Low demand, global crisis finally take toll
MUMBAI: Builders did everything to keep the realty prices high — from shrinking flats to laying off employees and offering freebies to prospective buyers. But the slowdown has finally made them wilt. Two major builders in Mumbai — Orbit Corporation and Wadhwa group — have cut their property rates by up to 20% amid a severe credit crunch triggered by the meltdown, low demand and high interest rates.
The Orbit Corporation, a real estate development company specialising in redevelopment schemes, has slashed its rates by up to 20% for its 10 projects under construction across the city. It brought down the rates from Rs70,000 per square foot (psf) to Rs60,000 psf for apartments at Orbit Haven, a project under construction on Napean Sea Road. The company has already reduced the area of the apartments to 2,500-2,700 sq ft instead of the planned 4,500-5,000 sq ft in the wake of the realty slump.
The company has brought down the rates for its projects in central Mumbai - Rs12,000-18,000 psf instead of the earlier band of Rs15,000-22,500 for 600-1,600 sq ft flats at Orbit Grande (Lalbaug) and Orbit Grand (Lower Parel).
“One has to accept that there is a slowdown and accordingly adjust your prices. There’s no harm in creating a demand by lowering the prices,” said Pujit Agarwal, Orbit Corporation managing director.
The Wadhwa group, which paid a whopping Rs831 crore for a plot of less than two acres at the Bandra-Kurla Complex, has also slashed its rates by Rs1,500 psf, bringing it to Rs10,000 psf for flats at Anmol Pride and Prestige, the company’s residential projects in Goregaon (West).
Group promoter Vijay Wadhwa said: “We had to reduce the prices as the demand is low because the rates are too high. When the demand is low, I can afford to reduce the rates.”
The group had also not given bonuses and increment to its staff this year. “The slowdown is definitely affecting and my staff understands the ups and downs of business. I could have dismissed 10 employees but I didn’t,” said Wadhwa.
