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 vhaldavnekar
    Yes REAL ACRES I agree with you that even the politicos need to do an exit. And even I am waiting on it. Builders in mumbai have indirectly started to reduce thou not directly. I will quote one real e.g.
    6 months before one very big luxurious builder 'gaddha' was getting an enquiry to the tune of 25-30 enquires per day. Today they call up prospective buyer 10-12 nos per day.
    As of black money is concerned you might be aware that I can turn Rs 100 into Rs 80 as white. Details of which cannot be discussed on a public forum. It is another complex dimension just as RE prices.
    There are many projects in mumbai which are 100% financed by politicos. Again would not name them but there are.
    Again if we refer Real History related to benami properties and their future the moment the main person goes away the second in command is not able to gain all of it as is.

    Yes, a classic eg. of benami properties is of Late Pramod Mahajan, who made over 2000 Cr & most of these benami properties are unknown & those who have those registered in their name, why the hell will they go to their kins informing about the same ? Even they know that the money used to buy such property was of ill-gotten wealth, so why bother ?

    Btw, what I have seen closely is - 'Paap ka paisa, paap main chala jaata hain'. (I have made the statement sober, actually the word starts from H & ends with M in Hindi).

    One may feel good in the beginning but as time approaches, you don't know where it vanishes !! Same would be the case when the leader of 'Watch gang' is bumped off.
    CommentQuote
  • Interest Rate Trap by HDFC

    Though home loan interest rate market looks competitive, how institutions are taking advantage of lacuna in the system.
    2009 Dual Interest rate scheme:
    1st year fix rate 8.25%
    2nd year fix rate 9.00%
    From 1st April 2012 onwards, RPRL -4.5(spread) = 16.5 – 4.5 = 12%
    1st Aug 2011 Scheme:
    Applicable Rates
    (Monthly Rest Basis) Fixed rates% Variable rates% Basis%RPLR
    Upto and including Rs 30 lacs 12.25 10.75 RPLR - 5.75
    Rs.30.01 lacs to Rs.75 lacs 12.50 11.00 RPLR -5.50
    Over Rs.75 lacs 13.00 11.50 RPLR - 5.00
    It means people who took loans(>30lacs) in 2009 scheme have to pay 1% more compared to current market rate. Whereas institutions advertised that from 3rd year it will reset the rate to market’s floating rate.
    We are not teasing anybody, we are trapping them.
    India needs Dodd Frank regulation like US to protect buyers.:bab (30):
    CommentQuote
  • Why Prices are not Correcting Sensibly?

    Despite low sales volume prices are not correcting sensibly (30-40%) ,
    1. Govt. running the deficit due to corruption & fraud do not want to stop the revenue from inflated properties.
    2. Banks do not want to declare the bankruptcies.
    3. Investors can’t admit openly.
    4. Foreign funds managers are giving rosy picture to investors & delaying the recognition of losses.
    How the scheme works,
    In stock market every company has to match the analyst predictions else stock value falls down. So companies cook the book within the allowable accounting principles & postpone the recognition of losses. Similarly, currently by hiking the rate persistently builders are showing artificial return to investors. If prices are sustainable then it should reflect in volume, it should reflect in rent. If regulators will force the mark to market valuations for investors, funds, banks & builders we will see bigger crisis than US.
    mark to market valuation = property can be sell in arm’s length transaction.
    It’s only a matter of time, who holds the inventory & delay the problem.
    Based on my personal survey, in one of the project in Baner which is completed, 35% flats are sold, in 35% only 10% people are interested in living rest are investors or purchased it for future use.
    CommentQuote
  • On sunday I met an NRI investor who bought 3 BHK in some GINI Construction property in Hadapsar at the price of 2750 psf 2 years back. He offered me 2800 psf 2 months back and I denied the offer because I did not like the location. And now last week he sold that property 2350 psf. Loss of 400 psf + 2 Years interest.

    This is the reality. Pune is no more property investors town and they are exiting very quickly even at huge loss.

