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Guideline Values of 2012

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Guideline Values of 2012

Last updated: April 11 2012
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  • #11

    #11

    Re : Guideline Values of 2012

    Doesn't the hike in guideline value going to push the market value up? This might reduce the market crowd and in turn reducing the demand thus pulling the market price down later, looks like an cycle to me. Is this what expected? I'm just shouting out louder so others can shed some light.
    Does this happened when Govt increased the guide line value last time?

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    • #12

      #12

      Re : Guideline Values of 2012

      Regarding New Guideline Rates in Chennai

      I am finding it amusing that the government has hiked the guideline values for the lands in Chennai. On one end, the government is ensuring that it cashes in on the Real Estate boom and taking its share of the black money that has been pouring like a thundershower. On the other end, homes that were already well out of our reach have now gone skyhigh in prices.

      I wish to ask all the bullish and bearish people here some simple questions.

      1) How many of you can afford to pay a EMI of 30-35k over the next 15-20 years????

      2) How many people in Chennai have an income above 30,000 Indian Rupees (INR)?

      3) If IT people are driving the boom, how come people like my manager, who earns above 24 Lakhs per annum gets frustrated with the landrates and buys a land in his hometown?

      4) As per Economic Times, only 2% of the IT folks in Chennai can really afford to own a decent home 1400-2000 square feet home in Chennai. While I understand that this statistic is a bit exaggerated, I have seen in my neighbourhood that around 25-30 projects have remained unsold, yet the developers hiked the rates from 3400 (March 2011) to 4200 per sq.ft (Latest rates). If there are no buyers, how can the rates be increased at 800 per sq.ft?

      5) When I asked the above questions to my IT colleagues, they greeted it with a sarcastic laugh and told me that most IT families comprise of working couples. So, at an average, an IT couple will earn around 50-60k per month or more and hence they can easily afford homes priced around 34-40 lakhs. My question is that considering that an IT couple, say A and B, earn around 70k per month. Let's say their income post tax is 55k (This is the highest takehome achievable at current tax slabs).

      If they bought a flat/house priced at 35 lakhs (THat's the minimum amount required to buy a 800-900 square feet flat in Chennai today), they will have to pay an EMI of minimum 35k. So, they have only 20 k (55000-35000) for their monthly expenses.

      Considering the couple have installed AC, Washing Machine, System, etc, their electricity bill would easily come to around 2k per month, add a groceries and other expenses to around 6k, they only have 14k remaining.

      Since most of IT folks have a car, considering they bought the car without a loan, they would atleast spend 1.5 - 2k for their car. So, they have only 12 k remaining.

      Now, considering the fact that the salaries are raised at 5-10% every year, and also considering that inflation is already around 10-15% every year, all the salary hikes are neutralized by the rising prices...

      If the couple have a child, the expenses increase around atleast 3-6 k for the first 3 years and more than 10k once the child joins school.


      So, considering the above IT scenario, an average IT family can barely afford a 35Lakh flat. Since IT folks form only 10% of the population, we can easily estimate that 35 Lakh is the highest affordable ceiling for an average Chennaite. Anything above is expensive.

      Now, finally, I ask my question?

      Is Chennai realty really afforable? Do IT people really have the power to purchase homes and complete their loans till the last EMI?

      What is the guarantee that another recession won;t come?
      What is the guarantee that your realty prices will appreciate further. Come one, already lands are going at prices well over crores of rupees, our salaries are increasing only by 10%, also inflation ensures that we save more to buy more?

      Please think and reply.

      Kindly do not come back with the IT Salaries will increase bullshit. FYI, I work in a highly reputed MNC. Salaries here only increase around 5-10% per year.......

      Comment

      • #13

        #13

        Re : Guideline Values of 2012

        No no. Its as simple as that. they pay the 50% from their parents or in-laws resources. so it becomes easy for them to buy. here in KK Nagar, Ashok nagar, T Nagar,there is no flat less than a crore available and all r getting sold too. esply al those who bought the flats in outer parts of chennai are coming bak to city atleast by selling the old one

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        • #14

          #14

          Re : Guideline Values of 2012

          Suppose the guideline value of a 2400 sq.ft plot has been increased from Rs. 300/- to Rs. 700/-. Value of the property increases from Rs. 7.20 lakhs to Rs. 16.80 lakhs. Earlier, you would be paying stamp charges of 6 % on Rs. 720000/-, which is Rs.43200/-. Now under the new rate of 5% on revised guideline value of Rs. 16.80 lakhs, the stamp duty works out to Rs. 84000.-. Mind blogging?

