New Budget..New Beginings?

Budget 2008 has not done much for the real estate sector in India, but the change in income tax rates, mean that there will be more money in the hands of the prospective home buyer. Coupled with this, construction costs are expected to come down on account of reduction in duty and Cenvat. But Housing loan interest rates have not come down meaning that EMIs continue to worry prospective buyers. Will all these translate into a higher demand for housing in Mumbai? The last four years have seen a tremendous price hike in retail housing sector on account of demand far outweighing supply. Out of the 90 lakh homes on sale in Mumbai, only 30% have been built. Prospective home buyers may start scouting for affordable property in surrounding areas like Nasik and Pune. A recently released report on the ‘Housing ‘un’affordability in Mumbai’ by CRISIL underscores the fact that owning a home in Mumbai remains out of reach for more that half the population of Mumbai. While buying a home in Mumbai will remain a dream for the lower middle class, prices for properties in the range of Rs 40 – Rs 50 lakh should see a much needed correction.

The commercial segment continues to be hotting up, although prices in ‘Amchi Mumbai’ outbeat downtown Manhattan. Speciality Malls are the latest concept to hit the realty market. Vardhaman Developers are investing Rs 35 crore to set up a Jewelery Mall, ‘Jewel World’ at Zaveri Bazaar. This Mall will house over 70 National and international brands. With the youth hitting Malls in a big way and with more disposable income on their hands, this concept should hit big time.

“Collectors Charges’ which has been in vogue since 2000 and has been touted as illegal has been finally scrapped by the State government. This is a fee which is levied on every transaction which take place on the land belonging to the Collector of Mumbai. This has been fetching the State, a revenue of Rs 50 to Rs 60 crore annually. Many buyers who had bought such property had not registered the property in their names on account of the huge money outgo. Nariman Point is the most affected. This scrapping may not bring about changes in property rates but would benefit buyers and sellers.