E Jayashree Kurup
I have been writing over the past two weeks about the India Apartment Index that magicbricks.com has launched.
I have received several comments from users in different cities asking why I have not focussed on affordable housing as well as corruption in the property markets.
The only way, I believe to counter corruption is to bring transparency into the deals. That is best effected by having clearly usable tools such as current property capital and rental values, using which you can compute yields etc.
The important thing to remember is that every buyer has a different reason for buying property. If you are an end user, any time is a good time. But if you know how markets have behaved over the last couple of quarters you may be able to adjust the time when you put in your money. It also helps in negotiating prices.
Similarly the more the metrics are used in the market, property purchases become more structured. We are very far away from structured property markets like the US and UK but small first steps are always welcome.
As far as affordability goes, it is a complex problem. Did you know that this sector is taxed and then retaxed. Of the price we pay, 35-48% goes in taxes. Prices of affordable homes will become realistic when the policy makers start reducing taxes at least in that segment. This is what happened in housing finance too. There is differential rates for affordable and other housing.
Many developers who have experimented with affordable housing of Rs 5-10 lakh say the demand is tehere but the finance mechanism cannot cope as the buyers do not have all the income on payslips. Unless that is fixed we will not have the private sector building in this segment.
These are random thoughts to answer your comments. Please keep those comments coming. We will try and create metrics to suit your needs.
Chennai Property Lawyers
@ Daniel & Boaz