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Should I buy a Flat in Sec 7578 after 2 years

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Should I buy a Flat in Sec 7578 after 2 years

Last updated: August 9 2010
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  • #31

    #31

    Re : Should I buy a Flat in Sec 7578 after 2 years

    HI all,

    I was enjoying reading good posts by the members..

    I work for a MNC in NOIDA itself. I also believe that its gud to buy the house after 2-3 years.By the way i have some Q's:

    1. People say that 1.5 lakh flats wil be absorbed since there is a genuine demand. Let me tell you that in 2008 recssion there were hardly 5000 new flats launched. In 2010 there are 1.5 Lakh flats launched. Is demand increased from 5000 to 1.5 lakh in 1.5 years ???? Its NOT. Its only the easy loans , publicity and lucrative slogans of price rise by builders that is riding this market.

    2. Is 1.5 Lakh flats going to the end user ???? Absolutely NOT. More than 50 percent are the investors. These investors will try to get out after 2-3 years even if they make 10-20 percent on there investment.

    3. Where the money is coming from ?? Everybody in my office have booked a flat in Noida,GN orN.extension by paying 1-2 Lakh DP and rest loan. I know people even with a salary of 20000 a month have booled a 15 lakh flat just thinkin of appreciation. Now , consider the current interest rates 8 percent for first 2 years. They will increase to 10-11 percent after 2 years making the EMI intolerable for most of these people.

    4. The inflation HAS ALMOST DOUBLED and most people spent their whole salaries on meeting their daily needs for food, bills , clothes etc. So these people will be in a trap after a certain time. I know many people who have just booked a flat bcoz their colleagues have booked. This is simply an absurd reason to book a flat.

    5. And suppose if there is another recession like in 2008. That will make the matter worse. All these investors and so called people who have booked on loans will sell there stuff at any price and there will be a chain reaction. That will be the right time for a good investor to exploit these people and get a right deal.

    6. Also after the commonwealth games the development projects will be on back foot and cheap labour will be readily available , thus pusing the prices downwards.

    These are only my personel views as i have seen the 2008 recession and seeing people crying after losing their jobs. One should always learn from the past and apply those in the future.

    Comment

    • #32

      #32

      Re : Should I buy a Flat in Sec 7578 after 2 years

      Well no doubt that the deluge of flats will not make much increase in RE prices for next two years..

      But India is a consumer oriented market.. We consume mostly what we produce. Therefore these flats will definitely have buyers and that is why new builders both big and small are launching new projects..

      In India, there was no recession, it was only mentality that everybody got cautious bcoz of global downturn and stopped spending.. Now that clouds of recession have gone substantially..people will definitely invest.. both for living as well as for investment. Since there is no social security in India unlike US, real estate in long term serves a big security. I have experienced that..

      In my view, the time is right for property buying if its as per your budget, location. Bcoz rates are at their lower levels..

      Biggest worry for future is inflation. If it increases, it will effect both real estate prices going upwards and consumer spending going downwards..

      Thanks..

      Comment

      • #33

        #33

        Re : Should I buy a Flat in Sec 7578 after 2 years

        2 years is pretty early to judge project development as most of these will be under construction. All these launches won't get completed before 2014. Considering the last 5 years economy growth and inflation rate, property rates are bound to go up in next 4-5 years at the time when these will be position to be compared and evaluated to come up at better buy.
        If one has the capacity to invest (depending upon own budget), time is now.
        You'll again be in the same dilemma after 2-3 years but will pay higher price for ready to move-in flats. Isn't it?
        Last edited by alien; August 7 2010, 04:44 PM.

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        • #34

          #34

          Re : Should I buy a Flat in Sec 7578 after 2 years

          Hi, My views in bold.
          Originally posted by pranavds View Post
          HI all,

          I was enjoying reading good posts by the members..

