So It looks like Mumbai is no different then the rest of the country. All the arguments of island city, no area to develop , constant demand, no supply, blah, blah seem to have failed. Credit and affordability drives markets. For too long we have been subjected to the builder and realtor rhetoric and many have been suckered into buying properties at outrageous prices.
From what I see 3000 per sq/ft seems to be the floor for housing in suburbs. Now depending on the builder you can get suckered into the super-built up area and end up paying 40% more but atleast
the base price is down.
Source : CNBC-TV18
Home buyers should gear up for good news. Home sale volumes seem to be bouncing back but at steep discounts. Mumbai developers have started bringing down prices, and in some cases the dip is as high as 50%.
CNBC-TV18’s Priyanka Ghosh reports.
For those who are waiting to buy a house, this could be a good time. New project launches in the market is witnessing a steep correction, with apartment prices in suburban Mumbai recording a dip by a whopping 50% in some cases, a clear indication of how hard pressed developers are for sale. Not surprising, as many of them have had single digit transactions last quarter.
Sandeep Runwal, Managing Director of the Runwal Group said, “In Thane, if you were selling at Rs 5,000 per sq ft (earlier), prices are down to Rs 3,100 and 3,300 per sq ft (now). So, you have seen a realistic correction of 45-50%... but it has brought the consumers back into the market.”
Sanjay Dutt, Managing Director of Jones Lang LaSalle Meghraj added, “I am talking about developers like Akruti, Lodha and Rustamjee, who have launched projects in the region of Rs 2,500 and Rs 3,000 a sq ft and from whatever I have learnt, they are selling.”
The Runwal Group sold 600-700 apartments in the past three months at a discount of 40-45%. Whereas, HDIL sold 70% of its Kurla project in five days, in March 2009 after launching it at a 35% discount.
CNBC-TV18 learns that Thane alone had 6,000 transactions in the past three months. Companies like Orbit Corporation and Nirmal Lifestyle too have revised pricing to the tune of about 35%.
That, according to experts, is in tandem with the average price correction Mumbai has seen this quarter.
But there is another rationale to this rampant price reduction. We understand that developers have come under tremendous pressure from both banks and private equity players to sell and churn inventories if they want funding and disbursal of loans. And, of course, in a cash strapped environment, developers have little choice to accept these terms and bring down prices to sell.
From what I see 3000 per sq/ft seems to be the floor for housing in suburbs. Now depending on the builder you can get suckered into the super-built up area and end up paying 40% more but atleast
the base price is down.
Source : CNBC-TV18
Home buyers should gear up for good news. Home sale volumes seem to be bouncing back but at steep discounts. Mumbai developers have started bringing down prices, and in some cases the dip is as high as 50%.
CNBC-TV18’s Priyanka Ghosh reports.
For those who are waiting to buy a house, this could be a good time. New project launches in the market is witnessing a steep correction, with apartment prices in suburban Mumbai recording a dip by a whopping 50% in some cases, a clear indication of how hard pressed developers are for sale. Not surprising, as many of them have had single digit transactions last quarter.
Sandeep Runwal, Managing Director of the Runwal Group said, “In Thane, if you were selling at Rs 5,000 per sq ft (earlier), prices are down to Rs 3,100 and 3,300 per sq ft (now). So, you have seen a realistic correction of 45-50%... but it has brought the consumers back into the market.”
Sanjay Dutt, Managing Director of Jones Lang LaSalle Meghraj added, “I am talking about developers like Akruti, Lodha and Rustamjee, who have launched projects in the region of Rs 2,500 and Rs 3,000 a sq ft and from whatever I have learnt, they are selling.”
The Runwal Group sold 600-700 apartments in the past three months at a discount of 40-45%. Whereas, HDIL sold 70% of its Kurla project in five days, in March 2009 after launching it at a 35% discount.
CNBC-TV18 learns that Thane alone had 6,000 transactions in the past three months. Companies like Orbit Corporation and Nirmal Lifestyle too have revised pricing to the tune of about 35%.
That, according to experts, is in tandem with the average price correction Mumbai has seen this quarter.
But there is another rationale to this rampant price reduction. We understand that developers have come under tremendous pressure from both banks and private equity players to sell and churn inventories if they want funding and disbursal of loans. And, of course, in a cash strapped environment, developers have little choice to accept these terms and bring down prices to sell.
9 comments:
The problem with this article is that all the sources are either builders or their cronies the analysts.
But on the flip side, the RE market seems to run on speculation. When there was news about price increase - the market ramped up pretty quickly across India to historic high levels. Now that there are a lot of rumors about price cuts I am sure in another 6 months the prices will be bargain basement. One has to keep waiting till the bottom drops out of the market. Else, one is a sucker.
I wonder if anybody can report the real prices from "registered agreements" in the stamp and registration office. Those will be the rates at which real deals are taking place (of course one will have to estimate the black component). But that will be a better source than the press and builders.
No need to try to find a real price now all the price reductions a bit shady; builders will come out screaming with reduced price in few months.
Builders are now spreading an exaggerated news of price cut [hike the price by 200% & offer 50% discount.] in hope to spur the demand. It’s a convincing attempt that the prices are corrected, now buy it.
On the other hand instead of targeting at growth govt. is busy in bubble protection activity.
http://www.thehindubusinessline.com/2009/
03/27/stories/2009032750700800.htm
What mistakes buyer should avoid before taking a buying decision?
Fear and Greed
“An abundance of greed and an absence of fear led some to make purchases — not based on the real value of assets, but on the faith that there would be another who would pay more for those assets. At the same time, the government turned a blind eye to these practices and their potential consequences for the economy as a whole. This is how a bubble is born. And in these moments, greed begets greed. The bubble grows.
In the past few years, we’ve seen too much greed and too little fear; too much spending and not enough saving; too much borrowing and not enough worrying,”
: Larry Summers
http://www.politico.com/news/
stories/0309/19972.html
So guys let it fall then only pick up minimum 50% price cut is guarantee.
Vulture.
Newspapers report false property rates
Rates in mumbai have not dropped. The builders are asking 60% in black, due to which persons depending on bank finance can not buy. Builders/speculators are holding on to their assets and not even prepared to negotiate.
I have been house hunting from dec '08 and have approached almost all builders in western suburbs of Mumbai. What appears on newspaper is not the reality. People want hard cash so that they can buy gold and hoard, or educated ones want to buy euros/dollars to hoard. People are loosing faith in indian economy and we have already backtracked to 1970.
I think people are forgetting the past experience. When in 1995 RE bubble bursted, it took almost 4 to 5 years to reach bottom. The current bubble was much bigger, how come bottom can happen within one year?
On the contrary, when housing became very expensive, builder lobby got state government to pass policy changes for increase FSI. That supply has not even begun to come to market.
IMO RE as investment is dead for at least next 10 years. Now if you need house for own use, it might be better to just buy already constructed home. No point in buying under construction.
DLF customers gang up, pressurise developer to commit refund
I am from thane/mulund area and i can tell you that these rates of 2500-3500 is for new construction which probably wont be completed considering the current oversupply of ready to move in apartments. These so called "projects" are parcels of land far away from the city centre and no construction has started yet. 4200 is the rate at which one can get ready possession from builders like Kalpataru, Kanakia, 5200 from hiranandanis. the smaller builders are willing to sell at 3500 levels.
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