Goa apartments were overpriced

‘Apartments were overpriced’

Panaji: In the past few years, a large percentage of property investors in Goa had been foreigners. But restrictive interpretation of FEMA has made it difficult for a foreigner to invest in India, affecting the market.
Says Chandrakant Kundaikar, legal advisor on property issues, “In 2000, 50% of the investors were foreigners, 30% NRIs, 20% people from other states and 10% Goans. By 2008, foreigners were down to 5% and Indians, especially Delhiites, had increased to 55%, followed by NRIs at 30%,” he said. The percentage of Goans has remained constant at 10% for the last eight years.
At the height of the construction boom, prices in Goa had shot through the roof. Said Michael Lobo, director of a trade magazine, “Apartment prices had been overvalued by almost 30-50%.”
The present value of apartments varies from Rs 8,000 to Rs 45,000 per sq m, according to government registered property valuer and architect S N Bhobe. The prices at their highest, range between Rs 20,000 and Rs 45,000 per sq m in Panaji, Calangute, Baga and Candolim, followed by Rs 15,000 to Rs 40,000 at Anjuna, Vagator, Arpora, Parra, Dona Paula, Miramar and Old Goa. The prices are at their lowest, between Rs 8,000 and Rs 15,000 per sq m are at Pernem, Quepem and Canacona. “Prices may come down as sales have reduced considerably,” he said.
Developers believe there are a number of reasons for the impending slump: buying power of people has reduced with the crash in the markets, interest rates have increased, and increased opposition to mega projects has created a feeling of uncertainty amongst investors.
“The construction market will feel the heat as the overall buying power of the people has reduced,” said Nitin Kunkolienkar president of Goa Chamber of Commerce and Industry. The EMI on a 20-year loan of Rs 20 lakh works out to about Rs 20,000 plus a month.
“Builders have little choice and will either have to scale down on amenities, sell the apartments at lower rates or sell the entire project to a bigger builder,” says Lobo.

October 3, 2008, The Times of India, Goa edition