NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News  » Business » Testing times ahead for Mumbai realtors

Testing times ahead for Mumbai realtors

October 13, 2008 09:58 IST

If the lower-than-expected bookings at a property exhibition in the city are any indication, the real estate developers here could be heading for a tougher time.

The four-day property exhibition, which concluded on Sunday, saw prospective home buyers returning 'disappointed' as they found the property prices 'unaffordable' and discounts 'meaningless'.

The sales were down more than 60 per cent at the 13th Real Estate and Housing Finance exhibition, which was organised by the Maharashtra Chamber of Housing Industry.

Dipika Gupta, a chartered accountant, could not find an apartment within her budget of Rs 50 lakhs (Rs 5 million).

"There was not even a single two-bedroom-hall-kitchen available within my budget in the central suburbs up to Andheri, Chembur or Bhandup," Gupta, who takes home a salary of Rs 60,000 every month, said

The advertisements by developers of affordable houses, however, could not convince the customers of the price. The rates of the Neptune Group's new project at Bhandup started at Rs 65 lakhs (Rs 6.5 million) for a 2BHK, or upward Rs 6,500 a square feet.

Buyers with higher budget but was looking at a value buy for investment purpose too could not come to terms with the market reality.

Shamsher Rajput, transport manager, ONGC, said: "It would seem that the current financial crises would have at least thrown up a few good opportunity for value buying. But that is not the case."

There were around 85 real estate developers and 15 housing companies selling more than 800 properties with various discounts at the exhibition. Gala Lifestyle Developers offered stamp duty waiver for two projects in Thane that started at Rs 4,650 and Rs 5,350 a sq ft.

Both the projects also had Rs 25 and Rs 30 as floor rise respectively. RNA Corporation said that buyers can book any property by paying Rs 1,000.

The developer also offered a scratch card where in the buyer can avail a discount up to Rs 300. On the other hand, home loan companies such as LIC Housing Finance and IDBI Bank offered 0.25 per cent and 0.5 per cent discounts on home loans on the existing card rates.

Bhavesh Patel, a businessman, said: "These discounts do not even  convert to 8 per cent of the value of the property. These are meaningless."

The developers have been holding on to their nerves. They are looking at buyers' response at the property exhibition to gauge the sales ahead in the festival season.

The situation has not changed since the last year. 

The 25,000 sq meters of exhibition witnessed people coming in hordes but returning  disappointed. And the sales were down more than 60 per cent, according to various international property consultants.

To sum up the mood, Mukesh M Patel, Knowledge Worker, Neelkanth Group, said: "These are testing times for us."

Tinesh Bhasin in Mumbai