Wrong to assume that there are only few in each Corporate getting 1 Crore plus salaries. Leave Amazon / Flipcart / SnapDeal etc - where the number is high. I have examples in TCS / Wipro / Infosys where atleast 500 associates (per Organisation) where employees make 1 Crore plus every year. And why just 1 Crore salary, people with 25 Lacs salary are also buying such houses on Home loans..
No Way Salaried person cannot buy a Home in City like Pune and Mumbai , Even if you take a Loan of 30lacs your installment will come to around 40k a Month which you will pay for 20-25 years.There should be some scheme for salaried class.
Heard of this, their's a project which serves everyone in India by
Sunny on Jul 26, 2016 08:50 PM | Hide replies | Hide message
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Today all buyers are investors who have more than one house. You just cannot make a decent living after paying EMI every month. That is why resale properties are cheaper
Author is 100% right in making his observations. On one hand, we talk about recession in real estate market while on the other, property prices are too expensive even for a person getting 1.5-2.0 lac/month take home salary considering expenses on education, children marriage & post retirement planning. Govt shall do well to dig deep as to who are the people funding projects where flats/Apartments are valued in excess of say 60-70 lacs & who are the people buying such property.
Aakar you are very correct.real estate price shot 15 times in last 10 yrs.All black money parked which came from swiss/Mauritius/P notes.Middle class is suffering a lot with this.and most effecting to there health.We cant leave peacefully becoz we have to buy our home OR we have EMI to pay end of month.I had high hope with BJP but no difference.Wish bubble burst and we leave tension free.
It is the cheap money policy propelled by the obsession with low interest rates which engineered an artificial realty, capital and commodity boom around the Globe. The speculators and Relators made merry while the sun shined and were under a delusion that the party was bound to last for ever to enable them to continuously make a killing. But that was not to be with the engulfing of liquidity and mortgage crisis that swamped US, Europe and other emerging economies in 2008 impairing and leaving their financial market in a perilous State which triggered a major banking collapse. The realty market then went in for a major course correction with prices falling like nine pins.
But unfortunately, this price correction in the realty market left India untouched due to the illicit nexus between the trio of Politicians, Builders and Bureaucrats who ensured that prices remain firm despite unfavourable market conditions. We now have the ugly spectacle of the Govt. repeating the vicious cycle of low interest rates which can only further heat the already over heated sector.
Well, I do not agree with Aakar Patel that except for Real Estate, other services and utilities are relatively very cheap in India for the simple reason that it is not so simplistic to quantify them with mere comparison of prices.
Take his example of a taxi fare covering a distance of about 6 kms costing about Rs. 100 in India whereas its equivalent costing about Rs. 1,200 in London. At today's rate, 1 British Pound is equal to about Rs. 88. So, when you work out such hypothesis to determine which is cheaper, you must convert the remuneration too to the currency in which it is equated. In this case, in London, if the salary of a mid worker is about 1000 pounds, it means his salary is about Rs. 88,000/- if it is converted to Indian rupees. On the other hand, the salary of a worker in the same category in India will be hardly more than Rs. 10,000 per month at best which means the British worker has much better purchasing power than the Indian.
The main reason seems to be the shady / unorganised background of the entire real estate sector in India. The funding to this sector is dubious and the expected returns by the financers to this sector is very high. Hence, the developers / builders have to sell at artificially high prices. A major portion of the buyers are investors having undisclosed sources of income and they can afford such high prices. Hence, this vicious circle continues.
