Mumbai Property Sale drops but No Dip in Realty Price
Real estate Mumbai is country’s most expensive real estate destination where there are no signs of softening in property price. In the past few months the Mumbai real estate has a stooping sale and during January-March in Greater Mumbai there was decline of an average of 14.8 per cent in property sale. Higher property taxes, increasing construction cost, hike in service Tax, property registration cost etc makes buying a property in Mumbai unaffordable and out of reach for the “aam aadmi” the common man.
Unsold flats in Mumbai
Property buyers blame real estate developers & builders in Mumbai for not co-operating for price correction. According to source, in Mumbai the country’s most expensive real estate market, around 35,000 units stand unsold. In previous year 2.66 crore sqft residential stock was lying unsold but builders in Mumbai are still unwilling to reduce prices. In an estimate, the value of unsold flats in Mumbai is around Rs 8,535 crore. In Mumbai Metropolitan Region (MMR) including Thane, Navi Mumbai and Raigad, 1.13 lakh units apartments lying unsold weighted average selling price of which is Rs 10,833 a square foot.
Vacant land tax
Centre is now considering a vacant land tax where more vacant flats you hold the more you will end pay. But there are huge problems with such a vacant flat where government may succeed in controlling the hoarding of flats but will end getting ‘dummies’ to live in a house and result in benami flats.
The main reason for the developers to increase their property prices is due to the delay in the approvals by the authorities and also imposing a high premium. Currently the property sale in Mumbai is lacking behind as high as up to 1.13 lakh and about 129 million residential areas per square feet.
On the occasion of launching new projects every builder is keen on hiking up the prices because of the less execution risk involved while nearing the property possession. As maximum number of buyers are considering a flat as a comfortable property, there are an increased number of chances of buyers opting for such projects. This in turn gives the builders a chance to increase the prices due to the higher demand.
Most of the renowned real estate builders like Nirmal Lifestyle, Kalpataru and others have increased their property prices by 10% in the past few months. Also other developers have increased their project prices up to 20% in Mumbai. The following are the increased rates of few of the renowned builders;
Wadhwa developers: Rs. 11, 250 per sq ft to Rs. 12,400
Kalpataru developers: Rs. 10,500 per sq ft to Rs. 11,500
The government is trying its best to milk out the money from the developers through high interest rates and cost of construction. The only way for the developers to make an efficient use of their money is to manage their costs.
Also read:
Buying a Resale or Pre-Owned Property
Property Selling: Save Tax While Selling a House
Things to Know Before Buying a Property
