Realty check: Buyers are sinking in negative equity
More than two lakh property-buyers are facing ‘negative equity’ (when an asset’s value plunges below the outstanding balance on the loan used to purchase that asset) due to delayed home projects in the National Capital Region (NCR). To most of them, these units had been sold with the promised of ‘price protection’, but prices are dropping so fast that the value of the ‘dream home’ is now lesser than the loan.
Nishant (38), had bought a flat in 2013 at Godavari in Mahagunpuram society in Ghaziabad, but is still awaiting possession. He is one among the hundreds of buyers who are waiting for their “dream home” from the last four years. The builder, Mahagun Group, has already collected 100 per cent of cost from him. His flat had cost about Rs 44 lakh, but is now worth just Rs 27 lakh due to price correction. Nishant told DNA: “It’s been more than four years that I am paying home loan EMI and rent every month. The builder had promised us that we would be offered possession by last year, but that did not happen.”
DNA found that Mahagun had agreed to pay the buyers a penalty of Rs 10 per sq feet, …read more