Land auctions conducted in Navi Mumbai last week witnessed bids that are 40% lower compared to those in November. The City and Industrial Development Corporation (CIDCO) conducted the land auction.
The market watchers are observing that with the Real Estate (Regulation and Development) Act (RERA) having limited developers’ ability to fund land purchases with advance payments from customers the land price in several parts of Mumbai Metropolitan Region (MMR) have seen a dip.
According to Financial Express compared with a price of around Rs 1.15-1.25 lakh per square meter back in November, prior to demonetisation, bids this time around ranged between Rs 65,250 and Rs 96,000 per sq m. Ashutosh Limaye, head of research at JLL India, told FE he expected activity levels in real estate would remain low for the next eight months.
As per the same report in Financial Express CIDCO is selling six commercial plus residential plots in New Panvel, the plots cover an area of 6,000 sq m. The Neelsiddhi Group acquired three plots — two at Rs 65,250 per sq m and one plot at Rs 76,000 per sq m. The Millennium Group acquired one plot at Rs 80,000 per sq m, while two plots went to the Satyam Group at Rs 77,000 per sq m and Rs 96,000 per sq m.
Vice president of MCHI, Manohar Shroff thinks that the RERA is the main reason why the bids have come in at such low levels and demonetisation has not affected the value of land or its purchases.
“The builders’ ability to fund these land purchases has been curtailed thanks to RERA. The project plans need to be approved by the relevant authorities before the developers can accept bookings. And before the plans are submitted, CIDCO needs to be paid the full amount,” Shroff said to the Financial Express.
There has been 8% drop in comparison to the previous year and it is believed it is going to continue be that way at least for another six months because of the introduction of the RERA.
