1) Hefty fines on builders that don't complete houses on time, increasing progressively with the delay.
2) Takeover and auctioning of any building that has been delayed by more than five years beyond completion date by any builder. This is continuous, i.e. if the buyer in the auction does the same, then s/he too faces the same fate.
3) Excessive property tax on unoccupied homes. Usually the rich have multiple houses, like holiday homes, farm houses, etc., which is OK. However, when these people buy, five, six flats, because they have money, the market price increases unfairly for a limited essential commodity. This is just hoarding. The key is to force people to give their house out on rent, thus driving down real estate sale prices. A flat leased out should attract less property tax, but the rent will be clubbed with the owner's income. An empty flat will have an exorbitant property or development tax.
Re: Some thoughts on reducing house prices
by bhanumurty on May 10, 2011 01:00 PM
1. Which honest builder you have in mind? 2. Now try local Goonda, Consumer court, High court, Supreme court, fate.....You can build a very good Case, but not a house 3. How many of them are honest again?
Everybody knows the Elephant in the Drawing room is the crazy prices charged by developers, yet for the past 6 years, the media has been generally egging us on to buy, and at times criticizing the banks for high interest rates.
Developers are sitting on billions of rupees and unwilling to lower prices. In my opinion, prices will not lower, but will stagnate for about half a decade. With inflation in other commodities, stagnation of prices itself, is a relative loss of value (for the builder) and a profitable situation or at least less exploitative situation for a middle class home buyer.
I had invested in a IT Business venture by buying IT space from CIDCO, CIDCO Cheated me by manipulating the area. For example A 1000 sq feet carpet area Module was sold as 2000 sq feet to me in 1998 and later the same space was sold as 1200 sq feet in 2004 to the mkt managers wife and and other employees/friends of CIDCO c
Imagine area of offices shrinking by 50% just to benefit the employees of CIDCO
So be careful even govt firms cheat.In corrupt India even govt does not follow standard measurements.Everything is possible in India.
legal process to get justice is lengthy and time consuming. Se be very extra carefull when you invest in India
Re: WAVE HOME LOAN INTEREST
by Argumentative Indian on May 10, 2011 12:47 PM
The need is for realistic real estate prices, once that happens, then interest will not pinch so much.
There is no one to speak for the common man.The government is supposed to work in the interest of the public but when they are hand in glove with the mafia you cant expect prices to fall .It is not a free and fair economy for prices to auto correct. People should also realize the only choice they have is to not buy houses but rent them and thus lot of unsold inventory will lead to crash ,but practically this is also very very tough thing to achieve. Only solution is forming Consumer groups (co-operative societies ) and building societies themselves. Food and housing are basic necessities and in India no government even bothers to give people affordable basic necessities even
Why there should be an intermediate level of lenders and customers? Let RBI directly give loans and use the Govt/Private Banks as agencies and not business establishments.This will eliminate the trouble and no need to blame these banks.A bank after all a convenience store for the product taht is called homeloan
If author of the article could have asked the question to atleast one home loan borrower of 50 lacs, the truth would have been known. He could not have said the rise of Rs.1700 per month in EMI is marginal. Most of the home buyers would incur lot of other expenses in addition to the loan amount of 50 lacs. Over and above 50 lacs, minimum of 15 lacs had to be incurred from the pocket towards 10% contribution, registration, stamp duty, maintenance deposit, club house deposit, wood work and other minor changes in home. Some extent of the additional funding need to be borrowed from friends, relatives and perhaps personal loans.
For the last 1.5 years i.e. 6 quarters, RBI announced hikes and we are foced to shell nearly 10000 pm extra EMI. If RBI hikes 25 bps, some banks are raising the interest rate of 0.5%. If RBI hikes 50 bps, it is 1%. The rise by private banks is not in proportionate with RBI announcement. Not only the EMI, inflation in school fee, medical costs and fuel charges leaving little room to cope with rise of EMI every quarter. A small hole to the boat in the middle of the ocean would change the fate of the occupant.
OM SHANTI .... VARGHESE IS PAKISTANI INTELLECTUAL (ISI AGENT).. SUPPORTING CONGRESS BJP NEXUS RULE ... WHO ARE TRYING HARD TO FOOL INDIANS ...DO NOT WASTE UR ENERGY ... OM SHANTI YOU ARE RIGHT MY BRO ... I HAVE FRIEND IN TIANJIN .... VERY HAPPILY MARRIED WITH 1 3 YEAR OLD KID .... GOD BLESS THEM ... CHINA STAND . OF LIFE IS 100 YEARS AHEAD OF INDIA..
Re: @ OM SHANTI
by om shanti on May 10, 2011 11:11 AM
Dear friend Okroal,well,I am not sure if Varghese is ISI or Vatican agent :)
But brother Varghese needs to move out and see the world to know the real changes happening everywhere and where India stands !
I have been to Tianjin several times,its one hour drive by road from Beijing,I was amazed to find a Tamil man selling Samosa,Chicken Kabab,in the food street in Tianjin,he has a stall there !
