Hereby I will prove how the realty boomers arguments are false.

What are the boomers arguments?

1.) Buy today, houses always increase in value in the long run.
WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.

2.) Renting is just wastage of money.
WRONG. As said before renting is now much cheaper per month than owning. If you don't rent, you either:

* Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance, costs that increase forever.
* Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income is sufficient for emergency expenses,retirement etc.

Either way, owners lose much more money every month than renters and that's assuming prices don't correct to very high level & everything is smooth in the economy.

3.) As a renter, you won't have any money left as you will spend them on vacations,cars & hence won't have equity/savings etc.
WRONG. Equity is just money. Renters are actually in a better position to build equity/savings through investing in anything but housing. Renters can get rich much faster than owners, just by investing in conservative stocks & bonds.

* Owners are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
* Owners must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity/savings. Only houses are such a guaranteed drain on cash.
* Owners must insure a house, but not most other investments.
* Owners must pay to repair a house, but not a stock or a bond.
* Owners lose their money as house prices reduce. The EMI's remain constant in spite of reduction in rates. At the end of loan tenure, they would have paid almost twice than that of current renters who will buy at logical rates. Keep interest rates in mind. Most of the EMI is not principal amount but interest.

4.) There are great tax advantages to owning a house.
WRONG. Many people believe you can just reduce your income tax by the amount you pay in interest, but they are wrong. Buyers may not deduct interest from income tax; they deduct interest from taxable income. And even then, the tax advantage is not significant compared to the large monthly loss from owning.

If you don't own a house but want to live in one, your choice is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc.

5.) RE is based on local factors, it's not a national phenomenon. RE of Delhi-NCR,Bangalore & rest of the cities has nothing to do with Pune RE.
WRONG. Lending rates remain the same throughout the country. ALL loans are harder to get. This will drive prices down everywhere.

6.) A rental house provides good income. So, you can rent if you have purchased as investment.
WRONG. Rental houses provide very poor income in hyped areas and certainly cannot cover mortgage payments. Remember there is almost 300% difference between EMIs & rent for the same house.

It's pointless to do the work of being a landlord if you can make more money with no risk, no work, and no state income tax by investing in assured good returns bond.

7.) If owning is a loss in monthly cash flow, but appreciation will make up for it.
WRONG. Appreciation is negative. Prices are going down. It only adds to the injury of already high EMI's.

8.) As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
WRONG. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many house owners are near bankrupt as they don't save anything at the end of the month due to high EMI's.
No one has to buy, but there will be more and more people who have no choice but to sell as their payments rise. That will keep driving prices downward for a long time.

9.) House prices never fall atleast in Pune.
WRONG. If you see the RE scenario of 1996, prices crashed by 50% & took a whole 7+ years to recover.
Exact 1996 scenario may not be there today but strong correction is inevitable across the city.

10.) House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
WRONG. House prices won't be zero, but the equity or the principal amount you paid can be zero or even negative. What you will pay as EMIs later in actual terms is not for the principal amount but only the interest as house prices dip. So, you will be only serving the bank.

11.) Prices will soften gradually, won't crash immediately.
WRONG. Prices are falling off a cliff. No one knows exactly what will happen, but it looks like prices will continue to fall for long time. These are just more manipulation of buyer emotions, to get them to buy even while prices are falling.

12.) The bubble prices were driven by supply and demand alone.
WRONG. Prices were driven by low interest rates and risky loans & good returns for investors in initial phases of boom in 2004-05.
Prices went up, interest rates went up & buyers savings went down. So prices are violating the most basic assumptions about supply and demand.

13.) There is lack of land.
WRONG. Ample of land is available & continue to be even in future in Pune. Sales volume are down. Even in Japan (small country with less land), prices went down. Current prices here are the same as that of 23 years ago. If we really had a housing shortage, there would not be so many vacant rentals.

14.) If you don't own, you'll live in a cheap neighborhood later.
WRONG. For the any given monthly payment, you can rent a much better house than you can buy. Renters live better, not worse. There are downsides to renting, such as being told to move at the end of your lease, or having your rent raised, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash. There are similar but worse problems for owners anyway, such as being fired and losing your house, or having your interest rate and property taxes adjust upward. Remember, property taxes are forever.

