Request to the to-be buyers & consumers - its festival time again for the next 3 months and builders/developers are hoping to clear their inventories at HIGH PRICES - this means the price will remain high for the next year to come - as even if they sell 25% in a project - they recover their costs....

So, my humble advice - to all - PLEASE DONT get sucked in by :

1. New offers such as agreement,car,parking FREE etc
2. New launches and pre-EMI by builers etc
3. Some Festive discount valid for first 20 buyers and for 15 days etc

All of these - AND similar are marketting GIMMICKS - if the BUYERS stay put now - for the next 3 months - they might get the SAME property at 10-20% less than whats available now ...

So, PLEASE DONT GET SUCKED IN --- AND GO AHEAD AND RENT !
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  • Good post!

    It is indeed likely that the builders will have a run on festive occassion. Like for cloth and jewellary mechants it could be a high season for builders:bab (4):
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  • Pune is in for a GLUT, Hyd is already down by 30-50%

    From a recent report from ICICI,
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  • Well, it just shows that Pune is launching too many projects - the absorption is very low - similar to Hyderabad - where prices have really corrected ?

    Whats IN for Pune ?
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  • Mid-size & small IT firms struggling to maintain growth



    This is when there is no Recession in US & Europe.....
    if it happens ???....

    Its time to stop buying flats and saving your jobs(not Spending Money :o) ......
    :o
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  • When would prices come down?

    Hey All,

    Can anybody tell me when would prices come down ? I know no one can predict perfectly but all have different perceptions.

    I don't know the when is peak/high time for properties and when it is low time during financial year.

    Please share your views.

    Girish
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  • Originally Posted by gery128
    Hey All,

    Can anybody tell me when would prices come down ? I know no one can predict perfectly but all have different perceptions.

    I don't know the when is peak/high time for properties and when it is low time during financial year.

    Please share your views.

    Girish

    The question is not when price will come down. Question is whether one wants to buy at unrealistic price and become slave of bank for 20 years..
    If the answer is yes, prices will not come down.
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  • Originally Posted by gery128
    Hey All,

    Can anybody tell me when would prices come down ? I know no one can predict perfectly but all have different perceptions.

    I don't know the when is peak/high time for properties and when it is low time during financial year.

    Please share your views.

    Girish


    No, the prices dont actually go mdown by more than 10-30%, however if it stays the same for the next 4 years - it means it has stayed the same since 2007, and if I consider prices is Kothrud in 2004 to be 2000 per sq feet, at 4500 per sq feet in 2014- its a case of ZERO return - inflation adjusted.


    Hence, to beat inflation and to break even - on an average which is 7% -- the property price needs to double by DEFAULT in 10 years.

    Now, if you take a loan at 10%, the property price needs to appreciate atleast by 17% PER YEAR - JUST TO BREAK EVEN --- which is surely not going to happen over the next 3-5 years...

    Hence, even if the prices dont RISE, you still lose - unless the prices appreciate by 17% each year.....for the next 3-5 years, and for the next 20 years.

    Hence, what happpened between 2003-2007 -- a meterioc 100% to 300% rise, needs to consolidate over the next 5-10 years -- thats the law of averages.

    The global rate if return in Real Estate is 5% including India and China - and inflation adjusted it is ZERO, however some of us got lucky by entering at the RIGHT time (say in 2005)and more importantly EXITING at the RIGHT earning a cool 50-100%(say in 2007) -- INFLATION ADJUSTED.
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  • I have something in my mind, but I won't disclose it right now coz the builders will not use these tricks in festive offers. So, waiting for builders to put their ads/offers first & then I will comment .
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  • Originally Posted by pcpune
    No, the prices dont actually go mdown by more than 10-30%, however if it stays the same for the next 4 years - it means it has stayed the same since 2007, and if I consider prices is Kothrud in 2004 to be 2000 per sq feet, at 4500 per sq feet in 2014- its a case of ZERO return - inflation adjusted.


    Long price stagnation not possible if there are more number of Investors in market.

    What do you think a Investor will do with his investment when he/she is convinced that market is stagnant and not rising any more? Sit on his investment or get rid of it?

    Price is demand vs supply. These investors are very very optimistic people in general, and they do not easily get convinced that market is now stagnant and prices are not rising.

