Builders & RE Bulls Theory Proved Right !!!
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stoxxx
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Started 8 years ago
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- Originally Posted by realacresLol:D. What is enough said?? Can you show me the price comparisons ??
Nanded City should have been 5000-5500/sq ft now (2500-2700 in 2009),
Samrajya should have been 8000-8400/sq ft (4000-4200 in 2009).......
And there are many other egs. too.
Btw, this is a forum & not twitter :D....please explain while starting new thread.
why are you getting worked up...he has made a point..quiet valid one too..CommentQuote0Flag - As rightly pointed out by some members prices have not doubled actually. But in my particular case a flat which was priced as 55L in 2010 Feb is available for 63L now. % wise its not much but definately my savings did not grow by 8L. Even if flat price increases by 3-4 lakh in a year it is enough to eat up all your savings for that year(for majority of the ppl) and you are in same waiting game.CommentQuote0Flag
- Originally Posted by tushart
% wise its not much but definately my savings did not grow by 8L. Even if flat price increases by 3-4 lakh in a year it is enough to eat up all your savings for that year(for majority of the ppl) and you are in same waiting game.
very true..can't just rely on % numbers..even though the small increase in numbers result in hefty difference in the final amount..which again takes a huge toll on the finances..CommentQuote0Flag - every person-situation is differentOriginally Posted by gandalfWhat you said makes sense if you plan to stay on rent all your life, or are you hoping that rates will nosedive to 2006??
consider you bought a flat in 2006 for 15lac, you will end up paying around 40lac(rough figures)...considering current scenario if you buy lets say even for 30 lac you end up paying more than guys who bought in 2006...of course all this is true if you are taking home loan...
I already have a 1 bedroom flat and even if I pay 1 cr i would get the same carpet area for a two bedroom flat , well that is just me ... . what is the point of living in a big 2 bedroom flat and not able to enjoy itCommentQuote0Flag - The difference is equal to the interest you would have paidOriginally Posted by tushartAs rightly pointed out by some members prices have not doubled actually. But in my particular case a flat which was priced as 55L in 2010 Feb is available for 63L now. % wise its not much but definately my savings did not grow by 8L. Even if flat price increases by 3-4 lakh in a year it is enough to eat up all your savings for that year(for majority of the ppl) and you are in same waiting game.
Friend,
Assuming an 85% loan on the home and 12% avg interest (pa) and 55000 as EMI, your interest alone comes to 7.85 L.
Consider that almost all the gain (which you call savings) is what you have given to the bank as interest. The price differential is the only "saving" which has been paid for by you.
If you have the discipline (99.99% don't) you could force yourself to save the 55k pr month and be cash rich beyond your expectations! :D
cheersCommentQuote0Flag - as always another brilliant post by wiseman.. despite being near to 52 week or all time low, they still dont look undervalued and possibly overvalued in many cases. other interesting thing is that no analyst recommends buying them (not that one should go by what they say. but still). and no mutual fund house seems to be interested in them.
having said that, i do agree to some extent with the original poster. prices have gone up substantially over the last year or so although i don't know the volume.. i think the reason is the lack of financial knowledge,peer pressure, family pressure etc. after the 2003 boom, real estate is planted in the mind of mass.. many are buying just because others are buying and they think living in a rented house is an insult or something.. in fact this is the question i am asked the most by relatives/friends. why are you not buying? i am sick of their advice saying buy it, it can only go up. etc etc..very difficult to argue with them. to me its an expense instead of an asset because i am looking to buy with very little loan or outright. my personal balance sheet will become cash poor and i cant use the money for something else.
i would recommend wait till 2012 end/2013 to get a clear picture.Originally Posted by wisemanStoxxx,
Good start!
Now let us get to the nitty gritty with an unbiased view ...
Coming to the the term "proved right". What was the prediction / prognosis? What is the data that proves it right?
For example ... if price in a location (please take a popular developed location & not some farmland which went up from Rs 1 to 2).
Show 2009 & 2011 prices. If you can, also show a price adjusted against
1. inflation
2. Gold
Show that target was reached!!!
As far as I can see, if target of builders was reached, one important, indirect indicator should have exceeded 2007 levels. Stock prices of listed builders.
Reason I'm invoking stock price is that it incorporates overall health of builder, including how much they are holding back as inventory (by borrowings & without selling) in order to keep prices artificially high. Otherwise, think of hit on prices if all that inventory came immediately to market at wharever price it could afford.
Here is that indicator...
Company, 2007 high, 2009 low, current
------------------------------------------------
DLF ....... 1300 ......... 170 ....... 225
Unitech .. 580 ........... 22 ........ 33
Sobha ... 1230 .......... 150 ...... 250
------------------------------------------------
You get the picture. If these were really doing well & selling all that they built at healthy prices (& not kept piling up inventory to hide the fact that the real market was actually weaker & could not support such volumes at such high prices), then their stock prices would reflect the health & good future prospects & be at new highs!!!!
