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?

Read more
12597 Replies
Sort by :Filter by :
  • 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 :)..

    To cut long story short, please read my previous posts where direct comparison between 2008 & 2013 has been done & how the RE bubble was artificially kept as it is earlier due to stimulus. If you see that post, you will get the answers.
    And yes, even 3 months before sub prime crisis took place in US, people were bullish on RE. :D
  • Originally Posted by rambler
    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.

    +1. Agree to you & Vaibhav completely.
    The simple funda I have is, it is essential to work for money, but it is more important that money works for you. :)

    Btw, railway fare has been hiked by about 2% w.e.f 7th Oct this year.
  • Chidambaram may cut spending by Rs. 20000 cr to avoid downgrade

    The finance minister may have to slice at least Rs. 20,000 crore from government spending to prevent a budget blow-out, which could threaten to send the country's credit rating into "junk" status, two ministry officials said.

    A budget blow-out would be a concern for credit ratings agencies. India has the lowest investment grade rating and Standard & Poor's maintains a negative outlook. A cut to "junk" status would raise its borrowing costs and could trigger further panic on financial markets after the rupee fell as much as 20 per cent this year and the economy posted its weakest growth in years.

    Chidambaram may cut spending by Rs 20000 cr to avoid downgrade -
  • Over 9 lakh houses empty in Delhi NCR: Report

    New Delhi: In times when people are facing severe difficulty in finding shelter in Delhi NCR, over nine lakh homes remain empty in the region, said the draft report of NCR Planning Board’s revised regional plan 2021.

    Out of these 1.23 crore census houses, 12.98 lakh houses remain empty. In those 12.98 lakh houses, approximately 70 percent are considered as posh colonies which come to around 9 lakh.

    Over 9 lakh houses empty in Delhi NCR: Report

    ^^ Another proof of RE bubble.
  • Another proof since 2009.
  • ...
  • Most Indians believe that property is the ultimate investment. After all, haven’t home prices been heading only one way — up? For instance, prices in Chennai have trebled since 2007.

    Recently though, there are signs of a slowdown. Data from the National Housing Board (NHB) show that property prices fell in 22 out of the 26 residential markets in the last quarter. Buyers are staying away from booking homes in many recent project launches. The shift in mood seems triggered by high home loan interest rates and steep price escalation in recent years, which has made homes unaffordable in some markets. These were not a big concern in the past, thanks to a booming economy. But buyers are now more risk averse as the economic slump has impacted salary hikes and job prospects.

    But do these justify talks of a bubble burst? The short answer is: No. Buyer interest in new homes remains quite healthy in most markets, even if transactions have slowed. Price correction will be limited to a handful of markets. In such an environment, here is what a buyer should do.


    To start with, watch out for the most vulnerable segments of the property market and avoid them. Right now, these include localities with a high level of ‘speculative’ buying, Tier-3 markets and luxury homes in certain cities.

    If property prices don’t appreciate, those most likely to exit the market quickly are speculators or second/third-home buyers. After all, such buyers are looking to make a quick profit rather than hold on to assets. So, markets with rampant buyer speculation may see sharper corrections with investors selling their holdings. Experts believe that in localities such as Dwarka Expressway in the National Capital Region (NCR), speculative buying is sizeable, as much as 50 per cent of the total.

    Tier-3 cities may find the going tough for quite awhile due to excess supply of new homes. For instance, Nagpur has around a 10 year supply of housing units. Coimbatore, with an annual demand for 500 units, churns out 7,000 units every year, according to Om Ahuja, CEO, Residential Services, Jones Lang LaSalle India. Lack of employment growth in these markets is also a stumbling block. These markets are likely to see a price correction as well as developers exiting.

    Price corrections are likely to be steep in the luxury segment, where the lure of high profit margins for the builder has created an over-supply. For instance, in Pune, mid-income housing remains robust but demand for high-end property is sluggish. Specific projects that do not fit the needs of buyers in the market are also likely to see steeper correction. For instance, a few builders in Sriperumbudur and along the ECR, near Chennai, are left with a large inventory as many projects are not meeting buyer expectations, with respect to features and prices.


    Some residential markets and segments may see milder price corrections or prices moving sideways.

    Economic or political concerns in the region may keep prices depressed in cities such as Hyderabad and Kolkata. For instance, the depressed Hyderabad market is looking for a firm resolution of the Telengana issue before sales pick up. Slowdown in a particular sector can have an impact too. For instance, the lull in the automobile sector has affected Pune, and a lull in the manufacturing sector has hit Coimbatore.

