Indian Real Estate Sector

RamaY · Post by **RamaY** » 04 Oct 2011 22:12

^ they gave ~800Rs per SFT construction costs. That leaves Rs 200 for the land value. Assuming a 8floor building they are looking at Rs 14,000 per sq. yard.

That can be achieved near Shamshabad airport in Hyderabad where land prices are in the range of Rs 2-5000 per sq.yard.

Singha · Post by **Singha** » 04 Oct 2011 23:13

prestige has launched sunnyside proj behind cessna biz park on ORR.

btw a giant phoenix mall is said coming up near hoody circle.

rohitvats · Post by **rohitvats** » 04 Oct 2011 23:43

RamaY wrote:^ they gave ~800Rs per SFT construction costs. That leaves Rs 200 for the land value. Assuming a 8floor building they are looking at Rs 14,000 per sq. yard.

That can be achieved near Shamshabad airport in Hyderabad where land prices are in the range of Rs 2-5000 per sq.yard.

Sirji - simple calculation

- Construction cost - 800/sft
- FSI Cost (and not land cost) - 100 to 200 (depending upon FSI available)
- Profit %age (on cost) - 20%
-------------------------------------------------------------------------------
Sale price - INR 1,200 per sft or for a 500sq.ft flat - INR 600,000

The million dollar question is land price and FSI-

-----if the FSI is 3 and FSI Cost/sft is 100, then land cost which can be afforded is INR 300 per sft --->Land cost - INR 1.3crore per acre
-----if the FSI is 2 and FSI Cost/sft is 100, then land cost which can be afforded is 200 per sft---->Land Cost - INR 87L

So, the State government need to give extra FSI to ensure that the land cost is bearable for the developers. Lower the FSI, farther the developer will have to go from the city to acquire the land. And the most important part which is not addressed in all this is the economic cost of living in these far off location(s) to the end-user. The commuting to their place of work+support infra is all absent in these far off places. The target audience for these developments would prefer (and do prefer) to stay in shanties or unregulated slums in the heart of the city or to places close to their work - people like housemaids/drivers/cooks etc. Just ask your maid if she would want to stay in Shamshabad even if you give her the house for free?

PS: Guess what - I'm working on feasibility study of low cost housing in Tier II city for one big fund house

RamaY · Post by **RamaY** » 04 Oct 2011 23:50

^

YSR solved this problem by providing govt lands to Indira Avaas Yojana in-around Hyderabad.

For example if GoAP can give lands to IT companies at ~1Cr per acre, they should be able to provide the same for affordable housing too.

Looks like Mahindra is trying to enter this industry eyeing govt projects...

rohitvats · Post by **rohitvats** » 04 Oct 2011 23:53

RamaY wrote:^

YSR solved this problem by providing govt lands to Indira Avaas Yojana in-around Hyderabad.

Eggxactly.........the only way Low Cost Housing can work in large cities is through government participation....they can contribute land at nominal cost (that is the only equity participation they are capable of anyways) and impose restrictions on developers in terms of pricing to ensure target customer gets the end product.

hnair · Post by **hnair** » 05 Oct 2011 00:26

Big problem with large-scale low-cost housing is ghettoisation as is witnessed in US and Western Europe...... And that is a prospective security risk for India, if we have clusters of people who feel they are economically segregated and no one else is caring.

What seems a good idea would be a certain percentage of higher-income family houses mixed with lower income ones in a specific neighbourhood. That way both Govt and private partner gets some extra money to provide any interest-rate subsidies(for govt) and a higher profit margin (for private player) in the process. Once the project is complete, the higher-income folks ensure their investment dont go to crap due to any law and order issues stemming out of government apathy.

Else everyone will assume the gubmint will take care of any social issues and we sort of know how that works out: slum lords + poverty vote bank politics => Oscar winning movies

RamaY · Post by **RamaY** » 05 Oct 2011 01:02

^ Good idea. But There is no way we can do complete == among the population though.

vera_k · Post by **vera_k** » 05 Oct 2011 09:52

Why would higher income folk want to live in a lower income neighborhood? Unless the higher income folk are given incentives like tax breaks or other advantages, they will want to live with other higher income people.

The reverse can be done where some amount of subsidized lower income housing can be made available in a higher income enclave. For example, if some low cost housing is made available in Lutyens Delhi, it won't cause the upper crust residents to move out. While the same residents will have a huge problem moving into a cluster of expensive homes in a low cost housing colony put up by DDA.

