The outbreak of Covid-19 has broken the back of several businesses, including real estate. Buyers are shying away from closing deals, demand is down to a trickle and the supply chain has been hit hard. Despite this, some units are being sold in the market at a discount of 15 to 20 percent, including barter stock held by contractors and vendors, say real estate experts.
Barter stock consists of units held by some contractors and vendors given to them by builders in exchange for services rendered, say real estate experts.
Worli apartment goes for Rs 6.8 crore
A few weeks ago, one of the top real estate firms in the country had sold an apartment in Worli for around Rs 6.8 crore. The firm had bought the flat just nine months ago for around Rs 9 crore, brokers told Moneycontrol.
This could be a unit held as part of the barter deal between the builder and the contractor, real estate experts said.
On August 18, Shapoorji Palonji Development Managers Pvt Ltd sold the flat, located in Omkar 1973, Worli, for Rs 6.8 crore. This includes the agreement value and the charges paid to the society. The firm had bought the unit in November 2019 for around Rs 9 crore from Elvera Realtors Pvt Ltd, local brokers said.
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The ready reckoner rate of the unit was around Rs 9 crore when the realty firm bought the flat. It had paid around Rs 57 lakh as stamp duty. The said unit was sold on August 18 by the firm for around Rs 6 crore and the ready reckoner cost was around Rs 9 crore, brokers in the know said.
Brokers said that the firm may be holding more such units in the project.
Shapoorji Palonji refused to comment on the transaction.
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10 units in another Mumbai project
One Avighna Park, another luxury project in Mumbai, also saw more than 10 luxury barter units getting bought a month ago at a discount, brokers in the know said.
A group of buyers comprising businessmen dealing in gold had negotiated to buy 35 units in the building for around Rs 200 crore. Of these units around 10 were barter units that were with the vendor of the project, local brokers said.
“There is a lot of barter stock available in the Mumbai market. Often, builders hand over apartments to their vendors and contractors in exchange of the services rendered by them. This is available at a discount of 15 to 20 percent during Covid-19,” explains Ritesh Mehta, senior Director and Head – West India, Residential Services, JLL India.
Most vendors and contractors are now looking at monetising the stock held by them and are likely to sell at a lower price going forward,” he added.
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Delhi-NCR, too, sees correction
A handful of deals that have been closed during Covid-19 in Delhi have also seen a correction of around 8 to 15 percent. A ready-to-move Mahindra Luminare property by Mahindra Lifespaces in Gurgaon recently sold for Rs 3.1 crore. Pre-Covid it was available for Rs 3.3 crore, brokers said.
A completed property in Gurgaon by Sobha Developers changed hands at a discount of around 8 percent during the lockdown. It was earlier available for Rs 3.35 crore, said a broker, who did not want to be named.
In Noida, a ready-to-move-in luxury property with a well-known developer was sold for about Rs 9 crore at a discount of around 10 percent recently. The project is almost four years old.