Realty check: High prices see steep fall

In contrast,realty rates in the distant suburbs have been the least affected by the slump. Property prices in tony Walkeshwar and Napean Sea Road have fallen by 35 and 40 per cent respectively. Similarly,Lower Parel has seen a 39 per cent drop in prices.

On the other hand,peripheral locations like the extended central suburbs beyond Thane,extended western suburbs beyond Borivali and mass housing locations in Navi Mumbai have seen the least fall in prices. So while Dombivali West has had a marginal one per cent fall from the peak rates in June 2008,prices in Virar East have fallen by nine per cent only,while in Nerul it has risen marginally by three per cent,shows figures of average residential rates by Liases Foras.

A case in point of the steady and steep fall in rates is that of Orbit Group’s Napean Sea Road projects. From their peak rates of Rs 72,000 a sq ft,it was brought down to Rs 53,000 a sq ft six months ago. Pujit Agarwal,managing director and CEO of Orbit Group,confirms that the company has recently sold two flats in its under-construction Napean Sea project at a full down payment of Rs 39,000 a sq ft. “Due to paucity of land in South Mumbai,the rates here shot up like crazy. Whereas in the distant suburbs prices never went up at this phenomenal rate. Also the category of buyers in South Mumbai are those affected the most by the downturn. The buyers in the extended suburbs are more or less stable as they are from the salaried middle-classes,” said Agarwal who has 11 ongoing projects in South and South Central Mumbai.

Gulam Zia,national director for research and advisory services at the Knight Frank,says “the ripple effect” of price correction is yet to reach the peripheral locations. “If a property at Napean Sea Road is available at Rs 35,000 a sq ft,a price at which a few months ago flats in Carter road and Bandra Bandstand were sold,the buyer would prefer to buy a flat in South Mumbai,thus bringing the rates down further in Bandra. Likewise rates in Kalyan and Dombivali will fall once rates in Thane starts going down.”