The sharply rising prices of property have dampened the Diwali mood for homebuyers in the city.
Diwali, considered an auspicious period in the Hindu calendar, usually sees people rushing to buy property and gold to celebrate the festival of lights.
However, this year, the situation seems gloomy and homebuyers seem unable to honour tradition. “People have no incentive to buy in the current scenario as realty rates are very high,” said Pranab Dutta, vice chairman and managing director, Knight Frank India Limited, a leading real estate consultancy company.
“Homebuyers are waiting for prices to come down,” he added.
In the past few months, builders have jacked up prices and currently there are hardly any properties within city limits costing less than Rs 1 crore. One of the major factors for the high prices are the investors who, assisted by the stock market boom, are running the whole show. Even places like Borivli and Mulund, referred to as far-off suburbs, are now commanding a price tag of Rs 1 crore.
“As investors have surplus money, they have diverted it to the real estate market and here actual buyers suffer,” said Aditya Bansal, vice-president (finance), Liasas Foras, a leading real estate research firm.
Builders, too, agree that prices are high. “But, how can we sell when the land costs are so high?” said Sukhraj Nahar, director, Nahar Builders. Abid Rizvi, managing director, Rizvi Builders, agrees with the role of investors pushing up realty prices. “Here when the bank does not give you loans, it is the investors that keep the whole cycle running and ease fund flow for projects,” Rizvi said. However, he also agreed that homebuyers are adopting a wait-and-watch attitude.
Liasas Foras, in its survey, has indicated that the rates of flats have increased by at least three times in the last five years while there has not been a corresponding increase in pay packages of homebuyers.
In Kandivli (W), prices are around Rs 8,400 per sq ft compared to Rs 6,200 in January this year. Similarly, in Andheri (W), where prices were Rs 10,000 per sq ft, flats are being sold at Rs 14,000 per sq ft. In Bandra (W), property prices are hovering at Rs 33,000 per sq ft against Rs 22,000 in January. In Mulund (W), rates are between Rs 6,500 and Rs 7,500 per sq ft compared to Rs 5,200-6,000 per sq ft in January.