Mumbai Real Estate: Year 2013 Recap
The year 2013 has been quite eventful for the real estate market across the country. While the overall market was slow, there were a few events that impacted the Mumbai real estate market. There was movement in some infrastructure projects while some ambitious projects failed to take off. In addition, there were a few policy changes as well as redevelopment projects that would impact the housing sector in a great way for the coming few years. Here is a recap of some major events in Mumbai real estate market during 2013.
Road and Infrastructure
1) The Worli-Haji Ali Sea Link, intended to connect Bandra and Worli to Haji Ali, was scrapped due to differences between Reliance Infrastructure Ltd and MSRDC. The project would have been the country’s first clover interchange built entirely over sea. At a later phase, it would also connect Nariman point to Haji Ali.
2) The ambitious Mumbai Trans-Harbour Link (MTHL) project too failed to receive any bids for the third consecutive time before the deadline. Officials claimed that failure to raise funds on part of the private firms may have been the reason for not receiving bids. MMRDA is now considering alternate options such as EPC, taking the Central government’s help or from international financial institutions for raising funds.
3) On a positive side, both the Mumbai Metro and Mumbai monorail inched ahead. The Mumbai monorail commenced its commercial trial run from September on the 9.8 km section of the 20 km stretch between Wadala and Chembur. The much-awaited monorail project is now open for the general public since 2 February, 2014. The Mumbai metro too went through trial runs. It was initially expected to commence in December 2013. However, due to certain delays, it is expected to become operational in early 2014.
4) The deadlock between the project affected people (PAP) and CIDCO for land acquisition in regards with the Navi Mumbai International Airport was finally broken with both the parties coming to an agreement.
Housing
1) The Maharashtra Housing and Area Development Authority (MHADA) announced that it would be relaxing some rules for winners of its lottery. Winners of the MHADA lottery will now be able to rent out their flats. This decision will benefit over 5,000 MHADA lottery winners in the last three years.
2) The first phase of Dharavi slum redevelopment had a minor movement and is expected to be ready shortly. The Dharavi project began almost a decade ago and is now in a critical state. It faced problems such as eligibility criteria, and moved slowly. However amidst different problems, one may expect about 360 tenements of the first phase being ready by early 2014.
3) The Central Mumbai District Consumer Disputes Redressal Forum recently said that developers are not allowed to charge buyers extra for a car parking space. The verdict followed the Supreme Court’s judgment in 2010 that a developer cannot sell an open space or parking space as it was a part of the society common area.
4) MHADA decided to issue tenders for redeveloping 27 old and cessed buildings it acquired in the island city of Mumbai. About 2,200 flats are expected to be built on these plots. The decision was taken with an intention to redevelop old buildings faster while adding more number of affordable tenements to MHADA’s list.
Policy changes
1) In the wake of shelving of some ambitious infrastructure projects in Mumbai due to disputes between government bodies and private firms, the Maharashtra state government decided to set up a dispute resolution authority for infrastructure projects. The authority would function to ensure successful tendering process and faster construction.
2) The Maharashtra state government decided to hike the incentive floor space index (FSI) available for redevelopment projects for dilapidated buildings from 2.5 to 3. The step was taken to attract more private developers to take up redevelopment projects in the city.
3) The Maharashtra government planned to change the transfer of development (TDR) policy. Presently, TDR can be utilized for redeveloping a plot situated to the north of the property from where it is generated. With the change in the policy, loading of TDR anywhere in the suburbs is possible. Moreover, to ensure that developers do not make unreasonable gains, it has planned for indexing of the TDR.
4) The Supreme Court (SC) made it mandatory for developers in Mumbai to set aside a minimum of 15-25% plot area for open recreational spaces at ground level.
