[V.Narayan]

Given that a home to live in is usually the single biggest investment a family makes it is tragic it was deliberately left virtually unregulated for 72 years since 1947. This so mainly because every other politician has a big stake in real estate both to make money and to launder his cash. Finally this Govt is proposing a regulator like we have for mutual funds and equity to make matters transparent for the investor.

Judging a project for quality, integrity, future value, completion on time or almost on time, take value etc can be woefully complex for the best of us let alone for the honest employee putting in his life savings for that one apartment. On the one occasion I made a bad investment which I exited only 11 years later not even covering inflation was a project I thought I had done my homework on and had gone through a (till then) trusted broker who made a nunnu of me!!!!

Real estate in large Indian cities is over valued and now that is changing, I believe permanently.

[DaptChatterjee]

Originally Posted by greenhorn

where they used cheap speaker cable (that I wouldn't even use for speakers) for wiring lamps etc. I'm pretty sure they had zero flame retardant capabilities.
Isn't there supposed to be some sort of regulation for this sort of stuff?

The relevant laws for house wiring are IS-694 (2010) and NBC (national building code) 2016. Unfortunately Fire Retardant wires are not mandatory but a properly selected Distribution board would minimise the chance of electrical fire.

[fordday]

Originally Posted by DaptChatterjee

let me tell you the truth. Most of these unsold appartments exist only on paper. Builders have launched the project, got a few flats booked, pocketed the initial payments and are now waiting for the other flats to be sold too.

On paper though, the whole project would be listed as unsold. Strange but true!

And the govt seems to have fell for their tricks.
GOI has earmarked 25000 crores (sort of bailout to the builders) to help finish the unfinished projects.
Projects got stalled because the builders mostly (not always) pocketed the money.
And the govt is now stepping in to help these builders.

[digitalnirvana]

Is buying resale flats / houses (from home owners) a better idea than the glut of unsold flats in newly built high rises?
Are prices going to ever come southward or will they continue to be priced out of reach of the common man?

These builders of housing complexes boast of 70% open space and a host of amenities like gym, club house, cycling track, jogging track, swimming pools and what not. At stratospheric prices.

I'm noticing that property prices haven't reduced at all, even though this thread says a lot of properties are not sold. I'm talking about Kolkata specifically - we don't have a house and being salaried folks we will have to put our life's savings and take on a substantial loan burden for buying a property. I don't see any reasonably priced property and frankly don't see a feasible way to buy one at current prices.

Sorry for the rant. I'm looking for a bit of guidance from seasoned people on here on how an aspiring first time home buyer should even proceed in these difficult times.

[speedmiester]

Originally Posted by digitalnirvana

Is buying resale flats / houses (from home owners) a better idea than the glut of unsold flats in newly built high rises?
Are prices going to ever come southward or will they continue to be priced out of reach of the common man?

I'm noticing that property prices haven't reduced at all, even though this thread says a lot of properties are not sold. I'm talking about Kolkata specifically - we don't have a house and being salaried folks we will have to put our life's savings and take on a substantial loan burden for buying a property. I don't see any reasonably priced property and frankly don't see a feasible way to buy one at current prices.

You can look at resale flats, but don't go beyond 5 year old flats if you are buying one on loan. Banks usually lend for a maximum tenure of 25 years for flats if new and it comes down as the property ages. You might be able to get one for good price if the seller is desperate, but also find out the reason for the sale.

Property prices depends on the holding capacity of the builder, if they have cash reserves to hold on, then the prices will not come down soon. But it is a big bubble waiting to burst.

Also do not ever get into the mindset/ societal pressure that buying a house is major priority as this might cloud your judgement.

My Father had sold one property of his in 2014 and to avoid capital gains tax, he was planning to buy a apartment in Bangalore, though there was no need for one. We saw quite a lot of property but none were good and within our budget. I calculated the capital gains tax component after all deduction and we found it is better to pay the taxes than buy something that didn't suit our needs. The day we paid the tax was the day demonetization was announced
The prices fell by more than over 10% overnight. But still we decided not to buy one since there was no need for one.

