Quote:
Originally Posted by Murtaza_t
realacres, the only thing that is forcing buyers in current times is the fear that if they don't buy now - they will not be able to afford tomorrow - prices will be beyond their reach!!! Else it could be peer or family pressure in IT circle!!
|
Murtaza,
I am copy pasting what I had already written in RE bulls thread:-
1.) Buy today, houses always increase in value in the long run.
WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.
As far as peer pressure is concerned, atleast for me, it is me who needs to take care of the life...if tomorrow I take wrong financial decision, these peers are not going to come & help me. So, buy based on your strength & wisdom, don't fall to what people say. Infact, I use multiple cell-fones, one of which is Nok_ia 1110, which I bought at INR 1499/- 2 years ago. Some people laugh when I speak on this fone, but I don't care about that, it's upto you to decide whether you want to spend 30k on 2 black-berries/SE Xperia or you can have one premium fone & other base model one.
Quote:
|
That is THE FEAR that is seeing buying even if it is too less. Nobody wants to miss the buss.
|
Which bus man?? Volvo from outside & PMPML from inside
or PMPML from outside & Volvo/Merc from inside
?? Decide.
Quote:
|
Another thing is you can take a loan, lock a property at current price and repay loan it in 3-4 years time if you have good savings. You cannot afford to wait till 5 years when prices could be more than double.
|
Man, if this is your capacity, be least bothered about the prices if you find VFM & like the property. Issue kicks in because of the 2 reasons of over-leveraging & peer pressure as you correctly mentioned above.
Remember than son,father & a donkey story?? Same is the case here.
* PS:- If some/all members don't know & are interested in this story, please inform, I will post the story here.