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Builders & RE Bulls Theory Proved Right !!!

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Builders & RE Bulls Theory Proved Right !!!

Last updated: June 15 2016
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  • #391
    #391

    Re : Builders & RE Bulls Theory Proved Right !!!

    Originally posted by Venkytalks View Post

    I have thought about historical price behaviour and found some interesting trends:
    Venky thanks for the analysis.

    Consider this:

    1. 6 Years old Resale rowhouse available for 85L
    2. Brand new 3BHK Flat with almost similar specs & at similar location available for 72L
    3. 3 year old resale flat with same specs but available for 62L

    Considering 6-8 years horizon after which I will exit the property which option would yield better?


    1. Would the rowhose appreciate much more as post 7 years there would be no such land available to construct one? OR
    2. The new flat might give the best yield but there would be many others as well in the race which would bring down the resale value OR
    3. The resale flat might have already given some profit as its available at 20% less than the above two?

    What do you guys think?
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    • #392
      #392

      Re : Builders & RE Bulls Theory Proved Right !!!

      Personally ...

      Originally posted by alok_kumar View Post
      Venky thanks for the analysis.

      Consider this:

      1. 6 Years old Resale rowhouse available for 85L
      2. Brand new 3BHK Flat with almost similar specs & at similar location available for 72L
      3. 3 year old resale flat with same specs but available for 62L

      Considering 6-8 years horizon after which I will exit the property which option would yield better?


      1. Would the rowhose appreciate much more as post 7 years there would be no such land available to construct one? OR
      2. The new flat might give the best yield but there would be many others as well in the race which would bring down the resale value OR
      3. The resale flat might have already given some profit as its available at 20% less than the above two?

      What do you guys think?

      After 6-8 years the difference in the age of option 2 and 3 would become marginalised. Do you really think there is much difference between 7 year old and 10 year old house?

      Assuming that your rowhouse is wall-to-wall construction and not the villa type which has separate houses in plots. In wall-2-wall you can't just demilish and reconstruct, which you can in a plotted layout - big difference.

      If it is wall-to-wall adjacent, 7 years later the row house will be 13 years old and it won't have much more years left for appreciation as I have noticed that when houses turn 20 years or older, their shortened remaining timespan will put pressure on price increases.


      So, my choice will be option3 first, option 2 next and row house last.

      This row house thing is really comparing unlikes so opinions will differ!

      Just my 2 bit purely on appreciation factor. There are many other subjective factors here that may be more pertinent.

      cheer
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      • #393
        #393

        Re : Builders & RE Bulls Theory Proved Right !!!

        There is a strong perception that in a row house one would have more privacy and also a small private garden. One can renovate a rowhouse in a more easier way than a flat.

        Appreciation will depend on the area, and the city. This would be different in different cities. In a city like Pune where the people in luxury class are on the rise I think the appreciation will be more for row houses and independent houses over a period of time.

        Another factor is security. Crimes in Pune are relatively less compared to other cities in India. So provided the area is safe, folks who do not mind spending a few lacs more will prefer a rowhouse over a flat.
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        • #394
          #394

          Re : Builders & RE Bulls Theory Proved Right !!!

          Originally posted by amitgupta00 View Post
          But Robert schiller says that RE in the long term gives only inflation adjusted returns.
          In 1970s and 1980s, India had very high inflation. Property outperformed inflation - and also interest rates (14-17% bank FD rates existed)

          1n 1990s, property badly underperformed inflation and even more badly underperformed FD rates of around 12%

          In 2000s, we had very low inflation of around 5%, very low FD rates of 8% averagem but property outperformed both by a wide margin.

          US data cannot be used to analyse Indian market
          Venky (Please read watch a or before posting)
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          • #395
            #395

            Re : Builders & RE Bulls Theory Proved Right !!!

            Originally posted by alok_kumar View Post
            Venky thanks for the analysis.

            Consider this:

            1. 6 Years old Resale rowhouse available for 85L
            2. Brand new 3BHK Flat with almost similar specs & at similar location available for 72L
            3. 3 year old resale flat with same specs but available for 62L

            Considering 6-8 years horizon after which I will exit the property which option would yield better?


            1. Would the rowhose appreciate much more as post 7 years there would be no such land available to construct one? OR
            2. The new flat might give the best yield but there would be many others as well in the race which would bring down the resale value OR
            3. The resale flat might have already given some profit as its available at 20% less than the above two?

            What do you guys think?
            In Delhi, resale row house would be best (you own the land).

            In Pune probably flat is best - but a lot depends on the quality, specs, society, builder and nature of inhabitants - new or resale does not matter as much as the brand and the quality. At same location, better quality can command double the price.

            For average MIG flat (2-3 BHKs), lower price of purchase usually means better returns in same location. For luxury flats, quality and society brand is everything

            Also, if deploying black, resale is better
            Last edited October 12 2011, 02:30 PM.
            Venky (Please read watch a or before posting)
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            • #396
              #396

              Re : Builders & RE Bulls Theory Proved Right !!!