15.) There's always someone predicting a real estate crash.
TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

16.) Local incomes justify the high prices.
WRONG. The mortgage should be more than your 3 years earning. It is much higher today. Most are already in danger/red zone.

17.) You have to live somewhere.
CORRECT. But that doesn't mean you should waste your life savings on a bad investment. You can live in a better house for much less money by renting during the down slide in RE.

18.) It's not a house, it's a home.
WRONG. Wherever one lives in it is home, be it apartment, condo, bungalow , mansion or house. Calling a house a "home" is a manipulation of your emotions for profit.

19.) If you don't buy now, you'll never get another chance.
WRONG. History proves otherwise.
Here's a beautiful quote from a analyst:-
"The real issue isn't whether you will be stuck being a renter all your life, she says. Its whether you'll get so scared about being shut out that you'll buy at the market's peak and be stuck in a property you can't afford or sell."

20.) It would take major economic recession or a major earthquake that wipes out this area in order for the price to fall by over 50%.
WRONG. Even today, if the prices fall by 50%, there will still be very few people who can buy at this levels due to uncertainty in jobs & most importantly high EMIs. Also, look at the rental rates for equivalent houses. Which loss per month is larger? EMI or rent?

contd....
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  • Originally Posted by realacres
    But I remain negative on residential front as this area has max no. of vacancies in entire city, add to it BR & MPolis or even maybe Hirco if it comes, I think selling residential project here is now really difficult.:bab (22):



    According to RaviK's Blog, MPolis is in Ph3 and in full swing..costing around 3500 psf.

    Until now, I use to think that only the nomadic tribes lived in the mountains.
    CommentQuote
  • Originally Posted by enduser
    According to RaviK's Blog, MPolis is in Ph3 and in full swing..costing around 3500 psf.

    Until now, I use to think that only the nomadic tribes lived in the mountains.

    LoL:D, liked that nomadic tribes!! As far as Ravi is concerned, he said full swing for Bloomfield, Crossover county & even Palash 2i (here he even uploaded the pics). However, palash never paid compensation of some 50k/month as promised in their ads even after the project did not complete on time.
    CommentQuote
  • Originally Posted by Saurabh01
    Even I heard Kumar Properties taken by ABIL but don’t about validity abt this news.

    Hmm, that's interesting. Btw, is it limited for only MPolis stake or has ABIL has bought out Kumar Properties completely?
    CommentQuote
  • Originally Posted by Saurabh01
    Pune is not attracting new IT investment. Most of the new setup is going to Chennai and Bang. Even Mahindra is setting up 3200 cr setup in Chennai. Let’s keep hope these SEZ will be occupied by companies. Otherwise they will convert it as residential or commercial space.


    You are not correct. Please read this article:

    http://business.rediff.com/slide-show/2010/oct/01/slide-show-1-the-fastest-job-creating-cities-in-india.htm
    CommentQuote
  • Rain Brings City to Halt & collapses buildings

    Day before yesterday when there were severe rains in the city, the basement of Bhujbal Township, Kothrud behind Eklavya college collapsed where 4 people were killed & 7 injured. The compound wall of neighboring society collapsed which increased the water flow here.

    Man, how can builders construct such junk & thirdclass or class less projects??:bab (45): And here are people trying to pay through nose for such crap projects from junk builders in Pune.:o

    Similarly, some rickshaws, bikes were washed away at Baner & Bavdhan as Ram Nadi was 2.5 ft above danger mark.

    Now, the useless PMC says that flooding was caused due to encroachments which will be removed post monsoons (read nothing will be done). Man, even Avinash Bhosle has encroached upon the river. It is a pity that a person having crores & owns a house on 12 acres of land still encroaches river. Same is the case with several builders as well where projects are built in flood line areas, thanks to corrupt PMC officials.

    I remember the story where the king says to a person that all the land is yours which you can cover till sunset. The man out of greed keeps running & finally dies due to exhaustion. GREED KILLS, I have myself seen several cases for the same even outside RE.