    Originally Posted by khbarilal
    Despite low sales volume prices are not correcting sensibly (30-40%) ,
    1. Govt. running the deficit due to corruption & fraud do not want to stop the revenue from inflated properties.
    2. Banks do not want to declare the bankruptcies.
    3. Investors can’t admit openly.
    4. Foreign funds managers are giving rosy picture to investors & delaying the recognition of losses.
    How the scheme works,
    In stock market every company has to match the analyst predictions else stock value falls down. So companies cook the book within the allowable accounting principles & postpone the recognition of losses. Similarly, currently by hiking the rate persistently builders are showing artificial return to investors. If prices are sustainable then it should reflect in volume, it should reflect in rent. If regulators will force the mark to market valuations for investors, funds, banks & builders we will see bigger crisis than US.
    mark to market valuation = property can be sell in arm’s length transaction.
    It’s only a matter of time, who holds the inventory & delay the problem.
    Based on my personal survey, in one of the project in Baner which is completed, 35% flats are sold, in 35% only 10% people are interested in living rest are investors or purchased it for future use.
    CommentQuote
  • Came across one good article explaining how new Union budget will slow down the reality sector further! Putting whole article as it is.


    The latest national budget has given India?s realty sector a short shrift, despite its stated objective to create conditions for growth, focusing on domestic-driven growth recovery. It has sadly even ignored the prescription given by the Economic Survey for 1011-12 that has projected the share of the country's realty industry to grow from 5 percent to 6 percent soon.
    What is really disappointing is that barring some window dressing, the budget has not taken any concrete measures to address the twin crucial issues of increasing supply and boosting demand. This was the primary requirement given that the industry has been reeling under high property prices, liquidity crunch, costly debt, muted foreign capital inflows, increasing inflation coupled with low business sentiment.
    Today, residential properties, principal demand driver for real estate remains restrained with key indicators like sales and absorption hit by high prices, spurred by increasing inputs and debt costs. This is clearly evident from the industry statistics showing almost 50 percent of unsold inventory in top cities like the National Capital Region, Mumbai and Bangalore. So much so that even affordable housing has been facing a slow down.
    In this backdrop, the real estate sector that is under stress required a booster dose in terms of fiscal incentives supported by enabling development and regulatory environment. But that has clearly not happened in the budget.
    Liquidity crunch has been the bane of real estate but budget has not addressed this serious issue of low bank credit flow and high funding cost. The long pending demand of the sector for granting industry status and giving infrastructure status to big township projects has been ignored, denying easy credit access at cheaper rates.
    High property valuations are having negative impact on flow of foreign capital especially as investors abroad are already wary of ambiguous policies and lack of transparency in real estate transactions in the absence of a regulator. And the budget has done nothing to liberalise such investment and exit norms. The brakes on foreign equity in multi-brand retail will further retard the growth of retail real estate.
    The budget does not hold much hope with high home loan rates contributing significantly to slow down in housing demand. The recent cut in cash reserve ratio by the Reserve Bank of India (RBI) does not mean anything unless interest rates are cut ? by at least 1 percentage point in home loan rates to boost demand. Also no attempt has been made to increase loan to value ratio or housing loans, especially when the recent RBI directive has excluded stamp duty, registration fee and other levies for total home cost, thereby bringing down the value from 80 percent to 70-75 percent.
    Moreover the much expected increase in the Rs.1.5 lakh cap on interest payment and Rs.1 lakh cap on principal home loan amount has not happened in the budget, thereby dampening the spirit of home buyers. Though the budget has a proposal to set up Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loan may be useful in the long run, it will however have no immediate impact on the housing loan scenario.
    There is a major hurdle to the growth of real estate due to high taxation structure, which in the residential segment, amounts to 30 percent of the total cost of the home. This calls for a viable tax structure by way of rationalisation of goods and service tax, stamp duty, service tax and local levies. Even 1 percent tax deducted at source has been imposed on property sellers on transactions worth Rs.50 lakh in big cities and Rs.20 lakh in smaller cities.
    But instead of providing any relief, the budget has further hiked the service tax which together with increase in excise duty, will further push up property prices, thereby dampening demand. The exemption on capital gains tax on property, if proceeds are invested in small and medium enterprises may be of little use. No tax benefit or incentive has been given in the budget to cover up high cost of green buildings with a view to give fillip to green realty. Nor has it looked at duty structures to ensure that middle and lower income housing is not a revenue source.
    With housing for all a tall order for the government in view of about 25 million shortage of low cost housing, the government has rightly put focus on affordable housing in the budget. Allowing borrowings from overseas for low cost housing, extension of interest subvention for one more year for loans up to Rs.15 lakh on property cost up to Rs.25 lakh, service tax exemption on low cost mass housing up to 60 sq mt and Rs.4,000 crore fund for rural housing are the steps that will give a boost to affordable housing.
    Even on the infrastructure front, budgetary provisions like external commercial borrowings for road, power projects, Rs.60,000 crore allocation for infrastructure projects, Rs.5,000 crore for creating warehousing facilities and one year extension of sunset clause on tax incentives for infra projects are growth-oriented moves.
    However there is no policy initiative to boost rental housing. Also in view of rise in affordable housing cost, property price cap of Rs 25 lakh should have been increased to benefit homebuyers in Tier I and II cities. Moreover, the budgetary provision to bring affordable housing under priority sector lending would have gone a long way in giving much needed push to affordable housing.
    All in all, with marginal increase in income tax limit and with additional burden of service tax and excise duty further bringing down disposable and investable income, it may well prove to be a setback to demand, with budget bringing hardly any cheers to realty.



