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....
Read more
Reply
12597 Replies
Sort by :Filter by :
  • ""To give an RE eg., one of my friends landlord has 3 flats in Pune & his daughter wanted to go to Australia for studies but he refused as he wants to buy one more flat. Now what sort of stuff is this ? Flat became more important than daughter ? :o""
    Sadly enough it is true such people do exist who place money ahead of own children education.
    The father should have remembered that education will enable his daughter to stand on her own feet and have more of a earning capacity due to professional course/education which presume was her intention of going to Austrailia.
    Anyway for whom is the father saving and saving.?For happiness? for wealth creation?
    Sense of misplaced priority.
    CommentQuote
  • Originally Posted by vaibav123
    ""To give an RE eg., one of my friends landlord has 3 flats in Pune & his daughter wanted to go to Australia for studies but he refused as he wants to buy one more flat. Now what sort of stuff is this ? Flat became more important than daughter ? :o""
    Sadly enough it is true such people do exist who place money ahead of own children education.
    The father should have remembered that education will enable his daughter to stand on her own feet and have more of a earning capacity due to professional course/education which presume was her intention of going to Austrailia.
    Anyway for whom is the father saving and saving.?For happiness? for wealth creation?
    Sense of misplaced priority.



    Now you know the reason why RE prices seldom come down
    CommentQuote
  • Originally Posted by realacres
    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....



    No offence... but i would like to point out something to buyers here.. Iam a first time buyer here in Mumbai and I was also scared before buying considering these high prices and I decided to do some "research". I came across loads of articles that gave very "logical" reasons why we shdnt be buying property at these prices. Then something funny happened. I came across an article from a very leading research firm that was extremely well researched and gave very compelling reasons on why a correction was imminent and it went on to say why prices will correct around 30-40% from there in less than a year. After i finished reading the article, i checked the timestamp on the article. It said Nov 2011 :).. Since then some projects i considered have gone up over 50%. What was really surprising was that the same reasons attributed now were also given then. And 1 year before that, 2 years before and 5 years before. The reasons are always the same. Which is why iam quoting the first msg in this thread (cos i just saw this). The point iam trying to make is that we can never time bubbles (even if you are convinced the RE mkt is one). Even if prices correct 50% from here, a buyer in 2010 is still flat on his investment. There will always be reasons not to invest. It has looked expensive for the last 10 years now. But if you are buying it for end use and you can "afford it", then you should go ahead and buy it without waiting for any correction. If it goes up 50% from here and then corrects 20%, thats not going to be of much help to you. And if you catch the market peak, thats simply your bad luck. All Iam trying to say is that you'll have almost close to zero probability of trying to figure out which way RE market is going based on "expert opinion"/ "research reports". Which is why if you are an end user then it shouldnt concern you too much. Almost all the leading economists/ nobel laureates and other stud ppl didnt see the 2008 crash coming till it actually happened. Up until 2007 end, Ben Bernanke said subprime was under control. Who are we to kid ourselves into thinking we can call it a "top" or "bottom" for this market, let alone any market!

    Having said all this, even i cant resist the temptation of acting an economist here :)..call it human weakness :).. RE situtation right now does look tight.. combination of factors seem to be affecting the sector now. But iam not stud enuf to call this a top.. all I would advise buyers here is to buy only what you can afford and try and bargain hard. But the most important thing..If you are an end user and you think its affordable, go ahead and buy instead of thinking prices will come down.
    CommentQuote
  • Well written,karthik.When we feel that we need some regular shelter it is better to buy and forget the calculations .Why do most people work all life ? It is for some security--food and shelter.If that is not the case why should one bother ?
    Bernard Shaw said," Those who are very wealthy do not bother about anything as they have everything,those who are very poor do not bother about anything as they have nothing to lose, but the middle class is the most dangerous class as they do not have everything nor do they have nothing." Our life has become only calculations and projections which go haywire because of the shenanigans of the rulers and the traders.All the research articles are written to be contested and verified.There is some logic in correction as the demand and supply scenario decides the price factor.It is better to read and enjoy the ones you read and felt shocked.Then follow your gut feeling and decide on the basis of your financial capability.

    Two things are true in life :
    30x40 or 3x6.At least the second one is true .

