Malgudi series-9
We have quite often seen, no matter how the economy is going the real estate is never cheap and probably never will in future ! There is a reason why i say this, when i was growing up in the early 90's a plot 30 x 40 in a decent area (Not in bengaluru) would cost for instance 20,000 INR where as anyone would need 3-4 lakh to construct a decent house on it ! It made real sense then to have a home of your own in a plot of our own !
Fast forwarding to current times a plot 30 x 40 in a decent locality (Not in Bengaluru) costs 12-20 lakhs and the construction of house somewhere between 25-30 lakhs ( assuming 2 lakhs per 100 sq feet). If you were to buy the same in bengaluru especially in the so called old city, a plot ( if available) would cost anywhere between 60 lakhs to 1.2 crore and afterwhich if you are still left with some money you can think of putting a fence or compund around it, let alone constructing a house !
If you are salaried or small time businessman or a decent contractor who makes enough money to save, you obviously think of buying your own home. Looking at the prices mentinoned above it may be difficult for the average middle class and salaried to reach anywhere near,hence you are left with no option but to be in a home which you call yours, though you neither own the land nor the skies ! which means you agree to stay in a flat to be compromised for an independent house on a plot ! (flats are more sought after nowadays and are a new status symbol with those people who can even afford an independent house !)
A city like bengaluru which has the ability to grow in all directions makes it more interesting for greedy realtors to pick their share of pie or snatch to be precise ! The growing bengaluru can be compared to " Connecting the dots game" where the dots signifies hundreds of already existing villages and connecting them is through building apartments and other commercial establishments without any plan in place for vehicular movement, sewage, water supply, parks, waste dumping, rain water harvesting, graveyards etc.
More often than not an investor let's say a software company gathers a few acres of land in the outskirts of the city from the nexus of real estate aggregator, builds its campus and starts operating, Within few years thousands start working in its campuses and that creates a huge demand for housing, commercial shops, recreation facilities, schooling etc. hence a mad rush to fulfilling them begins and development starts helter skelter ! In such a scenario land prices go up sharply turning the villagers into millionaire overnight, who were in such an anticipation from a long time (in most of the cases) who anyway tend to already have plans to spend the fortune on lavish marriages, gold, SUV's etc. which is considered as the symbol of dominance and showoff !
In some cases because of the very high land prices forward thinking companies buy and keep hundreds of acres of land with the help of the same realtor nexus in the vicinities of the city for future expansion ! No one knows when does future arrive anyway but they buy ! The nexus of real estate makes sure that such a news is widely publicised with company names and make sure they aggregate more and more land prior to such announcements mostly from the farmers who are not really aware of how prizes could be in the near future and what plans government has for that particular area ! If anyone denies to sell his land either he will be offered more or made an offer he doesn't refuse (the godfather way-on the gun point !).
In most of the cases most of these realtors are local politicians or their kith and kin who are very well aware of the future prospects of land or sometimes create prospects themselves by fooling larger public !
In anticipation of great development such aggregated land is sold by the Realtors to builders to come up with apartments, villaments, villas, plots publicising excessively with eye catchy adds like "Near to the proposed so and so campus " " Proposed Satellite ring road" " Proposed peripheral ring road" etc. fooling people but equally tempting and forcing them to buy ! ( Despite all these adds Bangalore is seeing a steady rise is un occupied properties starting from 2008 - please refer to Moneycontrol article " Despite remaining unsold, apartment prices refuse to come down in Bangalore " dated 15 August, 2013)
Here they also make sure that the cost of the empty plot is much higher than the cost of the flat that they construct making independent plots always costlier for the common man ! The customer who is in denial in the beginning is forced to buy these properties just because the economics of having an independent house doesn't fit their pay check anymore even when both husband and wife are working !
The nexus makes sure that a hype is created by bribing transport officials to sanction BMTC buses to the route once in a while to show that the region is connected well and is not in no man's land ! The builders make sure that paid articles are skillfully written in the property pages of the newspapers explaining the promise the area or the place possesses in near future and how it is the most promising investment and growth destination etc. Excessive adds in the local TVs promising free site visits in air conditioned vehicles, Hoardings kept every 100 meters about the property, specialities, and amenities. BDA, BMRDA, CREDAI, BIAPPA and Bank approvals they have got to show how clean they are !
