Why is that no one even bother to look at Mumbai threads these days ? lol.

12000 / sqft ? lol.

That is worse than Switzerland real estate. lol.
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  • When was Mumbai cheap?compare rates in mumbai vis a vis salaries available at that time.it was always out of reach for middle class people since beginning and it is just expanding.iphone is just an example to show effect of competition and nothing else.
    I do not understand what we are achieving by crying that Mumbai is absurdly costly.its a reality,if you have some suggestions to improve situation,please suggest.
    If you think there is no value in buying in Mumbai look elsewhere,or look outside re.
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  • Originally Posted by Kuldeepp
    When was Mumbai cheap?compare rates in mumbai vis a vis salaries available at that time.it was always out of reach for middle class people since beginning and it is just expanding.iphone is just an example to show effect of competition and nothing else.
    I do not understand what we are achieving by crying that Mumbai is absurdly costly.its a reality,if you have some suggestions to improve situation,please suggest.
    If you think there is no value in buying in Mumbai look elsewhere,or look outside re.


    here is one suggestion for the start:
    noone shud b allowed to buy properties as investments. this is the reason why 40% of properties in india are unoccupied, either locked or still under construction. only those who dont hav a home to live and require it for "living" shud b allowed to buy. they require it more than those who want to "invest" and take prices artificially up
    govnmnt n people shud undrstnd tht prime reason for houses is to live in them, not investments.
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  • Haha!!Do you really think this will ever happen?There is nothing wrong in investing.
    Again I am saying ,due to very high prices in Mumbai(it's financial capital of India)there is decentralisation happening and which is good for economy.

    Regarding salaries,get real.it is common in middle class in Mumbai and around to have 1 lakh per month family income if not individual income with 10-15 years of service.Please check with your relatives,friends and building.Again 000.1% having such income is terribly wrong assumption.I am in IT and can safely confirm that everybody with 10-12 years of experience get 10-12 lakhs per annum if not more.Same with finance.These 2 types of jobs are ample in Mumbai.Also there is hefty rise in government employees after 6th Pay commission.

    Also I have already proved that prices in Mumbai limits have increased in proportion to GDP with Borivli prices.You can check correctness of data from various websites.Your assumption of prices increasing everywhere by 10 times is WRONG.

    I think,enough explained,Mumbai prices are going to remain more than anywhere in India for a while,it may have correction in between but they will remain high!(rate of growth will reduce as prices increase and others will catch up)

    Thank you.
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  • I think the best approach will separate property tax for end users and investors.

    Those who live in their own home or rent it out should pay the current rate while those who leave it empty should pay around 5% of RRR.

    Originally Posted by ruchika1
    here is one suggestion for the start:
    ...
    govnmnt n people shud undrstnd tht prime reason for houses is to live in them, not investments.
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  • I think you are mistaken. Property rate appreciation should be in accordance with inflation and not with GDP growth. By that rule, property prices should be less than double in the last 10 years (inflation was under 5% for the first 6 years and has been high for only the last 3 years). Or look at rentals. I can say from personal experience that rentals have doubled in the last 8 years. There is no reason why property prices should increase at a higher rate than that.

    Originally Posted by Kuldeepp
    Also,there seems to be lack of understanding in growth rates.Growth rate is REAL growth rate,you have to add inflation to it to get nominal growth rate.So nominal growth rate has been 14-15 % for a decade now.(GDP growth 6-8 %+inflation 7-9 %).that is why India GDP has gone up from 400 billion in 2000 to usd 1.9 trillion in 2012.check in wikipedia.property rates have gone up in accordance to GDP growth
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  • Common.you mean to if an economy is increasing at 5% with very less inflation(as Japan ) then prices won,t rise at all?even though income of people increase?

    As I have already mentioned that rate of increase in Mumbai will be lesser henceforth and rentals will catch up.Also please check concept of forward PE?
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  • Originally Posted by Kuldeepp
    Haha!!Do you really think this will ever happen?There is nothing wrong in investing.
    Again I am saying ,due to very high prices in Mumbai(it's financial capital of India)there is decentralisation happening and which is good for economy.

    Regarding salaries,get real.it is common in middle class in Mumbai and around to have 1 lakh per month family income if not individual income with 10-15 years of service.Please check with your relatives,friends and building.Again 000.1% having such income is terribly wrong assumption.I am in IT and can safely confirm that everybody with 10-12 years of experience get 10-12 lakhs per annum if not more.Same with finance.These 2 types of jobs are ample in Mumbai.Also there is hefty rise in government employees after 6th Pay commission.

    Also I have already proved that prices in Mumbai limits have increased in proportion to GDP with Borivli prices.You can check correctness of data from various websites.Your assumption of prices increasing everywhere by 10 times is WRONG.

    I think,enough explained,Mumbai prices are going to remain more than anywhere in India for a while,it may have correction in between but they will remain high!(rate of growth will reduce as prices increase and others will catch up)

    Thank you.


    its not 0.1%, its less than 0.001%. n thats even lower. pls check population of india and per capita income of our country and see outside ur web of frnds and locality/society. not everyone here is in IT. and its again a misconception tht a mere "IT" before ur profession means u earn 1 lakh plus. in an IT office u hav clerks, lower level staff too. if v see things thru our restricted prism or just compare near n dear ones then it doesnt necessarily means that what u r seeing is "reality". as for ur advise of asking my frnds, i dont hav any relative or friend in IT sector. u r debating as if 1 person out of every 2 in our country is in IT, and that too earning 1 lakhs per month.
    regarding ur "family income" theory. good tht atleast u hav come down to family instead of individual. do u think if the whole family works hard 24x7, 12 months a year then all they deserve in their life is a mere house in a country that too on emi's and tht too 2 bhk in 1 crore+ in congested bylanes ? house is a basic need, its not privilage, it has becum privilage in our country now, which shud never hav been the case.
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  • Originally Posted by Kuldeepp
    Common.you mean to if an economy is increasing at 5% with very less inflation(as Japan ) then prices won,t rise at all?even though income of people increase?

