Sunday, July 12, 2009

Dharna by Maytas Hill County residents

Maytas hill county residents of Hyderbad staged a dharna in front of the house of their scamster promoter Mr Ramalinga Raju. The Satyam fiasco has caused Maytas to collapse under its own weight. The project work has stopped and investors and house owners are losing their hard earned money to bank loans. This is a very stark reminder to the state of financing in the real estate construction business. Maytas Hill county was supposed to have been completed by mid 2009. Now with the stopped construction, there seems to be no light at the end of the tunnel. These residents have to push their battle to the media like the Jet employees. Just a weekend protest is not going to help.

A friend of mine helped me translate the 2nd video.
The NRI mom is lamenting the lack of security for investments for NRIs. Her son is in London and got lured by the promises of Maytas. He has been paying EMI for 3 years now with no sign of completion in sight. She believed the builders promises but now nothing is happening. The bank is not reducing the interest rate and the government is not doing anything and not taking action against Maytas.

41 comments:

Anonymous said...

Can any body please translate the content of video?

Thanks.

Anonymous said...

She is saying "We are all screwed by builders. Housing is all fucked up now. God will take revenge from these Greedy bastards soon".

Anonymous said...

Seeing this dharna sends shivers up the spine. Basically all these people are F**ked!

Like the woman is saying hard earned money and 3 years have gone by plus 1.5 crores interest!

Then we have the likes of that mindless joker bind a*se bye...pumping innocent people to still go an buy with a 50% rise in 3 months??!!

There is no law and order to protect the innocent middle class who basically slog their life to get some savings from being fleeced by these con artists and their brokers! Its so sad...

However, this market will fall apart! Has to... Hope these rascals die and roast in hell at that time!

shailesh said...

I have seen so many cases in Mumbai where Builder duped innocent buyers, that I am of firm opinion on never to buy any unfinished home. I will give you personal anecdote. Back in late '80, we bought a flat in mumbai which was 90% completed. The builder was starting another redevelopment project nearby and used ground floor of our building to provide temporary housing. These home owners from chawls happily moved in temporary shelters, thinking they will get better flats to live in.

Till today they are still looking. The project got in legal trouble, and building construction stopped half way. The building is still half done since 1990. These people who left their livable home and moved in temporary homes, have now lived there for more than 20 years. There is no recourse.

I think these people who bought in Maytas, will be fighting legal battle for year to come, with no outcome. I don't see NRI's or any other local buyers having clout to bring Maytas to their knees.

shailesh said...

Maytas flat-owners protest at Raju home

Maytas Hill County was promoted as a ‘world class gated community’ in Bacchupally by Maytas Properties Limited. Comprising of 326 independent houses and 840 apartments in 83 acres, the project
was supposed to have been completed by March 2008. But the developers cited the fall in the real estate market for delays.

After the Satyam scam came to light, work at the site came to a grinding halt.

The potential home owners, most of whom had paid 100 per cent of the money upfront, were left high and dry. With no clarification from the government about where the project stood or the status of Maytas, the middle-class dream of these people of owning a decent home remains just that: a dream.

Most customers took bank loans to pay between Rs 60 lakh to 3 crore. “This stretched the finances of most people who sold their houses and moved into rented apartments till such time as they could move into Hill County,” recalls Satish.

Now, on the one hand they are struggling to pay EMIs and on the other hand, the banks are pressurising them to return the loans. Worse, since a large number of the customers are NRIs, software professionals and doctors, they have been hit hard by the recession.

According to Satish, the banks extended advance loans based on the Satyam brand.

“This is wrong, they should have first assessed the progress of construction on the ground,” says Satish. The site has half finished buildings and exteriors. Satish, who paid for a flat on the 11th storey, stares at empty space when trying to locate his flat. But when asked why they paid 100 per cent cash upfront based on Satyam’s brand image, Satish had nothing to say. According to the home owners, an amount of Rs 630 crore was collected by Maytas Properties from them. “Where has that money gone,” asks one of the protestors. The home owners say they will support whichever company wants to take over Maytas or if the government intervenes.