Theo_Fidel · Post by **Theo_Fidel** » 05 Oct 2011 10:14

Rather than higher & lower income we should think of densities. Higher and Lower density areas should be mixed together.

Also the Ghetto problem was a function of the break down of society in USA not necessarily income levels. Drugs, Crime and wholesale incarcerations caused the problem. So far we have more or less avoided this problem.

Singha · Post by **Singha** » 05 Oct 2011 10:46

in yindia nobody controls density. people build as high and as thick as they want, which results in tracts of 3-4 storey buildings like we see in dilli with common side and back walls. is this approved? should there not be min 2-3' gap at the sides?

krishnan · Post by **krishnan** » 05 Oct 2011 10:48

No body cares about the gaps. You have places where they dont even have a inch of space between two houses. To cut costs they even reduce the wall width

rohitvats · Post by **rohitvats** » 05 Oct 2011 14:55

^^^^Gentlemen, there is something known as Development Control Regulations and Building Bye-Laws which govern the usage of land and permissible built-up area, set backs, ground coverage and all that. One needs to submit his/her house drawings and plans for approval to the local development body and get the same sanctioned. While minor variations here and there can be managed (even serious ones), if oush comes to shove, the municipal corporation can bring down the illegal component of your house in a jiffy.

All the above follows from the Master Plan of the City and norms contained therein.

Sachin · Post by **Sachin** » 05 Oct 2011 15:57

hnair wrote:What seems a good idea would be a certain percentage of higher-income family houses mixed with lower income ones in a specific neighbourhood. That way both Govt and private partner gets some extra money to provide any interest-rate subsidies(for govt) and a higher profit margin (for private player) in the process.

A process I have seen in Karnataka, and generally done as a project by Karnataka Housing Board.
1. Huge areas of land are notified and taken up by government (after compensating the holders of the land) **.
2. The area is neatly arranged as green area (parks etc.), area to build flats, areas in which independent houses would come up, and also some sites left vacant (especially corner plots).
3. In the same area, specific belts are also classified for Low Income, Medium Income and High Income groups. The size of the house, flat varies.
4. These sites, flats are put up for auction and people who bid get the rights to land and the property. Flats and homes are built by contractors, and generally have a uniform design. The people who got the land in auction cannot sell it off for the next n number of years.
5. Corner sites, or specific apartments are kept aside and auctioned at higher prices when the whole area gets popular and people start coming there.

** A scam which I heard is most prevalent in Karnataka is on this notification, denotification business. Politicians or their chummies know that govt. is planning to buy land in an area. These fellows buy up the land from poor villagers who do not know this grand plan for a pittance. Then when the govt. acquires the land, these fellows sell it up for a higher margin. Key areas in such land, they claim back (or do not sell to the govt). They say this is the only land they have for a living and agriculture, and gets a de-notification done. These lands are then sold at exhorbitant prices when the whole area develops.

Vipul · Post by **Vipul** » 05 Oct 2011 20:03

At Rs. 56,000 per sq ft, this slum costs more than the rates in Colaba.

Sparked into action by the new airport redevelopment project, private builders are lapping up land in the surrounding areas at jaw-dropping rates.

Kishor Patel, a resident of one of the thousands of slums near the airport has cracked one of the most distorted real estate deals in Mumbai's history, having sold his 10ft x10ft shanty to a developer for Rs 56 lakh - which works out to an incredible Rs 56,000 per square foot.

The going rate for space in Bandra, a few kilometres and a different world away from the slum, is Rs 25,000-30,000 per square foot.

And in Colaba, houses are being sold at Rs 35,000-40,000 per square foot.

Patel’s isn’t an isolated mega-money deal in the area; in fact, it’s a transaction that confirms the fact that Mumbai’s latest property goldmine officially lies in the periphery of the airport.

Property rates here have peaked ever since MMRDA announced details of their airport redevelopment plan six months ago - the proposed makeover covering a 180-acre plot that includes slums in Santacruz, Vile Parle, Kurla, Kalina, Vidyanagari, Narayan Nagar and Chitmpada that circumscribe the domestic and the international airports.

Mumbai International Airport Authority Limited (MIAL), the executing authority for the plan, awarded this redevelopment contract to HDIL.

Sparked into action, private developers have now started lapping up land in the surrounding areas at jaw-dropping rates, with residents of Netaji Subhash Nagar, Gulzari Chawl and Vile Parle East at the receiving end of the windfall.

