Realty bites builders as fewer sales force them to cut prices

MUMBAI: With the real estate sector witnessing a slowdown, resulting in very few sales, builders have finally started to reduce prices of apartments across the city.

MUMBAI: With the real estate sector witnessing a slowdown, resulting in very few sales, builders have finally started to reduce prices of apartments across the city. Many builders have also stopped charging on floor rise and offering free parking spaces to woo customers.

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While Oyster Builders has launched a project in Kandivali (West) where the price is Rs7,000 a square feet, a prominent builder has slashed rates by Rs3,000 a square feet for a premium project in Sewri.

“In this period of slowdown, we are getting good response with the low pricing. We are able to sell,” said Tejas Vyas, CEO, Oyster Builders, adding that the price cuts have ensured cash flow.

Ekta Builders has got rid of floor rise premium for its Virar project and has come up with an assured delivery scheme, under which the insurance company pays interest to the buyer in case of a delay in possession.

Shraddha Lifescapes, at its IC Colony, Borivli, project — D Palazo — is not charging floor rise premium and also offering cash discounts. “We analyse how genuine is the buyer and offer discounts accordingly. The sales have slowed down considerably and hence we are being flexible in our deals,” said Bhavesh Sanghrajka, CEO, Shraddha Lifescapes. Many prominent builders are not openly advertising the reduced prices, but negotiations happen once a prospective buyer approaches them.

According to Liases Foras, a real estate research firm, time has come for a price correction. “Builders are in a bad condition and hence they have no alternative but to reduce prices. There is no way sales will take place at the current prices,” said Pankaj Kapoor, CEO, Liases Foras.

In the past few years, the real estate sector has witnessed turmoil. While builders have hiked prices to unaffordable levels, the government has continued to hike taxes and premiums, making apartments costlier. Even banks have laid down stringent home loan conditions, and the high interest rates have made buying a house in Mumbai difficult.