    Btw, does anyone has the update for Kapil Malhar, Baner post rains this week?
    CommentQuote
  • Sorry for diverting from current discussion....
    I want to congratulate author of this thread and all so called senior (or may i say enthusiastic) members for making this thread so successful.
    I have some observations...
    1. Though builders theory proved wrong for year or two, how many of us book benefit of that?
    2. how many of 'senior', 'real', 'wise' members advised us to buy and this is a right time (mid last year)...?
    3. Even when I saw some of the prices reduced by 15-20%, 'senior' members always had thought that prices are still too much higher.
    I remember people were talking about 1500-2000 rs rates.
    4. How many buyers got influenced by such advices? I think many people may have delayed their deal....
    5. I know these guys are so '....' (i don't find any adjective)..., that they can defend themselves and prove me wrong..
    6. Also, all 'seniors' are united! so, if any one of so called junior challenges them, he will be out of picture within a day. (I know I'll be victim now).
    7. Some of them went further and started advising on Stock Market (Not sure if this is the forum). And I remember when market was on 12k-13k, some 'wise' people quoted that this is end of bull... since then I saw many such posts and market is on 20.5k

    I was following this site, but later found it is so biased by some senior members...
    Thankfully, booked my dream home mid last year at 3200 prize, which is now being quoted at 4300...
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  • ^^^Hey surprised NOT to find mention of diwali thread in above post.

    LOL:D:D:D
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  • ^^ hehehe.. I guess he was buying his flat at the time when Diwali thread was popular.. so he might had missed that one :D
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  • Originally Posted by asdf2357
    Sorry for diverting from current discussion....
    I want to congratulate author of this thread and all so called senior (or may i say enthusiastic) members for making this thread so successful.
    I have some observations...
    1. Though builders theory proved wrong for year or two, how many of us book benefit of that?
    2. how many of 'senior', 'real', 'wise' members advised us to buy and this is a right time (mid last year)...?
    3. Even when I saw some of the prices reduced by 15-20%, 'senior' members always had thought that prices are still too much higher.
    I remember people were talking about 1500-2000 rs rates.
    4. How many buyers got influenced by such advices? I think many people may have delayed their deal....
    5. I know these guys are so '....' (i don't find any adjective)..., that they can defend themselves and prove me wrong..
    6. Also, all 'seniors' are united! so, if any one of so called junior challenges them, he will be out of picture within a day. (I know I'll be victim now).
    7. Some of them went further and started advising on Stock Market (Not sure if this is the forum). And I remember when market was on 12k-13k, some 'wise' people quoted that this is end of bull... since then I saw many such posts and market is on 20.5k

    I was following this site, but later found it is so biased by some senior members...
    Thankfully, booked my dream home mid last year at 3200 prize, which is now being quoted at 4300...


    Inflation will ensure that your RE purchase will be ahead for the next 15-20 years, over all other asset classes (bonds, g=old and stocks).

    I also booked, despite all the doomsters here, in 2009.

    But all their negativity put the risks in perspective - which is very valuable.

    Again, please do read the details - everybody here said, buy what you can afford. Dont buy what you cannot afford.

    Overleverage is bad and continues to be bad.
    CommentQuote
  • Originally Posted by asdf2357
    Sorry for diverting from current discussion....
    I want to congratulate author of this thread and all so called senior (or may i say enthusiastic) members for making this thread so successful.
    I have some observations...
    1. Though builders theory proved wrong for year or two, how many of us book benefit of that?
    2. how many of 'senior', 'real', 'wise' members advised us to buy and this is a right time (mid last year)...?
    3. Even when I saw some of the prices reduced by 15-20%, 'senior' members always had thought that prices are still too much higher.
    I remember people were talking about 1500-2000 rs rates.
    4. How many buyers got influenced by such advices? I think many people may have delayed their deal....
    5. I know these guys are so '....' (i don't find any adjective)..., that they can defend themselves and prove me wrong..
    6. Also, all 'seniors' are united! so, if any one of so called junior challenges them, he will be out of picture within a day. (I know I'll be victim now).
    7. Some of them went further and started advising on Stock Market (Not sure if this is the forum). And I remember when market was on 12k-13k, some 'wise' people quoted that this is end of bull... since then I saw many such posts and market is on 20.5k

    I was following this site, but later found it is so biased by some senior members...
    Thankfully, booked my dream home mid last year at 3200 prize, which is now being quoted at 4300...

    Thank you for the wishes & also note that no one will be kicked out. Infact, opposite views are in a way good as members can take balanced view for the same & take the final call.

