Loan EMIs

Are you among the people who have been waiting to get the key of their houses from past couple of years? Well Sachin Kala is indeed one such man waiting to start staying in the flat which he had booked nearly 4 years back. According to his builders, he was supposed to get his flat back in December 2013 however looks like the wait might be for more long time. He has already paid about 80% value for worth of the property and this property is nowhere close to completion. The only solace for his is that he is not the only one who is going through this. Most of buyers are going through the same problem across the country. With the builders facing financial problems, properties are not being completed on time leading to huge delay in the completion of the projects. Being cash strapped is causing problems in completing the projects. As per the review of the real estate analytics firm PropEquity, between the years 2011-2014, 3,753 projects were offered for possession in the Mumbai Metropolitan Region and out of these projects nearly 45% of them are still under construction. This problem is severe in the NCR region wherein 856 projects were up for possession and out of these projects, 78% are still incomplete and running behind the deadline. The company saw similar patterns in some of the other cities like Chennai, Bengaluru, Pune, Hyderabad, and Kolkata among others.

Reasons for the delay:

There are many reasons, which can be attributed to the delay in the completion of the housing projects. The reason being, there has been a considerable amount of decline in the demand for residential housing due to constant increasing prices of the property. During the boom period, the developers and builders have highlights so many new launches that they are now facing difficulty to complete these projects. Most of the developers are under financial problems as they have used all the money collected from the new projects towards the projects that are still not completed.

The new hope:

From the buyers’ perspective, they have a new hope in the form of the Real Estate Regulatory Bill. The bill has been targeted towards bringing out balance in the currently chaotic real estate industry and has many clauses favorable to the buyers. For example, the bill has proposed that builders and developers are required to deposit around 50% of the amount that they receive from the customer in a very different escrow account. By this way, they will be able to stop diversion of some of the funds. According to this bill, the buyer will have the complete control over their funds as they will be able to ask the developers to return the complete amount in case of the property not being completed in the promised time. At present approval has been given to the bill and it is ready to be presented in the Parliament.

Influences of delayed projects:

When it comes to a first time property buyer, any kind of delay in the completion of the project and them taking over the flat can cause them to undergo serious financial problems. Most of the times buyers will atleast anticipate a delay of about 10-12 months in the completion of the project however, none would have expected the same to go beyond 2 years. According to the reports on PropEquity, the Mumbai Metropolitan Region has seen an average delay of 25 months in the completion of the projects. The average delay in the NCR region is about 33 months. In simple, the bigger a residential project is, the buyer can anticipate a longer delay in possessing the property. Buyers who took loans to pay for the property and expected the EMIs paid to the bank to replace their monthly rents have now landed into a situation, that requires them to pay all these amounts. According to one of resident from Ghaziabad, it is very difficult to pay both the EMIs as well as monthly rental but they are left with no choice. When it comes to a double-income family, the problem remains the same. The same problem is also for the investors especially the ones who have put money towards their second or third houses. For them investment was about earning through the monthly rentals that would have easily covered up the EMIs they need to pay to the bank. Potential delay in the completion of the project can completely make the entire calculations go downslide. Even though everybody is paying EMIs to the bank, there is no sign on earning the monthly rentals.

Loss of tax benefits:

Any delay in the completion of the project means that you will not be able to avail any tax deductions until the project has been completed. Buyers look of tax deduction of about Rs1.5 lakh, which is towards the principal repayment, and a further saving of tax deduction of Rs2 lakh meant for interest on the payment. However, it is important for the buyers to have the possession on the property within 3 years of taking loan to avail benefits under Section 24. In case the buyer is unable to do the same in the span of 3 years they will end up paying tax for about Rs30,000 a year. The buyers however have one option; they can sell out the delayed property and always invest in ready to move in properties. However, they still have the roadblocks in terms of transfer fees and registration charges. People who have taken the property with the intend of renting it out have benefits as the complete interest is tax free even if the project has not been completed in the 3 years of time.

