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RE Prices, Builders and Newton...

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RE Prices, Builders and Newton...

Last updated: April 8 2012
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  • RE Prices, Builders and Newton...

    I have serious dilemma which comes from the basic question. If the RE prices are to going to rise for eternity like this then why do builders sell their projects at all and declare the project as sold out? Common logic suggests that they will get more from the same property when the prices are going up? I fail to understand. The builders’ not only defy the laws of the land but also the law of the gravity (sorry Newton)… Anyone can help me….
  • #2

    #2

    Re : RE Prices, Builders and Newton...

    Hi Nahar,
    I felt the same when salesperson tried to convince that rates will go up by 30% in one-year. I thought why the hell he wants to sell at all. #1.5 year later price fell by 20% (period of 2008-2009)

    RE in India is purely driven by 3 sentiments fear, greed and belief that house-price never falls (got surprised to hear from my sister-in-law who returned from USA after 2 years). It is the same belief which caused sub-prime crisis 3 years back
    Last edited April 6 2012, 06:14 PM.

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    • #3

      #3

      Re : RE Prices, Builders and Newton...

      Originally posted by naharabc View Post
      I have serious dilemma which comes from the basic question. If the RE prices are to going to rise for eternity like this then why do builders sell their projects at all and declare the project as sold out? Common logic suggests that they will get more from the same property when the prices are going up? I fail to understand. The builders’ not only defy the laws of the land but also the law of the gravity (sorry Newton)… Anyone can help me….
      Hi there....

      There are a total of 2 forums in entire IREF (one in chandigarh and one in gurgaon)which talk about 'RE prices going down' in India and even on those forums...few handful people attract a lot of wrath of fellow IREF members for even trying to say that RE may /should come down.....

      In US and Ireland...this was the scene in 2007 odd, when if you even talked that 'The Prices are too steep/don't make sense'..people would have actually beaten you up....
      I would just like to repeat a line of one fellow of IREF...'When the most conservative buyer goes out and starts hunting for property..its the time for crash'.....and i think the same holds good for you...who is trying to use logic in Indian RE, when none exist at the current moment....

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      • #4

        #4

        Re : RE Prices, Builders and Newton...

        Originally posted by naharabc View Post
        I have serious dilemma which comes from the basic question. If the RE prices are to going to rise for eternity like this then why do builders sell their projects at all and declare the project as sold out? Common logic suggests that they will get more from the same property when the prices are going up? I fail to understand. The builders’ not only defy the laws of the land but also the law of the gravity (sorry Newton)… Anyone can help me….
        +1.
        one of the brilliant post I have came across on this forum!

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        • #5

          #5

          Re : RE Prices, Builders and Newton...

          Originally posted by hitmady View Post
          Hi Nahar,
          I felt the same when salesperson tried to convince that rates will go up by 30% in one-year. I thought why the hell he wants to sell at all. #1.5 year later price fell by 20% (period of 2008-2009)

          RE in India is purely driven by 3 sentiments fear, greed and belief that house-price never falls (got surprised to hear from my sister-in-law who returned from USA after 2 years). It is the same belief which caused sub-prime crisis 3 years back

          Commercial rental of Mumbai's BKC and Nariman point have not even crossed Mar 08 highs
          rather are 15 - 35 % LOWER
          This is a very strong reflection of RE prices/value ...

          The residential buyers are being fooled to believe and buy at artificial jacked up prices....
          its a win win for all except buyer


          BKC beats Nariman Point to become country’s most expensive office space - Indian Express
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          • #6

            #6

            Re : RE Prices, Builders and Newton...

            Originally posted by frugality View Post

            Commercial rental of Mumbai's BKC and Nariman point have not even crossed Mar 08 highs
            rather are 15 - 35 % LOWER
            This is a very strong reflection of RE prices/value ...

            The residential buyers are being fooled to believe and buy at artificial jacked up prices....
            its a win win for all except buyer


            BKC beats Nariman Point to become country’s most expensive office space - Indian Express
            And i would say media plays a big role in this, time and again you read articles and statistics showing increase in RE prices and we have the genuine buyers falling prey to it and buying at high inflated prices.I have stopped believing any RE article published by media , it is nothing but paid news.
            Just visit the TOI online website, the first ad you get is of RE sales for NRI's highlighting how drop in rupee saves the NRI Rs.900/sq ft.

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