Transfers & Premiums...

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Safal Suri

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Oct 28, 2009, 3:52:12 PM10/28/09
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Hi All...
 
Let me first start with current premiums at 6.00 PM on 28.10.2009 (Those who think by providing these numbers I'm speculating, please ignore... those who wish to know present prevailing premium, may please take a note).
 
1,000 sq. mt. = Rs. 700 - Rs. 1,100
2,000 sq. mt. = Rs. 400 - Rs. 700
4,000 sq. mt. = Rs. 250 - Rs. 500
 
Jitender, as far as allotment transfers are concerned... popular RUMOUR is that transfer charges will be Rs. 110 per sq. mt. Transfer will be allowed AFTER depositing the allotment amount of 30% or 50%, as the case be. Un-limited transfers will be allowed up till Lease Deed and Registration are started in 4-5 odd years. Remember, all of these are RUMOURS. I can't confirm OR deny any of these.
 
That said, it makes sense, at least to me. By first ensuring that allotties deposit allotment amount, YEA is securing the buyers for its plots. YEA then continues to profit by allowing multiple allotment transfers. In fact, by allowing multiple allotment transfers, YEA might make more money than it would be allowing Lease Deed and Registration up front.
 
Next Point...
 
Sanjay, as for the premium of 1000 sq. mt., 2000 sq. mt. & 4000 sq. mt. shooting to negligible amount after the draw of 300 sq. mt. & 500 sq. mt. plots takes place on 17.11.2009, I seriously doubt that. I have my reasons for that...
 
It is popularly anticipated that opening premium of a 300 sq. mt. plot will range between Rs. 1,000 per sq. mt. (Rs. 3,00,000) to Rs. 1,500 per sq. mt. (Rs. 4,50,000) and opening premium of a 500 sq. mt. plot will range between Rs. 750 per sq. mt. (Rs. 3,75,000) and Rs. 1,250 per sq. mt (Rs. 6,25,000). Should the premium of a 500 sq. mt. plot reach Rs. 1,500 (Rs. 7,50,000) at any stage, it will be naive to imagine that a 1,000 sq. mt. plot will continue to stay in range of Rs. 100 (Rs. 1,00,000) to Rs. 500 per sq. mt (Rs. 5,00,000). Naturally, in such a scenario, the premium of a 1,000 sq. mt. plot will remain higher than that of a 500 sq. mt. plot and may again reach in range of Rs. 1,000 (Rs. 10,00,000) or more.
 
For those who couldn't understand jumbled figures, please let me explain in depth... but before I make my point regarding relationship between premium of 500 sq. mt. plots and 1,000 sq. mt. plots, let me first draw your attention to another issue...
 
OFFICIAL PLOT CATEGORIES AND HOW I DIVIDE THEM...
 
Although officially there are 5 plot categories... I club them in 3 categories/sub-categories...
 
Category LARGE
1. 4,000 sq. mt. (125 plots)
2. 2,000 sq. mt. (300 plots)
TOTAL 425 plots
 
Category MEDIUM
1. 1,000 sq. mt. (1,250 plots)
2. 500 sq. mt. (2,500 plots)
TOTAL 3,750 plots
 
Category SMALL
1. 300 sq. mt. (16,825 plots)
TOTAL 16,825 plots
 
I firmly believe, over a period of time, the premium for above clubbed categories/sub-categories will rise and fall in tandem with each other, independent of what takes place in other categories.
 
Some would ask why?
 
Ok!
 
Generally, LARGE category buyers are financially affluent people and can afford to purchase either/both, 2,000 sq. mt plot and 4,000 sq. mt. plot. However, for obvious reasons, people in MEDIUM & SMALL category can't afford to venture in LARGE category. Therefore, LARGE category has niche market and as a result, LARGE category has been allotted least number of plots (425). What happens in MEDIUM & SMALL categories will not effect the buyers or the seller of LARGE categories. They will be guided by their own dynamics.
 