    These trends may offer an opportunity for home buyers to negotiate attractive prices. A builder in dire need of cash to complete a project may offer price cuts, as delays reduce profits in a market where prices are not increasing. Builders with high debt may be open to selling completed properties at lower rates. Such deals, although offered only by few builders, may result in lingering price pressures.


    Buyer sentiment overall may be down, but far from out. Data from a property website suggests that following a decline, buyer interest in new apartments has increased by over 30 per cent in all major markets over the last six months. This is particularly true in markets such as Bangalore, where the fall in rupee has helped buoy the fortunes of IT companies and, as a result, the expectations of their employees. JLL says Sarjapur Road, Outer Ring Road and Whitefield in Bangalore, and other areas where IT companies are in close proximity, will see price appreciation.

    Low supply may help price increase in certain markets. For example, the Central Business District (CBD) in Chennai has a dearth of supply and properties are being lapped up at a brisk pace, according to Sunil Rohokale, MD & CEO of ASK Group.


    Even while house prices increased overall, home affordability, measured as the ratio of property price to annual income, has been stable. Data from HDFC shows that affordability was around 4.7 as of March 2013, a level that has been stable since 2010. Mudassir Zaidi, National Director, Residential Agency, Knight Frank, says that, on an average, home mortgages are paid out in six to eight years. The growth in annual savings may continue to help home price appreciation.

    Increasing construction and financing costs will have an impact as well. JS Homes, a Bangalore-based developer, says that the company’s cost of construction is now around Rs 1,500 per sq ft. Poddar Developers, a Mumbai-based developer of affordable housing projects, says that land prices have gone up by 15 to 40 per cent.

    All in all, if you are looking to buy property, be selective. Keep away from the bad and the ugly. There is plenty that is good and which is still available for sale.

    (This article was published on October 5, 2013)
  • October 5, 2013:
    Are you wondering if you should buy a property right now or wait for the dust to settle? If you are buying a home and planning to live in it, this may be a good time to be on the look out. This is because there are many unsold homes and builders are willing to negotiate with serious home buyers. However, risks of project delays and defaults will have to be factored in before you actually ink a deal.


    Home buyers in Mumbai were driven as far out as Virar to find a home to suit their budget, says Mudassir Zaidi, National Director, Residential Agency, Knight Frank. Falling prices may now offer an opportunity to find an affordable home closer to the city. Before identifying a location, ensure that infrastructure and basic amenities such as water are provided for.

    After deciding on the budget, research various projects coming up in the area. In addition to new launches, there may be deals available in the secondary market as well; be sure you don’t miss them. Check for approvals and evaluate the amenities offered.

    Due diligence on the builder is a must in this market. Sunil Rohokale, MD & CEO, ASK Group, advises buyers to opt for developers who have been in the business for over a decade, have completed over one million sq. ft. of construction and have a track record for timely completion of projects. Knowing the financial situation of the builder will also be helpful, but this information may not be available.

    A builder with a loan from a reputed bank or backed by PE funds is more likely to be financially sound.

    Be sure to check the legal terms of the contract with respect to payments, interest on late payment and clauses covering delays.

    Remember this is a buyers’ market, so go ahead and bargain heavily. “Do not show too much enthusiasm in the project while negotiating”, advises Ganesh Vasudevan, CEO of .

    You must know the market rates in the neighbourhood and keep another project as a back up.


    While mid-priced houses in most markets seem resilient so far, buyers in the premium segment may want to wait and watch. Experts believe that prices may correct or even if they don’t, there is high risk of delays in these projects.

    Those who are buying a home as an investment may also be better-off waiting as the near-term risk-return profile is not favourable. For instance, in some markets, prices may stay low over a three-five-year horizon. Unlike markets such as the US, home prices may not fall, as our population is growing, says Rajesh Vardhan, Managing director, Vardhaman Group.

    However, asset allocation to real estate has been increasing; its been over 50 per cent in the last few years.Property should ideally be between 30 per cent and 40 per cent of portfolio, says Sumeet Vaid, CEO, Ffreedom financial planners.

    Re-assess the current risks and return expectation of property investment in your overall portfolio before deciding to make an investment.

    Additionally, Rohokale cautions against buying outside one’s home market for investment for the purpose of diversification.

    He advises that you seek the advice of property consultants who specialise in the regional market before investing.