This is example where Intelligent people did stupid thing. The Housing bubble made everyone feeling left out. To get better rate, they were willing to pay 100% money even before the construction had started. Stupid!!!

GK said...

Interest rates may rise up to 100 bps: SBI chief
http://business.rediff.com/report/2009/jul/13/bcrisis-interest-rates-may-rise-up-to-100-bps-sbi-chief.htm

There you go...

Anonymous said...

Bernie Madoff has been sent to 150 years in jail. He was caught after Raju. The other guy (Lord something - forgot his name) has just pleaded guilty and face major jain sentences. He was also caught after Raju.

Raju has not even been charged properly yet.

Cant wait for the RE regulator to start and put a stop this 10% discount on full upfront payment scam. Caveatemptor though

Venkat ND

Anonymous said...

Bindass Bhai where are you?

Vik said...

The residents of Akme Ballet Apartments staged a protest and a hunger-strike against their builders outside the Akme project office in Indiranagar.


They alleged the builders’ apathy in fulfilling the commitments he had made to the residents.

The president of the Residents’ Welfare Group, Vinod Tiwari said the Akme Ballet- the ultra luxurious apartment project, started sometime in 2005 with a promised date of delivery within two years is still not completed.

Unkept promises

Akme had promised a world-class club house with swimming pool, gymnasium, two elegant club house and a range of outdoor and indoor games and supermarket resembling all the amenities and features of a luxury resort.

“Most of these promised amenities are either not delivered or delivered in a pathetic state. The club house does not exist even today and a tennis court is an eye-wash,” Tiwari said.
He added that the Corpus Fund, which is around 7.5 crores has not been transferred to the Residents Welfare Association.

What has more aggrieved the residents is that the apartment is not in a livable condition due to water-logging, seepage and other basic problems. When contacted one of the officials of the company Tanveer said, “some confusion has occured, which will be sorted out soon.”

Anonymous said...

I feel that these are not the middle class people who are stuck in the Maytas. These are bunch of greedy people who wanted to invest into property and become rich overnight. It is mentioned that they took loans from 63 crores to 3 crores.. Now come on which middle class person can afford such a huge loan. Middle class person earns hardly 20000 Rs per month, leave alone paying EMIs in lakhs.


These people should suffer and will suffer as govt. is not going to help them. Moreover this is the class that sits in their AC drawing rooms instead of voting.

Anonymous said...

Bindas Bhai, where are you? Kindly comment so that others can abuse you.

Anonymous said...

Govts role in general is to enforce contractual agreement made between 2 parties. If Maytas goes bankrupt, how can govt protect buyers? The system is functioning as it should and the buyers just should accept that they lost money in this deal (any way, why the hell an NRI is buying property in India other than for investment purposes). Similar things are happening in US & UK as well. This financial crisis is finally the thing that is bringing affordability to middle classes. Any way, govt wants NRIs to invest in businesses and not in properties. I am glad that he is learning his lesson and I hope that he never puts even a single pound in India again.

Shriniwas K said...

@" Anonymous said...

Bindas Bhai, where are you? Kindly comment so that others can abuse you.

2:01 AM" Pacific Time

WTF is this - Please refrain from using this blog as your personal punching bag.

Though a lot of us including me are extremely angry at the Indian sham real estate which is nothing but Land Mafia, Real Underworld, Greedy Politicians and hokie industries - it should be remembered that many people's livelihood is dependent on RE.

Here in America, Housewives or retired folk used to take up RE Broker job as a serious occupation that lets them work without regular schedule or for optional income. Once RE was propped up here in 1998-2005 RE broking went one step further and became a serious job - which eventually lead to the subprime crisis.

In India too this job should not be something great, but many useless and undereducated people who want to make quick buck of any easy job like Realtor, broker, share trader, MF-Insurance seller, P2P ponzi schemes, cash money lending etc.

If their livelihoods are dependent on such occupations, they are in for serious trouble for the next 2 years. I hope they take cue from these troubled times and get a real job.

