The real state boom was empowered by too many +ve factors during the year 2004 - 2008

    Cash Inflow from foreign Investers
    Home loan interest rates were quite low
    Boom in IT Sector
    People buying more than one house on loan just for investment purpose even if it was a costly affair.
    Many NRI's buying houses in India for investment.
    Black money from politicians and other sources going in to reality
    Now all of the above conditions have reversed


      Foreign investers taking out money
      Interest rates too high
      IT Boom some what burst
      People who brought more than one home are desperate to sell their 2nd home
      NRI's selling their invested houses as they need the money there.
      Black money some what already invested and not giving that result. Some more can flow in but it can not change the fate of this industry.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
      now all the +ve has become -ve and I see no reason for property rates going 25 - 50% down in another 1 year.

      So the mantra for home buyers is wait and watch policy unless you are getting a very good deal from some NRI or from a person who can not take the heavy interest rate any more.

      And for the ones who want to sell, sell your property even if it did not give u any profit.
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  • Now cash is the king. Do noy buy any real estate for another 6 months atleast.

    Prices are falling every month
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  • True. Gold prices flared up in international market in dollar terms and Indian Rupee is depreciating after budget leading to further jump in prices in rupee terms. In the past one week gold price has increased by more than 10%

    On the otherhand, to see the evidence of first steep fall in real estate price DLF one of the top builders has reduced their Bangalore- New Town project price launched recently at Rs.2775/sft to Rs.1850/sft just now!! 30% reduction in one go.

    Chennai real estate is defying gravity. Let us see how long.
    CommentQuote
  • Originally Posted by vens
    True. Gold prices flared up in international market in dollar terms and Indian Rupee is depreciating after budget leading to further jump in prices in rupee terms. In the past one week gold price has increased by more than 10%

    On the otherhand, to see the evidence of first steep fall in real estate price DLF one of the top builders has reduced their Bangalore- New Town project price launched recently at Rs.2775/sft to Rs.1850/sft just now!! 30% reduction in one go.

    Chennai real estate is defying gravity. Let us see how long.


    Dear friend,

    Chennai RE guys are very strong people, politically and financially with a lot of will. They would hold on for a some more months. But a time will come for them also for some distress selling. They will not go for new projects as the return will be marginal/reasonable and nominal and not like the ones which they have enjoyed /so long in the last few years. On going projects, they will delay and go in on some compromise on the materials/quality of contruction etc. Their political influence/funding ( mostly black money ) will enable them to hold on further. Ultimately the customer will be the sufferer.

    ks2071746
    CommentQuote
  • One can expect a correction up to 25% in end user market and up to 40% correction in investor driven market from the peak level.

    Regards
    CommentQuote
  • Real Estate prices have crashed in NCR by 20%. It is going to crash further. Wait the figure would be somewhare 50% in second quater.
    CommentQuote
  • Where is the correction?

    I would like to where in B'lore the correction is evident? From going back to the same developers and builders I have gathered that the latest tactic adopted by the cartel is that of passing the buck - "sir the correction is there but not here, it is in xyz part of B'lore #$@#2","correction has happened but we would not like to sell the houses built during boom time at reduced rates","these are luxury flats and come at a premium still..." are some of the ridiculous responses still doing the rounds. Understand that no one on other side of fence would like to lose a naya paisa on RE but then where the hell is the correction taking place - a ground reality or in print alone? Sick with these guys all.
    CommentQuote
  • Gold as an investment is a decent option however you may be slightly late to the party. Right time was 2003-2004. But if you look at it from the point of rapid increase M3 money supply, it still holds a lot of promise. I have some exposure to gold (I wouldn't put % here for my own sake). Make sure gold is part of your portfolio not all of it. Diversification is the name of the game.

    KS, Chennai RE is not so much immune to the RE slump as anywhere else. The politicians may be strong but market forces are stronger. If they retain the RE prices at inflated levels in Chennai, Industries/Investors/Home buyers will simply find alternative places to put their money. That will be a classic "Happy Budday" moment for the RE exposed politicians. Plus any long term exposure to RE would be exploited by their political rivals to point out the unidentified sources of income. Income Tax people are getting wiser too.

    To everyone, Investment requires strategy. Don't confuse your survival money with your investment money and don't put all your eggs in 1 basket.
    CommentQuote
  • Originally Posted by nick_alan_76
    To everyone, Investment requires strategy. Don't confuse your survival money with your investment money and don't put all your eggs in 1 basket.


    Good one Nick.
    CommentQuote
  • Would you believe it ...

    Originally Posted by nick_alan_76
    Gold as an investment is a decent option however you may be slightly late to the party. Right time was 2003-2004. But if you look at it from the point of rapid increase M3 money supply, it still holds a lot of promise. I have some exposure to gold (I wouldn't put % here for my own sake). Make sure gold is part of your portfolio not all of it. Diversification is the name of the game.

    KS, Chennai RE is not so much immune to the RE slump as anywhere else. The politicians may be strong but market forces are stronger. If they retain the RE prices at inflated levels in Chennai, Industries/Investors/Home buyers will simply find alternative places to put their money. That will be a classic "Happy Budday" moment for the RE exposed politicians. Plus any long term exposure to RE would be exploited by their political rivals to point out the unidentified sources of income. Income Tax people are getting wiser too.

    To everyone, Investment requires strategy. Don't confuse your survival money with your investment money and don't put all your eggs in 1 basket.



