Moneylife.in reports
Powai is a tony residential location in central Mumbai. Property prices here are reaching for the stratosphere. Rates have almost doubled over the past eight months. Recently, a two bedroom-hall-kitchen (BHK) of 985 square feet (sq ft) in Lake Homes, a residential complex—developed by Ekta World and Supreme Universal— sold for between Rs 90 lakh-Rs 95 lakh. During the slowdown (around nine months back), an apartment of the same size would have sold for Rs68 lakh. In 2007, when the real-estate segment was at its peak, this apartment would have sold for Rs78 lakh, revealed a source.
Prices have been steadily going up in this apartment complex (Lake Homes). Around a month back, the property was priced between Rs80 lakh-Rs85 lakh; four deals took place at these prices. “Prices have been rising quite rapidly. I have seen four-five deals happening at Rs80 lakh-Rs85 lakh—recently a deal took place between Rs90 lakh–Rs95 lakh,” said a resident of that area, who preferred anonymity.
63 comments:
Then go and buy, you moron and feel better.
Why are you misguiding people here ?
World stocks hit by Greek debt, India rate hike.
19-MAR-2010 : 7 Banks closed in one day in US.
On an average 12 banks are getting closed per month.
Siemens lays off 4200 IT employees.
Religare Cap lays off 17 execs from sales, research teams.
Job insecurity increasing.
RE players, speculators, investors. Still feeling bullish ? Still, in the state of denial ?
No rational person is in the state of denial. What is happening is going to continue and wise investors know it. The people that are in denial are those talking about America, Uk , Europe and predicting imaginary scenarios based on their text book knowledge. Comparing western economic models with ours is foolishness.
3 years back prices in borivili were in the range 4500-6000 rs per sq.ft.Todays they are nearing 9000 per sq.ft.and are still rising.
The best investment one can make is real estate. Those of you who wait for the prices to come down based on europe/america may have to wait forever, FOr INDIA is neither EUROPE or AMERICA
Only morons will pay such prices, but hey who can stop rats following the pied-piper.
Sabbal Sussu,
That's what people here are saying that India is not US or Europe and cannot have RE priced more than London/Tokyo or NY.
Get to reality. If not, keep buying. Good for you. The more pimps like you buy, the harder would be the landing.
You talk about theory, I wish people like you had taken even one course in basic economics, you wouldn't be spewing nonsense on this blog. I wonder if you ever went to school and ever got a real job. People like you just thrive on easy money made by screwing naiive people and then you think you have become successful in life.
Success is not just money, but what you have in your head and how you use it for the betterment of society.
Realty nosediving by 4%
Sussu bhai, if realty has such a pink hued future, can you explain why realty index is tanking. Why they are unable to raise either debt or their ipo's are doing so bad? hmmm..
Secondly, folks, realty has been growing at the rate of 3%-5% over the past 25 years!! Recently it has been zooming to 300% over the past 3 years. The regression to mean is going to be sharp and pretty bad for those fools who are invested. This is basic maths and basic economics...does not matter whether its India, US, Japan or whatever. Black money can prolong and drag in more suckers, but the end has to be severe and real bad!
I was just looking at some ads on craigslist for Delhi. I was surpirised to see asking prices of 4 to 5 crore rupees for flats. Are people drinking too much in Delhi now. Are they out of their minds or people who are paying these prices are really insane.
I cannot believe it. You can get a very good house on independent lot on NY city in less than a million dollars. These people in India are just crazy. Well, let is go as high it can and then fall with a big thud. Crazy idiots. They talk about crores, do they really understand how much is $200K.
I'm out of Indian market ASAP. I'm selling all my inheritance, cashing out, pay my proper taxes and save the money. The place is infested. Not worth going even.
Looks like both the sardars, the Singhs Montek and the PM are smoking some bad pot. All they have done is relaxed policies for foreign innvestments, lowered interest rates and caused the BIGGEST bubble in housing in Indian history. PM is India's Bush. He will be remembered in India like Bush is remembered in US.
Fake morons.
All of you are trying to prove that Sabbal is wrong but his predictions are more realistic than the wannabe goras cum economists amongst you. I too feel that this boom is fueled by the neo rich and their least worry is real estate market crash. The money amassed by the neo rich is mostly the fruit of labor of suckers like you, and i don't think that they are worried about the reduction of its value. Meantime, you guys are using your scientific brain trying to understand why this is happening and cursing few who don't go along with your thinking
Moron@04:36,
And Sussuu wannabe, its not so. Science is science, like Newton discovered that things fall due to law of gravity. So markets fall due to basic economic laws such as supply and demand and the cost of capital.
