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 pune_friend
    interesting...

    what would be more interesting is you ACTUALLY buying one more similar flat (may be next to yours) at 70L TODAY and selling it for 2 cr+ in 2018-19. Believe me it is quite possible. Not joking.


    I recently bought one for 72L (inclusive all) - 2BHK in wakad.
    I booked 1 for 18L in Rahatani in 2009 which I can sell today for at least 33L (current market is approx 36L - I am considering lower than market just in case I need urgent buyer).

    No FD is doubling the amount in 4-5 years - and remember - the interest rates are increased now - last year or so they were at max 7.5-8% approx. Many guys broke old FDs and created new to gain on interest part.
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  • Now will someone please tell me that if a developer can discount prices by 50%? forget about 50%, can a developer discount prices by 30-40%? NO - and if one does then I'll say he's a fool or he decided to move out of this business.

    Prices for high end homes in Delhi have fallen 20-30% over the last year. Why should Pune be an exception? Between 1995 and 1998, prices in Mumbai fell around 40%, so there is historical precedence too.
    BTW, I am not saying prices are going to fall in Pune, just that current and historical evidence goes against your argument.
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  • Originally Posted by RP Pune
    Free tax is 10%

    Include parking it's 14%

    but I am not saying your call is wrong as the above freebeis are on today's price and RA only knows who's offering them :D


    What is this 10% tax about ? Also why are you counting parking at 4 % ? Its about 2% only.
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  • Originally Posted by Tangent
    i bough a flat for 26L which now sells for 70L so now you decide who is a fool

    Last decade gave returns almost in everything you put your money in(you'll be astonished that returns in stocks and gold were many times higher than in RE and PPF used to give 11-12% tax free interest) - so people started thinking this will go on forever . This plainly is not true .

    RE , stocks , gold all are assets and profit depends on the buying price , cost of holding in terms of money , time , effort and selling price .

    You need to own a roof on your head but buy anything at any price ??? Lot of people are buying apts on leased land , no society , no conveyance , legal issues , under construction - pains to see educated people behave blindly and getting duped . My experience is most of the less educated lot is smarter in making financial decisions and do not get trapped in recurring costs .
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  • Originally Posted by investwest
    I recently bought one for 72L (inclusive all) - 2BHK in wakad.
    I booked 1 for 18L in Rahatani in 2009 which I can sell today for at least 33L (current market is approx 36L - I am considering lower than market just in case I need urgent buyer).

    No FD is doubling the amount in 4-5 years - and remember - the interest rates are increased now - last year or so they were at max 7.5-8% approx. Many guys broke old FDs and created new to gain on interest part.


    Recently been to B'lore to check on my investments . This is mostly an end users market unlike Pune and I'm easily making rent more than FD rates here plus prices are much lower .

    On way from airport got to know that the cab driver had constructed a house in 30*30 plot , was living in it , renting out the top floor at abt 30k month .

    I just wonder why people dont think outside Pune for investment purpose ???

    By the way , except Maharashtra many states have housing boards which sell off plots by lottery and KHB is one of the best .
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  • Originally Posted by investwest
    On inventory piling up and there are no sales - these are because of current inflated prices - I completely agree and if you check my earlier posts I always mentioned to piling inventory in cities including Pune.

    But my view is straight as always - if you are a builder and you are developing a project with the support of finance from bank or investors (Investors I don't mean someone who buys one flat from builder and want to sell it for profit, I mean big investors who lend money for profit sharing or for interest earning) will you sell it at loss just to repay your debits?
    Yes, you'll adjust prices little bit so that sells realize and you get money but will you sell it for loss - same question.

    If you predicted that by selling at 6k psqft (current rate of wakad if you look at market from developers perspective - includes all builder charges) will you slash prices to 3k psqft just to repay your debits?

    Answer is NO - you cannot book loss if you are a real businessman. Yes, you can reduce the profit - I'll explain how -
    If as a developer you have 40 flats to sell at 6k psqft and each flat is 1000 sqft that means you are aiming to sell each at 60L approx.
    How this 6k or 60L came? Did you dream this price? NO.. You did some market research and found out about paying ability of 'mass' (arguable but true), You found out about the current rates at which others are selling and you did your maths on profit calculation keeping in mind the raising cost of construction. Don't forget the interest on borrowed capital.

