Realty experts predict astronomical rise in slum prices

Realty experts predict astronomical rise in prices of slum dwellings with state government making current residents of pre-1995 structures eligible for rehabilitation

Realty bites Mumbai again. In its bid to woo voters ahead of the civic polls, the Maharashtra government on Monday decided to make current residents of pre-1995 slum dwellings eligible for rehabilitation under the Slum Rehabilitation Authority (SRA) schemes.

Skyward bound: Experts say the price of shanties will rise by 25 per cent.
Representation pic

Interestingly, this also means any person who has bought a shanty that was in existence on 1.1.1995 automatically becomes eligible for a free house. This according to real estate experts is going to jack up prices of slums by up to 25 per cent and soon, like apartments, even shanties would become unaffordable.

According to real estate brokers, prices of slum dwellings are already moving north. "Who doesn't want a home in Mumbai? People will pay anything for a shanty because this would guarantee them a permanent house in Mumbai, whenever there is redevelopment. This would, in the end, increase demand for these units and whenever there is an increase in demand there has to be an increase in prices," said Prakash Rohera of Kkarma Realtors.

At any rate
While developers are also of the opinion that slum prices will increase, they claim they cannot make a precise estimate. "The government's law means it's a free run for many. With the option available, slum dwellers will sell to the person willing to pay the highest price," said developer Manohar Shroff.

Housing experts claim that this would not only spike the prices of slums that have been regularised, but unregularised shanties will also cost a bomb. A property market analyst said, "The government has now given the liberty to buyers of pre-1995 structures. They are also planning to regularise the slums that came into existence till 2000. Soon they might pass on other freebies too. With elections everything seems possible."

"People will now queue up for buying a house in the slums. This law is going to increase the number of such dwellings in the city instead of decreasing it," said another housing expert.

However, state housing minister Sachin Ahir said, "This law would enable people to get houses, but won't increase the number of structures. That would be the same as it was in 1995. There are many genuine cases, where people have bought a house and just because of one law they were termed ineligible for rehabilitation under SRA. This law will empower them."

Govt helpless?
According to the government, 35 per cent of Maharashtra stays in slums. Real estate experts say the number goes up to 60 per cent in Mumbai.

Asked whether the policy would lead to price rise Ahir said, "Nobody can handle market forces."

The government right now doesn't have a cut-off date in mind, but is planning to come up with one soon.

"Anybody who has bought a slum dwelling a year prior to the date when the law was made would be eligible and to prove that he has been staying |in the shanty he'll have to produce documentary evidence," said Ahir.

However, according to brokers, this documentary evidence means nothing, as 'acquiring' such endorsement in Mumbai, and indeed India, is simple.

Humble abode
Rates in south Mumbai: A 10X10 shanty would cost anywhere between Rs 25-30 lakh
Rates in suburbs: A 10X10 shanty would cost between Rs 15-20 lakh, depending upon the location

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