A lot of companies are advertising for property citing nearness to Dwarka expressway corridor.

Shilas, Indiabulls Centrum Park and Ramprastha Edge Tower come to mind.

Does anybody have news on when this construction will start and when it is likely to finish? Has the contract been awarded and to whom?
Date of completion and start of operation will be vital news for evaluating the pricing of flats sold in this corridor.

Last I heard was that a few houses in Palam Vihar were slated for demolition for this expressway in May June 09 or thereabouts.
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  • Sirji, Main issue is that all your comments are generic and not specific to the person whom you are trying to convey your message. Secondly, you over use unnecessary words like "brokers", "MLM" etc in these messages with no reasoning. Do you want to say that every one who has invested on eway is "broker" or doing "marketing" here?

    Kuch aur nahin hoga bolne ko to ek liner mar doge "ganda hai but dhanda hai ye" :)
    if you don't have anything to contribute, kuch likhna jaroori nahin hai bhai.





    Originally Posted by MANOJa
    Vinay Bhaiya, laggata hain yeh thread apne zaida nahi dekha hain .

    Anyways, i can understand your situation ;).

    Have fun .
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  • No offence, but the way you have explained your savings, you can't buy in Ggn even if rates fall by 50%, which you also know is unrealistic.
    Rates will not come to your savings potential, you will have to match them :)

    Originally Posted by matrix_55


    Another thing, dont count how much you earn, count what you save.

    I earn 24L per annum, I give tax of 5 Lacs, contribute 1.5 L in PF so 17.5 L is leftover. 0.5L for annual vacation/function in family so left with 17L
    Per Month, I spend another 20k on rent and 15k on food and entertainment, 25k on 2 kids education and stuff, 8k on transportation, 4k electricity bills, 3k medicines,insurance and doc expenses, 6k for clothing and incidentals, 5k for internet,telephone etc. 5k for the maid. So 90k gone in expenses. ie more 11 L gone.
    (I have left out capital expenses like buying - car, tv, fridge, furniture, heart surgery for me or old parents etc out of the equation.)
    I keep 2L per annum for future education and marriage of each of my kids so I am less by 4L which I cannot put into for a home of end use.
    I am an end user left with 2L to invest per annum for a end use house, assuming I use all of it to buy a home.
    What is the maximum I can afford to buy in Gurgaon ?
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  • Thanks Vinay,
    Please tell me where would you reduce expenses if you were me. Thanks!
    CommentQuote
  • Originally Posted by matrix_55
    Dear Friends,

    Of all this talk of correction and how it will come, if ever - would like to draw your attention to something different.

    The point is that there is hardly any sale happening since the last 1 year when the prices have risen sharply. The lack of sales is a concern for the RE companies as well as for the investors - Agar uppar barish hogi to neeche to kicchad hi hoga bhai, no escape.
    I do not think the correction/stagnation would require job losses of folks. The folks as it turns out have not bitten the bait. Instead there are a lot of people who are investors looking to flip the property for a quick gain who have been stuck due to lack of participation in secondary market.
    Another thing I would like to add is look at the properties now on resale - loads and due to the fact that in Haryana the floor registration is now open which was not the case in 2007. This all points to a large bucket of supplies getting ready to hit the market in coming years. Competing with these secondary market supplies will be the RE companies in the primary market - kicking themselves in the rear for having focussed on skimming the market with the help of investors instead of end users.

    Now the competition is between investors and RE companies. Its a game where we have to see who blinks first investors or RE companies.


