One persons loss is another persons gain.

Sellers:
If you have any property for sale, sell it now. Dont be greedy. Else you are in for a big loss.

Buyers:
Dont buy property now. Wait for 6 months. If things are going down, wait another 6 months. The property rates are going to crash.

Here are the reasons:
1.) Builder/Politician nexus has caused the hype.
2.) The prices of real estate has increased by 3-5 times.
3.) Supply is more than demand for such premium prices properties.
4.) Salaries/Cost of material/Labour has not increased in the same ratio.
5.) There has hardly any improvement in infrastructure.
6.) No value added. Same traffic jams and trash once you get outside the community.
7.) Interest rates have gone up. Monthly instalments are becoming impossible for even profesionals. Not everyone is IT-Project leader.
8.) Stockmarkets have collapsed. DLF stocks has gone down significantly.
9.) There is liquidity crunch. FIIs have taken the money out to compensate for their losses in US due to sub-prime crisis.
10.) If you buy a property now, be prepared to stay in it for 5-10 years. You will be lucky if you can find a tenant who can pay 75% of your monthly mortgage. So you will loose 25% every month on interest costs and even more if the property prices go further down!
Read more
Reply
101 Replies
Sort by :Filter by :
  • Originally Posted by sethugm
    When the RE prices see market corrections , the HFCs/banks will rederive the net asset value of the house-on-heavy-loan and when it falls below the lent amount(outstanding) , HFCs/banks will demand extra collateral from the borrowers . When the borrowers cant afford to pledge extra collateral , the banks will decide on the course of action which will even lead to fire-sale.

    No hasty decisions buyers .Get the best bargain.

    My suggestion is not to hurry up to buy.

    If sellers dont hurry up they tend to lose the bargain power.

    Other than few builders / promoters , everyone realised the sky-high RE prices need correction which is expected more in the coming days...

    No sales - More supply - More distress for sellers.


    Dear friend,

    But don't forget, Chennai RE bigwigs have the political power, will and strength to hold on to their guns giving peanut reductions for long. Do not underestimate them. There will be not a loss to them by holding on but it can be some loss of profit only for them.

    ks2071746:D
    CommentQuote
  • Originally Posted by ks2071746
    Dear friend,

    But don't forget, Chennai RE bigwigs have the political power, will and strength to hold on to their guns giving peanut reductions for long. Do not underestimate them. There will be not a loss to them by holding on but it can be some loss of profit only for them.

    ks2071746:D


    Dear Friend,

    You seem to be more of a builders' friend than my friend.

    Howlong they can survive ?

    Do you think the Chennai politicians are powerful than Delhi Bombay & Bangalore politicians ? Why cant they holdup the prices ? Its purely supply & demand and affordability.

    Given the huge availability in Chennai , the prices will nosedive .

    Why did you leave the Block Money to further support your statement.

    But don't forget, Chennai RE bigwigs cant force people to buy their properties.

    And don't forget there are Chennai RE bigwigs who entered the market at the very peak time with highly leveraged funds and now in distress.

    Cheers
    CommentQuote
  • Originally Posted by sethugm
    Dear Friend,

    You seem to be more of a builders' friend than my friend.

    Howlong they can survive ?

    Do you think the Chennai politicians are powerful than Delhi Bombay & Bangalore politicians ? Why cant they holdup the prices ? Its purely supply & demand and affordability.

    Given the huge availability in Chennai , the prices will nosedive .

    Why did you leave the Block Money to further support your statement.

    But don't forget, Chennai RE bigwigs cant force people to buy their properties.

    And don't forget there are Chennai RE bigwigs who entered the market at the very peak time with highly leveraged funds and now in distress.

    Cheers


    anybody who differs is a friend of the builders,Ks why dont you toe the line,
    your logical views seem to have placed you in the builder fraternity.
    BTW Ks are you a builder?(pun intended)
    CommentQuote
  • I dont know how many people know that. The HDFC is selling 2nd hand house. Does this mean that Bank is acquiring the property from Loan Defaulter too...

    Bank also luring people to buy house by temp giving low int.
    CommentQuote
  • Hi all,
    I m naive so not commenting on anyone's replies here just writing our experience no pls pardon.
    We are NRI's and have been in US from last 3 years.We visited India in March 2007 and were planning to buy a residential plot preferably rather than appartment in NCR area.And found asal's behind ABES engg. college at NH-24.
    The seller asked 25 lakhs on registery and 25 lakhs black money total cash for 300 sq yard plot.We gave up our plan to buy anything that time as we were hearing news of real estate downfall in coming time and did not buy any thing.

    Now my father got some news about the current status over the same place is that those sellers who were demanding 25 lakhs in cash and were holding their plots to make more profit are not able to sell off their plots and looking for buyers and giving away 20% discount.

    We will be visiting India this year around september please u all real estate gurus suggest what should we do.. should we plan to buy if market goes down by that time or we should again wait for next 2 years .
    CommentQuote
  • Originally Posted by arin_12
    I dont know how many people know that. The HDFC is selling 2nd hand house. Does this mean that Bank is acquiring the property from Loan Defaulter too...

