Mumbai: The Real Estate Regulation and Development Act (RERA) seems to have had an impact on sale of real estate in Mumbai as the City and Industrial Development Corporation (CIDCO) land auctions in Navi Mumbai last week witnessed 40 per cent lower bids than in November.
Considering RERA having limited the developers' capacity to buy land with advance payments from customers, land prices in Mumbai Metropolitan region have started falling, a moneycontrol report said.
The current bids varied between Rs 65,250 and Rs 96,000 per square metre in comparison to Rs 1.15 lakh and Rs 1.25 lakh in November, before the demonetisation drive.
CIDCO is selling six commercial and residential plots covering an area of 6,000 sq m in New Panvel. The Neelsiddhi Group purchased three plots, two at Rs 65,250 per sq m and one plot at Rs 76,000 per sq m. The Millennium Group acquired one plot at Rs 80,000 per sq m, while two plots went to the Satyam Group at Rs 77,000 per sq m and Rs 96,000 per sq m, the report said.
Contesting the possibility of a post-demonetisation effect solely driving the lowered bids, the report said that as developers made payments to CIDCO through cheques, RERA was most likely the primary cause.
The stagnant period is expected for another six months owing to RERA and demonetisation spillover, industry experts predict.
Approximately 25,800 residential units were launched in the first quarter of 2017 from the country's top eight cities, witnessing a 16 per cent decline from the corresponding quarter last year.
Real estate launches have seen a steady quarter-on-quarter decline for the last four quarters corresponding with the announcement of Real Estate Regulatory Act (RERA) 2016 in March last year and the demonetisation drive in November 2016, the report said.
Launches in the residential sector have declined by about 8 percent during the period April 2016- March 2017 compared to the same period in 2015-16. In Delhi-NCR, new launches declined by almost 50 per cent, in Kolkata it declined by 29 percent and Bengaluru by 24 percent, the report added.
Courtesy: http://www.timesnow.tv published on June 06, 2017)