Why Builders Overbuild

29.03.2016 • Emerging Markets

From Vivek Kaul’s Diary (IND) –

Conversations with friends who live in Delhi and the National Capital Region (NCR) inevitably turn towards the topic of real estate. Over the last two weeks, I met two friends and we ended up talking about the perils of the idea of owning real estate, among other things.

In case of one friend the builder has taken the money and is postponing building the apartments. Meanwhile, the housing finance company has turned a blind eye to this. At the same time, my friend is paying the EMI, though the promised home is nowhere in sight. He continues to pay rent as well. Not a happy situation to be in.

In case of the second friend, the builder ended up building more floors than he had initially promised. My friend was lucky to get possession and move in. But with more floors he is now sharing the infrastructure with more people than was initially planned and this has its own share of problems.

Other than sharing the infrastructure there is a bigger problem which most people don’t even realise.

-Read More Here-

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