After his landlord raised the rent of his shop from Rs 8,000 a month to Rs 10,000 this June, Shetty opted to move out.
“I have not sold a single house in the last seven months.
How will I pay for rent and office staff? These days, it’s mostly leave and licence agreements (rental pacts),” says Shetty.
The story is no different for Hemant Thakker, 44, who operates from Ghatkopar west in Mumbai.
He had joined his brother’s realty broking firm two years ago.
A disillusioned Thakker is now looking at some other business opportunity.
“The last time we sold a house was in January or February.
"People are mostly taking homes on rent where the commission is pretty low,” says Thakker.
Dinesh Parmar of Bhoumesh Realtors in Vile Parle in the western suburbs is luckier.
He sold a house of 600 sq ft last month for Rs 2.10 crore (Rs 21 million) in an old building. But Parmar says he meets 8-10 prospective buyers every week, but hardly anybody comes back after initial enquiry.
The reason: High prices.
“Business has come down by 80 per cent.
"In these times, how many can buy a house at Rs 40,000 to Rs 50,000 a square feet?,” says Parmar.
Shetty, Thakker and Parmar are among thousands of realty brokers in Mumbai whose business has nose-dived due to slowdown in property market, mainly contributed by high prices and economic slowdown that has led to lower disposable income.
And most are looking at life beyond broking at least till things improve -- even though they don’t exactly know what to do.
Thakker says he knows at least 300 prospective buyers who are looking to buy a Rs 50- lakh (Rs 5-million) one bedroom-apartment in Ghatkopar, but are not getting anything at that price.
“A lot of properties are available, but sellers and developers are still holding on to high prices,” he adds.
Yashwant Dalal, president of the 2,000-member strong Estate Agents Association of India says property sales have declined by up to 60 per cent in Mumbai compared to last year.
“Those who do not have a good line-up of clients are in serious trouble.
Some of them even do not have money to pay their telephone bills.”
The demand-supply mismatch in Mumbai residential properties is such that, according to UK-based consultant Knight Frank, the city will take seven quarters to exhaust the existing unsold inventory in the market, which is just below Hyderabad which is at nine.
The ratio has been on a constant rise since December 2011 and has increased from five to seven during this period.
“Incessant price rise and higher concentration of premium projects with a ticket size of more than Rs 1 crore (Rs 10 million) in new launches have limited the purchasing ability of home buyers resulting in a decelerating rate of absorption over the previous four quarters,”
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