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Real Estate prices - On the way down?

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Real Estate prices - On the way down?

Last updated: June 18 2012
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  • #11

    #11

    Re : Real Estate prices - On the way down?

    Originally posted by Desperado View Post
    Tulips, in Bangalore big builders are not bringing down the price at all.
    Economy is tanking but real state is going up in Bangalore.
    This is a feature of asset bubbles. Irrational exuberance. In a way, most of the builders are neck deep in debt. Unless they raise the rates, they cannot keep up with the interest costs of their debts. There is an enormous amount of wealth destruction about to happen in this euphoria.

    If you want to play real prudent, keep your cash out of real estate now. Let people who have cash sink in their money. When the demand drops later, you will get more pricing power and there will be few people with cash to invest then.

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    • #12

      #12

      Re : Real Estate prices - On the way down?

      Tax fears make overseas investors pull out Rs 1 trillion from India

      Just read this news - Tax fears make overseas investors pull out Rs 1 trillion from India - The Times of India


      I think the end users need to be very careful about the extremely bullish comments made accross various threads in the forum. I think this forum is full of investors which for obvious reasons keep talking about the so called increase in prices by the builders and in the market in general. I think any astute investor should simply try finding answer to one question - How many end users can afford buying properties at these levels i.e. 1-2cr and much much more? I dont think there are loads of people who can do so. People's salaries are not rising 50% every year to justify that kind of increase in property prices. This is a complete investor, broker and builder created sham. I personally would not invest my hard earned money at these stupid levels. For end users its a different story.

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      • #13

        #13

        Re : Real Estate prices - On the way down?

        Originally posted by SS1983 View Post
        This is a feature of asset bubbles. Irrational exuberance. In a way, most of the builders are neck deep in debt. Unless they raise the rates, they cannot keep up with the interest costs of their debts. There is an enormous amount of wealth destruction about to happen in this euphoria.

        If you want to play real prudent, keep your cash out of real estate now. Let people who have cash sink in their money. When the demand drops later, you will get more pricing power and there will be few people with cash to invest then.

        I remembered a little something from somewhere which tends to reflect very well your comments.
        "Only when the tide goes down ,you can see who is swimming naked"

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        • #14

          #14

          Re : Real Estate prices - On the way down?

          Originally posted by gandabaccha View Post
          I remembered a little something from somewhere which tends to reflect very well your comments.
          "Only when the tide goes down ,you can see who is swimming naked"
          It's a quote from investment guru Warren Buffet.

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          • #15

            #15

            Re : Real Estate prices - On the way down?

            Originally posted by subbisrini View Post
            It's a quote from investment guru Warren Buffet.

            Thx, i guess i forgot where i got that from.

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            • #16

              #16

              Re : Real Estate prices - On the way down?

              Originally posted by Ultimate View Post
              Just read this news - Tax fears make overseas investors pull out Rs 1 trillion from India - The Times of India


              I think the end users need to be very careful about the extremely bullish comments made accross various threads in the forum. I think this forum is full of investors which for obvious reasons keep talking about the so called increase in prices by the builders and in the market in general. I think any astute investor should simply try finding answer to one question - How many end users can afford buying properties at these levels i.e. 1-2cr and much much more? I dont think there are loads of people who can do so. People's salaries are not rising 50% every year to justify that kind of increase in property prices. This is a complete investor, broker and builder created sham. I personally would not invest my hard earned money at these stupid levels. For end users its a different story.
              There is one more scenario :
              These days the new launch are at par or even 10-20% more than a ready to move in flat. And people are going mad over these new launches as less money is required to spend in the start.

              RE collapse may not happen.

              From current prices, if the investor reduce the price by 10-15 % , there will be many end-user just waiting that to happen and jump the gun.

              Again the mantra of RE: Location , Location and Location.

              If doomsday doesn't happen then RE prices at the key locations in various cities like Golf course road in Gurgaon, Whitefield, Indiranagar , Hebbal etc in Bangalore may not come down. The price may stagnate for sometime but will not crash.

              If someone makes an argument that the RE prices at all the places will crash then i dont agree.

              I agree that the RE prices at the locations such as Devenahalli may come down as everything is on papers now it cannot be self sustained.

