The article says the sale dropped 40 percent in last 4 months because of inflated prices. :bab (38):

In Mumbai, flat sales drop 30-50% in 4 months due to inflated rates

Mumbai’s builders seem to have priced themselves out of the market. Sales of apartments, on an average, have dropped between 30% to 50% over the past four months as end-users, discouraged by the high rates, are staying away or postponing their decision to buy their dream house.

But developers are not perturbed. Except in 2008, at the height of the global economic meltdown, they have been riding high on the real estate boom that started seven years ago.

According to sources, most builders have a good staying capacity and can afford to hold on to their prices despite the drop in sales.

A property expert said sales in the suburbs had fallen by more than 40%. "Investors from certain financially rich communities have formed a cartel and are driving up prices. They are trading in real estate by buying flats in bulk and selling in retail. On the other hand, the genuine purchasers are not buying flats at these inflated rates."

It is learned that many developers artificially jack up their rates by, say, more than Rs 1,000 a sq ft, and then play out the charade of giving a discount of Rs 1,000 a sq ft to a potential buyer. Moreover, in many residential projects, the difference between the built-up area and the carpet area is now almost 50%.

"Prices have reached their peak levels. Any further increase from here onwards will seriously affect the demand," said Anuj Puri, chairman and country head of Jones Lang LaSalle Meghraj, a global property consultancy firm. "Inquiries are slowing down, although commercial sales have been picking up."

Developer Sunil Mantri, also president of the Maharashtra Chamber of Housing Industry (MCHI), admitted that sales had dropped 10% to 20%, depending on the project and location. "Prices have shot up beyond the reach of the common man. The average rates have shot up by 20% to 30% since the past one year," he said.

However, Mantri claimed that sales were generally slow during the monsoon season. "We are working to boost sales in this slack period up to Navratri by way of promotions," he said.

Another developer from the eastern suburbs, who did not wish to be named, said sales had been down by as much as 50% below compared to last year. "The reason is the high prices, and the last three months have been pretty bad," he said.

Knight Frank (India) chairman Pranay Vakil said there had been a drop in volumes of outright sales. "There is resistance to high prices. In central Mumbai, a residential project which was quoting Rs 21,000 per sq ft and doing brisk sales last year, has now shot up to Rs 30,000 per sq ft with barely any transaction," Vakil said.

However, developer Nayan Shah of Mayfair Housing said he foresaw a severe rise in prices in the coming months. "The cost of TDR (transfer of development rights) has shot up and in places like JVPD, the BMC has restricted the floor-space index (FSI) to just 1 till the time housing societies surrender land reserved for public amenities. This will have a cascading effect on property rates," he said.

Source: TOI, 2nd August, 2010.
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