    Indian RE is a very shallow market which cannot and should not be compared to any other country leave alone US !!
    1. An industry whose practises are on borderline illegal; a minefield of litigations await the industry. RE in india running on laws which are dated to 18th century.
    2. No price discovery, no exchange mechanism to judge prices and demand. No indices. No reporting.
    3. Abundance of black money in the RE market to cheat taxes and hide income, leading to distortion in the actual demand supply.
    4. Prices rise because of scarcity and not any other reason. Buyers buy because of lack of any other option. The entire masterplan is nothing but a big scarcity drive. Why only 30 sectors why not 60-100 sectors can be launched when everyday news is being reported that there is a public outcry for affordable housing. A government hand in glove with builders.
    5. The huge difference of land prices in the country varying by upto 50 times in a distance of 50 kms.
    6. Monopoly created over land - license raj, by slowly releasing low amounts of land in a region and giving it to builders. As economy grows, the HUDA plots have been completely withdrawn to favour the builders, completing the saga. Due to the monopoly, quite reminiscent of 80s when poeple had no option but to buy bajaj. In those days, people used to sell in black - film tickets to cars and scooters. Everything was available in black. Those days police used to nab these black marketeers, nowadays these chaps are called investors!!
    Do remember though as soon as liberalisation came, within a short span of time what happened to Indian and the black marketeers- same fate awaits the RE industry. Just waiting for the trigger,this is how it will happen, if it is called correction so be it.

    I would even say a half decent RE model bill can do the trick forget about recession or job losses.

    Another thing, dont count how much you earn, count what you save.

    I earn 24L per annum, I give tax of 5 Lacs, contribute 1.5 L in PF so 17.5 L is leftover. 0.5L for annual vacation/function in family so left with 17L
    Per Month, I spend another 20k on rent and 15k on food and entertainment, 25k on 2 kids education and stuff, 8k on transportation, 4k electricity bills, 3k medicines,insurance and doc expenses, 6k for clothing and incidentals, 5k for internet,telephone etc. 5k for the maid. So 90k gone in expenses. ie more 11 L gone.
    (I have left out capital expenses like buying - car, tv, fridge, furniture, heart surgery for me or old parents etc out of the equation.)
    I keep 2L per annum for future education and marriage of each of my kids so I am less by 4L which I cannot put into for a home of end use.
    I am an end user left with 2L to invest per annum for a end use house, assuming I use all of it to buy a home.
    What is the maximum I can afford to buy in Gurgaon ?


    Sir,

    I would just like to respond to some of your points which I have highlighted.
    No RE regulation and abundance of black money are primary reasons that you see such unrealistic prices. Problem is that once RE gets regulated then prices would jump even further because clever builders would offer final prices to customers with all penalties already taken into account and built in the prices which would be offered. To make matters worse, once land acquisition bill gets passed then procuring land would be much more difficult. Higher land prices will mean higher prices for end users.
    Even though we hold US laws in high esteem, they were so stupid which was the primary cause of RE downfall there. You are much better off in India even with the unregulated market. Simply file a chapter 13 in US to avoid foreclosure and get protection under bankruptcy. In India if we have this provision, almost everyone would take a loan and file chapter 13.

    No disrespect sire, but with the savings plan you have mentioned, you won't be able to own a house even if you have an income of 50L. Your tax liabilities will grow, your kids will go to ultra uber schools, you will drive a Mercedes S-class (*apologies if you already own one), gas prices will go up two folds etc. etc. A person who wants to own a house either a) it is one of his/her priorities or b) wants to own as investment. If you wanted it as a priority, you could have cut down on some of expenditures like entertainment, family outing etc. Clearly as an investment you won't be able to do with this much saving.
    Also, income doesn't increase directly to 24L in a day. You must've been earning before marriage and two kids. There is always a chance in life, it is priorities and circumstances which dictate the path someone takes as well as a person's free will. :)
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  • Agree with the comments.

    There will always be demands for affordable housing and people will start moving out or commuting from places like Bhiwadi to Gurgaon, Palwal to Faridabad etc if actual working areas becomes too expensive. This is the kind of housing that is in highest demand in India and is also least available.




    Originally Posted by ggnkaaadmi
    Meghna ji,

    Political and economic environment contribute to investor sentiment and push/pull the prices. When people talk about correction in prices, it is more of a misnomer in Indian market as in India it is more of stagnancy of prices unlike US/European economies where it is decline in prices.

