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

YEIDA to luanch affordable, green homes
Oct 24, 2014
GREATER NOIDA : This Diwali , the Yamuna Expressway Industrial Development Authority ( Yeida ) is set to Launch Affordable Residential Flats for nearly 3,000 middle and Low INCOME green groups
BDA Cell to Protect Government Land
Oct 24, 2014
BHUBANESWAR : The Bhubaneswar Development Authority (BDA) formed a Land Protection Cell (LPC) here to safeguard land cleared of encroachments
DLF seeks interim relief from Sebi ban
Oct 24, 2014
MUMBAI: Barred by Sebi from accessing capital markets, realty giant DLF on Thursday sought interim relief from Securities Appellate Tribunal (SAT) to allow it to redeem funds locked in mutual funds and other instruments
Rs 1,200 per sq ft: Mumbai realty bribery rate is half of actual building costs
Oct 24, 2014
Mumbai: Elimination of corruption alone can bring down home prices significantly in India's urbs prima.
For realty tycoon Ali Lokhandwala, luxury must be practical and child-friendly
Oct 24, 2014
Mumbai: It's all about luxury, with each developer trying to do outdo his competitors by offering one facility after another
After minimal activity, realty in Maximum City picks up
Oct 24, 2014
Mumbai: Property sales registrations in Mumbai have seen a marginal year-on-year increase of 8.3% in July-September 2014
Festive season fails to bring cheers for real estate
Oct 24, 2014
MUMBAI: Despite recovery in market conditions and sentiment, this festive season has failed to bring in cheers to the real estate industry
Water crunch may hit DDA's new houses
Oct 24, 2014
NEW DELHI: People who have registered for DDA's latest housing scheme will most likely face a severe potable water crisis
Real estate helping Asia Pacific HNWIs to lead world
Oct 24, 2014
As the numbers of Asia Pacific HNWIs look to overtake North America in the next few months, their investment in real estate has been among the main factors for the growth, says data expert, Capgemini
Housing societies slam doors on singles ‘ready to mingle
Oct 24, 2014
Mumbai: The latest in a set of unwritten “rules” followed by housing societies while letting out flats to people in the city is “no singles allowed

Latest Realty News Of State

Realty Talk's