@Venkat ND
Bernie Madoff and Lord Allen Stanford may be punished for their Ponzi schemes, only because they took panga with powerful men

Also but there were a lot of powerful men in AIG, BofA, Lehman, Morgan Stanley, Merrill Lynch and numerous collapsed banks, who jeopardized the whole economy (they played with public's money and not private money). Those people went scot free -

Raju has done the same, he completely devastated shareholders money. So he also will get away with a minor sentence :)

Anonymous said...

Very nice article. "MUST READ"
By George Soros:

http://seekingalpha.com/instablog/34188-shiv-kapoor/12430-george-soros-s-reflexivity-the-indian-real-estate-bubble

shailesh said...

DLF plans to cut debt by Rs1,000 crore a month

New Delhi: DLF Ltd, the country's largest real estate developer, said it is looking to reduce its debt by Rs 600-1,000 crore each month in this fiscal by utilising funds raised by selling non-core assets, land plots, and the cash flow from operations.

The company had net debt of Rs 13,958 crore at the start of 2009-10, of which Rs 3,591 crore was to be cleared this fiscal.

However, the developer has been able to reduce the debt to Rs 12,000 crore, according to its latest statement.

So if RE was such a great investment why are they existing at such speed, or are politicians asking their money back from DLF.

Anonymous said...

Shailesh Ji,
The whole RE thing is fucked up now. People will keep waiting for 10 years now for any rebound in RE. It will slowly take lives of many people now.

In fact this whole India shining thing was artificially created by the Bush Govt. for 8 years and it is all gone now. India will be able to shine only after masses come out of poverty and Greedy bastards are eliminated.

One cannot rule out a civil war in India in another 12-18 months.

Anonymous said...

God only knows what ET is upto

Houses most affordable since 2005

15 Jul 2009, 0529 hrs IST, Prabhakar Sinha, TNN


Buying your own home is more affordable now than it has ever been in the last four years. The average price of a house is around 4.5 times of the Make these charges part of your budget
Tax benefits on home loan
Tips for home loan borrowers
buyer’s average annual income, against 4.6 times in 2005.

In 2007, the affordability factor had widened to 5.1% due to a sharp increase in real estate prices. However, with the prices of new houses dropping by around 30%, the number of years’ income required to buy a house has come down to 4.5 years.

Developers have realized the need to introduce affordable housing and are reducing dwelling size and omitting amenities which drive up cost in a bid to cater to the untapped demand.

HDFC, India’s largest housing finance company, calculates the ‘‘affordability factor’’ based on data of its home loan borrowers. At 4.5 times of annual income, the average EMI would be about 50% of a house buyer’s income on a 15-year loan. In the home loan market, this is considered affordable.

With interest rates softening in the last six months, demand has got a further boost. Bankers expect interest rates to stay stable, with a downward bias, for the next six to nine months.

Improved affordability seems to be translating into better sales. ‘‘In this quarter, we have seen good increase in demand compared to JanuaryMarch 2009,’’ said Renu Sud Karnad, HDFC joint MD. ‘‘We expect demand to improve over the next couple of quarters as the total cost of acquiring property has come down substantially.’’

With affordability factor of buying a house is increasing, senior officials of banks like ICICI Bank and State Bank of India said on Tuesday that demand for home loans has picked up.

In 2003 and 2004, when the housing boom had picked up, the situation was almost similar with the affordability factor down to around 4.5 and interest rates on home loans at 8%.

A senior banker in ICICI Bank said that if the economic slowdown is arrested and interest rates retained at the present level, there would be a boom for demand of affordable houses in the range of Rs 20 lakh-30 lakh. This, bankers feel, may push the price up in the medium term of six to nine months.

http://economictimes.indiatimes.com/articleshow/4778449.cms

Avinash

Anonymous said...

This Economic Times newspaper is crap. It was involved in a fraud. I read the Scandal at Economic Times Scam

Anonymous said...

I think Bindass Bhau had joined Economic Times. Since RE and BPO have dried up, these migrants have shifted to day jobs. So although BB has shifted to the media, he has yet to give up his dreams about RE.

