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Home sales going down !!!

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Home sales going down !!!

Last updated: July 25 2013
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  • Gaurav2k101
    replied
    Its almost 3 months since this thread started.

    Has the property prices come down. All I can see is that the price has appreciated around 10-15% in past 3 months across all the locations in bangalore.

    Builders have been courageous to launch the projects at exhorbitantly high price.

    In the current situation there seems to be no signs of prices softening.

    I still feel that there will not be a crash in proprty prices. Maybe some slight correction might happen. In Future the prices are bound to go up due to everything getting expensive.

    Leave a comment:


  • harish100
    replied
    Reality market is completely investor-driven, be it institutional or high net worth individuals. This is why builders/developers bet on the upward movement in property prices. Over the last six to seven years(except for 2008-09), bangalore prices have only appreciated— all thanks to the builder-political nexus and the strong element of black money in transactions. This has strengthened the belief that any unsold inventory can always be sold at higher prices in future.

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  • harish100
    replied
    Property prices will defenetly come down. If you remember the NRI, NRO have burnt their fingers in the American Real Estate market..just go back in history. Everybody like some investors in this forum were thinking real estate in japan in 1980 cannot go down as its a small country with very little land and very high population density..you know what happened after that?? Prices fell 75%!!

    Property can sustain its value only based on people's ability to pay now and into the future...so whatever you might say prices will collapse and once the downward cycles starts watch the builders flood the market with supply as no one wants to sit on inventory with declining prices!!. So dont be in a hurry to buy. Opportunities keep coming. builders/investors always try to create panic or scarcity, that there USP, dont fall into there pray...

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  • harish100
    replied
    Originally posted by Somashekar View Post
    DLF’s Worli realty deal looks like a distress sale | Firstpost

    For all those who follow the self styled Real Estate gurus on the forum, please read this article carefully. All the claims of builders make big money and buy at any rate has been trashed. If DLF - India's biggest builder cannot make money- how can you- individuals buying one or two apartments make money in this market?

    The market is really tough. Mobility has sacked people (including in India). Suzlon and Lanco Infra have had disastrous results. Interest rates and inflation are high. But the self styled RE gurus will keep saying buy at any rate because they hold no accountability for your money. Be afraid- very afraid of investing in this market at unrealistic prices. There are no more greater fools to buy at a higher rate.
    .

    Please dont follow First post. All crap written. Journalist / blog writers cannot do financial analysis. All wrong math... in first post article.

    Leave a comment:


  • Rddh12
    replied
    Regulation in RE sector is the way ahead?

    FM will have to break investor-builder cartel to tame realty prices | Firstpost

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  • pkr1308
    replied
    The article is quite insightful. The below sentence in the article made me think:
    "It means that when the deal is between knowledgeable equals, the real market price may be just a third of what we have come to expect."
    Most of the people started feeling that price's are not justified but builders are not reducing prices. But does that mean you go ahead and still buy? Depends on what for: If it's first home, end use, with in your means -- Oh yeah, definitely.

    Don't stretch your means unreasonably -- Add 'maintenance charges' also to your EMI outgo. And finally remember, selling a house/apartment/plot is not as easy as cancelling a FD or selling MF's or stocks.

    Leave a comment:


  • Somashekar
    replied
    DLF’s Worli realty deal looks like a distress sale | Firstpost

    For all those who follow the self styled Real Estate gurus on the forum, please read this article carefully. All the claims of builders make big money and buy at any rate has been trashed. If DLF - India's biggest builder cannot make money- how can you- individuals buying one or two apartments make money in this market?

    The market is really tough. Mobility has sacked people (including in India). Suzlon and Lanco Infra have had disastrous results. Interest rates and inflation are high. But the self styled RE gurus will keep saying buy at any rate because they hold no accountability for your money. Be afraid- very afraid of investing in this market at unrealistic prices. There are no more greater fools to buy at a higher rate.
    Last edited August 14 2012, 03:40 PM.

    Leave a comment:


  • Somashekar
    replied
    Other than the unrealistic prices, people today forget about the other aspects of a real estate investment. My comments are specifically on Bangalore but applicable to other cities.

    Maintenance costs
    Most apartments are charging Rs 2-3 per sft per month as maintenance. High end apartments charge Rs 5-8 per sft. These costs are rising at 20-25% per year. Most of the costs are towards Security and Maintenance (Labour), Water and Diesel for back up power. Water and Diesel constitute 50-60% of the costs. And these will continue to rise alarming due to the dropping water tables and increasing dependency on tankers. Some areas tankers are charging Rs 600-800 already. They will go up to Rs 1000-1200 by next March due to lack of rains and water mafia.

    In addition to all these most apartments associations are inefficient (and some are corrupt) leading to further leakages and more pass on of costs in the coming years. So factor in at least Rs 5000 to Rs 7000 per month only for maintenance for an average 1200-1500 sft apartment. These costs are forever meaning whether you earn, retire or out of country, you will have to keep paying them. If you rent it out , the tenant should pick up the costs but that also is difficult nowadays.

    BWSSB costs

    Many builders especially in Sarjapur, Marathahalli and Whitefield areas are taking money in the name of BWSSB connections. They are never deposited with the BWSSB because BWSSB is not accepting any new connections in the outskirts. So pretty much the builder pockets this money. I would be happy to be proved wrong on this but people who have bought in the old CMC areas can pretty much write off this amount. Ask the builder for the BWSSB receipt and then you will realize.

    Interest costs

    If you delay your payments even for a day, builders will put 24% interest costs. The reasons could be anything but you will have to pay the price for it. Even if you have paid on time, the builder will delay the project anything from 6-24 months leading to more costs for you- rentals for your current home and interest for your home loan.

    My point is this - buy for own use and buy within your budget. Good deals are available if you have the access to funds are willing to negotiate. Get out of this mindset that RE will always go up and builders can charge whatever they want and get away. And finally for those who believe some self styled gurus of RE on this forum, if you are investor buying apartments- just forget it, Yield is 2-3% while interest costs are 10-5-11%. Fancy words like buy at any price and you will make money are good on paper. Look for value and go for it only if it meets your budget and requirements.

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  • RBansal
    replied
    Thanks for sharing the article. It was informative.

    In the end article talks about center of gravity shifting to NCR region which is true. Mumbai is going to Dharavi manoos.

    Leave a comment:


  • Somashekar
    replied
    Mumbai realty is dead. It’s time to move on | Firstpost

    Leave a comment:

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