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Real estate - a dead investment in urban india

Discussion in 'Snippets of Life (Non-Fiction)' started by sureshmiyer, Jul 22, 2012.

  1. sureshmiyer

    sureshmiyer Silver IL'ite

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    India is called as one of the economic superpowers next to China in the 21st century and our middle class mentality is misguided by this delusion of grandeur of modern India that has taken away the focus from self-sufficient villages and built lop-sided cities that stretches into suburbs which run over more than 100 kms from the main cities.
    Leave aside other problems, the biggest problem faced by a common household mostly dependent on single salary or wage earner is housing. Other problems do not appear as grim when a family cannot afford to have a decent roof over its head. Interestingly, our country is said to be facing dangers of recession. The real estate shares keep falling, but on the ground level, apart from gold, people prefer to hang on to their own houses as a hedge against recession. Townships are built in farther and distant places, but with no real relief for an average earning customer. The prices are hiked with the lure of nearby stations, concrete roads, markets and the most bizarre part – the presence of an airport in the vicinity. I really do not understand what comforts an airport in the vicinity provides for an average earning individual. Is he going to travel by a plane every weekend?
    The steep hike in prices anticipating an international airport in and around Panvel, 60 kms away from Mumbai is one of the biggest frauds played on the middle class Indian. Spacious five star hotels and increased traffic due to airports are not going to solve his day to day problems. Yet people fall for the ruse and shell out more than their capacity. They do not understand that buying a house for the first time is no investment. You buy a house for living and it can never be an investment. Only second house with minimal loan burden can be considered as an asset.
    Majority of the newly constructed flats are being built and kept unsold in anticipation of higher prices. The rest are under construction. A new township called Ulwe near Panvel is being built with promises of international standard of living in the coming five years. Most of the flats are booked even before construction. A 2 BHK flat sells around Rs.60 lakhs and people are assured that their flat will fetch a crore in next three years. This is a hilarious business proposition. You are being told to shell out your life time savings and subjected to a huge loan burden for buying a flat of your dreams and then how can you expect to encash the appreciation earned by their property. Your life time is spent paying interest on the housing loan and by the time you are freed from the loan, you realize that it just remains a house where you can just live. Your hair starts graying and you start more concerned for your children and their future. When you start looking back the day you made Griha Pravesh and boasted of buying a flat before your near and dear ones, you will laugh at the futility behind your exercise. The builder or the agent would have promised that the concrete roads above the seaway would make you reach the city faster from the town, but in reality traveling from house to the nearest station itself becomes a nightmare. The International airport in the vicinity would have only worsened the situation with the noise of zooming planes above and roads chock-a-block with cars struggling to find space. McDonalds and KFC considered being the symbols of modernization would hold nothing for your taste buds as the Doctor will put their products in banned list due to high cholesterol and fats in your body.
    People are under the false impression that getting housing loans have become very easy with banks chasing them around. The moment anyone needs a housing loan, he will soon realize how difficult it is to acquire a house after paying exorbitant EMIs. Leave aside EMIs; purchase of a flat comes with shelling out black money component which is the norm rather than the exception. Apart from this, the stamp duty charges, broker charges and miscellaneous charges will make him run after personal loans or mortgage gold and it will be such a drain on his resources that will make him wonder whether to be happy or sad about it. Buying a flat actually makes him older and a slave to the circumstances. He fears for job security and other costs associated with the education and other expenses of his household.
    As regards the people who live on the other side of the spectrum build colonies of slums right next to the towering skyscrapers. All they have to do is to keep a bust of national leaders, name the slums after these leaders and build prospective vote banks. Behind the filthy drains and muddy narrow zigzag lanes that follow these housing shanties presents a completely different picture once you step inside the homes. You will notice LED TVs with Tata Sky connections with home theatre facilities, and all the modern gadgets that make you wonder about this city that lives on the edge. There is rampant electricity theft, pipelines are being punctured which puts a drain on the resources.
    In between these townships and slums, there is another façade in the form of low cost housing flats which look like dilapidated buildings and having minimal access to bare necessities. Even house rents are not affordable. The oft repeated joke that you can own a flat in US but not in India seems actually true. It is so typical of Indian cities where the so-called first, second and third co-world co-exists. And those who die of homelessness never figure in our priorities as they are not part of India’s GDP. The builder-criminal nexus, the proliferation of black money in the real estate sector and the active interest of Governments in keeping the flat prices high for the benefit of a few will never be addressed in the public forum. Even Aamir Khan would not dare to take up these issues in Satyameva Jayate. His movies will simply not run, and he will have to live in fear from the underworld. The builders – politicians – bureaucrats nexus has began to rule the cities all over India and land grabbing, with brutal eviction of families has reached its peak.
    Rather than being burdened with finding a house to live, I would advise people to buy an affordable plot in a remote village and build a house, which would be an ideal retirement house with scope for quality living. For many in cities, owning a house will always remain a pipe dream.
    … Suresh M Iyer
    sindmani likes this.

  2. mercyagin

    mercyagin Gold IL'ite

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    60 Lacs for 2 BHK is actually a low price. In Dharavi the price for 400 Sq ft Carpet area is more than 50 lacs.

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