Beaware of lot of chances of frauds and mis-commitments during diwali 2008 Property sales.
The Real Estate Market is in bad shape and this is the time lot of developers may resort to frauds and make fool of the customers.
What is the Problem ?
Real Estate Boom was started by working class like us but was hijacked by the Foreign Investors, Builders, Rich Investors and NRI.
Foreign Institutional investors were reayd to commit large money for the Builders to do large projects, Builders has started large projects and Rich Investors/NRIs were buying/pre-booking their property in expectations that the real estate prices will rapidly increase and they will sell the property.
When Inflation & Interest rates went up, they realized that there are not real buyers (working middle class) and there is little chance that these buyers will comeup for next few years to buy their property at high prices.
Recently the Foreign money dried up and no money is available to builders. Builders has also bought many large land banks at high cost by taking loans from banks. they are paying hich interest rates for it and they are not getting income from sales.
The big builders like DLF , Unitech are also in bad shape their stock prices have dropped nearly 80-90% and its not possible for them to raise funds for their projects. They have also invested in land and have to make payments for the same. There is news that some of them are defaulting.
So the problem is accross the board and things will not improve for long.
Old Projects !
Woek on old projects has stopped and builders are planning to sell the property first and build later. Also the money they are earning from some sales , is being diverted to pay their loans instead of completing the project.
This means that people who have bought property in uncompleted scheme will not get delivery by next 1-2 years and hence their cost of ownership increases at the benefit fo builder.
New Project Launches !
While all this is happening many builders have launched new projects before Diwali and promoting them agressively. This is clear indication of fraud or malafide intensions. When their old projects are themselves not sold , launching new projects is very surprising.
The only explaination seems is they want to sell Virtual Non existing attrative projects and lure some investors or buyers to invest in it. And they will use the proceeds for some other work. Also may be collecting money for paying for some dues of land. Also they may change payment terms and try to cheat you by taking higher commitments. I think there projects will take several years to take off and hence buyers must not invest in them.
RULE 1: Only and Only buy Ready properties. Go for resale or old properties for sale. Get premium discount for the same.
RULE 2: For buying any property in a partially built project, talk to few older buyers before commiting. Check if builder has been fullfilling their commitments.
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Analysts say prices may stagnate or decline in the next three months.Home prices may decline in the next three months, according to a national poll conducted among top property brokers by Edelweiss Securities, a Mumbai-based brokerage.Almost 70 per cent of the brokers who participated in the poll believe prices will be flat or negative in the period and even Diwali is unlikely to lift the mood in the property market.About 60 per cent of them believe that prices have stagnated over the past three months. The Reserve Bank of India’s move to raise repo rates by 125 basis points in the last six months has resulted in commercial banks increasing their lending rates by similar margins. In turn, home buyers have to pay a much bigger amount as monthly pay-out on home loans.For more view- realtydigest.blogspot.com
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