The property market , which is once again on fire, is being driven mainly by investors, raising fears within the industry that a meltdown may be just round the corner. The market is booming, but many are now asking how long will it be able to sustain the rates which have shot up by 60% to 100% since 2009.
As builders launch a slew of high-end residential projects with some offering enticing payment schemes to buyers, experts warned that it is more a sign of weakness to mop up demand, tie down purchasers and make it difficult for them to exit in case prices fall.
Despite the euphoria, builders are edgy and are suddenly offering not only brokerage but mega prizes to brokers to sell their stock.
A prominent south Mumbai developer has offered brokers 2% commission plus a Skoda-Fabia car if they get business worth Rs 5 crore, a Skoda-Octavia if they sell flats worth Rs 10 crore, a Mercedes C class if they get business worth Rs 20 crore, a Mercedes E class if they fetch Rs 30 crore, a top of the line Mercedes S class if the figure touches Rs 50 crore and a Rolls Royce if they manage Rs 100 crore business in some of his projects. This is a sign of desperation and a realization that the good times won't last forever,'' said an industry insider.
A recent innovative scheme that allows the buyers to pay just 10% upfront and the remaining 90% only on possession has received tremendous response'', said builders.
The trend started by Indiabulls Real Estate for two of its luxury skyscrapers in Lower Parel recently has now been adopted by several builders across the city. However, not many are aware of the fine print. Sources said there is a heavy exit load in case the buyer wants to get out.
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