Also, BB was talking about how his investments are spread all over the place and going to yield fantastic returns plus rental income...maybe he has retired and is waiting for all his eggs to yield golden geese soon...

Anonymous said...

I am getting 1850 sq feet aprtmrnt in Indiarapuram ghaziabad for 42.5 laks, parking n all included. It is in Amrapali society..

Can someone tell me if it is a decent price?

shailesh said...

India needs affordable mass housing

Estimates made by the prestigious Indian Institute of Management (IIM) Ahmedabad say that 78 per cent of all money spent on construction gets added to GDP. There are backward and forward linkages with over 250 industries and services like cement, steel, bricks, electricals, wood and glass, plumbing, furniture, security and maintenance services among many.

A back-of-the-envelope calculation shows that a construction programme of 2.5 million low-income houses a year - enough to take care of the demand backlog over 10 years - would add around one per cent to GDP growth. But there are several challenges to be faced.

A major one is the high cost of urban land. Deepak Parekh, chairman of India's largest mortgage bank, HDFC, stated in the latest annual report released recently: 'The real agenda for affordable housing has still not been brought to the table . . . affordable housing is not about box-sized, budget homes in far-flung places where there is no connectivity to work places and little surrounding infrastructure. The inability to adjust land policy with the changes in demand-and-supply conditions has led to serious shortages of urban land at affordable prices.'

As a result, most recently announced mass housing projects such as the one by Tata Housing are located in remote places far from places of employment. In cities like Mumbai, the problem of rehousing slum dwellers is faced by making it worthwhile to build free homes for existing slum dwellers, and this is cross-subsidised by building apartments for sale on the land.

shailesh said...

Cong divided over developing salt pan land

MUMBAI: Putting salt pan land up for development seems to have created a rift within the city unit of the
Congress.

Though Congress city unit chief Kripashankar Singh had recently met UPA chairperson Sonia Gandhi, seeking to open up 5,500 acres of saltpan land for constructions, party MP Milind Deora seems to have taken a green stand, opposing the real-estate move.

Environmentalists have warned of a disaster in Mumbai if the salt pan is opened up for construction.

While Singh said the land should be used for mass housing, Deora, who is close to AICC general secretary Rahul Gandhi, said, "I will ask Singh on what basis he put forth this demand. Any tampering with salt pan lands will prove disastrous for Mumbai.''

These lands, which are located in areas like Ghatkopar, Trombay, Kanjur Marg, Vikhroli, Mulund and Dahisar, are under the jurisdiction of the salt commissioneer, a central government official. Singh, while proposing the development, had claimed that the Union government had in principle agreed to hand over these lands to the state government, but the actual transfer was still to be effected. He urged Gandhi to expedite the matter.

I find these environmentalist's argument funny. It is ok to live in Slums and Shanty houses, but not in places like Vikroli and Trombay? If environment was big concern for these congress folks, what were they doing for last 60 years?

Anonymous said...

@Anon 5.56PM

Amrapali is a good builder. Around 42 Lakhs is a good price for 1850SF, provided you plan to live in the house yourself.

Please dont buy for appreciation, it will not do well. Nor for rent, you will get a poorer return than 1200SF flats, which get the best return.

If you are buying a home and are currently renting now, go for it. It is always a good time to buy your first home.

As a much maligned but somewhat crazy chap called Bindas Bhai, who used to haunt this blog a while ago used to say -

Dont Time, Dont Time, Dont Time!

(Hey BB bashers, please dont loose your unused amunition at me, I am just a quiet peaceful guy, so leave me in peace)

@Shriniwas K:

Raju was a front for the politicians, so obviously he will go scot free.

As for the Goldman and AIG execs - they didnt just go scot free, they got million dollar bonuses for their criminal efforts.

@Shailesh:

DLF collected money to build and speculated with it. So obviously they need a bail out.

Low cost housing will transform India slowly in the next 20 years

Slums are lousy, but destroying the greenery can have floods and other unforseen consequences.