Why are all the realty stocks nosediving? Because investors know that these companies are empty shells and its time some of these companies went bankrupt...Which also gives you a hint about what is going to happen to the realty bubble. If people are predicting the bursting of the realty bubble, they are right. That the bubble hasn't burst yet does not imply that the realty bubble will not burst in the near future.
It's like russian roulette if you have not died 5 times after pressing the trigger, it does not imply that you will not die the 6th time!! Rather, make sure you will not pull the trigger the 6th time...
Prices don't go up unless there is a demand.I haven't come across people buying and leasing/renting out which does not indicate an investment asset. Only 15% of new buyers have a mortgage on their home and therefore defaults does not even dent the lenders finances as they are very sure that they can recover the loan by auctioning the property. Given these circumstances, I don't see a bubble. What is happening is people are buying property instead of hoarding money in gold form.
Due to recession and other factors, some big realty players may even go bankrupt, but then the promoters of these companies aren't worried at all. Most have already reaped the harvest and if their companies sink, it is the public money that is going down the drain. Construction may slow down but I doubt the prices will travel south
Unless and until the government cracks down the public leeches, we wont see an improvement in this situation. and then, what is government of india - It is run bu the very leeches who suck the common man's blood
Anon above:
The bubble will burst. People are buying to park their money, but the question to be answered is from where are they getting this money?
This is easy money due to massive liquidity and money in cycle in the country. Most of it is stolen money from the Govt. and people are parking it. What happens when the RBI sucks out this liquidity, would new buyers have that kind of money to pay.
I think people who are parking their stolen money in RE would lose it the way they earned it. And as far as banks are concerned, you don't know how much they are exposed. Wait for the NPAs to hit them bad. Once it goes down, it will just spiral down and down and all buyers would have vanished overnight.
ANyone paying a lot of money in black to purchase RE would be toast as quite a bit of black money from the transaction would be evaporated when the prices fall.
If it was that safe, banks would make 90% of the price as loans. But they don't. They are trying to cover their arse but they may still get burnt as the bubble is massive. It could easily take prices down by 50-60%.
PORTUGAL RATINGS have been downgraded. Greece is already looking for some help to finance their debt. People are on streets in Greece. WHat was reason: Greece Govt. had interest rates low, massive borrowings and increased salaries for their Govt. employees. Didn't India do the same?
Now, IMF will bail out Greece. Next they will bail out Portugal and then Spain and then Italy and so on.
People may not know that INDIA also contributes a lot to IMF and a lot of Indian Tax payer Rupees will soon to going to bailout Greece and then other EU countries.
@Anonymous 6:24 - Your question
What happens when the RBI sucks out this liquidity, would new buyers have that kind of money to pay.
RBI is part of the corrupt government and the officials are as corrupt if not more. RBI takes order from corporate world and advices the government on the course of action to tackle inflation, alleviate poverty etc etc keeping in mind not to annoy anyone in the government and same time ensuring that they are well fed. I know several multi millionaires who are/were part of RBI. These are highly educated, intelligent and therefore dont flaunt their wealth and avoid limelight.
To answer your other question about banks. Banks are state controlled and no one gives a f.ck to what happens to the loans
We are living BhaRat my friend. Stop dreaming
@Anonymous 6.34
PORTUGAL RATINGS have been downgraded. Greece is already looking for some help to finance their debt. People are on streets in Greece
Stop worrying about these countries. They will come out of it. No one is going to use your as well as my money to bail them out. Don't believe BBC/CNN reports. What matters is the ground reality in our country.
I don't think MMS and his team is corrupt. India had a lot of black money that was stuffed in pillows or stashed as gold or in foreign banks. Since the realty sector is not transparent, people put a lot of that money in RE. This resulted in a huge realty boom and created a lot of employment. Of course, people at the top of the pyramid made a lot of money (like that DLF singh guy), but everyone made money. The black money was used to fuel India's growth which is much better than letting it sit in pillows and mattresses.
Now comes the fun part, as the RE sector succumbs to market forces, the biggest losers will be the people who put up all that black money in all cash RE transactions. If you bought a flat worth a crore with black money and 50 lakhs vanish due to a correction, 50 lakhs of black money just vanished!
