With the DP plan for Mumbai passed and the repo rate coming down real estate may see good days

Real estate to grow in Mumbai. Recently the Development Plan (DP) 2014-34, which will be the blueprint for the city’s land use over the next two decades, was finally passed in the Brihanmumbai Municipal Corporation (BMC). The Real Estate Sectordraft DP has gone through a lengthy revision process since it was first unveiled in 2015. The plan has since then gone through a process of public suggestions and objections before it got the final nod.

Real estate to grow in Mumbai. Also RBI in a press-conference held lately said that it was cutting the repo rate by 25 basis points. The Repo rate has become 6 per cent, down from the previous figure of 6.25 per cent– it is the lowest in last seven years.

So it can be believed that there will be happy days for Mumbai real estate now onwards. BMC officials said that Mumbaikars will get more open spaces, 10 lakh affordable homes, more commercial space with the allotment of five FSI to create eight million jobs, a central park, 120 hectare of new green space and a world class museum.

Vidip Jatia BelmacOn this situation, Vidip Jatia, Director, Belmac said, “The government has taken the initiative to fast track pending approvals and this has caused various permissions to be fast tracked. This has enabled developers to plan the launch of their future projects. However considering the current scenario, one of the major boosts which will increase customer enquiries has been the reduction in the home loan interest rates. This has enabled developers to offload low ticket size flats where customers have a high dependency on bank finances.”

Now for example if a person has taken a home loan of Rs 20 lakh for 20 years, he/she will save Rs 3,804 yearly if RBI maintains the current rate for a year. For a home loan of Rs 50 lakh, a person can save Rs 9,504 yearly. For Rs 1 crore, a person will save Rs 19,008.

The BMC plan has made it clear that Mumbai’s vertical growth is inevitable. BMC has earmarked Rs 2,400 crore in the current fiscal year for implementation of the plan and there will be a subsequent increase to Rs 5,000 crore in the next three years.

Getamber Anand, President, CREDAI National“The 25 basis cut in the repo rate is a welcoming step by RBI. More so, the 75 basis points cut in the marginal standing facility (MSF) is even a more important announcement by the governor. We also understand that at this point of time the banks are burdened with NPAs which calls for a higher amount of provisioning. This will act as a key deterrents for banks to cut rates on retail lending. But we still are very hopeful that home buyers will get at least a 50 basis point cut in home loan rates. This should definitely go well for the industry at large.” said Getamber Anand, President, CREDAI National.

Lastly, Deven Joshi, a new home buyer said, “We are hoping that the process of buying flats becomes smoother and we get better housing at cheaper rates in Mumbai soon.”

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