How your dreams of a new home go bust

Despite 90,000 flats lying unsold in and around Mumbai, MiD DAY finds that Rs 50 lakh will not get you a home even in places like Kandivli, Ghatkopar & Deonar

Despite 90,000 flats lying unsold in and around Mumbai, MiD DAY finds that Rs 50 lakh will not get you a home even in places like Kandivli, Ghatkopar & Deonar

First, the good news. A recent study by a real estate research firm has found that nearly 90,000 flats in the Mumbai Metropolitan Region, out of which 30,000 are within official city limits, are currently lying unsold.
One would be tempted to assume that this obvious demand-supply mismatch would lead to a fall in real estate prices and make housing affordable for the common man. The assumption would be far from the truth, however, and that is where the bad news begins. Armed with a budget of Rs 50 lakh, MiD DAY reporters went to areas like Kandivli, Malad, Ghatkopar and other suburbs distant from the island city, where one would expect to find a flat in this range, but came back empty handed in every case but one. The only flat we could find within our budget was a 1-BHK for Rs 46 lakh in the poorly connected Kurar Village in Malad, which would be ready for us to take possession of only in 2013.

Room with a view: The Orchard Residency at LBS Marg, Ghatkopar
(W) has flats priced at a minimum of Rs 1.25 crore

Bulk vacancy
Pankaj Kapoor, CEO, Liases Foras, the real estate firm which conducted the study, said that the overpricing of real estate in the city is the prime reason behind people not buying the vacant flats. The pre-launches of projects by builders has also contributed significantly to the glut of available housing options in the city, he said. "The really steep prices are the reason behind people staying away from buying flats. Of the 90,000 vacant flats, there are 30,000 in Mumbai proper and, of these, the percentage is the least in South and Central Mumbai and very high in the suburbs. Many flats in projects in Navi Mumbai are also lying vacant despite being ready for possession," said Kapoor. In certain places, builders themselves are holding out on selling the flats in their projects in the hope (read: greed) of getting more money by selling them later. A residential complex called Pride in Sector 7, Kharghar, has 136 flats, of which only 64 have been sold. The builder proudly admits to deliberately leaving them unsold and waiting for the "right time". Satish Sablok, who has partnered with Ekta Kamdhenu, the developers of the project, said, "I am expecting real estate rates in the area to go up further and have, hence, kept the sale of the rest of the flats on hold."

Dream home? Ashutosh Patil could not takes his eyes off the flat at
The Address, LBS Marg (Ghatkopar West), priced at Rs 2 crore

The hunt
MiD DAY reporter Pallavi Acharya visited three residential complexes in Kandivli and Malad to look for a flat costing less than Rs 50 lakh. Here's what she found:

RNA Royal Park, Charkop (Kandivli)
Price: Rs 1.64 cr
As soon as I went into the sales office of the project, I was asked to fill a form. I told the sales executive, however, that I was looking to move out of my Grant Road flat, wanted possession before the summer vacation ended and, most importantly, wanted to know what the price of a flat would be. Deflecting my price question, the executive said that he had flats ready and proceeded to give me information on the carpet area and parking arrangements. He also told me that the project had a clubhouse and that marble flooring was standard.

Impressed with what I saw, I asked how much the flats would cost and he told me that I would have to pay Rs 1.65 crore for a 2-BHK. I could see his face lose colour when I told him that my budget was Rs 50 lakh and even a 1-BHK would do. The disappointed executive told me that he did not have anything less than a 2-BHK to offer and said he would give it to me at a discounted rate of Rs 1.64 crore.

Last hope: Pallavi Acharya found a flat that fit the Rs 50 lakh budget
in Kurar village, Malad . Pics/Sameer Markande, Bipin Kokate, Rane Ashish

Nand Dham, MG Cross Road (Kandivli)
Price: Rs 70 lakh
There was no one at the site office and I was handed a brochure and asked to call on the number mentioned there. When I did, a sales executive at the other end said that all the 1-BHKs in the project were sold and that they wouldn't have met my budget or possession requirements anyway. He said the price range of the flats started from Rs 70 lakh and possession would be given only in January. After hanging up, I snuck a peek into the flats, which were huger and well constructed - but out of our reach.