    Bank also luring people to buy house by temp giving low int.


    second hand houses by banks are not new
    there is DRT which is constituted only for this,and i have attended many auctions since 6 years ,nothing new about it.
    many banks have defaulters,the NPA and bad debts are nothing new.
    how many they have is the question?
    CommentQuote
  • Originally Posted by arin_12
    I dont know how many people know that. The HDFC is selling 2nd hand house. Does this mean that Bank is acquiring the property from Loan Defaulter too...

    Bank also luring people to buy house by temp giving low int.


    This is general practice that banks have to reassess the Net Asset Value of the property-on-loan/collateral.

    Even when you take a loan pleadging Gold , if the gold value goes down than the lent amount the bankers are supposed to ask you to pledge extra collateral to avoid the bank's loss .

    As the RE prices see market corrections , the HFCs/banks will rederive the net asset value of the house-on-heavy-loan and when it falls below the lent amount(outstanding) , HFCs/banks will demand extra collateral from the borrowers . When the borrowers cant afford to pledge extra collateral , the banks will decide on the course of action .

    As Abk stated its depends on how many such defaults taking place comparing the yesteryears . If the increase is more than 20 % then there will be more such defaults in the coming years . As 20 % increase in early months of recession will result in a havoc in the months ahead.

    If the increase in EMI-default/inability-to-deploy-extra-collateral resulting in Auction is less than 10-15 percent comparing last year..it can be neglected ..which is normal

    If the increase is above 20 % ....then it will even lead to fire-sale. Just keep some money aside ... as banks would prefer hotcash when they liquidate the asset.

    Cheers
    CommentQuote
  • Originally Posted by snehra1
    Hi all,
    I m naive so not commenting on anyone's replies here just writing our experience no pls pardon.
    We are NRI's and have been in US from last 3 years.We visited India in March 2007 and were planning to buy a residential plot preferably rather than appartment in NCR area.And found asal's behind ABES engg. college at NH-24.
    The seller asked 25 lakhs on registery and 25 lakhs black money total cash for 300 sq yard plot.We gave up our plan to buy anything that time as we were hearing news of real estate downfall in coming time and did not buy any thing.

    Now my father got some news about the current status over the same place is that those sellers who were demanding 25 lakhs in cash and were holding their plots to make more profit are not able to sell off their plots and looking for buyers and giving away 20% discount.

    We will be visiting India this year around september please u all real estate gurus suggest what should we do.. should we plan to buy if market goes down by that time or we should again wait for next 2 years .


    Dear friend,

    Wait for atleast another 12 months minimum.

    ks2071746
    CommentQuote
  • Originally Posted by snehra1
    Hi all,
    I m naive so not commenting on anyone's replies here just writing our experience no pls pardon.
    We are NRI's and have been in US from last 3 years.We visited India in March 2007 and were planning to buy a residential plot preferably rather than appartment in NCR area.And found asal's behind ABES engg. college at NH-24.
    The seller asked 25 lakhs on registery and 25 lakhs black money total cash for 300 sq yard plot.We gave up our plan to buy anything that time as we were hearing news of real estate downfall in coming time and did not buy any thing.

    Now my father got some news about the current status over the same place is that those sellers who were demanding 25 lakhs in cash and were holding their plots to make more profit are not able to sell off their plots and looking for buyers and giving away 20% discount.

    We will be visiting India this year around september please u all real estate gurus suggest what should we do.. should we plan to buy if market goes down by that time or we should again wait for next 2 years .


    Pls clarify my understanding..

    I understand the builder was quoting 25 Whiite & 25 Black total 50 in Year 2007.

    Now he is giving 20 % discount on the 50 Lacs or the Black component 25 L ?

    Or is he offering you for total 20 Lacs ?
    CommentQuote
  • Originally Posted by snehra1
    Hi all,
    I m naive so not commenting on anyone's replies here just writing our experience no pls pardon.
    We are NRI's and have been in US from last 3 years.We visited India in March 2007 and were planning to buy a residential plot preferably rather than appartment in NCR area.And found asal's behind ABES engg. college at NH-24.
    The seller asked 25 lakhs on registery and 25 lakhs black money total cash for 300 sq yard plot.We gave up our plan to buy anything that time as we were hearing news of real estate downfall in coming time and did not buy any thing.

    Now my father got some news about the current status over the same place is that those sellers who were demanding 25 lakhs in cash and were holding their plots to make more profit are not able to sell off their plots and looking for buyers and giving away 20% discount.


    We will be visiting India this year around september please u all real estate gurus suggest what should we do.. should we plan to buy if market goes down by that time or we should again wait for next 2 years .


    wait for the sethugms "Fire-sale" by the banks and the impending 80% crash.
    but dont buy far off lands even at 80% discount they are not worth it.
    hope the wait is not long.
    CommentQuote
  • Originally Posted by abk
    wait for the sethugms "Fire-sale" by the banks and the impending 80% crash.
    but dont buy far off lands even at 80% discount they are not worth it.
    hope the wait is not long.


