As of now it seems Congress will be back in power unless BJP springs some surprises. I read on another thread that Congress coming back to power will result in slow down in RE prices indicating not good time for investors ahead?

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  • Slowdown in Real Estate prices and slow down of construction would actually be good in the long run. With apartments coming left and right and water being very scarce, moderation of real estate is urgently required. Also, if you just browse the posts on this site or any other Real Estate site, you can see that atleast 50% are investors/speculators hoping to make a killing in 1 year. This is unhealthy for any market and I am sure the situation will correct itself very soon with or without the BJP coming to power in Karnataka. I have seen posts where a person has never visited Bangalore but is considering investing 70 lacs in a pre-launch project in Bangalore based on tips on RE portals. This is an omnious sign that a correction is impending. When it will happen is anybody's guess. But in my personal opinion, 2BHK apartments of 65+ lacs and 3BHK for 80 lacs-1Crore is unsustainable and a 30-35% correction in RE prices will make housing affordable to the end users. Just my own thoughts.
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  • Apartment prices have become exorbitant with projects launching 5000 psft -10000 psft near hebbal donno people keep screaming Real estate buble will burst but can we expect some reality check on the prices and affordability
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  • Personally, I feel that some sanity should/will prevail. To me current real estate investment scenario looks similar to housewives buying some stock based on a tip by a stock analyst. I can see many people blindly investing in real estate and that's why I feel a bubble is building. When the bubble will burst is quite hard to predict but the signs of a bubble formation are not difficult to see unless we are blinded by greed :-)
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  • Originally Posted by yar.2007
    Apartment prices have become exorbitant with projects launching 5000 psft -10000 psft near hebbal donno people keep screaming Real estate buble will burst but can we expect some reality check on the prices and affordability

    People are buying near Hebbal and Yehlanka too based on news reports that appreciation is likely in next 5 years. They forget that the developer is already charging 5 years appreciated price NOW.
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  • Nothing will change.

    If some thing bad happens in any sort,prices will remain stagnant...no one will give away for lesser price.
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  • Originally Posted by jsriram
    Personally, I feel that some sanity should/will prevail. To me current real estate investment scenario looks similar to housewives buying some stock based on a tip by a stock analyst. I can see many people blindly investing in real estate and that's why I feel a bubble is building. When the bubble will burst is quite hard to predict but the signs of a bubble formation are not difficult to see unless we are blinded by greed :-)

    Agree. Similar to stock exchange of 06-07 when everybody thought Stocks are gonna touch 30K and the party is forever.
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  • Originally Posted by rameshh
    Nothing will change.

    If some thing bad happens in any sort,prices will remain stagnant...no one will give away for lesser price.

    Panic can cause strange things. If even some % of IT flies, many people will be in panic selling mode.
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  • If there is any blow to S/W industry,if there are 4L jobs in s/w...indirectly 10L people are earning because of S/w industry.
    Every one will have a problem.
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  • One reason for the unreasonable appreciation has been greed. Many buyers are aware that many of the apartments are exorbitantly priced and there is no value for money. Inspite of that, many people still go ahead assuming that they will gets returns of 20-30% YoY. Also, I have seen quite a few advertisements where people(mainly by brokers and some high profile investors/speculators) are selling within 1 year (bought during pre-launch and selling at launch) at 30-40% appreciation. This is purely speculative buying. Another recent trend (like brigade Golden Triangle/Prestige Tranquility) is that the launch price is already built into the pre-launch price i.e. the pre-launch price includes all the price appreciation to be gained after getting necessary approvals and other associated risks. Somehow all the developments which may happen 5-10 years down the line are already factored into today's price!
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  • Originally Posted by jsriram
    One reason for the unreasonable appreciation has been greed. Many buyers are aware that many of the apartments are exorbitantly priced and there is no value for money. Inspite of that, many people still go ahead assuming that they will gets returns of 20-30% YoY. Also, I have seen quite a few advertisements where people(mainly by brokers and some high profile investors/speculators) are selling within 1 year (bought during pre-launch and selling at launch) at 30-40% appreciation. This is purely speculative buying. Another recent trend (like brigade Golden Triangle/Prestige Tranquility) is that the launch price is already built into the pre-launch price i.e. the pre-launch price includes all the price appreciation to be gained after getting necessary approvals and other associated risks. Somehow all the developments which may happen 5-10 years down the line are already factored into today's price!

    Couldn't agree more.

    I am amazed that the many smart guys handling complex IT projects can't figure out that the Real estate projects are already over priced for next 5 years.
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  • I agree with points made so far, they echo sentiment of a common man who sees RE as a basic requirement first and then an investment vehicle

    As we continue to deliberate and moan, the prices will keep rising, If one looks at Mumbai or NCR, you will get indicators that Bangalore is where NCR was 5 years ago and Mumbai 10 years ago.

    I beleive the prices may remain stagnant, but any significant correction is not possible. There is enough money in the market(brokers, builders, politicans) they will not let the market fall as they are the biggest losers.