    Originally Posted by pkarthik84
    No offence... but i would like to point out something to buyers here.. Iam a first time buyer here in Mumbai and I was also scared before buying considering these high prices and I decided to do some "research". I came across loads of articles that gave very "logical" reasons why we shdnt be buying property at these prices. Then something funny happened. I came across an article from a very leading research firm that was extremely well researched and gave very compelling reasons on why a correction was imminent and it went on to say why prices will correct around 30-40% from there in less than a year. After i finished reading the article, i checked the timestamp on the article. It said Nov 2011 :).. Since then some projects i considered have gone up over 50%. What was really surprising was that the same reasons attributed now were also given then. And 1 year before that, 2 years before and 5 years before. The reasons are always the same. Which is why iam quoting the first msg in this thread (cos i just saw this). The point iam trying to make is that we can never time bubbles (even if you are convinced the RE mkt is one). Even if prices correct 50% from here, a buyer in 2010 is still flat on his investment. There will always be reasons not to invest. It has looked expensive for the last 10 years now. But if you are buying it for end use and you can "afford it", then you should go ahead and buy it without waiting for any correction. If it goes up 50% from here and then corrects 20%, thats not going to be of much help to you. And if you catch the market peak, thats simply your bad luck. All Iam trying to say is that you'll have almost close to zero probability of trying to figure out which way RE market is going based on "expert opinion"/ "research reports". Which is why if you are an end user then it shouldnt concern you too much. Almost all the leading economists/ nobel laureates and other stud ppl didnt see the 2008 crash coming till it actually happened. Up until 2007 end, Ben Bernanke said subprime was under control. Who are we to kid ourselves into thinking we can call it a "top" or "bottom" for this market, let alone any market!

    Having said all this, even i cant resist the temptation of acting an economist here :)..call it human weakness :).. RE situtation right now does look tight.. combination of factors seem to be affecting the sector now. But iam not stud enuf to call this a top.. all I would advise buyers here is to buy only what you can afford and try and bargain hard. But the most important thing..If you are an end user and you think its affordable, go ahead and buy instead of thinking prices will come down.
    CommentQuote
  • perhaps the father did not want her to go far away .
    one thing that is bugging me---why do we work all life ? To make life comfortable and have some security--food and shelter as long as we live.
    If we go on calculating all life about cost of housing and such things, where will be that quality of life ? It is better to buy when we feel that we need a permanent address .If we just accumulate money all life what is the point in all these discussions which only keeps us worried about everything all life.Rent or buy becomes a long argument and nothing else.That is also about saving money.If life is only about saving money and making more money,it is a meaningless exercise.
    TWO THINGS ARE INEVITABLE : roof and grave.
    When second one is guaranteed why not acquire the first one with our money? WHAT IS THE FUN IN BEING BURIED IN GOLD AND MONEY?
    There is no fun in dying a rich man,better live like a rich man .


    Originally Posted by realacres
    Man, Quality of Life has to be top of agenda in whatever you do. And this is not just limited to RE or money alone, but even small little things like joining a good gym or taking up sporting activity, being part of music (listening to it is also being part of it), go for nice drive or even taking a nice therapy in a spa or doing whatever you feel like doing at your time enhances the quality of life to great extent. To me, sometimes even doing nothing feels good. Just go on terrace & watch the stars, feels good. :)

    To give an RE eg., one of my friends landlord has 3 flats in Pune & his daughter wanted to go to Australia for studies but he refused as he wants to buy one more flat. Now what sort of stuff is this ? Flat became more important than daughter ? :o

    Problem is people look only for high return, high risk investments, often by over-leveraging themselves & while trying to make speculative gain, they loose their today. And who knows what tomorrow would be ? At the end of the day, it depends upon what your requirements are. Unless one is able to differentiate between NEED & GREED, one won't be able to live quality life.
    CommentQuote
  • @Rambler: ""There is no fun in dying a rich man,better live like a rich man .""
    Absolutely right.
    Live a happy life.Live life to the full.Try to be content.Restless urges will sometimes lead you to take risk and do things which are not part of your nature.
    I have a friend who stays in a single BHK and goes on a scooter,but he is a man with a smile from his heart,a man who is content with life.I know of many people who stay in 3 BHK,have big cars but always look for bigger car and more posh house.off course nothng wrong with bieng ambitious.But personally I feel you should be ambitious to increase your knowledge,your qualifications.There is always a limit to amount of money and what you money can do.
    Death is the ultimate certainty.But what matters is how your journey from birth to death had unfolded.Future is uncertain always,but how you enjoyed,how you were useful to society.That is what matters..""
    Absolutely right.
    Live a happy life.Live life to the full.Try to be content.Restless urges will sometimes lead you to take risk and do things which are not part of your nature.
    I have a friend who stays in a single BHK and goes on a scooter,but he is a man with a smile from his heart,a man who is content with life.I know of many people who stay in 3 BHK,have big cars but always look for bigger car and more posh house.off course nothng wrong with bieng ambitious.But personally I feel you should be ambitious to increase your knowledge,your qualifications.There is always a limit to amount of money and what you money can do.
    Death is the ultimate certainty.But what matters is how your journey from birth to death had unfolded.Future is uncertain always,but how you enjoyed,how you were useful to society.That is what matters.
    CommentQuote
  • Defaults on second home loans increase

    High interest, inflation & grim job scenario result in repayment hurdles.
    Banks are increasingly seeing defaults on housing loans, especially those taken to finance second houses bought for investment purposes. This is primarily because high interest rates on home loans, high food and medical inflation and the grim job environment have led to repayment hurdles.