          I work for a MNC in NOIDA itself. I also believe that its gud to buy the house after 2-3 years.By the way i have some Q's:

          1. People say that 1.5 lakh flats wil be absorbed since there is a genuine demand. Let me tell you that in 2008 recssion there were hardly 5000 new flats launched. In 2010 there are 1.5 Lakh flats launched. Is demand increased from 5000 to 1.5 lakh in 1.5 years ???? Its NOT. Its only the easy loans , publicity and lucrative slogans of price rise by builders that is riding this market.
          You are right but Demand is definitely there else there would'nt have been so many projects launched by builders. These builders are much more smarter than us and they will never put their big monies without surety of returns. We have discussed is many threads that a builder needs to sell just 30% of their project to recover costs and that will happen in 2-3 years. Even though there are around 1.5L new houses being proposed to be built by 2012-13 i am quite sure not more than 50-60K will be delivered i.e. 30-35% of total.
          The loan interest is high now (9.5%) and is likely to go further up to ~10.5% in the next 2 years


          2. Is 1.5 Lakh flats going to the end user ???? Absolutely NOT. More than 50 percent are the investors. These investors will try to get out after 2-3 years even if they make 10-20 percent on there investment.
          Yes correct, most of the investors are now the young generation who are getting good salaries.

          3. Where the money is coming from ?? Everybody in my office have booked a flat in Noida,GN orN.extension by paying 1-2 Lakh DP and rest loan. I know people even with a salary of 20000 a month have booled a 15 lakh flat just thinkin of appreciation. Now , consider the current interest rates 8 percent for first 2 years. They will increase to 10-11 percent after 2 years making the EMI intolerable for most of these people.
          Yes and you asked the question and answered it yourself The income level of Indian middle class is slowly rising. I also read somewhere that now there are more HNIs in India than ever before due to lot of people coming back from US and Europe.
          Also the number of people above the percapita income is now more than the number below which is sheer numbers. Builders and RE promoters do a lot of homework normally before starting a project.

          4. The inflation HAS ALMOST DOUBLED and most people spent their whole salaries on meeting their daily needs for food, bills , clothes etc. So these people will be in a trap after a certain time. I know many people who have just booked a flat bcoz their colleagues have booked. This is simply an absurd reason to book a flat.
          Yes you are right but then if u book a flat u then tend to control your unnecessary spend on nightouts, luxury items and purchase of expensive stuff which u would have otherwise been spending every month. In a way u become organised in savings, but yes then you are paying to the bank and builder

          5. And suppose if there is another recession like in 2008. That will make the matter worse. All these investors and so called people who have booked on loans will sell there stuff at any price and there will be a chain reaction. That will be the right time for a good investor to exploit these people and get a right deal.
          Yes but who will they sell it to? if there are buyers in recession then there will be more buyers in boom. hence in India there will never be a situation where u will not have a buyer for your house.Yes if it makes sense to buy now it makes equal sense to buy in 2012 or beyond.

          6. Also after the commonwealth games the development projects will be on back foot and cheap labour will be readily available , thus pusing the prices downwards.
          This is speculative. imagine if the games are a big success(not likely) then the spiral of success will continue with infrastructure development which will take prices northwards.
          These are only my personel views as i have seen the 2008 recession and seeing people crying after losing their jobs. One should always learn from the past and apply those in the future.
          RE is definitely in experiencing positive spiral as of now. In NCR buying a property is going to be a definite VFM .
          MM

          Comment

          • #35

            #35

            Re : Should I buy a Flat in Sec 7578 after 2 years

            Hats off to your anwering skills munish

            Though i too remain bullish on RE for a five year period but it will be more wise if you buy after 2-3 years to take the max. out of your profits.

            Take the example of crossings , a friend of mine has booked there in 2006 1550 psf. He got the possession now and the flat cost him 1900 psf incl. interest and other costs. The market price now is b/w 1700-1800 psf. Its right time to buy now not 3 years back. That is my point. I understand that is quite difficult to time market but a good investor should always make rgt deal rgt time.

            By the way do u think that pre launch rates of 2200-2500 psf is ok for NE considering the fact that it is hardly 0.5 kms away from crossings where ready to move in appts are available 1700-1800 psf??

