Mumbai property prices would go up by 15-20% in 2012

Potential home buyers who have been waiting for a long time for the property rates to correct, would have to wait for some more time as the prices in Mumbai is expected to go up by at least 15 to 20 percent.

According to Lalit Kumar Jain, the main reason for this is the recent amendment in the development control regulations (DCRs) for the state capital city. According to the DCR amendments, balconies, flower beds, terraces, voids and niches would be counted in the floor space index ( FSI).

To compensate for the loss of free-of-FSI areas, fungible FSI to the extent of 35 per cent for residential development and 20 per cent for industrial and commercial developments has been allowed with premium.

Fungible FSI at 60 per cent premium for residential, 80 per cent for industrial and 100 per cent for commercial at ready recknor rates

"FSI which was earlier available free, would now have to be paid for. This would result in the prices going up by at least 15 to 20 percent this year," he added.

Another reason for the property prices to remain high is the cost involved of various financial institutions. "These financial institutions have provided credit to these developers and to protect their interest, these institutions won't allow the developers to sell the property at lower cost," he pointed out.