To Beat Price Rise Invest in Upcoming Projects During Soft Launch
Call it Reaction or call it Correction or Consolidation. Data speaks a lot about unsold properties available in the market and expect the prices to drop by upto 20%. Most prospective buyers of real estate are waiting eagerly for the D Day to come. Quite a few of them have been waiting since a year or more and they have seen the prices rising 10% and above without taking a plunge. Interest rates on home loans have also matka result increased and benefits of teaser home loan rates or fixed interest rates are a thing of Past. These buyers have already lost a substantial amount of money waiting for the right moment to buy. Such buyers have paid a price of their indecisiveness.
A recap of possible reasons of property prices rising in Mumbai over last couple of years:
- All payments to the builders in an under construction building are subject to service tax @ 2.575%. This tax straightaway increases your cost of procurement and most of the banks and financial institutions are still not considering service tax for funding.
- VAT @ 1% of agreement value is to be paid at the time of registration. Most of the banks and financial institutions are still not funding this amount, though stamp duty and registration charges are taken as a part of the cost of the property.
- During the said period getting sand for construction was a problem for some of the smaller projects. Larger groups like Nirmal Lifestyle, HDIL, Runwal etc. had to procure sand from Gujarat and even Rajasthan, which increased the cost of raw material exponentially.
- Some of the projects that were held up due to forest issues in areas like Mulund, Bhandup, Borivali etc. have increased the risk for the builders.
- Due to the proposed changes in norms by BMC and clearances were not being provided to under construction projects, some projects were forced to stop work that resulted in cost escalations for the builders.