              Originally posted by tsongt View Post
              There is a strong perception that in a row house one would have more privacy and also a small private garden. One can renovate a rowhouse in a more easier way than a flat.
              Partially true coz privacy won't be there if some 11+ floor buildings come up right near it. Also, I have seen pathetic designs of row house where while walking on internal road, if the entrance door is open, you can directly see the kitchen from the road, let alone living & dining.

              Appreciation will depend on the area, and the city. This would be different in different cities. In a city like Pune where the people in luxury class are on the rise I think the appreciation will be more for row houses and independent houses over a period of time.

              So provided the area is safe, folks who do not mind spending a few lacs more will prefer a rowhouse over a flat.
              There are 2 ways to look at this:-

              > It is a row house but a normal row house with say 1500-1700 sq ft salable (this includes terrace, garden etc.) &

              > There is a project having 1-2 flats/floor, single or split level with 2200+ sq ft salable.

              In this case, it is quite possible that flat option may look better.

              Eg. Take the case of row house of Omega builders, Balewadi & Vascon Willows/Supreme Pallacio on other hand. Seeing current situation, it makes better sense to go for Willows or Pallacio (this location is bad but just as an eg.).

              Ofcourse, if the row house project is good, then it will beat flat project hands down, not to forget the feeling of being close to the land .
              If you are happy, you are successful.
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              • #397
                #397

                Re : Builders & RE Bulls Theory Proved Right !!!

                Whats been the appreciation on row house you mentioned ....

                Originally posted by alok_kumar View Post
                Venky thanks for the analysis.

                Consider this:

                1. 6 Years old Resale rowhouse available for 85L
                2. Brand new 3BHK Flat with almost similar specs & at similar location available for 72L
                3. 3 year old resale flat with same specs but available for 62L

                Considering 6-8 years horizon after which I will exit the property which option would yield better?


                1. Would the rowhose appreciate much more as post 7 years there would be no such land available to construct one? OR
                2. The new flat might give the best yield but there would be many others as well in the race which would bring down the resale value OR
                3. The resale flat might have already given some profit as its available at 20% less than the above two?

                What do you guys think?

                Alok,

                What was the appreciation of the 6 year old row house you have mentioned compared to equivalent flat over last 6 years? Just wanted to know since the past would be a fair indicator of the future in terms of appreciation.

                If this row house in question has better appreciation than the equivalent 3 BHK flat in the same locality, chances are it will continue to outperform the flats whichever way the market goes, I think.

                cheers
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                • #398
                  #398

                  Re : Builders & RE Bulls Theory Proved Right !!!

                  Thanks guys for all the views,these will help others also who are in same situation

                  Originally posted by wiseman View Post
                  Alok,

                  What was the appreciation of the 6 year old row house you have mentioned compared to equivalent flat over last 6 years? Just wanted to know since the past would be a fair indicator of the future in terms of appreciation.
                  Wiseman,
                  The rowhouse has appreciated by almost 50% but the point to notice here is the RE boom phase.
                  It was purchased in early 2005 when the RE mega boom phase started in Pune.The flats in the nearby area have also appreciated but to an extent of 30%

                  Going by the general perception/market there would not be too many takers for a house which is 10+ years old,it might run out of steam by then.This also confirms Venky's theory of "in bull phase maximum appreciation occurs during first five years & that too for a new construction "

                  Since I'm considering to exit the property after 8 years my best bet would be on a new flat,I'm targetting Baner & near by areas.

                  I would love to be proved wrong though for my analysis
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                  • #399
                    #399

                    Re : Builders & RE Bulls Theory Proved Right !!!

                    36 percent appreciation

                    36 percent appreciation in delhi in 1 year - guys where is the downturn

                    read on form todays :hindustan times front page news

                    I: Prices of upscale NEW DELHI: residential projects in south Delhi, Gurgaon, Noida and Faridabad have clocked about a 36% hike during the past one year, defying the general slowdown in the realty sector.
                    For instance, an ultra-luxury apartment in DLF's Queens Court project at Greater KailashII -a posh South Delhi locality -will now cost at least R16.20 crore, while it was worth less than R10 crore just a year ago.

                    Experts attributed the price hike for these apartments -ranging between 4,000 and 10,000 sq ft -to inadequate availability of ready-to-movein luxury apartments and speculative investments.

                    Plus, experts said one more reason for the high demand was the add-ons offered with such properties -private swimming pools, jacuzzis, mini theatres and multi-cuisine restaurants in high-brow club houses.
                    “The customers are well aware of the offerings in the United States, Canada and Europe. So, they expect and demand the same stuff in India,“ said Ajay Rakhija, director of Colliers International.
                    The sudden price rise also triggered the suspicion whether the properties are attracting black money. But Samir Jasuja, founder-CEO of PE Analytics, a real estate data intelligence firm, told HT: “Black money, or cash, deals are struck when an investor re-sells the property.“
                    He said, “In primary market transactions, where the money goes directly to project developers, involves all-cheque deals.“

                    A Gurgaon-based real estate intermediary, who did not wish to be identified, however, said as high as 70% of such deals were paid in `black' or cash.
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                    • #400
                      #400

                      Re : Builders & RE Bulls Theory Proved Right !!!

                      downturn is in our dreams...i think there is appreciation even in pune if u had purchased in 2009
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