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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Pune > Pune property rates will be down by Diwali
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Old May 26 2009, 12:15 PM   #21
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The real estate is not connected with stock market but with the 'actual' economy.
The simple question if we ask ourselves, it will give us some hint on future real estate market.
Are our jobs secure? Do we expect actual rise in take-home salary (considering variable components) in coming year or two?
To be optimistic, other industries based on Indian Domestic market may pick up a little bit in a year or so but I am not at all optimistic about IT industry as the US and Europe will take good enough time to come to normalcy.

As far as increase in quoted price by the builders is considered, this probably looks like tectic by builders association to re-create panic in buyers that prices may go up.
An effort to artificially crush the supply to pent up the demand.

 
Old May 26 2009, 07:11 PM   #22
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IT and Mumbai speculators r a major factor in Pune's RE market. IT is down, hardly any salary rise and spectre of pink slip.The Mumbai factor dont know how the wind is blowing.

Still RE is a looooong term investment.
can't be treated like liquid stocks.

Me think purported rise - a temperory blip.
Hope for fair price in few months time.
like Akssenti
 
Old May 28 2009, 08:27 AM   #23
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Street economics (not Academic economics) usually plays like this:

Demand (buyer side) = Supply - Reserves (seller side)

where reserves reflects how entrenched the seller is to bear the cost of excess...in one word - desperate. As much as a buyer is logical, pragamatic etc a 'buy' is always an emotional event.

With that said, we have a nice situation of Buyer keeping a lid on emotions for now and attempting to be pragmatic. Seller on the other hand is bleeding a bid - but sitting on a pile of cash (spare the smaller builders) from the boom.

Having personally gone thru a couple of bubbles, there sometimes is a trigger that either tips the equation. Personally, I was anticipating the elections + Indian-Fiscal Yearend to act as a trigger. I had a downward bias and am surprised by the resilience (i owe it to the reserves factor).

There will be other date-trigger/s - Monsoon followed by Diwali, next fY end. Then there could be other event-triggers ...who knows...

Whether you are buyer or seller, it is prudent to be patient. If you have to act (buy/sell) do your homework well and look for a deal. There is always one for everyone. If your gut says this is the time...just do it. If you do good, you will brag and call yourself a mini-Trump. If you do not do well, you will quickly forget about it and life will be good again.

Cheers all

PS: Given my condition and (still a bit downward) bias, I prefer ready possession over waiting for an end-product.
 
Old June 7 2009, 01:39 PM   #24
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Quote:
Originally Posted by akssenti View Post
I am sure many small builders and investors may sell desperately but the bigger builders seem to be in a better state. I would not expect rates to go much lower now. Maybe 5% maximum and that too not in all areas.
LoL. Look at builders like Rohan, down by 25%, Mont Vert, down by 30%, Nyati, down by 22%, Kumar Properties, down by over 24%. Get your facts right. Even Nanded City has reduced the prices from INR 3500/sq ft to INR 2500/sq ft. The prices have to fall by atleast 50% from their peak as it is the case across India & Pune is no exception.

Btw, how would you justify that Megapolis is building just 3 towers of proposed 58? BlueRidge going in coma (despite being sold out), Nanded city putting phase 2 on hold despite cutting prices?
 
Old June 7 2009, 07:54 PM   #25
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Quote:
Originally Posted by akssenti View Post

So as you say lets keep patience and hope for the best....

Also i feel stock market is linked coz a lot of investor money comes into the real estate market from people in Mumbai looking for an alternate house in Pune. Met some such people when i was house hunting and they told me that they have bought stocks when market was 8.5 and will sell it when it touches 14-15 and invest in property. May such speculation is causing the sudden jump. Who knows.. i dont trust paper reports coz I have spoken to some builders who then get interviewed by newspapers and the rates and information given in contradictory. Especially for developing areas like Kharadi, Wagholi, and PS.
Any investor who invested in stock market when in BSE was around 8500, has to be called a sane investor.

Would such wise investors from Mumbai are going to invest in RE in such bearish RE market in Pune? . Flats in Pune are no more a money generating asset now, whould buy a 3 BHK for 40L-45L and rent out for mere 12k-13k(max) ?