    Take an example of US. In US, people who couldn't even think of owning got credit from the banks and with the laws they had they were able to afford them with financing, re-financing, re-re-financing etc. Even procuring a loan in India is not an easy task whilst in US almost any Tom, Dick and Harry was able to get it and even now can get it. What will happen when ultimately banks stop refinancing, you lose jobs or your mortgage payment becomes more than what you can earn. Yes, you start losing your houses and make Obama president for divine intervention. You yourself know how that turned out. How many people do you know of in India who put money for a house which they can't afford ? Almost none or very few.

    In India, thanks to our social system and family responsibilities which are groomed in right from childhood, people tend to save first for family/other means and then spend from leftovers. Ask any friend/colleague/family/relative about buying a house and they would simply mention that it is beyond 'budget' rather than taking risk. Majority of the people who fall under the '20 lakh' rule you have mentioned are very risk aversive and avoid going for something they can't afford.Govt. rewards them by giving other good interest options in FD, bonds, Mutual funds etc. In US even CD (our FDs) give a puny 1% return or less than that.

    Some of the under '20 lakh' rule people who definitely are brave enough to sum up means for affording a house will leave no stone unturned to go for it but still won't go over their budget. Instead of going for something expensive like 'Gurgaon' they might go for something like 'Bhiwadi'. Is it a shame ? No. For some people who originally lived in Delhi, today's 'Bhiwadi' was their 'Gurgaon'. Delhi went out of their budget so they sought other avenues. Did you see any bubble bursts in Delhi? No.
    People still continue to buy at exorbitant prices there.

    Statistically (though I do not have any research data), what I assume is that only 5-10% people currently in Gurgaon are able to own houses. Out of them maybe 1% is able to own multiple houses. These 5-10% people either have:
    1) high paying jobs or 2) already own a house and have means to buy another one or 3) Sold a property and diversifying funds or 4) Couldn't open a swiss bank account and needed somewhere to park their money or 5) under '20 lakh' rule but brave and means to own a dream house or 6) all of above.

    Till you are unable to nullify one or more factors out of the above, prices will continue to rise and bubble will become a balloon which will continue to rise.

    Some people give examples of Noida that something similar can happen in Gurgaon which can bring prices down. Please bear in mind that laws are quite different in Haryana than UP. Haryana has been proven to be a role model when it comes to land acquisition in our country. Ask any farmer who has been paid and he will flaunt both his big mustache and multiple toyotas in his garage.

    Yes, there could be some unforeseen situations which can force some weak hands to exit. But do you feel people who have parked in their black money/life savings/second house money which they could afford would pull out ? Answer is a resounding 'No'. It will just force stagnancy in prices and these people will continue to hold for long term. I doubt anyone would sell his her 5000-7000 psft house/apartment for 1500 psft.
    India's population is not coming down in near future so there would always be demand (atleast for next 100 years- good enough for our generation).

    Heck, if property prices went down you would see a lot of NRIs put in their money because that would give them better returns than a lot of foreign banks give. A 100 psft increase in one year is a better return for them than what the bank gives.

    When I was new to investing in equities, I would always sell short when a stock used to make a big move thinking it is time for correction before realizing that momentum has swept me away :o. Over the years I learnt that just ride the wave instead of worrying about reversal. There will be signs aplenty when the actual reversal happens. Don't try to beat the trend or wait for the correction as you may actually get left out. :)
    I wanted to write about gold too but I guess this has already become a lengthy write up.
    Guys who read it till end and agreed with some points, well I am glad you liked. Others, I can just apologize as I can't give back your 10 minutes back for reading this post :D
    May peace with you all and stay blessed!
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  • Originally Posted by vinaybhatia
    Sirji, Main issue is that all your comments are generic and not specific to the person whom you are trying to convey your message. Secondly, you over use unnecessary words like "brokers", "MLM" etc in these messages with no reasoning. Do you want to say that every one who has invested on eway is "broker" or doing "marketing" here?

    Kuch aur nahin hoga bolne ko to ek liner mar doge "ganda hai but dhanda hai ye" :)
    if you don't have anything to contribute, kuch likhna jaroori nahin hai bhai.

