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Home sales going down !!!

Last updated: July 25 2013
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  • Home sales going down !!!

    Does anyone know what exactly is happening?

    The article on below link says that Sales in Bangalore is healthy:
    Home sales drop as property prices rise faster than salaries - The Economic Times

    And below article says the sales are donw by 18% in bangalore:
    Home sales down 50% in NCR and Mumbai, 18% in Bangalore in January-March 2012: PropEquity - The Economic Times

    Are these healthy numbers?

    Some says that there can be a huge default problem by middle class as they will not be repay the loan for apartments which are 80 lacs- 1 crores.

    Currently many people have bought homes by stretching themselves speculating that their salary will also increase in couple of years and then it will be comfortable for them to pay. But a recent surveys says that most IT companies are not hiking the salary by more than 5%. In that instance, with high interest rates the EMI will be huge and cost of living is also growing every day.

    How will india cope up with such a situation?

    ALso these days in Bangalore, it's a norm that every good builder is launching even 2 BHK at 60-70 lac + price range. A decent 3BHK from a reputed builder comes around 90lac-1crore+ other charges.

    Would there be many people able to afford it?

    Search the net and check the flat prices in areas like Bannerghatta road, Whitefield, Marathahalli, ORR , Hebbal and u'll b astonished to see such a high price. If someone has bought these flats 1-2yr back at good price then it's ok else How many people will b able to afford such a flat now?

    Real question still remains same to buy or not to buy...

    Food for thought!!!
  • #2

    #2

    Re : Home sales going down !!!

    Nice write up. I like it.

    That's why I always advocate, u should never buy a 1 crore flat, 'cause, if u default and have to sell or get out, u have to sell the whole unit, perhaps in distress at a loss and become homeless again. Instead, think about it this way:

    U want a big flat of 1 crore worth. Alright, go ahead and buy it. To cut costs and increase profits, many Tech jobs are moving to China and Phillipines where salaries are lower vis-a-vis Indian standards. So, u never know when u will lose your job. Instead, buy 2 adjacent flats of 50 lac each. U still have fulfilled your dream of being the owner of a 1 crore flat. When u find the going tough, u can get rid of one flat and still retain the other one for yourself. You still are the owner of atleast a 50 lac flat - far better than becoming a defaulter and a non-home-owner again!!

    This thing about buying a 1 crore or 80 lac flat on EMI or loan, stretching yourself so much, is just like the instance where, in this forum, one Techie has written, "being young and stupid, I bought a 20 lac car although I could have done with a 10 lac car. 2 yrs into my job now, I want to set my life straight and get about buying a flat, plot or villa. Can u please help, advise?"

    I must admire this young guys courage to openly admit he did a mistake. He has the desire to learn to set right his wronged life.

    How many on the forum here will openly admit, "I did a mistake. I am suffering by buying an 80 lac flat, 1 crore flat/villa on loans/EMIs, I lost my job, my wife kicked me .... learn from my mistake, dont do it, here is my experience". Anybody, has the courage? Can u write your story?

    Comment

    • #3

      #3

      Re : Home sales going down !!!

      Are we in a housing bubble now, because property prices are skyrocketing especially in the metro areas? Does it make housing a buyer's market?

      Is the bubble going to explode anytime soon or the black money economy will continue to push up housing prices?
      Would appreciate feedback!!
      thanks

      Comment

      • #4

        #4

        Re : Home sales going down !!!

        Originally posted by RAVIKANTH View Post
        Nice write up. I like it.

        That's why I always advocate, u should never buy a 1 crore flat, 'cause, if u default and have to sell or get out, u have to sell the whole unit, perhaps in distress at a loss and become homeless again. Instead, think about it this way:

        U want a big flat of 1 crore worth. Alright, go ahead and buy it. To cut costs and increase profits, many Tech jobs are moving to China and Phillipines where salaries are lower vis-a-vis Indian standards. So, u never know when u will lose your job. Instead, buy 2 adjacent flats of 50 lac each. U still have fulfilled your dream of being the owner of a 1 crore flat. When u find the going tough, u can get rid of one flat and still retain the other one for yourself. You still are the owner of atleast a 50 lac flat - far better than becoming a defaulter and a non-home-owner again!!

