Once upon a time, MHADA discounted its property at Oshiwara and Powai

By Dr Sanjay Chaturvedi
Its not too late a time when MHADA had actually reduced its offer price and there was policy to offer flats on “first come first take basis”. Would you believe it that from Rs.2800/- per sq.ft. to Rs.2100/- per sq.ft at Oshiwara and from Rs.3100/- to Rs.2700/- sq.ft. at Powai main road, MHADA flats were having no takers. MHADA advertised, recognised brokers and agents and gave them commission to sell its flats. But nothing sold. The last resort was to discount the rates.
It had happened in 1999-2000 when real estate prices were witnessing recession. Nothing was selling.
Hiranandani Gardens were selling Rs.3800/- to Rs.4200/- and Nahar Amrit Shakti was selling for Rs.1800/- per sq.ft. Tata’s Symphony and Lok Group were finding it difficult to sell their ready stocks.
Kalina, the rates were Rs.2400/- per sq.ft. and at Bandra West properties were sold at Rs.6500/- per sq.ft. People were smart and were selling their properties to Income Tax departments under Section 37 I. In the name of NOC,Income Tax department was purchasing properties which were under valued, according to them, under 37 I.
Colaba and south Mumbai were not having any new projects and there was no relief under section 33 of DCR. Lower Parel andDadar were treated industrial zone and no residential projects came up till 2005. Madhava, and Keshava buildings were selling for Rs.800/- per sq.ft. in 1991 , had struggled till 2000 to find their optimum rates.
What made MHADA to go for lottery system again? It was first on lottery system from year 1988 till 1996. MHADA gave plots at Gorai and was emphasizing occupants to take ownership in Anand Nagar and many MHADA colonies. Special rate FSI werealso offered at Rs.600/- per sq.ft. at MIG colony at Bandra East. Since CRZ got Gorai scheme delayed and MHADA was to refund the money, Supreme Court gave relief to Gorai plot occupants.
In 1996, after boom in stock markets and Harshad Mehta’s bull run in the economy, the property market collapsed and from 1996 till 2000, real estate have seen a bad phase. This is the time when there were no takers for MHADA’s property, and for that matter no property deals at all. In 2000-2001, MCHI brought first national level property exhibition at Fortune 2000 Building at Bandra Kurla Complex and a new era in property market started.
Those who started their career in Real Estate since 2001 had never seen a fall hence they have an analogy that property market do not fall. World over, property market is falling. We cannot have a de-coupling theory for our nation. We will sonn witness a recession or a corrction in property price, well , may not be in premium segment.