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By:

Correspondent

21 August 2024 at 10:20:16 am

Price Check

Maharashtra’s decision to keep ready reckoner (RR) rates unchanged for 2026–27 is a rare moment of restraint in a property market accustomed to incremental inflation. The move, justified by the government on grounds of the ongoing US–Iran conflict and a visible cooling in parts of the real estate sector, offers immediate, if modest, relief. In cities like Mumbai, where even marginal policy shifts can swell transaction costs, the freeze is sensible. But it is not sufficient. If affordability...

Price Check

Maharashtra’s decision to keep ready reckoner (RR) rates unchanged for 2026–27 is a rare moment of restraint in a property market accustomed to incremental inflation. The move, justified by the government on grounds of the ongoing US–Iran conflict and a visible cooling in parts of the real estate sector, offers immediate, if modest, relief. In cities like Mumbai, where even marginal policy shifts can swell transaction costs, the freeze is sensible. But it is not sufficient. If affordability is the goal, prices themselves must fall by at least 10–15 percent in order to offer relief to customers. RR rates, which determine stamp duty and registration values, effectively set a floor for property transactions. In a high-cost market, even a 3–4 percent annual increase as seen in recent years can translate into a meaningful rise in upfront costs for buyers. Last year’s hikes - 3.39 percent in Mumbai and 4.39 percent across the state - came after a two-year hiatus, itself preceded by modest increases during the pandemic years. By holding rates steady now, the state is acknowledging both the resilience and the limits of housing demand. The post-pandemic surge in real estate fuelled by low interest rates, pent-up demand and a rush for larger homes, has begun to taper. Luxury housing has remained buoyant, but the mid-income segment, particularly in Mumbai, is showing signs of strain. Developers, through their industry bodies such as CREDAI, have flagged a market that is increasingly sensitive to price. Freezing RR rates removes one source of upward pressure. It ensures no additional burden via stamp duty-linked costs, introduces a degree of predictability in pricing, and offers a marginal improvement in affordability. For homebuyers, that is no small comfort. For developers, it provides clarity in an uncertain environment. But a freeze is not a correction. It is, at best, a holding operation. The deeper problem lies in the widening gap between property prices and household incomes. In many urban pockets, particularly in Mumbai and its extended metropolitan region, valuations remain elevated relative to what most buyers can realistically afford. Developers fear that overt price cuts could erode margins and unsettle investor sentiment. But a stagnant market carries its own risks.   Housing markets function best when they are credible. That credibility depends on a shared understanding between buyers, sellers and the state of what constitutes fair value. The state’s parallel efforts of refining valuation tables, updating land records, and incorporating new survey data are steps in the right direction. They promise greater accuracy without altering headline pricing. But better data cannot substitute for better alignment between prices and purchasing power. By freezing RR rates, the Maharashtra government has avoided adding friction to an already delicate market. But prudence must now extend beyond policy into pricing. For now, the government has pressed pause. The market must press reset.

Choking Mumbai

For decades, Mumbai was perceived as a rare urban oasis, where the saline sweep of the Arabian Sea blunted the worst ravages of India's air pollution. That illusion has now been dispelled. A meticulous four-year study by Respirer Living Sciences (RLS), using data from its AtlasAQ platform, reveals the bleak truth that the city’s air is thick with pollutants all year round, with no ‘clean season’ left.


Mumbai’s annual average levels of PM10 (particulate matter ten microns or less in diameter) have consistently breached the national safety threshold of 60 micrograms per cubic metre (μg/m³). This is not merely a seasonal malaise tied to cooler winter months, as once assumed. Alarmingly, the city’s pollution levels persist even through the hot season, a time when improved atmospheric dispersion should offer natural reprieve.


Across the city - from Chakala in Andheri East to Deonar, Kurla, Vile Parle West and Mazgaon - pollution has become an unrelenting, ubiquitous presence.


The culprits are well known: traffic emissions from a burgeoning number of vehicles; unregulated dust from frenzied construction; industrial activity in and around the ports; and a conspicuous lack of dust control measures. Mumbai’s ceaseless growth now risks becoming a chronic liability.


Worryingly, the regulatory response remains sluggish. Mumbai’s urban planning continues to treat clean air as a peripheral concern, not a foundational necessity. Development plans rarely integrate environmental impact assessments in a meaningful way.


A sharper, citywide strategy is urgently needed. Dust suppression rules at construction sites must be enforced strictly, with financial penalties for violators and incentives for best practices. Traffic management systems should be overhauled to ease congestion and encourage the use of public transport. Expansion of clean, reliable mass transit network needs to be urgently prioritised. In addition, comprehensive real-time air monitoring at the ward level should be deployed, enabling authorities to respond to localised pollution spikes swiftly rather than relying on citywide averages that conceal dangerous hotspots.


Longer-term, clean air targets must be hardwired into the city’s master planning and transport policies. Green buffers along major traffic corridors, stricter emission norms for commercial vehicles and incentives for rooftop gardens and urban afforestation could all play a part. Industrial zones near port areas should be subjected to rigorous air quality compliance measures, not token self-certifications. Private developers and large infrastructure firms, often among the worst offenders, must be made stakeholders in the clean air mission through binding regulations.


Mumbai’s commercial dynamism - as a magnet for migrants, entrepreneurs and investors - depends not just on glittering skyscrapers but on something far more basic: the ability to breathe. Unless clean air becomes an unshakeable priority, the city risks suffocating its own future. For a metropolis that prides itself on its resilience against terror attacks, monsoon floods and economic shocks, the real test will be whether it can muster the will to fight an invisible, pervasive enemy slowly corroding the lives of its 20 million citizens.

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