BMC nod for building plans awaited, but flats sold out

Builders seem to have found the perfect formula to rake in the moolah, of course without compromising on their interest. Naresh Kamath reports.

Builders seem to have found the perfect formula to rake in the moolah, of course without compromising on their interest. With the civic body refusing to give clearance to new projects and the banks breathing down their necks for loan repayments, builders have resorted to pre-launch bookings and are giving heavy discounts to buyers.

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Under pre-launch scheme, customers, who buy purely for investment purpose, book flats even though the building’s construction plan doesn’t have the civic body’s nod. As such, developers offer huge discounts to buyers since they get money immediately to fund the project.

A prominent builder is selling flats at Rs17,500 per sqft at Bandra-Kurla Complex where the booking rate is Rs24,000. Another builder is selling flats at Rs6,500 per sqft at Malad (East) where the rates are Rs8,000 and above.

At Kandivli (West), builders are quoting Rs5,500 compared to Rs8,000 being sold presently. At Kalina, a builder is quoting Rs12,250 where the present rates are Rs14,500 onwards.

Talking to the Hindustan Times, Lalit Kumar Jain, president, Confederation of Real Estate Developers Association of India, supported this pre-launch scheme. “The financial condition is not very sound in the current market scenario. No builder would like to sell at lower prices,” he said.

Manju Yagnik, vice chairperson, Nahar Group, calls it a scheme to test the market. “We open these bookings before the official launch to our loyal consumers and NRIs. These bookings give us confidence,” said Yagnik. The investor pays at least 40% of the total amount of the apartment and is assured handsome returns by the builder.

In majority of cases, there is lock-in period of minimum one year till when the investor cannot sell the flat and after that, it is often the builder who buys the flat.

Housing activists have termed this illegal. “Builders are just resorting to any means to raise money while the state just looks the other way,” said Shreedhar Sharma, of Ravathy Foundation, an NGO involved with housing issues.