is it worth buying apartment for 60 lakhs + price in blore?

[mybdaprop]

Hi All,

is it worth buying apartment for 60 lakhs + price in blore?

Tips to consider before buying Apartment..

1. Is your apartment from reputed builder?

2. Is your apartment in Prime locality, is it nearby to office /IT PArks?

3. do you have downpayment of 25 to 30 LAkhs in your pocket ?

4. Are you willing to stay in Blore for 20+ years?

5. is your Job REcession Proof for next 10 to 12 Years?

If answer for all the above is "Yes" from you then you can afford an Apartment in Blore

else never look for buying an apartment in Blore....


Let take Live examples:

The Universal Truth Says "All builders in Bangalore are Money Looters" , they dont really care for the customer once the property is bought.....

In 2005 the Price of "2BHK/3BHK Purvankara Apartments" in MArathalli bridge was 22 to 30 Lakhs

In 2007/2008 the Price of 2BHK/3BHKApartments in Bannergetta Road form a REputed builder was around 18 Lakhs to 32 Lakhs

Why the Price has abruptly increased now to 60 Lakhs to 80 Lakhs for 2 to 3BHK apartments now a days? this is the price beeing quoted by builders, and we the salaried proffesionals all are like Sheep we listen to builder and take his wording and Price as if he is GOD...

Think about the resale value of our old wear and tired apartment, when we go to new popular site commonfloor.com mamoth number of second hand apartments are left unsold , as new buyers will always go for new apartments from builders rather than paying market price for second hand apartment whose value will detoriate further if bought second hand...

Lets take one example:

A Couple want to buy an apartment in blore, they have worked in IT for 5 years and are able to save 15 Lakhs, now with 15 LAkhs thay are buying a 2BHK apartment in Bennergatte road for 60 Lakhs

15 Lakhs downpayment + 45 Lakhs Loan ( with 50K INR as EMI for next 20 Years) + rs 3 as mainetnence fee every month( INR 3600 for 2bhk)


Now Lets take Cost of Living for this family..

Cost of EMI -> 50K

MAintenence -> 3.6K

FAmily+Fuel -> 15K

============================

Total -> Around 70 K is just cost of living in blore per month if you buy an apartment...

=============================


WE we look at the statictics from Builders 60% of apartmets are booked by NRI People, they just bought it as investment or for some rental income after wotking in forigen countries like USA, UK ets for 10 years... for them 60 Lakhs will look small, and after buying apartment they rent it for 12 to 15K

Many young professinals are in direct competition with NRI and they fall in trap for over priced apartment by increasing their band width by looking into thier current situation and commit for heftly Loans..

WE all should Strive hard for Govt to introduce a rule for NRI investment percentage in Apartments to 30%, as it is not benefiting the lives for Indian REsidents....and pusing all young professionals into the Shell of hefty loans,

is all young professinals job is REcession Proof? NO - NOT Guarenteed...

70% of apartments are laying vacant with out any residents, and builders are still creating artificial scarcity...

Aparments are coming up for hefty prices next to Nice Road which is extreme end of Bangalore...

in 90% of Aparments in Blore we dont even have basic amenities like WAter, people in aparments are making their own assiciation and putting water tankers to fulfill their daily water needs and still

people buy aparments, a shared floor, shared ceiling 10Lakhs cost price apartment for 60 Lakhs and keep making the builders rich so that they can exploit the reminder of Indian residents....



Lets all Property Aspirants Unite together and make a decision not to book over priced apartments...

as its all about demand and supply....

if we dont buy the builders has to reduce price....

Lets stop making builder Rich and get yourself Rich by valuing your hard earned money....

It MAtter of 20 + Long Years to REpay your hefty Loan my frinends (think about your job security, Recession, Resale Value of Apartment in Blore as Blore can grow horizontally, not vertically like mumbai)

Buy only approriately priced apartment and adequeatly sized apartment for your family and please dont fall in trap of Peer Pressure, or family pressure as you are the one who repays .... live for your self and not to impress others...

[adroit]

Excellent,



Even Iam of the same thoughts.. In Fact we should look to move out into rural bangalore and stay there which will anyhow become urbanised in max 10 years.

and prices are also very cheap. we can own land for 12 to 15 lakhs anywhere around EC, whitefield out of BBMP limits, in BMRDA approved layouts.



and then assuming 30 lakhs construction it will be like 45 to 50 lakhs we can own an independent house.





