Redevelopment proposals down by 50% in a year

Redevelopment of housing societies, once a money-spinning deal for most Mumbai builders, has virtually ground to a halt. Besides a stagnant property market, developers say such projects which earlier earned them huge profit margins, are no longer profitable because of high premiums and development charges levied by the BMC. Across the city, builders have either walked away from redevelopment projects after concluding agreement with housing societies or are asking them to renegotiate them. A senior official from BMC's development plan department admitted that new housing redevelopment proposals have dropped by 50% over the past one year. This has also badly hit municipal coffers. Till 2016, the BMC would earn close to Rs 5,000 crore a year by way of premiums and development charges paid by builders. This has now plummeted to around Rs 3,200 crore. The Bandra-Khar-Santacruz belt, where redevelopment projects boomed in the last decade because property prices here commanded astronomical rates, has also suffered. "Developers in this belt who once charged Rs60,000 to Rs70,000 a sq ft for new flats in redeveloped properties have shut shop," said market sources.