    So one should buy what one can in the current scenario as prices will not fall, if you cannot buy today you will find it even more difficult later

    I am saying this from my own experience over last few years and still tend to fell in trap of expectation that prices will correct. As someone said to me recently when buying RE nothing can go wrong i.e. it will always reap benefits in long term as long as you keep basics in mind
    1. Location
    2. Builder i.e. quality, timely delivery
    3. Litigiation free land
    4. Supporting infra
    5. Time of Entry/Exit


    Originally Posted by familyguy
    Couldn't agree more.

    I am amazed that the many smart guys handling complex IT projects can't figure out that the Real estate projects are already over priced for next 5 years.
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  • Originally Posted by Ark2011
    I agree with points made so far, they echo sentiment of a common man who sees RE as a basic requirement first and then an investment vehicle

    As we continue to deliberate and moan, the prices will keep rising, If one looks at Mumbai or NCR, you will get indicators that Bangalore is where NCR was 5 years ago and Mumbai 10 years ago.

    I beleive the prices may remain stagnant, but any significant correction is not possible. There is enough money in the market(brokers, builders, politicans) they will not let the market fall as they are the biggest losers.


    So one should buy what one can in the current scenario as prices will not fall, if you cannot buy today you will find it even more difficult later

    I am saying this from my own experience over last few years and still tend to fell in trap of expectation that prices will correct. As someone said to me recently when buying RE nothing can go wrong i.e. it will always reap benefits in long term as long as you keep basics in mind
    1. Location
    2. Builder i.e. quality, timely delivery
    3. Litigiation free land
    4. Supporting infra
    5. Time of Entry/Exit

    I am simple IT guy. I never look at RE as an opportunity to make money. End use is my thing. So I stay on rent. I have seen the rates increasing myself so I understand your argument but I still believe its a mad rush.

    Point about NCR/Mumbai is interesting. Mumbai is driven basically by people with big money. IT guys will stay on rent there forever, RE in Mumbai was out of reach of IT guys a long way back.

    NCR is totally investment dominated market, many thread say that close to 70% flats are with investors. Your guess is as good as mine as to what is the real value of NCR flat.

    When you say we might not be able to buy tomorrow, you sum up the worst fears of end users. But I feel if I am not able to afford tomorrow, I will move somewhere else. No big deal. Might even retire with acres of land and start agro buissness - many such options are there. Lets stop being scared what If we are not able to afford tomorrow. Life will play itself out.

    Bangalore on the other hand is mostly end user dominated who have fixed income and mostly earn in white. There salary is stagnating. Also, there are not enough new companies for late entrants to become the new VP/CEO, most people who entered after 2000 will likely get stuck at program manager/product manager level. Salary in the range of ~20 lacs. I feel Growth of RE prices in Bangalore at the max would be inflation linked and at worst will likely decline.
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  • Originally Posted by familyguy
    I am simple IT guy. I never look at RE as an opportunity to make money. End use is my thing. So I stay on rent. I have seen the rates increasing myself so I understand your argument but I still believe its a mad rush.

    Point about NCR/Mumbai is interesting. Mumbai is driven basically by people with big money. IT guys will stay on rent there forever, RE in Mumbai was out of reach of IT guys a long way back.

    NCR is totally investment dominated market, many thread say that close to 70% flats are with investors. Your guess is as good as mine as to what is the real value of NCR flat.

    When you say we might not be able to buy tomorrow, you sum up the worst fears of end users. But I feel if I am not able to afford tomorrow, I will move somewhere else. No big deal. Might even retire with acres of land and start agro buissness - many such options are there. Lets stop being scared what If we are not able to afford tomorrow. Life will play itself out.

    Bangalore on the other hand is mostly end user dominated who have fixed income and mostly earn in white. There salary is stagnating. Also, there are not enough new companies for late entrants to become the new VP/CEO, most people who entered after 2000 will likely get stuck at program manager/product manager level. Salary in the range of ~20 lacs. I feel Growth of RE prices in Bangalore at the max would be inflation linked and at worst will likely decline.


    I agree with "familyguy". If people cannot afford here they look some where else, its happening in most of my friends are looking in their native places to buy apartment/plots.
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  • May be we are diverting topic here.
    The topic is impact of new government on RE and not on the correction of RE due to underprice or overprice. It's certainly overpriced in most of the IT belt and lot more houses are coming with completion of several projects in 3-5 years time. But the point is, are we going to see some different direction of development with change of govt, new SEZs, new locations etc. What about planning and development boards and their stand.
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  • Originally Posted by sandym
    May be we are diverting topic here.
    The topic is impact of new government on RE and not on the correction of RE due to underprice or overprice. It's certainly overpriced in most of the IT belt and lot more houses are coming with completion of several projects in 3-5 years time. But the point is, are we going to see some different direction of development with change of govt, new SEZs, new locations etc. What about planning and development boards and their stand.

    There is no development with Congress. It was, is and will be redistribution while keeping signification amount in it's own pockets. With this out of the way, specific to Bangalore, I guess any work if they intend to do it all all would shift away from Hebbal, Yehalanka belt as I have heard most land there is owned by either the JD(S) or the BJP politicians.

    They will try to find new places to develop where they hold land or will buy immediately after coming to power.

    Investment in Bangalore might reduce as by now everyone is shit scared of Congress.
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