High prices turn buyers away
Mitesh Gala, a coaching class owner from Hindmata, Parel, wanted to buy an 800-square-foot house in the western suburbs. But when he approached the builder, the latter quoted a higher price for the same house Gala had seen a month ago, reports Naresh Kamath.mumbai Updated: Oct 21, 2009 01:16 IST
Mitesh Gala, a coaching class owner from Hindmata, Parel, wanted to buy an 800-square-foot house in the western suburbs. But when he approached the builder, the latter quoted a higher price for the same house Gala had seen a month ago. “The builder quoted me an extra Rs 5 lakh,” said Gala. “I was told that in Diwali, there is huge demand and prices naturally go up.”
Diwali gave the real estate market a miss as buyers continued to shy away.
The reason — developers, anticipating high demand, had hiked their prices.
The festival of lights, considered an auspicious time to buy property, saw a 10 to 30 per cent hike in residential and commercial property prices. Amar Thakkar, a travel agency executive, also postponed his purchase. “Houses are becoming unaffordable again,” said Thakkar.
Developers are justifying the hike. Sukhraj Nahar, director, Nahar Housing has hiked the rate of its Powai project, Nahar Amrit Shakti to Rs 6,200 per sq ft. It was Rs 5,800 last month. “There is tremendous demand for flats and buyers have come back. We hiked rates in view of Diwali,” Nahar said.
Neev Developers, which hiked the rates of its Ivory Towers project at Prabhadevi from Rs 14,000 to Rs 18,000 per sq ft, said: “Initially, we had quoted low rates due to bad market conditions,” said Jitendra Jain, director.
DB Realty has hiked its rate for its Kandivli project to Rs 7,500 per sq ft from Rs 7,000.
Industry experts say such hikes are not justified. “If this continues, consumers will shy away from buying and that will mean bad times for the real estate market,” said Anuj Puri, Chairman and Country Head, Jones Lang LaSalle Meghraj, leading real estate consultants.