            Comment

            • #36

              #36

              Re : Should I buy a Flat in Sec 7578 after 2 years

              Pranavds-my comments are below in bold.
              Originally posted by pranavds View Post
              Hats off to your anwering skills munish
              Though i too remain bullish on RE for a five year period but it will be more wise if you buy after 2-3 years to take the max. out of your profits.
              It all depends. What i feel(after seeing what happened in Noida in last 6 month is that there will not be a lot of new launches from 2011 to 2013 as most of this time will be used for completion and handover of projects. u will definitely get a better view of whats to come once u see how the projects take shape. But what u are saying will hold good after even 2-3 years. u might think after 3 yrs, hey lets wait for another 2-3 years and see whats new to come after 2013. It is like a chicken and egg mystery. though i heard this mystery got finally unfolded

              Take the example of crossings , a friend of mine has booked there in 2006 1550 psf. He got the possession now and the flat cost him 1900 psf incl. interest and other costs. The market price now is b/w 1700-1800 psf. Its right time to buy now not 3 years back. That is my point. I understand that is quite difficult to time market but a good investor should always make rgt deal rgt time.

              Different locations have different intrinsic values. CR even though is just 4-5 kms from mainstream Noida will never get compared to Noida. It is built keeping proximity betweeh Gzb, Noida and Delhi in mind and for the affordable middle class. And again what happened with CR is not bound to happen with Noida sec 75-78 etc.

              By the way do u think that pre launch rates of 2200-2500 psf is ok for NE considering the fact that it is hardly 0.5 kms away from crossings where ready to move in appts are available 1700-1800 psf??
              Again NE has its own value and comparison with CR which has its own value is not worthwhile though we do that becoz they are so close to each other. as a vague example- ATS vs Supertech even though both are in the same sector 93 , ATS is at a price of 7500 psf and is always in demand while other is at 5000 and struggles to get buyers.
              According to me all prelaunches are 25-30% on the higher side because they are from the builder's perspective. I would think from a users' perspective
              MM

              Comment

              • #37

                #37

                Re : Should I buy a Flat in Sec 7578 after 2 years

                Good comments fellow boarders...
                I think another important point is that if one could get a corporate deal less than Rs.2600-2650 (all included - Flexi), its worth buying... A clear NO to anything beyond that... When supply overtakes demand in a few months, there will be better opportunities to buy...

                The best opportunity as per me would be when flats are ready for registry, investors would try to sell before registry which can lead to panic selling... that would be the time to put the 'Nail in the Coffin'

                No offenses investors, its just a probable scenario

                Comment

                • #38

                  #38

                  Re : Should I buy a Flat in Sec 7578 after 2 years

                  Originally posted by new_indian View Post
                  Well no doubt that the deluge of flats will not make much increase in RE prices for next two years..

                  But India is a consumer oriented market.. We consume mostly what we produce. Therefore these flats will definitely have buyers and that is why new builders both big and small are launching new projects..

                  In India, there was no recession, it was only mentality that everybody got cautious bcoz of global downturn and stopped spending.. Now that clouds of recession have gone substantially..people will definitely invest.. both for living as well as for investment. Since there is no social security in India unlike US, real estate in long term serves a big security. I have experienced that..

                  In my view, the time is right for property buying if its as per your budget, location. Bcoz rates are at their lower levels..

                  Biggest worry for future is inflation. If it increases, it will effect both real estate prices going upwards and consumer spending going downwards..

                  Thanks..
                  I do agree with you, this is the right time to book flat.

                  I believe, only effect in another 2/3 years , rent will not increase as much as compare to last 3-4 years, 4 years before i was paying 7k for 2bhk, at the moment i am paying 15k.
                  So most of the guys like me who bought a flat are going to occupy the flat. Its not like all of sudden demand increased, its like people those who are staying in rented houses , in future will be owning a flat and will move in.
                  no one imagined Indrapuram with that so many builder and number of flats.

                  Thanks
                  abhi

                  Comment

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