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You have raised a pertinent point. Such high appreciation are difficult to sustain when the availability of new apartments will be ample in 2-3 years time frame. As rightly pointed out that bulk of the bookings are being done by investors, these units will be made available in the market just before registration of the flat to get the highest premium.
In Mumbai the prices have already come down as the flats are ready to move in, & sellers want to sell them before wasting money on the registry. Even the builders are offering ready to move in flats to end customer which is currently not the situation in Gurgaon.
Moreover, if the commonwealth games are not a hit (it currently looks to be a big let down) then image of India would also take a beating, & hence foreign investments which are currently huge in India...will also dry up.
In any investment returns do not exceed 20% in the long term, & such shall also be the fate of real estate.CommentQuote0Flag
- I tend to agree with both gaurav and valuesearch.
Time to be cautious. The chance for quick money is already over.
Now there is only big risk, little chance for reward
Only thing is, there have been relatively few new launches in the past year in Gurgaon, so there is no real bubble in the making for new projects. New bookings with a long term horizon of over 3-4 years seem safe
The crash is likely for the already built Sohna Road apts which have appreciated to crazy levels recently, as they get delivered and nobody moves in - reality will strike. I expect 3000 - 3500 psf levels to be revisited soon in Sohna Road.
Short term investors will suffer. Long term hold people will escape unscathed.CommentQuote0Flag
- well said Venkytalks;
real estate should be treated as any other investment and one should adhere to the investment principles which apply. unfortunately a lot of us get swayed and get into the speculave mode.
A 20% return which you pointed out is a very reasonable return.
In reference to gurgaon my view too is that anybody who has longterm 3-5 year time frame will definately make money( not abnormal returns!!!)
Just dont leverage yourself and stick to A grade builders!!!CommentQuote0Flag