Real estate market takes a beating
18 Jan 2009, 0000 hrs IST, TNN

Is real estate gradually becoming a buyer's market from being a seller's market?


MUMBAI

More than 50 of the 220 people who booked plush flats at the Seawoods NRI Estate in Nerul have stopped paying their monthly instalments. And, the developer of the two projects, City and Industrial Development Corporation (Cidco), is running after them and offering them all sorts of enticements to retain them; among the enticements is an offer to delay payment of the instalments by up to six months instead of three months. But not too many are ready for the bait.

Seven persons, who booked flats recently, withdrew their claims. Even the fact that by doing so they stand to lose between Rs 10 lakh and Rs 15 lakh has not made a difference. Cidco has deducted the earnest money deposit of between Rs 6 lakh and Rs 9 lakh on each flat and 10% of the instalments they have already paid. That loss-and the scenic creek area along Palm Beach-have not been able to convince buyers that the property is still worth Rs 7,500 a square foot.

Cidco marketing official R More said the development corporation had even brought down the interest on delayed instalments to 10% (from the earlier 16%). Flat owners were also promised a 10% discount if they paid the balance immediately.

However, nothing seems to be working.

More bad news on the development front comes from the same zone; L&T Infrastructure has asked for permission to go slow on the ambitious Rs 6,000-crore Seawoods station development programme. L&T had won the bid to acquire the Seawoods station and land at a record Rs 1,884 crore.

Cidco IT and special projects general manager D L N Murthy admitted that L&T had requested the government to go slow on commercial development proposed on 60 lakh square feet. L&t will be developing a dolphin-shaped station complex, parking facility for over 12,000 cars, terminals and office space for Cidco and

Central Railway, plazas, malls, theatres and recreational zones. The design of the station recently won an award from the Developers' and Builders' Association of America.