    Realty industry has little to cheer from budget - Yahoo! India Finance
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  • ..... increase in excise duty, will further push up property prices, thereby dampening demand.

    This is one of the false assumtion on which bears have been sitting on for many years now and the facts have been exactly opposite. The increase in prices have rather boosted the demand as the speculators also jump in the fray. Just do a quick review of past few years and you will find nowhere price increase have dampened the demand.
    On the contrary the demand drop when prices drop as everyone enters waiting game.
    CommentQuote
  • False assumption?

    Originally Posted by compuwalah
    ..... increase in excise duty, will further push up property prices, thereby dampening demand.

    This is one of the false assumtion on which bears have been sitting on for many years now and the facts have been exactly opposite. The increase in prices have rather boosted the demand as the speculators also jump in the fray. Just do a quick review of past few years and you will find nowhere price increase have dampened the demand.
    On the contrary the demand drop when prices drop as everyone enters waiting game.



    We are still in the bull phase of the RE market. Therefore, it still is the Bear's continuing position that, when cycle ends demand will reduce sharply and bring down prices significantly.

    Now demand can be "own use" or "investment". It is still not known what would be the reaction of investors to a sharp or prolonged bear phase, though it may be fairly assumed that own use buyers may continue to hold on mostly.

    To label the bear's assumption as "false" is also an assumption which might turn out to be itself false. And it is jumping the gun with a per-supposition.

    Its just too early to say (though the bear may have suffered notional loss from not buying into a rising market). We will really know about the "false" part of the bear's assumption only when the bear market really hits!

    Let us see!

    cheers
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  • Originally Posted by wiseman

    Its just too early to say (though the bear may have suffered notional loss from not buying into a rising market). We will really know about the "false" part of the bear's assumption only when the bear market really hits!

    Let us see!

    cheers

    Agree to few of your statements. However even if prices fall by 10-15% as well, a major part of notional loss will be ralized even when on strikes a deal at that level.
    The main issue here is that people have been hanging on "the fall is just two month down the line " for quiet sometime now and these false promises of falls have done greater harm than helping potential buyer (inadventantly these steatements themselves would have helped in keeping prices jacked up as the buyers enter the fray at controlled pace ... ).

    I am not justifying to go and buy at these prices but lots of people have missed good oppurtunities in 2008/2009 . Looking at current prices, it looks like steal ao those price levels. "Baner is not worth over 2500 at best" hang on people are paying 3.5K at Ravet.

    Hope you got the point.).

    I am not justifying to go and buy at these prices but lots of people have missed good oppurtunities in 2008/2009 . Looking at current prices, it looks like steal ao those price levels. "Baner is not worth over 2500 at best" hang on people are paying 3.5K at Ravet.

    Hope you got the point.
    CommentQuote
  • I was only picking on that single point!

