Mumbai: Some parts of Mumbai may see a correction in the price of land of up to 25 per cent, if the new initiatives planned by the Maharashtra government to improve land supply in the city come through.

The initiatives being taken to increase the supply of land include; repeal of the Urban Land Ceiling Act (ULCA); redevelopment of Dharavi; salt pan redevelopment and a new housing policy with incentives for rental housing and carpet area norms.

According to a study by international property consultant Knight Frank, the per-capita land availability for housing in Mumbai is 103 sq feet, which is one-tenth of international standards.

The study pointed out that out of the 475.07 sq km land mass in Mumbai, only 120.55 sq km is available for housing, which is 25.26 per cent of the total.

The announcement of the redevelopment of Dharavi has already led to softening of land prices. The project, expected to cost Rs9,300 crore will help the government develop 14 million sq feet of commercial space and 30 million sq feet of residential space in the next seven years.

Industry observers believe that once developed, the area could have a cooling effect on the surrounding areas including the Bandra Kurla Complex, Sion Bandra, Khar and Santacruz.

Knight Frank chairman Pranay Vakil said the mere announcement of Dharavi redevelopment itself would have a salutary effect on the sobering of prices and the impact on prices would be felt in 7-8 days. Vakil said that with the Dharavi redevelopment, in Bandra Kurla Complex (BKC), where prices are as high as Rs30,000 per sq ft the prices could slump to Rs7,000 per sq ft.

The next major factor, which could contribute to land supply, is repeal of Urban Land Ceiling and Regulation Act (ULCRA) in the monsoon session of the legislature. Mumbai alongwith its suburbs could see around 25,000 acres of land being freed up for development.

Industry analysts expect a 25 per cent to 30 per cent price correction when this kind of land supply hits the market.

Salt pans land development is also expected to free up 5,500 acres of land in the island city and could see a correction of up to 15 per cent-20 per cent in surrounding areas.