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Mumbai’s real estate market has a reason to cheer as the revised Development Control and Promotions Regulation 2034 (DCPR), which came into force earlier this week, will bring down construction cost in the megalopolis by six per cent.
The government has reduced premium FSI and fungible area cost by 10 per cent for residential development. While earlier, land owner was to pay 60 per cent of the land ASR (annual schedule of rates) to government agencies, now they will need to pay 50 per cent. “The revised decision of the government will bring down the total project cost by at least 5 to 6 per cent,” according to an analysis by real estate consultancy, Liases Foras.
Redevelopment of difficult cess buildings would attract developers, since more TDR (transfer of development rights) will be on offer. “Whether these benefits will be passed on to homebuyers is yet to be seen,” said Pankaj Kapoor, MD, Liases Foras.
The past policies of the State government have been limited in checking congestion, leading to construction of tall residential/commercial towers on narrow roads. “By linking permissible FSI to road width, the DCPR 2034 will ensure that taller buildings can be constructed only if the road width can support it, thereby reducing congestion,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.
“The plan will prove to be a game changer for the Mumbai real estate market. With significant part of the land earmarked for affordable housing development, this segment will witness increased activity ,” said Anshuman Magazine, Chairman, India and South East Asia, CBRE.
“The proposed change of setting the minimum benchmark of 300 sqft for all developments under affordable housing will prove useful in giving people space, thereby ensuring the success of this scheme,” he added. Real estate developers as well as investors who were sitting on the fence will look at developing projects, as the plan lifts the curb on FSI in the city. On the commercial real estate segment, residential hotels, financial technology and bio-tech parks, and medical and educational hubs will also benefit from an increased FSI.
“What is commendable is that the plan has not compromised on open spaces, green cover and no development zones,” Magazine added.
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