Of course, that 50 lakh probably made a lot of people lots of money and did the economy some good before vanishing!
I am just waiting for this to unwind now as the rate cuts kick in. Garam Garam Chai!
I too think that not all people are corrupt and MMS is one of the most respected honest person Indian can have.
Btw, theives are everywhere. Their day is coming soon.
RBI is also not corrupt. There could be some people in it. I can think of Fin Min to be corrupt as they have to please people to get votes, but RBI NO WAY.
No one says MMS is corrupt. He is MOS (Most Obedient Servant), so is Chidambaram. By having clean figureheads doesn't solve the main national problem, in this case extreme corruption. These figureheads do not hold anyone accountable for the national ills. The one who wields real power, SG, is too busy dousing the flames of communal infernos and economy is least priority in her agenda. It seems that her only goal is to make her son to be the future ruler of India. The opposition parties are hell bent upon seeing that it wont happen. They want to topple the present government and take us to the Ramayana Era. In this process no one cares about Am Admi.
I'm earning 45000 p m (gross) and still living with my parents. How I'm supposed to live like a free bird and enjoy life like a normal human being. The only place I can afford currently is a 'Kotri' in some slum chawl of mumbai.
Anonymous 10.46
You say RBI is not corrupt and again go on saying 'some people in it could be corrupt'
corrupt people don't survive in a clean environment. In any organization corruption can not survive if few clean people are part of it. It is either corrupt or clean. There is no way between.
Clerical, junior and middle management level don't have an opportunity to be corrupt. but. who is supervising the seniors.
So, do not just blindly say that RBI is not corrupt just because MMS is our PM
I just had some RE guy tell me Rs 25K per sq ft price for house in Juhu, mumbai. I could not stop laughing !!!
Well.. it only means Builders are aware that prices are going to nosedive very soon. By increasing to high level now and later reducing it actually make them free to anounce to the World that 'builders have reduced the prices by 30%-40%. Just like raising the price of an item and then publish discount on it.
People be careful :)
Is The United States Headed For A Commercial Real Estate Crash Of Unprecedented Magnitude?
Contributed by The Economic Collapse Blog (Reporter)
Thu Mar 18 2010 19:14
Will commercial real estate be the next shoe to drop in the ongoing U.S. financial crisis? While most eyes are on the continuing residential real estate disaster, the reality is that the state of the commercial real estate market in America could soon be even worse. Very few financial pundits are talking about this looming disaster but they should be.
The truth is that U.S. commercial property values are down approximately 40 percent since the peak in 2007 and currently approximately 18 percent of all office space in the United States is now sitting vacant. That qualifies as a complete and total mess, but the reality is that the commercial real estate crisis is just starting.
A vast array of commercial real estate loans made between 2000 and 2005 are coming up for a rollover, but because credit standards have tightened, borrowers may find that they simply do not qualify for refinancing.
2010 - Alt A , Option ARM are rearing the ugly heads. Please check the YouTube clip
The Housing Collapse of 2010 Will Be Worse Than 2008
Very funny.
A few morons having black money may be investing. Rest everything is paid news.
Morons like Sssuu and some brokers themselves just do some bookings (They don't buy actually) and then print paid news in media and newspapers regarding the RE demand. Whereas the fact is that people are just observing all this drama (Nautanki).
This Nautanki is sure to have a real bad end.
Just ignore it and don't buy.
In my view house prices have gone up presumably because
1)Flat and house quality have improved from previous generation buildings construction.
2)Investment by FII in Stocks and in real estate directly or indirectly
2)Lot of people jumped into bandawagon after loose credit policy begining specially 2002
3)Investment in property is now considered as short term, thinking they will sale at higher price quickly as herd mentality says property will not go down no matter what
4)Paid news in Fouth Estate.
5)Lack of trasnparent data and information
6)Price fix cartel by builders and brokers.
7)Loan against stocks/mutual fund ,and then money used to buy real estate as return consider astronomical (12 % on loan and return 30% to 100 %)
8)Builder bailed out by GOI
@ Sanjay
Here is why now believe its Bubble
1)As per some economist Investment percentage in India is now more 40 % to 45 % and consumer spending is around 60 %. Previously it was 70%, model is very close to chinese one now. And once Investment money start to trickle, there goes multipier effect and 1 to 2 % drop in GDP is huge.