When we see that prices have really gone up on increasing volumes & low supply, then we have a genuine story. Otherwise its like the bailouts have kept various economies in "growth" mode!
cheersCommentQuote0Flag - Hi Wiseman,
I understand the calculation. This is what a person keeps telling own mind and then feels good. But my mind does not get convinced. Look below - this is what my mind keeps telling me back.
If I take loan for 15 years, it means i will have to pay EMI for 15 years. If bought in 2010 - I will pay from 2010 to 2025. If bought in 2011 i will pay from 2011 to 2026. Assuming interest rate and loan amount does not change -its the same amount.
The only bad thing is - 40L loan was enough for me in 2010. Now I will need to take 44L loan.
Thanks
Tushar
Originally Posted by wisemanFriend,
Assuming an 85% loan on the home and 12% avg interest (pa) and 55000 as EMI, your interest alone comes to 7.85 L.
Consider that almost all the gain (which you call savings) is what you have given to the bank as interest. The price differential is the only "saving" which has been paid for by you.
If you have the discipline (99.99% don't) you could force yourself to save the 55k pr month and be cash rich beyond your expectations! :D
cheersCommentQuote0Flag - Originally Posted by tushartHi Wiseman,
I understand the calculation. This is what a person keeps telling own mind and then feels good. But my mind does not get convinced. Look below - this is what my mind keeps telling me back.
If I take loan for 15 years, it means i will have to pay EMI for 15 years. If bought in 2010 - I will pay from 2010 to 2025. If bought in 2011 i will pay from 2011 to 2026. Assuming interest rate and loan amount does not change -its the same amount.
The only bad thing is - 40L loan was enough for me in 2010. Now I will need to take 44L loan.
Thanks
Tushar
why do u think you need 4L incremental growth every year in loan requirement.....the prices are steady since feb-2011....almost 6 months...
who knows it may remain steady for next 1 year and even come down.....
you can add up 1 years savings...in down payment and end up paying less....CommentQuote0Flag - Pune Real Estate Market Slowing Down Started
Pune Real Estate Market Slow Down Started ---
1. Vilas Javdekar and Associates was the first builder who brought down the rate or "cut the rate" from Rs.3,200 to Rs.2,900 per sq.ft. in Wakad, Aundh annex.
2. Now, Topaz Park, (Park Street phase 3?) by Pride Purple is ready to charge Rs.2,900 if you give an advance disbursement of loan or if you make 100 % down payment.
Should it be new thread ?Originally Posted by rajtjrllwhy do u think you need 4L incremental growth every year in loan requirement.....the prices are steady since feb-2011....almost 6 months...
who knows it may remain steady for next 1 year and even come down.....
you can add up 1 years savings...in down payment and end up paying less....CommentQuote0Flag - please post these news on the thread
property rates reducedCommentQuote0Flag - +1 for tushartCommentQuote0Flag
- Originally Posted by pawarnileshPune Real Estate Market Slow Down Started ---
1. Vilas Javdekar and Associates was the first builder who brought down the rate or "cut the rate" from Rs.3,200 to Rs.2,900 per sq.ft. in Wakad, Aundh annex.
2. Now, Topaz Park, (Park Street phase 3?) by Pride Purple is ready to charge Rs.2,900 if you give an advance disbursement of loan or if you make 100 % down payment.
Should it be new thread ?
Great news :)CommentQuote0Flag - In my opinion, making advance disbursement or 100% down payment in this situation is the riskiest of options. If things get worse for the builders, there will always be a fear of abandoned projects. This has happened in the past during previous corrections. I feel that one should not fall for this trap just to save a couple of laks. In these shaky volatile times, a ready possesion house is the safest bet.
"Now, Topaz Park, (Park Street phase 3?) by Pride Purple is ready to charge Rs.2,900 if you give an advance disbursement of loan or if you make 100 % down payment. "CommentQuote0Flag - Not sure from where this news u got
This is the response from their salesperson after enquiry
Topaz park sold out
2900 ..heheh it was 4K+ :)
Originally Posted by pawarnileshPune Real Estate Market Slow Down Started ---
1. Vilas Javdekar and Associates was the first builder who brought down the rate or "cut the rate" from Rs.3,200 to Rs.2,900 per sq.ft. in Wakad, Aundh annex.
2. Now, Topaz Park, (Park Street phase 3?) by Pride Purple is ready to charge Rs.2,900 if you give an advance disbursement of loan or if you make 100 % down payment.
Should it be new thread ?CommentQuote0Flag