New FSI may reduce house prices

The state government’s proposal to give 2.5 floor space index (FSI) to dilapidated buildings in the Mumbai Metropolitan Region will pave the way for supply of more houses, which will lead to correction in property prices.

According to government officials, the decision to give 2.5 FSI against the present one is likely to be taken soon. “We have completed all formalities,” he told DNA.

Because of the high property prices in the Mumbai city limit, people are compelled to buy houses at peripheral locations — Navi Mumbai and Thane. “Looking at the high demand, developers jacked up prices making houses unaffordable. Now, the government’s plan to give additional FSI will restrict the developer’s greed. More FSI will help in creating more affordable houses,” said Pankaj Kapoor, managing director of Liases Foras, the real estate research firm.

He added the developers should honestly transfer the benefit of additional FSI to the consumers. “Otherwise, they are in a habit of gulping the profit and leaving buyer in lurch. Government decision will surely help to cut down the land prices and automatically house prices. Along with allotting higher FSI, the infrastructure of these locations needs to be developed subsequently. So, they will not crumble down under the pressure of ever increasing populations. It is a good decision, because of majority people are settling at these locations only,” Kapoor added.

Atul Nemade, a real estate agent from Navi Mumbai, said, the developers were riding on the airport proposal and jacking up the prices. “Now, Navi Mumbai airport project work has slowed down and it unlikely to be completed on schedule time. And, the decision will help to reconstruct the residential towers on dilapidated buildings. We have to use the land judiciously because of the less availability of land,” said Nemade.

Presently, developers are not interested in developing old properties . “It is not viable to undertake residential projects in the less FSI. The decision to give more FSI will change the scenario,” said Manohar Shroff, general secretary of the Maharashtra Chambers of Housing Industry, Navi Mumbai.