Although property sale has not picked up, developers are jacking up prices to lure buyers who are dithering to buy a flat.
As per the Groffr.com, the real estate brokerage firm’s report, in last three month (August to October), the property rates have gone up almost by 6% while in April to July, the property rates increased only by 4%.
We analysed the prices of 100 projects to come to this conclusion. We observed that 35% of the projects did not witness any price change. The 44% project witnessed 10% appreciation, 15% project registered 10% to 20% price rise while 6% projects saw 20% to 30% price appreciation. Only 1% project witnessed a 40% price rise," said Sandeep Reddy, co-founder of Groffr.com.
Reddy said the developers are mainly hiking rates in projects which are ready to move in. "And such ready possession inventory is very low in the market. Buyers need not pay both EMI and rent," he said.
Saying that developers have a command over the prices of ready flats, Reddy added: "Buyers can get a good rate in the prelaunch stage. Once the developer gets all approvals for the building, he starts hiking the prices. So, most of the price rise happens between the prelaunch and launch only."
Atul Nemade, a real estate expert, said that increasing property price is the developer’s strategy to attract buyers sitting on the fence waiting for prices to drop.
"Many buyers are in two minds about buying a house. If realty price rises, a buyers thinks it would again increase in future," he said. "So instead of dilly-dallying, he decides to buy the house right away. It is psychological and the developers use every trick to woo buyers."
A significant price rise has been recorded in the western suburbs such as Vile Parle, Kandivli, Goregaon, Borivli, Santacruz, Andheri, Malad, Ghodbunder Road in Thane, Dombivli and Nerul in Navi Mumbai.
A developer has another reason to increase property rates. "The input cost has gone up by almost 40% in the last one year," said Lalit Kumar Jain, president of CREDAI.
"Apart from taxes, the prices of diesel, cement and steel have increased. In the last two years, the labour cost has gone up by almost 100%. The fungible FSI has increased almost 15% project cost in Mumbai. We have to recover from the buyers the rising cost of the project," he added.