Avoid delayed projects:

Always have enough information pertaining to the construction project as well as the developers. This will avoid any problems later on. Attentiveness among the customers is the key to avoid many problems in the future. Customers can protect themselves from fraud developers and projects. Keeping a track on the record of accomplishment of the developers also avoid lots of problem in these kind of projects. Referring to online forums will help to learn about these developers and it is important to avoid investing and dealing with new groups and developers.

It is important to ensure that the developers have valid license and government’s approval to run the project. There are many instances where in developers have tried to sell out property even before they have ownership of the land. It is important to ensure that the payment of construction is linked with the stages of project completion. Customers need to ensure that they have clauses of delay in the contract and ensure that the developers do not hike the price of the property.  Never fall prey to lure or other offers which talks about big properties for lesser price.  Carefulness is everything today and especially when there is lot of money involved.

Avoid spending on projects involving EMIs

Are you among the people who have been waiting to get the key of their houses from past couple of years? Well Sachin Kala is indeed one such man waiting to start staying in the flat which he had booked nearly 4 years back. According to his builders, he was supposed to get his flat back in December 2013 however looks like the wait might be for more long time. He has already paid about 80% value for worth of the property and this property is nowhere close to completion. The only solace for his is that he is not the only one who is going through this. Most of buyers are going through the same problem across the country. With the builders facing financial problems, properties are not being completed on time leading to huge delay in the completion of the projects. Being cash strapped is causing problems in completing the projects. As per the review of the real estate analytics firm PropEquity, between the years 2011-2014, 3,753 projects were offered for possession in the Mumbai Metropolitan Region and out of these projects nearly 45% of them are still under construction. This problem is severe in the NCR region wherein 856 projects were up for possession and out of these projects, 78% are still incomplete and running behind the deadline. The company saw similar patterns in some of the other cities like Chennai, Bengaluru, Pune, Hyderabad, and Kolkata among others.

Reasons for the delay:

There are many reasons, which can be attributed to the delay in the completion of the housing projects. The reason being, there has been a considerable amount of decline in the demand for residential housing due to constant increasing prices of the property. During the boom period, the developers and builders have highlights so many new launches that they are now facing difficulty to complete these projects. Most of the developers are under financial problems as they have used all the money collected from the new projects towards the projects that are still not completed.

The new hope:

From the buyers’ perspective, they have a new hope in the form of the Real Estate Regulatory Bill. The bill has been targeted towards bringing out balance in the currently chaotic real estate industry and has many clauses favorable to the buyers. For example, the bill has proposed that builders and developers are required to deposit around 50% of the amount that they receive from the customer in a very different escrow account. By this way, they will be able to stop diversion of some of the funds. According to this bill, the buyer will have the complete control over their funds as they will be able to ask the developers to return the complete amount in case of the property not being completed in the promised time. At present approval has been given to the bill and it is ready to be presented in the Parliament.

Influences of delayed projects:

When it comes to a first time property buyer, any kind of delay in the completion of the project and them taking over the flat can cause them to undergo serious financial problems. Most of the times buyers will atleast anticipate a delay of about 10-12 months in the completion of the project however, none would have expected the same to go beyond 2 years. According to the reports on PropEquity, the Mumbai Metropolitan Region has seen an average delay of 25 months in the completion of the projects. The average delay in the NCR region is about 33 months. In simple, the bigger a residential project is, the buyer can anticipate a longer delay in possessing the property. Buyers who took loans to pay for the property and expected the EMIs paid to the bank to replace their monthly rents have now landed into a situation, that requires them to pay all these amounts. According to one of resident from Ghaziabad, it is very difficult to pay both the EMIs as well as monthly rental but they are left with no choice. When it comes to a double-income family, the problem remains the same. The same problem is also for the investors especially the ones who have put money towards their second or third houses. For them investment was about earning through the monthly rentals that would have easily covered up the EMIs they need to pay to the bank. Potential delay in the completion of the project can completely make the entire calculations go downslide. Even though everybody is paying EMIs to the bank, there is no sign on earning the monthly rentals.

