The Maharashtra government has admitted that the surplus Mumbai mill land issue has been cleared. As a result, it is feared that prices will go down again and that properties will depreciate in value. But how valid are these fears?

Since there are hardly any bona fide advisors on the buying and selling of property, particularly when we consult investment and tax consultants, apprehensions about investment in real estate are too many. It appears that only a few select companies in the country have access to the services (advice, property identification, execution of deals, follow-ups) of international property consultants such as Chesterton Meghraj, Collier Jardine and Knight Frank. The reason is obvious. It makes perfect business sense to these MNC property consultants to get 30,000-odd square feet in Vikhroli for British Airways on a turnkey basis or arrange an entire floor of Mafatlal Centre in Nariman Point for Mitsubishi.

But what about a prospective buyer of a flat in suburban Mumbai? Can he go to these outfits for advice and purchase a property?

Here are some of the answers. ``Yes, of course, any individual can walk into our office, but only out of genuine interest and not to take a joy-ride through the city,'' says Saleem Ahmedullah of Knight Frank.

Uday Mathur of Chesterton Meghraj says: ``Though these companies offer services such as consultancy, valuation, etc, for individuals, the actual deal would be routed through a local broker or an agent.''

Even though consultants to whom flat buyers can go to are few in number, take note of this advice:

On the release of mill area into the property market, Uday Mathur of Chesterton Meghraj says: ``We don't expect any drastic fall in prices. Besides, it will take some time under the present development control rules.''

Opines Saleem Ahmadullah of Knight Frank: ``There will be a lot of supply, but it will take time.''

According to some reports, most of the deals in the mill land have already been tied up and developers will release the supply gradually, so as to not depress the prices.

Properties in mill areas will be comparable with those in Central Mumbai, with the rates varying from Rs 6,000 to Rs 10,000 per square foot. Even if the prices fall by 10-15 per cent, suburban flat owners are not likely to find the mill area affordable.

Says a property dealer: ``You go through black, dirty, pot-holed alleys to reach the high-rise that will take the place of tall mill chimneys, and when you go up to the 20th floor, it is just like being in a palace, overlooking a panoramic view of South Mumbai with the sea and the bay. But you've got to go through hell to reach the heaven.'' Foreigners, executives and high net-worth individuals are simply not interested in these buildings.

``For the clients from abroad, the quality of life matters, which includes neighbourhood, besides quality of construction and ambience,'' says Uday Mathur. At the most, a growing family in Colaba or Malabar Hill may move down to a bigger space in Central Mumbai as a compromise. But such instances could be just a few. Thus, there won't be any upward pressure on prices.

So, the general consensus seems to be that the property scene in areas other than Central Mumbai would be independent of the mill-land issue.

According to a report by property consultant Richard Ellis, the real estate market in the city (Mumbai) is not expected to see any serious pick-up in activity until the first or second quarter of 1998. ``As a consequence, the rental and capital values are expected to remain stable in the short term.''

The report adds: ``Attracted by the relatively low real estate values in the city (over peak 1995 levels) and the stability observed over the last quarter, interest in investing in real estate is visible. However, this interest is still to translate into actual transactions, with most investors preferring to wait for some more time to see whether this stability will continue.''

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.