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How much to wait before buying flat

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How much to wait before buying flat

Last updated: January 31 2017
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  • How much to wait before buying flat

    As the discussions and rumors going on about the real estate prices going down after the 500 and 1000 nite ban and hit on black money. I am wondering how much should i wait to see the effe ts of this action on market. As i am looking to buy a 2bhk flat in 40 ro 50 lakh range
  • #2

    #2

    Re : How much to wait before buying flat

    At that price point for a 2bhk flat i dont think we will see significant price corrections in major citites like pune or bangalore. (at least these are the only cities with whose real estate market i am in touch with and know actual buyer.).

    Most of my friends who like me work in some it sector company earn about 10(single earner)-20 lac (double earning) andcan easily afford a emi of about 25-45k for now.

    Infact most of the couples at my experience range have typically bought home over 50-60 lacs range and have home loans of about 50k a month

    And for all these folks its completely white money. Granted that the same complex might have many apartments where the home is owned by someone with a lot of black money but i dont think in these two specific cities thwt it is over 20-30%(ans in blr most of these are by owned by the land owners who are part of the joint development agreement)

    Sales of new apartments for next six months would slow or near zero but i belive six months on or a year on it will be nearly in the same range.

    You might see multiple re launches of properties which are a bit further away from the city and suddenly it will start selling as value home.

    If land prices are cheap enough i have seen kushal builders in chakan sell flats of 900 sq feet for 30 lacs so sure we might see more of something like that but not sure how much of it will actually drop as people who invest of real estate know and understans it is not liquid.

    i was in talks with a builder in bangalore for a prelaunch project in similar budget range when shit hit the fan and i am stilll going theough as it makes sense in my context. I am sure he will not be able to sell in next six months but i am kinda betting that these prices will hold one year on and he will be able to complete the project.

    For flats worth 1cr n above i am not so sure but i do know few folks who have worked onsite and spent more than 1cr white in properties from rohan, shoba and prestige.

    While there is always that 20% homes in such project again which are locked up in most cases to my eyes it seems that some or other nri like me has invested in it and kept hoping it appreciate or provide a home base when. That will slowly go away if it hasnt already as most people realised that RE is not liquid.

    Just my 2 cents.these r my assumptions and i might be completely wrong as i have very narrow viewpoint of a average it engineer in blr
    Last edited November 13 2016, 05:34 PM.

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    • #3

      #3

      Re : How much to wait before buying flat

      Originally posted by LokeshPathra View Post
      As the discussions and rumors going on about the real estate prices going down after the 500 and 1000 nite ban and hit on black money. I am wondering how much should i wait to see the effe ts of this action on market. As i am looking to buy a 2bhk flat in 40 ro 50 lakh range
      property prices for price tag of 1cr and above will be dropped by 5 to 7 % as such properties are purchased by mostly businessman who invest 80% white and 20 % black or different ratio , flats of range 30 to 90 lacs won't drop as buyer of this segment depends mostly 80 to 85% on bank loan, which is white itself, and 15 to 20 % is always saving ready for such buyer in white, and secondly many builders have started selling property at higher price to people who hold lots of black money in current currency situation, those buyer are ready to pay 30 to 40 % higher price if builder is accepting there black money , and multiple adjustments are done later after December.

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      • #4

        #4

        Re : How much to wait before buying flat

        Properties upto 1Cr may not experience much correction. Its only the super luxury units (2.5 Cr and above) which may experience corrections of upto 20%. The black component in a lot of deals is paid by cheque which is white anyway. Even in the past most builders / sellers didnt accept cash as there is a chance of getting fake notes. I had personally seen a deal where both parties went to a bank to count the notes (which is risky anyway). So i dont think there will be any huge correction as most money experts predict.

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        • #5

          #5

          Re : How much to wait before buying flat

          The answer is simple & it's more inwards. Let's say you want to but property of 60.00 lacs & you have yearly saving potential of Rs. 5.00 lacs. Shortlist the projects & keep close eye on price movement. If you feel that the price movement is going to outperform your yearly saving potential (means 60.00 lacs flat exceeding the price of Rs. 65 lacs in a year) then you should be buying it immediately. Otherwise it's better to wait.
          At the same time, waiting endlessly by expecting a crash of 20% or so is like living is fool's paradise. The prices have been near stagnant (2 to 3% avg. annual increase). Affordability of salaried person goes up by 5-6% every year. So like other members said, even without price correction people are there buy properties in below 80 lacs segment. If inflation is outperforming your savings then don't burn your fingers. It's better to pull the trigger.
          Last edited November 15 2016, 07:59 PM.

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          • #6

            #6

            Re : How much to wait before buying flat

            I believe it would be best to wait for 3-6 months and keep a close eye on resale properties in your target location. RE could go through transition period where number of black money deals will go down leading to price correction and more transparency. In my view, resale would provide a better deal in short team. Price growth for next 1-2 year will be muted.

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            • #7

              #7

              Re : How much to wait before buying flat

              I would suggest stay on rent for year or so. There are few more measures coming on benaami property , gold. So wait for year if you can. Rent is very cheap in Pune. Enjoy it!

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              • #8

                #8

                Re : How much to wait before buying flat

                wait and watch for now

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                • #9

                  #9

                  Re : How much to wait before buying flat

                  Whenever there was a slowdown/recession in RE sector; bank started giving fresh loan to builders to repay previous loans to avoid NPA. This has been observed in 2008 as well. Somehow govt does not want Recession in this sector as other sectors growth is dependent on this sector. This doesn't mean prices will continue increasing as industry needs buyers too. Hence I believe prices will remain stagnant on this level. If you are an end user, bargain hard n get the best deal else stay away..

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                  • #10

                    #10

                    Re : How much to wait before buying flat

                    if you are looking for self use then i'll suggest just go for it but do not lock your money in under construction.
                    As far as investment in real estate is concerned then only god can save you.

                    Also note that in case you are looking for 3bhk then there are lots of stress sale happening in range of 90 -1.1cr so keep your eye on such sale.

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