One of Ramane’s neighbours in Netaji Subhash Nagar - a 5000-strong shanty town - recently sold her hut for Rs 50 lakh. Other slum pockets in the area such as Gulzari Chawl and Vile Parle East, home to more than 300 hutments, are now the hotbed of intense negotiations between residents, private developers and corporators, who are willing to dole out attractive sops to have the land vacated.

The negotiations have pushed rates to unprecedented highs, with the smallest tenements fetching a prices upwards of Rs 50 lakh and more. Two years ago, when talk of redevopment first began, rooms in the same slums had anyway shot up to Rs 26 lakh.

According to sources, developer Rajan Vasant Kumar Dhruv has already purchased around 70 to 80 per cent of the hutments in Netaji Subhash Nagar area alone. When contacted, Dhruv said that he is buying the slums for his own redevelopment plans and insisted that all transactions and agreements “have been in white”.Meanwhile, the giddying rates have created unrest in the neighbourhoods. Slum dwellers who sold of their huts in 2009 are now demanding to be paid the difference in the prices they were offered earlier and what the units are fetching now. They have also filed a police complaint against the corporator Parag Alavani and developer Rajan Dhruv, accusing them of cheating them and using unfair means to grab their homes.

Talking to this correspondent, a resident of Netaji Subhash Nagar, Ramchandra Manaval alleged that Alavani and Dhruv had promised to pay him Rs 70 lakh for his slum unit. But when Manaval left the city on work, the duo negotiated with Manaval’s father and settled the deal for Rs 36 lakh.

Dattaram Kudale has a similar story, accusing the duo of forcing him to sell off his house for Rs 36 lakh. Those who refused to be arm-twisted then, says Kudale, are the ones who are benefiting now.

Rubbishing these allegations, Dhruv said, “This grievance is mainly coming in from those who have sold off their shanties two years ago. They offered a price that was appropriate at that time. Their argument that they have been paid less has no meaning in today’s market scenario.”

Vasu · Post by **Vasu** » 31 Oct 2011 11:53

Now real estate sector needs reform

The Supreme Court ruling banning real estate transactions on the basis of power of attorney and making sale deed compulsory for property sale is a welcome step that will make secondary market transactions fool-proof. It will check the evasion of stamp duty and black money dealings no doubt.

The anomaly between valuations and circle rates has not just been leading to high property cost in the secondary market but also encouraging black money transactions. It is heartening that some state governments are engaged in bridging the gap between market value and circle rates with a twin objective of checking the flow of black money and evasion of registration fee and stamp duty in property transactions. What's further needed is uniform rationalisation of stamp duty by the states.

High property valuations are having a negative impact on the flow of foreign direct investment in real estate that has dropped to 2.97 percent from the total of Rs.121,000 crore in 2010-11.

Today residential property accounts for 80 percent of real estate market in terms of volume, growing at about 35 percent annually. And low-cost housing forms a predominant part of it. As much as 99 percent of the shortage of 24.71 million housing units is for homes that will satisfy the needs of people in lower income groups and economically weaker sections.

The most difficult task before the government is to meet the unprecedented challenge of making developed land available at affordable cost. To bring down property costs, policy initiatives aimed at promoting innovative building designs, construction materials and technology are required. The government also needs to look at outdated floor area ratio afresh and tune it to current needs.

Considering that taxes on residential construction are as high as over 30 percent, the government also needs to look at duty structures in the housing sector to ensure that middle-income group housing and below is not a revenue resource for it. Similar is the need to re-look the restrictive policies, archaic municipal laws, negative rent control acts and low rental returns in order to promote rental housing.

Policy initiatives to develop debt market for housing, fully integrated with financial market could be of much use.

Several real estate reforms relating to liberalisation of foreign direct investment rules, computerisation of land records, public-private partnerships and urban renewal have helped to bring in much-needed professionalism in the sector, thereby speeding up real estate growth. The Jawaharlal Nehru National Urban Renewal Mission has effectively catalysed the process of urban renewal by augmenting civic infrastructure and effective delivery of basic services through sound governance.

Today there is complete governance deficit when it comes to managing the affairs of real estate, especially as there's no regulatory body for the sector. This is diluting the efficacy of reforms. There's an immediate need to regulate real estate by introducing the proposed Real Estate Regulation Bill without any further delay.