    (This article was published on October 5, 2013)
    Sumanta Rudra, head of infrastructure and administration at VFS Global, has decided to defer buying a property. "I am expecting a correction in property prices. I will only take a call about buying after the elections."

    With the festival season coming, there will be a plethora of advertisements in newspapers and your email boxes will be flooded with promotional mailers goading you to buy property with catchy lines such as "Buy before property prices go up further", "Get the best discount," etc.

    However, many like Rudra are unwilling to get carried away. They feel deferring the decision will work in their favour. Of course, there are other issues. As a banker says, "Given the tough economic conditions, most people are unwilling to part with liquidity. So, even if there are great deals, the feeling is "let's wait for some more time". Add to that the Reserve Bank of India's (RBI) red flagging of the 20:80 schemes due to fears of default from builder and people are unwilling to commit, at least for the time being.

    Convince the builder of your intention to buy
    Go with your family and carry your cheque book; be prepared to make immediate downpayment
    Bargain since the builder will not offer discounts up-front
    Factor in loading, freebies like free kitchen cabinet or air-conditioners, waiver of stamp duty while asking for discount
    Have a pre-approved home loan if you can

    It is not that corrections haven't taken place. Prospective buyers are offered teaser price cuts of 5-10 per cent in Mumbai and Delhi and slightly over 10-15 per cent in other cities.

    For example, in February 2012, a four-bedroom flat in Jolly Maker 1 at Cuffe Parade, one of Mumbai's most expensive residential areas, was sold for Rs 29 crore. The transaction was reported widely as the highest-ever price for a residential apartment. Today, a similar flat in the same building will not fetch more than Rs 24-26 crore.

    According to National Housing Bank's Residex, an index for property prices, property prices at Cuffe Parade and Malabar Hill of South Mumbai have fallen by almost nine per cent in April-June 2013 compared to January-March 2013. Even for Mumbai as a whole, the Residex shows a slight dip in prices. The trend is similar in 24 out of the 26 cities for which the National Housing Bank provides data.

    In order to sell, some builders are giving free car parking and/or bearing the stamp duty and registration. "However, no builder will admit to it since it will send out distress signals to other potential customers," points out Om Ahuja, CEO-Residential Services, Jones Lang LaSalle, India.

    The question, for the likes of Rudra, is whether it will fall further. V K Sharma, managing director and CEO of LIC Housing Finance, feels if you are buying property for investment, then you should wait for some time. "A major appreciation in prices from the current levels looks difficult. If you are not in urgent need, then it is better to hold your buying decision for now," he says.

    If you are looking at buying your first property and, more important, one in which you intend to stay, the traditional answer is: Don't look at prices. The answer stays the same, but with a caveat - prices are unlikely to run away in the near future, so delaying the decision is unlikely to hurt substantially. If you want to buy now, ask for discounts. Faced with oversupply, developers will be more than willing if they are convinced you are a serious buyer.

    Little appreciation in the near future
    The real estate sector has been in trouble for some time. However, prices have been resilient because builders have received funding from potential buyers (through home loans), private equity and investors. Meanwhile, builders have launched projects, which are yet to be sold. In Mumbai itself, some 10 million-plus flats priced at over Rs 1 crore are said to be lying unsold.

    Meanwhile, new projects have been launched even as existing projects haven't sold out completely. Obviously, capital appreciation is not something most experts expect. Anand Moorthy, head (real estate services) at RBS Financial Services, says there is humongous supply in most residential areas, even in the secondary market. Investors should not expect more than five-to-eight per cent growth in prices in most cities for the coming one-two year horizon for realistic gains. Another reason to wait, especially for investors, is because real estate is not liquid.

    Anuj Nangpal, managing director (investor services ) at DTZ India, says: "The anticipated downward pressure on prices is expected to prevail in the short-term owing to significant inventory overhand across most micro markets. Additionally, the recent hike in home loan interest rates along with continued slowdown in economic environment has further dampened sentiments amongst prospective end users. The consequent drop in demand has further limited any opportunity for price appreciation in near future," he says.

    Is this a buyer's market?
    Some feel that buyers are on a stronger wicket. Lalit Jain, chairman of the Confederation of Real Estate Developers Associations of India, says: "Our costs have increased substantially. In fact, we have sent an advisory to our members saying they can sell at the lowest prices due to the liquidity crunch. What customers are getting today is the best price and at the first possible trigger, at the first signs of economic situation improving, prices will go up. Developers are giving good bargains even to individual buyers."

