panjim: The realty market in Goa is a bit like the pretty girl who smiles at you but turns cold when you approach her. The Goan market is a unique space which attracts builders from all over the country and also buyers interested in that second home or for a spot under the sun far away from the maddening crowds.
However like the rest of the country the realty sector in the state has mirrored the fate of the industry in the rest of the country.
Sales across the board have dropped dramatically in the middle segment. An increase in interests rates on home loans coupled with a depressed sentiment meant that sale of flats had dropped.
However there was excitement still in one segment of the realty market. Individuals interested in buying villas or even large Portuguese houses in the state were still exploring options.
Kulashekhar of Milroc said “For these people, interest rates hikes or a depression in the economy have no meaning. They will buy irrespective of the state of the economy. It is a good market to be in but it is a niche market.”
It is a market that defies description meaning one needs to ask as to what one considers as luxurious. Is it the cost of the property, the location or the facilities on offer that makes it luxurious? Or is it the history of the project ie important during the sale of Portuguese era villas.
Kula Shekhar said it was very tough market and yes having contacts in that segment helped but it did not mean that sales would take place because of those contacts.
This segment which catered to those with a couple of crores to spend on villas was not the really high end market.
According to him the really high end would usually buy a plot of land and have an architect create something unique for him or her. In Goa he said there were approximately 5 to 10 builders who focussed on the upper end with individuals who would focus on the really niche supper rich crowd.
It was not unusual for these individuals to buy new villas add their touch by putting in the latest amenities from the world leading brands and selling it to Bollywood stars who wanted houses in Goa.
The 5 to 10 builders in Goa usually mixed luxury housing with projects aimed at the mass market so as to generate funds. This trend however had stopped because of the general slowdown in the market.
Another builder from Mumbai who operates in the Goa market said that the term luxury housing itself was up for debate. Apartments or villas in the Rs 1.5 to 3.5 crore price range would compare to houses in Mumbai in the Rs 95 lakh range.
He said the prices in the state were driven by the fact that all the land was in the hands of private parties. They controlled the cost of land which had reached astronomical prices. This meant villas that could cost Rs 2 crore at the most were being sold for Rs 4 or 5 crore.
Many projects he said were very good and deserved the costs because of the facilities on offer but with land at such a premium it was a crazy market to be in. He said that the rise of select projects with walled off compounds had resulted in several Bollywood and industrialists buying second or third homes but to loosely call all projects in the 2, 3 or 4 crore price range as luxury would be misleading.
Desh Prabhudessai, chairman Credai Goa chapter said the industry as such was experiencing a slump and to claim that the luxury segment was doing well was a misnomer.
He said “In the last six or eight months nothing is really moving. I don’t see how the market will improve in the short term. Those who have built will have to grit their teeth and hold on.”
He said the prices demanded by builders were also due to the fluctuating prices of the cement which was presently at Rs 380 per bag which had to be factored in. The govt he said had promised it at Rs 180 per bag for its contractors working on infrastructure projects.
The costs of the luxury villas were driven by the high cost of land as well as a charge on the so called premium factor which was attractive to its target audience.
A builder who had a luxury project in the state revealed that in the past he would sell 6 apartments a month whereas now with great difficulty he was selling one or two.
Asked how long this state of affairs would continue he said it was all a matter of sentiment. Once the people with money realise that their good days were here gain they would start buying into these projects.
Perhaps till then the builders will have to wait and watch as time ticks by and possibly the interest on their loans increase their outstanding’s to the financial institutions.