    I totally agree with you. This is such a sick line of thinking that anyone who is positive on NPR is either a broker or MLM and all the smarties of the world are invested either in spire or palm hills.
    CommentQuote
  • Originally Posted by matrix_55
    Thanks Vinay,
    Please tell me where would you reduce expenses if you were me. Thanks!


    I won't comment on your expenses but will share my experience.

    I was sitting on fence for 4 yrs to buy a decent RTM flat for end use, which I could afford. I was very optimistic that market can't sustain these price levels and will fall to the level that genuine mid-income buyers would be able to buy. Finally, after waiting for 4 yrs, I decided to enter market with only investment objective and goal was to slowly build my buying capacity. Believe me, all these neative factors like delay in construction, delay in start of project after launch or pre-pre launches were now working in favour for me. The idea was to take calculated risk based on location/builder/entry price and make the best. Today I can buy more than decent RTM flat at good location in main ggn by selling all my investments that I have made in last four years. If I would have waited till now, most likely I would have been still sitting on fence and cursing market for these unrealistic prices.

    I am not trying to justify the market. The market was hyped few years back, is hyped now and will remain hyped. We have only two options, either wait for the system to get better or adjust yourself to make best use of it.
    CommentQuote
  • Originally Posted by vinaybhatia
    I won't comment on your expenses but will share my experience.

    I was sitting on fence for 4 yrs to buy a decent RTM flat for end use, which I could afford. I was very optimistic that market can't sustain these price levels and will fall to the level that genuine mid-income buyers would be able to buy. Finally, after waiting for 4 yrs, I decided to enter market with only investment objective and goal was to slowly build my buying capacity. Believe me, all these neative factors like delay in construction, delay in start of project after launch or pre-pre launches were now working in favour for me. The idea was to take calculated risk based on location/builder/entry price and make the best. Today I can buy more than decent RTM flat at good location in main ggn by selling all my investments that I have made in last four years. If I would have waited till now, most likely I would have been still sitting on fence and cursing market for these unrealistic prices.

    I am not trying to justify the market. The market was hyped few years back, is hyped now and will remain hyped. We have only two options, either wait for the system to get better or adjust yourself to make best use of it.

    Very well said Vinay & I fully endorse. My story is absolutely similar, the only difference is you may have started early.
    I have learned one thing...the first step is most difficult...but most important.
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  • Originally Posted by ggnkaaadmi
    Meghna ji,

    Political and economic environment contribute to investor sentiment and push/pull the prices. When people talk about correction in prices, it is more of a misnomer in Indian market as in India it is more of stagnancy of prices unlike US/European economies where it is decline in prices. ..
    .
    .
    .
    .
    Guys who read it till end and agreed with some points, well I am glad you liked. Others, I can just apologize as I can't give back your 10 minutes back for reading this post :D
    May peace with you all and stay blessed!


    One one the best posts that I have read on IREF so far...full of facts backed by some data. Can't agree more with you on your stock markets trends as I have learnt it the hard way too. Trend is your friend as they say in stock market....great article. Have become your fan ggnkaaadmi.
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  • NH-8 ( Gurgaon - Delhi Toll road ) tender was floated in 2001 & it was open to public in 2008 so it took 7 years for completion . We cannot compare NH-8 with D-Xway but we can easily guess that D-Xway can take anytime between 7 to 10 years or even more
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  • Originally Posted by MANOJa
    D e way - Hypothetical Millionares .


    I am sorry to say Manoj Ji that while the joke sounded great its posting here on this thread is in very bad taste as we could be having some female audiences too & should be careful of ours posts as it is a public forum. If you were so keen on sharing X rated jokes to explain your POVs, please either start another thread on X-rated jokes if IREF allows & posts them there or refrain from any such posts on normal threads meant for healthy discussions.

