abhi

I had purchased a plot of 200 sqyds in Sector 46 in March, 2007 for Rs. 70 Lacs (35,000) and sold it in March, 10 (after 3 years) for Rs.1 Cr. (Rs.50, 000). The vicinity is almost the same with zero development around it.

In 3 months, the same plot is for sale in the market for Rs. 65,000 i.e. today as on July, 2010.

I made a decent profit of Rs. 30 Lacs in 3 years and it seems the plot is now fetching its current owner Rs. 30 Lacs in 3 Months.

Now what sort of appreciation is this? I enquired with some agents in Gurgaon and they say that there are “REAL BUYERS” in Gurgaon.

I completely fail to understand the logic of this phenomenal real estate jump in Gurgaon.

With ZERO infrastructure upgrade (just the Metro), why is the real estate market going so high?

Some say that Gurgaon is still cheaper than Delhi so the current land prices are justified. But how can you compare Delhi with Gurgaon which has crumbling infrastructure?

With so much upswing in the Gurgaon realty market, it seems no one expects the market to go down. They say commodities are getting expensive and there is inflation everywhere so why not real estate.

SO THE MILLION DOLLAR QUESTION STILL REMAINS

Munish Malhautra

Abhi,

This debate is probably the most important debate which keeps people hooked to this forum.
i have a question-
-why did u sell the plot 3 months back when there were already hints of price increase ? if u needed money fine in that case.

I have always maintained that RE investment will give you decent returns if basic parameters are adhered to. And in now way will it go down in the long term.

__________________
MM

MANOJa

Right time to sell is more important than when to buy.

RBBR_711

The gain in 13% (annually, compund) for you and 46% (annually, compund) for the 2nd seller. More than that u can earn in Stocks , Mutual fund / SIPs ??? Not convinced ???

Your investment of 50,000 psf increased in 3 years to 65,000 , calculate same amount in FD at 13%, it will be same, do same calculation for 2nd seller , 50,000 to 65,000 in 3 months.

Read this
http://www.jagoinvestor.com/2009/12/...-in-india.html

But yes, there are different advantages and risks in both investment and u need to chose accordingly.

akmanocha

Exactly, your pricipal amount was high. so annualized return is not high if you see it that way. The return in amount(rs) terms is of course. but the you had that money to start with.

sandelhi

Abhi,
The reason why Sector46 has not seen much development is because HUDA has given time until 2015 for construction house there to allotees. So going forward in next 3 years the development is going to pick pace.

Also, I would diagree regarding the current price in this sector. It's between 54000-60000. 65000 may be for good park facing plot.

But really the appreciation you have seen in last 4 months is mainly due to two reasons 1) Overall rise of 25% in gurgaon property prices. 2) Dealer are hyping this sector alongwith Sector45.

If you had held on it would have given you even better returns considering sectors like 31/40 rates have climbed to 65000-73000.

Venkytalks

Abhi, is the plot "for sale" or "sold" the second time?

People can ask for anything or any price, they will not get it.

I know a fellow who bought a flat for 70L and immediately put it on the market for 1 crore. Now 4 years later he is still trying to sell it for 2 crore. Still no buyer - and the longer he waits, more he has to sell it for, just to break even

If the fellow asks for 65,000 now, he might get it after 1 year. The longer he waits, more is his opportunity cost.

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Venky