Mumbai real estate gets a boost from new rules
Though the new norms could impact developers' margins, analysts say it will also mean pricing based on carpet area, bringing in more transparency and fair practice in the sector. Developers, too, have welcomed the move, stating it will bring everyone on a level playing field.
The year 2011 was a damp squib for the real estate sector in Mumbai. Apart from Reserve Bank of India tightening the noose over lending, developers also faced the wrath of local regulatory authorities. There were very few approvals given to projects, leading to a pause on fresh supply of apartments in the market.
In 2011, a mere 19,470 residential units were launched in Mumbai, a drop of 65% compared to 54,968 units launched in 2010, according to data compiled by Eyestate, a joint initiative by Knight Frank India and Indicus Analytics. Under the new DCR, flower beds, balconies, terraces and other areas, which were free of Floor Space Index (FSI) calculations, will now form a part of FSI calculation in lieu of premium levied from builders. FSI is the ratio between the built up area allowed and plot area available.
According to the new rules, developers will be allowed to develop 35% of the plot area over and above the permissible FSI for residential projects and 20%
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