    So, as a developer, you came to conclusion that you'll start selling at 5.5k - you'll sell 10 flats at this price and then next 20 you'll sell at 6k and then last 10 you'll sell at 6.5k to average out your costs considering 100% profit.

    No developer makes 100% profit - even they initially plan for it. Inflation, raising cost of construction materials and labor and so on eats from this 100% even if you considered them earlier. If sales get delayed then further interest on borrowed capitals eats from this 100%.

    So at the end you end up in making approx 60-70% profit if everything went well and some new comers make even lesser than 50%.
    Any project approximately takes 3 years to complete - so divide this 60% average by 3 years - 20%. If you are not getting at least 20% profit a year - why to do business?

    Now will someone please tell me that if a developer can discount prices by 50%? forget about 50%, can a developer discount prices by 30-40%? NO - and if one does then I'll say he's a fool or he decided to move out of this business.

    Yes, when sales don't happen you see discounts but you should be realistic about the figures. You'll never get a flat selling at 70L today for 30-40L tomorrow or next year or anytime prior and after that.

    When someone says prices are stagnant for a year - yes they are but then that's coming out from that 100% planned profit - when this planned profit goes below 70-80%, developers will not have any choice than to raise the prices.

    Be realistic guys - you can hope for a discount of 4-5L or say max 10L on 70L but not more than that and for getting 10L (approx 15%) discount you'll need to find a developer who is in urgent need of money so that he gets food that day at home.


    Profit margin is in multiples of 100% :) . Many builders have land banks bought decades earlier at throwaway prices . Also there are JVs with land owners and leased lands at discounted prices .

    I agree that any business is for profit and nothing wrong with quoting whatever you wish . Question is whether you can sell at that price .
    Similarly its not a question of whether developer can reduce only by 20% or X% - it is at what price he'll be forced to sell due to market conditions and illiquidity or dupe investors money .
    Lastly , businesses can also make losses during bad times just like they make profits in good and continue to operate to make profits in the future .
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  • Originally Posted by compuwalah
    What is this 10% tax about ? Also why are you counting parking at 4 % ? Its about 2% only.



    6% SD
    3% ST
    1% VAT
    30k reg
    Parkinng + Infra charges (society, electricity etc.) is usually 5%
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  • Who says builders are distressed?

    India Infoline Finance Ltd, the non-banking finance company (NBFC) of financial services firm IIFL Holdings Ltd, has closed three back-to-back real estate investments in projects in Mumbai, said people familiar with the development.

    India Infoline Finance has put in around Rs.260 crore across these three deals primarily in the form of loans to developers, who will use the money for project development, to buy construction rights for projects and for acquiring land. “These are some of the larger transactions that have been recently closed from the NBFC portfolio apart from a few other smaller deals,” said a person familiar with the development, but didn’t want to be named. India Infoline Finance generally lends to real estate firms, which have good locations, generate good cash flows and have approvals in place.

    “With a number of debt funds in the markets, NBFCs have become more aggressive and competitive,” said the person mentioned above.
    The demand for capital in the real estate sector remains high, particularly in Mumbai where land and cost of construction are more expensive and sales in recent months have been relatively tepid.

    In the first transaction, India Infoline has given Rs.100 crore to a suburban residential Mumbai project being developed by Midwest Infrastructure. Rajan Dhruv, partner, Midwest Infrastructure, said that it will use the money to buy extra floor space index (FSI) or building rights from government agency Maharashtra Housing and Area Development Authority (Mhada). The project in Andheri West, which will have two 38-storey towers, is a Mhada housing redevelopment project.

    Another Rs.60 crore has been lent to an upscale residential project of K. Mordani Realty Pvt. Ltd in Bandra West. Kumar Mordani, director, K. Mordani Realty, said all the approvals for the project are in place and construction will begin shortly. “This is the first time we have raised a relatively large sum of debt. Sales have been slow but there are opportunities for acquiring new lands, and so we want to be ready with funds,” said Mordani. While sales are not quick, it is working on connecting with actual home-buyers in the market to sell, instead of investors, who seem to have disappeared during an apparent slowdown, Mordani said.