        This thing about buying a 1 crore or 80 lac flat on EMI or loan, stretching yourself so much, is just like the instance where, in this forum, one Techie has written, "being young and stupid, I bought a 20 lac car although I could have done with a 10 lac car. 2 yrs into my job now, I want to set my life straight and get about buying a flat, plot or villa. Can u please help, advise?"

        I must admire this young guys courage to openly admit he did a mistake. He has the desire to learn to set right his wronged life.

        How many on the forum here will openly admit, "I did a mistake. I am suffering by buying an 80 lac flat, 1 crore flat/villa on loans/EMIs, I lost my job, my wife kicked me .... learn from my mistake, dont do it, here is my experience". Anybody, has the courage? Can u write your story?
        Partially agree with you.

        First of all, 1 crore flat will in most of the cases offer many things:
        1) might be at a good location.
        2) Might have good amenities.
        3) Can be easily rented out due to good location.
        etc.

        While these days, if someone wants to buy a 3BHK from a reputed builder at 50 lacs, then he may have to move to Electronic city or almost 15 kms away from suburbs.

        So what is he loosing:
        1) not a good location.
        2) may not have good amenties.
        3) might now be easily rented out due to location.

        What i have seen in my circle is that there are many people ready to buy 1 crore flat of around 1800-2000 sqft.

        Right now also it may be ok but 5 yrs down the line, the price may become 1.5 crore. At that time would anyone buy flat at such a cost.

        May be yes: if someone has already invested in a flat earlier and sells that and then buy these 1.5 cr flat.

        Even a person earning 20 lacs will not be able to buy these flats after 5 yrs.

        Let say he has 50 lacs with him, savings and money received from selling earlier flat. He has to take a loan of 1crore. EMI will be 1 lac. How can one manage these numbers.

        So my POV was when someone has already invested in a flat and that may grow more as compared to this 1 crore to 1.5 crore then only someone can buy else it's not possible.

        And how many people will be there who have done it.

        Today also , flats are 1.5 crore in areas like cooke town, benson town , koramangla , etc. but they are in limited numbers.

        While today's 1 crore in suburbs are being build in huge numbers.

        Comment

        • #5

          #5

          Re : Home sales going down !!!

          House purchase as investment and as end user are two different things. Definitely house is one of the basic necessities and every one need it. So if you are buying house for living in then it is a wise move to go for economical housing for middle class salaried people like me. Not much pointinbuying 1 crore flat by stretching as associated expenses are also very high. And you are just living in a high cost place.

          Buying as investment also doesn't make any sense as such high cost property will not at all be liquid enough to be sold. Think ur self who will be buying a property which 1 crore + Expected appreciation. Very few, making the property less liquid. So don't buy expensive houses by stretching ur self.

          Comment

          • #6

            #6

            Re : Home sales going down !!!

            Originally posted by RAVIKANTH View Post
            Nice write up. I like it.

            That's why I always advocate, u should never buy a 1 crore flat, 'cause, if u default and have to sell or get out, u have to sell the whole unit, perhaps in distress at a loss and become homeless again. Instead, think about it this way:

            U want a big flat of 1 crore worth. Alright, go ahead and buy it. To cut costs and increase profits, many Tech jobs are moving to China and Phillipines where salaries are lower vis-a-vis Indian standards. So, u never know when u will lose your job. Instead, buy 2 adjacent flats of 50 lac each. U still have fulfilled your dream of being the owner of a 1 crore flat. When u find the going tough, u can get rid of one flat and still retain the other one for yourself. You still are the owner of atleast a 50 lac flat - far better than becoming a defaulter and a non-home-owner again!!

