Hi Friends

Recently there have been so many flats launched in Sec 75-78. The count may be close to 50000 with about 16000 in Gardenia + 8000 in Silicon City & Princely estate etc. Add to it about 1,00,000 flats in Noida Extn.
Almost all of them will be delivering by 2012 end (best case scenario as promised).
Here is a different view I have adopted to avoid entering the booking game:
1. Everything is in the Air - Barring a few, even Bhumi Pujan hasnt been done for most of the plots. No Bank funding yet (which sets the timer of 30 months). Who knows when the work will start and when would it complete.
2. No clue of the final look - everything is promised to be a dreamland but what if things turn out ugly later on. May be another shabby Indirapuram in the making
3. Infrastructure - About 1.5 lakh new houses would mean 6 lakhs+ people. Are we ready with Electricity, Water, Schools, Hospitals etc?
4. Price Wars & Confusion - Even though things are a bit cheaper today, there is so much of confusion. One can never be sure to get the best deal for the best apartment.
5. Supply and Demand - With about 1.5 lakh flats coming up and being delivered at almost the same time, there would be a huge supply around 2012. It will definitely bring down the price of all flats, even the ones in developed areas like sec 50, 51 and 62. One might get a better deal then.

Hence I am planning to take the flat only later on in 2012. It might cost me a bit more, but atleast I will have all the options available. I can view the societies, their facilities, their finishing, location, flat location, metro existence etc.

No offenses meant to people who have already booked, but its just a lateral thinking post which might interest some members.

All the best to All

Regards
Buzzz
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  • Originally Posted by rdwasnik_2009
    Hi Munish,

    nice to see your points. Just let me correct you on calculation of difference in cost of booking an under-construction flat and ready-to-move-in flat. I'm taking all the parameters same.

    Scenario 2 Buy flat today
    Total Additional cost = 6 Lakhs Only (not 12.5 Lakhs)

    1 (Loss on Bank FD) + 3 (Rent Paid) + 0.5 (Tax to Govt.) + 1.5 (Max avg tax amount which could have been saved on 6 lakh principle+interest under Section 24b and 80C) ]

    other costs written by you will be anyways paid by the buyer only.

    Conclusion
    Under-construction flat purchased for Rs 25L is equivalent to ready-to-move-in flat of 31L as of today.
    So if rate of flat appreciates to 40L, that means one need to pay 29% extra to get it.

    Well this is just a calculative monetary illustration, there are other pros and cons as mentioned by other members.

    Raj

    I had taken a hypothetical figure, actually it will come to 7.5 lacs.
    6L lacs Loan Interest+ principle in 2.5 years on 20Lacs loan. The interest component is maximum at the start.
    1 lac for FD interest
    50K as taxes
    Rent will be common so no need of adding into cost. Regn charges can also be removed.
    Hence hit is 6+1+.5=7.5 Lacs.
    The difference is 24%. now this is only if the flat appreciates to 4000.
    In 30 months paying 24% is also still not worthwhile for someone who has limited resources and is looking to stay . the flat appreciates to 4000.
    In 30 months paying 24% is also still not worthwhile for someone who has limited resources and is looking to stay . the flat appreciates to 4000.
    In 30 months paying 24% is also still not worthwhile for someone who has limited resources and is looking to stay . the flat appreciates to 4000.
    In 30 months paying 24% is also still not worthwhile for someone who has limited resources and is looking to stay . the flat appreciates to 4000.
    In 30 months paying 24% is also still not worthwhile for someone who has limited resources and is looking to stay .
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  • Delaying your flat purchase by two years is a good idea, following points shall be considered

    1) If end users are staying in rented accommodations and if they move to their booked flats then also there will be many previously rented accommodations available.

    2) Projects can be evaluated better after the construction and lay out is finalized.

    3) This strategy keeps the risk of builder default out.

    4) Huge supply will hit the market, but if economy grows much of it might be absorbed.

    5) Prices are not flying away in two years at least in Noida.

    6) One should be prepared to pay around 20 percent extra in case he chooses to delay the purchase.

    7) He may loose the advantage of location/floor.

    8) One should remember demand for urban housing is increasing and will continue to do so even if there are some downturns in economy.

    9) Interest rates will be almost at peak after two years.

    10) Rewards are generally associated with the risks taken. Hence percent appreciation after two years will be less than otherwise.
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  • Originally Posted by Munish Malhautra
    I had taken a hypothetical figure, actually it will come to 7.5 lacs.
    6L lacs Loan Interest+ principle in 2.5 years on 20Lacs loan. The interest component is maximum at the start.
    1 lac for FD interest
    50K as taxes
    Rent will be common so no need of adding into cost. Regn charges can also be removed.
    Hence hit is 6+1+.5=7.5 Lacs.
    The difference is 24%. now this is only if the flat appreciates to 4000.
    In 30 months paying 24% is also still not worthwhile for someone who has limited resources and is looking to stay .