It was the time in 2005, when the cost of 3 BHK in a decent area was around 18L-20L and rent used to be around 9k-10k.

I think in this market only geniuine buyers are looking to buy(leaving a few exceptions) if they get a good deal within their budget.

  • The salaries have been cut from what they used to be in 2006-2007.
  • No increments from last 2 yeras.
  • Take home salary has decreased and cost of living has increased. So, one has to re think about how much one can pay per month for EMI.
  • Everyday there is new layoff news from a different company.
Many of my friends bought flats during year 2007 and are having sleepless nights now because of the above mentioned factors.
 
Old June 7 2009, 11:18 PM   #26
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Quote:
Originally Posted by realacres View Post
LoL. Look at builders like Rohan, down by 25%, Mont Vert, down by 30%, Nyati, down by 22%, Kumar Properties, down by over 24%. Get your facts right. Even Nanded City has reduced the prices from INR 3500/sq ft to INR 2500/sq ft. The prices have to fall by atleast 50% from their peak as it is the case across India & Pune is no exception.

Btw, how would you justify that Megapolis is building just 3 towers of proposed 58? BlueRidge going in coma (despite being sold out), Nanded city putting phase 2 on hold despite cutting prices?
Buddy you get your facts right. All these things happened before my post and I had factored that in. Go and see bookings in Nanded city. They have dropped drastically after prices have fallen coz people are losing confidence. Also, what i meant was that correction has happened around Feb March time. If you expect 25% more then best of luck. BTW Kalpatrau has suddenly hiked to 2500 non negotiable from 2250 negotiable. Hope you get a good deal and your dream correction.
 
Old June 8 2009, 05:08 AM   #27
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Quote:
Originally Posted by Sarang_Pune View Post
The real estate is not connected with stock market but with the 'actual' economy.
The simple question if we ask ourselves, it will give us some hint on future real estate market.
Are our jobs secure? Do we expect actual rise in take-home salary (considering variable components) in coming year or two?
To be optimistic, other industries based on Indian Domestic market may pick up a little bit in a year or so but I am not at all optimistic about IT industry as the US and Europe will take good enough time to come to normalcy.

As far as increase in quoted price by the builders is considered, this probably looks like tectic by builders association to re-create panic in buyers that prices may go up.
An effort to artificially crush the supply to pent up the demand.

Sarang,

On the contrary, the Stock Market is much more connected and sensitive to the "Real" Economy (thats what I think you wanted to say by "actual"), than the RE market.

1. For a few important reasons. Stock markets represent the entire economy, which is much bigger than the RE part of the economy alone.

2. RE has no real economic value. Nothing particular is generated as a surplus in RE - it is just a question of locational differential, trading of RE to a greater fool at a bigger price and not much else. Companies, on the other hand actually convert raw materials to finished goods and sell it at a profit generating a surplus. One might call rent as a surplus. But that merely happens to be the icing on the cake with regard to locational differential. Take the example of people leasing flats for a fixed deposit with no rental. The implied rental is the interest on the lease money deposited somewhere.

I assume, by Stock Market not being connected to the "actual" economy, you mean the speculative part of the market which just jumps in and out of stocks on a daily basis. That, I agree.

cheers
 
Old June 8 2009, 07:57 AM   #28
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The Pune East house exhibition at Vimannagar by PBAP or CREDAI now doesn't seem to have generated any real bookings? by seeing the small crowd at this event.

Me thinks : The prop prices will remain at this state, & go down only during diwali as a discount offering , another fact is state election is due in Aug-Sep. There is strong possibility/certainity prices softening to generate cash funds for electioning
 
Old June 8 2009, 10:51 AM   #29
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I agree. Apart from any other reasons. There is a certain quiet in the market. I believe that this is just the lull before the storm. I believe at a certain point the prices are going to implode and crash.
 
Old June 8 2009, 03:49 PM   #30
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Latest CREDAI exhibition seems to be an attempt to show that property buying is on the rise again. Just to fool the crowd...

Have you read the FREE issue they circulated during the exhibition? It shows the picture of exhibition with crowd breaking in. The matter inside claimed that CREDAI has provided budget homes to people and thats why people have now started buying again.

My opinion over this is that if builders are trying hard to make a scene that property market is back again, then it is definitely not.
 
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