Goa realty prices come down by 25%

Goa realty prices come down by 25%

Preetu Nair, TNN

PANAJI: The meltdown has started to trickle into Goa's real estate market. According to developers, prime property rates are down by 5-10%, while
the prices of flats constructed by small-time builders are down by 20-25% since the new year. Prices, they predict, are likely to fall further by mid-2009.

Moreover, about 25% of ongoing projects are stuck due to lack of funds or buyers and even the number of north Indian buyers has dropped by about 75%, they say.

"Small builders have reduced their rates by 20-25% to pay off bank loans. But prime builders in the state have reduced their prices by only 5-10%. Many builders who own land are not constructing now and are closely watching the market for changes," said Victor Albuquerque, chairman of the Alcon Victor Group.

Agreeing, architect Dean D'Cruz said that the prices are set to fall further by at least 20% in the next few months. "The number of buyers have reduced and about 25% of projects are stuck as people are not investing in them because of the anti-mega projects movement and the glut in the market," he said.

Real estate sources told TOI that the market has been stagnant for the last six months now and even banks are refusing to give loans to builders.

"The main reason for this is that prime investorsmostly north Indians, especially Delhiiteswho were investing in property in Goa have decreased from 55% to about 30%," said sources. The percentage of Goans investing in property however, has remained constant at 10% for the last eight years, they added.

Meanwhile, property evaluators believe that prices had been overpriced by almost 30-50% in the last three years.

In mid-2008, residential prices at their highest, ranged between Rs 20,000 and Rs 40,000 per sq m in Panaji, Calangute, Baga and Candolim, followed by between Rs 15,000 and Rs 40,000 at Anjuna, Vagator, Arpora, Parra, Dona Paula and Miramar.

At their lowest, prices ranged between Rs 8,000 and Rs 15,000 per sq m at Pernem, Quepem and Canacona. Prices are currently down by between 5% and 25% depending on the builder. "Prices may come down further as sales have considerably reduced," said property evaluator S N Bhobe.

Admitting that the prices have come down, Datta Naik, president, Confederation of Real Estate Development Association of India said that the rates have now been rationalized. "In the cities there is no reduction in prices as there is limited supply. It is the upmarket and coastal areas where there is some rationalization," he said.

This rationalization, he added, has happened after a brief period of stagnation. "People are now buying smartly and builders are taking care of the specifications, security aspect, post delivery maintenance and other aspects aimed at improving the quality of the premise," said Naik.


18 Feb 2009, The Times of India, Goa edition