Similarly, most MEDIUM category buyers can afford either/both, 1,000 sq. mt. and 500 sq. mt. plots, however, very few/limited customers of SMALL category will venture in MEDIUM category. I know, many would argue that those who can buy a 300 sq. mt. plot can also afford a 500 sq. mt. plot. Yes, I agree... but going by market feedback and my interaction with, literally, HUNDREDS of people over last month... it seems very clear to me... most people who want to buy a 300 sq. mt. plot are focused end users and generally, first time buyers. Most buyers of 300 sq. mt. plots have very limited budget and are unable to stretch their pockets. Based in my personal experience, I would say that almost 85% to 90% are focused 300 sq. mt. plot buyers only. They will not venture into buying and selling of 500 sq. mt. plots.
 
NOW back to relationship between premium of 500 sq. mt. plots and 1,000 sq. mt. plots. Before explain the same in detail, let me once again attract your attention to another important issue. I am sure many must have already noticed it.
 
2,000 sq. mt. plots (300 nos) are almost double in number than those of 4,000 sq. mt. plots (125 nos)
 
500 sq. mt. plots (2,500 nos) are precisely double in numbers than those of 1,000 sq. mt. plots (1,250 nos)
 
300 sq. mt. plot is the only category that is a separate CATEGORY in itself. 300 sq. mt. plots constitute 80% of all plots on sale.
 
Now, coming back to the relationship between premium issue... I have few points to make...
 
1. 1,000 sq. mt. plots witnessed most hectic trading in last few days. Naturally because it was the cheapest of the lot AND because it had maximum numbers of plots (1,250).
 
2. 500 sq. mt. plots will witness next wave of hectic trading by speculators/short term investors/RE agents.
 
3. 500 sq. mt. plots are in unique position. One... more people (including speculators/short term investors/RE agents and end/final users) can afford to buy a 500 sq. mt. plots. Two... although, the number of 500 sq. mt. plots on offer (2,500) is double of that is offered in 1,000 sq. mt. plots (1,250), the number of potential buyers of 500 sq. mt. plots will be at least 4 times more compared to the potential buyers (including speculators/short term investors/RE agents and end/final users) of 1,000 sq. mt. plots.
 
4. Locational advantage. 1. There is not a single village in blocks housing 500 sq. mt. plots. 4 out of 5 blocks (R, S, T & U, except Q) has clear approach via blocks housing 4,000 & 2,000 sq. mt. plots. 2. 500 sq. mt. plots are housed quite away from 300 sq. mt. plots.
 
5. In spite of being 16,825 plots in all, 300 sq. mt. plots will hold on its own. Mainly due to its price tag and affordability. For e.g., Even a auto-rickshaw wala in Delhi can afford to buy or invest in one. My take is, for 1 300 sq. mt. plot, there are at least 5-10 potential takers.
 
I believe, similar to 1,000 sq. mt. plots, over trading of 500 sq. mt. plots will take place (mainly because they are few in number, when compared to 300 sq. mt. plots AND also the fact, that they are just double in numbers compared to 1,000 sq. mt. plots, yet over 4-5 times more people can afford 500 sq. mt. plots compared to those who can afford 1,000 sq. mt. plots), which will result in 500 sq. mt. plots witnessing smart premiums (in range of Rs. 750 to Rs. 1,500... and possibly up to Rs. 2,000). As a result, rising premium in 500 sq. mt. category will create pressure (temporary or otherwise) on 1,000 sq. mt. plots, resulting in instant hike-up of premium to above Rs. 1,000 per sq. mt.
 
I'm aware, quite a few members of this forum will yet again not subscribe to my thoughts. Fair enough... everyone has the right and independence to think and believe in their own manner.
 
However, this is my analysis and I am hope I will be proven correct. And then, I maybe wrong. Only time will tell...
 
Cheers...
 
