A few days ago I did a sarcastic article on ‘how real estate prices cannot fall at all’….now I am contradicting myself!
Two different stories about real estate deals:
One person bought in a upcoming luxury project in year a 4bhk house for Rs. 112 Lakhs in dec 2006. In 4 years time, a self respecting real estate ‘player’ expects to get about 18%p.a.However the builder had said if he held on for 4-5 years he would get about Rs. 250 lakhs.
Well he is not getting anywhere close to that price. He is getting about Rs. 130L for the same. And he is not sure whether the deal will go through at all…..and the big reputed builder wants a 5% transfer fee. LOL.
In a second case a person had booked a 2bhk with a builder in 2007 Jan. He was supposed to get possession of that flat in 2009 Divali.
2009, 2010 and 2011 Divali have passed!
Recently this guy went to a local politician who has said ‘I will ensure all his construction is brought to a halt if he does not give possession by April/May 2012.
Even in the first case, the buyers have formed a group and are planning to go to court. The builder used to charge them 18% p.a. for delay in payment, but when he is delaying the handing over of the building there seems to be no regret – not even a tone of apology. Even now the builder is talking big, comes on television as an authority of the construction business….but the property is not ready for possession.
The second builder again is not delivering…and the buyers cannot do anything. Neither can you do anything to the builder – he has sold a few flats to the local bigwigs in the police department – so they cannot come out in the open, OR speak against the builder. Ha ha ha…
So here are 2 investments – one giving a pathetic return, and the other one may or may not return your capital AT ALL…
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