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Mumbai

While 2013 was a year of stagnancy for the real estate market in Mumbai, 2014 is expected to perform better. However, there are certain factors that would impact growth and a substantial improvement is expected only if the conditions favour the market. A few things one hopes will happen in the year 2014 are:

• Builders sticking to their project timelines and completely adhering to the legalities of the market. It would be an ideal situation where the builders carry the construction as per their BMC approval plans after getting the IOD and CC issued by the organization.

• Builders refraining from diverting the incoming sale funds of a particular under-construction project to other projects. This would ensure completion and delivery of the said project as per the scheduled date given to the buyer.

• Builders refraining from launching any new projects until they clear their existing stock.

• Prices being corrected and brought to a realistic base. This would make real estate slightly affordable for the middle income home buyers.

While these are the most ideal measures that may impact the market positively, 2014 general elections will play the most pivotal role in the real estate market of Mumbai. It would depend upon how the new government would support the builder’s lobby in terms of relaxation of the Floor Space Index (FSI) norms and Coastal Regulation Zone (CRZ) norms.

The Government’s adherence should be of total transparency in terms of business policy formation. It should encourage business growth in terms of exports in order to facilitate the appreciation of the value of the Rupee. This in turn would ensure that business houses and individual businesses flourish, which would allow people to have adequate funds in order to support their property investments.

The government should support larger Foreign Institutional Investors (FII) to come to India and be involved in business activities. This would result in higher profits for Stock Market players which would again result in enhancing the funds available for real estate investments.

Property buyers and investors in Mumbai have already borne the brunt of wrong investment decisions in 2012 and 2013. In this New Year, they should learn to be more cautious before making real estate decisions. The investors need to rationalise their decisions and be 100 per cent convinced before buying a new property. They need to anticipate a good and realistic ROI, which is derived after logically reasoned calculations and proper study of the then real estate market. They also need to take notice of the particular project and its builder’s past performance and track record before entering into the investment.

Biren Somaiya, CEO, Whitebird Realtors

The views expressed in this article are authors’ own