Loss of tax benefits:

Any delay in the completion of the project means that you will not be able to avail any tax deductions until the project has been completed. Buyers look of tax deduction of about Rs1.5 lakh, which is towards the principal repayment, and a further saving of tax deduction of Rs2 lakh meant for interest on the payment. However, it is important for the buyers to have the possession on the property within 3 years of taking loan to avail benefits under Section 24. In case the buyer is unable to do the same in the span of 3 years they will end up paying tax for about Rs30,000 a year. The buyers however have one option; they can sell out the delayed property and always invest in ready to move in properties. However, they still have the roadblocks in terms of transfer fees and registration charges. People who have taken the property with the intend of renting it out have benefits as the complete interest is tax free even if the project has not been completed in the 3 years of time.

Avoid delayed projects:

Always have enough information pertaining to the construction project as well as the developers. This will avoid any problems later on. Attentiveness among the customers is the key to avoid many problems in the future. Customers can protect themselves from fraud developers and projects. Keeping a track on the record of accomplishment of the developers also avoid lots of problem in these kind of projects. Referring to online forums will help to learn about these developers and it is important to avoid investing and dealing with new groups and developers.

It is important to ensure that the developers have valid license and government’s approval to run the project. There are many instances where in developers have tried to sell out property even before they have ownership of the land. It is important to ensure that the payment of construction is linked with the stages of project completion. Customers need to ensure that they have clauses of delay in the contract and ensure that the developers do not hike the price of the property.  Never fall prey to lure or other offers which talks about big properties for lesser price.  Carefulness is everything today and especially when there is lot of money involved.

If you want to own a home, so this festive season is great time to buy your dream home and save money to celebrate this festive season in best way. Real estate developer and builders are offering the great discount and offers more rampant as Q3 of the year draws to an end and Q4 is about to start. Few buyers are  positive with real estate investment but others still thinking, is it right time for investment and own a dream home? In India the festive season has always been the special period for real estate sector, as builders and developers offers the great discount and deals with various freebies on the time of purchase. And this time investors or buyers are also looking for best deal.

This time festive season is expected to be much positive than previous three years. In market there are a lot of unsold inventory due to low buyer sentiments, thus some areas with the significant of unsold inventory such as; exteriors of Gurgaon, Greater Noida, Noida, NCR, Navi Mumbai and Thane are expecting to witness lucrative deals and witness various. Many builders are concentrating on positive number games by offering various offers such as; promotional schemes during the launch time and early bird discount and more. If you are one of the buyer so you should expect the following offer or incentives in this season:

•    Free club membership
•    International or national travel vouchers
•    Cash discount
•    Brokerage discounts
•    Free car parking space
•    Discount on registration fees and stamp duty
•    Gold coins or cash back
•    Free car
•    Free appliances or home amenities such as; modular kitchen, air conditioners and more

But is also expected that, this time developers may not offer above mentioned deals and discounts, as this time developers seems to be more focused on  the fundamentals, and they can negotiate on the pricing rather than providing free gifts and offers. It is amply clear from the other festive offers that presently positive current is floating in the market. In Delhi or NCR, most of the developers are offering Possession Linked Plans (PLPs) as the part of a festive deals wherein, multiple schemes (30:30:30, 30:70, 25:75, 10:90) are 10:90. Many developers are also planning to let go the EMIs till possession, and some of the developers are offering booking at a very low prices starting from Rs 1-2 lakh.

This time real estate developers seem to hit the bull’s eye with deals and discount on the cash component as it is obvious that buyers are more inclined towards cash components instead of free gifts and other offers. In one of the survey, more than 60 % of respondents said that they are looking for cash discount in this festive season rather than gifts and freebies. So, is this the perfect time to buy property? Well, it seems to be positive time for buyers to buy the property and developers to sale the property and they are willing to negotiate.

Normally, it is difficult to save the healthy amount of your savings, but this time it is easy and simple to save the cash and as well as get the luxury from various options due to more supply and less demand in market. Now the developers are planning to pick up the buyer sentiments for selling their buyer sentiments. After the festive season price is expected to show up word trend, so it’s a right time for buyers to choose the and buy dream property.