    One fine day when they realize this, supply will increase in the market, putting downward pressure on price. Demand further slides down, to allow prices to fall further.

    Multiple buyers jump at all levels, but over all prices will decrease if there are more investors in Pune.

    It will all depends on how many investors are there in the market!

    Stay tuned!
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  • There's also a possibility that prices actually don't come down but go up :bab (45):
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  • Originally Posted by puser
    There's also a possibility that prices actually don't come down but go up :bab (45):



    The prices would definitely go up & we have to watch out for the best deals
    available in the festive season.
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  • Originally Posted by pcpune


    Hence, to beat inflation and to break even - on an average which is 7% -- the property price needs to double by DEFAULT in 10 years.

    Now, if you take a loan at 10%, the property price needs to appreciate atleast by 17% PER YEAR - JUST TO BREAK EVEN --- which is surely not going to happen over the next 3-5 years...



    If you are considering loan case then do not mix it up with inflation. If house is taken on loan of 10% and it is appriciating at 10% then it is break even. Even bit profit as one is saving on rent. So break even will be at around 8 to 9 % appriciation per year.
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  • Originally Posted by mahesh pune
    If you are considering loan case then do not mix it up with inflation. If house is taken on loan of 10% and it is appriciating at 10% then it is break even. Even bit profit as one is saving on rent. So break even will be at around 8 to 9 % appriciation per year.

    Well, you are considering "appreciation" two times here -

    10% abd 8-9% -- which is what I have added -- and it is around 20%.

    For me the maths is pretty simple - If i take a loan to buy something at 10%, and if the inflation is 8%, it needs to atleast appreciate by atleast 18%, for me to JUST BREAK even,

    Most consumers DONT realize this,and they think well- if my 40 lacs flat has become 45 lacs in 3 years - its a cool 5 lacs profit .

    For me - (If he is on loan), that 45 lacs need to be 65-70 lacs in 3 years -- JUst to break even --- now subtract the 4.5 lacs rent for 3 years - out of 65 -- still te value should be 60 lacs ---

    Hence, a person is MAKING a good loss of 15 lacs in 3 years.

    Hence, I always believe - buy property when

    1. Either you have 50-70% cash, and the rest is loan,and in periods of high interest rates and highest inflation - most of the property is through cash- hence you get a good deal - nobody is buying in these periods

    2. You dont have cash - about 10-20% - this is the time when you buy in periods of low inflation and lowest interest rates -(in 2005, home loan fixed was 7%, inflation around 5-6%), so that 10-12% appreciation over 1 year is manageable and possible.

    NOW, we are in a period of HIGH inflation and HIGH interest rates - and the property rates are the highest - people who generally buy with cash are investors - absent from the market --- indicating it is really a WRONG time to BUY.
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  • Originally Posted by mahesh pune
    If you are considering loan case then do not mix it up with inflation. If house is taken on loan of 10% and it is appriciating at 10% then it is break even. Even bit profit as one is saving on rent. So break even will be at around 8 to 9 % appriciation per year.


    Below is my experience:
    * Ratio of monthly home-loan interest v/s rent. It's 10% v/s 4%. Owning #3 times expensive than renting.
    * Buying RE on loan in current-market, one has to compromise on monthly-expenses & area of living.
    * One can easily rent at developed locations like Aundh/Wanwori as compared to buying at Wakad/Undri.
    * One can change rented-place on need but not owned-place.

    Two examples:
    *A colleague in my office at Magarpatta comes from Pimple-Saudagar (daily 2 hours of travelling) as she owns house there.
    *A relative has bought house at Vishrantwadi with loan from ICICI at #11%. He left pune coz got better job in Ahmedabad.
    Now he is earning 3% as rent in Pune and paying both EMI and rent :o
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  • Originally Posted by puser
    There's also a possibility that prices actually don't come down but go up :bab (45):


    Well, as I have said before, I dont think the property prices will go up or down by more than 20% in the next 3 to 5 years, market dynamcis simply wont allow it.

    If it goes down - many people jump in - keeping the prices high.

    If it goes up - the sales really dry up - forcing the builders to reduce prices.

    Its the time of STAGNATION.
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