According to City Corporation Town Planning Office, over 66 two-storey projects have been launched since the beginning of the year till July, indicating that the demand for residential property was good. But June-July have seen a serious dip in the bookings. The slump is seen due to reluctance of non-resident Indians, who account for 55%-60% of the demand, to invest in the city properties.

PMA Razak, president, Mangalore Chapter of the Confederation of Real Estate Developers' Associations of India (CREDAI), told TOI that there is a dip of about 10% in mid and affordable segment category apartments. This goes up to 25% in the luxury segment. MD Siraj Ahmed Saif of Inland Infrastructure Developers said that during his recent trip to Dubai, he saw the investor confidence in Mangalore falling. 'People in the Gulf are insecure and they want to secure investments with more returns than on real estate or residential properties. NRIs investing here are not seeing much appreciation in their investments. Those who want an assured and safe returns see bank deposits or other instruments of high return as a safe bet,'' he said.

He said that in Mangalore, if an investor wants to sell a property, he doesn't get the premium easily. While in Bangalore, though the same situation prevails, because of the vastness of the market, one will get a premium. Saif said that he's into various projects in Bangalore and though the market is difficult, he feels comfortable. "Here where are the people? In the recent past no big industry with an employment potential has come up, which says it all," he said.

Property Infratech India Private Limited, MD, Rohan Monteiro said that when supply outstrips demand there is bound to be a problem. "t also depends on the project location. Bellisma project on Kadri Main Road was sold 90% in a few months after the launch. The same project would not have attracted even 10% if it was elsewhere,'' he said. Dheeraj Amin of Northern Sky Properties admitted that the value-for-money properties and locations play an important role in investment flow. "Properties in convenient locations in mid and affordable segment have faced no problem, but properties in excess of Rs 4,000 per sq ft have not been attracting customers as much in the past couple of months,'' he said.

Sources said, adding to the woes is that the property rates in the city range from Rs 4,000 to Rs 4,500 per sq ft and in the outskirts it ranges between Rs 2,700 and Rs 3,500 per sq ft, now being considered prohibitive for a tier II city like Mangalore. Moreover, some projects have long gestation period and NRIs do not want their money to be locked up in uncertain environment.