Despite a drop in sales of property in the city, the real estate prices are still high, and the citizens fail to fathom why.
In the past six months, sales have dropped by over 40 per cent and developers, even while they are refusing to publicly admit the stagnancy in the market, are offering veiled discounts up to 15 per cent.
“Developers can not cut prices, because once you do that it signals the start of a downward spiral. They are holding on to the prices to maintain the momentum,” said Rajesh Mehta of Raha Realtors, property consultant.
It is precisely this bravado which is on display at the ongoing MCHI realty fair at Bandra Kurla Complex where developers have put up properties on display which are unaffordable to the common man .
According to realty analyst Vivek D, property prices are out of real proportion only because of speculation and investments by NRIs who have invested heavily in realty.
“Developers cannot afford to sell them at low rates as it would then affect their relationship with the investors,’’ he said.
Dilip Sheth, treasurer of Estate Agents Association of India, said, “I would put the blame squarely on Delhi-based developers who in their bid to set up base in the city, quoted exorbitant price to purchase NTC mill land two years ago. Mumbai developers too then followed suit and under the garb that the country’s economy is on the roll, hiked property rates.’’
While the residential market, which is more sensitive to interest rate movement, has calmed in recent times, developers are reluctant to admit this. “Apart from high steel and cement costs, we pay high cost to land owners and housing societies who charge us for the area utilised in balcony, lobby. We have to recover the cost and naturally, then, the rates will be high,’’ argued Anil Agrawal of RNA developers.
In a sign that the overheated property market was affecting them, two developers had offered special incentives to attract customers. While Mantri Group offered to pay stamp duty of Rs2,51,000 and Rs1,51,000 on a 2BHK and 1BHK, Prajapati Constructions offered to pay 1% registration fee and give free open car parking space for a flat booked during the exhibition. Housing finance companies were offering a 25 basis point discount.
“An interesting marketing gimmick if you notice is that developers have appointed attractive looking girls to entice the customers to visit the stalls. This is in lines of exhibitions held in Dubai. Property exhibitions earlier used to be drab,’’ pointed out a
property consultant.