In the age of excessive Internet usage these properties make their own websites, upload their plan, hire some proxy bloggers /opinion makers who write more and more good stuff on line about the builder, developer and the property attracting more tech savvy crowd. NRI's who save money in great deal usually get carried away by these mirage of growth stories from a distance and invest in couple of properties hoping it will turn into a fortune soon ! But the sad part is these properties never gets occupied by its owners unless rented which doesn't generally happen in the case of NRI's, increasing the no of unoccupied residences creating false demand which further enhances the blind growth story ! (This is explained with greater detail in the first post article dated April 30, 2015 " 1.2 crore vacant homes-This one number tells us all that is wrong with indian real estate")
Competing with the above, many more companies pledge to buy land in the vicinity provided they get it at discounted prices especially if it is government land or given speedy approvals with smoother transitions from land owners to the company ! Here the nexus of Realtors again creeps in who work closely with politicians, land owners, builders and companies to make further aggregation of land and the cycle continues !
In the entire process no body cares about the availability of water in the area, growing requirements, Main and sub road connectivity, sewage systems, movement of heavy vehicles, further expansion possibilities, livability of the habitat etc. People who want to buy a home are in full mood and anything favourable only goes into their ears ! Buyers generally in metros are not worried about whether the land has any litigation from land owners ? Whether the ground water table is adequate for now and future ? Whether all the claims made are real, practical and legitimate ? whether all the necessary clearances been taken etc.
The big buyers who are large corporations sometimes aggressively buy litigated land knowingly or unknowingly taking risks and planning to mitigate them post buying by appointing shrewed lawyers who can turn the table any side ! As they say " as long as the vulnerable exists so long does the cheater co-exists !" perhaps in more numbers !
In this way everyone jumps the bandwagon of development which is appalling !
We have quite often seen, no matter how the economy is going the real estate is never cheap and probably never will in future ! There is a reason why i say this, when i was growing up in the early 90's a plot 30 x 40 in a decent area (Not in bengaluru) would cost for instance 20,000 INR where as anyone would need 3-4 lakh to construct a decent house on it ! It made real sense then to have a home of your own in a plot of our own !
Fast forwarding to current times a plot 30 x 40 in a decent locality (Not in Bengaluru) costs 12-20 lakhs and the construction of house somewhere between 25-30 lakhs ( assuming 2 lakhs per 100 sq feet). If you were to buy the same in bengaluru especially in the so called old city, a plot ( if available) would cost anywhere between 60 lakhs to 1.2 crore and afterwhich if you are still left with some money you can think of putting a fence or compund around it, let alone constructing a house !
If you are salaried or small time businessman or a decent contractor who makes enough money to save, you obviously think of buying your own home. Looking at the prices mentinoned above it may be difficult for the average middle class and salaried to reach anywhere near,hence you are left with no option but to be in a home which you call yours, though you neither own the land nor the skies ! which means you agree to stay in a flat to be compromised for an independent house on a plot ! (flats are more sought after nowadays and are a new status symbol with those people who can even afford an independent house !)
A city like bengaluru which has the ability to grow in all directions makes it more interesting for greedy realtors to pick their share of pie or snatch to be precise ! The growing bengaluru can be compared to " Connecting the dots game" where the dots signifies hundreds of already existing villages and connecting them is through building apartments and other commercial establishments without any plan in place for vehicular movement, sewage, water supply, parks, waste dumping, rain water harvesting, graveyards etc.
More often than not an investor let's say a software company gathers a few acres of land in the outskirts of the city from the nexus of real estate aggregator, builds its campus and starts operating, Within few years thousands start working in its campuses and that creates a huge demand for housing, commercial shops, recreation facilities, schooling etc. hence a mad rush to fulfilling them begins and development starts helter skelter ! In such a scenario land prices go up sharply turning the villagers into millionaire overnight, who were in such an anticipation from a long time (in most of the cases) who anyway tend to already have plans to spend the fortune on lavish marriages, gold, SUV's etc. which is considered as the symbol of dominance and showoff !
