I have got confirmed news from one of family friend who works with one of the reputed builders (from Pune), that property market in Pune is getting worse day by day. Many people who has signed but not made agreements are cancelling the deals (due to job conditions). Plenty of new projects are at High Risk. Many wise builders stopped the launch of new projects (including Paranjpe, DSK, Kumar).
People don't have money to pay EMI. Investors are not getting good rents. They want to sell off.
All in all, by Diwali rates will be down, if not the same.

You still can buy a flat if you have secured job and enough of money in hand. Those who want to take loan (more than 10L), please don't take risk.

Sansona
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  • No Offence to anybody, but i am really amazed at the way people are making predictions with full of pessimism, wise people comment as if they are working at World Bank and know everything when things will go down and when would they go up and i think have forgotten the basic business cycles.

    I will explain why i am predicting markets to do good in future(and they will) later, kinda busy right now.
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  • simple anology if one can understand, how much vegetables, petrol, diesel, spices, land, movie tickets, bread, Salt costed 5/10 years before. Where is our population going up/down.
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  • Originally Posted by kirunOnly
    I have seen Pune and Hyderbad and compairing one with another, I will prefer Hyderabad which is quite good in terms of infra, roads, flat size, rates and job prospects.
    Yes, the Telangana issue will again pull Hyd prices down which will make it more attractive for end users who are in IT.

    Whatever may be scenario, i.e. Telangana or no telangana, KSR has large stakes in Hyderabad RE through his son. However, in event of Telangana state formation, for investment purpose, Vishakhapatnam will be my bet as the Andhra capital will move there then.
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  • Originally Posted by findingnemo
    simple anology if one can understand, how much vegetables, petrol, diesel, spices, land, movie tickets, bread, Salt costed 5/10 years before. Where is our population going up/down.

    Prices are goig up due to less production & high consumption due to increasing population. However, the affordabilty for 99% buyers is between price range of 5-15L.

    Again, more population means more workforce, which means more competition & comparatively less salaries. What if tomorrow Vietnam, East Europe become more attractive than India for IT?
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  • How does one explain this?

    Originally Posted by findingnemo
    simple anology if one can understand, how much vegetables, petrol, diesel, spices, land, movie tickets, bread, Salt costed 5/10 years before. Where is our population going up/down.



    Nemo,

    In the last 10 years all of us went from being in a surplus position to a massive deficit position (if you ask how, note that public debt has gone into overdrive and this is nothing but money owed by each one of us to be recovered from us sometime in the future through more taxation). You are right in saying that prices have been increasing last 10 years. But you don't seem to understand 2 things ...

    1. That price rise is another way of saying your rupee is depreciating, and
    2. That your income rise has kept pace and maybe more than that, so far

    Much of this has been due to the increase in money supply and the taking on of debt. At some stage in the long term, this trend will stop and reverse. The time seems to be now. And in the coming years, you will see a contraction of money supply. So, Govt will have much less to spend and so will you.

    You don't have to be in the World Bank to know this! :D Just read up a little and use some thinking.

    You will also notice that, 10 years ago, you were much more comfortable with your "much less" salary and probably saved more as a percentage of your income. Therefore, even though your salary has risen maybe 5 times, you save much less and have a greater problem making ends meet.

    As you can see, this "feeling of being rich" or the "positive wealth effect" is what you saw as Central Banks freely printed and lent out money which finally ended up in your pocket as increased income. But you may not have noticed that, silently, in parallel the same assets also went up in price faster than your income went up, which is why, though you have a lot of rupees in hand, it doesn't feel like much! Soon, the "feeling of being poor" or the "negative wealth effect" will happen, especially if you have a lot of debt, when global contraction occurs.

    cheers
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  • Originally Posted by realacres
    Prices are goig up due to less production & high consumption due to increasing population. However, the affordabilty for 99% buyers is between price range of 5-15L.

    Yes, very true. Strangely, nobody even considers sub-20 L as possible price of a flat in Pune. You mention 15L and builders and agents will pounce upon you!

    Also, there are people who are quite confortable in paying 2600-2800 p.sq.ft in places like PS, PG, Wakad, etc.Prices are goig up due to less production & high consumption due to increasing population. However, the affordabilty for 99% buyers is between price range of 5-15L.

    Yes, very true. Strangely, nobody even considers sub-20 L as possible price of a flat in Pune. You mention 15L and builders and agents will pounce upon you!

    Also, there are people who are quite confortable in paying 2600-2800 p.sq.ft in places like PS, PG, Wakad, etc.
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  • Prediction ...

