Property prices in free fall – buy house in Mumbai, get one free in Alibaug

Property prices in and around Mumbai are tumbling - almost 15-20 per cent over the past 12 months or so - with builders looking to rid themselves of unsold inventory. As a result, not only are discounts getting bigger, but developers are throwing in freebies to lure customers, reports the Financial Express.

For example, an apartment in Chembur comes with another one free at weekend getaway Alibaug. And that's after the price of the Chembur flat has already been reduced by 15-20 per cent.

''The price of these apartments in Chembur are priced 15-20 per cent lower compared to the going rate 18 months back,'' Amit Wadhwani, director, Sai Estate Consultant, a channel partner for the offer, told FE.

Tata Housing has come up with a cash-back offer of up to Rs10 lakh for projects in Kalyan, Bhandup, Mulund and Thane in the Mumbai Metropolitan Region (MMR) and in Dabolim, Goa. Prices start from Rs70 lakh and go up to Rs4-5 crore.

Last week, Kolte Patil Developers announced buyers could book apartments at the launch price even for projects nearing completion. The Pune-based developer is willing to forgo the premium over the life cycle of the project, which according to sector experts is typically around 10-15 per cent but could go up to even 30-40 per cent. The offer is valid for homes in Mumbai, Bengaluru, Pune and Goa.

Group chief executive Gopal Sarda told FE property prices were fluctuating. ''Demonetisation, RERA and GST have all led to buyers postponing purchases of homes,'' Sarda said.

A 300 sq ft flat worth Rs10 lakh in Alibaug bundled with a Rs1.75 crore, 675 sq ft apartment in Chembur might not seem much. But when it comes with a Rs99 lakh apartment in Nahur, a northern suburb, it's a better deal.

Ashwinder Raj Singh, chief executive of JLL-India, told FE builders' cash flows have been under pressure for some time. ''But they are beginning to accept this now and are more open about it as the advertisements show,'' Singh explained.

Developers, he said, continue to offer discounts as they have been doing for nearly two years now but these were now being packaged differently.

Hoping to cash in on the auspicious and festive periods in March and April, builders are vying to come up with schemes. The advertisements reflect discounts are fairly high -upwards of 20 per cent in some instances.

Stocks of unsold apartments are piling up after the 8 November demonetisation hit sales hard. Even before demonetisation, however, inventories were high. At the last count, there were 6.7 lakh unsold residential units across the country with 1.55 lakh in MMR alone.

The high-end segment had been impacted the most with launches almost halving to 12,000 units in 2016. The registration of property sales had fallen to a six year low in November and December in MMR alone. Knight Frank India observed in a report that 2016 ended with the lowest launches and sales the residential real estate segment since 2010 owing to demonetisation.