Members,

I have been tracking quiet a few threads in this forum, but still not able to make a call on whihc property to go for..............sometimes feel like gurgaon RE market is a bubble and is completely driven by brokers/builders..........My budget is between 50-60 lacs and is looking with a view of 4-5 years, not only for investment...... Senior memebers please suggest..........

Thanks,
Vishal Tuhan
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  • Originally Posted by AmitMM
    its not hype its a very viable business model :)!!!!!!!!!!!!!!
    launch few units at attractive rates. increase price by 300-400 rs in next few weeks. this creates a sec. market immediatly. the initial investor makes 100 % profit on his 15-20% payment.in few weeks.
    next investor gets in at prices lower than the company price and hopes he makes some money in next 6-12 months.
    the end user gets in at launch prices because either he was not aware of the prelaunch game or he missed the bus...:D
    this then creates a new benchmark for the prices for new projects in vicinity.
    with everybody out there to make a quick buck no body should be complaining.........
    for end user........ nobody cared about YOU any ways!!!!!!



    Amit

    Very well written/explained.
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  • Originally Posted by AmitMM
    with all due respect to venky my views are slightly different.
    with lock in period of 5 years in fd if the same amount is invested in real estate flat/plot it should give atleast a 20% annualised return.
    historically the best investment over long term 5-7 years has always been land and now may be appt. Can anyone point out one prop in gurgaon which has not gone 2.5 -3 times in the last 7 years.
    the only variable is if you are smart enough and lucky too to predict and time the market you might get benefit of 10-15%. but again at corrected prices i have never seen too many deals happening.
    I believe- PEOPLE WILL KEEP GROWING LAND WILL NOT.
    so as long you invest in clear titles and reputed builders one can enjoy above average returns compared to other investment options


    Hi AmitMM.

    historically the best investment over long term 5-7 years has always been land and now may be appt.....

    Actually that is not true - historically stocks have outperformed all other assets including RE in India in the last 30 years.

    Having said that, you might be right - but right only for land i.e. plots. You can safely keep a plot for long term and it will outperform FD.

    Flats I am not sure. Despite that, I personally have made flat booking in 2009 fully believing that it will outperform in the long term of many years. My stocks are also for long term - the never sell category.

    My thought was for short term RE and short term stock investors. Looks like a bubble right now. Which means current speculative buy in stocks and speculative bookings might be a bad idea. You might not get a quick exit.

    RE has given fantastic and once in a lifetime returns from 2003 to 2007. It was because of India shifting from high to low interest rates. That chance can never come again (I missed it). One should not extrapolate from this to future.

    India has huge land, what it lacks is roads to reach it and law and order and infrastructure. Otherwise there is no land shortage - except by govt policies.

    20% annualised return means in approx four years 1Cr flat will become worth 2Cr. Eight years 4Crore. 12 years it will become worth 8 Crore.

    So 1 crore flat will become worth 8 Crore in 12 years time? If this was certain, it would be fantastic.

    Are you sure this will happen? Needs hyperinflation to happen - possible with Congress govt but by no means certain

    From 2002-2008, 20L flat in Dwarka became 80L. In 1998, it was already 20L cost, in 2010, it is still worth 80L only.

    So return is from 1998 to 2010 (12 years, money quadrupled) is approx 12% annualised. Good but not fantastic. And this included the most fantastic RE returns time in Indian history.

    Better returns from plots though! Around 20%

    .
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  • Originally Posted by Venkytalks
    Hi AmitMM.

    historically the best investment over long term 5-7 years has always been land and now may be appt.....

    Actually that is not true - historically stocks have outperformed all other assets including RE in India in the last 30 years.

    Having said that, you might be right - but right only for land i.e. plots. You can safely keep a plot for long term and it will outperform FD.

    Flats I am not sure. Despite that, I personally have made flat booking in 2009 fully believing that it will outperform in the long term of many years. My stocks are also for long term - the never sell category.

    My thought was for short term RE and short term stock investors. Looks like a bubble right now. Which means current speculative buy in stocks and speculative bookings might be a bad idea. You might not get a quick exit.

    RE has given fantastic and once in a lifetime returns from 2003 to 2007. It was because of India shifting from high to low interest rates. That chance can never come again (I missed it). One should not extrapolate from this to future.

    India has huge land, what it lacks is roads to reach it and law and order and infrastructure. Otherwise there is no land shortage - except by govt policies.

    20% annualised return means in approx four years 1Cr flat will become worth 2Cr. Eight years 4Crore. 12 years it will become worth 8 Crore.

    So 1 crore flat will become worth 8 Crore in 12 years time? If this was certain, it would be fantastic.

    Are you sure this will happen? Needs hyperinflation to happen - possible with Congress govt but by no means certain

    From 2002-2008, 20L flat in Dwarka became 80L. In 2010, still worth 80L.

    So return is from 2002 to 2010 is approx 12% annualised. Good but not fantastic. And this included the most fantastic RE returns time in Indian history.