    Not sure why there is so much prediction about negetive side. On the contrary I feel things will go in opposite direction. We have just started seeing what happens when countries start opening up with more relaxed trade rules. IT boom in India was one big example as India is now seen a undoubted service provider (note - not producer like US). Few years back when Chinese PM came to India, he accepted this fact and rather than foolishly trying to compete India, he invited all Indian majors to put up shop in China. He even said that Indian prowess and Chinese strength in hardware, if comes together, can dominate the world. China on the other hand is seen as undoubted manufacturing powerhouse of the world and even chinese goods are very well accepted in India. Similarly each country will find its own special streghth and make big on that one. I rather feel that we are rather on the verge of a major boom. However the benefits of the boom may not be uniform . It may rather lead to some countries benefitting less than others or maybe some countries rather having negetive impact. Again withn the country certain sections will benefit more or less depending upon situation. Time will only tell what's in store. The events in US and Dubai happened at a good time. This will be a big lesson for world economy and the regulation will be more stringent in future. Such event may even happened in history when concept of banks came into existence. Noone now will remember those incidents. But the scale or size of impact would have been less (what happened to Karad bank in Mah). I am not sure of what impact the events will have on real estate as its just a matter of demand supply. If the movement of world economy will further demand of storng urbunization, overall RE prices may increase but there may be some dip cycle in between. If somehow work from home concept clicks and broadband penetration is signifincat in the country, then more population will move to rather more affordable areas or even may move out of metros bringing down RE prices significantly.
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  • I agree with above. There is no need to be too pessimistic and keep waiting.

    In cat & mouse run, mouse wins becauz cat runs 4 food and mouse 4 life. The fear of loss is always a better motivation than desire of gain.

    So there should always be fear of loss, but you have to make a decision. Just thinking that ship will sink, on the other hand whole world is saying BRIC countries like India will be next drivers for worlds growth. And that is a reality, look around yourself something is getting constructed or upgraded.

    Also i think india IT industry will see the boom again, look at the multi billion dollor contracts companies are getting from the Indian Government and with English as our prowess (something to cheer abt british rule), China wont be able to compete with us in the service sector for the near term (atleast 10-15 years).
    PSUs, Govt. jobs are paying very good to babus now, all this will come back as investments in one way or other. Lots n lots of other reasons are there why India has to shine in future. Otherwise it will be a gloomy scenario for the whole world if India/China wont perform will. I think they BRIC will do good in future.
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  • Let me clarify my position a little!

    Originally Posted by findingnemo
    I agree with above. There is no need to be too pessimistic and keep waiting.

    In cat & mouse run, mouse wins becauz cat runs 4 food and mouse 4 life. The fear of loss is always a better motivation than desire of gain.

    So there should always be fear of loss, but you have to make a decision. Just thinking that ship will sink, on the other hand whole world is saying BRIC countries like India will be next drivers for worlds growth. And that is a reality, look around yourself something is getting constructed or upgraded.

    Also i think india IT industry will see the boom again, look at the multi billion dollor contracts companies are getting from the Indian Government and with English as our prowess (something to cheer abt british rule), China wont be able to compete with us in the service sector for the near term (atleast 10-15 years).
    PSUs, Govt. jobs are paying very good to babus now, all this will come back as investments in one way or other. Lots n lots of other reasons are there why India has to shine in future. Otherwise it will be a gloomy scenario for the whole world if India/China wont perform will. I think they BRIC will do good in future.



    Compuwalah, Nemo, etc

    You might think I was born with a frown on my face!:D

    But most of my money was made as a bull. The reason I'm so gloomy about the world today is this ...

    Almost all rules of safety and transparency have been set aside by the biggest risk takers of the world today. The total amount of debt-based derivatives in the world is expected to have crossed a thousand trillion sometime in the recent past. And all of this is being hidden from the world by the deliberate secrercy of the FED. This means that, when "profits" happen (nothing but risks which will turn into a loss in the future), the bankers loot this to the tune of 60% and leave the losses from the risks taken to be borne by you and me!!!!

    The euphoria you see around is because most of the aam janta do not know the intricacies of what happening behind the scenes. The belief is that bankers are trying to loot one lasttime as much as possible before the sh** hits the fan.

    At no time in the history of the world has similar situations unwound in a nice way. Most times, empires have collapsed and died out (Roman Empire, Tughlaq dynasty, Dutch, French and British Empires (much of the reason why the British left most of their colonies in the first half of the 20th Century was that they were unable to sustain debt levels during that period).

    The US and other developed nations hae built up a debt monster which is far, far higher than any built in the history of the world!!! This too will unwind in a drastic and chaotic manner. This is almost a certainity and likely in the next few years.

    You can either remain ignorant about it or ignore it, but the train is headed your way and you are on the tracks. Its just a matter of time.