    There are some things that will work in your favour while bargaining. While those looking to buy should bargain for good rates, they should not hope for the developer to offer it to them. "There is very high probability that you can get discounts. In a market like Mumbai, a discount of even five per cent is good. In other markets, you can get 10-15 per cent or even 20 per cent," says Sanjay Dutt, executive managing director (south Asia) of Cushman & Wakefield. Buyers with pre-approved home loans in hand are in a position to bargain for a better price. In fact, simple things such as going with your family members and with a cheque book to make the downpayment will show you are a serious buyer and ensure good discounts.

    Since October-January is considered an auspicious time to buy property, this is when builders offer discounts on the price or give benefits such as stamp duty waiver or freebies such as kitchen cabinet or air-conditioners in the house. So, if your builder is not offering any of these facilities, you can bargain and ask him to reduce the price to that extent.

    If you are looking to buy a property in a premium project, going with an up-front payment will ensure you get discounts. The retail market is largely broker-driven. So if you approach the builder directly, you can straightway ask for a two per cent discount on the price. You can also ask to include the loading and ask the builder for a discount. Loading is the carpet area (the actual usable area of the house) minus the super built-up area (non-habitable area such as staircase, veranda etc). In Mumbai, Thane and Pune, the loading is 40-50 per cent; in Chennai, Bangalore and Hyderabad it is about 30-35 per cent, while in Gurgaon it is 35-40 per cent.

    "Compare carpet loading factor and amenities cost. Builders have a decent spread and now they are willing to sacrifice some of it," says Moorthy of RBS Financial Services.

    Waiting period
    According to Dutt, the good time to invest in real estate is between now and March 2014, the festival period starting with Ganesh Chathurthi and ending with Gudi Padwa. There is also a good chance of getting attractive deals in land and residential apartments because of the market conditions, with lower sales and new supply hitting the market.

    "Once the general elections are over and there is some political and economic stability, the window of opportunity will be over," says Dutt.

    In fact, with harder rules on project approvals, land acquisition and taxation on property coming in, developers will have to raise prices to stay relevant in the market and solvent in their businesses. However, there are enough existing projects and inventory with many builders, which will have to be cleared before the impact of the Land Acquisition Bill comes into play.
  • By December mid ( post assembly election results)...India will wake up to reality of Modi Juggernaut

    Stock markets have already started building this expectation in prices

    Real Estate will follow

    Unfortunately such simplistic solutions ( delay till elections) never work in real world ...purely because every one can think of that
  • Very difficult to find a thread on a new RE project launch on the Pune RE forum of this site. What does that say? No new supply coming into the market? How is that going to affect the prices 2-3 yrs from now? Remittances are at all time high - 70 billion $. Where is all that money going? Car sales are holding up but where are people putting that 70 billion $. This 70$ is over and above the salaries earned by IT folks in India so where is all that money going? No mass layoffs in IT. On the contrary things are looking pretty good.

    Moved recently from UK to US and the economy here is has got only direction - up. You might see slight adjustments on a QoQ basis with the debt debate and irratic economic data like ISM, Home Permits etc etc but the only thing that matter to the US economy right now is the amount of oil and gas its producing and how the world oil and gas prices will react to this boom. Have a look here - U.S. expected to be largest producer of petroleum and natural gas hydrocarbons in 2013 - Today in Energy - U.S. Energy Information Administration (EIA)

    I would keep an eye out for good deals in RE within Hinjewadi.
  • Your guess is right but no prize for the guess.
    Bank deposits are not rising.
    Gold does not seem to be sky high.
    Vehicles are not in great demand.
    But the RE seems to be resilient despite the show of discounts.
    The 70 billion is in for good.
    It is spread all over India not just Pune.
    Most of the new launches are not discussed here on IREF.
    But Bears will be angry .matrix,realacres and mangoman will pounce on you.

    Originally Posted by herohiralal
    Very difficult to find a thread on a new RE project launch on the Pune RE forum of this site. What does that say? No new supply coming into the market? How is that going to affect the prices 2-3 yrs from now? Remittances are at all time high - 70 billion $. Where is all that money going? Car sales are holding up but where are people putting that 70 billion $. This 70$ is over and above the salaries earned by IT folks in India so where is all that money going? No mass layoffs in IT. On the contrary things are looking pretty good.

