CREDAI has expressed deep dissatisfaction regarding the prevailing policies of the Maharashtra government, characterizing the Mumbai real estate market as distinctly “investor unfriendly.” This unwelcoming climate has compelled CREDAI, the apex body of real estate developers, to reconsider its investment strategies, with attention now shifting towards Gujarat.
The developers' association has stated a clear intent to avoid further investments in Mumbai real estate, asserting that the imposed conditions have become excessively burdensome. Among the concerns raised are surging property taxes and escalating land lease rates, which they cite as contributing factors to this increasingly hostile environment for investment in Maharashtra.
The Confederation of Real Estate Developers’ Association of India has noted that the government’s uncooperative policies will effectively alienate real estate investors from the land, potentially facilitating a boom in the real estate market in Gujarat instead.
Mr. Lalit Kumar Jain, a distinguished developer based in Mumbai and also president of CREDAI, has been vocal about the detrimental effects of the Maharashtra government's stringent policies, declaring them highly discouraging for investors. "These policies are totally discouraging to the investors," he remarked, shedding light on the shift in perception towards Mumbai's real estate landscape.
At one point, Mumbai was a prime destination for real estate investors, both internationally and domestically, but it appears that those days are fading fast. Jain's statements reflect a sentiment that the golden era of Mumbai real estate may never return.
According to a recent report from Cushman & Wakefield, Ahmedabad now leads the pack among India's top ten cities for investment, garnering an impressive र 71,270 crore across real estate and other sectors such as infrastructure. Notably, investments in Ahmedabad account for approximately 39% of the total investments amassed by these ten leading cities.
The unfavorable policy landscape in Maharashtra is driving investors away from Mumbai, leading to increased costs associated with the real estate sector. A remarkable rise in the investment volumes in the top ten emerging business destinations in India has been highlighted by Cushman & Wakefield, indicating a sevenfold increase in investment within these areas. Cities that have made the list include Bhubaneswar, Kochi, Indore, Chandigarh, Vadodara, Coimbatore, Jaipur, Nagpur, and Visakhapatnam, alongside Ahmedabad.
Real estate remains a vital element for entrepreneurs, yet when operational costs soar, alternatives become necessary. This shift is evident in the rising interest towards Gujarat, which is merely a short flight away from Mumbai, thus elevating demand in its real estate market.
Developers in Mumbai have also lamented the excessive regulatory hurdles prevalent in the state, which obstruct timely approvals for a multitude of building projects. After a lengthy hiatus of nearly two years, authorities have now begun to selectively approve only a few projects.
In response, Mumbai real estate developers have proposed the introduction of a single window clearance system to mitigate these regulatory delays. This concept, originally proposed by some government officials, is expected to be implemented soon.
Reliable sources suggest that the approval processes in Gujarat are significantly more efficient, with commencement certificates (CC) provided directly by government officials. Furthermore, Gujarat’s administration consists of a dedicated team of IAS officers assigned to address investment and financial inquiries, even running call centers to facilitate support.
GIFT (Gujarat International Finance Tec-City), a project initiated by the Gujarat government under Narendra Modi's leadership, aims to establish a global finance hub near Ahmedabad, encompassing townships and specialized financial zones.
CREDAI's Mr. Jain pointed out that regions such as Bihar and Punjab are enhancing their investor-friendliness. He also mentioned that Andhra Pradesh, Karnataka, and Jharkhand are on the brink of launching a single-window clearance mechanism. Jain expressed hope that the Maharashtra government will reform its policies to become more supportive, adding that real estate builders are fully prepared to collaborate closely with the government.