At Rs 16,000/sq ft, Nerul is costlier than Andheri

Say builders, stunned by a CIDCO auction that saw the high bid for a plot in Nerul in Navi Mumbai, fear that controversy over breach of norms may further dampen buyer sentiment

At Rs 16,000/sq ft, Nerul is costlier than Andheri

Say builders, stunned by a CIDCO auction that saw the high bid for a plot in Nerul in Navi Mumbai, fear that controversy over breach of norms may further dampen buyer sentiment

The satellite city might be witnessing a storm in terms of real estate. A record deal in Nerul has raised fear among builders, who think high land prices will drive buyers away.

The plot of land at Sector 29 in Nerul that was auctioned by CIDCO
for Rs 1.64 lakh per sq m has builders worried. Some say the high
prices will deter prospective buyers from venturing into the already
troubled real estate market in Navi Mumbai

Late last month, CIDCO, the town's development authority, auctioned five plots in Sector 29 of Nerul and the highest bid was made for Rs 1.64 lakh per sq m or approximately Rs 16,000 per sq ft.

Industry experts claim that such high rates do not even exist for plots in places like Andheri, where they vary between Rs 13,000-15,000 per sq ft.

The high quotation has left many builders in the area stunned as well.

They question how such rates could be afforded in a bleak market. Manohar Shroff, secretary, MCHI-Navi Mumbai, said, "The deal has actually surprised us. But then the land is scarce in the area.
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And CIDCO releases it on such a limited scale that most builders do not have any option but to cough up the price."

The base price for the plots was Rs 36,000 per sq m, but the steep incline in the rates show greed for land on part of builders, observe experts.
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In the past, land prices had touched Rs 13,000 per sq ft for places like Ghansoli, one of the highest for the area.

Rajesh Prajapati of Prajapati Developers and president of MCHI-Raigad said, "This would be counted among one of the big-ticket deals of Navi Mumbai. If such deals continue, prices will surely head north, which is a reason for worry."

Hit by breaches
Meanwhile, the recent controversy of alleged irregularities during construction of 21 buildings including the Venus Housing Society in Navi Mumbai has left the satellite city's real estate market a bit shaken.
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Builders fear action against buildings that have extended beyond the prescribed floor limit without permits will not only affect the 21 buildings but the market in general.

Already, realty has been hit by low sales and high prices. The controversy will further haul down the demand
from buyers of land and flats, and more importantly, investors.

"Such irregularities are going to jinx the buyer sentiment," said Shroff.

Said a builder from Navi Mumbai, "The realty market is going through a bad phase and the biggest support for the builder to get liquidity is via investors.
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With the revelation that many illegally constructed buildings may be demolished, investors would shy away from putting in their money in such projects."