Realty rates dip in island city
Failing to lure buyers, builders of high-end residential projects slash prices, reports Naresh Kamath.business Updated: Jan 03, 2009 01:37 IST
The slowdown in realty sector has hit premium residential properties in the island city and builders have been forced to reduce the rates of these plush flats.
Many builders have started offering cuts in rates after failing to lure buyers with sops such as free registration and extra amenities, said realty experts.
After Orbit Group — which is building a skyscraper at Parel — officially slashed prices by 30 per cent, it got takers for its flats. The rate has decreased from Rs 22,000 to Rs 18,000 per sq ft.
“Our flats are selling and the cut has shown results,” said Pujit Agarwal, managing director, Orbit Group.
Just a year ago, these plush flats with modern sophisticated amenities — curtains that closed and opened with a remote control, lights that dimmed automatically and round-the-clock security — had got a significant chunk of the property market.
Today, given the realty slump, there are fewer buyers. However, majority of builders are not forthcoming on the price cut as they feel it would affect the value of their project.
“The builders quote high rates but once you sit on the negotiation table, the rates come down,” said a broker, requesting anonymity.
Beau Monde has three 33-floor residential towers at Standard Mill Compound, Prabhadevi. The glass buildings, which were priced at Rs 55,000 per sq ft, have now fallen to Rs 45,000.
Representatives of Sheth Group, which is building these towers, refused to comment.
In nearby Lower Parel, the rate in Marathon Heights has come down to Rs 29,000 per sq ft from Rs 35,000, said industry sources.
Mayur Shah, managing director of Marathon Realty Limited, denied this saying all his flats were sold off.
Though the sources said discount is being offered in 57-storey Lodha Bellissimo, being constructed at Lower Parel, Lodha Group director Abhishek Lodha denied it.
According to Jones Lang LaSalle Meghraj (JLLM), a real estate consultant firm, the cut in prices is due to the oversupply in the luxury segment. “There is more supply than demand of these luxury flats and hence the builders are slashing prices,” said Anuj Puri, chairman and country Head, JLLM.
Realty experts attribute the fall to the bubble burst saying the rates were ridiculously high.
“Builders just took advantage of the boom and hiked the rates. Even after discounts, the rates are still high,” said Ajay Chaturvedi, chief executive officer, Accommodation Times, a fortnightly realty magazine that tracks the market.
In several cases, the real discount is coming from individual investors who see no sign of realty market recovering and started selling by offering up to 30 per cent less rates than the developers, said brokers operating in the area.
For instance, a flat owner in Beau Monde flat at Prabhadevi was seeking Rs 30,000 per sq ft as against the builder quoted rate of Rs 45,000. Another one in Marathon Heights was ready to sell his flat at Rs 18,000 sq feet as against the official Rs 29,000.