    Finally, Parinee Developers and Projects has received Rs.100 crore, in two tranches, from India Infoline Finance for its project in Andheri West, which the developer is in the process of converting from commercial to a residential development. Vipul Shah, director and partner, Parinee Developers, declined to comment. Apart from the NBFC portfolio, IIFL Alternate Asset Advisors Ltd, part of IIFL Holdings, is also awaiting clearance to raise a new real estate fund that will focus on investments in residential projects, similar to its maiden real estate fund of 2012. The proposed fund will have a Rs.500 crore corpus with an additional Rs.250 crore that can be added later and will look at deals in smaller cities for the first time, apart from the usual metros.

    With a number of private equity (PE) funds functioning more like NBFCs today with debt-like deals, the latter is facing the pressure in terms of pricing deals competitively. “With so much competition between NBFCs and debt funds, there is a pricing pressure because every deal has an inherent risk of default and one has to factor in that,” said Ambar Maheshwari, managing director, corporate finance, Jones Lang LaSalle India, a property advisory. In a scenario where there is more money chasing fewer deals, the pricing risk is critical and funds and NBFCs need to do their due-diligence more closely.
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  • Originally Posted by investwest


    Answer is NO - you cannot book loss if you are a real businessman. Yes, you can reduce the profit - I'll explain how -
    If as a developer you have 40 flats to sell at 6k psqft and each flat is 1000 sqft that means you are aiming to sell each at 60L approx.
    How this 6k or 60L came? Did you dream this price? NO.. You did some market research and found out about paying ability of 'mass' (arguable but true), You found out about the current rates at which others are selling and you did your maths on profit calculation keeping in mind the raising cost of construction. Don't forget the interest on borrowed capital.



    You definition and view of business is quite limited. There are a number of companies which book losses year on year just to grow the business. If you look at companies like Amazon, it has either booked losses or has posted minimal profits in comparison to its huge market cap.

    Commodity prices have fluctuated in the past, but I don't think labor costs in India have doubled in the last 10 years. Its still a migrant worker driven industry where the workers do not have much of a say. Think of it as social injustice that the workers who actually build these soul-less apartments have to live inside a shanty during construction.

    The reason RE is over-priced in India is because of builder greed and a lack of regulation. There is no free markets in RE in india and most of the builders have some sort of political connection. It comes in handy to stash all the black wealth almost every businessman in india has. A lack of regulation and weak legal systems make it easy for the offenders to get away. Right from land acquisition to eventual sale of the property everything is muddled.

    Apartments are priced not on cost of construction + profit margin, but on some pre-determined formula that prices will rise by "x" % every year to keep the investors and buyers happy. This leads to a lot of speculation and unnecessary bubbles. I mean if housing is a basic necessity, where does all this greed come into the picture? why cant people just buy apartments and be happy? whats the need to buy multiple apartments for investment purposes?

    And lastly, what has Pune added to the world to deserve such world-class prices? a bunch of IT services companies and another bunch of back-offices for product companies or KPOs? We often mask our lack of innovation by coming up with fancy words like jugaad innovation or incremental innovation but the fact of the matter is that, after outsourcing Indian IT has not delivered any real innovation. I mean where are the Facebooks and Googles of India in Pune or anywhere in India?
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  • indian IT has not delivered a much needed change to the economy .... brought in employement .. gave boost to economy and put india on world map ... which none of the industry has done so far ... you dont always need innovation.... IT did open opportunity to so many who otherwise would have been unemployed .... it has give n business to trasnport,hotels and restautrant sectors in addition to infra that was developed due to IT
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  • who is asking to buy at insane rates .. use your own discretion ...it has been established fact that buying at current level as investment is stupidty .... . my point is ppl who waited since 2009 are clearly at loss including many bears here .....

    @RA even you can meet accident in your car so ficttious sceanrios have no value here ... then also consiedr if you are kicked out of your rented house in a day or two ? believe me it has happened.. so possibilities are endless .......
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  • Originally Posted by Tangent
    who is asking to buy at insane rates .. use your own discretion ...it has been established fact that buying at current level as investment is stupidty .... . my point is ppl who waited since 2009 are clearly at loss including many bears here .....

    @RA even you can meet accident in your car so ficttious sceanrios have no value here ... then also consiedr if you are kicked out of your rented house in a day or two ? believe me it has happened.. so possibilities are endless .......