[Miyata]

Originally Posted by digitalnirvana

Is buying resale flats / houses (from home owners) a better idea than the glut of unsold flats in newly built high rises?
Are prices going to ever come southward or will they continue to be priced out of reach of the common man?

These builders of housing complexes boast of 70% open space and a host of amenities like gym, club house, cycling track, jogging track, swimming pools and what not. At stratospheric prices.

I'm noticing that property prices haven't reduced at all, even though this thread says a lot of properties are not sold.

What you've stated is quite true. I have been reading about property price corrections/lowering since the last 7-8 years. The bubble that is waiting to burst has been in the news quite long now.

Tragically, no one can really predict when it will happen. But almost everyone believes the 'day is coming'.

It did happen in a much better regulated market of the US. People could buy decent houses in quite a few cities for even $40,000 or less! When will a similar thing happen in the unregulated Indian market - no one can say for sure.

Buying from homeowners can be a good move depending on the nature of the circumstances - location of property with respect to ones current requirements of office commute and other parameters. You do get to known little better on the nature and quality of the construction. Sometimes in the inner cities, there would be no choice but to buy from private homeowners.

It appears to me I myself might be one of those looking to sell my house/apartment in NCR region in the not so well identified yet near future.

I guess if you wait long enough, you might even start seeing those offers of buy one, get one free! However, to make the best of it, may need to keep saving and investing for now.

[longhorn]

No builder can manage to hold on to prices over a longer period if he has invested his own money into the project. I believe most funding is from banks/ home buyers (upfront payments / installments due or bank loans). At the max the builder would put in money for the land. They would have stashed away sufficient funds for them and wouldn't mind the company going broke as their money is hardly involved. Finally it is left to the courts / banks / govt agencies to clear up the mess (again from taxpayers money).

[SideView]

Originally Posted by fordday

And the govt seems to have fell for their tricks.
GOI has earmarked 25000 crores (sort of bailout to the builders) to help finish the unfinished projects.
Projects got stalled because the builders mostly (not always) pocketed the money.
And the govt is now stepping in to help these builders.

I feel there is a scam involved in this. Will the builder pocket this also money also and additionally get money from home buyer also.

Who is going to pay back the government money or do they not have to? Nothing is clear hence room for interpretation.End of day we are the ones taken for a ride and builder escapes maybe with a slap on the knuckle.

[Sebring]

Name one builder who is jail? The Government has readied a massive bail out package for the sector and there is zero incentive to reduce prices. (I wouldn't lower pricing, if I was a builder - as long as there is this safety net why should I?) Builders are the new emperors, and you just have to see their lavish lifestyles to believe it! Trampling all over laws. My friend picked up a RERA project, a year over due, and when he invokes RERA the builder says "sure, go ahead - but till RERA delivers a verdict you cant have possession and you still have to give us the monthly EMi. Second best option is for you to wait 'just' 6 months". There is no talk of compensation, (such is the lawless-ness)

Originally Posted by longhorn

No builder can manage to hold on to prices over a longer period if he has invested his own money into the project. I believe most funding is from banks/ home buyers (upfront payments / installments due or bank loans). At the max the builder would put in money for the land. They would have stashed away sufficient funds for them and wouldn't mind the company going broke as their money is hardly involved. Finally it is left to the courts / banks / govt agencies to clear up the mess (again from taxpayers money).

[DaptChatterjee]

Originally Posted by fordday

And the govt seems to have fell for their tricks.
GOI has earmarked 25000 crores (sort of bailout to the builders) to help finish the unfinished projects.

Government is doing it for the hapless buyers. Many of the builders are in jail and/or gone bankrupt (Unitech, Amrapali, Supertech, Jaypee etc in NCR). There are projects launched 10/15 years ago that are still unfinished. One can't even imagine the plight of the buyers who have been paying regular emi's.