    Better returns from plots though! Around 20%

    .

    very enlightening mail venky
    i would agree with you on appts....
    appts in india are a recent phenomenon barring mumbai. so a long term return may be hard to predict. also any flat has life unlike land..
    as for your point that india has enough land my take is land near metro/industrial hubs.
    soon like westren countries the concept of downtown would probably come in with travelling time replacing distace.
    20% return is a representation baswd on current scenario.. may or may not hold good. but i would still tend to belive re will out perform other investment

    like any other investment short term view is always high risk prone. i have learnt one thing you can never time the market .

    keep the valuable inputs flowing
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  • Great inputs both Venky & Amit.
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  • Originally Posted by AmitMM
    very enlightening mail venky
    i would agree with you on appts....
    appts in india are a recent phenomenon barring mumbai. so a long term return may be hard to predict. also any flat has life unlike land..
    as for your point that india has enough land my take is land near metro/industrial hubs.
    soon like westren countries the concept of downtown would probably come in with travelling time replacing distace.
    20% return is a representation baswd on current scenario.. may or may not hold good. but i would still tend to belive re will out perform other investment

    like any other investment short term view is always high risk prone. i have learnt one thing you can never time the market .

    keep the valuable inputs flowing


    Hi Amit.

    Yes, I totally agree, well located plots will give better returns than stock also. manesar might be the best place - close to industry as well as possible IT campuses in future.

    Unfortunately I went with flat and cannot invest more now in RE. My thought was - one can at least live in the flat. Plot is just a piece of paper.

    My next one will definitely be plot.

    Still, all Congress govt have had 10-20% inflation. So without RE, other investments might be useless.
    CommentQuote
  • Still, all Congress govt have had 10-20% inflation. So without RE, other investments might be useless.
    that is absolutly true - I moved abroad in 2001 as i could not afford 3 bedroom flat in gurgaon which were selling for 15 lakhs and I can not still afford it as they are selling for 1.5-2 crores. any savings in india has to earn more that 10 percent to beat inflation.
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  • Good Discussion

    Very enlightning discussuion Venky n Amit. Though i am a newbee here; I think even with my limited knowledge, what Venky is saying makes sence to me. RE (Flat in Gurgaon) is too risky at the moment till it becomes stable ((Like they say Valuations are too high and moving every week;; its a sign of bad things to come)). Its time to book profits and wait till next right time to buy.
    CommentQuote
  • Originally Posted by Venkytalks
    Hi Amit.

    Yes, I totally agree, well located plots will give better returns than stock also. manesar might be the best place - close to industry as well as possible IT campuses in future.

    Unfortunately I went with flat and cannot invest more now in RE. My thought was - one can at least live in the flat. Plot is just a piece of paper.

    My next one will definitely be plot.

    Still, all Congress govt have had 10-20% inflation. So without RE, other investments might be useless.

    Very very interesting comments Venky & Amit. It is construtive debates like this which makes me keep coming back to this forum.

    Venky: I would also be interested in getting land, & best way to get them currently(with limited funds) would be going through various government plots schemes that keeps coming in the market. With limited funds we can keep trying, & if we are lucky we can keep them for long term by taking a bank loan. All the best!!!
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  • On my interactions with various brokers, many of the brokers r telling me that when projects r soft launched/launched, initial BSP of project is influenced by the grading of the builder, ie.. a builder of higher repute demands a higher rate & smaller builder with a project in the same vicinity gets a lesser rate. I agree to this.

    As per brokers, when projects of both said builders r reaching completion stage, they would demand a similar premium/price.

    Members , please comment
    CommentQuote
  • Originally Posted by MANOJa
    On my interactions with various brokers, many of the brokers r telling me that when projects r soft launched/launched, initial BSP of project is influenced by the grading of the builder, ie.. a builder of higher repute demands a higher rate & smaller builder with a project in the same vicinity gets a lesser rate. I agree to this.

    As per brokers, when projects of both said builders r reaching completion stage, they would demand a similar premium/price.

    Members , please comment


    not really... the builder reputation matters and some price differential does remain though may be less pronounced.
    case in point sohan road.
    vipul green still commands more premium than parkview, then orchid with parsavnath greenville still comparitively cheaper.

    similarly on golf course dlf still is more expensive then vipul and parsavnath.
    also when the project nears delivery the potential rental income also gets factored in along with the general facilities being provided.

    the ROI may be more on a smaller builder because the entry cost is comparitively lower and at delivery the gap although there, reduces.
    case in point tulip vs vista where this might happen
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  • Originally Posted by sandeep12345
    Very enlightning discussuion Venky n Amit. Though i am a newbee here; I think even with my limited knowledge, what Venky is saying makes sence to me. RE (Flat in Gurgaon) is too risky at the moment till it becomes stable ((Like they say Valuations are too high and moving every week;; its a sign of bad things to come)). Its time to book profits and wait till next right time to buy.


    venky/sandeep,
    Its time to book profits and wait till next right time to buy.

    your valuation concerns are justified, the way market has shot up in the
    last couple of months but my take is slightly different.
    I would like you all to kindly comment on
    1.what correction/stabilty in prices do you all foresee in next
    A. 12 months
    b. 18-30 months from now.
    2. how do you define the next right time to buy.