    “Customers borrowing money to buy houses for investment purpose tend to be more vulnerable during an economic slowdown than those buying properties for end-use.
    Dont get carried away and take a hone loan for investment purposes at the present time.You need to have a back up plan in case ofg lay off,closure of company etc.
    Article from Business Standard:Defaults on second home loans increase | Business Standard
    Additional reading links:Highest NPAs in minimum home loan bracket « Deal4loans
    BankBazaar | Loan default is not the end!
    Well housing loans are among the biggest laon an average person takes and needs to take care and try to factor in standby arrangements in case of any unexpected contingency.
    It is easy to take a loan but difficult to repay at times.
    CommentQuote
  • Originally Posted by vaibav123
    @Rambler: ""There is no fun in dying a rich man,better live like a rich man .""
    Absolutely right.
    Live a happy life.Live life to the full.Try to be content.Restless urges will sometimes lead you to take risk and do things which are not part of your nature.
    I have a friend who stays in a single BHK and goes on a scooter,but he is a man with a smile from his heart,a man who is content with life.I know of many people who stay in 3 BHK,have big cars but always look for bigger car and more posh house.off course nothng wrong with bieng ambitious.But personally I feel you should be ambitious to increase your knowledge,your qualifications.There is always a limit to amount of money and what you money can do.
    Death is the ultimate certainty.But what matters is how your journey from birth to death had unfolded.Future is uncertain always,but how you enjoyed,how you were useful to society.That is what matters.

    The only thing that really matters is peace of mind - there'll be no end to desires and ambitions , they'll just grow with every bit of success achieved .

    The only thing that really matters is peace of mind - there'll be no end to desires and ambitions , they'll just grow with every bit of success achieved .

    The only thing that really matters is peace of mind - there'll be no end to desires and ambitions , they'll just grow with every bit of success achieved .

    The only thing that really matters is peace of mind - there'll be no end to desires and ambitions , they'll just grow with every bit of success achieved .
    CommentQuote
  • Originally Posted by vaibav123
    ""To give an RE eg., one of my friends landlord has 3 flats in Pune & his daughter wanted to go to Australia for studies but he refused as he wants to buy one more flat. Now what sort of stuff is this ? Flat became more important than daughter ? :o""
    Sadly enough it is true such people do exist who place money ahead of own children education.
    The father should have remembered that education will enable his daughter to stand on her own feet and have more of a earning capacity due to professional course/education which presume was her intention of going to Austrailia.
    Anyway for whom is the father saving and saving.?For happiness? for wealth creation?
    Sense of misplaced priority.


    Maybe the father has just looked around and decided that a vested interest in RE and a lack of education is the best background for kids to excel in a better money making area (read: politics) in Pune (or in general India).
    CommentQuote
  • Originally Posted by pkarthik84
    No offence... but i would like to point out something to buyers here.. Iam a first time buyer here in Mumbai and I was also scared before buying considering these high prices and I decided to do some "research". I came across loads of articles that gave very "logical" reasons why we shdnt be buying property at these prices. Then something funny happened. I came across an article from a very leading research firm that was extremely well researched and gave very compelling reasons on why a correction was imminent and it went on to say why prices will correct around 30-40% from there in less than a year. After i finished reading the article, i checked the timestamp on the article. It said Nov 2011 :).. Since then some projects i considered have gone up over 50%. What was really surprising was that the same reasons attributed now were also given then. And 1 year before that, 2 years before and 5 years before. The reasons are always the same. Which is why iam quoting the first msg in this thread (cos i just saw this). The point iam trying to make is that we can never time bubbles (even if you are convinced the RE mkt is one). Even if prices correct 50% from here, a buyer in 2010 is still flat on his investment. There will always be reasons not to invest. It has looked expensive for the last 10 years now. But if you are buying it for end use and you can "afford it", then you should go ahead and buy it without waiting for any correction. If it goes up 50% from here and then corrects 20%, thats not going to be of much help to you. And if you catch the market peak, thats simply your bad luck. All Iam trying to say is that you'll have almost close to zero probability of trying to figure out which way RE market is going based on "expert opinion"/ "research reports". Which is why if you are an end user then it shouldnt concern you too much. Almost all the leading economists/ nobel laureates and other stud ppl didnt see the 2008 crash coming till it actually happened. Up until 2007 end, Ben Bernanke said subprime was under control. Who are we to kid ourselves into thinking we can call it a "top" or "bottom" for this market, let alone any market!

