Thursday, December 22, 2005

Bangalore : Investors or Bag holders

Recently I have been running into bunch of people who have purchased 3-4 flats in Banglaore for real estate investment and who are interested to sell.

One guy I met had over 2 crores of property. He needs to pay the 10% VAT(approx 20L) (thanks to the FM) since the purchase was done before april 05, and is now desperate to sell the apartments. Another guy I met had over 80L in houses. and surprisingly the builders havnt sold out too and these guys are trying to sell (time for a perfect storm)

All this thanks to Craigslist or Sulekha so I havn't even probed the real estate agents ?

If these guys use the realtors, they have to part with another 1-2%. If they have a 20% appreciation over 1 year the effective return they have is 20 -10 - 2% = 8%.,.Fixed deposits and stock mutual funds can yield better.. How stupid can these guys be ?

how many of these rats are trying to bail ship is anybody's guess.

I think this is the sign that the market is going to pause and turn down.. Lots of availability on Sarjapur road, rates havn't moved up and more property coming into the market.

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