    Benefit of this? Well, I have recieved several pms who said that just because they didn't buy last year (some even canceled their booking, projects still stalled), they are happy to see their bank balance rise & have peace of mind. There are also cases where members asked me for projects in PS but were transfered to Bangalore & now are settled there. They are so happy that they didn't buy in Pune but in Bangalore at much less price with better infra & good project. They were in touch with me from Bangalore (& are now even now as they have become my friends :) ) & were asking various queries. They will be taking possession in a month:).

    PMs from NRIs mostly deal with location issues & now all of them have said that they will first rent, get the feel of the area & then take a call whether to buy or not in that area.

    As far as prices are concerned, you got it for 3200 now it is 4300, good for you on paper.....but you missed the fact whether the project was worth even 3k at first place? Frankly, 4k+ anywhere in Pune is stupidity, I would rather buy at Navi Mumbai, put that on rent & rent in Pune!!

    As far as stocks are concerned, post 18000 levels, it was dictated only by FIIs...so pulled out all investments in stocks (maybe having about 6-7k, which is meagre). I did say to buy gol_d when it was about 18200, now there is hike of almost 1100+!!

    Sticking to RE, we have always said that there is a bubble in the market & so if one has to buy, it has to be 40-50% downpayment with 30% EMIs of take home income for duration not more than 10 yrs. One may or maynot follow this, but if someone can do this, let him buy for 5000/sq ft at Pirangut, just forget VFM though.

    As far as 1500-2000 rates are concerned, there are places in Pune which deserve this but if you think these are rates for KP, Kothrud, Bhoslenagar, then you are naive to think like this.

    Btw, I would appreciate if you can let us know the project name where you have bought your flat & the number of bookings which have taken place at 4300.

    *PS:- See the posts of ajit & other RE investors who are finding it difficult to sell the flats, also distress sales have now again become common. Check the news & posts for the same as well.
    CommentQuote
  • RE is a long term purchase ...

    Happened to meet a small builder whose family has been in this line for decades. They are largely low-leveraged party and have a good reputation in the market.

    What he was saying was very interesting. Told me that if I could bring full payment with me, he can take me to any builder and get me flats for as much as 40% off on the rates initially quoted by them. And he was rather serious about it.

    He was also quite negative about the concept of everyone hiking up prices based on land-bank pricing. Said that actuall purchases of these "land banks" were much lower than the bid-up prices and builders would be willing to go much lower if pressure on the built up due to continued low volumes.

    Secondly, while it is good to see prices having risen by some margin, it is largely driven by sentiment and builder quotations. The risk of enormous amount of inventory and weak volumes will continue to pile up pressure on builders and in the event the real world economy continues to show weak numbers for an extended period of time (as is expected) then it will inevitably lead to weakening numbers in our economy resulting in prices coming back down again to pre-recent-boom times.

    Let us see where the world economy goes in 2011/12 and then decide whether we were right in our decisions. Anyway, if people are happy with their purchase, good for them. Most people buy as a one-time purchase of a home. I try to be extra-smart and also look for it to be a good investment as well. Only point being made (like Venky and Real are saying) is not to get too much into debt in search of somehow getting that home before it runs away. It won't. I have seen RE for last 25 years. It does not run away and provides around 12-15% CAGR returns in strong areas. There are many horror stories in RE too, just in case people think RE is boom-boom all the way.

    I too have been very happy NOT buying RE for last 3-4 years. Having used up the money in purchasing gol.d (have been buyer since Sep 2006 when it was around $690 per ounce) and getting out of the stock market in Jan 2008 and back in March/April 2009, my money has done in the markets what it could never have done in RE - multiplied much higher than 100%. Have largely got out of stocks too since Jan 2010 in parcels (when market hit 17k+). This is what I thought will happen and it seems to be working out for me at least.

    Nobody is perfect and I have been lucky (which I always maintain!)

