Finally, affordable housing in Mumbai

A fresh burst of land supply in Mumbai, owing to the Bombay High Court's go ahead on the transfer of development rights, could cool down runaway property prices in the city, reports CNBC-TV18.

The Bombay high court's ruling on Monday to lift the ban on transfer of development rights or TDR along western and eastern expressways and suburban railway tracks, could lead to an estimated 50,000 more housing units being available in the city.

TDR is an incentive given to builders in the city in the form of proportionate property development rights, should builders give up the property for slum rehabilation or to build homes for people affected by their building projects. Builders were allowed to use TDR anywhere northward of their original plot.

 For the past 2 years due to a stay on TDR a lot of land supply was choked. Now with the influx of new land supply that is expected, experts believe that it could have a sobering effect on property prices which had witneseed an unprecendented growth over the past 2 years.

"I think in the short term there might be 10 - 15% drop in property prices, because of the huge amount of supply on both sides. But in the medium and long term, the need for housing is so strong that it will pull up," says Anuj Puri, MD, Trammell Crow Meghraj.

"Tenements close to 50,000 could come up over 5 years period, at an average of 5 -10 thousand each year," says Sunil Mantri, Vice President, Maharashtra Chamber of Housing Industry.

With builders now getting the green signal to buy and transfer the development rights onto properties being developed along the corridors that lie between the suburban railway stations and the western and eastern expressways, the floor space index will also double.

FSI signifies the build-able area allowed on a particular plot of land. The FSI, north of Mahim in Mumbai is currently 1 but with the use of TDR it can go upto 2.

A number of projects coming up along the Western and Eastern Expressways had been stalled due to the interim ban. Developers also say that the end users had booked a substantial number of apartments there and with the clearance for the use of TDR, consumers will finally get the flats they had paid for and potential home buyers will not be faced with a scaricity of homes especially along Mumbai's major link roads.