The Governmint of India is planning to introduce the bill in the winter session.

It aims to set up state-level regulatory authorities, making it mandatory for developers to register with these bodies and submit project details. There'll be punitive costs for straying from the submitted details and a host of other measures.

The two most urgent requirements are to rationalise stamp duty and scrap the Rent Control Act everywhere. The former has been pinpointed by Prime Minister Manmohan Singh as one of the prime causes for the glut of black money in the real estate sector: under-the-table deals thrive when legitimate processes come with excessive costs attached.

The Rent Control Act, meanwhile, has done a great deal to worsen the demand-supply imbalance in cities like Mumbai. It has added to artificial shortage created by builders' unrealistically high price points.

A recent study by PricewaterhouseCoopers and the Urban Land Institute of India stated that India is one of the most attractive land markets in the Asia-Pacific region. But it cited lack of transparency as the main reason holding it back.

Prem · Post by **Prem** » 01 Nov 2011 02:27

Singha wrote:in yindia nobody controls density. people build as high and as thick as they want, which results in tracts of 3-4 storey buildings like we see in dilli with common side and back walls. is this approved? should there not be min 2-3' gap at the sides?

Sir ji,
2,3 inches will add up to Billions of $ loss in place like Dilli, Bombay. My young nephew in Delhi tells me the real Estate has almost trippled in last couple of years.

kmkraoind · Post by **kmkraoind** » 01 Dec 2011 10:27

HDIL sells off prime plot at 42 crore loss - TOI

It seems land for speculative and investment buying had ceased.

Vipul · Post by **Vipul** » 01 Dec 2011 22:21

Any expert advice on when would be an appropriate time to invest in a down market?

rohitvats · Post by **rohitvats** » 01 Dec 2011 23:25

kmkraoind wrote:HDIL sells off prime plot at 42 crore loss - TOI

It seems land for speculative and investment buying had ceased.

From the article -

"HDIL management had told us that the land was sold at Rs 105 crore. Considering they have to service a huge loan of Rs 3,820 crore, a loss of Rs 10 crore is understandable in such bad markets. But Rs 29 crore less than the original price is a bit too much,'' said a property consultant.

That sir, is the operative sentence in the entire report. And this is a situation staring many a developers in the face. DLF needs to service 7,000 Cr debt, yes, 7K Cr by March 2012. Just wait and watch. You'll see more such deals.

VinayB · Post by **VinayB** » 05 Dec 2011 22:00

Vipul wrote:Any expert advice on when would be an appropriate time to invest in a down market?

When you find a market that is down

After 2007 there was supposed to be a down market in Bangalore. That was during the time of sub-prime in US. But prices did not go down. Prices stayed at those levels upto 2009 and then started to rise again.

This is my observation -
- when big builders launch projects, they sell initial stock at pre-launch and launch offers. Soon after they hike prices by 30-50% (possibly after they meet their projected cost)
- the big projects take 2-3 years to complete. There are always delays. The buyer bears the cost of the delays.
- During this time the prices may stay flat, upto the stage of completion / handover.
- during this time speculative buyers will also be selling. some builders impose a cost on these sellers (cut in their profit)
- at the time of completion you will find units from the builder himself, and from the speculative buyers, at the rates that were inflated shortly after launch.

So the options are
- to buy a 'hole in the ground' at pre-launch / launch prices and take the risks. Risks are - project delays, builder violating sanctioned plan, thus occupancy certificate getting delayed, registration delays. These are risks with a probability of 1 [*]
- buy a completed unit near the completion from the builder or a speculative buyer.

After 2007, next cycle of big builder launches happened a few months back in Bangalore. The prices have gone up by 30% since the summer.

This cycle could be broken and prices crash. But the powers will cause hyper inflation before that can happen, destroy any savings you have, and take everyone down in one shot.

[*] I know projects from 'reputed' builders that took 2-3 years for registration after the completion. During this time, needless to say, selling will be difficult - you need to find a particularly 'smart' sucker.
I deliberately avoid the term 'invest' or 'investor'.
I also suspect that there is a correlation between interest rates and these cycles, though I cant place it. Banks lend to the builders. Builders inflate prices right after launch. After 2-3 years the builders have inventory that has to be sold, at inflated prices. More supply in theory can bring down prices. Banks step in, do rate cuts, teaser loans etc. Once the suckers are locked in, banks go onto their cycle too.