    Originally Posted by compuwalah
    Agree to few of your statements. However even if prices fall by 10-15% as well, a major part of notional loss will be ralized even when on strikes a deal at that level.
    The main issue here is that people have been hanging on "the fall is just two month down the line " for quiet sometime now and these false promises of falls have done greater harm than helping potential buyer (inadventantly these steatements themselves would have helped in keeping prices jacked up as the buyers enter the fray at controlled pace ... ).

    I am not justifying to go and buy at these prices but lots of people have missed good oppurtunities in 2008/2009 . Looking at current prices, it looks like steal ao those price levels. "Baner is not worth over 2500 at best" hang on people are paying 3.5K at Ravet.

    Hope you got the point.


    Compu,

    I was only nitpicking on that single point, thats all!

    Also, there is another way, but given the inability of people to be disciplined, its most likely not to work in most cases.

    If people do not want to buy at these levels, OR find that they are highly and should decide later when they have settled a bit more, one can rent, while having the discipline to SET ASIDE the equivalent EMI amount into savings every month.

    If this is done and if the person does some homework and spreads this money into other investment in Stocks, PMs, fixed income securities, I have pointed out, with a spreadsheet long ago, that this strategy ensures that the person can keep pace with RE price rise and still buy at anytime in future without suffering increase in cost to him/her.

    The problem is, without the property forcing people to pay EMI, savings do not happen and thus the home runs away in terms of affordability as people perpetually suffer from low savings.

    cheers


    Compu,

    I was only nitpicking on that single point, thats all!

    Also, there is another way, but given the inability of people to be disciplined, its most likely not to work in most cases.

    If people do not want to buy at these levels, OR find that they are highly and should decide later when they have settled a bit more, one can rent, while having the discipline to SET ASIDE the equivalent EMI amount into savings every month.

    If this is done and if the person does some homework and spreads this money into other investment in Stocks, PMs, fixed income securities, I have pointed out, with a spreadsheet long ago, that this strategy ensures that the person can keep pace with RE price rise and still buy at anytime in future without suffering increase in cost to him/her.

    The problem is, without the property forcing people to pay EMI, savings do not happen and thus the home runs away in terms of affordability as people perpetually suffer from low savings.

    cheers


    Compu,

    I was only nitpicking on that single point, thats all!

    Also, there is another way, but given the inability of people to be disciplined, its most likely not to work in most cases.

    If people do not want to buy at these levels, OR find that they are highly and should decide later when they have settled a bit more, one can rent, while having the discipline to SET ASIDE the equivalent EMI amount into savings every month.

    If this is done and if the person does some homework and spreads this money into other investment in Stocks, PMs, fixed income securities, I have pointed out, with a spreadsheet long ago, that this strategy ensures that the person can keep pace with RE price rise and still buy at anytime in future without suffering increase in cost to him/her.

    The problem is, without the property forcing people to pay EMI, savings do not happen and thus the home runs away in terms of affordability as people perpetually suffer from low savings.

    cheers


    Compu,

    I was only nitpicking on that single point, thats all!

    Also, there is another way, but given the inability of people to be disciplined, its most likely not to work in most cases.

    If people do not want to buy at these levels, OR find that they are highly and should decide later when they have settled a bit more, one can rent, while having the discipline to SET ASIDE the equivalent EMI amount into savings every month.

    If this is done and if the person does some homework and spreads this money into other investment in Stocks, PMs, fixed income securities, I have pointed out, with a spreadsheet long ago, that this strategy ensures that the person can keep pace with RE price rise and still buy at anytime in future without suffering increase in cost to him/her.

    The problem is, without the property forcing people to pay EMI, savings do not happen and thus the home runs away in terms of affordability as people perpetually suffer from low savings.

    cheers
    CommentQuote
  • Originally Posted by wiseman

    If this is done and if the person does some homework and spreads this money into other investment in Stocks, PMs, fixed income securities, I have pointed out, with a spreadsheet long ago, that this strategy ensures that the person can keep pace with RE price rise and still buy at anytime in future without suffering increase in cost to him/her.



    Wiseman: Can you please send that spreadsheet again. Maybe I joined much later.
    CommentQuote
  • Originally Posted by RealHunter1
    On sunday I met an NRI investor who bought 3 BHK in some GINI Construction property in Hadapsar at the price of 2750 psf 2 years back. He offered me 2800 psf 2 months back and I denied the offer because I did not like the location. And now last week he sold that property 2350 psf. Loss of 400 psf + 2 Years interest.

