Mathematics on Pricing of Land
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Natarajg007
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- Originally Posted by ks2071746Dear friend,
The Chennai RE is showing downtrend now. The collapse has not started and it may not collapse also, but will continue to show downtrend.
ks2071746
Dear friend
continuation of downtrend for long period will result in collapse.
Global recession has not impacted India yet fully. Here it will take somewhat longer duration.
The so called big names like Citi bank, General motors, English electric etc.. are on the verge of bankruptsy...
More names like this will continue to appear in news hereafter.
Certainly this will impact all over world.
Wait and see
thanks
chataaraCommentQuote0Flag - Today's news is TCS chennai has fired some 200 people.
Out of these atleast 50 have take housing loans and would want to sell their house at lower cost to avoid further lossCommentQuote0Flag - Originally Posted by Nataraajg007Today's news is TCS chennai has fired some 200 people.
Out of these atleast 50 have take housing loans and would want to sell their house at lower cost to avoid further loss
Dear friend,
I beg to disagree with you that 50 out of the fired 200 would want to sell their flats. If I remember having read in the news papers correctly, the fired people are those mostly new joiners and in the last 5% in the ranking on performance. I do not think, they would have gone in for their flats so soon. Kindly remember, the IT guys go in for their RE mostly when they get married or in the verge of getting married. Most of them get married when they have put in atleast 3 years plus in the field. And mostly the girls they opt are also in many cases are earning members, possibly from IT field or if unemployed, are from well to do parents. Especially in Tamil Nadu, the girls side will give the boy a good lot of gold and silver jewellery which will come handy to the boy to manage the house loan in case of difficulty.
ks2071746:DCommentQuote0Flag - Originally Posted by ks2071746Dear friend,
I beg to disagree with you that 50 out of the fired 200 would want to sell their flats. If I remember having read in the news papers correctly, the fired people are those mostly new joiners and in the last 5% in the ranking on performance. I do not think, they would have gone in for their flats so soon. Kindly remember, the IT guys go in for their RE mostly when they get married or in the verge of getting married. Most of them get married when they have put in atleast 3 years plus in the field. And mostly the girls they opt are also in many cases are earning members, possibly from IT field or if unemployed, are from well to do parents. Especially in Tamil Nadu, the girls side will give the boy a good lot of gold and silver jewellery which will come handy to the boy to manage the house loan in case of difficulty.
ks2071746:D
Dear friend
One cannot manage the housing loan which is well above 30 or 40K per month with his wife or with her husband's reduced salary or with just gold and silver given as dowry.
thanks
chataaraCommentQuote0Flag - Originally Posted by chataaraDear friend
One cannot manage the housing loan which is well above 30 or 40K per month with his wife or with her husband's reduced salary or with just gold and silver given as dowry.
thanks
chataara
Dear friend,
Surely one should be be able to manage around Rs. 30000 EMI with salary like od Rs. 20,000 pm each and help from parents alongwith some gold and silver jewellery sale or pledging temporarily , if considered with the income tax benefit on house loan interest , interest subsidy some IT companies give as also the rent the chap may save. But it is not easy for atleast the first 2 or 3 years by which time the property will be more yielding. Of course, the family will have to curtail their expenses to the barest minimum and learn/manage to live within what cash is left out every month. I feel, for a young couple of about 27+ age, an EMI of about Rs. 30,000 may not be an impossible to manage quantum. Upto Rs. 45000 range EMI will be almost not possible situation for the IT guys in this age range unless both together get in hand cash of Rs. 60000+ every month.
ks2071746:)CommentQuote0Flag - Whthere Rs 20,000 or Rs 30,000 EMI, the question is job stable or not. If stablility is the problem, no one will at any EMICommentQuote0Flag
- Dear friend,
Jobs are a little difficult now for those with less than 2 years of experience in IT field. I have referred to those of about 27 + years of age, who will have atleast 3 or 4 years of experience who can somehow manage to be in some IT job or the other with even Rs. 30,000+ pm type of take home pay and with his spouse also with atleast 2+ or 3 years experience can supplement with another Rs. 20000 + a month atleast. it will not be easy for the initial period of 2 or 3 years to manage the family within what remains after the EMI, but it is to be managed and possible though difficult in today's situation. 15 years back, when I went in for a flat of about 850 sq. ft. at Saidapet, costing Rs. 7.5 lakhs then, I managed to put in about Rs. 3.0 lakhs out of my savings/Provident Fund withdrawals and a house loan of Rs. 4.5 lakhs from HDFC at a whopping 16 % ROI. The EMI was coming to Rs. 7700 PM and my take home salary was then less than Rs. 10,000 with a son going to school, of course living in company township with a low rent of Rs. 300 PM. It was Himalayan efforts initially, but we did manage. The ROI has come down later to almost 8.5% progressively in another 7 years time and the loan was fully paid of 2 years back. I was the only breadwinner in the house and we did manage somehow. Unless some risk is taken and the couple manage, ing a flat any time will look most difficult and at times impossible. I feel, one should not only look into what income comes in today but also what can be the income possible in the coming years till the loan repayment. Afterall, the so called dull economy may reverse after 2 or 3 years and it may be flourishing again. Regards.