Venkat ND

Anonymous said...

Any comments on Bangalore RE scenario? Are prices still falling? Should I wait till 2010 if I want a good bargain?

FYI, I am only looking for apartments that are ready to move in including previously lived in flats.

Vik said...

Which areas are you looking for in Bangalore ? For Ghaziabad if the apt has good amenities the price is good. Even though I don't know the Delhi-NCR region my theory is that a good builder with good amenities will quote in the 3k range. I've seen it in Pune, Bangalore, Chennai, Hyderabad. So if you like the location then go for it.

Anonymous said...

Cheap housing offers lifeline to Indian developers
By Rupam Jain Nair – 1 day ago

NEW DELHI, India (AFP) — "No frills, Simple homes" reads the banner hanging in the Delhi headquarters of Unitech, India's leading property developer.

It's a mantra that has been taken up by realtors across the country with a new-found passion for affordable housing that owes little to their social conscience and everything to their bottom line.

The global economic downturn ended a four-year property boom in India that had largely been driven by the luxury housing segment and saw a near three-fold increase in residential prices in major cities.

Now developers are turning their attention to middle and lower income buyers and low-cost housing that offers lower profit margins but enjoys much greater demand.

"We made a mistake by only focusing on the top two-three percent of India's population," acknowledged Unitech vice president Vikram Datta.

"Now we have to reach the masses by entering into budget and affordable houses," he said.

According to a May 2009 survey by the Associated Chambers of Commerce and Industry of India, there is a nationwide housing shortage among lower and mid-income families of around 20 million units.

With luxury housing projects struggling to find buyers, that kind of demand suddenly seems more attractive.

Unitech has committed to constructing 20,000 affordable houses at a cost of 17 billion rupees (340 million dollars) by 2011 across the country, and others are following suit.

"India desperately needs budget houses. Constructing and selling them is the only way for real estate companies to survive," Rajiv Dash, a senior official at Tata Housing Development Co., told AFP.

In May, Tata launched a low-cost housing project on the outskirts of India's financial capital Mumbai, constructing 1,000 studio apartments which sell for as little as 7,800 dollars.

The targetted buyers are primarily factory workers and small shopkeepers.

By building on cheaper, suburban land and bulk-buying raw material, developers can turn a per-unit profit of around 15 percent which is half the return on luxury houses.

"But less profit is better than no profits," said Sanjay Verma, managing director for real estate consultancy Cushman & Wakefield.

In the last five months more than 65 property developers across the country have announced new projects in the affordable housing segment.

For 32-year-old Amar Singh, a commodity trader living in rented accommodation in New Delhi for over a decade, the new trend has enabled him to realise his dream of buying a home.

"I am now the proud owner of a small, two-bedroom apartment," said Singh, who hopes to move in to his still under-construction home by 2010.

Singh managed to procure a loan from a private bank and arranged the down payment by selling some of his wife's gold ornaments to seal the house deal.

Anonymous said...

Situated on the outskirts of New Delhi, his affordable housing project with 120 apartments will provide parking space to all residents, a play area for children, a power back-up and a small cafeteria.

Such amenities do not feature in the low-cost sector, where the developer's priority is to maximise the number of units.

"The low-cost houses are just like boxes with a door and few windows, there are no value additions," said Verma.

But while they may be spartan in the extreme, they do provide basic amenities such as water, sewerage, drainage and street lighting which is a major step up for low income settlers living in shanty towns.

The newly-elected Indian government announced a housing scheme in its recent budget as part of a plan to promote a slum-free India in five years.

Such an ambitious target, analysts say, can only be realised with massive private sector involvement.

"Indian property developers should consider themselves fortunate," argued Verma. "They have a new market to do business. The faster they make small houses, the more money they earn."

http://www.google.com/hostednews/afp/article/ALeqM5jlaR1fNpZncf7r69Aln8cE7b6qww

Anonymous said...

Situated on the outskirts of New Delhi, his affordable housing project with 120 apartments will provide parking space to all residents, a play area for children, a power back-up and a small cafeteria.