    In my case in 2006 when I completed my first 11 months and wanted to continue for second tenure, the landlord was suspecting about my intention, but when he realized that I am about to get the possession of my own home in next 6 months he happily allowed me to live even without any further agreement.


    Owners normally won't keep same person on rent for multiple years without break. Even if the person is ready to pay excellent rent, he has to leave.
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  • Originally Posted by investwest
    Car was never prior to home.. AFAIK and what I observed.
    These days people buy car and stay in rented homes. Also, ipad and iphone never had priority over homes.
    Only essentials comes in correct order before home.


    You have to live and provide your kids with a 21st century person's life. Not 19th century.

    Rent.

    You obviously need a roof. Dont buy 1BHK in peripheet. Rent the 3 BHK you can afford for 50% of EMI

    Thats how Americans Germans Japanese and our previous generation Indians live their 20s and 30s.

    Originally Posted by sudhashbahu
    When I stayed in Mumbai/Thane, I had no need for a car. I bought my first one more than 10 years after working in an IT company, that too second-hand (all cash). Years later I bought my current car second hand (all cash).

    I used (and still use) a 6630 bought in Dec 2005. After much pressure from wife and kids I recently bought a Moto E.

    My principles:
    Don't spend more than 2.5 lakhs on car. Never take car loan.
    Don't spend more than 10K on a phone. Never take EMI option.
    Don't buy RE for investment, only for own stay
    Invest in Equities, Bonds, FDs, RDs etc and most important make best use of PF/VPF.

    PF gives 8-8.5% assured, tax-free returns without any limits. Nothing is better from a risk/reward angle.


    I live in Delhi. Life is impossible without a car.

    Cant speak for Bombay and Bangalore. There you can eliminate car maybe.

    Originally Posted by Tangent
    dude i am not staying in US or may be you are ...so dont really need a car to move around ... what i did was the best decision .. i had 5 laks which i invested in RE rather than buy car... the flat i bought sells at 70L (actual transaction unlike your fictiuous examples ) cost price was 26L .. but you wont understand why i did it becsue if you did you would not be satying on rent for 5 years .. and trying to prove how fool ppl are to buy RE ...... i think you should have bought a flat instead of car in 2009 when you started the thread .... ... i have made engough saving to buy atleast a Honda city ,, but to me car is more luxury than nececisty ....... bu

    and btw now you are suggesting that buying a car is VFM than buying a FLAt .. wake up man... anyway as always you wont understrand ..... ppl raked in moolah since 2009 while you are trying to prove that ppl buyiing are fools ....... i bough a flat for 26L which now sells for 70L so now you decide who is a fool


    2009 was spectacular timing. I also bought then.

    Yes if extraordinary opportunity presents itself, forego the car.

    Such time comes about once in 8 years only.

    Rest of the time buy the car. Cheapest one is just 2 lakhs.

    Originally Posted by Tangent
    btw i gave the advice of buyin flat before car to many of my friends (2008-2011).. sommtetimes fought with them ... but now all of them thank me because at current rate they couls have afforded only a compact 2bhk rather than bigger flats they bought


    Again special timing.

    Give that advice today or anytime in last 2 years and your friends will curse you.
    Originally Posted by Tangent
    bte the car that was worth 5 laks must be worth junk now

    and new car still costs same albeit with more features

    5 years of not taking a bus doesnt have value?

    Buying a home by denying yourself a better life is silly.

    Originally Posted by mysantoshin
    I feel like a loser here.

    1. Didn't buy a home even after 9 yrs of IT experience.
    2. Bought 2 junk pieces in b/w Bajaj Avenger(felt like god when bought) and Honda Jazz (wasted 7 lakhs in the name of security, safety and comfort). But I love to ride my junk 2-wheeler and feel safe with family in 4-wheeler junk in this mad traffic.
    3. Don't like a flat within budget and the ones I like are well beyond my budget, but thankfully affordable on rent.
    4.Damn! I hardly like any city to live (spoiled by a 6 month stay in chandigarh in 2005). Waiting for smart cities to be built.
    5. Thankfully invested in ppf and epf to full extent. Have some endowment policies also from LIC.
    6. Some one advised me to buy term-insurance and mediclaim even if employer provides one and I DID. Wish he would have advised to book a flat.