DrawbACKS:


1) Loneliness------ Yes for Some time probably 2 to 3 years and people will occupy them.
2) Water--- No apartment gets cauvery water I think.. so no issues.. but once these layouts come under BBMP govt will provide water..
3) Current-- I don't think this should be a problem..
4) Civi Amenities----the BMRDA approved layouts have at the least PARKs, so that should be fine..
5) commutation--- definitely an issue but if u have a car i think we can manage..
6) waste disposal----- may be an Issue-- becuase BBMP not there... but BBMp has recently told that they will not collect waste from aparments > 10 unirs..
7) closeness to schools--hospitals etcccc.. all these required huge land and definitely are out of city than within BBMp limits...




loan aspects--- easily repayable, an independent house , no issues and happy living..



Open for Dsicussion



thanks
Adroit



So I think it is time for young home aspirants to move out into rural limits and probably adjust for 3 to 5 years time by the time those areas also get urbanised..

[keshavachandras]

Excellent,
Even Iam of the same thoughts.. In Fact we should look to move out into rural bangalore and stay there which will anyhow become urbanised in max 10 years.
and prices are also very cheap. we can own land for 12 to 15 lakhs anywhere around EC, whitefield out of BBMP limits, in BMRDA approved layouts.
and then assuming 30 lakhs construction it will be like 45 to 50 lakhs we can own an independent house.

DrawbACKS:
1) Loneliness------ Yes for Some time probably 2 to 3 years and people will occupy them.
2) Water--- No apartment gets cauvery water I think.. so no issues.. but once these layouts come under BBMP govt will provide water..
3) Current-- I don't think this should be a problem..
4) Civi Amenities----the BMRDA approved layouts have at the least PARKs, so that should be fine..
5) commutation--- definitely an issue but if u have a car i think we can manage..
6) waste disposal----- may be an Issue-- becuase BBMP not there... but BBMp has recently told that they will not collect waste from aparments > 10 unirs..
7) closeness to schools--hospitals etcccc.. all these required huge land and definitely are out of city than within BBMp limits...

loan aspects--- easily repayable, an independent house , no issues and happy living..

Open for Dsicussion

thanks
Adroit

Hi Adroit, Not sure if you are from bangalore or settled here due to your job. Owning a site for 10-15L somewhere in a BMRDA approved layout and wait for 3-5yrs and construct a house for approx 30 L , you have an independent house for 45-50L wow - Sounds really great !!!!!!

However just a few points to think on.
1. Is this site or house an investment option?
2. R u living in a rented house?
3. If you are a working couple or live with parents?
4. What is the loan amount considered for the plot?
5. Maintainance - Entire cost is on house owner
6. Do we have the time to run behind people to get minor things fixed?

3-5 yrs 30L+8%(min) inflation in construction cost+Initial Investment+Loan EMI+Already paid EMI+Rent Paid (if stayed in a rented house)+Additional EMI burden for construction loan+additional responsibilities (Child eduction) these are just a few cost wise constrains.

your drawbacks say Loneliness - What about security? can you afford to leave your parents or wife alone over a weekend? can you leave the house unattended for 2 days? how safe is it to walk back around 9PM?
Commute - What if your car broke down- or other family members have to travel while you are at work?
Can you leave the site vacant for 3 years in a remote place?

These are just a few things that immed flash to ones head when they think of an apartment or site.

I agree apartments ar enot 100% secured however it is much more safer than an independent house in a remote place. There are lot of disadvantages in an apartment too, when compared to independent house the convinence given by an apartment is far ahead than that of an independent house.

[duffyhair]

why cant the probable group owners come up with a gated residential community..
buy land of 10 acres (since BMRDA approves layouts of 10 acre and above) and the convert them into a gated community in the CDP plan. For this gated community, we can have fenced compound, security, UPS as common amentites and share the cost.
the rest are plot owners choice..
adding the blog post written in 2011 but holds good even today..