2)Credit bubble build by Indian bank.Money was pumped into market and again some got into Real estate (Same situation in China but in very grand scale).
MUMBAI—ICICI Bank Ltd., India's largest private-sector bank by assets, is returning to its roots by boosting corporate lending, Chief Executive Officer Chanda Kochhar said.While retail lending has powered the bank's climb over the last decade to one of the subcontinent's most vital companies, the bank has been forced to slash its unsecured retail loans and credit card portfolios. The default rates on these loans had climbed too high, Ms. Kochhar said.
Here is full article
http://online.wsj.com/article/SB10001424052748704211704575139442072480252.html?KEYWORDS=ICICI+Bank
Similarly Asset bubble in China .Another WSJ article excerpt
HONG KONG—One is a Chinese state tobacco company. Another, a Japanese ramen chain. And finally, an obscure Hong Kong semiconductor manufacturer.
What they have in common: They are the latest companies to jump on the real-estate bandwagon as prices soar in Hong Kong and mainland China. For some experts, they are also troubling evidence of froth in both property markets.Last week, a small manufacturer of diodes and transistors called Sino-Tech International Holdings Ltd. stunned investors by announcing that it was "diversifying into the property sector," buying a luxury three-story residence in Hong Kong's swank Peak district for more than US$36 Million in cash, biggest sums ever for a property here.
That mad sino-Tech the latest in a string of a companies larges and small, state-owned and privately run,that are pilling into Hong Kong and Mainland china's property market -despite no demonstrable experience in the sector
1)Historically low borrowing rates and large government stimulus packages have brought a rush of relatively unsophiticated late comers into real estate market in search of easy money.
2)Regulators and market players worry these investorys are pushing prices to irrational levels, paying sums of money that better reflect the ability to tap deep welss of cash than market fundamentals.
3)Office values have held steady in cities like Beijing and Shanghai despite vacancy rates of about 20% and drop in rents by as much as 40%.
4)Some experts have pointed to Japan's 1980 real -estate bubble as a precedent, when bakery owners and other relatively unsophiticated investorys were jumping into market with Splashy purchases that backfired when prices collapsed.In that case, property prices rose with little regard for fundamental metrics , such as rental yields , with purchases justified purely on the basis of the expectation of capital appreciation.
Now sound familiar in Indian context, Jet Airways paid hefty amount to buy land in Mumbai, now Godrej and god knows who else have jumped into real estate.
According to me all real estate Consultant and brokers are morons if they are suggesting that real end user can get in any time because these people are going to hold property for whole life, yes offcouse if price are realistic in range of 5% to 10% of true value.
At the end of day I want to at home relaxed ,not worrying about how I am going to pay mortgage my rest of life when I could have rented same apartment for 40 % of my EMI and rest of money put in some Pension related policy and after 58 years I would have been getting more than each month as pension then the running around to rent my property with less amount.
This bubble will some time to unwind and I am not going wait this out because sucked into this stupid whirlwind is no sane option.
@sanjay
Great post
Explains people always blame other for what they don't have like if they don't have brain or knowledge or economics they blame people who tell truth with it
The illusion of bubble burst and price declines is just a dream which will never happen
The abuses of users here just proves how desperate they are to be sitting on the other side of the fence that is having property
Guys you freaked out
Go and shout at your mom and dad may be they will give your your milk bottle
Accept prices have throughout history of any underdeveloped country with inflation known only one terriotory going up
You can't compare usa and INDIA
Comparing usa population and INDIAN USA price should be 1/8 of INDIAN price
It proves if INDIA becomes advanced it should have 8 times price than USA lol
There are many ways of calculations and being a prostitute of convincing oneself
Open your eyes
People make money and buy
You can shout
Like galielio said by me telling sun revolves around earth fact will not change up there
Similaraly by you growing arguing and proving to yourself or others here that property prices will go down too much nothing will happen
If you were so great analyst how come you are poor servants earning 15-20 lacs a year and shouting at prices of 25000Rs per sq.ft.?
Take care
and be brave to face facts which you don't but you can blame me of not facing it
You can't compare advanced economy of USA or EU with underdeveloped economy of INDIA where basic needs are not meet
Clear?
