- Property market in Year 2001 -2004 was quiet Ok; People were able to buy Flats in reasonable rates.
- Year 2005 -2007, some of the well known builders started the rates boom, flat which was at the cost of Rs.900 Sq Ft now became Rs.3000 to 8800.
Q: Are there any additional facilities?
No Same Scheme/Area, Flat sold at 20 Lacks Now selling at 45 lacks.
Q: Why Property increased so High?
IT people competition to buy sweet home .., they are bound to take….
Q: Who is going to Benefit from this Property Boom?
Only Builders, Bankers and some of the Politicians
Q: How is the Bank’s support on Home Loans?
Last Year, Bank gave the loans at flexible minimum rate; Now Banks has sufficient number customers - RACING WITH BUILDERS INCREASE, (Trap) Slowly Banker’s increasing interest at % 0.5 every year.
Q. IT salaries are high in Market, How much actually IT-people getting in Hand?
People, who bought house of 30 Lacks to 50 Lacks, now they need to pay EMI25,000 to 35,000 for 30 Yrs. If bank keeps same interest rates. Suppose Salary is 35- 40K per Month, 30K will be the EMI.
Q. Is there any “Terms & Condition or Processes to increase rates”?
No, Depends on Builders Greediness. Every builder follows the different strategies, Builder sold one flat 1500 Per Sqft in Morning and 2800 Per Sqft in the Evening, There are no records maintained.. RATES JUST INCREASING……
Q. Who made builders smart & greedy?
Greedy IT people.. No body is asking, Flat was sold at 15 Lacks, Why now 35 Lacks?
Q. What will be the actual ‘area of living’ or carpet area if the builder proposes 1000 sqft?
The actual carpet area will be 800-850 sqft only. The common area is also included in the proposal. If two flats are in the same floor, then the builder cheats both the residents by collecting
How do Builders cheat buyers? … Let us see with a simple example
Builder XYZ proposes a flat in a decent residential area.
Rate (Unit Price) - Rs. 3500 sqft.
Registration - Rs. 40 per sqft.
EB and drainage - Rs. 50,000
Covered Car park - Rs. 1,25,000
Corpus fund - Rs. 50000.
For a 1000 sqft flat (850 sqft carpet area), the approximate cost will be Rs. 37, 65,000. In the same plot area the builder would have constructed 8 or 10 flats.
Let us see how a builder earns his profit
Total sales for the builder - 37, 65,000 *10 = 3, 76, 50000 ( 3.76 crores)
Cost of the land - Rs. 40 lacks per ground
Total cost of the land - 80 lacks for two ground —–> A
Total built-up area for 10 flats - 10*1000 sqft = 10,000 sqft
Construction cost per sqft (for normal specification) = Rs. 900 per sqft
Total construction cost - 10,000 * 900 = Rs. 90,00,000 —–> B
Other expenses for the builder - Rs. 20 per sqft = Rs. 2,00,000 —–> C
Total expenses for the builder
A+ B+C = Rs. 80,00,000 + Rs.90,00,000 + Rs. 2,00,00= Rs. 1,72,00,000 ( 1.72 crores approx)
Total Sales = Rs. 3.76 crores - Rs. 1.72 crores
Total profit of the builder = Rs. 2.04 crores.
Let us see the share of each resident
- Cost of land = Divided share among the other 10 residents= Rs. 80, 00,000 / 10= Rs. 8, 00,000
- Construction cost = Rs. 900 * 1000= Rs. 9, 00,000
- Other expenses = Rs. 2,00,000 ( approx)
- Total = Rs. 19,00,000 ( Nineteen lacks)The total share for each resident is Rs. 19,00,000 ( Nineteen lacks only )But he pays Rs. 37.5 lacks for the flat.
So,
1. IT People should think about buying flats for at least next 1-2 Yrs.
2. Once rates are reasonable, with some legal process get the Booking.
3. Check Facilities, Convince, Road Approach, schools & Mainly co-operation water
4. Ask Questions If I buy 1/2 BHK at 20 to 45 Lacks, Do I get resale value in future?
5. Today you are capable for paying 1500 -3000 maintains per month? Will be the same case after 20-30yrs after retirement.
6. In All, Don’t stretch more to get the more & more loans, other wise, it will create unnecessary pressure and tension.
7. Read the above mentioned calculation carefully, when you are about to buy a flat please keep this in mind.
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