I got a mail from Purvankara and I had time to put the maths so that others can make out how RE firms are looting us..
text extract of the colourful emailer sent to my inbox from one of the property websites (another intrusion of privacy !! even though I didnt ask for promo mailers)
Purva Skywood
Purvankara has launched a new project, Purva Skywood at Kudlu, Haralur off Sarjapur Road. Seven imposing towers that greet you from a distance. Thirteen acres of serenity that transport your senses to different world. 728 aesthetically designed 2,3 & 4 BHK apartments that range from 1285 sqft to 2382 sqft. Amenities that is straight out of a dream.

Purva Skywood at a Glance

* Location: Off SarjapurRd, Kudlu/Haralur, 4 kmsfrom ORR junction.
* Land Area: 13 acres (approx.) -728 units
* Floors: G+15, G+18 & G+20
* Type of Flats: 2, 3 & 4 Bedrooms
* Bank approval for home loans(expected): ICICI, HDFC, CITI, Axis, India Bulls, HSBC, Deutsche Postbank, LIC, SBI.


Size (sqft) Super Area (sqft) Rate (Rs./sqft) Basic Cost (Rs.)
2 BHK 1263 2920 36,87,960
2 BHK 1309 2920 38,22,280
3 BHK 1662 2920 48,53,040
3 BHK 1834 2920 53,55,280
4 BHK 2340 2920 68,32,800

Now, I was curious to know how these costing of these properties work. According to me, the computation part :
728 units * 1263 sqft (considering all units as 2BHK for computation purpose)*2920/ sqft
= Rs. 272,16,13,440 or in short 272 crores!!
cost of land : 13 acres in SarjapurRd, Kudlu/Haralur, 4 kmsfrom ORR junction would be around 5 crore/acre at the max = 65 crore
cost of construction @ rs.1,000 per sq ft
1263* 728 *0.7 (since carpet area is 70% of super area ) = 643642 sq ft.
643642 * 1000 = 64 crores..
additional costs = 10 crore (i know this is on higher end )
project execution cost = 2 crore
grand total = 141 crore..
considering a profit of 30% (which is again at higher end), the total project should hve been 141* 1.3 = 185 crore

but, they have jacked up the prices such that they would make a profit of atleast cool 150 crores on this project..
Earlier days, flats are cheaper and individual houses are costlier. Nowadays, there is not much difference between them. The cost of owning a flat in outskirts is 80% of owning an individual property in the residential area. Time for RE investors to ask for spilt up and ensure fair pricing is done..

[hkrish]

Very good analysis and inputs

@duffyhair, thanks for your inputs i always wanted to understand how the daylight robbery happens.

@mybdaprop
I think you have hit the frustration point pretty much where i was some 6 months ago
Owning a 2bhk for 60 lacs and whether finally its worth the struggle. The truth is it is NOT.

I also agree, that some cap has to be put by government against the NRI folks buying many apartments,
and making difficult for our own countrymen.

But there is one thing that NRI' folks CANNOT do, which LOCALITES can do, which is buying a plot, putting
a compound around it and making frequent visits every month to check and protect.
Or hire a builder and build home, with frequent monitoring to save money

An year to 6 months back 2 bhk used to be 40 lacs and 3 bhk 60 lacs from decent builders.
Now its come 60 (2 bhk) and 80 lacs (3 bhk). Its when i got bugged, while several of my friends settled abroad
or seniors in IT industry were buying 2nd and 3rd properties, i was just not able to even buy one.

1. I also learnt that majority of salary goes to real estate (either apartment or house [plot+home] or rent), whether
you like it or not
2. Even if you finish paying one apartment loan, you move on to buy another apartment
3. Owning an apartment has appreciation flattening issues and delay in selling, which you had
rightly pointed.

So considering (3) is it worth the struggle in owning the apartment where you neither own the roof
nor the floor, where you slog 20 years paying EMI for 60 lacs.

So i decided (and have) bought a BDA approved plot (30*60) worth around 45 lacs and will soon build
a 2 bhk in Ground floor (worth around 25 lacs), leaving space for 3-car-parks in Ground floor.
So totally it is 70 lacs for a good well built 2 bhk.