Consumption patter everything is different
That is why inflationis not rising in USA but it fucked up high in INDIA on little stimulus
INDIA growth story is your killer
It is either employment or high prices
Choose
Use of cheap abusive language proves how brainless desperate frustrated these buyers who were expecting price declines are
Guys, prices will go down if:
Govt puts heavy tax on fund inflow and outflow from foreign. They can't do that or you will loose your jobs
Govt doubles interest rate (in which case you will end up paying high interest to banks) so that is is 1.5 times the rate of inflation which means it should go to level of 12-14% a year like before
Stocks may flucuate go up and down but property prices are here to stay and will stay
Don't post uncivilized fucked up shit here
If you want to take drugs go and take them elsewhere
When you don't have arguements or valid points you try to abuse people who are telling correct things
Stop the increasing population
Stop the discrimination
Elect right leaders
otherwise just pay your price
Properties will continue to grow up and up
The best way to expose the black moneybags is to publish in real time the ownership of all properties (compulsory) online with agreement values. Then we will really know what is going on.
@Cool Head Bhai,
Black money is paid either as cash or a cheque to some charitable institution. By publishing the actual vs agreement valur wont achieve anything.
I'm sure that the anonymous guys spewing filth in this blog are employees of either sandas or sussu.The idea is to provoke the genuine bloggers . I request everyone here to ignore sandas/sussu and their paid pimps
Two drunks are discussing about India's progress
Rama: yaar, sube ka paper pada
Soma : nahi yaar, kya likha hai
Rama : kya admi yaar tum, paper nahi padte ho. Likha hai , Anil aur Mukesh duniya ka sab se bada amir hai. Sala, bill ghati gaya gutter mey
Soma: yaar, hamara sardar papa kamal kar raha yaar. bambai dekho, kitne mall ho gaye. Ek se bada Ek. Chanas milega tho andhar jaake dekh. kya chamak gimak hai. baniya ke dukhan sab gaye baad mey.
Rama: sahi hai yaar. hamare filam duniya ka duniya dekte hai. Sab se chamak gimak ka ladki aishwarya hamari hai yaar. Baad mey sharukh ka baat alag hai. Suna ki paavwali ladki pintu, james bond ho gayi. Saala, India bahut chamak raha hai yaar
Soma: yaar, ghar jane ka time ho gaya. tere paas kuch paise bache hai kya. jaane ke pehle do navtang dalke jayenge yaar
Rama: yaar, pehle nahi socha. jo kuch bacha tha, usse dhal karidha yaar. Thoda chillar bacha hai. chalo, mere jopde ke paas ispirit milta hai. dharu iske same kuch nahi. chal aaja
DRAW YOUR OWN CONCLUSIONS
Interesting stock's info for people who think real estate is a good place to invest!!
Like I said before, intelligent money first exits stocks before people start noticing that the industry sector is going bankrupt!!
Intelligent money is fleeing Realty stock in droves...
By staff reporters Feng Zhe and Wen Xiu
03.24.2010 21:58
Bank of China Executive Salaries Halved
New rules released by the government have reduced some banker salaries by nearly 50 percent
[Click for Chinese Version]
(Caixin Oonline) The total salaries of senior management at the Bank of China shrank by nearly 50 percent in 2009 although the bank’s assets and profits expanded last year.
…
On March 10, China Banking Regulatory Commission released a new pay regulation, which stipulates that bankers are required to return the part of their salary related to bad loans.
Over the past several years, the scale of Chinese banking assets has consistently expanded with impressive results. At the same time, listed banks gradually moved toward market-oriented executive incentive mechanisms, implementing across-the-board salary increases.
US is going into massive recession. India is toast.
The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates.
US trying to reflate housing bubble:
Futile Attempts To Reflate The Housing Bubble & The Deadly Cost
Daniel R. Amerman, CFA, DanielAmerman.com
When a financial bubble bursts – can it be reflated? And what are the risks for all of us the reflation attempt fails?
http://danielamerman.com/articles/Reflatep.htm
Bank of China Executive Salaries Halved
US is going into massive recession. India is toast.
US trying to reflate housing bubble
Blah Blah Blah Blah Blah.......
This blog doesn't make sense anymore. Everyone knows that the situation in US/China/Europe has little to do with the situation here, yet some people constantly blame these countries for the ground reality here.