Bade · Post by **Bade** » 08 Dec 2011 01:18

^^ Very nice write up. Asking price for premium row-houses with poor road connectivity 3-4 crores in B'luru. People with double income and taking home 20-40L per year surely are not the ones buying these, or are they ? Even CEO types are buying 4-5 units of 3bd apt for resale later. I would not think this segment would not want to dabble in such investments. Indian scenario is truly weird.

I heard from a sales guy that R2I types are not the feeders in the system. They might be the sucker guy who becomes the end user/owner of this cycle, described in the previous post. Locals with vast hidden incomes and cheap cost of living (relatively to the west) are making a killing for the last ten years or so. But is it sustainable ?

ManjaM · Post by **ManjaM** » 08 Dec 2011 19:12

Saar, why anyone wants to pay 4 crores for a cookie cutter row house in some god forsaken area of bluru is beyond my understanding. We recently completed construction of house(started 10 completed in 11) in Bluru on a plot that was purchased from a private party (in 09). Total project cost is about 30% of what you have quoted. Parking for 4 cars, living space, green space, solar space, etc etc all included. People need to smart up and do some math before plonking down on big ticket multi crore purchases.

Bade · Post by **Bade** » 08 Dec 2011 20:56

^^ Not everyone has the means and local connections to implement successfully a single home construction project in a reasonable time. So the builders are preying upon the non-residents and outsiders. But that alone does not explain the inflated prices. It has to do with speculative buying with black money of local biggies who remain in the background. The rates are not supported by supply and demand. Supply is being artificially curtailed to support the prices.

SwamyG · Post by **SwamyG** » 08 Dec 2011 22:00

Vipul wrote:Any expert advice on when would be an appropriate time to invest in a down market?

A. If you are very positive about long time growth of India, then the real estate is going no where but up. There will be ups and downs. But it will not tank like how it tanked in America. Because the growth and demand in the two countries are different. Do you believe India has reached critical speed and threshold, where it will continue to grow irrespective of how desi IT companies prosoper?

B. The answer to question (A) will decide the next decision. If you are positive, don't time the market unless:
B.1 You are looking for a quick entry and exit - like a day trader. That is you are trying to flip houses. Buy low and sell high.
B.2 If you are looking beyond say 10+ years of holding the property. A few lakh rupees here and there won't matter

B.3 What kind of personality do you have? Are you the sort of person who is (1) Ready to suffer a few lakhs on a long term profit (2) Ready to spend lots of time to squeeze every rupee from the market turning them into profit?

RamaY garu: Ramky Estates in Gatchibowli flat is done. We will get possession soon enough

Just a delay of one year.

Vipul · Post by **Vipul** » 08 Dec 2011 22:22

Thanks SwamyG and VinayB for your replies.A lot of points to consider.

vera_k · Post by **vera_k** » 09 Dec 2011 13:12

Bade wrote: I heard from a sales guy that R2I types are not the feeders in the system. They might be the sucker guy who becomes the end user/owner of this cycle, described in the previous post. Locals with vast hidden incomes and cheap cost of living (relatively to the west) are making a killing for the last ten years or so. But is it sustainable ?

Yes, the R2I theory has always been a suspicious one. Indian construction has much to evolve, what with basics like drywall, heating, cooling, insulation being absent in even "premium" homes. That pretty much guarantees that most of the demand is from locals.

krishnan · Post by **krishnan** » 09 Dec 2011 16:23

Its the local people who have benefited a lot esp those who have good contacts.

Like our milk man who sold his land , used to bring us milk in his mahindra scorpio

Vasu · Post by **Vasu** » 02 Feb 2012 12:18

CBI charges Emaar with financial irregularities

Delhi-based real estate developer Emaar MGF has been accused by the Central Bureau of Investigation (CBI) for allegedly committing financial irregularities through stated sale of plots at grossly undervalued price in the 358.36-acre joint venture Emaar Hills Township Project (EHTPL) in Hyderabad.

While the accusations center around the sale of villa plots covering 36 acres, the CBI says that the larger scam involves the reduction of the equity stake of the state-owned Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to 6.5 per cent from the original 26 per cent in the project.

The CBI yesterday arrested AP government's principal home secretary BP Acharya for his role as vice-chairman and managing director of APIIC in facilitating both.

The investigating agency had already arrested Emaar MGF top official and ex-CEO of EHTPL GV Vijayaraghavan last week. He was named as an accused.

