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Boisar: where apartments are lying vacant

| | Updated on: Jan 12, 2015
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Sluggish market has made exit difficult for investors

As one walks into the affordable housing project of Tata Housing at Boisar near Mumbai, one can see rows and rows of 3,000-plus apartments spread across 64 acres.

But barring an occasional car or two-wheeler making its way to the estate department of the developer, one doesn’t see too many people as not many have moved into the houses. The flats ranging from 360 sq ft to 465 sq ft low cost units to two and three BHKs of up to 1,360 sq ft are sold out and ready for occupation.

Tata’s woes The estate management officials said that over 190 families were residing and more will move in soon. Some buyers were yet to take possession of their homes.

Tata Housing has had its share of woes. The company had to spend ₹6 crore to lay a pipeline to bring water from the Surya Dam. Power supply too is an issue and work is on to link up to a Tata Power substation. In the interim, a temporary connection is in place.

The company has however done all it can to build neatly paved roads and spacious blocks keeping in mind quality conscious customers. Brotin Banerjee, MD and CEO of Tata Housing, could not be reached for comments.

Right customers Mahindra Lifespaces had also launched a 1,000 apartment residential project in the affordable space in Boisar in September.

Asked about the customer profile the company was looking to sell its affordable homes, Sriram S Mahadevan, Business Head, Mahindra Lifespace Developers, said, “It is easy to sell but difficult to find the right customer.”

The Mahindras have managed to sell about 250 flats in the first phase of 359 units to customers whose annual income is less than ₹6 lakh. Pankaj Kapoor, Managing Director of real estate research firm Liases Foras, said this is the state of many affordable housing projects, which due to land cost, are far away from the city. Added to this were investors who are always ready to corner offerings that come their way, especially when it is from a reputed brand. Although prices have more than doubled over four years, the sluggish market has made it extremely difficult for investors to exit.

There were projects in the NCR where ready flats (owned by investors) were quoting at ₹3,500-a-sq ft while new launches were asking for ₹6,000-a-sq ft. Developers were also offering rental returns to promote sales. In November, a Liases Foras report said the sluggish real estate market had unsold stock of 815 million sq ft of residential space across six cities as of Q2 FY15.

Kapoor said the inventory of apartments could take well over four years to sell.

Published on January 12, 2015

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