    And now I have builder friends willing to help me get 40% off on new flats in Bangalore (on quoted prices) if I can get in 100% cash down. Do you think using the money in the last 2 years for good gains in other markets and then putting it into RE at good bargains is a decent strategy? :). I don't think RE gives you the flexibility to get in and out as the commodity/stock markets do. Therefore having a certain sum of money in these markets and putting the rest in RE (mainly cash down) for long term gains is probably the way I would go for optimum peace of mind. If I don't have enough cash, I will learn/work my skills in the markets to make enough money before buying RE at proper levels of debt. No hurry. RE opportunity will alway come around.

    cheers
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  • Thanks Venky and Realacres for your thoughts!
    One thing, I should appreciate about that everyone is talking 'affordability'.
    Great! As you are seniors, I would like to see many posts about 'affordability' than 'speculation'...
    And, I really respect that you have more knowledge about location, good projects/builders, etc. So, please
    continue helping us in that matter. But, please be less 'speculative'.


    Also, I feel , 'value' is very complex thing, be it of RE, stocks, , or whatever... Hence, I'm very small guy
    to predict/speculate/question them.

    But, I'm buying good stocks and g_ld since 3 years. (both of them). It is for very long term (15+ years).
    And, because, I'm buying systematically (and from part of savings), I don't worry and speculate about risk...

    Also, Please don't try to prove that everything you said was correct!!
    I mean, everyone can go wrong on some of the predictions... (Finally they are predictions..)
    But, the way they are predicted by some of the senior member's is laughable.. I mean that kind confidence and the way of arrogance, is not
    required.. E.g. Realacres said, "4k+ anywhere in Pune is stupidity"



    Now, about the points made by Realacres:

    1.
    Benefit of this? Well, I have recieved several pms who said that just because they didn't buy last year (some even canceled their booking, projects still stalled), they are happy to see their bank balance rise & have peace of mind.

    --> May be some of the guys who didn't send you PM, could have afforded their dream home last year.. I mean they can still afford this year, but at some cost of delaying...

    2.
    There are also cases where members asked me for projects in PS but were transferred to Bangalore & now are settled there. They are so happy that they didn't buy in Pune but in Bangalore at much less price with better infra & good project. They were in touch with me from Bangalore (& are now even now as they have become my friends ) & were asking various queries. They will be taking possession in a month.

    --> How can there be exactly more than one such case's'? Anyways, I accept there are more than 1 guy, who was looking in PS then transferred to
    bangalore and bought there. But, it this a generic case? If I want to settle at Pune, I'll buy at Pune, that's all. (Infact, I moved from Bangalore to Pune, as Its my hometown).

    3.
    PMs from NRIs mostly deal with location issues & now all of them have said that they will first rent, get the feel of the area & then take a call whether to buy or not in that area.

    --> Good! I feel, Its more related to the location, they would like to live.., Anyways, I've no counter argument..

    4.
    As far as prices are concerned, you got it for 3200 now it is 4300, good for you on paper.....but you missed the fact whether the project was worth even 3k at first place? Frankly, 4k+ anywhere in Pune is stupidity, I would rather buy at Navi Mumbai, put that on rent & rent in Pune!!

    --> I think, I did much of a research and then bought it. And, I believe in my research, as you believe "4k+ in any area in Pune is stupidity".
    Only thing, I'm not so much confident to say about whole of Pune RE. About worth of the Project that I bought, I feel in the nearby locality
    and project , I felt it was best 'VFM'.

    5.
    As far as stocks are concerned, post 18000 levels, it was dictated only by FIIs...so pulled out all investments in stocks (maybe having about 6-7k, which is meagre). I did say to buy gol_d when it was about 18200, now there is hike of almost 1100+!!

    --> I think both g_ld and Stocks were at 18k same time. Now, you know the levels.. Again, I'm very small guy to predict it. Just that I'm buying systematically both of them. And, I can't sell all of the investment.. at it is accumulates at to much of patience.

    6.
    Sticking to RE, we have always said that there is a bubble in the market & so if one has to buy, it has to be 40-50% downpayment with 30% EMIs of take home income for duration not more than 10 yrs. One may or maynot follow this, but if someone can do this, let him buy for 5000/sq ft at Pirangut, just forget VFM though.

    --> This is best thing you said. Please talk more of affordability..

    7.
    As far as 1500-2000 rates are concerned, there are places in Pune which deserve this but if you think these are rates for KP, Kothrud, Bhoslenagar, then you are naive to think like this.

    --> OK.