    This is the reality. Pune is no more property investors town and they are exiting very quickly even at huge loss.

    Thanks for the update man. The only good part for investor is that he didn't pay any PROPERTY GAINS TAX !

    I also came to know that prices have reduced in resale in Amanora Park Town. And those Aspire towers are still aspiring to get some buyers !! :D

    And as some link Pune RE to Mumbai, here is another news :-

    Indiabulls have reduced their prices from 4800/sq ft to 4150/sq ft at their Panvel project.
    CommentQuote
  • real,

    investor selling property at a loss may be a particular one-off case. the attitude of builders, the current atrocious cost of 3 bhk touching a crore in some projects, the psft rate at locations like "kaspatey wasti" casts serious doubts on many investors exiting their investment with losses selling at lower cost.
    CommentQuote
  • Originally Posted by puser
    real,

    investor selling property at a loss may be a particular one-off case. the attitude of builders, the current atrocious cost of 3 bhk touching a crore in some projects, the psft rate at locations like "kaspatey wasti" casts serious doubts on many investors exiting their investment with losses selling at lower cost.

    Look, investors don't sell in cartel. They have 1-3 flats & the more they hold, more they suffer when market is not good. And unlike builders, the investors need not put money earned from RE back into RE. This are the first one to exit.

    And the recent eg. of DSK Hariyali is a classic eg. for the same. There is also a flat in Ganga Satellite, 2100 sq ft for around 1.1 Cr. Resales for 2 BR in Tain Square are available for 50L for 1300 sq ft.

    Look man, at the end of the day, I think this is even better in one way. Why ? Coz buyers can get ready poss flats at lesser rates. And don't forget that in boom period over 40% of buyers were investors. Imagine if this supply comes in, mostly in ready poss, where will builders stand ??

    And ready poss at cheaper price is always better than just launched project with higher price with 100% terrace & 30% loading.
    CommentQuote
  • Originally Posted by realacres
    Look, investors don't sell in cartel. They have 1-3 flats & the more they hold, more they suffer when market is not good. And unlike builders, the investors need not put money earned from RE back into RE. This are the first one to exit.

    And the recent eg. of DSK Hariyali is a classic eg. for the same. There is also a flat in Ganga Satellite, 2100 sq ft for around 1.1 Cr. Resales for 2 BR in Tain Square are available for 50L for 1300 sq ft.

    Look man, at the end of the day, I think this is even better in one way. Why ? Coz buyers can get ready poss flats at lesser rates. And don't forget that in boom period over 40% of buyers were investors. Imagine if this supply comes in, mostly in ready poss, where will builders stand ??

    And ready poss at cheaper price is always better than just launched project with higher price with 100% terrace & 30% loading.



    Totally agree. I have not booked any flat yet and now i am in a position that i have to book one as early as possible. I will always opt for resale flat, over newly launched project, because I do not want to wait for years to get possession. :)
    CommentQuote
  • Originally Posted by puser
    real,

    investor selling property at a loss may be a particular one-off case. the attitude of builders, the current atrocious cost of 3 bhk touching a crore in some projects, the psft rate at locations like "kaspatey wasti" casts serious doubts on many investors exiting their investment with losses selling at lower cost.


    For investors, its all a matter of 2 key things
    1. "takka" (what is the right time to sell flat so that I can exit with max. profits and min. risk). He will never want longer wait and high probability of risk.

    2. black money - if he can find buyer who can pay him in black proportionate to what he may have put in, his tax liability goes down significantly

    3. May not be for Pune, but for Mumbai market, most of the investors do not even do "agreement". It is just understanding with the builder. Investor's agents are always on the lookout when they think better sell sooner than later

    For them, it's like stock market - guessing the top and selling before people start realizing or sentiment starts becoming bad. It is a fact that investors have stopped buying and smart ones are looking to do profit booking, if not distress sale. If they are not sure, they may put the money in some other investment. They do not have any compulsion to hold or reinvest.
    CommentQuote