This is all fooling around. 1.Say you want to buy a house worth 50Lakhs 2..You should have 10Lakhs for upfront payment 3.You should go for a loan of 40Lakhs 4.EMI For a 40 Lakh Loan @10% interest,assuming it remains same, for 20years----Rs.38601.(Total Interest:Rs.52.6Lakhs) 15years-----Rs42984(Interst payment:Rs.37.4Lakh) 10Years-----Rs.52860(Interest:Rs.23.4Lakhs) 5 Years----Rs.84988(interst:11Lakhs)
Re: EMI
by bhanumurty on May 10, 2011 11:05 AM
The total cash payout alltogether will be for 20year loan:40 40 53=1.3Cr. 15year loan:40 30 37=1.07Cr. 10Year loan:40 22 24=0.84Cr. 05Year loan:40 15 11=0.66Cr. (This is the cost of the ownership without considering the tax benefit into account)
Re: Re: EMI
by bhanumurty on May 10, 2011 11:07 AM
The addition above goes like this: 40=Value of the loan amount 40=Value of initial downpayment after the tenure 53=Interest paid for the total period. The other figures can be self explanatory
Re: Re: Re: EMI
by bhanumurty on May 10, 2011 11:28 AM
Now let us come to the EFFECT of EMI: If 10% changes to 11%, increse in EMI and total interest would be For a 5 year loan:Rs.1982 and Rs.1.2Lakhs 10year loan:Rs.2240 and Rs.2.12Lakhs 15 year loan:Rs.2480 and Rs.4.83L 20 Year Loan:Rs.2687 and Rs.6.1L
Re: Re: Re: Re: EMI
by bhanumurty on May 10, 2011 12:25 PM
Consider TAX saving. If you are in 30% bracket, and you can save (honestly)upto Rs.100000. How? on Interest portion:150000 and 80C of Rs.100000, which results in Rs.75000 savings over tax per annum. You need to reduce Rs.5000 from it towards prperty tax etc.means an annual savings of Rs.70000
Re: Re: Re: Re: Re: EMI
by bhanumurty on May 10, 2011 12:48 PM
The question is can you afford: Rs.85000EMI for 5 Years? Rs.53000EMI for 10 Years? Rs.43000EMI for 15 Years? Rs.39000EMI for 20 Years?
Re: Re: Re: Re: Re: EMI
by bhanumurty on May 10, 2011 12:28 PM
If you are a law abiding citizen, you will lose the exemption on the HRA recieved.Then your Taxable income would be increased by Rs120000.Hence, the net effect is actually negative, but for a simple idea, strike of the loss in HRA Exemption against the savings in Tax
Re: Re: Re: Re: Re: EMI
by bhanumurty on May 10, 2011 12:37 PM
Hence You will have an asset after 5 years worth Rs.51L @5% appreciation 10 years worth Rs65L 15 years worth Rs.83L 20 years worth Rs.1.06Cr
Re: Re: Re: Re: Re: EMI
by bhanumurty on May 10, 2011 12:42 PM
Net Result after 5 Years:Loss of 15L Plus Asset 10 Years:Loss of 19L Plus Asset 15 Years:Loss of 34L Plus Asset 20 Years:Loss of 24L Plus Asset
AS PER ECONOMICS AND GLOBAL SITUATION .... IT IS MANDATORY THAT , PRICE WILL GO DOWN .... BUT DEAR INDIAN WAKE UP ... DO NOT FALL IN TRAP OF WET DREAMS THAT , REAL ESTATE PRICES WILL GO DOWN .. DEMAND SUPPLY EQUATION IN FAVOR OF SELLERS ... IMPORTANTLY ... EVEN IF 1000 YOU WILL NOT BUY FOR YEARS .... THESE BUILDER , POLITICIAN CARTEL HAVE ENORMOUS MONEY POWER TO SUSTAIN FOR LONG TIME ... SO THEY WILL NEVER ALLOW OF FALL OF PRICES ... IN NEXT 2 YEARS ... MINIMUM BASE RATE OF 2TIER CITY WILL BE INR 5000 / SQFT .... FOR TIER 1 CITY IT IS 15000 /SQFT MIN ...
Re: INDIAN REAL ESTATE PRICE WILL NEVER GO DOWN
by sasi on May 10, 2011 10:55 AM
For our ever growing population the housing demand increases; I think that is the catch point for Real Estate business. I suggest buying land for a low price in which ever town/place that has decent ameneties and stopping buying of apartments will get the Real Estate prices down. Buying a super fast car and traveling from far is a better option than buying the costly asset in hawa (apartment).
Re: Re: INDIAN REAL ESTATE PRICE WILL NEVER GO DOWN
by okroal on May 10, 2011 11:00 AM
This is not possible practically .. unless like in US , UK...you allowed to work from home ... once in week ..you can report to office ..... or also unless you get petrol allowance from offfice ...
Re: Re: Re: INDIAN REAL ESTATE PRICE WILL NEVER GO DOWN
by sasi on May 10, 2011 11:18 AM
sorry ,I indicated buy land , building house and commuting is an option when ever one is financially healthy or wants to retire. And one has stopped buying flats in apartments imply one is saving almost 40 L if you can purchase land for 10-20L. why would one need petrol allowance then ? I cant understand why on hell any one one would but asset as costly as 50 L known as Flat situated in air , and go bankrupt
Re: Re: Re: Re: INDIAN REAL ESTATE PRICE WILL NEVER GO DOWN
by okroal on May 10, 2011 11:59 AM
Bro , Sasi , What you have said .. is possible ... but you wil not get any land for 10 lakh to 20 lakhs ...in near by town area .... you have to go to village area for land 10 to 20 lakhs ... land cost almost 30- 40 lakhs ... i understand your logic of not buying flat in air ... but in practical life ... if you are doing 12 hours white collar job in MNC ...you need to stay in city !!! .. only if you have business ... you can stay on separate ground flat .... at low cost ...
Re: Re: Re: Re: Re: INDIAN REAL ESTATE PRICE WILL NEVER GO DOWN
by subhra nayak on May 11, 2011 09:22 AM
you are absolutely correct !! But do we have any other hope ?
