Friday, April 09, 2010

Realty check: Rising rates thwart home buyers' plans

The bubble grows bigger day by day. Most buyers are priced out as the flats are sold to investors or with folks with pots of black money. I'm sure the journalist who wrote this article is facing the pinch as well. 13000 is Andheri is 3 times the rate in 2006. Add to that the usual bogus built-up rate the sq/ft rate is over 18,000. Just rent the same property for 30,000 rs and enjoy it. One blogger asked the opinion of SS and BB on Bangalore real estate. I would say that Bangalore real estate is priced right and if you have need an apt you can get one from 40L onwards though you might have to goto the outskirts for that. Apartment sizes are generally larger then Mumbai and it is not uncommon to find rates in the vicinity of 3,000-4,000. Also the built up loading is roughly 20%, unlike the 40%+ loading applied by the Mumbai crooks

DNA reports

Mumbai: If the projects displayed at the annual property fair by the Maharashtra Chamber of Housing Industry are any indication, purchasing a flat will be a daunting task for home buyers this year as well.

Buyers will have to contend with property prices, which have almost doubled, and a dwindling stock of ready properties in “affordable” areas beyond Kandivli in the western suburbs and Panvel on the harbour line.

Take for instance Athena and Astraea buildings being constructed in Rustomjee’s Urbania project near Majiwada Junction at Thane. In a year’s time, the price of the project has increased from Rs4,000 per sq ft to Rs6,143. Similarly, Gundecha Symphony in Andheri (West) has increased rates from Rs8,000 per sq ft to Rs13,000.

The rates were a huge disappointment for visitors. Lillu Asurlekar, a prospective home buyer, said, “I am looking for a flat in Andheri or Goregaon, but the prices are very high. I will now have to go beyond these areas. How can anyone shell out Rs4,000 a sq ft for a flat in Panvel?”

Barring Everest Developers, who offered a discount of Rs100 per sq ft, there were no discounts offered by any top ranking developers. In fact, for the first time, developers like Lokhandwala and K Raheja Universal did not participate in the property fair.

Sunday, April 04, 2010

Who Is Jacking Up Property Prices In Mumbai? reports on issues much discussed on this blog for quite some time

By Sindhiya, Section Real Estate
Posted on Fri Apr 02, 2010 at 11:42:54 PM EST
A bunch of vested interests seem to be working together to fuel India's new property bubble, especially in expensive real-estate markets like Mumbai

Real-estate prices in India, which are already reaching for the stratosphere, are being further fuelled by a set of vested interests such as established brokerage firms and leading media houses through reports which exaggerate demand and suggest that realty prices may go up even further. Meanwhile, angry investors are struggling to get the regulators to act quickly and decisively to dampen the price escalation.

Recently, ICICI Securities released an all-India survey (across eight cities) which was headlined--`Affordability not a concern--healthy demand for homes at current prices: ICICI Securities survey'. A closer look suggests that things are not so rosy.

In fact, apart from vaulting prices, potential property buyers are outraged at how they are being cheated with regard to the actual usable area that is being sold to them. Moneylife has already reported on how the loading, which used to be anywhere between 20% (built-up) to 40% (super built-up) has now been pushed up to as high as 80% by several builders in Mumbai. With the government showing no signs of setting up a property regulator, builders and developers clearly feel confident that nobody will check their dubious selling tactics.

Another factor that has increased prices in Mumbai is the loading of taxes (in form of value-added tax (VAT) and service tax) on the already high price being forked out by consumers.

Source: Who is jacking up property prices in Mumbai?

Click On "Full Story" For More...

A research report circulated by ICICI Securities says that Ahmedabad has the highest inventory of 59%, Chennai has inventory of 10% while Mumbai has an inventory of 8% and National Capital Region (NCR) has only 1%. However, property experts are sceptical about these numbers. "It is a doctored report to show optimism. In fact, Chennai represents the least inventory and Mumbai & NCR the maximum. I am surprised to see such a false picture being painted by one of the credible brands," said Pankaj Kapoor, founder, Liases Foras.

For many media companies, headlines that point to property prices rising even further, usually translates into increased advertising revenue. In some cases, they have equity deals with realty companies which include an agreement to project reports that favour these companies. A reader has written to point out that some of these headlines sound like "quotes from the builder".

A senior executive of a leading information technology firm has even been writing to the governor of the Reserve Bank of India, pointing to how vested interests are pushing up property prices.