Wednesday, April 22, 2009

Rental Rate Hikes

Since last 3-4 fortnights I am searching for a taking a a two room set on rent in and around Old Faridabad and I found a very interesting fact about Property Dealers during the process. In Sector-28, one property dealer told me that rent for the two room set and three room set is equal and the range is around Rs.6000, while in sector-17 market one property dealer told that the range for two room set starts from Rs.5000 and in Sector-18 housing board colony the scenario is very robust, thanks to these property dealers who are increasing rate everyday and making clients fool. In starting day the rent for EWS is Rs.3000 after one week it is Rs.3500 and now it is Rs.4000 and about LIG flats one month ago rent is Rs.4000 but now it is Rs.5500. When I myself starts roaming in Sector-18 the rent is around Rs.3000 in starting which is negotiable and now it is Rs.3500 negotiable for EWS category. For LIG category the actual slab is around Rs.4500 now a days. In Sector-28 itself I found a two room set @ Rs.3700 which clearly presents the thinking of property dealers.

In other sectors the range is Rs.4000(negotiable) for two rooms. Actually if you goes to one dealer on first day he recommends a rate which is generally 15% more than the actual price and in next 2-3 days he will again increase it by 15% more and the cycle continues.

This virtual cycle crates a fictitious bubble which on burst creates a havoc as happened in the Real Estate (flats/bungalow/plots) markets. I also feels that due to fall in buy & sell market of real estate the focus of dealers are on rental market.

In case of the buyer/seller is an outsider (not local to that place) they provide him with totally wrong information. From some peoples I also listened that in case of sale of property dealers eats big chunk money by giving less amount to buyer and charging higher amount from Seller. They tells buyer that market is down and no seller is their and also mention weak points regarding his property and to the seller they says no their is no recession in real estate and mentions him advantages of owing the proposed property and tells him the rate which is much more than told to buyer. They keep his difference money in their pocket and also charges commission from both parties. I think it is purely against the moral ethics of business to eats money between deals, you should charges commission from both parties but should not take the money in between. It is also commonly known fact that property dealers are not having clear image, background, character.

It is worth to be noted that on Internet I was not able to found any property for less than Rs.5000 on most popular sites like 99acres, magicbricks and makaan.

Property Dealers in Real Estate sector are like the share market operators who sometimes create blunder is financial market and leads the real/small investors to surprise.

So do you have any idea which can break this virtual / fictitious rental rate hike cycle.

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