Industry experts share insights into Mumbai's booming redevelopment market

The Maharashtra government has reportedly lowered the premium for redevelopment of cooperative housing societies located on collector leasehold land.

The premium has been reduced from 15% to 10% of ready reckoner value to obtain ownership of land, and 5% of RR value in case of self redevelopment.

Read reckoner value refers to the government's standard valuation of properties in different areas, used to calculate stamp duty and registration fees.

This reduction in premium is expected to benefit over 8,000 housing societies that are now old and can be redeveloped.

Anarock Property Consultants Chairman Anuj Puri, and CBRE Executive Director, Rajesh Prasad discussed the opportunity size of the Mumbai redevelopment property market with CNBC-TV18 in light of this latest development.

Puri sees this as a fantastic opportunity given that Mumbai's housing market is huge, making up half of India's homes, and around 185 lakh crore new homes are sold every year.

Over the next few years, Puri expects nearly 15 to 20% of new supply to come from redevelopment of societies. In terms of value, it may contribute around 25%.

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“In society redevelopment, we are seeing quality developers because a lot of these societies are South Mumbai based, but in many of these South Mumbai residential redevelopment societies the land parcels are much smaller, and the viability is very high. So, the total value terms, over the next few years, nearly 15-20% of new supply will come from redevelopment of societies and in terms of value, this may go up to 25%.”

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CBRE's Prasad said the revision augurs well for the realty business in Mumbai as the city is surrounded by water on three sides, and redevelopment is the way forward.

For the entire discussion, watch the accompanying video