Powai is a tony residential location in central Mumbai. Property prices here are reaching for the stratosphere. Rates have almost doubled over the past eight months. Recently, a two bedroom-hall-kitchen (BHK) of 985 square feet (sq ft) in Lake Homes, a residential complex—developed by Ekta World and Supreme Universal— sold for between Rs 90 lakh-Rs 95 lakh. During the slowdown (around nine months back), an apartment of the same size would have sold for Rs68 lakh. In 2007, when the real-estate segment was at its peak, this apartment would have sold for Rs78 lakh, revealed a source.
Prices have been steadily going up in this apartment complex (Lake Homes). Around a month back, the property was priced between Rs80 lakh-Rs85 lakh; four deals took place at these prices. “Prices have been rising quite rapidly. I have seen four-five deals happening at Rs80 lakh-Rs85 lakh—recently a deal took place between Rs90 lakh–Rs95 lakh,” said a resident of that area, who preferred anonymity.
He also added, “The fourth phase of Lake Homes was launched at Rs5,400 per sq ft in May 2009, because the realty sector was going through a slowdown. But now I feel that the bubble is blowing up.” Currently, a 2 BHK in Lake Homes (of 985 sq ft) is priced at Rs 110,00,000, according to Magicbricks.com. A property agent in Powai said that the current price of a resale property in Lake Homes ranges between Rs11,000-Rs11,500 per sq ft.
The Nahar Group, which was selling new buildings (of 925-975 sq ft) at its Nahar Amrit Shakti project in Powai at Rs52 lakh-Rs 58 lakh, is now quoting a price of around Rs 90 lakh. The group launched a residential project named Lilium & Lantana during the slowdown (around eight months back) at Rs5,400 per sq ft plus floor rise (a premium of Rs50 per sq ft), but now the price has jumped up to Rs9,000 per sq ft plus the floor rise premium. Hiranandani Gardens, a project by Hiranandani Developers, is retailing at a price ranging between Rs14,000-Rs18,000 per sq ft, said the realty agent. This area had reported sale of a 3 BHK flat (1,350 sq ft, fully furnished) at Rs1.15 crore around nine months back. Now it is difficult to get a 2 BHK flat at this price.
On top of this, buyers are also being forced to cough up 3% extra as service tax if the property is under construction. The Budget proposals on service tax on such properties have still not come into force, but developers are apparently passing on this proposed tax to customers. To add to the woes of prospective buyers, home loan interest rates have also gone up.
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