    I first reccomended Gold at around $450 levels more than 3 years ago and have since been recco-ing it every time it declined by a significant amount. Btw, me and my investors have more than doubled their money in Gold in the last over 3 years.

    The current price is a little high to get in now and one should wait till it declines and settles around $800 - $850, which it should once there is a respite from this really horrible news about imminent financial catastrophe in the EU region due to the near-collapse of emerging economies in Europe.

    The final target for Gold stretches from $2000 (almost sure) to $3500 (some think its quite possible) to s high as $5000. Some extremists say Gold can go as high as $8000 per ounce briefly under certain circumstances.

    Keep aside some money every month for Gold purchase. When there are significant declines buy certified coins which are easily re-saleable.

    Of course, there will be some who say, "is this an RE forum or what". To which I will say, while sometimes Land is as good as Gold, sometimes Gold may be even better than land - for a while at least!!! :D

    cheers
    CommentQuote
  • Originally Posted by wiseman
    The current price is a little high to get in now and one should wait till it declines ..........

    I think the entry point is going to be very critical as some one entered at the previous peak of 1980 would not have made any money by investing in gold. For someone who entered in 1980, gold should be at $ 2,200.00 to break even when you adjust the prices for inflation (US CPI). There are some interesting articles on gold by Adrian Ash on the real long term value of gold at Bullion Vault.The current price is a little high to get in now and one should wait till it declines ..........

    I think the entry point is going to be very critical as some one entered at the previous peak of 1980 would not have made any money by investing in gold. For someone who entered in 1980, gold should be at $ 2,200.00 to break even when you adjust the prices for inflation (US CPI). There are some interesting articles on gold by Adrian Ash on the real long term value of gold at Bullion Vault.
    CommentQuote
  • Originally Posted by ajithpkl
    Originally Posted by wiseman
    The current price is a little high to get in now and one should wait till it declines ..........


    I think the entry point is going to be very critical as some one entered at the previous peak of 1980 would not have made any money by investing in gold. For someone who entered in 1980, gold should be at $ 2,200.00 to break even when you adjust the prices for inflation (US CPI). There are some interesting articles on gold by Adrian Ash on the real long term value of gold at Bullion Vault.


    Wish I was exposed to gold during the 2001 bust. Got burnt royally for being all in tech stocks. Anyway, what happened... happened. Now with the trillions being pumped into the economies worldwide, i think the rampant inflation is on the way. Anyway, that's a finance/economics discussion.

    Oh BTW, did you guys see a report on Q4 economic report on India ? Economy grew by ~5%. The doesn't even cover inflation.
    CommentQuote
  • Well ... the slide has now begun ...

    Originally Posted by nick_alan_76
    Wish I was exposed to gold during the 2001 bust. Got burnt royally for being all in tech stocks. Anyway, what happened... happened. Now with the trillions being pumped into the economies worldwide, i think the rampant inflation is on the way. Anyway, that's a finance/economics discussion.

    Oh BTW, did you guys see a report on Q4 economic report on India ? Economy grew by ~5%. The doesn't even cover inflation.



    Unfortunately for the ruling party, the slide did not wait till the elections. It has begun in right earnest.

    Q1 2009 should be lower simply because Oct 2008 was still not as badly hit as Nov, Dec OR Jan 2009. The next budget is going to be really interesting. While I believe that the World's economic storm will have an increasing and much bigger effect on India than popular perception has accepted, even the fiscal deficit next year itself will add to our problems.

    Job/Salary cuts, roaring fiscal deficits, crashing exports. 2009 is going to be a very interesting year. Almost surely economy will not revive in 2009. Look at 2010 minimum for the revival.

    Also, as this slide accelerates the real drop in RE prices will srart showing!

    cheers
    CommentQuote
  • Deficit

    You are right wiseman. The budget deficit is a big thing and government will have to look at it closely. The 5.3% GDP gain with 6% Deficit and 8% Inflation is unsustainable. Next budget will certainly be interesting to say the least.

    On a side note regarding the reasons why NRIs will not invest more in 2009/2010, Say an NRI remitted $60K for buying a property in India back in Oct 2007 at Rs. 39/$. Now imagine he want to pull back that money, he will be pulling out at Rs. 51/$. That's a loss of Rs. 12/$ and total Rs. 7.2 Lakh for his initial investment. Imagine that he had taken a second mortgage on his house to invest in India and the picture gets dirtier. With so much rupee fluctuation, do you think anyone in his/her right mind invest at this time ?

    BTW, Tech companies have already provided their outlook in the form of reduced hiring, lower hikes (if any), performance review etc. The people actually making big money are going to suffer... RE prices have to drop big time. I am afraid for people who put their life's savings in the booming RE.
    CommentQuote
  • property prices crashing

    you are right nick...reality prices are bound downwards. Can you suggest what may be done if one is highly invested in house/commercial property. should one sell few?What then to do with cash?
    CommentQuote
  • Everyone's situation is different. You need to decide whats best for you. My suggestions to people would be deleverage and keep some cash at hand (enough for get by for a tleast 6 months). Don't be stuck in debt up till your eyeballs (specially in these times) and don't gamble with your own or other's money.

    I have taken my own advice and have no debt (house, car and other investments are paid off) and have sufficient cash reserves (for rainy day). My other cash positions will be invested when I see realistic prices (doesn't matter if it is RE or other investments).
    CommentQuote