Question

A builder constructs a house for rs. 50,00,000.due to recession, its value depreciates by20% in 2 years. What value does he get if he sells this house after 2 years

Answer 1

Answer:

Step-by-step explanation:

Indian Real Estate has been one of the high riding sectors since 2002- 2003. After very bad ninetees decade, it has resurrected itself like never before. Infact, in last three to four years, the property market in India has zoomed by more than 300% in few cities. When I bought my first house in 2000 in Pune, India, the housing market was was just starting to show the glimpse of what was in store for future, however what followed over next 5-6 years has been beyond anyone’s expectation and has been a dream run for Indian construction Industry.

But what about the future ? Will it still keep going up the monemtum ? Will it remain constant ? or will it take a U turn ?

These are the million dollar questions for you and me.

My younger cousin called me yesterday from India. His builder had called him up to tell that the township where he had bought the 3 Bedroom flat was near completion and should recieve the possession in a month.

Why did he specifically call me and tell me this ?

It is because I had given him an advice against making the house investment last December. I told him “the property market has moved too high in a short period of time. It may just collapse. It may not be a good time for you to buy. You should see consolidation in property market shortly. Wait for 6 months to a year and you will get much lower rates”

How proud was he that he had made the right decision of buying the house because the real estate market in India is still going strong. Every one knows the success of Biggest real estate IPO in India “DLF”!

What he told me later was even more surprising. Last December, when he bought the flat, he got a rate Rs. 2300/- per sq. ft. (approx $60 psf ). During his recent visit to his apartment, he asked the builder about current rates. He was overjoyed to hear that rates had climbed to Rs. 3600/- per sq.ft. (approx $90 psf).

A huge jump of around 60% over December 06 rates !

I felt like hiding my face for the advice I had given him, it made me look so foolish.

So what advice will you give me, If I decide to book a new apartment in India, specifically Pune ?

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Hi All,

I am searching for a 3BHK flat in ORR, Sarjapur, Whitefield area. I realised that suddenly (last month) every builder seems to have increased the prices together by around 500 – 600 psft. Now a 3 BHK for about 1500/1600 is not available below 80 lakhs any where for a tier 1 builder. It is very strange that all builders are raising prices together. In one case I have a long list of 3 BHK flats for sale but they are not ready to reduce the price.

Seems like a Cartel !

Have you experienced the same ?

Besides, who are the real buyers ? It is scary to pay this price of Rs. 4200 – Rs 4800 psft when there is hardly any Water available and borewells are running dry !

Need some assistance – It would be good if you could share your experience.

Cheers,

Ashish.

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HI all, It is a township of 50 acres in Lodha Palava City. The Golf course is of 30 acres. Lodha Golflinks comprises of 25 Villas and 4 towers. It has an internal amenities like Golf facing apartments, Private garden, Italian flooring in Living room, Wooden flooring in Bedroom, Split AC in all rooms, etc External amenities in Lodha Golflinks Codename 9 Iron includes Golf Course, Clubhouse, Swimming Pool, School, Hospital, etc.HI all, It is a township of 50 acres in Lodha Palava City. The Golf course is of 30 acres. Lodha Golflinks comprises of 25 Villas and 4 towers. It has an internal amenities like Golf facing apartments, Private garden, Italian flooring in Living room, Wooden flooring in Bedroom, Split AC in all rooms, etc External amenities in Lodha Golflinks Codename 9 Iron includes Golf Course, Clubhouse, Swimming Pool, School, Hospital, etc.

Floor Plan 4 BHK Villa: 3321 sq-ft carpet area 3 BHK Sky Garden Residence: 2525 sq-ft. carpet area 3 BHK Terrace Residence: 1596 sq-ft carpet area 2 BHK Terrace Residence: 959 sq-ft carpet area. This project is located on Kalyan Shil Road in Dombivali east Less than an hour drive from South Mumbai Dombivali less than 15 minutes Vashi less than 30 minutes Thane less than 30 minutes Floor Plan 4 BHK Villa: 3321 sq-ft carpet area 3 BHK Sky Garden Residence: 2525 sq-ft. carpet area 3 BHK Terrace Residence: 1596 sq-ft carpet area 2 BHK Terrace Residence: 959 sq-ft carpet area. This project is located on Kalyan Shil Road in Dombivali east Less than an hour drive from South Mumbai Dombivali less than 15 minutes Vashi less than 30 minutes Thane less than 30 minutes

Answer 2

Answer:

Step-by-step explanation:

Assume there is a 2 BHK Flat for sale at a decent location. Considering the cost of the flat between 60L to 80L. Assuming 70L as a total cost of the flat. Banks will give you not more than 85% of total cost amount which doesn't even include local taxes from certain banks. Assuming you have taken a loan for 20 years. Here is the calculation.

Base payment 15 % = 10.5L (this will rip you off with all your previous savings)

Loan amount = 59.5 L.

EMI per month Rs.59, 000 per month

Maintenance charges approx. 24K Rs per year = 2000 Rs per month

Average property Tax per month = 1000-1500 Rs per month

- Tax benefit is discount on the Interest amount = 50K per year = 4K per month

That also for first few years as most of the EMI goes in interest.

- 1 Lac in base amount is any way settled for PF, 80CC and LIC contribution

- Total EMI comes to approx. Rs 65,000 per month for next 20 years.

(Society maintenance, water taxes and corporation tax will increase with inflation).

After paying this much money per month.

You have to say no to your family for shopping (even after a CTC of 12 Lacs)No holiday trips, no gifts to parents, skip friend's marriage, no new Car for initial few years and lot of cost cutting measures. If you get fired from the company, you are doomed. or what If recession hits. Days are not far for such crisis to hit the market. China market and Greece are examples of it.

Hence, total cost of ownership for 20 years = 65,000 X 20 X 12 months + 10.5 L = 1, 66, 50,000 (approx 1.67 crores)

What have you got ?

"Home for 20 years", and after 20 years you will have a 20 years old flat in 20 years old society (dirty and filthy )

- After 20 years if the cost of your 2 BHK home is say 2 Cr by market value (I doubt because it will be very old flat in the middle of crowded city). You make nothing out of it.