    As I have already mentioned that rate of increase in Mumbai will be lesser henceforth and rentals will catch up.Also please check concept of forward PE?


    If income of people is rising (on a per capita basis), inflation will rise provided supply of goods remains the same. This is because there is more money chasing limited goods. And so, even the house prices prices will rise. On a longer term basis, generally the house prices will rise in line with inflation which in turn will rise in line with rise in earnings of people.
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  • Originally Posted by piy12b
    If income of people is rising (on a per capita basis), inflation will rise provided supply of goods remains the same. This is because there is more money chasing limited goods. And so, even the house prices prices will rise. On a longer term basis, generally the house prices will rise in line with inflation which in turn will rise in line with rise in earnings of people.


    You should buy land. They dont make it anymore - Mark Twain

    While everyone agrees to what he says, not many people gets to see what he left unsaid. He most probably said "you should buy land (irrespective of prices)". Your paper money and its debasement through inflation means nothing for the utility and value of the underlying asset behind each flat i.e. land. Why do you think lodha and dlf pay thousands of crores for land parcel? Because those rupee prices dont matter. It is only an exogenous input to an economic cycle, and does not have to do anything with GDP and inflation. It can only respond to exogenous shock, thats all. Activism doesnt help, pragmatism does.
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  • Well Land is probably the best investment but unfortunately the politicians do not want you to buy it i.e. only a farmer can buy agricultural land etc etc but instead they sell you the finished product at bubble prices via flats, SEZ.

    The politicians also control the supply of the agricultural land that can be converted to NA so as keep the prices of flats high.

    The smart money has moved there a long long time ago and frankly agricultural land prices have plateaued after a brilliant run but as an investor I am certain this is one commodity which is going to give me great returns . It's scarce for a population like India but also gives me tax free income.

    Love these politicians of ours when you can understand their vision or lack of thereof.
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  • Well, first of all, that is the definition of inflation - average fall in the value of money. Since inflation is nearly zero aerage prices (including consumer goods, durable goods and capital goods) are not changing. By your logic why are these prices constant if income is increasing?

    Second, real estate prices in Japan have actually been flat for several decades. Look at http://www.marketoracle.co.uk/Article8080.html. In 1980, the real estate index was at 60; in 2008 it was 90. That is little over 1% increase over a 28 year period. I looked at Japan Inflation Rate for the inflation rate. It appears that inflation rate over this period was also of the order of 1%.

    Forward PE is usually used with the running year or next year data (the near future) as these can be reasonably estimated. Longer term estimates are more akin to speculation.



    Originally Posted by Kuldeepp
    Common.you mean to if an economy is increasing at 5% with very less inflation(as Japan ) then prices won,t rise at all?even though income of people increase?

    As I have already mentioned that rate of increase in Mumbai will be lesser henceforth and rentals will catch up.Also please check concept of forward PE?
    CommentQuote
  • Originally Posted by Skywalker20
    You should buy land. They dont make it anymore - Mark Twain

    While everyone agrees to what he says, not many people gets to see what he left unsaid. He most probably said "you should buy land (irrespective of prices)". Your paper money and its debasement through inflation means nothing for the utility and value of the underlying asset behind each flat i.e. land. Why do you think lodha and dlf pay thousands of crores for land parcel? Because those rupee prices dont matter. It is only an exogenous input to an economic cycle, and does not have to do anything with GDP and inflation. It can only respond to exogenous shock, thats all. Activism doesnt help, pragmatism does.


    Funny thing is, while you mention DLF as a great example of a company who understands the concept that money keeps losing value and that rupee prices didnt matter and hence they keep buying land, in fact they have been trying to do exactly the opposite recently.

    They have traded their lower parel land for money. Same for their Aman resorts, their plotted developments in Goregaon and so on. I wonder why..
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  • While there can be some correction or stabilisation phase for next couple of years, long term property prices will increase.

    Prior to 2004, most people used to invest in stocks and FD's. However with this RE boom, even salaried people have started invested in RE, i have lot of friends who previously invested in stocks etc are now investing in smaller properties.

    Coming to the affordibility aspect, there are luxury/semiluxury apartments where the prices are 30-35% above the other normal projects of local developers. For example, in goregoan you can get 2BHk in 85-1 cr, however if you compare it with Rustomjee elanza which quoates 2 Cr for 2BHK

    There wouldn't be big correction in near future

    Points to consider:
    This is a global economy, everything is driven from west, US economy is slowing showing signs of improvements though it will take long time to be out of the woods

    Even Indian economy has been growing slowly, however before 2014 elections, congress is going to get much better results

    Last year almost all projects were stuck du to DCR, so there were very few launches, hence builder were raising prices without actual sales

    This year there would be huge projects:

    Lodha Blue Moon
    Bombay Dyening ICC
    L&T Powai

    So probably the prices won't move much and builders may give good discounts to clear inventory and than market stabilize for couple of years, but doesn't seem there is going to be a huge correction/crash.
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