    No offenses but just felt that we CANNOT be forced to read whatever is dished out to us while on public forums.:bab (5):
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  • I earn 24L per annum, I give tax of 5 Lacs, contribute 1.5 L in PF so 17.5 L is leftover. 0.5L for annual vacation/function in family so left with 17L
    Per Month, I spend another 20k on rent and 15k on food and entertainment, 25k on 2 kids education and stuff, 8k on transportation, 4k electricity bills, 3k medicines,insurance and doc expenses, 6k for clothing and incidentals, 5k for internet,telephone etc. 5k for the maid. So 90k gone in expenses. ie more 11 L gone.
    (I have left out capital expenses like buying - car, tv, fridge, furniture, heart surgery for me or old parents etc out of the equation.)
    I keep 2L per annum for future education and marriage of each of my kids so I am less by 4L which I cannot put into for a home of end use.
    I am an end user left with 2L to invest per annum for a end use house, assuming I use all of it to buy a home.
    What is the maximum I can afford to buy in Gurgaon ?

    Thumb rule crude analysis:
    Your post tax salary is 19 L, which is going to increase with Direct tax code coming soon. Consider take home pay as 16 Lakh. Banks allow 40% loan, means 6 lakh. Save 6 lakh for house by any means. Other expenses need to be rejigged. Your internet expense seems to me quite bloated. There are many things I would not go in detail, as I don't want MAHABHARAT in your home. And don't worry much about children's marriage. It pains me to say but the fact remains that In the current scenario If they donot do it in autopilot mode, your house bought will take care of that and many other things in long run, if you live in it or better if you rent it out.
    But you need to take a firm stand that come what may, you are going to save 6 lakh per annum.
    Though I am 100% sure that you already have thousand better ideas than what I am advocating, as you know much better how to carry your innings on BHOOLOK than I can suggest with my limited wisdom. With your salay , you already belong to top 5% in the country in Salaried class, I think.
    You certainly need to be more desperate to own a house. For whatever purpose.
    Thanks for bearing with my trivia.
    regards
    novice
    Though I am 100% sure that you already have thousand better ideas than what I am advocating, as you know much better how to carry your innings on BHOOLOK than I can suggest with my limited wisdom. With your salay , you already belong to top 5% in the country in Salaried class, I think.
    You certainly need to be more desperate to own a house. For whatever purpose.
    Thanks for bearing with my trivia.
    regards
    novice
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  • Originally Posted by vinaybhatia
    I won't comment on your expenses but will share my experience.

    I was sitting on fence for 4 yrs to buy a decent RTM flat for end use, which I could afford. I was very optimistic that market can't sustain these price levels and will fall to the level that genuine mid-income buyers would be able to buy. Finally, after waiting for 4 yrs, I decided to enter market with only investment objective and goal was to slowly build my buying capacity. Believe me, all these neative factors like delay in construction, delay in start of project after launch or pre-pre launches were now working in favour for me. The idea was to take calculated risk based on location/builder/entry price and make the best. Today I can buy more than decent RTM flat at good location in main ggn by selling all my investments that I have made in last four years. If I would have waited till now, most likely I would have been still sitting on fence and cursing market for these unrealistic prices.

    I am not trying to justify the market. The market was hyped few years back, is hyped now and will remain hyped. We have only two options, either wait for the system to get better or adjust yourself to make best use of it.


    The golden words...Location ( n times), builder and entry price. Thank you.
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  • Details of expenses post suggestions received

    Thanks a lot Novice, Vinay and Khan Sahab, Here are the expenses considering the advices received:

    Case 1 - Reduce Expenses, Increase Savings - Vinay and Novice
    Reductions here:
    0.5L for annual vacation/function in family reduced to 0. Get a 2BHK and reduce rent by 5k, reduce food and entertainment by 5k by reducing going out or ordering food from outside, cannot reduce kids education cost much (any decent school in Delhi/GGN costs abt 10k with 2.5k for books/dev funds/coaching/kid stuff), reduce transportation cost by 3k by getting rid of the car, reduce electricity bill/water bill by 2k , cannot reduce medicine/insurance expenses,clothing and incidentals reduced by 3k, internet/ cost reduced by 2k. Maid removed totally so another 5k saved.
    So I have extra 3.5 L per annum from the expenses reduced. So now I have 3.5 L + 2L = 5.5 L for the house. What can I afford now?
    I can afford a 40-50 L loan so my cash flow affords me is a max 60-70 L.