In US and most countries of Europe, everyone gets around $1000 per month that is enough to meet their basic needs. If people beg or starve, it is due to their drug habits or mental illness, in most cases these are self inflicted. The governments ensure that the people are not marginalized. Our country, exploitation is the rule of the day. Vested interests say that you belong to a free country like USA, Europe and entitled a share of profits gained by development. These is what we are led to believe and most of us believe this. However, a fraction of what is gained is thrown at us like people throw excess food to dogs. No one has any accountability.
If anyone wants to contribute some thing positive to this blog, please stop drawing parallel between western countries, as we may take another century to reach the fair play and moral standards of such countries
BTW, I liked the sarcasm in Anonymous's 9.01 posting . It is true that many of us take pride in achievements of top industrialists forgetting our own misery. In actual fact, most of these guys park their wealth in wealthy countries. This is one of the reason why third countries remain third countries
I am glad to see some level headed people amongst the bloggers. Those who recognise reality and act upon it eventually attain success. Those who ponder on text book theories and doomsday scenarios will always be bitter towards life and never be successful. Those who think west is their god, should try to migrate to west rather than theorizing the local fundamentals and trying to draw parallel with western economic models.
SssuSu seems to be uneducated and uninformed.
Ever heard of globalisation, Ssusu ?
The economies of the world are so much inter-connected to each other today, and that everybody has seen last year.
If India had so much intrinsic value, the sensex would not have crashed to 8000. If FIIs take out their money, it would again crash to 8000 or below.
All the evils of capitalist economy are now seen in India also, in a same way to the west.
e.g. Layoffs, Job Insecurity.
The job stability of the erstwhile years is a thing of past.
India is a service economy which heavily depends on USA and Europe.
That's why bloggers here post news from the west.
Understood, SssuSsu ?
@ Anonymous who was spewing filth here few days ago.
What do you think of yourself, you mo-f* ?
You
1) Form a cartel
2) Hold the country to ransom by artificially maintaining high prices
3) Deal and create Black Money.
4) Unethical / Illegal / Non-transparent dealings. Paid News.
5) And by doing such things, earn easy money.
And you think, you are a successful businessman ?
Unfortunate, Very unfortunate.
Rather than bashing the posters who say that the prices may never decline, let’s look at the forces that are acting in India’s real estate market to draw conclusion. I do believe that there is a possibility of prices dropping. On the other hand there is a strong possibility that prices may not drop at all in rupees. Inflation is so high that you earn negative return adjusted to inflation and your purchasing power goes down, provided you have excess money to invest. Inflation will salary to keep on increasing at a very high rate, say 10%-15% per annum compared to western economies where average salary raise would be 2%-4%. Once inflation spiral sets in, it is very painful to bring it down. High interest rate will cause recession and it may result into devaluing the currency to spur growth. Compared to western countries and China, productivity is low in India. It means wages will be lower to be competitive in global economy. Housing at price, which is equivalent to other countries where wages are higher, can be met only at a low demand. The highest cost component in house is labor and land. Since labor is cheap the houses in India should be considerably cheaper if you create transparency and reduce red tape. I don’t see that happening in near future. Therefore, only option is left is higher inflation, no price decrease (Rs), Rupees devaluation. At the end, salaries will be higher in India in Rupees terms and everyone will be happy, except the poor common man, who can meet barely put the food on table. Indians working in foreign countries can buy property at reasonable price and Professionals in India can buy house due to rising salary.
Anon above:
It means USD going to Rs 55-60 soon?
Anonymous 7 46
1.First world economies are interconnected
2. Third world economies are manipulated by first world
We have a long log way to go to join the first world. China probably will join the first world soon. What will happen to our country is anybody's guess
My View:
Whoever is saying India and USA(or any other developed country) is right. The housing prices in India are absolutely correct if not totally. Have you guys ever thought of rate of Interest you get in India? Your money doubles in 6 to 8 years by putting in Govt backed saving certificates. Just 25lakhs invested in such schemes in 1998 have become 1 Crore today.
But if you are thinking they will become 2 Crore in next 6-8 years and you can buy property at cheap rate in the US or elsewhere is like living in fool's paradise. That is never going to happen. So..
INDIANs - Buy property at the on going rate if you can afford it or help small towns by moving there to keep overall balance.
NRIs: Do not buy property in India at all until exchange rate becomes almost 80-100Rs/Dollar which is bound to happen in next few years. If you think by keeping money in Indian saving schems make you more rich is nothing but day dreaming.
All the best.
