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Coming Property Crash

Last updated: May 5 2009
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  • #51

    #51

    Re : Coming Property Crash

    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 .

    Comment

    • #52

      #52

      Re : Coming Property Crash

      Originally posted by arin_12 View Post
      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?

      Comment

      • #53

        #53

        Re : Coming Property Crash

        Originally posted by arin_12 View Post
        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
        Last edited February 19 2009, 03:51 PM.

        Comment

        • #54

          #54

          Re : Coming Property Crash

          Originally posted by snehra1 View Post
          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

          Comment

          • #55

            #55

            Re : Coming Property Crash

            Originally posted by snehra1 View Post
            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 ?

            Comment

            • #56

              #56

              Re : Coming Property Crash

              Originally posted by snehra1 View Post
              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.

              Comment

              • #57

                #57

                Re : Coming Property Crash

                Originally posted by abk View Post
                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.

                Comment

                • #58

                  #58

                  Re : Coming Property Crash

                  Location is going to become critical ...

                  Originally posted by sethugm View Post
                  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!

                  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!

                  cheers
                  Last edited February 19 2009, 06:35 PM.

                  Comment

                  • #59

                    #59

                    Re : Coming Property Crash

                    Originally posted by sethugm View Post
                    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

                    Comment

                    • #60

                      #60

                      Re : Coming Property Crash

                      Originally posted by wiseman View Post
                      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!

                      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!

                      cheers
                      i for once agree with wiseman(with pleasure)

                      Comment

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