Such amenities do not feature in the low-cost sector, where the developer's priority is to maximise the number of units.

"The low-cost houses are just like boxes with a door and few windows, there are no value additions," said Verma.

But while they may be spartan in the extreme, they do provide basic amenities such as water, sewerage, drainage and street lighting which is a major step up for low income settlers living in shanty towns.

The newly-elected Indian government announced a housing scheme in its recent budget as part of a plan to promote a slum-free India in five years.

Such an ambitious target, analysts say, can only be realised with massive private sector involvement.

"Indian property developers should consider themselves fortunate," argued Verma. "They have a new market to do business. The faster they make small houses, the more money they earn."

http://www.google.com/hostednews/afp/article/ALeqM5jlaR1fNpZncf7r69Aln8cE7b6qww

Anonymous said...

I dont think BB is so talented, from RE to Call centre and now at ET.

Old Man why do you say that?

Anonymous said...

One cannot rule out a civil war in India in another 12-18 months.

8:26 PM

Bastard tell the country where u are staying right now. Ass hole like you who are licking whites back side and talking big on this forum

Anonymous said...

real estate prices have only one way that is UP..

You guys can discuss till eternity but the prices of RE are not going to fall... They can only rise...

If you want to waste your prime years of your life in a dingy acco or a rented house, do that... But remember that your prime time of life is which you need to enjoy is priceless... What is the harm in paying a little higher prices for this...

Anonymous said...

Anon @"Bastard tell the country where u are staying right now. Ass hole like you who are licking whites back side and talking big on this forum"


Your this kind of language shows anger and too much anger that may lead to massive frustration in the coming years and when you won't be able to do anything, angry people like you will come to the streets and may eventually lead to a civil unrest.

As regards to your comment about "licking whites back side", that's what the whole IT industry is doing. Modern day slavery in the form of cheap labour in India.

My location is Zimababwe and I'm working as a chartered accountant. There are no whites here.

Anonymous said...

Cool down folks. If someone thinks that RE will go up, please buy some more of property.

If you think it will not, then wait. What is the fight about.

I would just say that there is no product in the market that ever gives more than 10% return and RE gave more than 60-80% returns for the past 3-4 years. That has to correct either now or over an extended period of time.

Shubh Chintak

Shriniwas K said...

People who are so keen to do gaali-galoch in the forum, then dont do it like cowards hiding your identity. As anonymous, one can easily post whatever you want, it takes some courage to reveal who you are and make a stand.

I admit that things are hard for some if they reveal their identity, but then it is only cowards who abuse from the behind the veil of anonymity.

Anonymous said...

Shriniwas,

You sounds like a very brave man. You reveal your identity and then challenge people to come forward and reveal themselves. I presume you want people to reveal themselves because then you will fly over to their houses and bash them up when they do gaali-galoch against you??

I admire your bravery, just wish you have also mentioned something about brains too.

Anonymous said...

My location is Zimababwe and I'm working as a chartered accountant. There are no whites here.


Boss that does not give you the right to talk ill about our country.

Shriniwas K said...

Duh yeah right, this blog is not for settling scores. If I had nothing else to do like today's Real estate brokers, I would probably go around hunting for anyone who abused me online :)

Else to be even more silly I could post as anonymous saying one thing and contradict my own statement as another anonymous post... What value does it add to anything probably nothing


About the local vs expat debate,
For the record, ever since Man began to think, he began to migrate for survival. Even after civilization settled in, humans have been migrating either for better prospects or for any other reason. So calling anyone bootlicker is really stupid.
If you have to abuse someone, abuse those who engage in criminal activities and malpractices, who justify crime and disobey accepted laws. You can debate on issues but not abuse. That is the most absurd way of solving a problem.

Srikanth said...

why do these guys invest in India..with huge money ...last year these guys...telling my property prices are doubled...needs to get a rule that NRI should not iinvest in india and the money is more taxable....Governament should not involve in person business

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rajni sharma said...
This comment has been removed by the author.