nitesh321

I agree. Comparison should be done. I am saying about timing your move to buy your house to stay there (& not for investment). If someone is buying a home to stay there, he/she would be staying there ATLEAST for 10yrs. So how does appreciation of that house come into picture.

About affordability, yes it is difficult for most of them to buy a flat of more than 40-50L. But without over-leveraging if one can afford to buy he/she must go for it asap. 5-6yrs ago 3BHK was easily available within 20L. At that time no one thought that the prices would be 3-4 times in next 5yrs. Even now we cannot say what will be the situation in coming years.

monds

Mutaza_t & Puser,
Absolutely true...I echo what you both said above...

realacres

Yep, now I think we should discuss offers about Indira Awaas Yojana. For investors, better buy a slum, so as soon as rehab takes place before elections, you will get pucca makaan free of cost.

Man, the illegal Bangus staying near Mumbai airport in slums, get pucca houses for free & here we are still scouting for a FLAT even with half crore in pocket.

__________________
IREF Rules - Read Me

monds

Very very well said man...Bangde get pucca houses for free...this is India...perhaps we all have to teach our children right from their childhood about Indians and Indian Culture, at least me..!!
What a shame...

You know what...???
The Nagar Sevak of Baner and his brothers runa prostitute racket right in the Veerbhadra Nager and adjecent area to it...they have grabbed couple of plots and two old bunglows and they run this racket from those houses..
Most shocking thing is they are spreading a word that all NRI and IT girls / women do all this prostitution to earn more money...
It is nothing but an attempt to spoil the society and make people accept whatever goes around their houses...
All educated citizens must weak up now and fight against those guns, the cancer is spreading fast...guys in kothrud or somewhere else don't say that your problem is not my problem ...this will reach you in no time...after all this is NCP raj...

aslamgen

Everyone needs to understand why inflation keeps going up. Infact if we have indeed become truly productive over the years then we should be seeing deflation (we can make the same products with lesser inputs costs - hence prices should come down). Ever since the world moved from a x standard to a "fiat-standard" - inflation has ruled the roost. Politicians and Goverments across the world are lured by the ease of printing money out of thin air to finance their fancy schemes and largesse. As volume of currency/money goes up, its value goes down - so purchasing power reduces and you have inflation!

aslamgen

Funny - the word "gld-BULLION" gets deleted from the post. Pls read "x" in the above post as "gld-BULLION" / "Aurum".

pcpune

I am amazed by the number of launches in the last 2 months in Pune, thats really good news, we want more ready possessions !

pcpune

Well, I just have to ask you one question, why do people go in for FDs if they know they are earning ZERO % on it per year - inflation adjusted - the reason is simple - the ZERO percent is guaranteed by our financial system - you can also buy in AAA rated bonds which provide 7%, infact most corporates park their money in debt/bonds than in Real Estate.

The assumption that RE always gives 15% return every year - is definately flawed. And, the money which you leverage - and maybe profit or loss from it - are both affected by inflation since, NO institution gives 100% free credit, they always take in "margins" which is 10-20-30% , in property case, it is 10-20% of agreement value - the bank would keep that amount if you fail to pay up and also take ownershipm of your property.

Infact in US, the situation in 2007-2008,was something called as bottom down mortgage -

The apt in Indian terms - say costed 50 lacs in 2005, in 2007 - it costed 25 lacs, now -- if you had paid say 15 lacs downpayment+ 5 lacs interest in 2 years, still the amount paid to the bank is only 20 lacs.

In this case, its better for you to stop payments, and buy a new similar apartment.Some of the US banks and institutions declared bankruptcy bcos of this.Now,this is a classic case of "bad levereging" in RE, most think it cannot happen in India .

puser

Ad today by KUL, Kumar builders; on their properties and celebration

wiseman

Pcpune,

If you go through many of my earlier posts many months ago, almost all the things you are saying, like

When your loan amount is 85% of the house you pay around double the price over the loan period (15-20 years) to the builder and bank

I have said, but people seem to have a hard time understanding or accepting it. Ask the "oldies" in the forum like Real ...

So, we are very much in agreement on the basics of debt, leverage and the general rules of taking on debt like interest-cover, debt cover, free cash flow and so on.

I believe that the builders had one slim chance in late 2009 around festival time to CUT prices and move inventory. They completely goofed it by actually raising prices (how stupid can you get!). With the next move down in stock and eventually in RE markets, this time around many builders will go into liquidation as they will be buried under a huge amount of illiquid debt locked into empty depreciating buildings. I suspect that this time around the job-loss situation will get much more serious and longer term (as stimulus will not help this time around as massive global deflation will pull down demand sharply in all sectors and many oversold sectors like Auto and RE will see a lot of distressed, repossessed assets come to market at great bargains by the Financial Institutions who lent money against them) and a lot of property bought at high prices and leverage will come to market at distress prices. Simultaneously demand should also drop as people will be chasing higher commodity prices with lower disposable incomes and tight loan market.

This will be a deflationary depression with demand declines and collapse in most asset classes except bullion and Agriculture. So, cash and cash equivalents (safe fixed income securities) is probably the safe way to ride this out (and also making it a habit to eat Dal Chawal and Curdrice! And also watch movies on cheap Cable/DTH rather than pay 300 bucks to get the "experience" of the theaters!

Let us see.


cheers