TDR prices getting too hot for realtors

Mumbai: As real estate prices increase across the city,
the price of transfer of development rights (TDR), 
too, has started reaching for the sky.

Going by TDR brokers, the increase has been particularly
noticeable in the western suburbs. TDR prices have
increased to Rs 2,700 per sq ft in Bandra to Santacruz,
and to Rs 2,500-2,600 per sq ft between Santacruz and Borivali.

The central suburbs aren’t far behind. TDR prices in Chembur, 
too, are near Rs 2,700 per sq ft and in suburban areas like Mulund
to Bhandup, at around Rs 2,450-2,500 per sq ft.

“TDR is now selling at Rs 2,600 per sq ft,”
Sarang Wadhawan, managing director,
Housing Development and Infrastructure (HDIL),
said on the sidelines of the Ficci realty summit here.

At the end of the first quarter this fiscal, HDIL had started
selling TDR for Rs 2,100 per sq ft. In just four months,
prices are up 29%, Wadhawan said.

“Though TDR prices have been hiked so much,
there is no sale at all due to price hike. Earlier,
the developers didn’t have any liquidity to buy TDRs
when prices had fallen to as much as Rs 830 per sq ft.
Now, as projects are selling and prices have been hiked,
the TDR cartel is back,” a leading TDR broker said.

Last month, when DNA Money ran a survey, TDR prices
were found to be around Rs 2,545 for Bandra to Santracruz
and Rs 2,300-2,400 beyond Santacruz.

“If developers enter at such high levels, then project rates
are bound to go up and buyers would not have any option
but to pay. I don’t think at this time developers can shell
out or will shell out this much as they have burnt their fingers badly,”
an analyst tracking the sector said, preferring anonymity.