r2i forum

I have never invested in real estate in India and hence am quite ignorant of how to deal with uncertainties that come with it. I had made a big deposit towards a villa in a new project in late 2016. It is by one of the highest quality builders in Bangalore who is also known for long delays. At the time of deposit they didn't have necessary approvals and amount was deemed 'earnest deposit' to hold the plot. Since RERA kicked in mid 2017, they have delayed promised completion dates by 4 years. They are yet to receive approvals by the way - now expected by mid this year! There has been no interest or compensation to-date but they claim that since they will still honor the original price despite rise in costs over next 4 years, it is still a good price and I should hold. Another point to consider is that delay in completion date provides more freedom in liquidity flow.
I will appreciate if finance-savvy colleagues here can shed light on whether the offer of same price but with delay of 4 years is good or bad from investment pov.

Check if your project is under investigation.

Link: https://rera.karnataka.gov.in/projectsUnderInvestigation

I suggest you file a format complaint to RERA Karnataka. They've delivered quite a few verdicts against erring builders.

Hope this helps.. good luck!

AbhijithS;671144Check if your project is under investigation.

Link: https://rera.karnataka.gov.in/projectsUnderInvestigation

I suggest you file a format complaint to RERA Karnataka. They've delivered quite a few verdicts against erring builders.

Hope this helps.. good luck!

Thanks for sharing the link. Builder or the project is not listed under 'Projects under Investigation' but I had earlier found one of the phases of that project listed under 'Applications Rejected' which builders had claimed to be approved.

My query is more from finance angle - assuming they do receive approvals, is it worth holding on to the property just because the price will stay (i.e. not increase with the delay in construction)?

boomerang;671172Thanks for sharing the link. Builder or the project is not listed under 'Projects under Investigation' but I had earlier found one of the phases of that project listed under 'Applications Rejected' which builders had claimed to be approved.

My query is more from finance angle - assuming they do receive approvals, is it worth holding on to the property just because the price will stay (i.e. not increase with the delay in construction)?

How big is the deposit? Is it 50% of total cost? Is the overall price > 500k USD? At higher price point, the probability of price going higher is pretty low. You are betting that RE price will outpace inflation in India. It has not even kept up with inflation for past several years. Many projects that started 3-4 years ago are now quoted at just 20%-25% higher than the initial price.

boomerang;671172Thanks for sharing the link. Builder or the project is not listed under 'Projects under Investigation' but I had earlier found one of the phases of that project listed under 'Applications Rejected' which builders had claimed to be approved.

My query is more from finance angle - assuming they do receive approvals, is it worth holding on to the property just because the price will stay (i.e. not increase with the delay in construction)?

What makes you think they'll get the approvals? Why would you invest in something without them having all approvals in place? If the builder has already lied to you about earlier approvals why would you trust him with your hard earned money?

RE is not going to pick up anytime soon. I'd suggest you take back your money as quickly as possible. If you do plan to buy something ensure its fully constructed & the builder is providing both OC/CC otherwise its just not worth the hassle IMHO.