Well said wiseman & sansei.
Wiseman, agree with what you say but who jacked up the RE rates including land at first place? Builders. The price of flats went up & thinking that prices will always go up, builders wanted to sell as much as possible, hence they bought land at higher cost as the land owners then started demanding their pound of flesh from the builder.
Hence,
High cost of flat>> Increase in land price>> Increase in flat prices.
It is a viscous circle.
Today, the value of land banks given as collateral by big builders like DLF,Omaxe, Unitech etc. has fallen by over 55%. DLF even sold it's land at much cheaper cost than market price in May 09.
In Baner. a plot which was going for INR 2100/sq ft is now available for INR 900/sq ft!! Similar cases are there even in eastern parts of Pune.
Builders can still make flats at 15L even today, what they won't earn is the 300%+ profit which they make.
* Most of the builders had purchased land at throw away rates before the boom period! Areas like wakad & Balewadi had price of sub-INR 100 sq ft for land. Not to forget agri land purchased at even lower rates & later converted to NA.
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