Wednesday, May 21, 2008

Thane Real Estate Prices Start Tumbling

Runwal is offering free parking and a write-off on your stamp duty and registration costs, while Dosti is providing an upfront 10-15% concession. These Mumbai builders are offering sops to those willing to invest in their projects. Clearly, Thane's realty boom is slowly turning sour.

Encroachment of Forest lands by developers, a case that is now in the ambit of the Supreme Court, has made Thane a shaky destination for real estate home buyers. If the Supreme court case turns against them, they stand to lose their entire investment. Banks too are unwilling to fund such properties. Further compounding these problems are sky-high real estate rates.

Owners of apartments on forest land are even offering their homes for Rs 1,500 cheaper per sq ft, yet are unable to attract buyers. May is the peak month for real estate and a time when brokers and builders have a field's day, demanding prices according to whims and fancies. This has not been the case this year. In private brokers admit that they foresee a slowdown once monsoons arrive and the slack sets in.

According to Edelweiss analysts tracking the realty sector, demand for homes in Thane has fallen 20-30% percent in the last quarter. In Mulund it is 40-50 percent say broker sources. Despite this, builders are not toeing this line, but say that rates have in fact been increased 5-10% percent. This however is a gimmick, since all of this becomes negotiable once the money is placed on the table.

Affordability and forest land issue have become a bone of contention in Thane. No one wants to shell out Rs 4,200 to Rs 6,500 per sq ft for apartments in this city. Brokers are advising that unless there is a pressing need for a home, 4-5 months, homes are certain to fall further.

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Posted by Eclectic Investor at 1:00 PM  

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2 Comments:

Unknown said...

Because of new upcoming Metro train projects,Flyovers in both Thane and Navi Mumbai, the property rates of this area are increasing very fast.and its best place for investors who are searching new properties for investment.

5:59 PM  
Unknown said...

The real estate in Thane is the fastest growing in the whole country. This growth partly can be attributed to its proximity to Mumbai. Those who are not able to buy a home within Mumbai can certainly buy a wonderful home in Thane and commute in between the cities. The main reason why this city is on the top in the housing sector is the presence of good real estate developers. This is actually one of the main reasons why any city sees development. The best developers develop really good projects that bring in buyers. There is healthy competition amongst them which ensures even more development. This benefits the buyers a lot as they get more amenities and features at amazing prices.

4:54 PM  

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IN PASSING

Consider how the crisis has unfolded over the past eighteen months. The proximate cause is to be found in the housing bubble or more exactly in the excesses of the subprime mortgage market. The longer a double-digit rise in house prices lasted, the more lax the lending practices became. In the end, people could borrow 100 percent of inflated house prices with no money down. Insiders referred to subprime loans as ninja loans—no income, no job, no questions asked. - George Soros in latest book


“When everything’s going up, there’s a feelgood factor and people tell each other how much their houses are going up at dinner parties,” says Professor Mark Stephens of York University’s Centre for Housing Policy. “Then the music stops, as it always does.”

“Last year, Japan was a more attractive market to put money in. If you look at the US, we can now get an internal rate of return of 25% there, so why would anyone want to come to India?” - a senior executive at an international financial services group, who did not wish to be named.

"Most people told us house prices never go down on a national level, and that there had never been a default of an investment-grade-rated mortgage bond, "Mortgage experts were too caught up." - John Paulson, trader, who bet against subprime market and made $15 billion.

The most puzzling are the real-estate projects of Parsvnath. Just have a look at the Pride Asia project near Chandigarh. They are asking almost US $300K-$350 K dollars for 2 bed room apartments. They have Villas in this project that costs more than US $1.5 million dollars. It is true that some people in India have that kind of money in India. However most of their wealth is black money and that can not be used to buy these properties. Obviously, these projects have been launched keeping NRIs in mind. - Sanjeev, comment from another site

Prachi Desai, aka Bani, the star of Balalji Telefilms's soap, Kasam Se, has been house hunting for over a year. She had almost closed a 2-BHK deal last year for Rs 1.5 crore in a Oberoi Constructions' building located at Andheri, Mumbai, but when she went back to confirm it, she was asked to cough up Rs 2.61 crore. Since then, she is still house hunting. - Mumbai Mirror

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