            This thing about buying a 1 crore or 80 lac flat on EMI or loan, stretching yourself so much, is just like the instance where, in this forum, one Techie has written, "being young and stupid, I bought a 20 lac car although I could have done with a 10 lac car. 2 yrs into my job now, I want to set my life straight and get about buying a flat, plot or villa. Can u please help, advise?"

            I must admire this young guys courage to openly admit he did a mistake. He has the desire to learn to set right his wronged life.

            How many on the forum here will openly admit, "I did a mistake. I am suffering by buying an 80 lac flat, 1 crore flat/villa on loans/EMIs, I lost my job, my wife kicked me .... learn from my mistake, dont do it, here is my experience". Anybody, has the courage? Can u write your story?
            One more perspective here.

            when we say that 50 lac flat is good to invest compared to 80-90 lac flat.

            A cheaper flat will increase more in %age. so consider it increases by 50% in 3 yrs. SO price is 75 lacs now.

            While 90 lac flat increases by 20% as we say that the demand will be low.
            So 3 yrs hence this will be 1.08 crore.

            Now think, after 3 yrs for a fresh buyer in market 75 lac will also be more considering it is of a small builder, is at a not so good location.

            Then how this price is justified then. who will buy this 75 lac flat.

            This is a catch 22 situation. If you buy at 50 lac flat now, if it increased more then also there is problem for u while for a 1 crore flat if it increased less then also there is a problem for u.

            Whatever be the cost if the price increase irrationally then even v'll not be able to sell that 50 lac flat or have to sell that at loss. Expecting a 50 lac flat will give amazing return may nt be true.

            So those who have invested at right time , when today's 1 crore flat was 40 lacs few yrs back they r the lucky ones.

            Today RE may not give as good returns compared to past 4-5 yrs.

            Comment

            • #7

              #7

              Re : Home sales going down !!!

              buy what you can afford - stretch ur legs based on the size of your cot or blanket - lol
              be simple - it helps long run.yes risks do give high returns- but i guess the tension is not worth the effort.its just one life - live it right

              Comment

              • #8

                #8

                Re : Home sales going down !!!

                No point buying flats at 80 lacs or a crore if you are looking at appreciation. How many people would be able to buy a property worth 1.6-2 crore after 5 years?

                Besides, buying in suburbs makes more sense. A lot many people find them affordable and hence buy there. This will aid in the development of the suburbs. Today's suburbs are part of tomorrow's cities and capital appreciation is much higher there.

                Property value appreciates more in Bangalore's outskirts - Economic Times

                Comment

                • #9

                  #9

                  Re : Home sales going down !!!

                  Originally posted by SS1983 View Post
                  No point buying flats at 80 lacs or a crore if you are looking at appreciation. How many people would be able to buy a property worth 1.6-2 crore after 5 years?

                  Besides, buying in suburbs makes more sense. A lot many people find them affordable and hence buy there. This will aid in the development of the suburbs. Today's suburbs are part of tomorrow's cities and capital appreciation is much higher there.

                  Property value appreciates more in Bangalore's outskirts - Economic Times
                  The prices of flats in suburbs is itself 80 lacs +. So suburbs is no longer affordable.

                  Today even if a small road comes in suburbs the prices appreciates by 20-30%. See how Sarjapur road has appreciated with the news of Infosys.

                  Also the point was that there are soo many flats on ORR , KRPuram , Whitefield, Marathalli area which costs 80 lacs +. For 10% appreciation, the price will be 1.3crore in 5 yrs hence. So who will buy these flats then ?

                  Comment

                  • #10

                    #10

                    Re : Home sales going down !!!

                    Originally posted by rajureporter View Post
                    Are we in a housing bubble now, because property prices are skyrocketing especially in the metro areas? Does it make housing a buyer's market?

                    Is the bubble going to explode anytime soon or the black money economy will continue to push up housing prices?
                    Would appreciate feedback!!
                    thanks
                    core areas will be unaffected for example price in JP nagar ,Jai angar ,Malleshwarm,Indiranagar.Hebbal will be stable .while Kanakapura road or devanhalli or kengri or Whitefield behind ITPL will see the effect of recession

                    Comment

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