pmpvip

I dont understand why property prices are so inlated in Ahmedabad and in general in India.

Looking to the average earning of the person no common man buy even a two bed room apartment at its current prices.

Is it all artificial prices in the real estate like stock market? I had seen person buy house in 10 Lakh a year or two back and then now he tells it worth 20 lakh. I can not understand any logic behind such prices in the AHMEDABAD unless money start growing on TREE overnite.

So do any of yoy think all this is a ARTIFICIAL BUBBLE generated by few rich and influencial peoples and builders, which has no connection to COMMON MAN's income or resources in AHMEDABAD?

Is this bubble of ARTIFICIAL REAL ESTATE PRICES will brust?

even with income from countries like US and UK some peoples when they come to INDIA get shocked with prices of properties and they tell that they can not afford to buy a house in ahmedabad/ india in general. So how a local person which not even earn RS 25000/- PM on average can afford to buy 25-50 lack flats and apartments and how long such high prices of property which are too high for common man can ge sustained?

aditi sharma

This is greed.
Everyone wants to milk the common man.
The nexus between politicians, babus, and builders causes this unrealistic prices and artificial boom. The Real estate does not deserve the prices it has reached now. Common man can not afford such prices and EMIs specially in this uncertain times.
From here the real estate has only one way to go... Down !!

Dhaval

Hi,
Sky rocketing price is not only in Ahmedabad. Its everywhere.
In Pune you will find every builder advertise with "POSSESSION READY" .
But still they are not bringing cost down. Ever since new Government came back to power, sentiment has improved and hence price too have moved northwards.

No doubt we read jargon's like Affordable housing, cheap home rates, easy availability of home loans still it is beyond my scope to go for said Affordable house.

Regards,
Dhaval

wiseman

pmpvip,

We are only following the Western concept of conmanship in everything we do. Back in the good ol' days, the general tendency was to stay away from debt and minimise it. Therefore, all major purchases were made after saving and paying down a substantial amount. In fact, traditional financial communities like the Marwaris were wholly averse to debt - unless they were the people who were lending (we can learn a lot from this community about how to handle finances and create wealth).

Today, a whole generation of youngsters have been brought up on a deadly cocktail -

1. the western adiction to debt and not feeling that too much debt is a bad thing, and

2. Lack of financial knowledge (most people don't even have simple concepts in place like compounding effect, leave alone npv, irr and so on)

So, the following is inevitable. As Western companies invade us with their techniques of marketing, the young will fall prey increasingly to the message "why wait till tomorrow? Do it today with ZERO down and rest in easy instalments!" (easy for the seller, that is ).

This, and the willingness of the Banks to provide easy credit (and the Govt to look the other way as it keeps the masses happy and votes the party to power again), is the reason prices will continue to be at uncomfortable levels.

Till we reach a critical point when there is oversupply, overcapacity and saturation in the markets. Then, like the US today, India will suffer a massive bout of indigestion due to overconsumption and prices will take a tumble in major deflation.

Since pent-up demand is still sitting in the wings, unlike America, we still have a way to go before we come to their level. This is what is keeping prices up and unaffordable in reality (but seemingly affordable due to credit availability)

cheers

cgandhi362

Banks that never used to lend are lending; and as there are private sector jobs that people think will remain, they are more willing to borrow.

K S SHAH

Why should anyone buy at such inflated prices? Specially this inflation is also due to NRIs. I am also NRI and I suggest that no NRI should buy at this price. Everyone is praising current government! Why any one does not ask question to our CM regarding this inflation in real estate prices?

nycpingo

Only three commodities will decrease in availability - land, and oil. Indians are addicted to land and . Prices will never go down.

Following reasons that inflate property prices

1) Builders- very high holding capacity. Builders have bought/buying land beyond mehsana at peanut prices. My friend(who is a builder), he bought land in sanand at 100 rs per sq yard 10 years ago. They make profit in the first few bunglows they make. They can afford to HOLD the properties

2) Investors- (NRIs and out of State investors) Who want to diversify their portfolio and invest and make money and invest and make money and so onn...........Also rapid industrialization reduces land availability. Eg Nano project and Pharma SEZ in sanand has decreased land by 2000 hectares.

3) Politicians- Who feed of the builders during elections, make policies lucrative to the builders. Eg. Do you thing one floor parking is enough for a 10 floor building? The builders like that. People don`t. Did you know that more than 8 floors the residents are responsible for fire safety not the builders or the government?

4) Megacity GAP- Most upcoming megacities are much more expensive than Ahmedabad. Pune Ahmedabad Hyderabad and Banglore are set to become megacities in 2012. Hyderabad and Banglore are 4 times more expensive to Ahmedabad and Pune is almost double the price

5) People are insecure- And don`t want to miss the boat. The builders feed on this insecurity.

6) Ahmedabad has a good future - so remember guys if you have money invest it wisely with a reputed builder.

Basic funda of real estate - Land and location always appreciate and construction always depreciates.

pmpvip

Real estate prices in India are totally illogical to understand, when compared to average family earnineyg per annum.

How a common man/family who may be earning 2-3 lac ruppees per year can afford a house or flat with 25-50 lakh in any are of ahmedabad.

Even being NRI I can not think of affording such high priced, very poor quality construction which also have several other legal problems.

Do you guyes think it will come down that in California etc. where they were overly inflated before and way beyond local family incomes.

We understand India has high population but still over all population except for 10-20 % upper middle class does not earn beyond 2-3 lacs per year.

If you think prices might fall, how long it will take befor it should fall.

I dont think there is so much industrial growth in India so that prices DOUBLE every two/three years in the real estate?