BUILDER CARTEL JACKS UP PRICES IN MUMBAI

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Half a dozen developers control 70 per cent of TransferableDevelopment Rights in the city. A cartelisation of Mumbai’s realestate , one of the costliest in the world, in the matter of transferabledevelopment rights (TDR) has put upward pressure on prices and has also causedconcern in policy circles. In a recent development, just six-odd builders and developers hold 70 percent of the 2.5-3 million sq ft TDR available. The price of TDR has also surgedto Rs 2,500-Rs 3,000 per sq ft from Rs 800-1,000 sq ft in the past six months. TDRs are rights granted by the civic or state agency to aproperty developer who surrenders land to the government and, in exchange, isallowed proportionate or more development rights on land in the vicinity ornorthwards. He may sell that property so developed or sell the right itself,the TDR; these are transferable. Realty sector sources said the Mumbai cartel had meant a rise in TDR prices practically everymonth. The development is a sequel to a 2008 order of the High Court here,which stayed a state government decision to allow 33 per cent extra buildingrights (measured as more of Floor Space Index, or FSI, the ratio of what can beerected on a plot of land to its area) in return for more premium. The order was in response to a public-interest suit on theissue. A state government official, who did not want to be quoted,said the government may approach the court shortly to reiterate its plea foradditional FSI (they may even go to the Supreme Court to get the stay vacated,say officials). The higher FSI, if allowed, will stop the builders’ cartel fromjacking up prices at will, he said. Maharashtra’s minister of state for housing , Sachin Ahir, said: “Thegovernment will take all necessary measures to curb cartelisation in the use ofTDR in Mumbai.” Sunil Mantri, chairman, Sunil Mantri Realty, said, “Pricesof TDR are unaffordable.” However, Nainesh Shah, executive director of EverestDevelopers, argued that TDR rates can be brought down only by an increase inthe stock of land and the government is the only entities that can make thishappen. “More land needs to be released,” he said. Ashutosh Limaye, associate director, strategic consulting,Jones Lang LaSalle Meghraj, said TDR trading follows the open market principle.For areas that are popular and in demand for real estate development (Bandra,Chembur, Vile Parle, etc), land prices is high and it makes sense to buy TDReven at a higher rate. Mumbai’s own peculiarity is that TDR, in practice, can onlybe deployed in the northern suburbs, while it is generated in the area south ofthis. This contributes to the upward pressure on its price. The governmentorder which the court stayed, on allowing more FSI on payment of a premium, hadsought to widen the supply, was the official argument. Opponents of the way TDR has worked in practice, includingthose who went to court on the issue mentioned, argue that it has led tocongestion in the suburbs, haphazard and unplanned development, and intensepressure on infrastructure. It may be noted that this policy, pioneered inMumbai, has since been adopted by state and civic agencies through the country. Courtesy:- BS:- 03-march-2010 For more information regarding apartment in mumbai, bedroomapartments, buy property in india, commercial complex in india, commercial realestate, commercial space in mumbai, dealers, flats for sale, indian real estateinvestment, investment options in real estate, luxurious flats, malls, officespace, office space in mumbai, online real estate, penthouses mumbai, plots,property consultants, property in mumbai, property india, property investment,real estate company, real estate developer, real estate mumbai, real estate inindia, real estate investment strategies, real estate market, real estate news,real estate portals, realtors, realty, residence, residential real estate, sellproperty, shop, villas, Residential Apartment   Visit    www.zameen-zaidad.com             www.propertycafeteria.com  

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  Half a dozen developers control 70 per cent of Transferable Development Rights in the city. A cartelisation of Mumbai’s real estate, one of the costliest in the world, in the...

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