    Moved recently from UK to US and the economy here is has got only direction - up. You might see slight adjustments on a QoQ basis with the debt debate and irratic economic data like ISM, Home Permits etc etc but the only thing that matter to the US economy right now is the amount of oil and gas its producing and how the world oil and gas prices will react to this boom. Have a look here - U.S. expected to be largest producer of petroleum and natural gas hydrocarbons in 2013 - Today in Energy - U.S. Energy Information Administration (EIA)

    I would keep an eye out for good deals in RE within Hinjewadi.
  • Pune has second highest deferment of malls in India

    Now after huge inventory in residential segment, commercial spaces too have been hit. RE bubble everywhere. (Those who say RE bubble was in 2009, that's true, but then we also had money out of thin air created in 2009, now there's no money, real or thin air to keep bubble floating).

    Tell-tale signs of the slowdown in Pune's retail industry are the diminishing footfalls and vacant spaces in the many malls that had mushroomed in and around the city. In a recent report, Cushman and Wakefield has listed Pune as one of the eight major cities where the great Indian mall boom seemed to have busted. In fact, Pune has seen the second highest deferment of proposed business in malls in the country.
    Malls at prime locations such as Vimannagar, Koregaon Park, Kalyani Nagar and Aundh seem to have more vacant places than working shops.

    Industry-watchers blame a host of reasons for the low occupancy, with many citing the ensuing global uncertainty for a slowdown in the retail trade. Realtors also agree to the perceived slowdown in the real estate market, with commercial properties in both Pune and Mumbai seeing a downturn.

    In 2005, 21 new malls were announced in the city but sources in the PMC said only half of them have come up till date. Areas where plans have been deferred include Camp, Aundh and Baner. In fact, parking woes have brought down commercial rentals in areas like Camp and MG Road.

    Average Occupancy

    *Property surveys show that on an average the occupancy of malls is around 40 per cent

    *Other than the two malls in Hadapsar, which have reportedly 90 per cent occupancy, those on Pune Nagar Road have an average 10-16 per cent occupancy

    *In Koregaon Park areas, malls have an occupancy of 34 per cent

    *Average occupancy of malls in Swargate is only 10 per cent

    Pune has second highest deferment of malls in India - Indian Express

    ^^ This news should also open eyes of flat buyer when builder says there will be mall coming up in front, rear, side....above or below the project :D. When some builder says something about PROPOSED MALL, tell him this news.
  • rambler,

    In your link, this is what LK Jain is stating :- "In fact, we have sent an advisory to our members saying they can sell at the lowest prices due to the liquidity crunch. "

    It is clear that RE bull too has given up hope of holding on to high prices.
    And even by his daughter's logic, Kruti Jain, Pune is blah blah due to proximity to Mumbai, then Pune rates should fall even faster as same is happening in Mumbai.
  • Spectre of bubble-burst looms over housing sector

    The year was 2007. The real estate market, like the Indian economy, was on a roll. And Manish Khanna was busy house-hunting in Mumbai. His weekends were spent looking for an affordable deal in a good locality.

    But every weekend, when Khanna sought to finalise a deal, the prices would have risen by Rs 200 to Rs 300 a square foot over the previous week.

    When he finally bought a flat in Navi Mumbai’s Nerul locality, Khanna paid Rs 5,200 a sq. ft. for a property that had cost Rs 4,200 a sq. ft. when he first checked it a month earlier.

    Those were the heydays of real estate. Incomes were growing and so was the demand for real estate, while property supplies were limited.

    Cut to 2013: builders are sitting on piles of unsold inventory and debt, demand has slowed down in metros and big cities, projects are stalled, private equity firms are exiting the sector and new projects are selling at discounted rates.

    The long real estate party finally seems to have come to an end.


    According to data from property research firm Liases Foras, sales in five key cities — Mumbai, Pune, Chennai, Hyderabad and Delhi-National Capital Region — declined in the April-June quarter from the January-March period.

    As a result, prices are seeing a correction — the inventory of unsold houses has touched a whopping 669.95 million sq. ft.

    “A correction phase has started. The market has shifted from investors to end users. Investors cannot hold on to properties forever and this supply is coming back to the market at discounted rates,” says Pankaj Kapoor, founder and MD at real estate consultancy Liases Foras.

    In Faridabad, prices are down 15 per cent in the secondary market, while in Gurgaon, they have declined by about 20 per cent.

    Normally, builders have inventory, which can be sold in seven to eight months. However, this time around, the level of inventory could take up to 30 months to be sold, says Kapoor. That should be enough to give sleepless nights to builders and developers. Most have huge debts on their balance sheets.

    Spectre of bubble-burst looms over housing sector | Business Line