ks2071746:pCommentQuote0Flag - We now face a completely differrent world!!!Originally Posted by ks2071746Dear friend,
Jobs are a little difficult now for those with less than 2 years of experience in IT field. I have referred to those of about 27 + years of age, who will have atleast 3 or 4 years of experience who can somehow manage to be in some IT job or the other with even Rs. 30,000+ pm type of take home pay and with his spouse also with atleast 2+ or 3 years experience can supplement with another Rs. 20000 + a month atleast. it will not be easy for the initial period of 2 or 3 years to manage the family within what remains after the EMI, but it is to be managed and possible though difficult in today's situation. 15 years back, when I went in for a flat of about 850 sq. ft. at Saidapet, costing Rs. 7.5 lakhs then, I managed to put in about Rs. 3.0 lakhs out of my savings/Provident Fund withdrawals and a house loan of Rs. 4.5 lakhs from HDFC at a whopping 16 % ROI. The EMI was coming to Rs. 7700 PM and my take home salary was then less than Rs. 10,000 with a son going to school, of course living in company township with a low rent of Rs. 300 PM. It was Himalayan efforts initially, but we did manage. The ROI has come down later to almost 8.5% progressively in another 7 years time and the loan was fully paid of 2 years back. I was the only breadwinner in the house and we did manage somehow. Unless some risk is taken and the couple manage, ing a flat any time will look most difficult and at times impossible. I feel, one should not only look into what income comes in today but also what can be the income possible in the coming years till the loan repayment. Afterall, the so called dull economy may reverse after 2 or 3 years and it may be flourishing again. Regards.
ks2071746:p
ks,
Consider yourself a lucky person. You may think that it was your ability to sacrifice and face hardships which pulled you through.
And no doubt this was the case :)!
But please remember that it was only the global economic boom for the last 27 years - from 1981 - which helped you keep you job as well as look forward to ever increasing salaries to pay off your loan and be the proud owner of your own home!!! Congrats.
Look at today's scenario and see what a world of difference 12 months has made.
The Whole World is nearing depression. Globally decline in assets has crossed US$ 40 TRILLION in just a single year. Global has declined over 20% and we are just entering the serious phase of this depression. These things take around 3-4 years to reach the bottom. They then take another 4-6 years to bottom out and start rising! Thats a decade gone. Then it takes around another 15 years to come back to the previous peak. Thats a grand total of 25 years!!!
Don't believe me? No problem. The Dow took till 1954 to come back to its peak of 1929. Thats 25 years. And it was helped by World War II which saw a huge stimulus in rebuilding the world, which only the US was able to do (as it was relatively unscathed by the War).
If you were in the same position now as you were when you had the Rs.10000 salary you will be in serious trouble. Today, people with 50k in salary - and how many people really have 50k salaries outside the IT business? - have 30k - 40k EMIs. This thing about pawning Gold is all good for the talk. But remember, this bears interest as well - and now-a-days at very high rates. So, as someone had said, its now all about job security. Anyone having a 60 lakhs home with a 60k EMI is probably looking at seeing this home come down in value to say 45 lakhs has an extremely uphill task to see his home still in his hands at the end of 3 years from now. He has my sympathies, but - like fate was working to your advantage then - it will probably work against this person now.
cheersCommentQuote0Flag - Herd mentality
People have herd mentality. they tend to realise the gravity of the problem only after it is too late to do anything. when all are ing RE one also gets carried away & gets into debt trap for 25 to 30 years . debt is very sharp edged sword. people will surely bleed by the cuts of debt swordCommentQuote0Flag - Dear friend,
I am not talking of loans like Rs. 50 lakhs or 60 lakhs. It can be Rs. 30 lakhs or less only. A fairly decent 3 bed flat is available in good locality for around Rs. 40 lakhs or below. Due to higher margin money, one may have to shell out Rs. 10 lakhs by self which normally a 27+ year would have saved in his last 4+ years alongwith his better half also in job for the last 2 years or so. It is true that job security is not like what it was earlier, but those with 4+ years experience in IT will be able to find some job or the other or continue in the same company with very less increase or no increase or even with some wage cut. Instead of wage cut, many companies plan now for increased work hours of about 1 or 1.5 hrs. extra per day. This is the time i.e., about 27+ years of age, one should go in for his dream house within his capacity and capability to manage the loan jointly with his wife, as waiting for some more years may not help as they will have to take care of their kids costly education etc. by then. Fearing the so called " collapse " or " likely job loss " etc. may make him go into his shelter and possibly delay his house dream for years, ultimately after some years, say 5+ years, and then feel/regret that he should have done it 5 years ago etc. Of course, this is for house/flat for personal use and not for pure investment purpose.
