The real estate project launches in Mumbai dropped by 24 per cent in the first quarter of 2017, a recent survey said.
Launches dropped by 24 per cent at 4,900 units against 6,500 a year ago, a study conducted by the property consultancy firm Colliers International found.
The trend may continue for a short term as developers are adjusting to the new Real Estate Regulation and Development Act (RERA) rules, it said.
"The developers have been selling projects and units based on the marketing plan and layouts, and super built-up areas often represent a loading on the nature of amenities a project offers. Since the FSI norms and rules have differed from sale plan and chargeable areas of projects, it is posing a challenge for developers," Colliers International Executive Director, Office Services and Investment Sales, Ravi Ahuja said.
Developers now have to upload on website all sanctioned and approved plans and the buyer can do diligence and be privy to artificial mark-ups in such super built-up areas that sometimes go as much as 40-60 per cent higher than carpet area.
"There is a hesitation of under-construction projects sold prior to RERA to follow RERA rules," Ahuja added.
The rules stipulate that all new under-construction projects must register with the authority by July 31, 2017. After that date, developers without registration won't be allowed to advertise or sell projects in the market.
"With the RERA becoming a reality now, it is important for developers to prepare for the changes promptly. The change in the real estate cycle may act as an entry barrier for small players and speculators. We believe improved project planning will help developers avoid delays and manage project funds efficiently," Colliers International Senior Associate Director, Research, Surabhi Arora said.