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The pandemic induced slowdown in real estate can wait because new project approvals in Mumbai cannot.
Wait, What?
Real estate developers in Mumbai have to pay hefty premiums to the BMC and the state government in order to get additional development rights, and till December 31, 2021, this premium has been reduced by 50%.
Per this TOI story, this slash in premium has led to long queues outside the sanctioning office at the BMC as builders line up with their project plans for speedy approval.
How Big Is The Queue?
Sample this and figure it out yourself.
A record INR 4,800 crore has been collected as sanction fee between April and September, 2021. By the time the December 31 deadline gets over, this amount is expected to be north of INR 8,500 crore.
In comparison, INR 2,500 crore was collected by the BMC in FY21, and INR 3,800 crore in FY20.
What's Moving?
Redevelopment projects, which were earlier being shunned by Mumbai's builders owing to high premium charges, and decreasing profitability, are back in vogue.
In the Bandra-Khar-Santacruz belt alone, 70 redevelopment projects have already been approved by the BMC since the premium was halved.
Also, since higher FSI is being offered for commercial towers, a lot of redevelopment is skewing towards office space.
Increasing Demand
New projects, no matter how incentivised need actual demand to become viable for builders, and experts opine that over and above general factors - like increasing vaccination and economic recovery - the boom in the stock market is a big reason for Mumbai's increasing real estate appetite.
Semi luxury apartments, priced between INR 5 to 10 crore are thus seeing a lot of traction.