Vardhan.
The revamp of the 97-acre Government Colony at Bandra is expected to create an extension of the Bandra-Kurla Complex with a residential and commercial enclave here. The Centre has also given in-principle approval for easing CRZ norms, which is expected to create at least 1 lakh low-cost houses in the city with an equal number of bigger flats for residents.
The impact of these decisions, however, will be seen only a couple of years from now. The immediate question is whether more housing stock will mean a reduction in real estate prices?
Experts are reacting with caution. “There is no doubt that these moves will encourage more societies to opt for redevelopment,” said Pankaj Kapoor, managing director, Liasas Foras, a real estate research firm.
However, he said there is no mechanism to check prices. “Developers tend to keep prices high and make houses unaffordable. Something should be done to make them sell at affordable rates.”
Nayan Shah, managing director, Mayfair Group, said if the state had given higher FSI to buildings built before 1985 at least 70,000 buildings in the suburbs would have gained instead of 4,000. “This would have helped create more housing and would have impacted the realty market,” Shah said.