32Manish

Need your advice on a buying decision. I want to invest in a residential plot. I have been researching for 6 months and have shortlisted a plot in sec-31, greater noida.

It is purely for investment purpose and horizon is 7 years post which i want to sell it off and book profits.

I had also considered 'apartments' and 'commercial office space' but concluded that they are in over-supply at least for the time being and might see correction over next 12-18 months.

I was upbeat about 'retail spaces' but again ignored it as i wanted to invest in a prime retail space of a prime locality but was getting small
'covered area' in my budget of 60 Lacs.

I finally concluded on residential plot (200 sq. m) in sec-31, greater noida.

While I am totally satisfied about the future of this town over a 20 year
investment horizon, but I have the following apprehensions:

- Whether this is the 'right time' to buy ? Various analysts feel that world economy is slowing, US has a looming recession, indian economy is showing signs of deceleration, inflation and interest rates are hardening and realty prices are tapering off and correcting.
Research reports are saying of a possible further correction of 15% from here.

- i have observed that in last 1 - 1.5 years realty has stagnated in general. In particular, there has been mixed trends. eg. gurgaon has corrected, rohini (i.e. delhi) has appreciated hugely and greater noida (a tier-II city) has remained static. This is further confusing my decision. It seems that satellite towns might not appreciate for the time being and there could be stagnancy for 2-3 years. Since my investment horizon is only 7 years i am apprehensive about my 'timing' of buying.

- My funds are presently parked in FDs, yielding after-tax returns of 8%. If greater noida remains static i will lose on the opportunity cost of FDs.
Also if there is any forecast for correction, i can buy this plot at a lower rate in 1-2 years.

- some reports say that correction will only apply to residential apartments and commercial office spaces and not on residential plots and retail spaces

Kindly advise on -

- View on future price trends for greater noida 'plots' (not apartments) . will there be major corrections?

- should i buy now or hold on the decision for the time being.

looking forward to your help and advice

rgds

Manish Gupta