Realty slowdown makes builders cautious

October 11, 2008	(Be the first to rate this story!)  Loading ...
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The slowdown in the real estate sector has forced developers in Mumbai to tread carefully. Developers have drastically cut down work on their under-construction projects. When flats are no longer selling as briskly as they used to, there is little point in speeding up construction work, a leading builder confessed privately to this newspaper recently. The construction industry is suddenly down in the dumps and builders are still unwilling to say when they will relent and reduce prices.

Some of them are also believed to have postponed launching new projects. Loans for construction have virtually come to a halt since the past three months, industry sources said. In the residential segment, prices in some of the upscale projects coming up in Malad and Goregaon are in the range of Rs 9,000 to Rs 10,500 a sq ft. In Juhu, the rate is anywhere between Rs 15,000 a sq ft to Rs 21,000 a sq ft in upcoming projects. In south Mumbai, there is an eyeball to eyeball confrontation between buyers and sellers of premium apartments. The seller is still adamant and refuses to lower the price, while the buyer is still not falling for it. In the past six months, the same flats which were put up for sale are still circulating in the market, said a CEO of a real estate company, not wishing to be identified. t Pedder Road, a builder who has just finished an upscale apartment block, is finding no takers. He has been demanding a whopping Rs 80 crore for each apartment, which is spread over 8,000 sq ft super built up area. Not a single unit has been sold at this price, said market sources.

Confronted by a bleak scenario, builders are twiddling their thumbs and waiting for the real estate market to revive, said an insider. A handful of developers who are sitting on large chunks of land since many years, and who have little exposure to banks, are in a comfortable position at present. The rest are finding the going tough while some who had purchased land at unrealistically high rates, are finding the noose tightening. According to housing experts, about $4 billion has been pumped into the Indian real estate market by FIIs and venture capital funds. Another $12 to $14 billion was to flow in within the next 18 months. This will not come anymore.

News Published Under:   Mumbai |

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