Buying a home? Rs 1 crore may not be enough

If you're looking for a house in a new project and you have less than Rs 1 crore in the bank, you might as well give up.

If you're looking for a house in a new project and you have less than Rs 1 crore in the bank, you might as well give up.

HT Image

From Worli to Jogeshwari, there has been a glut of project launches but the rates and sizes on offer ensure that all new apartments come with at least an eight-figure price tag.

In Borivli, for instance, developers are quoting Rs 10,000 a sq ft and Rs 7,500 to Rs 8,000 a sq ft in Mulund. Most flats measure 1,000 sq ft or more.

So, a 2BHK flat can easily set you back by Rs 1.5 crore, no matter where it is located.

Among the new projects, the Lodha Group launched one in Goregaon (East) for Rs 8,900 a sq ft, with no apartment smaller than 1,100 sq ft. Sheth Developers opened bookings at Rs 9,700 a sq ft for a Marol project. Associate Height at Jogeshwari is priced at Rs 10,000 a sq ft for apartments between 1,000 sq ft and 2,000 sq ft. HDIL's project at Goregaon is priced at Rs 8,100 for apartments measuring 1,670 sq ft onwards.

Builders justify the prices by claiming to provide amenities of the highest quality. “Our products are superior,” said Kamal Khetan, chairman and managing director of Sunteck Realty.

Sunteck Realty is building the 53-storey Signia High that has flats measuring 2,100 sq ft to 5,000 sq ft, at Borivli. The cheapest flat there costs Rs 2.5 crore.

The prices have effectively put on hold the dreams of middle-class buyers. The only option they have now is to look for flats up for resale or try their luck in Maharashtra Housing and Area Development Authority's (Mhada's) low-cost projects. “The prices are too high; no one is buying the houses,” said Pankaj Kapoor, chairman, Liasas Foras, a real estate research firm. He said Mumbai has more than 22,000 flats lying unsold due to the high rates.

However, builders insisted the projects are doing well. “In many families, both the husband and wife are working. Houses even at today's prices are affordable for them,” said Sunil Mantri, chairman of the Maharashtra Chambers of Housing Industry.

Whatever the demand, the pricing trend shows few signs of letting up.

On Dussehra, three premium projects were launched — one each by the Lodha Group at Lower Parel, Indiabulls at Worli and Lokhandwala Infrastructure also at Worli. None of the houses in these projects cost less than Rs 5 crore.

With Diwali coming up, the Runwal Group is launching a project in Andheri (W), quoting Rs 14,000 per sq ft for its 1,000-2,000 sq ft apartments.

Pranay Vakil, chairman of Knight Frank India, a real estate consultancy, said the projects would get some response. “Since the stock market is doing well, people would invest their profits in real estate,” he said.