ks2071746CommentQuote0Flag - Originally Posted by ks2071746Dear friend,
I am not talking of loans like Rs. 50 lakhs or 60 lakhs. It can be Rs. 30 lakhs or less only. A fairly decent 3 bed flat is available in good locality for around Rs. 40 lakhs or below. Due to higher margin money, one may have to shell out Rs. 10 lakhs by self which normally a 27+ year would have saved in his last 4+ years alongwith his better half also in job for the last 2 years or so. It is true that job security is not like what it was earlier, but those with 4+ years experience in IT will be able to find some job or the other or continue in the same company with very less increase or no increase or even with some wage cut. Instead of wage cut, many companies plan now for increased work hours of about 1 or 1.5 hrs. extra per day. This is the time i.e., about 27+ years of age, one should go in for his dream house within his capacity and capability to manage the loan jointly with his wife, as waiting for some more years may not help as they will have to take care of their kids costly education etc. by then. Fearing the so called " collapse " or " likely job loss " etc. may make him go into his shelter and possibly delay his house dream for years, ultimately after some years, say 5+ years, and then feel/regret that he should have done it 5 years ago etc. Of course, this is for house/flat for personal use and not for pure investment purpose.
ks2071746
Dear KS,
Timing the entry in to RE is very important particularly in this once in a lifetime economic crisis because if you get it wrong you could easily lose 20-50% of your money invested even if it is for personal use.
People who had invested in stock thinking 12000 as bottom for sen had lost 35% of their investment and this can happen in RE also and dont forget already 45 percent of the world's wealth has been destroyed by the global credit crisis.CommentQuote0Flag - Originally Posted by ks2071746Dear friend,
I am not talking of loans like Rs. 50 lakhs or 60 lakhs. It can be Rs. 30 lakhs or less only. A fairly decent 3 bed flat is available in good locality for around Rs. 40 lakhs or below. Due to higher margin money, one may have to shell out Rs. 10 lakhs by self which normally a 27+ year would have saved in his last 4+ years alongwith his better half also in job for the last 2 years or so. It is true that job security is not like what it was earlier, but those with 4+ years experience in IT will be able to find some job or the other or continue in the same company with very less increase or no increase or even with some wage cut. Instead of wage cut, many companies plan now for increased work hours of about 1 or 1.5 hrs. extra per day. This is the time i.e., about 27+ years of age, one should go in for his dream house within his capacity and capability to manage the loan jointly with his wife, as waiting for some more years may not help as they will have to take care of their kids costly education etc. by then. Fearing the so called " collapse " or " likely job loss " etc. may make him go into his shelter and possibly delay his house dream for years, ultimately after some years, say 5+ years, and then feel/regret that he should have done it 5 years ago etc. Of course, this is for house/flat for personal use and not for pure investment purpose.
ks2071746
Look this news. Will any one from IT will dare to take loans now to RE
TCS raises performance bar
Shanthi Kannan
Freezes hiring of experienced professionals
Promotions for current year deferred
CHENNAI: Tata Consultancy Services (TCS), the biggest Indian IT major, has decided to tighten its belt. In this process, it has frozen the recruitment of experienced professionals unless they are approved by the respective business heads for project-specific skills. Wherever possible, it will re-train experienced professionals within the company to take on these roles.
On the offshore movement, it has pointed out that though in the current context, increasing its offshore leverage was a win-win situation for customers and the organisation alike. This will result in offshore movement of people who are now located on-site. Similarly, promotions for the current fiscal year have also been deferred, as was done last year. With current uncertainties, the deferment continues for now.
The company has finally asked the operating units to raise the performance bar and utilise resources in a most effective manner. The process for undertaking this is a detailed one and will result in some involuntary attrition. The company is helping these employees with out-placement, counselling, alternative positions in subsidiaries, if available, or a fair exit.
As part of optimisation, route rationalisation in transportation has also been looked in to. These measures were stated in a recent circular issued by the company’s higher officials to its employees.
