A lull in the market and increase in land prices and cost of construction materials have affected the realty sector, leading to a slowdown in new constructions in the city in the past few months.
The realty sector is already facing a downturn for the last two years. The gap between demand and supply has increased - the supply is more, but the demand is less. Moreover, the prices of sand and macadam (small pieces of stones) have increased by 30% to 50% in the past five six months.
According to sources in the real estate, there are around 5,000 flats ready in the city but lying unsold. There are around 8,000 apartments under construction.
Speaking to TOI, the president of the Confederation of Real Estate Developers' Association (Credai), Nashik, Kiran Chavan, said, "The realty sector is facing a slowdown with the cost of construction materials like sand, macadam, cement and steel rising substantially over the past six months. Even the land prices have risen exponentially. These factors have led to a halt in the new constructions."
In the past six months, sand prices have increased from Rs 3,200 per brass to Rs 4,100 per brass, macadam prices from Rs 2,200 to Rs 3,500 per brass, cement from Rs 250 per bag (50 kg per bag) to Rs 356 per bag and steel prices have risen from Rs 41 per kg to Rs 48 per kg.
Chavan said, "The city already has thousands of flats ready and several under construction. However, there are very few bookings. Following this, very few construction activities are going on in the city. The number of investors from Pune and Mumbai looking to buy property in the city has also reduced. As a matter of fact, the present situation is a good buying opportunity for customers as the prices of residential properties will further increase in future due to rising cost of construction materials."
The land prices in Nashik have increased by three to 20 times in different parts of the city in the past six-seven years. They have gone beyond the buying capacity of the middle class people.
Land prices, which were in the range of Rs 1,100 to 15,000 per war (per nine square feet) six-seven years ago, have increased to the range of Rs 8,000 to Rs 35,000 per war today.
The prices of flats which were in the range of Rs 1,500 to Rs 2,500 per sq ft few years back have now shot up from Rs 2,700 to Rs 6,000 per sq ft. A mid-size flat would now cost anywhere between Rs 25 and Rs 30 lakh. High-end apartments in up market areas like Gangapur road, College road and Mahatmanagar would cost between of Rs 5,000 per sq ft and Rs. 6,000 per sq ft. Residential properties on the outskirts of the city like Pathardi, Makhmalabad and Adgaon would cost within the range of Rs 2,700 and Rs 3,200 per sq ft.
The city is currently witnessing a demand of two and two-and-a-half BHK flats.
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