    Why?

    Just rent. Its cheap.

    I live in a rented flat because its close to work.

    Originally Posted by investwest
    I was talking about 'earlier'.
    If one skids - the argument can be reversed - what's the use of owning a car (no matter what - a hatch or 15L+) and getting thrown out of house by landlord (with or without notice) and what's the use of shifting every 11 months and disturbing family and especially kids and their friend circle every 11 months. If you have elders staying with you then - what's the use of expecting them to adjust in new surrounding every 11 months?

    Again, car is a depreciating asset (though I own it and happy to have it) will you be handing over it to next generation? What'll they get out of a 10-20 years old car?

    I agree with you on quality of life - but, do you call it a quality of life which pays EMIs for car (most of the guys buying cars on loan, I did this mistake when I joined job had loan limit with no liabilities, so I paid interest on a depreciating asset - such a fool I was and there are lot many like me) and paying rent for home? I'll prefer to stay in own house and roam on bicycle if I cannot afford a scooter after paying EMIs of home but with own home I'll ensure stability to my family - kids and parents. With own home, they can make/convert it the way they want and after all this there comes an element of satisfaction of achieving something in life (even car gives that satisfaction but home is home).

    In developed countries, the concept of family itself is in question and forget about inheritance and so on.. usually people don't stay with parents so they don't have to consider that angle in owning a house (see data of US and UK and you'll find that most of the Asians and in that too most of Indians have good families and not their natives).
    Again, in developed countries, the thinking is - earn to live and spend for oneself and get loans if you can and spend that too on fun, holidays, hobbies and so on - remember why US faced the dangerous recession?

    In India, we have the best economy - we call it savings economy - everyone tries to save for future and for next generations. There's nothing wrong in that, you'll get the feeling from Indian parents that whatever I could not get, I'll try to give to my kids - this feeling lacks in developed countries and they have their own different issues. So don't compare with them.

    I'll still say that owning a car (especially on loan) prior owning a house (anywhere, does not need to own at the place/city you work) is not a good idea - it's pure idiotness.
    I went through it and I know how and when it pains - as I was paying EMI on car, I had low eligibility left for home loan - where is quality of life when you need to adjust in 1 room lesser to own a car?


    Do people really have to move every 11 months?

    Almost EVERYONE who is a landlord will extend the lease if you give 10% annual increase.

    Most tenants move not by force but by choice. Because after one year at 17000 they can get similar flat for 17000 and dont want to spend 18700 for the convenience of not shifting.

    20s and 30s are supposed to be devoted to career. You should upgrade to the best you can do with your abilities.

    Renting gives you the flexibility to take necessary risks to move up in career. You can move cities. If your career shift doesnt work, you dont have millstone of EMI. You can quit and try again.

    Best time to buy is when you have reached peak earning capacity.

    By all means invest 30 to 50% of SAVINGS from salary (salary 1L expenses 50K & savings 50K means EMI of 25 K) in the form of EMI in property as soon as you start your job.

    But dont try to live in your investment. Keep life and investment separate.

    Rent a 4 BHK if earning well. Live properly. Dont live in 2BHK in periphery of Gurgaon because its what you can afford with same earning well salary because flat costs 1 cr and 1L EMI is all you can afford.

    Rent 4BHK for 60K. Live near good schools with good standard of living. Save 40K. Buy out the flat you rented when savings are adequate and salary higher.
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  • i recently bought an apartment in pune. By reading all your comments I think you people will call me a fool for this decision. :(
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  • Originally Posted by anirban8
    i recently bought an apartment in pune. By reading all your comments I think you people will call me a fool for this decision. :(

    Life is not black and white. Some people will call you smart others will call you a fool at any point of time. Everybody has different context upbringing and circumstances. Other people try to judge you in their context and and assumptions and may come to a different conclusion.

    I personally prefer to spend more time in thinking about why I should or not take a particular decision rather than what other people think about it. When I read few of the above posts I find some of those applicable to me while others are not.

    Move on. You have got the house spend you thinking on how to make the most of it. Appreciate the diversity of opinion that you get via the social platform, Congratulations For your new purchase enjoy.
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