Hi folks,

i have seen many folks here comment that property rates will be down by Diwali, or down in another 6-12 months etc...

I have been looking around last 2 months and have never seen any builder in Pune bringing down the rates, instead its increased by 5-10% in certain projects especially in the western part of Pune. I am looking for ready posession, or projects which can handover homes before March '10.

Is there any specific news someone is certain which can be a trigger to bring the rates down? local elections? Budget - July 09? is bottom still not reached in US/UK/western economies, and are we expecting more bad news which can affect jobs in Pune?

just wanted to know what makes buyers optimistic to wait for a RE downside?

Thanks.
Read more
Reply
85 Replies
Sort by :Filter by :
  • Originally Posted by realacres
    You forgot to put this smiley:- :D coz a person having 3+ flats in Pune is unable to maintain Indica then a person staying on rent will not be able to afford even daily pass of PMPML bus


    It is like Shahrukh saying he can't afford BMW.
    Else these flats bought by over-leveraging.
    CommentQuote
  • touche

    Point about over leveraging is correct too.

    Also, what real says about commercial real estate might be worth exploring. My cousin just bought a 600 sq ft shop floor in Industrial building in MIDC Bhosari, it cost him 24L. Same shop floor rents to about 12k per month. So rents in industrial real estate are better than residential.
    CommentQuote
  • Commercial RE is like a FD giving 12% interest, but has down time and other hassles attached to it.

    I would prefer the FD any day.

    Commercial RE is worth buying if you can use it for your own commercial purposes. Giving it out on rent is not for salaried people to pursue.

    You forget the main difference between flat and FD - you can live in the flat. FD (including commercial RE)is a piece of paper whose value is by no means fixed in times of economic chaos.
    CommentQuote
  • :bab (6):Now with rising interest rates dream house go more unaffordable!:o
    CommentQuote
  • Not really, Puser. Now the bank rates rise, psf rate will fall!

    Now people cannot get unlimited credit from bank - prime mover of RE price inflation.

    RBI also giving verbal assaults on builders - we "will" think about higher provisioning for RE in Oct-Nov - thats basically talking down a frothy market before bubbles inflate.

    We have a good reserve bank.
    CommentQuote
  • Hey Venky.. why do you think prices will go down.. CLover sold out 3500.. if the phase 2 & 3 does not sell.. do you think he will drop below 3500..



    Originally Posted by Venkytalks
    Not really, Puser. Now the bank rates rise, psf rate will fall!

    Now people cannot get unlimited credit from bank - prime mover of RE price inflation.

    RBI also giving verbal assaults on builders - we "will" think about higher provisioning for RE in Oct-Nov - thats basically talking down a frothy market before bubbles inflate.

    We have a good reserve bank.
    CommentQuote
  • My two cents - maybe Venky can explain better.
    If interest rates are lower - for a given salary - a person can draw a higher loan. Thats an invitation for builders to increase rates. If interest rates go up, demand will fall, loan amount that can be availed reduces - rates go down.
    CommentQuote
  • To an extent its right that higher rates will reduce demand and hence the property prices will fall as the builders will not have many buyers. And to lure them builder might reduce rates.

    But this will hold good for some time, then since the builders will not be making good profits( lower PSF rate and higher interest costs), the construction activity will reduce. Hence the overall supply will also go down.

    Since the urban housing demand will continuously increase in India irrespective of rates or other smaller downturns, so we can actually see the reverse effect of higher rates. What it will mean higher rates might push the prices of ready to move in properties, as there will be limited supply of new buildings.

    For real estate prices to moderate the most important thing is supply, till the time supply is more than demand the prices will be less as is the case with new constructions of Noida , G. Noida , Faridabad.

    Originally Posted by aslamgen
    My two cents - maybe Venky can explain better.
    If interest rates are lower - for a given salary - a person can draw a higher loan. Thats an invitation for builders to increase rates. If interest rates go up, demand will fall, loan amount that can be availed reduces - rates go down.
    CommentQuote
  • Various amenities, construction quality and other high-end things like video door , gen-backup etc would also vanish and u would see same mundane apartments looking like chawl
    CommentQuote
  • Agree totally with both Aslamgen and Digvijay, both having explained it very well.

    Ultimately, RE is headed only one way and that is up.