The builders may not get this money, government could ask NBCC or such PSU's or reputed contractors like L&T to complete the project. There would be some payment remaining and also a few unsold appartments for government to recover the money.

[kiku007]

How long to sell all of India's unsold houses?

Erm, forever? Because most houses need to be sold and not necessarily all of them within a certain time.

After dealing with many people in the real estate business in Chennai in relation to the sale and rental of residential property in a prime location I can confirm that the situation is grim.

I think the liquidity crunch, GST, DeMo and uncertainty around IT Jobs has dampened the market in Chennai.

Around ten years back, a number of friends/relatives borrowed heavily and invested on apartments in the 30L range. It's a disaster of sorts.
1. Home loan at around 11%? 10 years into the loan. Easy guess on the massive amount paid to the bank already.
2. Measly monthly rental income of around Rs.10,000.
3. Water and other maintenance fees.
4. Unable to re-sell in current market conditions.

Whoever taught people to borrow and invest in apartments blindly!

I wish they teach about money in schools and colleges.

[Sebring]

They're all out on bail, this being an economic offense. With their battery of lawyers, I'm not surprised if they get a gentle rap - and stay of out of the slammer for ever. But yes a lot of middle class are suffering (including my friend and his family).

Originally Posted by DaptChatterjee

Many of the builders are in jail

[am1m]

Originally Posted by kiku007

Around ten years back, a number of friends/relatives borrowed heavily and invested on apartments in the 30L range.
Whoever taught people to borrow and invest in apartments blindly!

I remember this phase quite clearly. 15-10 years ago, when banks were offering (relatively) lower rates of interest on home loans and quite easily to young professionals.

Everyone around me was talking about buying apartments 'for investment'. Most of us were about 3-4 years into our careers at the time and yearly increments were pretty good. Since by the grace of god (my parents rather), I already had a roof over my head, I never considered taking a loan for a flat. But I remember a lot of my friends thought that since they were in good jobs, the money would always keep rolling in and went ahead buying on loan. The societal pressure was there too, random aunts, neighbors would encourage young people to buy.

The sad part is a lot of them are not even staying in their own flats now. Job shifts, crazy Bangalore traffic have made more than a few rent their own apartment out and stay on rent elsewhere!

The problem is homes (and cars) are very emotional investments still in India. They should be thought of as assets (depreciating in the case of vehicles, unless you can write-off as a business expense!) and financial decisions should be made accordingly.


Interesting anecdote: In 2006, there was a fire in the building where I worked. There was a bank on the same floor and the security evacuated all of us. Suddenly, one of the bank employees tried to make a desperate dash back into the bank, shouting, "oh god, the home loan records..."

[No idea why, I'm pretty sure records would have been online and backed up even back then, but pretty funny.)

[DaptChatterjee]

Originally Posted by Sebring

They're all out on bail, this being an economic offense.

Unitech's Ajay and Sanjay Chandra, Amrapali's Anil Sharma are behind the bars for a long time. The honorable Supreme court has taken a very strong stand and must be applauded

[AltoLXI]

Originally Posted by DaptChatterjee

Unitech's Ajay and Sanjay Chandra, Amrapali's Anil Sharma are behind the bars for a long time. The honorable Supreme court has taken a very strong stand and must be applauded

They are enjoying the life behind the bars.

LED TV, coconut water, crates of mineral water, badminton rackets and household items were among the prohibited things found in the prison cell of Unitech MD Sanjay Chandra and his brother Ajay, lodged in Tihar Jail for allegedly cheating homebuyers.

This was communicated to the Delhi High Court by Additional Sessions Judge Ramesh Kumar-II, who carried out an inspection on September 4 following complaints from other inmates that Chandra brothers and others jailed for white collar crimes were enjoying "luxurious lifestyle".

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