Safal
 
 
 

Sanjay Gupta

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Oct 28, 2009, 4:14:11 PM10/28/09
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Hi Safal,

Thanks for the detail information.
As you informed that the procedure of transfer is still not clear, so I assume that no real/genuine buying or selling is happening.
Then what is the premium which you are mentioning, it is mathematical or speculative price?
I am bit confused on this issue. Who are these buyers and sellers? How is this premium getting calculated?
Can you please explain this a bit more.

thanks
=Sanjay

Safal Suri

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Oct 28, 2009, 11:52:05 PM10/28/09
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Hi Sanjay,
 
Obviously you are not aware how RE transactions and dealings takes place in Gautam Budh Nagar (Noida, Greater Noida & Yamuna Expressway). This is not the first time that sellers are selling, and buyers are buying, before lease deed/registrations are officially announced. In one of my earlier posts I have described in detail how things work. Maybe you didn't read it or forgotten about it. Just to refresh your memory...
 
1. Agreement To Sell (Registered).
2. GPA (General Power of Attorney).
3. SW (Specific Will).
4. Change Of Address.
 
These are LEGAL instruments by which all deals take place in NOIDA & GREATER NOIDA (These are not hypothetical instruments, they are being used everyday. You may confirm from any RE professional in this area). Same instruments are currently being used in Yamuna Expressway. Remember, ALLOTMENT TRANSFER is NOT permitted in Noida and Greater Noida, yet the Lease/Registration takes place after 3 to 4 years. How then are deals done in Noida & Greater Noida? By above said instruments.
 
As for YEIDA, allotment transfer WILL BE PERMITTED, just that the amount (allotment transfer charges) and other T&C are yet to be officially announced. I'm told the delay is because senior officials of all three authorities were busy in UP INVESTMENT exhibition at Mumbai. They have now returned. Soon, they will be meeting in this regard and announcements regarding the same will be made in due course.
 
As for the buyers and sellers...
 
The Buyers:
1. Investors (All kinds... day traders, short-term and medium-term investors).
2. RE Professionals (Those directly involved in RE. Includes, property agents and builders).
3. Individual Users (End users and single/small time investors).
 
Apart from above, many original allottees have decided to retain the plots. Initially quite a few original allottees approached the market for selling the plots, however, once the prices rose, a lot of potential sellers saw merit and decided to retain their plots for 2-3 years.
 
The Sellers:
1. Original Allottees (Many of them applied to make short-term gains. However, many applied by submitted entire amount. Most of them are genuinely interested in retaining their allotments, over long periods)
2. Investors (Day traders and short-term investors, who recently bought the plots with intentions of selling at higher premium in next few days)
2. RE Professionals (Property agents, builders and RE financiers, who recently bought the plots with intentions of selling at higher premium in next few days)
 
For general information. Over one and half dozen members (mostly silent members) of this forum have approached me in last couple of weeks. I have successfully bought plots for them or sold their plots, as the case may be. In each instance, I ensured that the seller and buyer gets to meet each other. So far 9 members of this forum itself, have either bought or sold the plots through me. Why am I telling this? Just to provide example that the deals ARE taking place and its no fantasy imagination of property dealers in this area.
 
I don't know how-many members of this forum are directly connected to the roots of RE industry in Gautam Budh Nagar, especially YEIDA. I am and I do dealings here everyday. Many times I am surprised by the content (mostly, blindly and un-reasonably negative) some members post on this forum. Clearly, some people are simply ignorant about the ground realities. Such members seem to gather all their information, either by online articles, or hear-say from people who live here. Problem is, often such information is incomplete and half-cooked, which is not always correct or the truth. Worse, such members tend to actually believe in half-cooked information and then make their judgements based on incomplete information. If things could get any worse, sometimes some members of this forum speak in such confident manner that they know-it-all.
 
Personally, after many many years of being in this field I am still learning something new everyday. I don't claim to know-it-all. At times when I don't know, I accept I don't know. No shame in doing so. And I request other members. Please do not create a stereo type image of this area. We all are here to learn from each other. I have. So, please shed unwarranted attitude and focus on merits/de-merits only.
 
Yes. Every place has some good and some bad qualities. Cant be all good. Cant be all bad. Lets just discuss the merits and de-merits. And, lets not get personal or sarcastic.
 