But the best part is yet to come here:
a. I own the land and appreciation aspects are good
b. In future i can (and will) build 1st floor (3 bhk) and 2nd floor (3 bhk) for each around within 20 lacs
as the land is already owned up (provided the salary goes up)
c. So technically one can own 3-homes GF, 1st flr, 2nd flr and leave 2 for rent (for a 30x50 site)
Rent of two homes will further reduce the EMI pressure
d. Already 3 bhk rents are hitting 15-20 K, so even if you rent for 20K, for a 20 lacs construction, it
will almost cover up the EMI, while you pay for the GF (2 bhk)+ ploat loan, which is for 70 lacs

Exit options:
- In case if i loose the job, banks dont wait more then 3 months, in case of apartment
im not sure whether i can sell in 3 months, but that is not the case with plot
- Even if due to bad time of losing job, im forced to sell of the plot+home, atleast i would gain
far-far more appreciation than apartment and have a buyer far-far quicker than apartment as homes sell faster than apartments
(Eg: 45 lacs site bought 8 months back is already now worth 60 lacs).

Individual house in a layout is often criticised for security aspects, its when one of my friends showed
the security system with video-door phone and more importantly infra-red/laser light enabled burglar alarm
(with a separate power line supply), like the way its done in US. It monitors all entries like doors and windows.
Moreover, in most layouts when people come up with
4-5 houses, they start discussing about having a common security for a shared-salary. Its not like the way in apartments, where
no one agrees for anything, in layouts since everyone has their own home and privacy, they really co-work
to solve the security threat.

So i think, im fully ON and cheer you up for buying site in out skirts BMRDA approved for 10-30 lacs, or BDA approved within city (for 40-50 lacs),
and building a house, rather than blood sucking apartments with 2-bhk 60 lacs and giving you sleepless nights on how are you
going to pay the EMI, a struggle wit no purpose, other than making builders rich.

In individual house also there is risk and struggle, but the risk very less and the struggle has some purpose.
If you somehow survive 20 years paying the EMI, you can retire with 2 rented homes and one own home.

Good luck

Regards
Hkrish

[keshavachandras]

Owning an indipendent house would be every man's dream; however keeping the current market looks like most will just live with the dream;

Reading the points identified about how an individual house would be much easier to sell, or yeilds better returns; where as apartment is not so easy to sell or does not yeild better returns.

A few facts of Apartment vs Plot, aloso posted in eariler link
http://www.mybdasites.com/viewtopic.php?f=37&t=1561

1. Flats come with an undived share, usually a 60L+ flats would give around 400 - 700 sqft of UDS so one does own a piece of land.
2. When cost of a 30*40 site in a near developing area (bsk 6th stage for example is running at 48L) and a decent construction average is 30L total cost is 78L; and the seller wants to register at giduance value i.e 15L, so remaning 33L needs to be shelled out of hand, plus construction cost - how many could afford this kind of cash? if they can afford 33l cash , there loan amount would be only 20L as against 55L when they construct a house in turn EMS would be 22K against 57K per month.
3. Flat purchase are usually 100% white transactions, so in case of any acqusition you are eligible for compensation on prevaling market value and capital gain tax exemption will be minimal.
4. Assume one has paid 48L for plot and 30L for construction, and in a worst case needs to sell do you think he can sell it for same price?
5. Assume after 3 yrs, if land appriciates say by 10% cost of land would be 53L and construction cost would also increase by 8% inflation resulting in 35L construction, whill will force more and more people to look at flats which would definetly be within reach compared to individual house.

As in any case Individual House or Flats both have advantages and disadvantages, depending on affordability one needs to take a call.

[hkrish]

1. Flats come with an undived share, usually a 60L+ flats would give around 400 - 700 sqft of UDS so one does own a piece of land.

Oh yes, valid point, everyone knows this. I just requoted the usual saying in hindi 'neither roof is yours nor the floor'.
However its small area, when i did see some how houses in indra nagar or CV raman nagar going for sale at 8000 per sft or 10K per sft, then size
does matter

2. When cost of a 30*40 site in a near developing area (bsk 6th stage for example is running at 48L) and a decent construction average is 30L total cost is 78L; and the seller wants to register at giduance value i.e 15L, so remaning 33L needs to be shelled out of hand, plus construction cost - how many could afford this kind of cash? if they can afford 33l cash , there loan amount would be only 20L as against 55L when they construct a house in turn EMS would be 22K against 57K per month.

