mumbai_realestate

The percentage of ready to move yet unsold residential property is more than 3.5 per cent out of total unsold residential inventory in the MMR (Mumbai Metropolitan Region) and Navi Mumbai, as per the latest report released by CREDAI (Confederation of Real Estate Developers Association of India) and JLL India. However; the total estimated value of ready to move residential inventory is more than Rs. 2,430 crore. From last 30 months, inventory level is continuously increasing in Mumbai Metropolitan Region. Housing inventory level is increasing to record level and it’s just due to the weak sales and unaffordable property prices even than when real estate developers are offering lucrative discount and schemes such as; big discounts, foreign tours, free cars, free ACs, free parking space and more.

In Navi Mumbai, the percentage of completed flats and apartments, which are still waiting for owners or buyers are at 8.13 per cent of the total unsold residential inventory. In Thane and Mumbai, 1.33 per cent and 1.10 per cent of the total unsold residential apartments or flats are ready for possession. According to report, these inventories are overhang in Mumbai Metropolitan Region including Navi Mumbai and Thane from the duration of more than 30 months. There are total 3.35 per cent or 2,600 residential units are available as ready to move inventory out of total 77,460 residential units, which are available in Mumbai, Thane and Navi Mumbai. Currently there are total 5,311 residential units available as unsold inventory which have price more than Rs. 5 crore and about 17,000 residential units have price between Rs. 2 and Rs. 5 crore, however; more than 35,700 residential units have price between Rs. 65 lakh and Rs. 2 crore whereas; 19,500 residential units are priced below Rs. 65 lakh.

According to Ashutosh Limaye, National director of research at JLL India, “For the real estate market of Mumbai there are slow absorption rate because currently buyers are holding their purchasing decisions as they are expecting little more correction in the weak real estate market. It’s just representation that how buyers are showing interest in the completed residential projects. These days real estate market is becoming the end user driven and investors don’t have longer funds to invest in real estate market to get the high rate of return”. The reason behind slow sale of residential unit can be the more price of these 2,600 residential units as they have price more than Rs 1 crore, which is unaffordable for normal Mumbaikars as most are from middle class. However; real estate developers are thinking that they are offering affordable and reasonable ticket sizes and this price is justified as per market conditions.

Suburbs from Goregaon to Vile Parle have more than 205 completed ready for possession unsold units which have price more than Rs. 2 crore. However; the areas where residential units have price below than Rs. 65 lakh are emerging as one of the most affordable region in Navi Mumbai and these areas are; Dronagiri, Karanjade and more which are far away from suburbs off Ghodbunder Road in Thane. In present, some of the real estate developers are already accepts the demand of consumers. Now it’s time when real estate builders should realize that buyers are ready to buy residential projects, but developers should stick to their construction deadlines and they have to complete whole project at correct time.

Even after completion, real estate developers are taking at-least six month of time to sell their entire inventories. As per recent data there are 18 per cent buyers are investing money in starting of project however; 27 per cent buyers are investing money in real estate market near the completion period.

Under-construction _ property

Whenever any end user buy property from under construction project directly from investor, so its means that indirectly he is willing to enter into the multi-party transaction. And sometimes it can be complicated, so it’s recommended to know some facts before entering into it. If you are buying property from investors, so deal will not the same as you do while buying property from real estate builders. If any property investor want sell his own under-construction property to any buyer or end users to earn profit, so he have to transfer all the property rights to new buyer in exchange of money. However; whole transaction needs builder to be the part of deal as in starting buyer will neither get the possession of the property nor all rights about the property. This tripartite deal known as the “Assignment Deal” (Assigner, assignee and builder).

Most of the people are unaware about these kinds of deal because its bit complicated as it involves multiple transactions. Sometimes it become stressful and so people need to get alert before entering into any deal with investors. Most of the buyers (assignee) don’t know that they have to deal with other parties too, if assigner or seller has taken loan for same property, so it could be bit more complicated because formalities will also includes closure of the assigner’s loan. Before entering in these kinds of deal you should ask these questions;

1. How much money for property are still dues?

You can ask to builder to show up the statements of account, where you will be able to see the made payments with dates and you should also get the instrument numbers to get the lending. If there is any unaccounted payment, so never consider it until builder is showing you receipt.

2. At the time of inception of the project, what was deal cost between builder and investors?

For fresh buyers it is important to know that actual price of deal at the inception of the projects and he or she should also get the documents such as; copy of deal sale agreement or sale agreement between seller and the builder. If you are planning to take loan, so you need to submit these documents. However; some seller never disclose these facts, but you need to understand that it’s mandatory.

3. There are any pending dues or not?

Ask the seller that there are any pending dues or not because it can attract the large amount of penalties during possession if you will do delay in paying those dues. And in that case builder will charge on new buyer with interest rate.

4. If assigner is struggling with home loan problem, so clear that he will pay or new buyer will pay that home loan.

If seller has taken the home loan while buying same property from builder, so you need to close the loan the issue. You can do it in three ways;

• Seller pays his all funds.
• Seller asks buyer to pay the whole loan as a part of agreement.
• Buyers bank pay to the seller banks. This process is not so easy because product is not available with banks at this point of time.

5.  There are any other loans or conditions with property?

If property is attached with any other condition or loan, so better to clear the loan issues and conditions because if seller will not disclosure these things so you will not know about it. In India, we can search for loan and property of individual, but still there is no facility to search for the collateral created in a property.

6. What should be the penal clause, if assignee backs out from dues?

•    No fund arrangement from self-source
•    No loan eligibility 
•   Any other personal reason

It doesn’t seems to important at time when everything is going good, but its better and recommended to include it as a clause in Memorandum of Understanding to get clarity and basic understanding.

7. Who will be responsible to transfer the fee to builder and at what stage?

In normal conditions, sellers are used to pay the transfer charges, but still there is no rule back so better to clear this because sometimes buyer & seller both avoid paying the changes or they start bargain. The most important thing which matters in transaction is speed through which all parties pay their fees or amount because there will be following parties;

• Assigner
• Builder
• Assigner’s lender
• Assignee’s lender
• Assignee