The CBI is going to file a charge-sheet in the case tomorrow. A senior CBI official said, “All aspects of the case are being looked into. There is a case of conspiracy between the company and the government. There has been exchange of favours between the two parties.”

According to the CBI officials, Emaar was made a conduit by government officials for providing favours to certain parties. “Emaar was given land at a nominal rate and a blind eye was turned at them when they were giving bungalows and villa plots in an unfair way,” a CBI official said.

RamaY · Post by **RamaY** » 02 Feb 2012 21:07

SwamyG wrote: RamaY garu: Ramky Estates in Gatchibowli flat is done. We will get possession soon enough Just a delay of one year.

Congrats SwamyG garu. I hear the Lanco (which started a year earlier than Ramky) is also at the same status. So you did good

RamaY · Post by **RamaY** » 02 Feb 2012 21:10

vera_k wrote: Yes, the R2I theory has always been a suspicious one. Indian construction has much to evolve, what with basics like drywall, heating, cooling, insulation being absent in even "premium" homes. That pretty much guarantees that most of the demand is from locals.

Indian climate and construction method (brick walls) do not need these funny things like drywall (it is required as a fire insulator on wooden frame), heating/cooling - if you have a nice roof garden you really do not need this cooling and heating in most of India.

Theo_Fidel · Post by **Theo_Fidel** » 02 Feb 2012 22:38

Drywall is technically not a insulator or a fire barrier. What it does create a hollow wall that can then be insulated. In Indian heat insulated houses will be required if A/C becomes standard as seems likely. It is also cheap, light and extremely fast to put up with little labor. Fire rating comes when it is part of a full system with fasteners, treated studs and non-combustible barriers.

A well insulated U 0.05 (R-20) 450 sqft apartment can be kept at 22c year around with a single 1-Ton A/C. Actually even 0.5 ton if the openings are properly sealed. Many of those window A/C's in India are 1.5 ton and horribly wasteful as the windows are not sealed and the walls uninsulated.

This is the odd thing about India. We often suffer needlessly.

Vipul · Post by **Vipul** » 05 Feb 2012 04:52

India to get index to assess trends in housing sector.

By March-end, the government will, for the first time, get a clear picture on the trends in the housing sector and its contribution to the economy when India gets its first Housing Start Up Index (HSUI) — a measure of housing construction activity in the country.

A joint initiative of the Reserve Bank of India and the Housing and Urban Poverty Alleviation (HUPA) ministry, the first set of data for ten cities is expected to be released by March end. Initially, HSUI will be released on a pilot basis for just ten of the fifty Indian cities.

The index will come up every quarter and will be based on data of newly built residential units in urban India 2007 onwards. The index will measure the change in the level of activities in the housing sector and identify the growth/recessionary tendencies in this and related sectors of the economy.

“The number of housing starts during a period indicates the demand and supply situation in the housing market, as reflected in the conversion of the building permits into actual starts. They are considered as the lead indicator of economic activities because of their strong forward and backward linkages,” said a ministry official.

About 275 industries like cement, steel, etc are dependent on the construction and housing sector. It generates a lot of employment. “The index will help in indicating whether the economy is booming or going down,” added the official.

At present only five other countries – United Kingdom, United States, Australia, Canada and Brazil have a housing start up index of their own.

“We have completed the survey in eight cities. We are in the process of analysing the data,” said an official.

The coverage will be expanded gradually to include all cities/ towns having a population of more than 1 lakh. The cities for which figures will be released in March include Faridabad, Bangalore, Vishakhapatnam, Kolkata, Nagpur and Pune.

RamaY · Post by **RamaY** » 05 Feb 2012 06:48

Theo_Fidel wrote: A well insulated U 0.05 (R-20) 450 sqft apartment can be kept at 22c year around with a single 1-Ton A/C. Actually even 0.5 ton if the openings are properly sealed. Many of those window A/C's in India are 1.5 ton and horribly wasteful as the windows are not sealed and the walls uninsulated.

This is the odd thing about India. We often suffer needlessly.

That is interesting info. Thank you.

sum · Post by **sum** » 12 Feb 2012 14:08

^^ Could any kind soul explain what is a Khata and a Occupancy certificate and is it a must have document if i am buying a apartment which is a re-sale ( i.e, already bought by someone and then being sold to me)?

