MUMBAI: Traditionally, developers have wielded considerable influence in the real estate market. However, housing societies planning redevelopment are now shifting dynamics in their favor. With builders eager to secure redevelopment rights, these societies are negotiating aggressively, often making “unrealistic demands” for their properties.
Market insiders report that housing societies are seeking additional space, hardship compensation, and relocation amounts that exceed prevailing market standards by as much as 15%–25%. Alongside standard area matching and displacement compensations, many are requesting excess amenities and significant hardship payments per member. Some expectations extend beyond what’s feasible, with societies demanding extensive additional area, substantial displacement payouts, and premium finishes.
“There’s a herd mentality at play,” a property market analyst noted. “When a few societies in a neighborhood receive high offers, others see that as the new norm. However, each plot has its unique FSI profile, zoning challenges, and financial viability. It’s inaccurate to benchmark every property against the highest transactions in the area.”
The sentiment that “developers are back in the market” since 2022 has propelled inflated expectations throughout the western corridor. Between Bandra and Juhu, societies are requesting rents for alternative housing at Rs 225 per square foot, while prevailing rates hover around Rs 150 to Rs 175. Additionally, corpus funds that should ideally range from Rs 3,000 to Rs 3,500 per square foot are being targeted at Rs 4,500 to Rs 5,000.
According to sources in the property market, this trend is particularly visible from Bandra to Borivali, especially in micro-markets like Khar, Santacruz, Andheri, and Goregaon where redevelopment activities have surged in recent years. Even housing societies in Borivali and Kandivli, which typically leaned toward mid-range projects, are now setting unrealistic expectations on par with those found in areas like Vile Parle or Juhu.
Sanjay Daga, CEO and MD of Anex Advisory, stated, “The rising aspirations and evolving lifestyles are shaping how societies negotiate. Many are pursuing higher compensation, added space, and improved amenities, believing that the robust market will support these demands. Nevertheless, developers are bound by strict feasibility constraints influenced by fluctuating land values, construction expenses, and market uptake.”
Daga emphasized that societies should evaluate a developer’s history and reliability rather than merely opting for the highest bidder, as an attractive offer can turn out to be costly if project execution falters. “Striking a balance is vital — both parties have valid concerns. Societies are looking for fair compensation for their properties, while developers must prioritize long-term viability and timely project delivery. When expectations align with practicality, redevelopment can become a mutually beneficial endeavor rather than a contentious issue.”
Developer Ram Raheja noted that some housing societies may have aspirations that seem commercially unrealistic. “We often refrain from pursuing certain tenders when the numbers don’t add up,” he mentioned. This trend has emerged partly because some developers are willing to extend terms beyond standard feasibility norms, typically seeking a foothold in a micro-market where they lack presence.
“It’s completely understandable for society members to want the best possible deal and maximize their redevelopment benefits. However, it’s crucial to handle these expectations carefully, as redevelopment is a long-term commitment with minimal room for error,” warned Raheja.
Experts attribute this inflated outlook to two main factors: perception and incomplete information. Many societies become aware of record-breaking deals and assume similar figures can be applied to them without grasping the underlying economic realities. They focus on enticing headline numbers rather than project costs, sales values, or land utilization prospects. The influence of social media, informal comparisons, and anecdotal reports has further fueled this expectation bubble.
“What many societies fail to recognize is that land economics can vary dramatically over short distances, and the viability of a redevelopment deal is contingent on FSI potential, construction costs, expected sale values, and market absorption — not merely the perceived prestige of a location,” experts explain.
Moreover, a new trend is emerging with societies expecting to retain 70–80% of the FSI share, a significant increase from the previous 35–40%, believing that developers can still make these figures work. “When societies overstate their demands for area and payouts, credible developers tend to withdraw, creating space for smaller firms with limited capital. These players often make aggressive promises but may lack the resources to fulfill them, leading to stalled projects and postponed completions,” remarked a market analyst.