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          • #15

            #15

            Re : Guideline Values of 2012

            Originally posted by radnats View Post
            Suppose the guideline value of a 2400 sq.ft plot has been increased from Rs. 300/- to Rs. 700/-. Value of the property increases from Rs. 7.20 lakhs to Rs. 16.80 lakhs. Earlier, you would be paying stamp charges of 6 % on Rs. 720000/-, which is Rs.43200/-. Now under the new rate of 5% on revised guideline value of Rs. 16.80 lakhs, the stamp duty works out to Rs. 84000.-. Mind blogging?
            Thanks sir .. anyways majority of the time Market price does not match with the old guide line value.. in that case they will consider the stamp paper for which ever is higher ... anyways we are paying high .. please correct me if I am wrong.
            since the paper charge from 6 - 5% reduction will it help the buyers from middle class hopefully.

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            • #16

              #16

              Re : Guideline Values of 2012

              snt2011 said: No no. Its as simple as that. they pay the 50% from their parents or in-laws resources. so it becomes easy for them to buy. here in KK Nagar, Ashok nagar, T Nagar,there is no flat less than a crore available and all r getting sold too. esply al those who bought the flats in outer parts of chennai are coming bak to city atleast by selling the old one


              @SNT2011: I am afraid you are just partially right, buddy. Many parents in Chennai do not own houses and therefore, they cannot provide the required funds to support their children. But yes, parents can and will support their children by providing their life savings - Which normally amounts to 6-8 lakhs. Some parents would have bought plots during the late 80s, 90s, and during the early 2000s. It is due to their investment that many young people blindly get the courage to pay the initial amount (6-8 for the EMIs). It is exactly the reason why many flats with high prices still get sold. People do not realize the dangers of investing in a property, whose price has already reached breakeven point.

              As you said, properties within the city are worth crores, I agree. But the problem is that builders have not even spared the suburbs, they have raised the property values in the suburbs to astronomical values.

              For example, a few months back, I had gone to Perungalathur (Chitra Avenue), we saw a property, which was listed around 3150 per sq.feet. Then, we went to Guduvanchery (A suburb, which is almost 10 kms away from Tambaram), even there, they listed the same rate (3100 rupees per sq.feet). As we wanted a property desparately, we went even further beyond Guduvanchery only to find that all properties are listed around 2900-3100 per sq.feet.

              My question is how can two properties, which are both away from the city, have similar prices considering that fact that one property is proximate to the city while other is 12 kms away.

              Can you justify this? Just because the sixth salary commission raised the salaries doesn't mean that the common chennaite has become rich enough to buy properties at any rate. Even today, the average chennaite salary is still less than 20k. Therefore, I state that properties are unaffordable in Chennai suburbs. As for the city properties, I leave it to the experts to decide

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              • #17

                #17

                Re : Guideline Values of 2012

                its quite natural to charge more for suburbs when the city grows at such a huge rate. T Nagar costs 15K to 20K and naturally ashoknagr will become 10K and it s chain reaction and spreads like cancer. I know its a dangerous phenomenon, but it s happening in front of your eyes. but many places as u mentioned there is huge anomaly in pricing which r predominently due to some middle men too.

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                • #18

                  #18

                  Re : Guideline Values of 2012

                  new guideline

                  Hi friends -- i have a big doubt regarding registration charges -- actually while registering till now the practice is 8% + 1% but u r mentioning as 6%.

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                  • #19

                    #19

                    Re : Guideline Values of 2012

                    Your point is agreed buddy. But why do they charge us an astronomical sum when their flat occupation rate is lesser than 30% in the suburbs. If you are asking me to shell out money, better show me value. Why should I pay 30 Lakhs for an apartment, which I donno whether would be built or not. You cannot trust promoters these days as most of the properties are UNDER CONSTRUCTION..... Once you pay the initial amount and process the home loan trusting these guys, you are almost landing yourself in their jail till they give you the flat. They will milk you dry of every paisa that you have.

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                    • #20

                      #20

                      Re : Guideline Values of 2012

                      Originally posted by sriram1982 View Post
                      Hi friends -- i have a big doubt regarding registration charges -- actually while registering till now the practice is 8% + 1% but u r mentioning as 6%.
                      That is right sriram1982 and I too have the same question in my mind and guess some one would be able to shed more light

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