Bangalore Real Estate: Owners undercut Builders?
As property prices stabilize or correct across Indian metros, and higher interest rates pinch investors, there are several (somewhat predictable) outcomes:
- Home loan default rates increase.
- Builders delay completion of projects - last Friday, Moneycontrol interviewed someone from CRISIL (I forget the name) who said that even Tier 1 builders such as Purvankara were delaying completion/possession date - the supposed causes were “aggressive timelines & shortage of labor/systems”.
- Foreign investors rethink their Indian real estate strategy.
Yet another outcome is that individual apartment owners begin to undercut the prices quoted by builders in projects that are not sold out. Case in point: this ad in Bangalore Craigslist.
Looks like a 10-15% price cut. What remains to be seen is whether such discounting will become widespread. I think we went from a ‘rising price’ sellers’ market to a ‘high price, no transaction’ market; and will soon transition to a ‘discounted price’ buyers’ market.
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