    my take on the market is that the high prices are here to stay. they will only move up though at a slower rate. the days of unreasonable/super returns are over but they will continue to move up.
    In Gurgaon we are looking at about 25000/30000 units being added in the next 2-5 years based on project launched/pipeline(pls correct the numbers if wrong)
    the gurgaon/manesar belt looks to add another 15000 -20000 jobs at current estimate which might rise.over next 3 years so absorption should not be an issue unlike noida.

    my only concern is that there is a very disturbing trend of middle-high level professionals who are developing a investor mentality of looking at quick/short term returns. coupled with ready bank loans at their disposal this might become a double edged sword.

    i always believed that the USA like subprime would never happen in india becaude RE in india always had a high black component. but with buyer now contributing only 10-15% of cost and with no EMI schemes floating.
    the scenario might change.
    I hope i am not forced to change my view point by these :o

    my take on the market is that the high prices are here to stay. they will only move up though at a slower rate. the days of unreasonable/super returns are over but they will continue to move up.
    In Gurgaon we are looking at about 25000/30000 units being added in the next 2-5 years based on project launched/pipeline(pls correct the numbers if wrong)
    the gurgaon/manesar belt looks to add another 15000 -20000 jobs at current estimate which might rise.over next 3 years so absorption should not be an issue unlike noida.

    my only concern is that there is a very disturbing trend of middle-high level professionals who are developing a investor mentality of looking at quick/short term returns. coupled with ready bank loans at their disposal this might become a double edged sword.

    i always believed that the USA like subprime would never happen in india becaude RE in india always had a high black component. but with buyer now contributing only 10-15% of cost and with no EMI schemes floating.
    the scenario might change.
    I hope i am not forced to change my view point by these :o

    my take on the market is that the high prices are here to stay. they will only move up though at a slower rate. the days of unreasonable/super returns are over but they will continue to move up.
    In Gurgaon we are looking at about 25000/30000 units being added in the next 2-5 years based on project launched/pipeline(pls correct the numbers if wrong)
    the gurgaon/manesar belt looks to add another 15000 -20000 jobs at current estimate which might rise.over next 3 years so absorption should not be an issue unlike noida.

    my only concern is that there is a very disturbing trend of middle-high level professionals who are developing a investor mentality of looking at quick/short term returns. coupled with ready bank loans at their disposal this might become a double edged sword.

    i always believed that the USA like subprime would never happen in india becaude RE in india always had a high black component. but with buyer now contributing only 10-15% of cost and with no EMI schemes floating.
    the scenario might change.
    I hope i am not forced to change my view point by these :o

    my take on the market is that the high prices are here to stay. they will only move up though at a slower rate. the days of unreasonable/super returns are over but they will continue to move up.
    In Gurgaon we are looking at about 25000/30000 units being added in the next 2-5 years based on project launched/pipeline(pls correct the numbers if wrong)
    the gurgaon/manesar belt looks to add another 15000 -20000 jobs at current estimate which might rise.over next 3 years so absorption should not be an issue unlike noida.

    my only concern is that there is a very disturbing trend of middle-high level professionals who are developing a investor mentality of looking at quick/short term returns. coupled with ready bank loans at their disposal this might become a double edged sword.

    i always believed that the USA like subprime would never happen in india becaude RE in india always had a high black component. but with buyer now contributing only 10-15% of cost and with no EMI schemes floating.
    the scenario might change.
    I hope i am not forced to change my view point by these :o
    CommentQuote
  • Members are requested to keep the discussion relevant to the topic. You don't want to face suspension for off topic thread discussions.
    CommentQuote
  • Hi Amit.

    Re: Looking value for money aprtment in gurgaon

    I am of the opinion that prices in Gurgaon for flats will remain steady for next 6 to 18 months. They will not rise further.

    Your concern about no EMI schemes and pro buying flats is justified, but they form probably 10-20% of total buyers only.

    black money guys dont discuss in internet fora.

    If this price trend is true, booking today gives no advantage over booking 1 year later in terms of price.

    Still it would be wise to book now in nearly sold out projects which will be completed early (eg. Tulip projects, Ramprastha, Indiabulls etc) than booking in early launch projects which might face huge delays in case of global crises.

    Also, booking early may give choice of locations - although brokers try to sell useless locations first and try to keep better ones for themselves.
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  • I don't really agree with Venky that flat prices will remain stable for the next 6-18 months. Maybe for next 6 months.

    As we all know, Gurgaon Real Estate is already over-priced and one can find same advertised properties for 3-4 weeks. i.e the actual buyer is not willing to invest at the current kind of rates.

    Land investment is a safer bet in the long run (at least 3 years hold). With so many projects coming up, why do you think (Venky) that prices will remain stable? Kindly enlighten.
    CommentQuote
  • Hi Abhi.

    By stable, I mean they will not rise further. With many new projects recently released, I dont think there will be any more price increases.

    They might fall - a lot - if global events happen. But it is unlikely.

    More likely, builders will just hold prices at current levels. They are no longer over-leveraged and have holding power. Even if there is too much of new projects, NOIDA like competition is unlikely - supply in Gurgaon is 1/10th of NOIDA.

    So prices are likely to be steady.
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