Last week two buyers - a couple and their friend, came to discuss their choices in a new housing project? All the three of them were senior government officers. The husband wife couple despite pooling their resources struggled to come up with the money (including loan component) to buy their choice of flat. This after 30 years of service at a senior level. The other friend, a senior officer in BSNL (A govt. telecom) was doing no better. Ultimately all three of them left my office, highly disheartened, being unable to bridge the gap in their funding. I couldn't help them immediately with alternative options either since their heart was set on the given project. With great deal of persuasion, I convinced them to open their minds to other alternatives. Along with my team now we are now embarking upon the journey to identify some affordable alternatives for such clients. The journey promises to be quite difficult though rewarding.
High Prices! This is just the tip of the iceberg. My company conducted more than 300 site-visits in several projects over the last 3 months. Our success rate is less than 5% on these visits. Most of the visitors claimed that prices quoted was out of their reach by a vast margin.
Why on earth are we flooded with multi-crore pricing? I refuse to believe that the apartments and villas upwards of Rs 1.5 Crores ($300,000) are meant for the middle-class millions. The EMI for such properties itself will be in the range of Rs. 150,000 plus ($2500) per month. Additionally of course, they need to come up with the money of food, clothing, education and medical bills.
Like everyone else, I have related concerns. Question that continue to be relevant, such as,
- Why are land prices allowed to climb so high?
- Why is there a limited supply of converted land?
- Why is the FSI limited to such ridiculous levels in the CBD (Central Business District - central part of town with most economic activities). Why can't we build more densely (vertical growth) and leave more open spaces for infrastructure and greenery ?
- Why do Builders quote such high rates? Are they victims or the cause of such prices?
- What is the role of Government and the judiciary?
- Why do amenities cost so much? ...
The surrealism that has invaded the realty space needs to be replaced with reality. There is a real need to reduce the prices of housing products across board. We need to see legislative or judicial initiative changes which might indicate that things can improve.
Until the next time,
Cheers!
