Waiting game for realty sector ends as developers blink
By Gajanan Khergamker
There’s every need to rejoice. Developers have begun to bring down the prices and they’re admitting to it too. The fall ranges from 15 per cent to 35 per cent according to industry sources. Maharashtra Chamber of Housing Industry, Navi Mumbai’s general secretary Manohar Shroff said developers have begun to cut down property prices to survive in the market.
The demand has been damped by escalating interest rates, rising inflation and soaring construction costs which have also altered investment trends. A realty group which has residential projects at Mulund and Thane, has conceded, “We have decided to bring down the rates in some projects to boost sales. We aren’t the only ones suffering the heat though. Other big city developers have done the same.”
Developers are keen on clinching deals and are now willing to give that benefit by way of ‘discount’ to genuine buyers. As the cash flow in the realty market dries up with each passing day, there is a sense of panic in the industry, according to real estate firm Liases and Foras.
Mumbai, primarily an investor market, is now seeing troubled times as investors, themselves being in a financial mess, have desisted from pooling in further resources in the industry leaving developers turning to ‘real’ buyers to meet demands.
The waiting game appears to be reaching a feverish pitch and an inevitable end. Back in the city where properties were held back for purpose of invesment, things have changed. In cooperative housing societies, flats which lay vacant are now being thrown open for sale and at prices that are highly compromised.
“It’s just not feasible for us to continue paying maintenance bills, quarter after quarter without any returns anywhere in sight,” says Ms Hira Modi who is now looking to sell off her two BHK flat at a society in Colaba.
“I had kept it solely to draw some income out of renting it out but realise that it’s just not worth it,” she says. “With the way realty appears to be depreciating day after day, I feel I’ll be better off selling it off and investing the money in another sector,” adds Ms Modi.
So, after refusing to renew a leave and licence agreement that fetched her a sum of Rs one lakh per month, she’s looking for a buyer to outrightly purchase the place.
Jaydeep Gokhale who was looking to buy a place in Ghatkopar is finally clinching a deal for a price he had been angling for since long. “The developer was only interested in ensuring that I was a genuine buyer and would make payments in time,” he says. “After all, just like errant builders, they too come across agents in the guise of buyers and land up wasting their money, time and energy,” adds Gokhale. “Once I gave him a down payment in advance of Rs 30 lakh, he gave me a whopping discount of a fourth of the price he had been demanding,” maintains a thrilled Gokhale.
As talk goes, the corrections will continue for a while and activity which was frozen for a bit will begin to thaw.
