Realty sector must become idiot proof!

The sellers are oblivious to the construction cost
The buyers are unaware of how much should be paid
Both must act wisely
Otherwise, both have to pay dearly
RERA’s role is crucial at this moment

King Johnson Koyyada: Imagine this. We boarded a plane, fastened our seat belts, and then there came an announcement- “We have hired a new pilot to reduce our costs. Do not panic if there are any sudden movements and jerks in your journey.”

What would we do when we hear such a statement? Do we want to get off that flight immediately or do we continue our journey ignoring the threat to our lives?

Currently, the construction sector is facing similar situation – full of new builders, new offers and buyers who do not think twice before investing. It is for sure that the construction industry would soon witness an unprecedented pandemonium. To prevent it from happening, there is an urgent need to make the construction sector idiot proof.

In the current market, there is no dearth for realtors who are oblivious to construction costs, but are eager to draw plans only on paper without any real ground work. They copy stunning elevations from the internet and get some awesome designs drawn, to share them with buyers via WhatsApp and sell the properties at cheaper rates in the name of UDS and prelaunch offers.

There is also no scarcity of investors who are eager to invest in such projects with cheaper price. If this situation continues any further, the construction sector could soon face a catastrophic blow. Both the builders and buyers alike should think big and work together to avoid any untoward situations. Only then, the entire construction industry can become idiot proof. Otherwise, at least 70 percent of buyers in the current market could end up in trouble.

It is a well-known fact that no matter what kind of business you do, one must invest money, time and energy to succeed. The returns should be higher than the investment and only then one would succeed. One must understand that it would be foolish to take up a business which gets the returns lesser than the investment. If this method is applied to the construction sector, most of the people who are currently developing apartments are unaware of the construction cost and factors that could affect the same. And yet, some new entrants are kickstarting their apartment consruction and selling the properties for cheaper than the market price.

Under the current circumstances, the construction cost of a five-ten storeyed building can be as high as Rs 2,500 per square feet. The price of land is nowhere less than Rs 10 crores per acre in Hyderabad. Assuming that one would construct 1.1-1.2 lakh sq.ft in an acre land, the land value itself would be not less than Rs 1,000 per sq.ft. The marketing and other costs are an additional expenditure. But some builders are selling flats for a price anywhere between Rs 2,600 and Rs 2,800 per sq.ft. Despite knowing the fact that it would difficult to complete construction at such low prices, some fraudulent builders are selling their plots and a few gullible buyers are jumping on the bandwagon to purchase them. Thus, both of them are behaving foolishly without any knowledge about the ground realties. As a result, the entire construction sector is in danger of falling apart. Therefore, the realty sector must become idiot proof, failing which around 60-70 per cent builders and buyers would fall into a deep abyss.

Construction is a high risk business. There are many subtleties involved. Sometimes, one cannot even expect how, when or why some of these problems arise. Only a few experienced builders will be able to figure out how to fix them. Others are confused as to what to do or should not do. In the process, one should not be surprised if the entire project gets stalled. Under these circumstances, it would be difficult to complete the construction and one cannot be sure of making profits after going through all this turmoil. Even the experienced builders commit mistakes in the process. But as they have a good understanding of the field which is gained over several years, they can come up with solutions to their day-to-day challenges. But it is a difficult task for those who have recently entered the realty market especially those who took up UDS and prelaunch sales. It is ironic that they all think that construction is easy.

A doctor’s mistake could snuff life out of a patient. Similarly, a foolish mistake by a builder during the construction of a project, could put hundreds of innocent lives under threat. Hence, the builders should remain extra cautious before, during and after construction of the apartment without fail.

Buying a new house. Real estate agent giving a home keychain to a buyer. Modern flat style vector illustration isolated on white background.

RERA must act

To ensure that the construction sector in Telangana becomes idiot proof, the RERA must be proactive. Cases should be filed against prelaunch and UDS builders, apart from imposing hefty fines. Builders will not stop selling flats in UDS and prelaunch sales, unless they are awarded with stern punishment. The buyers too will stay away from such fraudulent projects. The realty sector in Telangana can become idiot-proof and flourish only when the prelaunch and UDS sales are completely rooted out. Otherwise, the market could suffer a risk of 60 to 70 percent loss in the coming days.