I have been holding on to my decision of buying flat for last 2 years now. I thought the the property prices will reduce. I had a chance to buy when the prices dipped 20-25 % recently. But now I have seen many properties in Pune, and rates are mind blowing. It seems beyond my reach. Although I am getting good pay, being in IT, if I think these rates are high who are the people who are buying these properties at these rates?
I am confused and loosing my patience fast. It seems I will never be able to buy a flat. Please advise.
@Anonymous 9:23
You are absolutely right. There is a correlation between the property prices and the alternate investment methods. When you analyze this, you find the price increase is not absorbent.
It is absurd to think that property prices to remain stagnant for 5 years while your money doubles in the bank
Anonymous at 2:38 :
What are the prices in the Pune projects ?
To all the SsuSsus out there,
There was RE crash from year 1991 to 1997. And that time even recession was not there.
If it happened that time, it is all the more possible that it will happen this time because now there is recession since last 2 years. RE crash is imminent and unavoidable.
anonymous 3 34
Right on point dear. There is going to be a great influx of money into India in the coming yeas as the confidence in swiss/offshore banking institutions is gradually being eroded. I wont be surprised if prices double or triple for prime properties. No one wants to sleep on dead cash
Hard days are coming. Manmohan's miracle has worked for some people but for vast majority it has created innumerable economic problems.
Anonymous 2 28
my suggestion to you is to investigate newly coming up places in pune suburbs. There are still nice affordable places. If u r thinking of kothrud, wanowri, boat club, fatima nagar etc the prices are too high
Thanks all for your suggestions. I was looking in areas like Warje, Bavdhan which can be considered as outskirts of Pune. The rates the builders quoting are 3500-3750, a 3bhk flat with carpet 950 sqft odd is costing 52- 60 lakhs after registration and everything.
@ Anonymous 8:43 AM above,
I would suggest that do not buy at these absurd inflated prices.
Builders are clearly cheating you and bankers would be more than happy trapping you for a big EMI for 25 years.
This is all the more risky, because RE prices would crash and your flat would get devalued.
There is no race going on here as to who buys a flat first.
There is so much unsold realty, so many realty projects abandoned, suspended,
and the RE players have defaulted on their loans and begged and got them restructured.
So, wait till the RE prices fall to affordable levels. Or Unless RE players are forced to build affordable homes.
Stay in a rented place for the timebeing and save the money.
If the builders can form a cartel and inflate the RE prices to absurd unaffordable levels, then the buyers also must unite and not purchase RE at these unaffordable levels.
Anon 2.38pm,
My older bro brought a house in a Lake side enclave in a suburb of Atlanta, in Feb2009. He is the 2nd owner the prv owner brought it new in 1994. My bro paid $25,000 less than the original purchase price.
House prices have crashed in the economy which commands 40% of global GDP
House prices in PUNE is soring because of the money being earned by unscrupulous elements, aka Black money in India.
In the year 1991 MMS had come out with $ gift cheques scheme wherein the govt would not ask any Q on receipt of $ gift from NRI friends and relatives. We were offering this service i.e. $ for rupees at a 20% comm, i was approached by a PWD Juniour engineer from the Water works division. Guess the figure he wanted to wash ''Rs3.5crores'', this was in 1991 when my apt in Chembur cost 15-18 Lakhs, same is now valued at 70 lakhs.
During this same period a Chief secratary in Jayalalithas admin had rcvd a gift chq of Rs48crores.
So do your math and guess the amount of sewage now being parked in RE.
@shayna
20% commission is too too high. The going rate in HK, NY, Toronto, London is 2-3% depending on the amount. Most Realtors or their agents in Mumbai arrange this provided that you have offshore account and you are off the islam watch radar
I would recommend all middle class salaried people to stay out of the RE nonsense currently going on in India. You can easily get burned in case of a downfall and you'll need at least 10 years later to get out of it.
Let the biggies with stolen money play it. Choice is yours. I'm happily renting at a fraction of price and I don't need to buy at these exhorbitant prices. My wife is supportive of my decision and even my parents. It makes more financial sense for me to put my money in FDs and rent till the market corrects by at last 50%.
Here is an interesting link I found. It was published in Indian Express on 27th March. It talks about the developers and underwriter nexus which creates false demand and how the prices gets inflated because of this nexus.
http://www.indianexpress.com/news/soldout-ormerelyheldback/596210/0
somebody find nexus between FekuchandOfIndia newspaper and builders.
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