Navi Mumbai flat sold for half the asking price

Here's the big proof that real-estate prices in Mumbai are falling.

A 13,000 sq ft sea-facing duplex apartment in Palm Beach Road in Navi Mumbai has been sold for Rs 12,500 per sq ft against the Rs 20,000-Rs 25,000 per sq ft quoted a few months earlier. That means a Rs 32 crore flat selling for Rs 16.25 crore.

The apartment in Akshar El Costillo at Sector 6, Nerul, was bought by Paradise Group managing director Manish Bhatija a few days ago. He bought the property on the 21st floor in the 28-storey building, along with five parking slots.

Though Bhatija confirmed the transaction, he didn't disclose the details. "It was a really reasonable deal in recent times," is all that he said.

Industry insiders agree that the property market is really scaling down. "If this fall continues, end-users will be able to buy their dream homes," said an industry insider. He said Palm Beach is the Nariman Point of Navi Mumbai.

"At Palm Beach, most apartments fall in the luxury segment. If rates are plummeting in this segment, it means property rates are likely to slide further. Because high-segment houses always face the first hit," said Pankaj Kapoor, MD, Liasea and Foras, a property research firm.

Kapoor said that the holding capacity of developers cannot stretch beyond a certain period. They have to pay high interests to banks, he said.

"Investors are the first set of people to exit during a downfall. Currently, most investors are exiting because there is no significant growth or appreciation in the property market. People feel investing in mutual funds or parking money in banks are better options," Kapoor added.

But Maharashtra Chamber of Housing Industry (MCHI) Navi Mumbai unit general secretary Manohar Shroff had a different opinion.

"If one deal has taken place at a lesser rate, that doesn't reflect the entire market. We sometimes read about south Mumbai apartments being sold for Rs 1.25 lakh per sq ft, but that doesn't mean that it is the rate for the whole of south Mumbai," he said.

Anand Sherawat, MD, Bhoomi Anand Group, however, said that the property market is going through a turbulent situation. "We thought that after the Lok Sabh elections, market sentiments will improve. Virtually, there are no buyers now. Most buyers are making inquiries but not returning," said Sherawat.

Another developer from Navi Mumbai blamed the government. "There are constant changes and amendments in government policies. There is no clarity as to where the housing sector is moving.

He also said that the Palm beach deal was a desperate sale. "There are very few buyers in the market to purchase such high-end and ultra luxury properties. Therefore, that particular flat was sold at a low price," said Arvind Goel, president of of MCHI, Navi Mumbai.