Monday, August 02, 2010

In Mumbai, flat sales drop 30-50% in 4 mths due to inflated rates

Times of India has this article. Looks like they have to tell the truth after all. Buyers have to be wary of the high builtup area which seems to be heading to 50% from the usual 25-30%. Also now a days there is no water supply graned to new buildings until end of 2011. I think by the time 2011 comes, they will move it another few years. Best to buy something ready construction with no water issues.

MUMBAI: Mumbai’s builders seem to have priced themselves out of the market. Sales of apartments, on an average, have dropped between 30% to 50% over the past four months as end-users, discouraged by the high rates, are staying away or postponing their decision to buy their dream house.

But developers are not perturbed. Except in 2008, at the height of the global economic meltdown, they have been riding high on the real estate boom that started seven years ago.

According to sources, most builders have a good staying capacity and can afford to hold on to their prices despite the drop in sales.

A property expert said sales in the suburbs had fallen by more than 40%. "Investors from certain financially rich communities have formed a cartel and are driving up prices. They are trading in real estate by buying flats in bulk and selling in retail. On the other hand, the genuine purchasers are not buying flats at these inflated rates."

It is learned that many developers artificially jack up their rates by, say, more than Rs 1,000 a sq ft, and then play out the charade of giving a discount of Rs 1,000 a sq ft to a potential buyer. Moreover, in many residential projects, the difference between the built-up area and the carpet area is now almost 50%.

More here