    Case 2 - Working Spouse - Khan Sahab

    Working Spouse with 16L per annum, tax at 2.5L = 13.5 less PF .8L = 12.7L
    Her transportation, insurance, meals, wardrobe, office incidentals/: Abt 8k per month. 1L spent. Left with 11.7 L.

    Continue with original expenses, with 2 L from husband savings, = 13.7L per annum.

    Continuing with the reduced expenses from case 1 , increasing expenses for maid,car, guilt compensation for not giving time for kids etc = 2 L per annum.
    3.5 L from man, 11.7 from wife = 15.2 Lacs

    What I can afford now with working spouse, reduced expenses & total family income of 40L and assuming I put every single penny in RE: 15 L per annum. I can bear interest expenses for a loan of about 1.2 crores helping me buy property of maximum value 1.5 cr.

    I believe 40L per annum Income family would cover more than 97% of the working class population in Gurgaon.

    Summary: Attempting to capture the mythical end user for the houses - A stereotype is required to cover the bulk of users.

    1. Single earning families of upto 25L fare worst, gurgaon cost structure is simply not affordable for 95-97% folks. Mostly who are single earning 25L can afford no more than a 60-70L house.

    Final Cost to End user, a 1700 sqft 3BHK at 3000 BSP = 51L + 8 L (EDC/IDC/PARKING) + 5 LAC registration, Taxes and finishing = 65L. Match.

    Dual income families earning abt 40L per annum ( again 95-97% f olks covered) can afford properties between 1cr to 1.5 cr.

    Final Cost to End user, a 2000 sqft 4BHK at 5000 BSP = 1 CR + 14 L (EDC/IDC/PARKING/CLUB) + 12 LAC registration, Taxes and finishing = 1.25 CR. Match.
    Current listing of xxacres of properties on sale/resale greater than 1 cr = 13806 (60% of total listed) and about 9k are even greater than 1.5 cr.(40% of total listed)

    Of course this is only the start of the boom, things will pick up pace from here. Rather they have to...
    From here on we need to ensure we must have more than 16-18% growth in rates in BSP per annum (Break up: 10-12% financing cost for the loan and 2% for the dead weight of EDC/IDC/CLUB/Parking/S tax) and 5-10% due to delay in possesion/increase is super area, RE Drama fee, blah blah etc).

    So if BSP rate grows less than 16-18% from here on, most likely we have lost money in RE. Except this time, the properties in resale, increased deliveries and agressive launches by Builders and the unsold inventories will make the competition tougher to get the mythical end user to select the brickworx or it all goes rusting 16-18% a year. Those of us who have picked up stuff at lower levels are safe for now.
    The exponential increase in property value is due to scarcity, not economic growth alone. As this scarcity dissolves, hope you will understand what I intended to say. Economic growth is an underlying engine, due to inefficient markets RE rises spectacularly in gurgaon and does a dodo in Greater Noida. Scarcity = supply vs demand is the key not growth alone.

    PS: I also invested in RE at ok prices in 2008-2010 era and sitting on my share of paper profits. But would not look anything at these levels as I would not play long on stocks even if their technicals are screaming because the damn fundamentals are worrisome. Anyways, let see who bags this one.

    I may be totally wrong as well, so disclaimer - My POV
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  • The only problem with Greater Noida its Location..Look how proximity to Delhi plays a role here. GN will come p once the industry will move there.

    The proximity to the airport plays an important role here.

    Greater noida is great planned city but due to location disadvantages its in shambels.

    Location advantage is at the top of usp when it comes to Projects like ATS Koccon, Shobha, Vatika , and all other sectors that are either next to Delhi or on NH8.
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