Not a good start for realtors, jewellers

Gudi Padwa always meant good business for realtors and jewellers. That is till the recession set in.

Gold prices, which rose to Rs14,300 for 10 grams from last year’s rate of Rs12,000, and peoples’ expectations of property prices falling and loan rates going down saw sparse customers at most shops during this festive weekend.

“Flat buyers are adopting a wait-and-watch policy,” K Ravindran Nair of Romit Enterprise said. “They have the money but they are sceptical about developers completing the projects.”

Nair on Friday managed two bookings, with customers paying the token money. He sold a 3-BHK flat in a seven-year-old building at Gokuldham at Rs5,900 a square feet, which is 25% less than the market rate of Rs7,000 a square feet. And he gave a 3-BHK on lease at Rs30,000, which is 12% less than the prevailing rate of Rs35,000.

Ram Prasad Padhi of Pinnacle Realty, who was out shopping with his family, had something similar to say. “I used to conclude five for six transactions. But this year, I managed to close the deal on three after days of negotiations,” he said. “Buyers want ready projects, but there are not many.”

For buyers, this may sound good news. Property rates have been falling. In Juhu, Joy Builders is offering flats at Rs14,000-Rs15,000 a square feet. The rate earlier was Rs18,000 a square feet. Nair has an investor who wants to sell his flat in Lodha Grandeur at Prabhadevi at Rs18,000 a square feet, which is 40%-45% less than the earlier rate of Rs25,000 a square feet.

Dharmesh Jain of Nirmal Lifestyles in Mulund has offered flats at Rs4,500 a square feet and in Kurla, HDIL has rates of Rs5,351 a square feet. Another builder has offered flats in Andheri (west) at Rs7,600 a square feet. In Kharghar, Navi Mumbai, the rates are around Rs2,900 a square feet.

The Lodha group, which recently advertised flats at Rs1,999 a square feet in Dombivili, managed more than 150 bookings in a day. “I had a good response with 200 bookings. I am expecting more buyers,” Jain said.

Gold jewellers are in low spirits because of poor sales. SK Jain of Chunnilal Jewellers in Vile Parle (east) blamed the high gold rate and recession. “Earlier, we used to have 50 to 60 customers every day by 4pm. Today, we have only 10 customers buying a token one gram gold because it is auspicious,” he said.

A spokesperson of Tribhovandas Bhimji Zaveri said people did not want to buy gold because of the high price. “Also, recession has led to job insecurity. And this has affected the spending power of consumers,” he said.