MUMBAI REAL ESTATE SCENARIO: REALTY IN DOLDRUMS

Despite an average drop of about 20 per cent in property prices in far-flung Mumbai suburbs, especially in the affordable segment, buyers still appear reluctant to take the plunge.

The 600-member builder fraternity of the Maharashtra Chamber of Housing Industry, more known for exhibiting the best of luxury in Mumbai, sidestepped for once to showcase affordable housing stock on the western suburb here last week.

While it looked like the developers had succeeded in rekindling buyer interest, by bringing prices down in some peripheral areas, many buyers were little enthused when it came to the location.
Price correction

Centrum researchers said the average price correction in some areas such as Vasai/Virar was 30 per cent at Rs 2,000 a sq.ft, Thane 18 per cent at Rs 3,300, Dahisar/Mira Road 18 per cent at Rs 3,900, and Kandivali/ Borivali 22 per cent at Rs 5,300. They said it should be understood that besides the pricing, genuine home seekers weigh issues such as transportation, infrastructure, water and power supply.

Merely building smaller flats at distant locations at Rs 20 lakh could not create demand. It is expected that a further price drop of 15 per cent is likely in the coming months.

The Maharashtra Chamber had specifically ensured that the top end of the price range was Rs 49 lakh and the lower end Rs 6 lakh. Interestingly, the expo also marked the re-entry of the one bedroom-hall-kitchen units in builder portfolios. However, many home seekers, while being attracted by the appearance and design of the properties, wanted to know how one could commute to the city from there on a daily basis.

“We witnessed keen buying interest from home aspirants, who came in large numbers to see the exhibition exclusively for the budget properties. We are sure that the exhibition will certainly result in good bookings in the days ahead,” said Mr Harish Patel, Convenor-Exhibitions, MCHI.
Huge demand

In contrast, the Maharashtra Housing and Area Development Authority, in less than a fortnight was able to mop up over four lakh applications for 3,863 houses it has put up for sale in upcountry city locales. The sq.ft rate of the MHADA properties spread across various locations is almost half the existing market rates.

The General Secretary of the Builders Association of India, Mr Anand Gupta, felt ‘affordable’ had become a relative term in Mumbai housing, as people were comparing MHADA prices with those of the private sector. The land MHADA had was allocated to the agency decades ago by the Government.

Mr Gupta said the private sector could match the MHADA offer only if the government decided to make MHADA a nodal authority and award time-bound fixed-price contracts to builders to develop the land the agency had. Earlier this week, BAI submitted a petition to the Government in this regard.

Further, the association had told the Government that 99 per cent of the five lakh home buyers would return disappointed, as only 3,863 units were on sale and hence the government should consider awarding builders contracts to develop properties on the lines of MHADA.