    Yes Abk ,

    You well said "but dont buy far off lands even at 80% discount they are not worth it".

    But would you advise to go for it if one get it at 40-50 % discounted in a livable place where you have reasonable(I cant expect decent infra) infrastructure ?

    Cheers.
    CommentQuote
  • Location is going to become critical ...

    Originally Posted by sethugm
    Yes Abk ,

    You well said "but dont buy far off lands even at 80% discount they are not worth it".

    But would you advise to go for it if one get it at 40-50 % discounted in a livable place where you have reasonable(I cant expect decent infra) infrastructure ?

    Cheers.


    The only reason to buy far off land for 80%+ will be for speculation - and you will probably make a packet doing that if you buy at that kind of discount! :D

    The "Peak Oil" crisis has only temporarily taken a back seat and brought oil back to $35 levels. Once this bottom is reached, the effects of depleting oil reserves on a permanent basis (there is still some controversy about this) will ensure a long period of high oil costs - leading to prohibitive transportation costs (like the Rs.400 auto fares mentioned elsewhere) before alternative forms of energy are found and commercialised.

    So, whats being advised is, buy with a view that you will remain close (or at least have cheap transportation) to your main daily destinations (school, office, markets, entertainment, etc).

    Generally city centers are the best bets because they are generally equi-distant from multiple options (even if you change jobs or schools, generally you won't suffer much if you are closer to center). Also the best infrastructure and transportation options are found here. Obviously the downside is polution of various kinds - space, noise, air, water, etc).

    This are the important reasons city centers always command highest premiums and fall the least during bad times and also always find buyers even at the worst times, though at discounts.

    There is a reason land is cheap in far of areas. Because living becomes expensive to make up for it! :D

    cheers
    CommentQuote
  • Originally Posted by sethugm
    Yes Abk ,

    You well said "but dont buy far off lands even at 80% discount they are not worth it".

    But would you advise to go for it if one get it at 40-50 % discounted in a livable place where you have reasonable(I cant expect decent infra) infrastructure ?

    Cheers.


    sethugm my estimate is 20% max in established localities with social infra.
    my reasons are shaped by my expierience since 1995.
    eg avoid OMR beyond sholinganallur,bangalore highway beyond maduravoyal,
    gst road beyond guduvancherry.etc
    CommentQuote
  • Originally Posted by wiseman
    The only reason to buy far off land for 80%+ will be for speculation - and you will probably make a packet doing that if you buy at that kind of discount! :D

    The "Peak Oil" crisis has only temporarily taken a back seat and brought oil back to $35 levels. Once this bottom is reached, the effects of depleting oil reserves on a permanent basis (there is still some controversy about this) will ensure a long period of high oil costs - leading to prohibitive transportation costs (like the Rs.400 auto fares mentioned elsewhere) before alternative forms of energy are found and commercialised.

    So, whats being advised is, buy with a view that you will remain close (or at least have cheap transportation) to your main daily destinations (school, office, markets, entertainment, etc).

    Generally city centers are the best bets because they are generally equi-distant from multiple options (even if you change jobs or schools, generally you won't suffer much if you are closer to center). Also the best infrastructure and transportation options are found here. Obviously the downside is polution of various kinds - space, noise, air, water, etc).

    This are the important reasons city centers always command highest premiums and fall the least during bad times and also always find buyers even at the worst times, though at discounts.

    There is a reason land is cheap in far of areas. Because living becomes expensive to make up for it! :D

    cheers


    i for once agree with wiseman(with pleasure)
    CommentQuote
  • Originally Posted by snehra1
    Hi all,
    I m naive so not commenting on anyone's replies here just writing our experience no pls pardon.
    We are NRI's and have been in US from last 3 years.We visited India in March 2007 and were planning to buy a residential plot preferably rather than appartment in NCR area.And found asal's behind ABES engg. college at NH-24.
    The seller asked 25 lakhs on registery and 25 lakhs black money total cash for 300 sq yard plot.We gave up our plan to buy anything that time as we were hearing news of real estate downfall in coming time and did not buy any thing.

    Now my father got some news about the current status over the same place is that those sellers who were demanding 25 lakhs in cash and were holding their plots to make more profit are not able to sell off their plots and looking for buyers and giving away 20% discount.

    We will be visiting India this year around september please u all real estate gurus suggest what should we do.. should we plan to buy if market goes down by that time or we should again wait for next 2 years .



    The residential plot is located at very prime location on NH-24.And pls read this article to understand more.
    http://www.expressestates.in/full_story.php?content_id=92440

    We did not contact them its a property dealer of ghaziabad who is a friend of my father told him that now they are diving 20% discount on the black amount and he also said those guies will be selling those plots at 70 -80 % discount on the black money around july.We don't know if its a rumor or they are really giving 20% discount right now on the black money because this is what we have heard from a third person.
    CommentQuote