Although builders adopt innovative tactics by offering freebies on new purchases, prospective buyers will not see a reduction in prices of flats
Even though the odds are against them, the real estate sector in the city is in a rebellious mood. The flat prices refuse to go down. While builders across the city are offering freebies to lure prospective buyers, they have categorically refused reduction of prices.
Drawing in customers: Sunil Mantri of the Mantri group said that the
offers he provides are value added services that bring in more customers,
enabling them to bring in more business. File pic
In fact the builders declared that reducing the prices isn't possible.
At an exhibition held at Bandra-Kurla Complex by MCHI that concluded on Sunday, builders blamed rising prices of other components related to real estate and the hike in the interest rates for not lowering rates.
While some builders claimed that reducing the price would mean death of a project, some informed that they wouldn't have enough money to bribe the bureaucrats.
It was clearly evident at the exhibition that many builders were offering freebies -- international trips on the booking of a flat, free stamp duty and registration. But the begging question is, if builders are ready to spend several lakhs of rupees to lure buyers to sell their flats, then why not lower the prices?
Manju Yagnik, vice chairperson, Nahar Group, claims that negative publicity will affect the project, if a builder reduces the price.
"The cost of everything associated with the real estate industry has shot up, finance cost has increased, the rate of interest has risen, material costs have gone up, and labour costs have risen by 50 per cent. All these factors aren't helping the builder," said Yagnik.
Asserting Yagnik's claim, Sunil Mantri, owner Sunil Mantri Realty, said, "The interest rate that institutional lenders were lending us has gone up from 12 to 15 per cent. Private lenders have also increased their rate from 24 per cent to 36 per cent. The land prices aren't coming down, Prices of cement and steel have gone up by more than 25 per cent, however, none of the builders have increased their prices, which has gone up by nearly 20 per cent and instead builders have absorbed all this on their own balance sheets."
Mantri, who himself is giving away free international tours on the booking of a flat at his Goregaon project, claims that the offers are value added services and are bringing in more clients to his project. However, these offers are in no form the symbol of reduction in prices. "Had there been a discount of nearly 10-20 per cent in the prices, then it would have helped the buyer more. But for someone investing a crore or more, one or two lakh won't matter too much," he said.