Looking at various threads for different regions, one gets the feel that most of the members are pretty new to RE investing. By new, I mean they seem to have seen only the Bull phase in the market and haven't seen the lull or bear phase which usually lasts for many, many years.

No doubt, in a developing economy like ours where GDP picked up steam in last 10 years and rose from 6% to 9% last year, money poured from all directions, be it FDI, NRIs, black money, quick disbursal of loans from banks and lastly from desperate end-users who waited for a softening in prices which almost never came.

In between, there were few hiccups like 2008 when all asset classes crashed. Though stock markets are yet to come back to 2008 levels, RE continued to make new highs, attracting newer investors by the hordes every passing day in the lure of making a quick buck.

But like all good things in life, this madness too had to end one day. Suddenly, we are hearing of GDP in last qtr going down to 5.3%, Inflation refusing to go down below 7%, Salary hikes not coming as anticipated, leave alone any increase in new jobs, even huge job losses are being reported.

Add to it, news of fresh property registerations falling more than 50% in big metros like Delhi/Mumbai, banks like HDFC reporting sharp fall in new home loan applications, huge inventories being piled up.

All this does ring alarm bells in the ears of veteran RE players who have seen how suddenly nobody even wants to talk about plots and flats in difficult times, how difficult it is to liquidate your property even at a loss, how projects are left in limbo when builders don't find buyers, etc.

But the new breed which has only seen rising salaries and rising RE prices in RE market dismisses all this. It continues to dismiss each and every warning. I personally know of many young people who have their own homes but have borrowed heavily from banks and others to invest in RE, all to make a quick buck.

I have personally seen the boom in office spaces from 2003-2007 when my own small investment in a office space of 250 sq.feet made at 9L in 2003 fetched me 36L in 2007 but I didn't buy at 36L but sold it and those who bought at 36L are not able to get that price till date after 5 years. And this office was in prime locality of Netaji Subhash Place in Pitampura.

But I committed the mistake of investing that entire amount in a retail mall in 2007 at peak of retail boom. And till date, I am not able to find a buyer to exit even at cost price because that price which I bought was actually a 'sell price'.

In fact, themes keep on changing, 10 years back, it was 'office space' becoz of dotcom boom, 5 years back, it was 'mall mania' because of retail boom and currently its 'residential boom' mainly because of ease it offers for parking black money. If it was fuelled by genuine demand, people would be talking of places in main city of Delhi but wat we see is that most debates are around investing in farway places like GN or New Gurgaon.

I personally believe we have seen peak of 'residential boom' and smart money has already begun moving out, looking for new pastures. No doubt, there will always be end-users looking for their won house in a grossly populous country like ours but the days of expecting above-average returns through RE investment are clearly over. In fact, capital protection and liquidity should be the biggest worries going forward into near future.
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  • Mr Bullish ,
    i really liked ur post a lot ,
    as i am new to the real estate market , i might not be having enough expirience to guide others but certainly i have seen four different markets,
    i used to trade in stocks, gold, mutual funds, real estate
    one factor which helps me in the era is if i am having loss in stocks m earning high due to rupee depreciation , if i am gaining in property then that money will be for my family and future ,
    at the end i am not too eager for money , just a small baby in the crowded city who do small small investment to keep himself and his family happy .. :)
    cheers for life ..
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  • Originally Posted by ritzshaan
    Mr Bullish ,
    i really liked ur post a lot ,
    as i am new to the real estate market , i might not be having enough expirience to guide others but certainly i have seen four different markets,
    i used to trade in stocks, gold, mutual funds, real estate
    one factor which helps me in the era is if i am having loss in stocks m earning high due to rupee depreciation , if i am gaining in property then that money will be for my family and future ,
    at the end i am not too eager for money , just a small baby in the crowded city who do small small investment to keep himself and his family happy .. :)
    cheers for life ..


    Boss, history is the best teacher, it shows very clearly that everything averages out to a median in the long run. One must check Brakes and not just Accelerator before going on a long ride. Accelerator give the Fun while brakes Save the life. I hope U got the hint.
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  • yes brother, i definitely got ur point ,
    i like driving slowly , very slowly though .. :)
    and my hand is always on the brake ..
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  • Excellent post Mr Bullish .

    This is somehow the reality of real-taste . You wrote it all in the best possible way.

    Having views similiar like you , Even i am worried to park my funds in real estate further . I don't see any huge upside in anywhere around Delhi / NCR in any near future . Either market is going to get stagnant for a long while or else it might become a no buyers market for sometime .

    Kindly take a look at my thread too and give your views on the same .
    https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/noida-real-estate/32730-huge-budget-need-advices-to-make-the-best-out-of-it?t=34550
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