http://www.dnaindia.com/report.asp?newsid=1136317

MUMBAI/NAGPUR: On Thursday, after 31 years, the contentious Urban Land (Ceiling and Regulation) Act, 1976, better known as Ulcra, was finally laid to rest.

The deed was performed in the winter session of the Maharashtra Assembly in Nagpur, despite vociferous opposition from the Shiv Sena. Both the houses approved the repeal of the Act.

“The Act has failed as an instrument to achieve what was intended of it,” said chief minister Vilasrao Deshmukh. “It’s expedient to repeal the Act since it’s of no use to either the government or the poor, and the centre has already repealed it in 1999.” But the big question remains.

Will it translate into cheaper houses for middle-class Mumbaikars? Yes, say experts and developers, but there’s a caveat. “It will take at least two years for the impact of the repeal to take effect,” Niranjan Hiranandani, managing director, Hiranandani Constructions, told DNA.

But experts are, however, unanimous about one thing: prices will start falling in the peripheral suburban areas first. “One may just be able to buy a much cheaper flat in Kandivali or Thane in the current financial year,” says Pranay Vakil, chairman, Knight Frank.

“The next step should be rationalisation of the Rent Control Act and the Coastal Regulation Zone (CRZ) laws.” Agrees Hiranandani: “Peripheral areas like Vasai, Virar, Panvel, Mira-Bhayander and Thane will see a drop in property prices of up to 30% in the next two to three years.”

The repeal of the Act is expected to release approximately 3,000 acres of land for construction in the next couple of years. “A lot of land is going to be available soon and developers will think twice before jacking up prices every week as they used to do earlier,” Vakil said.

Experts from several multinational consultancies privately say that the “correction” – read: fall in prices – in the suburban market would be in the region of almost 40% in the next 18 months.

The downward trend will be more in tier II and tier III cities, especially Pune, Nashik and Nagpur, where a lot of land will be released into the open market.

Vijay Wadhwa, chairman, Wadhwa Developers, who recently paid a record Rs46,883 per sq ft for a commercial plot of 1.65 lakh sq mt of land at the Bandra-Kurla Complex, told DNA: “As land availability increases, the supply will match up to the demand. But I do not see property prices falling in the short term.”

The Ulcra repeal would release some 30,000 acres of surplus land in the Mumbai agglomeration, which includes Navi Mumbai and Thane, alone. The land, owned by 400-plus trusts, institutions, individuals and private corporations, technically falls within the purview of the repealed Ulcra.

Apart from Mumbai, about 70,000 acres would be released across eight cities of Maharashtra. “Once the act is repealed, the vacant land released from its purview would be used for construction under the Development Control Rules (DCR),” said chief minister Deshmukh.

He said it would be mandatory for developers to construct 40, 60 and 80 square metre flats. “If needed, the DCR will be amended so that developers build LIG, MIG and HIG (low-, medium- and high-income) houses in equal share,” he added.

Do not imagine that the property price in Mumbai or anywhere in India is going to fall. No looking back, the price will keep moving upwards only.
Remember it is India, the land of 1.1 billion people!
Any thing and everything will be in demand always.