Yogi_G · Post by **Yogi_G** » 18 Feb 2012 13:29

Learned maulanas, is it good time to buy real estate in Chennai? Well actually somewhere near Madhurantakam. Been out of touch with real estate prices for a bout 2 years now so plz let me know if I should seriously consider or wait for some more time?

Singha · Post by **Singha** » 18 Feb 2012 21:17

in my opinion if you look at 60x40 or 60x80 plots in the BDA layouts of BLR that came up in last 10 yrs - parts of Kmangala, HSR, HBR, HRBR layouts, the vast majority will be local people with ancestral wealth, hidden income, high legitimate income etc and not ITvity r2i types. most of these bigger plots feature homes with premium std of construction and interior work and sport atleast one good car in the garage many having 2 cars or a couple of bikes.

a whole host of korrupt govt officials incl police and ministers/MLA types have built magnificent homes in these layouts, it always comes in the news when Lokayukta does a raid periodically...nothing is known what happens to these thieves of public money - do they carry on, are they suspended, are they prosecuted (doubt it)..... ?

many of these properties (some have multiple in blr and plots of land in villages and smaller cities) are in names of wife, siblings, shell cos....1 kg of gold and 10kg of silver plus 1-2 cr of cash seems to be lying around casually in the house itself

thick cage of steel rods engulf the houses and boundary wall on all sides to protect against hawks , have nots and thieves swooping in for a strike.

Bade · Post by **Bade** » 19 Feb 2012 04:20

Indian real estate prices are not being driven by hapless R2I types or even never to return NRI's from distant non-gelf lands, it is all internal from HNI individuals and the other corrupt lot. B'lr is a prime example of that. Delhi and Mumbai can only be worse. No idea what is driving Kolkata real estate prices. Chennai must again be the rampant corruption that goes with every deal made there. I read somewhere that there is a 15% price drop in Kochi and Ahmedabad over the last year, perhaps due to all the overbuilding that has happened in the last decade.

Singha · Post by **Singha** » 19 Feb 2012 08:21

indeed it would be hard to find a top govt official without atleast 3 flats, 1 house, 3 plots of land, 2 kg of solid gold and several crores of cash in family accounts. this is the bottom of the pond level - people like police sub inspectors, RTO official, panchayati secrectary types have such wealth.....the big fish are out of sight and do more sophisticated stuff like setting up charitable, edu and religious trusts to launder and buffer their 100s of crores deftly, JVs with top builders etc.

top doctors and lawyers also make big money here. and its easy for them to maintain multiple books in collusion with the CA and heavily under report their income. CA probably gets a cut of the proceeds saved.

doctori and lawyeri is like a 'tournament' system - the top 5% guys make 80% of the money, the rest 95% make very poor money and share the 20%. I have a relative young doc in blr residency in a pvt medical college who makes slightly less than a security guard.

Bade · Post by **Bade** » 19 Feb 2012 19:54

In KL the docs make lot of money. Almost everyone, and this has been going on for the last 30 years at least when gelf money poured in to maintain family left behind. The docs own multiple plots ( farmable ones not 20x30 types) all over the state. The more successful ones own large tracts in the hills too and run resort business.

I am told in Blr, the BDA layouts gets allotted to retired KA govt officials in preference to general public every time there is a new layout created. They then resell them at inflated market prices. It is an inside job done legally. Such is the state of rape in India, we do not need any outsiders to rip our wallets. Satyameva Jayate only on the surface !

Singha · Post by **Singha** » 19 Feb 2012 21:35

there is a rule that BDA plots can be given in allocation by Govt only to 10+ yr residents. this automatically excludes the newly settled crowd who can at best buy in resale at inflated prices as you said. some r2i types from KT still manage to get in via relatives who are based here, the rest are out of luck.

in resale the prices are very steep from word go , perhaps something like 4000+ sq ft...and later 10,000+ sq ft for the land alone.

@5000/sq ft for a 40x60 plot thats 1.2cr for the land alone - effectively putting it out of reach for 90% of buyers... people find it better to buy a flat with ameneties than a 40x30 plot with no sunlight, hemmed in on all sides and 2 ft separation in the sides...

also they have failed to keep pace with even the demand from local people and not formed any big layouts in last 7-10 yrs atleast....lakhs of people file their names and some kind of lottery is supposed to be held. this when BLR has no real geographical or river obstacles to expanding in any direction esp north and east....no new ring roads (plans on paper) and no BDA layouts.