    Having said all this, even i cant resist the temptation of acting an economist here :)..call it human weakness :).. RE situtation right now does look tight.. combination of factors seem to be affecting the sector now. But iam not stud enuf to call this a top.. all I would advise buyers here is to buy only what you can afford and try and bargain hard. But the most important thing..If you are an end user and you think its affordable, go ahead and buy instead of thinking prices will come down.


    I think there is a fundamental difference we need to understand.

    The time for RE for self use is always "now". At that time, you need to only think of your requirements (location, space, commute, special needs etc) and your individual financial ability to pay back. You can always try to get value for your money but you can also compromise on some aspects. The point here is simply that individual finance management matters more.

    But the RE for using as investment is strongly discouraged... and thats where the bears attack the bulls.

    The message is simple... Get yourself a home to live which you can afford while having a peace of mind but dont think of that as an investment for resale.
    CommentQuote
  • ""The message is simple... Get yourself a home to live which you can afford while having a peace of mind but dont think of that as an investment for resale.""
    @punerebuyer: I fully agree with you.RE(Flats)presently is not for investment purposes.
    Defaults by second home buyers availing home loans has increased.The pinch of EMI at variable rate can affect you.
    Most people pay EMI by curtailing other savings and little bit of expenses.Most expenses are difficult to curtail.
    You cannot cut essential expenses-milk,education,medical etc.Discretionary expenses-mall visits,cinema,small holidays etc are essential for enjoyment of life.Cutting down can be done here but your quality of life suffers.What is the point of earning if your small "happinesses" is curtailed.
    Financial discipline is a must.
    CommentQuote
  • Not that I support the idea of running after money but lets give it a thought. One has two options to live life.
    1) Enjoy your life to maximum. Spend whatever you earn and live a lavish life. By the time u die you will probably have one house and some cash.

    2) Spend your money wisely or for that matter sacrifice the lavish life, live a simple life and accumulate wealth for your kids and loved ones.

    Most of you would say option 1 is the way to go but then consider in between there is some medical emergency and you are in need of cash but u don't have it. And then u rely on some charity to help u. I see lot of middle class people going to charities in need of money. like my son has some disease or my father has some disease and they ask for money. I see such emails also on fb or on company intranet.

    Here if you would have run after money you would definitely had some cash with u. Also with u sacrificing your lavish life u can ensure better education, future for your kids. If you have even more u can donate that money.

    But the feeling of owning something and doing something for others is much more satisfying than just enjoying ur life selfishely.
    Standard of life can not be defined by the amount of money u spend on malls, movies, holidays and dinners.
    CommentQuote
  • Both of your options have been factored in the advice that one should lead a quality life.It does not mean one should spend everything before death.Family is factored in.Regarding helping others I believe that most of the people here on the forum do it but do not trumpet about it.People help and just forget about it as a routine matter.Quality of life does include providing all the necessities for the family and educating children properly.
    WHO SAID QUALITY IS EATING, DRINKING AND WASTING AWAY EVERYTHING ? It refers to the peace of mind derived from satisfactory life and not worrying about everything needlessly.


    Originally Posted by dreampune
    Not that I support the idea of running after money but lets give it a thought. One has two options to live life.
    1) Enjoy your life to maximum. Spend whatever you earn and live a lavish life. By the time u die you will probably have one house and some cash.

    2) Spend your money wisely or for that matter sacrifice the lavish life, live a simple life and accumulate wealth for your kids and loved ones.

    Most of you would say option 1 is the way to go but then consider in between there is some medical emergency and you are in need of cash but u don't have it. And then u rely on some charity to help u. I see lot of middle class people going to charities in need of money. like my son has some disease or my father has some disease and they ask for money. I see such emails also on fb or on company intranet.

    Here if you would have run after money you would definitely had some cash with u. Also with u sacrificing your lavish life u can ensure better education, future for your kids. If you have even more u can donate that money.

    But the feeling of owning something and doing something for others is much more satisfying than just enjoying ur life selfishely.
    Standard of life can not be defined by the amount of money u spend on malls, movies, holidays and dinners.
    CommentQuote
  • CommentQuote
  • CommentQuote