5 reasons I gave up the idea of buying a flat in Noida

I was very much interested in buying a flat in Noida, as I am paying a rent of about 19000 per month. A few thousands more and it can make EMI of a flat. Instead of an expense, it will become an investment and I will get tax breaks and appreciation in the property value too.

Having bought a flat earlier in Pune, I thought I knew this game. But what I came across surprised me and turned me off the whole idea of buying a property in Noida.

Not only the city is not as good as Pune, buying the property here is a whole different ball game here.

1) You do not talk to the builder - you cannot - you talk to the underwriter

You lowly investor who wants to buy does not get to talk to the builders of the NCR. They are bigshots - these days they are not at their highest net-worth but they are bigshots nevertheless. So you instead talk to the Underwriters. No, they are not agents, they are underwriters... the reason the name underwriter sounds like undertaker is because dealing with an underwriter is very similar to wrestling with undertaker.

Undertakers are a vestigial, unwanted party in your home-buying experience who jack up the property prices because the builder does not want to talk to a lowly you. Underwriters acquire the responsibility of selling a batch of properties in a housing complex and make their money by selling these flats to individuals for a profit. Yes, your property price just went up so that the underwriters could make a living and maintain their posh offices in sector 18.


The fact that your budget is just 35 lakhs is no deterrent for the underwriter who wants you to buy a flat for 70 lakhs, which you can possess in 3-4 years. Although the underwriter has a ready-possession property matching your requirement that will cost 33 lakhs, he just won't tell you about it. Everyone wants to be enterprising in the NCR.

2) The black money

Dilliwalas are stinking rich. Sometimes, everytime they are bored buying audis and rollsroyce s, they buy a few flats in the upcoming areas of Delhi. Real estate is good investment, said Kushal Pal's (DLF fame) dad. This means the underwriters tell you that this society is nearing possession date with only 2 years to go, but you will be able to get a flat only in resale. When you ask them what does that mean - they answer, another person has booked this property when the project was launched. And the land registering rules are such in the NCR, that the sellers of homes show transaction value same as the previous transaction value of the property and take the difference in black or cash  - about 9-10 lakhs as a general rule.

You won't get loan for this and will have to arrange this in addition to the 20% of the house value for which the bank does not lend you money. So, if you buy a flat for 50 lakhs, the registry will be 40 lakhs and apart from the home loan of 32 lakhs, you will have to shell out 8 lakhs (20%) plus 10 lakhs of black money. You can buy a flat for 50 lakhs if you have about 18 lakhs with you. Congratulations to all my salaried friends out there!

3) delay (Possession)... delay ..(possession) delay ....(possession)

The average possession is within 3-4 years of the launch of the property. This is the time when you can book a property without paying the black money. Yay! But the average delay in the NCR properties is 2-3 years. So, within 5-6 years (unless you book something like JP Aman - in which case you will have no aman), you will get the possession of your flat, if at all you get it. The rise in the property rate is a reward for the buyer... for his risk taking and astuteness in choosing the property. But in Noida extension, some builders tried compelling the buyers pay additional money before possession, as the rates had gone up astronomically. Duh! (Source: CNBC Awaaz)

4) If at all you get it

The land acquisition laws in Noida are a little confusing. Hapless flat buyers watch with great anxiousness the court cases that are going on among the builders, the government, and the prior occupants of the land - the farmers. In all of India, Noida probably offers you the least possibility of possessing the flat you have bought. Just a google search can tell you. Gurgaon, apart from what went on between the DLFs and the Vadras (as claimed by BJP), is much better than Noida. 

5) The city has nothing much to offer apart from proximity with Delhi

Noida itself is a crass place. It neither has the simplicity of a village nor the sophistication and culture of a city. The facilities also not at par with a small town. It's just a place to survive for those who cannot afford an abode in Delhi. I will rather hold on to my hard earned money to get something in a better city in India, where my money's worth will also be better.

But all is not lost if you have to buy a flat in Noida - we may just be sitting on an American-style sub-prime crisis in this area. (source: my own intuition) 



Further reading: http://www.indianrealestateforum.com/f-real-estate-noida-83.html/



Comments

Darpan said…
Great writing, and totally true. Keep it up.
Sir, what are the flat prices in Pune?
Say, 2BHK... decent sized?

Also, is it a good city to live for a software engineer? Are there enough opportunities to go around to think of settling down in Pune post marriage?
Harsh Bhardwaj said…
The information is half cooked ......have some friends from Delhi/NCR.
Gyanesh Talwar said…
@Harsh Bhardwaj - you are welcome to post your own well cooked comments - so what is the reality like?

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