Property rates nosedive in Navi Mumbai CM’s Statement On Airport Delay Spurs Price Correction

Investors, politicians, builders and land traders who speculated on property and drove up rates in Navi Mumbai are in a bind because hopes are fast receding of the new airport coming up anytime soon. A major shake-up in the Navi Mumbai property market appears to have already commenced after chief minister Prithviraj Chavan announced that the government was in no position to fix a timeline for start of construction work.      A local source told TOI of a price correction that is based merely on the CM's statement. "A builder in Ulwe (behind Seawoods) suddenly dropped the rate for his land from Rs 60,000 a square metre to Rs 45,000 in the past two days," said the source. "Earlier, buyers were queuing up for this land. Suddenly, the tables have been turned. They are expecting a further downward correction despite the builder reducing the rate to Rs 45,000."      Ulwe is considered a hot property destination because the planned Nhava-Sewri road-link is also expected to touch there. However, work on both the international airport and the link are not expected to start anytime soon.      Last week, TOI reported that Cidco, the nodal agency for the project, is yet to acquire 475 hectares of private land for the airport, which is to be spread over 2,072 hectares. Of the 475 hectares, about 291 are required for aeronautical purposes. The CM told the state assembly that work on the airport cannot start without completion of land acquisition.      "Speculators are nervous. Many politicians, and builders fronting for them, bought large chunks of land in Navi Mumbai hoping the returns would be astronomical once the airport came up," said a local developer. But with national elections barely a year away, these political heavyweights may be forced to sell their holdings at cheaper rates to raise cash to fight the polls.      A source in the Navi Mumbai branch of Maharashtra Chamber of Housing Industry (MCHI) said, "It's a setback for several developers. On Palm Beach Road, builders quoted Rs 18,000 to 22,000 a square foot (super-built-up) for flats and said that the price would double when the airport came up. Today, there are no buyers."      Cidco tenders for commercial plots in Khargar reached up to Rs 1.25 lakh to Rs 1.41 lakh a square metre. These plots were barely half-an-acre to one acre in size. Tenders for residential plots (halfan-acre each) fetched bids of over Rs 2 lakh a sq m a year ago.      A successful bidder for a residential plot failed to pay Cidco because the price he quoted was too high and few clients showed interest in his project. "Such high rates in a super-slow market were mainly in anticipation of the new airport," said the official. Land prices in Dronagiri touched Rs 35,000 to Rs 45,000 a sq m, although it has virtually no infrastructure.      Market sources said developers and hoteliers were eyeing investment in Navi Mumbai. Arvind Goel, president of MCHI, Navi Mumbai, said almost a dozen five-star hotels have come up in the region and another five to six are expected. "People feel cheated, especially those who bought apartments here," he said.