One Brooklyn Bridge Park, a luxury waterfront condo complex in New York, has been reduced in price in an effort to start the sales ball rolling once again

One Brooklyn Bridge Park Unsold

I understand the developers have been reluctant to reduce prices because of the potential cost to early buyers. But, the market has spoken and the complex remains two-thirds unsold after nearly 18 months on the market. Prices have been reduced by between 3 and 9%, although prices in Brooklyn have fallen 11% this year, so it remains to be seen whether this level of decrease will make any difference.

Robert Levine, CEO of RAL C&A LLC, the developer said,

We have adjusted pricing on select units to be more consistent to our initial offering prices in February of 2007. This creates some great incentives and opportunities to prospective buyers.

But with prices across the USA returning to levels more in line with several years prior to 2007, with no end in sight currently, this may not be enough of an incentive. As the financial institutions begin a return to more rational lending practices, a logical consequence of this is a return to more rational housing prices. As of this week, around 300 of the 449 units in One Brooklyn Bridge Park remain unsold.

One Brooklyn Bridge Park

It seems as though trouble is brewing in the luxury real estate market in Mumbai.

Demand from local investors has died down dramatically, and now even the Non-Resident Indians or NRI’s who were major investors in such luxury properties, are cooling off. NRI’s are expecting property rates to go lower, just as the US property market is currently witnessing major changes due to the subprime crisis.

Until around four to five years ago, there were just a few developers who were involved with building luxury homes. However many others joined in, due to the higher margins involved.  These developers entered the luxury sector, without a proper analysis or assessment. Thus now they face an imbalance between demand and supply. In the suburbs of Mumbai, the supply outstrips the demand. In fact it is estimated by Jones Lang LaSalle, real estate consultancy firm, that supply exceeds demand by nearly 25 to 35%.

The NRI investors comprised of nearly 20% of luxury home buyers. And these numbers have dropped. The drop in numbers does not look good for the luxury realty market in Mumbai. Moreover, multiple developers seem to be attracting the same NRI segment. Developers are linking up with banks, who have a list of high net potential people, and are offering them freebies such as free round trip tickets to India, in order to take a look at their properties.

At such times, it makes more sense to attract people of Indian origin. PIO’s are those generation of people, whose forefathers migrated during the British reign, and are now settled abroad. There is a considerable number of PIO’s in Australia, Africa, the UK etc.