Complications Galore

It seems that the Mumbai property market is losing its sheen because of factors which are totally unrelated to the market forces of demand and supply. It is the issue where a Buyer has to consider 10 more factors before deciding to buy a home. These are not the usual things one has to go through, but due to lack of complacency and government policies in the housing sector a buyer is now forced to delay decisions or spend that extra time for getting the required transparency in a transaction.

Inspite of the fact, the prices of the properties have touched all time highs and buyers have to pay through their nose, the rules and regulations and various terms and conditions are literally different in each project. Each builder so to say has his own rules, some builders want 40% down payment, some want 10% down payment, some will not take down payment, but will take full payment. Parking is a big issue, some reports say that parking should be free, another says, it should be paid and when you reach the builders office he wants to charge you minimum 5 Lacs for a open car parking.

A lot of builders have started quoting on the carpet areas, but a lot of them are still quoting on Super Built up areas and the so called Maharashtra Government’s housing policy is still far from any remote implementation, in the last assembly section we did hear that the policy will be firmly implemented with its own new version, but the bill never got passed and the matter is still status quo. In all the entire system, is becoming complex and the plot thickens to a great extent here.

In a strategic move, the BMC a few weeks back wanted to introduce stringent norms for compliance towards property taxes, after a huge uproar from the real estate industry on the negative impact of the same to Mumbai’s Rental Market, the Government decided that no change will be done as this is the election year and finally, keeping in mind the general interest of the people they will leave this topic for a while as well.

Then, we have our age old Forest Land Issue, where first the government allows you to build, gives the builder the Commencement Certificate or any other required clearance to go ahead and construct, then, we have the issue that this is on the Forest Land and thousands of property owners and investors are left in the lurch and there are so many issues and even in one housing society building one wing is termed as in the Forest Land and another one is clean.

Now, let us talk about CRZ and FSI, the government changed the FSI from 1 to 1.33 a few months back only to see a respite in prices, i would like to see if there has been any impact of this one, the idea was to create stock for the common people but it does not seem to happen as there is no control over the situation.

Housing a very sensitive sector, the government on the other hand has failed to come out with transparent policies, stringent norms to protect the interest of the property buyers and investors. We are in the year 2008 now and i don’t know how long it will take us to mature here and have a straight transaction, people are loosing patience and especially, the High Net Worth Individuals and Non Resident Indians who account for a good amount of buyers in the market today are loosing interest if they are given complications and headaches to buy out the properties for self use or investments.

I have been speaking to a lot of Non Resident Indian’s and who own homes abroad and they are very keen to still to invest in India, as they are very scared and concerned with the red tape and lack of transparency and of course different opinions on most of the topics and the typical attitude that yes, that clearance will be sought later, we have applied for it, you make the payments it will be done in due course.

At an estimate there are more than 2500 Buildings and Projects under construction in Mumbai-Virar, Thane- Kalyan, Navi Mumbai and Panvel today and there will be nearly the same amount of Co-operative Housing Societies to be formed for their welfare. A good amount of these buildings will not even have Occupation Certificates before people move in desperation as they need a house to move in and they have invested in it for self use etc. and they will not wait for the developers to account for all the compliances. And these compliances get dragged on and as a result around 35% of the buildings don’t have a functional society today in Mumbai, Thane and Navi Mumbai.