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More luxury homes than city needs: analysts

Till two years ago,Darabsha Lane with its dozen tenanted low-rises stood out on Napean Sea Road,otherwise always the address of the well-heeled.

Written by Shalini Nair | Mumbai |
March 8, 2010 2:27:02 am

Till two years ago,Darabsha Lane with its dozen tenanted low-rises stood out on Napean Sea Road,otherwise always the address of the well-heeled. Today,most of the middle-class residents have been elbowed out to make way for three super-luxury towers by Orbit Corporation,with plush apartments,duplexes and penthouses,each up to 10,000 sq ft in size.

Darabsha Lane is a symbol of the pace at which developers are constructing opulent apartments for the super-rich in Mumbai. A total of 16 new projects offer apartments over 5,000 sq ft,and many more are under way. The apartments are priced upward of Rs 10 -20 crore,with the most expensive being the Rs-1 billion duplexes at Lotus Villa on Napean Sea Road followed by the Rs-60 crore duplexes of Mittal Grandeur,Cuffe Parade.

At this rate,realty experts estimate,supply of luxury homes will exceed demand by six times. “The super-luxury segment makes up barely 5 per cent of the total demand and the supply will soon account for 30 per cent of the new homes,leading to an oversupply,” said Pankaj Kapoor of research agency Liases Foras.

The offtake is already very slow,he said,with barely one luxury apartment in a project sold in three months. “When the market was down,developers jumped to affordable housing so that they could generate money from actual sales. But from the time the stock markets rose,the valuation game came into play again. Builders are no longer worried about healthy sales as they are not investing their own money but money raised from investors,merely from announcing new projects,” said Kapoor.

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Further north,the city’s erstwhile mill heartland is witnessing projects with taglines like “By invitation only”,rendering a greater snob value. Developers like Lodha,DB Realty and Indiabulls are building sprawling apartments and duplexes with swimming pools,health clubs,gyms and terrace garden flats. Typical of such constructions,the first residential floor often starts after the 10th building floor to ensure an unhindered view,with those lower reserved for automated car parks. Some projects also offer sundecks,private pools for every apartment,personal elevators,rooms for domestics,wine cellars,spas with jacuzzis and massage parlours,besides a yacht and a private air charter,a concierge and valets.

Last week,Lodha Developers launched 29 sky villas in Thane,each about 5,000 sq ft,with cellphone-operated appliances,private movie lounges,personal spa pools and walk-in wardrobes. Over a year ago,the group had launched a middle-income housing project in Thane with homes from Rs 40 lakh. Their latest offering is priced upwards of Rs 4 crore.

Abhisheck Lodha,managing director of the Lodha Group,says the project is getting a good response from businessmen in Thane and Navi Mumbai. “There is a huge demand for apartments with nice ambience and comforts not only in Mumbai but also in places like Thane,” he said.

Real estate consultant Sandeep Sadh points out that years ago,one of the main arguments for sale of mill land,where most luxury projects in Central Mumbai are coming up,was it would generate more housing stock. “To buy apartments priced over Rs 20 crore,an individual must be with a net worth of Rs 150 crore at least. Someone with that kind of money would be already staying in private villas and apartments and there are only a few who would want to invest such a huge amount as a non-performing asset,” said Sadh,who adds developers are creating an excess of such apartments as most are playing with money raised from the market.

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