Daily News & Analysis 
 
MUMBAI, Jan 5: Purchasing a residential apartment has now become a cost-prohibitive proposition. Contrary to perception of prospective flat purchasers and realtors that property rates have gone up to 25 per cent, the new Ready Reckoner 2006 published by the state government for calculating stamp duty, have upset their calculations.

Property rates have in fact, risen by an astounding 72 per cent as compared to last year. Nowhere is the hike apparent than in Mumbai city area and more specifically at Masjid Bunder where residential rates quoted earlier at Rs5,000 per square feet (psf) are now quoted at Rs8,610 psf.  Similarly, at Matunga, residential rates quoted at Rs5,900 psf in 2005 now have gone up to Rs7,080 psf.

The hike, interestingly, though does not reflect in the high land rates quoted for the same area. For example, the reckoner has recorded an unprecedented increase of nearly 148 per cent in land rates from Rs1,880 psf in 2005 to Rs4,660 psf in 2006 in Masjid Bunder.

Little wonder then, realtors are stunned by the exorbitant rates. What though has taken the cake is the government’s move to sub-divide the existing zones for calculating stamp duty.

Thirty two  sub-zones, mostly in the island city, have been created with each having a different rate. “Property prices are bound to be affected,’’ said Rajesh Mehta of Raha Realtors, while quoting an example of zone 66, which covers property between August Kranti Marg and Pandit Ramabai Marg.

Till last year, land was priced at Rs7,850 psf, residences at Rs17,400 psf and commercial property for Rs19,300 psf in this zone. In 2006, five sub-zones, each covering a particular stretch of road, have been created.

“So, if you want to buy land between Tembe Road and Teen Batti Marg at Walkeshwar, it will cost you Rs10,390 psf, about Rs915 less than the Rs9,475 psf fixed for the neighbouring stretch from August Kranti and Forjet Street junction to BD road. Similarly, flats will now cost Rs19,200 psf – about Rs1,700 less than Rs17,500 psf fixed for the same above two sub zones,’’ said Mehta.

Adding further, he said, “I really do not understand how the government arrived at these rates. They do not conform with rates at ground reality. I have requested them numerous times but they are refusing to show me what conditions led to these figures.’’

Sunil Shah, a suburban real estate broker said, “Take for example, a 1,000 sq ft flat at JVPD. While the reckoner has pegged the rate at around Rs5,000 psf, at the ground level, the market value is somewhere between Rs6,000 and Rs6,500 psf.’’