Yes, seller wants to register at guidance value ie,.say 15 L, but banks give loan on market value right (almost all of the nationalised banks and private banks) do this.
Even the BMRDA layouts in outskirts register at guidance value and sell at market value and almost all of the nationalised banks and private banks given loan.
All transaction that i know off happens this way.
Only issue is, if the seller/developer asks for black money or cash then its the problem, are you referring to that.
Ofcourse there is a minor risk, which all understand, as one is trying evade the property tax by registering at lower amount.
As per my legal, argued with developers, i registered at market value, but paid high registration cost.
Most all developers dont agree to this, but i feel the minor risk is OK. Because politicians buy plots, lands, most like not apartments.

Assume one has paid 48L for plot and 30L for construction, and in a worst case needs to sell do you think he can sell it for same price?

I am sorry, i dont agree to this. This may be true for apartment. I have friends in IT in apartment, who lost job in recession and sold the apartment
in almost same price. IF he could have waited for only 1-2 months, he could have sold for a good price. But the pressure from bank was high.
For houses the layout in which, if it is good, there are always brokers, developers eyeing for any re-sale. Even after 2-3 years, it shoots up.
For eg: the layout i am in 2 yrs before it was 1600, when i bought 2600, within 8 months 3000.

As in any case Individual House or Flats both have advantages and disadvantages, depending on affordability one needs to take a call.

As mybdaprop was saying since there is a too much demand for flats, that is the reason for hiking prices.
Now i feel they have hiked so much that people need to explore other options, rather than go with the same old flow.
Earlier in 2001 to 2006, NRI folks used to buy plots in layout after layout (not apartments), as many of my relatives used to do.
But moment BDA/BBMP abolished the concept of Gated community, then it became risky to own plots without frequent monitoring.
Hence NRIs started buying apartments. And since they're buying it, the prices as have hiked up.

So localites need to explore and see the end of road in buying a plot to own a house.

Individual house vs Apt is a personal choice as you rightly said. But the exploitation level has hit up the ceiling.
Some authority has to put some limit on the profit that these developers hit. But no government is going to do that.
However as famous financial advisor Robert kyosaki would say, "Buying an house or apt is an emotional thing, but when it comes to
money, one needs to keep away the emotional thing and go by brains". So i personally feel, now owning a house and apt (With present prices), is
almost matching. And in my case i actually prefer an apartment, but now going for individual house.
And becomes more beneficial if one builds 1st flr, 2nd flr.

But even in case, if ones personal preference is apartment, one more solution is there.
As far as i know from folks who have PRE-CLOSED the loan, within
5-6 years, they have not done by paying from salary. They have done by selling their plots, which they bought alongside with apartments.
Friend bought plot for 150 per sft in hormavu 6 years before and sold it for 2500 per sft and closed his home loan.
(So one more evidence plot/house appreciates way higher)

So whether one is in rented house or own-a-house or apartment, whether you like it or not, we are ALL in real-estate, which is a pricking nail
with EMI or Rent. And nail can be removed by another sharp nail, so better buy a 2-bhk apt with a plot in outskirts for 700-900 rs per sft (BMRDA) and
wait for it to appreciate and pre-close the apartment loan. This is one more idea, that can be explored.

regards
Hkrish

[hkrish]

One last point, which i forgot. Owning a house is profitable only if one goes for 30*50 or 40*60 and build G+2 and leave 2 for rented and one to stay.
If one is going for a house in 30*40, i would suggest them to rather go for apartment, as in 30*40, you cannot get 3 bhk in single floor,
hence G+1 will be one house and 2nd flr to rent,which is not that great.

[keshavachandras]

Hi Hkrish,
really valid points on 30*50 and 40*60 plots, now a days it has become so hard to find a seller who is willing to register at market value, and myself being a middle class salired person found it extremly hard to find a single guy who was ready to accept all white even after 2 years of pursuite; Can you believe one owner sold his plot for 30Rs more than what I quoted because the other person was ready to pay 50% cash.

Yes, seller wants to register at guidance value ie,.say 15 L, but banks give loan on market value right (almost all of the nationalised banks and private banks) do this.

Nationalised bank gives loan only on registered value.

Assume one has paid 48L for plot and 30L for construction, and in a worst case needs to sell do you think he can sell it for same price?