    8.
    Btw, I would appreciate if you can let us know the project name where you have bought your flat & the number of bookings which have taken place at 4300

    --> I don't think its needed here. Just that its at good location/ good project for me. And if I'd have bought it there today, then I'd to pay at 4300..
    CommentQuote
  • Originally Posted by asdf2357
    But, the way they are predicted by some of the senior member's is laughable.. I mean that kind confidence and the way of arrogance, is not
    required.. E.g. Realacres said, "4k+ anywhere in Pune is stupidity"

    This is my thinking, you can disagree. For me, renting a flat is far cheaper than buying at 4k+. Infact, even in Vasant Kunj, South Delhi, the rates are similar to Koregaon Park!! Thane is cheaper than Kothrud!! Even projects of ABIL are so highly priced that you can get a upscale project in Mahalaxmi, Prabhadevi, Bandra or even Juhu!! Banjara Hills, Hyderabad is cheaper than Kalyaninagar!! Look man, I have traveled a lot, seen infra, quality of life elsewhere & hence my statement. Also note that none of the compared area sells based on PROPOSED or DP stuff & quality is far superior than projects here. Add to it that these are capital of states, where does Pune stand?? It doesn't even have PMRDA, & DP remains pending for decades:o. The only thing Pune separates itself from rest is Pawar & Co.:bab (45): If you limit yourself to Pune, you will find Sopanbaugh better than Frankfurt!:D

    Now, about the points made by Realacres:

    1.
    --> May be some of the guys who didn't send you PM, could have afforded their dream home last year.. I mean they can still afford this year, but at some cost of delaying...

    And how about those who canceled their flats last year & still are happy??

    2.
    --> How can there be exactly more than one such case's'? Anyways, I accept there are more than 1 guy, who was looking in PS then transferred to
    bangalore and bought there. But, it this a generic case? If I want to settle at Pune, I'll buy at Pune, that's all. (Infact, I moved from Bangalore to Pune, as Its my hometown).

    2 in Bangalore (Satyam err TechMah, Infy), 1 went to Thane (TCS), & another to Aurangabad (Skoda). Informed in detail about this 1 guy in B'lore as he is the only one who has purchased, rest have not.

    4.
    --> I think, I did much of a research and then bought it. And, I believe in my research, as you believe "4k+ in any area in Pune is stupidity".
    Only thing, I'm not so much confident to say about whole of Pune RE. About worth of the Project that I bought, I feel in the nearby locality
    and project , I felt it was best 'VFM'.

    If you feel that way, it's nice, no comments.

    6.
    --> This is best thing you said. Please talk more of affordability..

    It's always there, don't over-leverage, what more should I talk? But then there is also the thing called as VFM.

    8.
    --> I don't think its needed here. Just that its at good location/ good project for me. And if I'd have bought it there today, then I'd to pay at 4300..

    Fail to understand what makes you hide this? :bab (38): Well, I am not doubting at what rates you bought or what are current rates. Asked this just to see what was the the quality, builder, possession date etc. If not the project, you can atleast let us know the location. This I think won't harm your interest. If you can't disclose anything about this, not even the area, then the credibility for such discussions goes down for the simple reason that the builders are now again on the negotiating table, ready to reduce prices!!

    Btw, forget Pune, I am getting loads of SMSes & emails from builders even outside Pune giving damn low rates. What's more, a FD scheme of 16% as well:D. Only about 5 months ago, 12% was the norm...it is now 16%!
    Seems we need to put disclaimer now after every post!!

    Anyways, if you have bought & happy, enjoy the process of this man:).
    CommentQuote
  • Originally Posted by asdf2357
    --> I think, I did much of a research and then bought it. And, I believe in my research, as you believe "4k+ in any area in Pune is stupidity".
    Only thing, I'm not so much confident to say about whole of Pune RE. About worth of the Project that I bought, I feel in the nearby locality
    and project , I felt it was best 'VFM'.


    Can you please publish your "research". How you arrived at conclusion that 3200 prize was good price? and also why do you think 4K+ across Pune is stupidity?

    Why I am asking is because according to me nothing is worth after 2006 even with the dip of 2009. I follow the rent formula to arrive at this conclusion.

