Steep prices scare off buyers, builders raise discounts
A clear indication of the cooling demand for real estate in and around the city in recent times is the desperate measures developers have been resorting to in the hope of luring customers.mumbai Updated: Apr 21, 2011 01:14 IST
A clear indication of the cooling demand for real estate in and around the city in recent times is the desperate measures developers have been resorting to in the hope of luring customers.
There is a glut of discounts and schemes being dished out to those showing even a passing interest in buying real estate. Right from free parking space to discounts of up to 10% up front if flats are booked within a stipulated period. While one may not see these discounts advertised, they are very much part of the deal.
“Sales have dried up completely due to the steep prices. So, lately even over-the-counter discounts are being offered,” said Ambar Maheshwari, head, investment advisory, DTZ, international property consultants.
In Mumbai and the suburbs, investors and buyers have been enjoying discounts as high as 20% in case of bulk bookings.
“In Navi Mumbai, we were offered Rs 3,000 per sq ft even though the actual price was Rs 4,000 per sq ft,” said a buyer who has booked six two-bedroom flats in a building near the proposed airport.
“Some developers are also offering discounts if the buyer is able to cough up a down payment of 40%, a part of which is in black [unaccounted for cash]. But, no developer will accept or advertise the discounts as they want to give the impression that all is well,” a real estate consultant said.
Industry experts say most developers are better placed now than in 2008 when real estate prices had crashed. “Most developers have seen phenomenal sales in the past two years and have even re-negotiated loan rates with banks. They also have the capacity to hold on to higher prices despite low sales,” Maheshwari added.
But, despite discounts, real estate in the city still remains out of reach for most people.