I am sorry, i dont agree to this. This may be true for apartment. I have friends in IT in apartment, who lost job in recession and sold the apartment
in almost same price. IF he could have waited for only 1-2 months, he could have sold for a good price. But the pressure from bank was high.
For houses the layout in which, if it is good, there are always brokers, developers eyeing for any re-sale. Even after 2-3 years, it shoots up.
For eg: the layout i am in 2 yrs before it was 1600, when i bought 2600, within 8 months 3000.

My question was as simple as your understanding, when one has paid 78L for a house, and paid EMI for 3yrs, and due to unavoidable circumstance if they have to sell it, and with bank pressure they its really hard to get the true value of the house. Yes independent house might fetch you better returns but people would want to bargain hard when it is a distress sale. And stake in a indipendent house is higher than an apartment as investment is more.

Selling an apartment would be lot easier compared to indipendent house due to no of buyers will be compartively more in the range of 60l than those who can push to 75L.

[hkrish]

Nationalised bank gives loan only on registered value.

In all layouts i checked so far, Except SBI all nationalised banks like LIC, Can-fin, Punjab national bank give loan on market, not registered value.
I have friends who HAVE bought plots in the same layout as mine. Infact in one of the BMRDA layouts,
they said they have the papers processed in every other bank, other than SBI, because SBI give loan only on registered value

Yes independent house might fetch you better returns but people would want to bargain hard when it is a distress sale. And stake in a indipendent house is higher than an apartment as investment is more.

Regarding purchasing power of new buyer:- Even if you were to sell the apartment of 60/80L one will
aspire to sell for 1 - 1.2 cr. Will salaried people buy for 1.2 Cr. Re-sale of any apartment or house in developed areas is usually
bought by NRIs or cash-rich folks/businessmen. So the struggle to sell in distressed time remains the same for both.

Atleast with home he may not be able to BULLY-down the price too much because, new buyer knows plot is a appreciating asset.
Eg: if i bought for 3000 per.sft, today and tomorrow in that area it goes for 6K per.sft in 3 yrs, maximum, he will bully me down to
5K per.sft, not more as he knows there will be other buyers. So in any case profit is good.

But in case of apt: I presently live in 25 yrs old rented apt in HEART of bangalore, near Ulsoor. Good looking & well built.
Even here the last re-sale of 2bhk happened only for 60-lacs. Even i would not prefer to buy where-i-live, though it is
BRICK construction and very stable, because of mosaic tiles (not vetrified-nano or marble)
or old type windows and NOT UPVC
Everyone knows apt appreciates in first 5 years and then it flats-off. Builders come up with new ideas, new materials,
and your heart buys in to that.

Selling an apartment would be lot easier compared to indipendent house due to no of buyers will be compartively more in the range of 60l than those who can push to 75L.

This is news to me, as the inputs i got for all brokers, agents and soaked guys in real estate, houses sell faster than apartments.
Let me re-check with them.
They said, People usually prefer NEW apartments in little catching-up area than buy an old one (with little older ideas) in the heart of the developed area.
Also with apartments designs, look & feel keep changing every 5 years. Even in this forum people are talking about buying NEW apartments not old ones.

http://www.mybdasites.com/viewtopic.php?f=37&t=1561
Even in the link given the final write up was very correct.

I always preferred apartments , but when i went to buy, financially i felt it was not worth the money for what they are giving.
Finally i tried to buy apartment from my relatives who are very reputed builders. Since they are very close family members, they gave
the TRUTH/Gyan of what i had given above and literally TALKED me out of idea of buying an apartment
(but they actively sell apartment

Then i secretively approached tier-1 builders like prestige, purvankara etc,. Friends told that these branded builders
with mighty projects OUTSOURCE most of the building work and has lot of quality issues. One of my friends live in prestige shantiniketan,
called me to his apartment to show the basement car-park roof, water leakages, and quality of construction etc,.and ensured that he talked
me out with all statistics.

Tier-2,3 builders had quality issues or legal loop holes in land they had bought. But atleast they did not seem so unfairly priced.
But as mybdaprop was saying, they also hiked to 60L/80L. I also became upset and DID NOT WANT TO CO-OPERATE with BUYING
and encourage UNFAIR increase in price and WANTED to PROTEST.

So considering all above, and benefits pointed out with buying plot, went with plot, hence shared the knowledge gained the process and always willing to learn.