    But RBI interventions in 2006 and currently have flagged RE froth problems well and they have handled it also quite well. Just following RBI is a good way to guage direction of RE market (which is more firmly linked to bank rates than stock markets are
    CommentQuote
  • in my opinion it will be flat over the next few years. (considering inflation, it will be effectively down)..

    but remember, during 2003-2007 time frame there was a not single bad news on the economy front. so it kept on going up. after 2007 November, thers a lot of bad news and still it has not stopped ( banks collapsing,sub prime crisis, recession,Dubai debt,Europe debt). we dont know whats coming next.

    eventually it all depends on job market. if the job market is hit, then it will even come down. i think a lot of people bought over the past few months. because they assumed the worst is over.
    CommentQuote
  • Originally Posted by kaatesha
    in my opinion it will be flat over the next few years. (considering inflation, it will be effectively down)..

    but remember, during 2003-2007 time frame there was a not single bad news on the economy front. so it kept on going up. after 2007 November, thers a lot of bad news and still it has not stopped ( banks collapsing,sub prime crisis, recession,Dubai debt,Europe debt). we dont know whats coming next.

    eventually it all depends on job market. if the job market is hit, then it will even come down. i think a lot of people bought over the past few months. because they assumed the worst is over.

    Totally agree with your views. The prices would not shoot up in next 2 years or so. Increased number of choices for the buyer and higher Interest Rates would ensure that. However, sometimes the ever-increasing demand in the housing sector baffles me. I believe it has more to do with the notion (false?) that owning your home means you've made it in this world! This in turn drives everyone who has a stable job (or thinks has a stable job) to jump on the RE express.
    CommentQuote
  • Originally Posted by Trublu
    However, sometimes the ever-increasing demand in the housing sector baffles me. I believe it has more to do with the notion (false?) that owning your home means you've made it in this world!


    I agree with you on false demand, as some percentage are investors (for e.g. 2/3 time buyers).
    With subdued atmosphere, investor-demand will reduce, causing lots of resale/rental will hit the market
    CommentQuote
  • Originally Posted by Digvijay
    But this will hold good for some time, then since the builders will not be making good profits( lower PSF rate and higher interest costs), the construction activity will reduce. Hence the overall supply will also go down.

    Pune is already over-built in terms of residential spaces. The current inventory itself is sufficient for the end users, so I don't think that stoppage of new constro will lead to shortage. Simply look at Kharadi, Wakad, Baner, Undri.....you will find several projects still selling for past couple of years atleast, not to forget the resales.

    Someone said that VAscon-Clover is sold out at Kharadi, but man, there is Gera, Yin Yang, Marvel etc. at these places which are yet to be sold out. Most of the current sales I believe is taken by speculators without doing the agreement. Always remember BR as case study....everything was sold out in first 3 days, yet they are offering group discounts, Nanded CIty was to launch ph2 in Dec 09, the registrations of ph1 are yet to start!!:bab (35):

    So, don't believe what the builders say, it is just to push their ph2,3,4,5......harder & faster.

    Coming to RBI, the hike in interest rates will be across the spectrum & not just home loan. So, a person who already has car loan, personal loan etc. will be already paying more before he applies for home loan. The situation for these buyers will be more grim as they will be hit by multiple loan EMIs hike.
    CommentQuote
  • But real.. the question is will it result in drop in price.. I suspect not unless the the situation drags on for couple of years..
    A Gera and a Marvel hold on to price.. but slow down the construction because he does not have the money.. People who have already invested are stuck.. He does not openly offer a price reduction (group discounts will be there) .. but me as an individual buyer.. he might offer to reduce the parking cost.. or good price at his new phase that is yet to be launched, has frebies thrown in, but will not give me the huge discount the property has taken..
    New projects get launched in the area at huge discounts.. but I am nervous to invest there because of the uncertainty of the project and the financial situation.. and my budget also has shrunk.. because of the inflation and bank loan interest hike..
    As a common man.. I keep chasing the end of the rainbow..


    Originally Posted by realacres
    Pune is already over-built in terms of residential spaces. The current inventory itself is sufficient for the end users, so I don't think that stoppage of new constro will lead to shortage. Simply look at Kharadi, Wakad, Baner, Undri.....you will find several projects still selling for past couple of years atleast, not to forget the resales.

    Someone said that VAscon-Clover is sold out at Kharadi, but man, there is Gera, Yin Yang, Marvel etc. at these places which are yet to be sold out. Most of the current sales I believe is taken by speculators without doing the agreement. Always remember BR as case study....everything was sold out in first 3 days, yet they are offering group discounts, Nanded CIty was to launch ph2 in Dec 09, the registrations of ph1 are yet to start!!:bab (35):

    So, don't believe what the builders say, it is just to push their ph2,3,4,5......harder & faster.

    Coming to RBI, the hike in interest rates will be across the spectrum & not just home loan. So, a person who already has car loan, personal loan etc. will be already paying more before he applies for home loan. The situation for these buyers will be more grim as they will be hit by multiple loan EMIs hike.
    CommentQuote