No takers for ‘easy’ schemes by desperate developers
While owing an apartment in Mumbai with a ticket price of anywhere over Rs 1 crore by paying nothing more than 10 per cent of the price until possession may seem like an irresistible deal, analysts caution buyers against signing on the dotted lines before reading the fine print
Oct 24, 2014
Source : The New Indian Express
Residential Apartments

 

Mumbai: In a bid to beat their blues in the slackened realty market, developers in Mumbai are trying to make the most of the festive season by dangling lucrative easy payment schemes. While owing an apartment in Mumbai with a ticket price of anywhere over Rs 1 crore by paying nothing more than 10 per cent of the price until possession may seem like an irresistible deal, analysts caution buyers against signing on the dotted lines before reading the fine print.

 

The algorithms vary from the 80:20, 75:25, 60:40 schemes to the recent spate of the seemingly lucrative 10:80:10 schemes.

 

Over the last couple of months, a large number of developers have announced the 10:80:10 scheme wherein buyers are required to pay merely 10 per cent of the apartment cost at the time of booking while the developer will pay the home loan interest to the bank until the time of fit-outs or possession. For instance, the latest phase of the 33-acre Ariisto Heaven project in Mulund offers buyers two-bedroom apartments costing upward of Rs 1.60 crore and three-bedroom apartments for over Rs 2.60 crore at a down payment of Rs 11 to 15 lakh in addition to the stamp duty, registration and other fees.

 

Several other developers such as Sheth creators’ Andheri project, Rajesh Lifespaces’ Powai and Mulund project, Gurukrupa Developers’ Malad project and Rustomjee’s Thane project offer the 10:80:10 options while others such as Dosti group, Damji Shamji Shah, Mayfair Housing, Indiabulls Real Estate, Neptune Developers and Runwal developers have on offer other variations of easy payments.

 

The 10: 80:10 scheme is, however, just the latest in the slew of interest subvention schemes that the Reserve Bank of India tried to clamp down on last year on the grounds that it exposes both the buyer and banks to greater risks while allowing easy liquidity to cash-strapped developers .

 

“The scheme benefits developers as instead of paying the high interest rate that is levied on construction financing from banks, projects are financed through homes loans that are available at a lower interest rate of 10 per cent to individual homes buyers,” said Abhishek Ranganathan from the financial services company Phillip Capital India.

 

The sudden dependence of builders on end-user’s money is also owing to the fact that investors who used to fund projects by booking a specific number of apartments even before a project was officially launched are now refraining from putting their money on real estate.


Analysts further point out that the interest cost is ultimately borne by the buyer himself. “There are various ways that developers factor in the interest paid by them in the sale price of the apartment. It could be by inflating the total cost, or by increasing the built-up area or by hiking the price of car park or floor rise,” said realty agent Sandeep Sadh.

 

Latest Realty News

Pune to witness 40% shortfall in housing units by 2018: Study
Oct 22, 2014
PUNE: The city is expected to witness a 40% shortfall in the supply of housing units by the end of 2018
'Make builder accountable for collapse'
Oct 22, 2014
NEW DELHI: In the wake of building collapses in Delhi, Chennai and Mumbai, city architects, structural engineers and even building plan sanctioning agencies pushed for a new provision in the regulations to hold contractors and builders responsible
Realty portals filling information gap for buyers
Oct 22, 2014
Bangalore: Now online start-ups, including Housing.com, PropTiger, and CommonFloor, are setting up their own teams, data science labs and open forums to provide safety information to buyers of Real Estate Props
Consumer activism: Buoyed by social media and pro-consumer courts, homebuyers take on errant builder...
Oct 22, 2014
MUMBAI | NEW DELHI | KOLKATA: The real estate industry is no more a 'seller's market' and is in fact a 'buyer's market'
Housing industry upbeat over BJP government in state
Oct 22, 2014
Mumbai: Representatives of the housing industry in Mumbai and Maharashtra are upbeat with the results of the Maharashtra Assembly elections coming out in favour of the BJP
Dip in TN Property Registration Leads to Revenue Stagnation
Oct 22, 2014
CHENNAI: With no major projects being registered during the first half of the financial year, property registration across the state fell by around 50,000, resulting in revenue stagnation
Property developers upbeat
Oct 22, 2014
Mumbai: The sentiment in the property market is improving and becoming more rational, with the euphoria seen during the first six months of this year
The new investment mantra in real estate is satellite cities
Oct 22, 2014
New Delhi: Rapid urbanization has thrown up many complicated challenges for home owners as well as city planners
Un'real' estate? Buying houses still a distant dream for many
Oct 22, 2014
The burgeoning price of real estate continues to keep Indian realty far from reality for many
Real estate market abuzz with activity
Oct 22, 2014
LUCKNOW: After a dull period of more than two years, activity is back in the real estate market this festive season

Latest Realty News Of State

Realty Talk's