Tuesday, July 1, 2008

Real Estate Prices

In last three – four years prices of property have increased many folds and reached a level that EWS (Economically Weaker Section) category flats constructed by government are out of reach of a common man. A middle service class person can not afford to buy the EWS category flat than how the poor peoples will purchase same. In previous decade government generally constructs the houses through Housing Board Department but now government also constructs flats because of increasing pressure of population density and increasing inflation. Private builders are earning too much of money by purchasing land at cheap prices and selling flats at very-very high prices. All around the Delhi or we can say in National Capital Region most of big companies are engaged in constructing many projects for different types of flats and selling them at good profit margin ratios. Companies are making fool to customer by even promising luxury facilities but actually delivering only low standard facilities. Cost of single bedroom/ studio apartments are approx. Rs.15-20 lacs depending upon location, city and facilities offered. If a person is earning approximately Rs. Ten thousand per month how he will purchase the above flats even if he takes loan he is eligible for approximately 30 to 40 percent of his salary i.e. Rs. Four lacs maximum and he have to repay the loan as per month loan installment of approximately Rs.1000/- for every lac he/she borrows or approximately Rs.4000 in above mentioned case. In last 6 months even home loan interest rates have also move upwards. So what will happen with the projects which are selling flats in the range of 50 – 70 lacs and even more than that and about villas I can not make a comment.

In 2001-02 prices of houses in my area constructed by housing board is four to five lacs but now the rates are 13-14 lacs.

The reason of high prices is due to commonwealth games in Delhi, Construction of Metro rail, Black money investment by Politicians, Bureaucrats and Businessman’s.
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