TCS has decided to take these measures with immediate effect to ensure that the company is well-equipped to deal with the sharp contraction in global economic activity. It is also stated that the company has taken these steps to mitigate the risks emerging from the current economic slowdown and uncertainties.
Operational efficiency
Most TCS customers have started feeling the pain of the slowdown and are looking to extract maximum efficiencies from their reduced IT budget. In this context, it needs to work on bringing in greater operational efficiencies across the organisation by conserving and controlling costs.
At the same time, it wants to continue to invest in people, technology and training to ensure that it can adequately respond when the economy does turnaround.
Though TCS has come forward with these announcements, there are other IT companies, which are quietly issuing pink slips to their employees based on their performance.
Many firms have cut down the strength of employees on-site, while some have even sent out the employees waiting in the bench.
This economic slowdown will act as a correction methodology for many IT companies.
They will re-look at the factors such as quality, pricing, efficiency, productivity and delivery in a more stringent way. Similarly, the industry which went on recruiting heavily during the boom period, now adopts go slow tactics.
="http://www.hindu.com/2009/03/11/stories/2009031151351600.htm"]http://www.hindu.com/2009/03/11/stories/2009031151351600.htm
CommentQuote0Flag - Dear friend,
This is 1 % of TCS staff strength and from the last 5% in the performance ladder at the bottom, and may also be from the bench. This 1% or 5% or even 20% may not make a very big difference. But out of the the other 80 or 95 %, atleast a portion of that would like to make use of the current downtrend to their dream flat for personal use, may not be for investment as the current opportunity of downtrend in prices and banks ready to loan under the reducing ROI regime etc. may induce people to select and go for their flats.
ks2071746CommentQuote0Flag - Originally Posted by ks2071746Dear friend,
I am not talking of loans like Rs. 50 lakhs or 60 lakhs. It can be Rs. 30 lakhs or less only. A fairly decent 3 bed flat is available in good locality for around Rs. 40 lakhs or below. Due to higher margin money, one may have to shell out Rs. 10 lakhs by self which normally a 27+ year would have saved in his last 4+ years alongwith his better half also in job for the last 2 years or so. It is true that job security is not like what it was earlier, but those with 4+ years experience in IT will be able to find some job or the other or continue in the same company with very less increase or no increase or even with some wage cut. Instead of wage cut, many companies plan now for increased work hours of about 1 or 1.5 hrs. extra per day. This is the time i.e., about 27+ years of age, one should go in for his dream house within his capacity and capability to manage the loan jointly with his wife, as waiting for some more years may not help as they will have to take care of their kids costly education etc. by then. Fearing the so called " collapse " or " likely job loss " etc. may make him go into his shelter and possibly delay his house dream for years, ultimately after some years, say 5+ years, and then feel/regret that he should have done it 5 years ago etc. Of course, this is for house/flat for personal use and not for pure investment purpose.
ks2071746
I agree with you that to reap full benefits of leveraging, one has to enter early when taking loan.
The earlier the age, The longer is the tenure for repayment and higher is the eligible loan amount.
While, planning out a investment portfolio one should plan only taking their own money.The money they have saved and what they are hoping to earn.Even if its for self use, When taking a bank loan it should be considered on par with any other investment.
The additional income from spouse and other sources should be only part of the contingency measures and for cushioning.
Confusing both would lead to unknowingly over exerting your capacity and putting yourself in high risk.
Are husband wife going for joint loan?then its different.Both people's repaying capacity is taken into account.
There may always arise a situation where one of the partner would want to take a break to look after other priorities in life, quit the job and want to start a business etc.
Investments should be planned in a way so that one shouldnt feel handicapped by their liabilities.
Planning 25-30% of your take home salary for EMI for a short tenure loan is the best way according to me.Even if its conservative and would mean less returns.It will make it easy to manage the EMI even if there is a salary cut/job loss or any other difficulties.
Its better not to take the complete eligible loan amount and entire tenure of 20 years that the bank offers.
Take loans only based on your needs and individual repaying capacity not how much you are eligible for now.CommentQuote0Flag - Originally Posted by Nataraajg007In chennai, mots of the ads are being repeated with no takers.
The reason is simple. People are loosing jobs/promotions.increments.
No cash.
Hence naturally RE is collapsing
Hey, you are writing here like a madman, trying to impersonate my id and you are talking about repetitive advertisements. So many on this board have asked you to bugger off and you dont. If getting an idiot like you out of sight is so difficult then to sell RE takes time. So dont use that as a reason for your imaginary view that RE prices are falling you idiot.CommentQuote0Flag