Excerpts

What is secondary property market?

All plots, apartments and houses that are up for resale, comprise the secondary property market. What is surprising is that a significant percentage of these are new projects that are resold within months of their completion!

Statistics reveal that nearly 30- 40% of the new residential projects in the city come up for resale either during the time of construction or within a year of their completion. Out of these, 80% are individual investors.
In the last one year alone, approximately 30 new projects were floated comprising around 20,000 dwelling units. If one goes by an average of 30-40% coming back for resale, around 6000- 8000 dwelling units have already come back to the market. Out of these, 50% of the projects are still under construction! To satisfy the said needs, Propmart Technologies is going to organise the resale exhibition.

Why resale exhibition?

There is a huge secondary property market in India that is highly disorganised. This market is generally comprised of individual sellers, middle-men as well as property agents. Often there is no proper exchange of information between the buyers and sellers. To provide this highly disorganised market an organised and professional platform, Propmart technologies is organising the first ever resale property exhibition in India from Bangalore.

What does it entail for individual buyers and sellers?
First of all, it will provide a platform for both buyers and sellers to interact directly without any middlemen. Secondly, all the pre-owned properties on display will be clear in status and approved by BDA, BMRDA and BIAPPA along with legal clearance of projects including encumbrance, details about updated status on tax, khata and other aspects. Thirdly, the exhibition will be an FSBO show and fourthly, if required we can also arrange for complimentary actual site visits.

What is FSBO?
FSBO or ‘For Sale By Owner’ is a transaction done directly by the owner without the involvement of a real estate agent. The owner, in this case saves on the 2% brokerage. FSBO however constitute only 12- 15% of the resale transactions. Almost 85% of the resale transactions are currently being executed by real estate agents. In certain cases where the property is sold before registration, the builder also gets involved in the transaction since the second buyer is the first occupant of the property.

What is your opinion about the trend of properties changing hands before getting the first occupants?
Today, property for some is no longer an emotional buy. It is another means of achieving short to medium term appreciation, which explains the trend of the properties changing hands before its first occupants. The satisfaction is mainly derived by the short-term investors who already have their own houses but buy new ones, just to make a quick buck in the bullish real estate market.

Propmart had recently done a survey for an MNC property developer on the buy-sell cycle of various household assets. The study revealed that items like washing machines, refrigerators and colour TVs have an average buy-sell cycle of around 24 to 36 months, and two/four wheelers around 30 to 45 months. What was interesting was the fact that the retail land had the buy-sell average of 18 to 21 months and the house/apartments around 50 to 70 months.

Why should one opt for a resale home when there are so many primary properties on offer?
It is more convenient to buy a resale property as one gets financed on the overall cost of the dealing. Say, on buying a new house worth Rs 40 lakh, with the bank financing 80% of the amount, one will have to pay Rs 8 lakh (ie 20% of Rs 40 lakh) as downpayment. And after adding up the BWSSB, KEB, parking and registration charges, the total payable amount will come to Rs 16 to 18 lakh. Whereas, if one goes for the same property of the same builder in the same locality, but pre-owned, worth Rs 55 lakh; he will only have to shell out Rs 11 lakh (20% of Rs 55 lakh). Moreover, the unit is ready to occupy and the buyer knows in advance the rentals that property will fetch. Therefore one can easily set up the EMIs against the rentals.
For further details contact:

Propmart Limited, #63, 1st Floor, “RMZ Gateway” 80 Feet Road, 4th Block, Koramangala, Bangalore-560 095.
Tel: +91-80-2250 1318/20/21.
Or log on to: www.propmart.com