Bandra flat rates soar 300% in 6 yrs

Mumbai: Bandra-Khar (west), Mumbai's costliest real estate belt outside the island city, exemplifies the unrealistic property prices despite a market meltdown. 

    Bandra's Carter Road, Bandstand and Pali Hill are trying to catch up with Cuffe Parade and Malabar Hill. Prices in these upmarket suburban enclaves here have spiralled to between Rs 40,000 and Rs 60,000 a sq ft from Rs 15,000 per sq ft only six years ago. 

    In a recently completed luxury building on Pali Hill, which was recently mired in controversy over construction violations, the developer is believed to be quoting a mindnumbing Rs 75,000 sq ft (carpet area) and has sold apartments at close to Rs 40 crore each. 

    Recently, a 1,140 sq ft flat (carpet) on Pali Hill was sold for Rs 7 crore. A sea-facing apartment of similar size on Carter Road has received offers of up to Rs 9 crore—the owner wants Rs 11 crore. Elsewhere in Bandra-Khar, the average rate is Rs 25,000/sq ft. 

    Even tiny one-BHK flats in old buildings are being quoted at Rs 1.5 crore while 2-BHKs command around Rs 3 crore. In brand new towers, builders demand 20% to 40% in cash upfront, encouraging only those with black money to invest. Fly-by-night bldrs may lose out in Bandra-Khar TIMES NEWS NETWORK 

Mumbai: Pankaj Kapoor of Liases Foras, a real estate research firm, said prices in Bandra-Khar are symptomatic of the malaise in Mumbai's property market. "These are unproductive prices and builders quote unrealistic figures. They are trying to equate Bandra with Nepean Sea Road,'' he said. 

    As prices reached dizzying heights, Bandra-Khar became a prime example of civic lawlessness and urban chaos. Over the past decade, the lucrative belt attracted the land mafia and a new breed of rapacious builders linked to politicians and the underworld who built luxury skyscrapers on tiny plots in narrow lanes, which once housed quaint bungalows. 

    Citizen activists consistently complained about the thriving nexus between local BMC officials and developers that led to haphazard development in this once peaceful suburb. In many of the bylanes, buildings have come up with no open spaces around them. In some of the new constructions, balconies and cantilever projections virtually touch the road line. 

    But things are about to change. Many fly-by-night builders who bucked the system by bribing BMC officers, are slowly getting edged out of the Bandra-Khar market. Building rules which were amended by the BMC and approved by the state government last January have hit them hard and affected their profits. Local property market 

sources said around 20 plots bought by such builders at astronomical rates are now up for sale. "They were used to making 200% profits on each project by selling certain areas of the building illegally to flat purchasers. The new rules have stopped this gross misuse,'' said these sources. Another local developer said, "They have realized that plots they bought at high rates will not yield them the super-profits they earned over the years through manipulation.'' These builders made a huge killing in the past decade by manipulating building concessions granted to them by successive municipal commissioners. They illegally sold areas like flower beds, voids, common lobbies, terraces at market rates to flat buyers, although these areas were not part of the building's floor space index (FSI)—the permissible built up area vis-a-vis the plot size. 

    Land prices in Bandra-Khar were artificially jacked up because these builders paid Rs 6 lakh to Rs 7 lakh a square yard for a plot, knowing that they would make super profits by misusing building areas by bribing BMC officials. 

    A crooked builder could build over 60,000 sq ft on a 1,000 sq yard plot by misusing concessions. Under the new law, he will not be able to build more than 40,000 sq ft saleable on a similar sized plot. Moreover, his profit will take a hit because of the premium he will pay the BMC for the compensatory FSI. "A new breed of builders will now move in; the old unscrupulous ones will be pushed out because they cannot reconcile themselves to decreased profit margins,'' said a building industry source.