CIDCO To Freeze Reserve Price Of Land For FY 2020-21
In order to boost the real estate sector and stabilise the property prices, the City and Industrial Development Corporation (CIDCO) has approved to freeze the reserve price of land in various nodes of Navi Mumbai and surrounding areas for the Financial Year 2020-21 i.e. from 1st April 2020 to 31st March 2021.
“CIDCO Board has taken the decision of freezing the reserve prices of its plots in various nodes and surrounding areas of Navi Mumbai. This shall boost the real estate sector and stabilise the property prices,” said Dr. Sanjay Mukherjee VC & MD, CIDCO.
The Reserve Price of Land of the node represents the break-even rate of land and infrastructure development cost and it is worked out by adopting the present worth concept. The total of the compounded value of net past cash flow and the discounted value of balance infrastructure yet to be incurred on the project in the future years is divided by the balance saleable area of the node gives the Reserve Price of land at a given point of time. The Reserve Price is calculated as per square meter. Every year reserve price is determined by using this formula.
The reserve price approved by the Board is valid for one year and thereafter it is appreciated at a percentage decided by the Board from time to time, varies from 5% to 15% till the new reserve price is worked out on the basis of Project Report. Based on the reserve price, the land prices for different land uses in the node are fixed in accordance with the Land Pricing and Disposal Policy approved by the Board, CIDCO said.
Or for many years, the real estate sector had been severely affected due to the economic recession and the current pandemic situation. The reserve price of land was frozen by CIDCO in the year 1997-98 and 2004-05. “On the background of these above points, it has been decided to freeze the reserve prices of lands in the nodes of Navi Mumbai and surrounding areas for the period of one year i.e. from 1st April 2020 to 31st March 2021. This decision will benefit the residential as well as commercial developments, in turn, the overall real estate sector,” CIDCO said.