    Finally, you were talking about the IT sector. Let me tell you. One of the CEOs of a top-5 IT company is a classmate of mine! :D Back in 2008, I was very bearish and predicted his stock price to fall below 100 from above 300 levels. He laughed since he was very bullish about IT sector then. When it reached below 80, he stopped laughing and I turned bullish and bought. It went back to above 300. But the strangest thing happened. While I turned bullish, he has now turned worried and is expecting some very challenging times for IT in India. He specifically stated recently that, while Indian IT companies are twiddling about oursourcing efficiencies and suchlike marginal impact things, what they do not seem to be seeing is that there is a giant change in the very global IT model which will make all these twiddling around insignificant and of no consequence. Indian IT is in a state of hubris and may not be able to adapt to the dramatic shifts in IT model coming up. From his vantage point in making many multi-million $$$ deals in the recent past, he must be seeing something we are unable to!

    Please remember that, when you are talking multi-billion $ companies, a pipeline of many 100s of millions is not enough. It barely covers 1-2 years future sales. And with the coming tightening and slowdown in general and a greater competition globally in IT, these high valuations will be under great stress in the future.

    While we will definitely do better than most others, there is going to be a prolonged and significant pain in the coming decade until all of this hidden financial hydrogen bombs are defused through transparency and bankruptcies; NOT bailouts and secrecy!!!

    Somehow, the world's greatest financial risk-taking adventure which took 27 years to buildup is not likely to dissipate in a couple of years without much pain to this world?! This is not only my belief, but the belief of people much bigger than me!

    Till the clouds dissipate on a sustainable basis, it is safer to be wary and pessimistic. You can actually make more money that way than being a hyper bull in these conditions.

    cheers
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  • as kishor biyani has stated in his book It happened in India, there are consumers and servers. The servers mostly belong to the unrognaized sector. For the consumers, access to labor of servers from the unorgnaized sector is cheap and hence they have to spend astronomical amounts on other comforts like cars and houses.

    This may sound out of context but if one things a bit deeper would realize it.

    The day the server's labor will get its due in India and their exploitation will stop, lot many things in Indian Economy will fall in place.
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  • Wiseman, Indian IT CEOs are definitely seeing something that we do not. That may be the reason why all Cognizant top management sold most of their shares in last month and CEO sold ALL of them!
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  • Good Discussion

    Guys,
    I just read that in the new direct tax code that may come into effect in 2010, there is no exemption for home loan or hra. Is this true?
    If it is, i think this will be a big disincentive for the salaried class or even others to take loans to buy houses.
    Please put your views on this.
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  • No free lunches

    Originally Posted by findingnemo
    In cat & mouse run, mouse wins becauz cat runs 4 food and mouse 4 life. The fear of loss is always a better motivation than desire of gain.

    Hey, liked this, well said. However, sometimes, chances of dog chasing a cat can't be ruled out either where cat runs for life:D i.e. hunter becoming hunted.:p

    I agree with you as well as wiseman as I think both of you are right in your places. What I just know is this:-

    Economy sustains if purchases are made from own's pocket. If it is borrowed (debt/loans) it will not be sustainable especially when the earning becomes less & spending more just because you have access to cheap credit.

    It is something like this:-

    People go on shopping spree using credit card thinking as if it is free:D & when they get the bill, they have high BP:D. Just remember that there are no free lunches.

    Spend after saving; Not save after spending.
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  • Next Dubai

    This is what Ajit Dayal says about property market in mumbai and pune.

    India isn't another Dubai, and thus our property market will escape the kind of collapse that has impacted the Gulf nation. This is what Mr. Keki Mistry believes. Coming straight from the chief of HDFC, India's largest housing finance company, these words carry a lot of weight.

    As Mr. Mistry says, "Dubai was very different from India. In India, the property market is largely end-user based; in Dubai, the property market is largely investor based." While we are in agreement with Mr. Mistry about his views on the nature of the Indian realty market, we believe certain pockets in the country like Mumbai and Pune do give a sense of a building bubble. And they seem like strong contenders for being the 'next Dubai'!

    Link to the article
    http://www.equitymaster.com/5minwrapup/detail.asp?date=12%2F18%2F2009&story=2
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  • Originally Posted by aditi sharma
    This is what Ajit Dayal says about property market in mumbai and pune.

    India isn't another Dubai, and thus our property market will escape the kind of collapse that has impacted the Gulf nation. This is what Mr. Keki Mistry believes. Coming straight from the chief of HDFC, India's largest housing finance company, these words carry a lot of weight.

    As Mr. Mistry says, "Dubai was very different from India. In India, the property market is largely end-user based; in Dubai, the property market is largely investor based." While we are in agreement with Mr. Mistry about his views on the nature of the Indian realty market, we believe certain pockets in the country like Mumbai and Pune do give a sense of a building bubble. And they seem like strong contenders for being the 'next Dubai'!

    Link to the article
    ]http://www.equitymaster.com/5minwrapup/detail.asp?date=12%2F18%2F2009&story=2


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    Good link, thanks for this.
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