Buyers are staying away from properties built by DB Realty Ltd, the company whose detained founder Shahid Balwa is facing allegations of links with politicians and the underworld in the 2G spectrum pricing scandal rocking the country.
At least four buyers including one investor HT spoke to said they were ending or postponing planned purchases of property from the company.
“Buyers are the first one to fret in such a situations and are staying away from the company's properties in central and northern Mumbai,” said the head of a real estate consultancy based in Mumbai.
“There would be defaults as far as buyers are concerned. Secondly, even investors who had invested about two years ago may exit, booking less profits,” said an industry analyst.
But the company is confident that it will weather the storm.
“DB Realty is a big organisation what will not be affected by any controversy,” said a top Executive said to be close to Balwa.
In an official statement DB Realty said, “We have not received any cancellation from customers for our projects nor do we expect any issue with loan disbursement by private banks. Rather, this fiscal year DB Realty is expecting highest-ever sales bookings of Rs 3,200 crore.”
A broker in Mumbai’s Dahisar suburb, where DB is selling 570-square-foot flats for R45 lakh said customers and investors alike were worried by delays. He said typically, the first buyers were pre-booking investors who would exit when a project is completed.
“But now investors are looking to exit due to the CBI inquiry into DB Realty," he said.
"Luckily I had not paid the token amount when news about Balwa broke,” said a customer. “I am cancelling my purchase in DB Realty.”
A buyer in a half-finished Kandivali project said he was “stuck with the property.”
A customer who had applied for R25 lakh loan with a leading private bank for a DB Property recently got a call saying there were some “issues” with the loan. He blamed it on the scandal.
“We may look at disbursing home loans for properties that are complete but we will have to take a call on the one's that are under development,” said a senior official with a private bank.