Cheers...
 
Safal Suri

ArnabMukherjee

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Oct 29, 2009, 12:38:24 AM10/29/09
to YEIDA
Dear Safal,
If you say, Transfer is not allowed in GN, then why do people
(secondary market buyer) pay transfer and registration after 3-4 years
of allotment ? The original allottee also needs to be present over
there ?
Could you clarify this ?

Thanks
Arnab M
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ArnabMukherjee

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Oct 29, 2009, 12:58:50 AM10/29/09
to YEIDA
Dear Safal,
One more request. Could you please enumerate the merits and demerits
of YEIDA without being speculative. So far we know YEW is getting
built and plots will be allotted in 4 to 5 years time frame.
The main worry of end user of YEIDA is the elapsed time. When Noida
came about in early 80s, the place got developed in 4-5 years with 75
percent people started living there. GN took about 18 years to reach
to a stage still did not match Noida (meaning people living there).
Going by this logic, YEIDA may not get populated in our life time.
So please let us know the ground realities in terms of merits which
makes you think we will be able to live there in 10 years time.

Take care,
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Safal Suri

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Oct 29, 2009, 1:21:02 AM10/29/09
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Arnab you are getting confused.

Allotment Transfer and Lease Transfer are two entirely different things.

Allotment Transfer is not allowed in Greater Noida and Noida.

Allotment Transfer is allowed in Yeida.

Safal

ArnabMukherjee

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Oct 29, 2009, 1:24:10 AM10/29/09
to YEIDA
Dear Safal,
Many thanks. These shortened terms often confuses people. They simply
say transfer charges. Its basically lease transfer charges and not
allotment transfer charges.

Take care,
ArnabM
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Safal Suri

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Oct 29, 2009, 1:26:00 AM10/29/09
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Dear Arnab,

Yes, as time permits I will provide an unbiased analysis. More like SWOT
analysis.

Would have done long back... but for the people who copy my stuff and use it
for their own use... why should I work for them?

However, please stop comparing and co-relating Noida with Greater Noida and
then Greater Noida with Yeida.

The entire premises is faulty. Different times, different socio economic
conditions, different political scenarios, different demand-supply
equilibrium. Comparing them with each other... all the time... for
everything... is just plain wrong.

What pains me most is that all the intellectuals are stuck with time and all
they can do is compare with old examples.

Move forward. Times are changing. Change with time or you will be left
behind. Like others have in the past.

Cheers...

Safal

nagin chand

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Oct 29, 2009, 1:54:23 AM10/29/09
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Yes, Safal, with time there is a need to see things differently BECAUSE they actually are different. And analytical tools do project such things but WE always impose our views and biases and suppress much NEW INFORMATION and POINTERS just because it does not gel well with ones thinking, philodophy, model, or the stand taken  earlier, etc.

The most STARKING result is that we are then left behind as the CHANGE will keep on happening.

The comparison with earlier settlements have little relevance except that the Noida-GreaterNoida Expressway has given a new life nad vibrancy to the standstill/dull/morose Noida with all the advantages of its proximity to Delhi! And that was a modern thing taking birth from the thinking and planning of those who conceived and executed Greater Noida. We must salute them. This is also a reason that a large network of modern life veins, ROADS, will happen all around in the NCR and then development will be a common story throughout the NCR and not in pockets.

Safal has provided clear information in a transparent manner. But Safal, do not fear if others will use your SWOT analysis on YEIDA, for at least then they will depend on something sensible. So, come on and present your SWOT analysis as soon as you can.

Sometimes we must ignore mails/information even if it is from very learned sources such as that from Arnab when it starts suffering from monotony.

Nagin Chand

On Thu, 29 Oct 2009 10:53:19 +0530 wrote

Sanjay Gupta

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Oct 29, 2009, 3:51:39 AM10/29/09
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Hi Safal,
Thanks a lot to for your time to explain your point.

thanks
=Sanjay
 

thanks
=Sanjay
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