06-11-06
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#6
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New Member
Join Date: Oct 2006
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will the buyer's benefit?
Yes, you are right to some extent. But the builder's next move if the policy is implemented has been anticipated and is the latest storm in the cup now... 
Quote:
THE new draft housing policy unveiled by the State government on Wednesday may have made buying a house easier, but it comes with no monetary difference for the buyer. For, to compensate for the revenue loss due to ban on including built-up or super built-up area, the builders will increase the rate per square foot of the carpet area. "To adjust the revenue loss, the builder will simply increase the rate per square foot," Lalit Kumar Jain, convener, Confederation of Real Estate Developers Association of India (CREDAI) and Kumar Builders chairman, said.
The reason: The built-up or super built-up area adds as much as 25-35 per cent of the total area of a flat. So, in actual terms if a person buys a 1,000 sq ft flat, the carpet area is a mere 650-750 sq ft, while the person pays for the entire 1,000 sq ft. To put it in monetary terms, if a person buys a 100 sq ft flat at the rate of Rs 80 per sq ft, the total cost of the flat works out to Rs 8,000. However, the customer gets only 80 sq ft carpet area with the rest going for built-up and super built-up areas. But the draft policy has made it clear that the builders can charge only for the carpet area. Hence, if a customer buys a flat with 80 sq ft carpet area at Rs 80 per sq ft, the customer has to pay only Rs 6,400 and not Rs 8,000 for the flat.
This had led to speculation in the market that the house would cost less. But the reality is that instead of Rs 80 per sq ft, the builders will now raise this to Rs 100 per sq ft, thereby having no change in the price for the customer. But if the customer wants to go for a 100 sq ft carpet area flat, the customer will have to shell out Rs 10,000. However, a section of the builders said they had been following a carpet area-based pricing strategy for the past few years.
Source: Pune Newsline
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