Mumbai developers’ ‘Gudi Padwa’ dreams are less likely to bear fruit this year
Shukti Sarma 04 April 2011

Despite the festival season—cutting across communities, various freebies being offered and substantial discounts, buyers are staying away from property purchases. However, a few analysts feel that it would be better to cash in on the current discounts, as rates are likely to go up in the near future

Amid dismal sales figures, city developers and builders were looking forward to Gudi Padwa for some improvement. Unfortunately, despite the freebies and other attractive offers, buyers have shied away from purchasing properties.

"Last year, it was comparatively better," said a Borivali-based broker. "This year, it brings us no joy. We have not seen a single registration this year, and I know of other brokers in other parts of Mumbai who are suffering in the same way," he said.

'Gudi Padwa', 'Akshay Tritiya' and 'Dussera' are traditionally considered to be auspicious occasions for making purchases, and usually see a lot of activity in the realty sector. Many people register for buying properties, and builders and brokers too, offer attractive deals to woo them. Gudi Padwa, which comes around the time of Punjab's 'Baisakhi', the Tamil 'Puthandu', Andhra's 'Ugadi' and Kerala's 'Vishu', is a profitable time for developers.

Many developers have offered discounts up to 20% on property prices and other offers to attract buyers. Even those developers, who had been otherwise reluctant to restructure property prices, have offered some sort of incentive. For example, the Sanghvi Group declared the launch of 'Sanghvi Paradise' at Rs1,854/ per square foot (psf) for the first 50 bookings along with offering discounts of up to Rs3 lakh for Sanghvi Exotica and up to Rs100/psf for 'Sanghvi Valley', 'Sanghvi Ecocity'. 'Sanghvi Nakshatra' and 'Sanghvi Nisarg' and 'Shankheswar Nagar'.

However, the magic has not worked. Neither has this year seen many project launches. Ramesh Nair, managing director-west India, Jones Lang LaSalle, said in a report, "The number of launches is lower when compared to last year, as not many projects have been approved in the last four months. There is a noticeable trend towards smaller-sized units, obviously meant to catch the tail-end of demand."

It appears as if the festive spirit cannot outbalance decreasing affordability. As Mr Kalpesh Shah, treasurer, National Association of Realtors (India), pointed out, projects which offer affordable rates are the only ones likely to sell. In many cases, people have stayed away from developers who have not reduced their prices.

"But what do we do?", remarked a developer in Navi Mumbai. "The last year has been bad, and some people are under pressure to settle bank dues with the financial year ending. So, we couldn't offer much discounts."

However, some experts feel that it is better to register for property now. "Post festival, some developers may hike prices citing increased input costs", an analyst said. Mr Nair said that people who are willing to take advantage of the festive offers and pay 30%-40% down payment will make a profit.

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