    No no Munish, I guess you did not understand my point. When I calculated difference in costs, my assumption is that the 'home buyer' condition is same in both the cases. e.g. if a person who takes a loan today for under-cons flat, I am assuming that the person who will buy flat after 2.5 years will also take loan.
    So this 6L of interest will never get into consideration of difference calculation. Because this interest component is anyways to be paid in any case.

    But as per your post it seems like you wanna say that a person will take 20L loan for 25L flat but if he'll buy after 2.5 years he'll become rich and earn enough to pay cash of 35 to 40L in this period.
    or
    I guess you are calculating the total burden on the person not the difference of cost.

    Raj
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  • Originally Posted by Digvijay
    Delaying your flat purchase by two years is a good idea, following points shall be considered

    1) If end users are staying in rented accommodations and if they move to their booked flats then also there will be many previously rented accommodations available.

    2) Projects can be evaluated better after the construction and lay out is finalized.

    3) This strategy keeps the risk of builder default out.

    4) Huge supply will hit the market, but if economy grows much of it might be absorbed.

    5) Prices are not flying away in two years at least in Noida.

    6) One should be prepared to pay around 20 percent extra in case he chooses to delay the purchase.

    7) He may loose the advantage of location/floor.

    8) One should remember demand for urban housing is increasing and will continue to do so even if there are some downturns in economy.

    9) Interest rates will be almost at peak after two years.

    10) Rewards are generally associated with the risks taken. Hence percent appreciation after two years will be less than otherwise.


    I agree to Digvijay here. If one is having enough money, he should always go for ready-to-move in flats, mainly because of peace of mind and satisfaction.
    But only reason people go for under-const flat is lack of enough money.

    Raj
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  • Originally Posted by rdwasnik_2009
    No no Munish, I guess you did not understand my point. When I calculated difference in costs, my assumption is that the 'home buyer' condition is same in both the cases. e.g. if a person who takes a loan today for under-cons flat, I am assuming that the person who will buy flat after 2.5 years will also take loan.
    So this 6L of interest will never get into consideration of difference calculation. Because this interest component is anyways to be paid in any case.

    But as per your post it seems like you wanna say that a person will take 20L loan for 25L flat but if he'll buy after 2.5 years he'll become rich and earn enough to pay cash of 35 to 40L in this period.
    or
    I guess you are calculating the total burden on the person not the difference of cost.

    Raj


    Raj,
    i just realized that we are talking the same thing but putting it across differently:)
    When i said boss's boss, it was in sarcasm.
    we all agree that it doenst make much difference(burden on buyer) buying now or 2 yrs hence.
    yes if u continue staying on rent (forever)then it sure gives u more liquidity to spend more.... but then house buying can control and check those expenses hence becomes worthwhile.
    yes if u have cash go for purchase.
    crazy spiral.
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  • Originally Posted by rdwasnik_2009
    I agree to Digvijay here. If one is having enough money, he should always go for ready-to-move in flats, mainly because of peace of mind and satisfaction.
    But only reason people go for under-const flat is lack of enough money.

    Raj


    Raj if i have cash i would like to minimize my cost of purchase and that is only if i buy an under constructed house. A person with excess cash is normally an investor as a buyer (like me) is always running short of it:)
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  • Majority of buyers are in age range of 27-35. With my experience I can tell you that if you have debt or some other objective then you tend to save more rahter than keeping cash.

    Suppose you work in private sector and earn 50k per month.
    If you buy flat now, in 3 years or until you get possession you may pay 6 lakhs from your pocket but if you do not buy and just keep making bank FD you may save only 4 lakh.
    Rest 2 lakh you will buy something which might not required.
    It could be buying a new car or a costly while your existing car runs good and your also working well. But if you bought a flat then you might skip these as you have to pay for your flat and your objective will be to keep loan as minimum.
    There are lot more other ways which may give you better return than RE but no surity.
    JP/Unitech lot more other company offering Fd with almost 15% commulative annual return and company FDs are safer than buying flat of these companies.
    So if you have disposable income of 10 lakh buy these and get 1.40 lakh interest every year
    this will atleast cover your 75% to 100% amount of annual rent.
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  • I understand that this lack of enough cash is the sad part of the story. But I personally feel that one should go for under-const flats. Let me share my experience.
    Back in 2006 some of my relatives were suggesting me to buy a flat in Aditya group, vaibhav khand, IP. rates were around 1800. Some of my friends suggested that there will be enough supply after 3 years 'coz of 1000s of flats coming in IP and don't buy. I didn't and went to B'lore. Last year when I came back, seen a whole new story. IP rates were 3500+ despite recession.
    Same Aditya flats were almost ready (though people got possession on early 2010) and the rates were 4000. I was wondering, where the hell whole supply has gone.
    I would have stayed in my own house if I had purchased at that time.