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              • #17

                #17

                Re : Real Estate prices - On the way down?

                Whitefield is one of the worst hit places in case of a business slowdown (esp pertaining to IT). 2008/2009 was witness to the same. Residential units which are primarily bought via loans and that too by guys whose jobs are not secure are invariably the first ones to blink. Gurgaon is no exception, in 2009 land deals were available at 1/2 of peak rates in sector 51, which now are >3 times of their 2009 values.
                Mixed use premium areas like JP Nagar, Kormangala, Indiranagar, Jayanagar, SadashivNagar which primarily have houses hardly see any downside, infact its very difficult to find sellers there. Even South bangalore didnt see much downside during that time. There was little supply in north bangalore but the prices had fallen there decently as well to the tune of 25% (maybe cos manyata tech and related guys buy there). However the biggest cut was in the Whitefield, ORR and Sarjapur area where prices had come down to 2006 levels. Prices have ATLEAST doubled since then. Its a bubble out there in ORR, Whitefield, Sarjapur and that will be the first one to burst in case of a slowdown.

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                • #18

                  #18

                  Re : Real Estate prices - On the way down?

                  Originally posted by Nishant Sharma View Post
                  Whitefield is one of the worst hit places in case of a business slowdown (esp pertaining to IT). 2008/2009 was witness to the same. Residential units which are primarily bought via loans and that too by guys whose jobs are not secure are invariably the first ones to blink. Gurgaon is no exception, in 2009 land deals were available at 1/2 of peak rates in sector 51, which now are >3 times of their 2009 values.
                  Mixed use premium areas like JP Nagar, Kormangala, Indiranagar, Jayanagar, SadashivNagar which primarily have houses hardly see any downside, infact its very difficult to find sellers there. Even South bangalore didnt see much downside during that time. There was little supply in north bangalore but the prices had fallen there decently as well to the tune of 25% (maybe cos manyata tech and related guys buy there). However the biggest cut was in the Whitefield, ORR and Sarjapur area where prices had come down to 2006 levels. Prices have ATLEAST doubled since then. Its a bubble out there in ORR, Whitefield, Sarjapur and that will be the first one to burst in case of a slowdown.
                  Agree to some extent to ur view but again there is 1 more point.

                  We cannot compare the situation to 2008-09.

                  What is the difference in whitefield area since then:
                  1) 2 new malls already operational. Phoenix and ITPL. Footfall is also high in these malls. In-Orbit is about to open in couple of months. Posters already up with Shopperstop nd McDonalds.
                  2) Many companies have expaned their offices in Whitefield. Capgemini has taken the building in Brigade metropolis and Prestige Shantiniketan(PSN).
                  3) Till now ITPL is one of the biggest office space in bangalore and gues what PSN has more space than ITPL. Half of the building is already occupied by HUL, Britania, Capgemini , Huawei , Caterpilar etc. and they are operational.So in an area of 2 km around 1 lakh people will work in few months from now. In whitefield around 3-4lac people will work.
                  4) Metro Phase 2 is approved to come to whitefieldthough it will take 5-6 yrs now but it'll come.
                  5) narayana hrudalya and other hospitals have started work there.
                  6) Marriot hotel is opening soon in Inorbit.
                  7) Many international schools are here.

                  2 yrs back no one wanted to stay in Brookefield, whitefield area but now everyone wants to stay here due to availability of everything anyone would want and still they an save 2-3 hrs of traffic everyday. Most people doesn't want to stay in koramangla now.

                  Ground Reality: There are many end users who want to buy a 2BHK but there is no ready to move in available and those available are at high price. If there is 10% cut then u'll see huge surge in demand.

                  The main problem is new launches by builder.

                  These r risky but ready to move in whitefield will not have any problem and demand is already more than supply in that segment.

                  Price will go up for ready to move even if recesison hits. Because in connstruction flats will be delayed fot 2-3 yrs from their due date and hence it will add more pressure on the supply and hence demand will go up.
                  If recession hits then Sarjapur will be hit first and then devahalli.

                  So for all the factors Whitefield seems to be a safest bet among all other locations.

                  All other views are welcome.

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