Cosmic Heritage, Kurar Village (Malad)
Price: Rs 46 lakh
This was the only place where we found a 1-BHK that was within the Rs 50-lakh budget. The price quoted for it was Rs 46 lakh, but the project had the disadvantages of being located far from the railway station, with poor connectivity, and of the flats being ready for possession only in 2013. When I asked the person at the site office, who claimed to be the builder himself, for a discount, he said he was willing to reduce the price if I was ready to give him all the money at one go.
MiD DAY reporter Ashutosh Patil, who was on the same mission, visited residential projects in Ghatkopar and Deonar. Here's what he found:

Orchard Residency, LBS Marg (Ghatkopar West)
Price: Rs 1.25 crore'
A strong sales pitch greeted me as soon as I entered the site office: '10 towers of 15 storeys each with luxurious apartments built by the Runwal Group. The apartments are available in 2-, 2.5- and 3-BHK configurations and the minimum cost for a 2-BHK is Rs 1.25 crore'. When I told Neetu Bhambri, assistant manager, sales, about my Rs 50-lakh budget, however, she said, "We don't have any flat for Rs 50 lakh since none of the existing projects have 1-BHK flats.

The current rate for projects on LBS Marg in Ghatkopar is Rs 11,000 per sqft." I was told that a 2.5-BHK flat would cost me Rs 1.4 crore, a 3-BHK flat Rs 1.5 crore and that stamp duty, service tax and VAT would be extra. They also said they would help me get a loan for the same. The list of amenities included a clubhouse, party lawn, gymnasium, meditation and yoga centre, swimming pool and direct access to the R City Mall from the society complex.

The Address,
LBS Marg (Ghatkopar West)
Price: Rs 2 crore
When I approached the sales team, Senior Sales Executive Karishma Sakhrani said, "We don't have any flat in the price range of Rs 50 lakh in this project. If you have a budget of at least Rs 2 crore, you can own a luxurious flat of international design, which will give you true value for money." The amenities on offer were a lily pond, garden pavilion, jogging/ walking trail, water garden, swimming pool, clubhouse and temple. They offered possession by December 2013.

Vrindavan Terrace, Sion-Trombay Road (Deonar)
Price: Rs 8 crore
The multi-storey structure is coming up very close to the landmark R K Studios. When I approached a senior sales executive of Thapar Builders, which is developing the residential project, he said, "We don't have any flat in the range Rs 50 lakh right now. Since the price land is increasing by the day, the minimum cost of our flats is Rs 8 crore. We can't afford to make low-cost homes in the range of Rs 50 lakh in the eastern suburbs. Our flats are 4-BHK ones and have an area of 4,000 sq ft or more. Surojit Sengupta of Arun Abha Construction company, which has been constructing residential projects in the eastern suburbs for more than 30 years, said, "Getting a flat for Rs 50 lakh is a difficult proposition in the eastern suburbs these days. Even a basic 1-BHK flat with an area of 600 sq ft will cost you not less than Rs 60 lakh. Navi Mumbai is your only option with that kind of a budget."

Investor angle
According to real estate experts, some of the so-called vacant flats appear to be empty but have actually been bought by investors. Ajay Chaturvedi, a real estate expert said, "It would be wrong to say that so many flats are vacant in the city. Most of them have been bought by investors and they prefer to keep the homes under lock and key." Jishu M, a resident of Navi Mumbai, went to Palm Beach Road in Vashi in search of a flat.

He was offered two optionsu00a0-- one was an under-construction 1-BHK flat for Rs 30 lakh and the other was a 1-room-kitchen flat for the same price. "I asked them why the smaller flat cost the same and the sales representative said that it was because it belonged to an investor, who wanted to make a decent profit from it." Sunil Mantri, president, Maharashtra Chamber of Housing Industry, claims that the figure of unsold flats cited by the report was an inflated one. "These figures are huge. It is hard to believe that housing stock worth more than Rs 1 lakh crore is lying vacant. There are many NRIs who have bought the flats and do not stay here."

Voices
People like me will be able to buy flats only when the real estate bubble bursts, which will happen soon
--Bakhtyar Italia, Nawroz Bagh

A year ago, the cost per sq ft in Parel and Mumbai Central was nearly Rs 22,000, which has gone up to
Rs 32,000 now. The rates have become unaffordable
--Rohit Dikshit, Parel

My friend has been trying to find a flat for a very long time, but the prices are so high everywhere that we cannot find one to suit his budget
--Kunal Pawar, Parel