    I am curious to know what you use to arrive at different conclusion. May be I am missing something, so want to learn from you. Please publish.
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  • Originally Posted by asdf2357
    Sorry for diverting from current discussion....
    I want to congratulate author of this thread and all so called senior (or may i say enthusiastic) members for making this thread so successful.
    I have some observations...
    1. Though builders theory proved wrong for year or two, how many of us book benefit of that?
    2. how many of 'senior', 'real', 'wise' members advised us to buy and this is a right time (mid last year)...?
    3. Even when I saw some of the prices reduced by 15-20%, 'senior' members always had thought that prices are still too much higher.
    I remember people were talking about 1500-2000 rs rates.
    4. How many buyers got influenced by such advices? I think many people may have delayed their deal....
    5. I know these guys are so '....' (i don't find any adjective)..., that they can defend themselves and prove me wrong..
    6. Also, all 'seniors' are united! so, if any one of so called junior challenges them, he will be out of picture within a day. (I know I'll be victim now).
    7. Some of them went further and started advising on Stock Market (Not sure if this is the forum). And I remember when market was on 12k-13k, some 'wise' people quoted that this is end of bull... since then I saw many such posts and market is on 20.5k

    I was following this site, but later found it is so biased by some senior members...
    Thankfully, booked my dream home mid last year at 3200 prize, which is now being quoted at 4300...


    many of us RE buyers in list are thinking what Japanese thought in 80 - 90s
    check out the Image attached (Original and Modified) ... where we are now and where Japan and US were ......


    There is nothing new in India that rules of world will not apply ... its all brick and mortar house and earth has Plenty of it :)



    Originally Posted by wiseman
    Happened to meet a small builder whose family has been in this line for decades. They are largely low-leveraged party and have a good reputation in the market.

    What he was saying was very interesting. Told me that if I could bring full payment with me, he can take me to any builder and get me flats for as much as 40% off on the rates initially quoted by them. And he was rather serious about it.

    He was also quite negative about the concept of everyone hiking up prices based on land-bank pricing. Said that actuall purchases of these "land banks" were much lower than the bid-up prices and builders would be willing to go much lower if pressure on the built up due to continued low volumes.

    Secondly, while it is good to see prices having risen by some margin, it is largely driven by sentiment and builder quotations. The risk of enormous amount of inventory and weak volumes will continue to pile up pressure on builders and in the event the real world economy continues to show weak numbers for an extended period of time (as is expected) then it will inevitably lead to weakening numbers in our economy resulting in prices coming back down again to pre-recent-boom times.

    Let us see where the world economy goes in 2011/12 and then decide whether we were right in our decisions. Anyway, if people are happy with their purchase, good for them. Most people buy as a one-time purchase of a home. I try to be extra-smart and also look for it to be a good investment as well. Only point being made (like Venky and Real are saying) is not to get too much into debt in search of somehow getting that home before it runs away. It won't. I have seen RE for last 25 years. It does not run away and provides around 12-15% CAGR returns in strong areas. There are many horror stories in RE too, just in case people think RE is boom-boom all the way.

    I too have been very happy NOT buying RE for last 3-4 years. Having used up the money in purchasing gol.d (have been buyer since Sep 2006 when it was around $690 per ounce) and getting out of the stock market in Jan 2008 and back in March/April 2009, my money has done in the markets what it could never have done in RE - multiplied much higher than 100%. Have largely got out of stocks too since Jan 2010 in parcels (when market hit 17k+). This is what I thought will happen and it seems to be working out for me at least.

    Nobody is perfect and I have been lucky (which I always maintain!)

    And now I have builder friends willing to help me get 40% off on new flats in Bangalore (on quoted prices) if I can get in 100% cash down. Do you think using the money in the last 2 years for good gains in other markets and then putting it into RE at good bargains is a decent strategy? . I don't think RE gives you the flexibility to get in and out as the commodity/stock markets do. Therefore having a certain sum of money in these markets and putting the rest in RE (mainly cash down) for long term gains is probably the way I would go for optimum peace of mind. If I don't have enough cash, I will learn/work my skills in the markets to make enough money before buying RE at proper levels of debt. No hurry. RE opportunity will alway come around.

    cheers



    adding to your points and Realacres points
    how do you justfy VFM .....
    Indian Metro service sector are so highly paid that it surpasses the RE prices of US and Europe ??

    when did that happen ... are our pays higher then US/Europe counter parts ?
    But our houses are .... so either the pays are low or RE is a Bubble...

    what it is
    illogical??
    Dillogical ?
    Greedlogical ?
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