THE REAL ESTATE MONITOR-6 .... Caught between Scylla & Charybdis!

 

Ramesh Kumar from Greater Noida

Until this morning, I knew not Chaitanya Prakash Singh, a Financial Advisor from Allahabad. Like me, he is also been a resident of the Ghost Town of Greater Noida over the past three years. He shuttles between Allahabad and Greater Noida where his offspring lives and works. 

I bumped into this late-fifties Allahabadi professional during my real estate watch tour recently.  He was a few steps ahead of me. He was aware of my photographing of various housing complexes, incomplete or ready-but-unoccupied in the vicinity of Panchsheel/Supertech Ecovillage blocks. Security staff, perched in their chairs outside the gates awaiting the arrival of day duty colleagues before being relieved, watched me with no interest. One more passerby, maybe. Prospective buyer, perhaps, they might have surmised.

"You live in this area?" I asked. This was my opening gambit to Singh. He affirmed. We began conversing about the Ghost Town angle. "Absolutely, right," he responded. He was pointing to various projects en route and commenting on the progress he witnessed over the past three years. 

By and large, promoters boasted of the clubhouse, kids park, gym, swimming pool, etc. Singh opined that these are the wish list of the elite and who can reject the middle-class's aspiration to move up the ladder. "These are inadequate. Take the kids' park. There are 600-700 families in any complex. Look at the playground size. Puny," Singh explained as we kept the pace under grey skies with sun peeping subtly from behind clouds. 

Talking about the housing sector, promoters/builders spent whatever prospective buyers paid in installments, raised through housing finance companies or banks, on creating new land banks. After all, land supply is finite and therefore, grab as much as possible at the earliest. There was no focus on completing the task on hand. Greed? Definitely. Thus the initial projects suffered.

Lenders have no interest in the project progress. The delayed project ensured more interest income for them. I never heard of lenders' tracking. Besides the interest income, their interest is protected in the form of house hypothecation: until the loan consisting of principal and interest is fully repaid, the property ownership lies with them. So no worries. 

"We are only facilitators. We help you realize your dreams. Chasing the builder is not our job. You're the owner of that property and hence it is your responsibility to ensure the builder delivers his promise," argues a housing finance company friend, requesting anonymity. He added that they don't release the final installment to the builder until the property ready for possession document is submitted. They are safe.

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READ ... Update on Antariksh

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The buyer is in a fix: caught between Scylla and Charybdis, the two monsters Homer depicted in the Greek classic Odyssey. Builders play hide and seek and seldom deliver on time. Banks keep getting their payments promptly from buyers. Very few who bought the property in faraway suburbs because they cannot afford in city jurisdiction can afford regular visits - weekly? - to check the project progress. Builders, thus, go scot-free.

In these times of huge towers with multiple flats, there is limited collective action. Each fends for oneself. Builders take advantage of such a lack of unity among buyers to indulge in all kinds of procrastination activities. Poor buyers, we are all! 

"My father booked a flat in this project long ago. He is no more. I am not sure whether I will be able to live in my flat," is a common refrain among the dejected buyer lot. Many times, my better half told Ramesh Joshi, who brokered the deal for us, that hopefully, our grandchildren may get this property ready. Will they come to live in this flat is another story.