    Raj
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  • Originally Posted by mrityunjay
    you are living in fools Paradise. now a days price of those units which will came into existence in 2012/2013, is Rs 2500-3000 PSF. On the days of possession the price will be around 5500-6000( as the price of sector 50 and 51 in now a days are Rs 5500-6000 PSF).

    so dont be in any pipe dream and book a falt b4 too late


    correction - you can easily buy sec 50 and around for 4100-4200
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  • Originally Posted by rdwasnik_2009
    I understand that this lack of enough cash is the sad part of the story. But I personally feel that one should go for under-const flats. Let me share my experience.
    Back in 2006 some of my relatives were suggesting me to buy a flat in Aditya group, vaibhav khand, IP. rates were around 1800. Some of my friends suggested that there will be enough supply after 3 years 'coz of 1000s of flats coming in IP and don't buy. I didn't and went to B'lore. Last year when I came back, seen a whole new story. IP rates were 3500+ despite recession.
    Same Aditya flats were almost ready (though people got possession on early 2010) and the rates were 4000. I was wondering, where the hell whole supply has gone.
    I would have stayed in my own house if I had purchased at that time.


    Raj


    Raj do u know reasons for that?
    -It was launched at low price 1200-1800 in 2005-06 and was started as affordable housing for middle class
    -Most of the buyers were end users

    Believe me you were lucky. not that i am against IP(i myself have a flat there).....now who wants to buy in IP at 3700-4000 as they can get same in a good locality in Noida.
    The infrastructure is pathetic there? power issues, over crowded, many projects(started in 2006) are still unfinished, invisible green spaces . I would not like to buy a flat for 50+ lacs there, i would prefer to build a villa in Noida in a new sector or a villa upcountry for my life after retirement.

    Only specific need based requirement would lead someone to move there.
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  • Every one saying that we will have 1lac or 1.5 lac flats after 4-5 years. But I really doubt this only good projects will complete during this time frame. That would be not more then 50000 flats available after 4-5 years. There would be few projects which will never complete even after 10 years. So price appreciation will always be there for good projects which are going to complete on time with good quality and good location.
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  • Now we have reached to that million dollar question...
    Who is that good builder and which is that good project where you will have your dream house?
    Originally Posted by Ajay Chauhan
    Every one saying that we will have 1lac or 1.5 lac flats after 4-5 years. But I really doubt this only good projects will complete during this time frame. That would be not more then 50000 flats available after 4-5 years. There would be few projects which will never complete even after 10 years. So price appreciation will always be there for good projects which are going to complete on time with good quality and good location.
    CommentQuote
  • ATS , 3C, logix , Mahgun , Unitech , Gulshan ..
    You can add to the list
    Originally Posted by sigma1
    Now we have reached to that million dollar question...
    Who is that good builder and which is that good project where you will have your dream house?
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  • Million $ Question... very well said sigma1 ji...
    Adding to the list of doubts we have "proposed" metro site, "proposed" sports city, "proposed" golf course, "proposed" commercial like atta...

    Not sure about a good flat, but if one would have made so many "proposes" to a girl, she might have said YES ;-)

    No offenses (its Friday night)
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  • HI all,

    I was enjoying reading good posts by the members..

    I work for a MNC in NOIDA itself. I also believe that its gud to buy the house after 2-3 years.By the way i have some Q's:

    1. People say that 1.5 lakh flats wil be absorbed since there is a genuine demand. Let me tell you that in 2008 recssion there were hardly 5000 new flats launched. In 2010 there are 1.5 Lakh flats launched. Is demand increased from 5000 to 1.5 lakh in 1.5 years ???? Its NOT. Its only the easy loans , publicity and lucrative slogans of price rise by builders that is riding this market.

    2. Is 1.5 Lakh flats going to the end user ???? Absolutely NOT. More than 50 percent are the investors. These investors will try to get out after 2-3 years even if they make 10-20 percent on there investment.

    3. Where the money is coming from ?? Everybody in my office have booked a flat in Noida,GN orN.extension by paying 1-2 Lakh DP and rest loan. I know people even with a salary of 20000 a month have booled a 15 lakh flat just thinkin of appreciation. Now , consider the current interest rates 8 percent for first 2 years. They will increase to 10-11 percent after 2 years making the EMI intolerable for most of these people.

    4. The inflation HAS ALMOST DOUBLED and most people spent their whole salaries on meeting their daily needs for food, bills , clothes etc. So these people will be in a trap after a certain time. I know many people who have just booked a flat bcoz their colleagues have booked. This is simply an absurd reason to book a flat.

    5. And suppose if there is another recession like in 2008. That will make the matter worse. All these investors and so called people who have booked on loans will sell there stuff at any price and there will be a chain reaction. That will be the right time for a good investor to exploit these people and get a right deal.

    6. Also after the commonwealth games the development projects will be on back foot and cheap labour will be readily available , thus pusing the prices downwards.

    These are only my personel views as i have seen the 2008 recession and seeing people crying after losing their jobs. One should always learn from the past and apply those in the future.
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