In some cases because of the very high land prices forward thinking companies buy and keep hundreds of acres of land with the help of the same realtor nexus in the vicinities of the city for future expansion ! No one knows when does future arrive anyway but they buy ! The nexus of real estate makes sure that such a news is widely publicised with company names and make sure they aggregate more and more land prior to such announcements mostly from the farmers who are not really aware of how prizes could be in the near future and what plans government has for that particular area ! If anyone denies to sell his land either he will be offered more or made an offer he doesn't refuse (the godfather way-on the gun point !).
In most of the cases most of these realtors are local politicians or their kith and kin who are very well aware of the future prospects of land or sometimes create prospects themselves by fooling larger public !
In anticipation of great development such aggregated land is sold by the Realtors to builders to come up with apartments, villaments, villas, plots publicising excessively with eye catchy adds like "Near to the proposed so and so campus " " Proposed Satellite ring road" " Proposed peripheral ring road" etc. fooling people but equally tempting and forcing them to buy ! ( Despite all these adds Bangalore is seeing a steady rise is un occupied properties starting from 2008 - please refer to Moneycontrol article " Despite remaining unsold, apartment prices refuse to come down in Bangalore " dated 15 August, 2013)
Here they also make sure that the cost of the empty plot is much higher than the cost of the flat that they construct making independent plots always costlier for the common man ! The customer who is in denial in the beginning is forced to buy these properties just because the economics of having an independent house doesn't fit their pay check anymore even when both husband and wife are working !
The nexus makes sure that a hype is created by bribing transport officials to sanction BMTC buses to the route once in a while to show that the region is connected well and is not in no man's land ! The builders make sure that paid articles are skillfully written in the property pages of the newspapers explaining the promise the area or the place possesses in near future and how it is the most promising investment and growth destination etc. Excessive adds in the local TVs promising free site visits in air conditioned vehicles, Hoardings kept every 100 meters about the property, specialities, and amenities. BDA, BMRDA, CREDAI, BIAPPA and Bank approvals they have got to show how clean they are !
In the age of excessive Internet usage these properties make their own websites, upload their plan, hire some proxy bloggers /opinion makers who write more and more good stuff on line about the builder, developer and the property attracting more tech savvy crowd. NRI's who save money in great deal usually get carried away by these mirage of growth stories from a distance and invest in couple of properties hoping it will turn into a fortune soon ! But the sad part is these properties never gets occupied by its owners unless rented which doesn't generally happen in the case of NRI's, increasing the no of unoccupied residences creating false demand which further enhances the blind growth story ! (This is explained with greater detail in the first post article dated April 30, 2015 " 1.2 crore vacant homes-This one number tells us all that is wrong with indian real estate")
Competing with the above, many more companies pledge to buy land in the vicinity provided they get it at discounted prices especially if it is government land or given speedy approvals with smoother transitions from land owners to the company ! Here the nexus of Realtors again creeps in who work closely with politicians, land owners, builders and companies to make further aggregation of land and the cycle continues !
In the entire process no body cares about the availability of water in the area, growing requirements, Main and sub road connectivity, sewage systems, movement of heavy vehicles, further expansion possibilities, livability of the habitat etc. People who want to buy a home are in full mood and anything favourable only goes into their ears ! Buyers generally in metros are not worried about whether the land has any litigation from land owners ? Whether the ground water table is adequate for now and future ? Whether all the claims made are real, practical and legitimate ? whether all the necessary clearances been taken etc.
The big buyers who are large corporations sometimes aggressively buy litigated land knowingly or unknowingly taking risks and planning to mitigate them post buying by appointing shrewed lawyers who can turn the table any side ! As they say " as long as the vulnerable exists so long does the cheater co-exists !" perhaps in more numbers !
In this way everyone jumps the bandwagon of development which is appalling !