I got a call from a Mumbai builder’s office today morning. The executive was trying to give me informatin about the apartments they were trying to sell. I had in fact visited this builder in February earlier this year and he wanted to know if I was still interested. Back then, they quoted me about 45 lacs for a 600 sqft 1 bedroom-hall-kitchen apartment in Kandivali (E), Mumbai. It was too much for my liking and I decided not to buy the property. The builder now is willing to sell me the same apartment at as low as 36 lacs. That is at approximately 25% of erosion of price within space of 9 months.
Whoa! The builders, it seems, are seriously feeling the heat of recession. However its no surprises for us. There have been talks of a price correction since long time. The property market was already swollen like a hippo for last 2 years. People argued that it will fall, and people like me believed them. The wait is now finally paying off. Incidently it seems to be happening all of a sudden. I spent last two weekends surveying properties in Thane and adjoining areas. Believe it or not, a 3 bedroom hall kitchen apartments with all the modern amenities and excellent society are available at a sub-50 lacs price (all inclusive). And these are areas not too far from station. As far as I know, it was difficult to get even a ‘small’ 2 bhk at that price in Thane about an year ago. The rates are suddenly under a slide. In fact, a builder called me and offered me to arrange for a pick up at Thane station/ Check naka to help me commute to his site.
Builders are actually getting desperate to off load the property they have at hand. One of the reasons I see for this desperation is the realization of investment they have made. Most of the land acquired was in the times when market was on its upswing. Loans were borrowed. Staggering rates were paid to get hold of the prime property. However due to recent slow down, the sale of new houses came to a stand still. Buildings were built, towers were erected. But there were not enough buyers. This is prompting builders to reduce rates and recover whatever money they can. I spoke to few real estate guys whom I know to get a first hand account of whats happening. A prominent real estate agent who operates between Powai and Mulund said, “There were times when we used to handle 12-15 enquiries per week. I had to heavily staff my office to cater to the incoming calls and visits. Today however we barely manage to sell 1 apartment a month, that too at lesser rates.”
It is evident that the recent slow down has eroded wealths of one and all. No doubt why builders are now shifting their focus. Unlike 2-3 years back when they stressed on building premier properties, they seem to have shifted back to the economy homes. An article in Times of India today mentioned the names of most prominent builders who are changing their gear from luxury to affordable housing. Seems the builders have learnt their lesson.
If you ask me, the gyanguru, wait for 2-3 months and you will get prime property at dirt cheap rates 🙂