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Should one really wait for Price Crash?

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Should one really wait for Price Crash?

Last updated: December 19 2010
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  • #41

    #41

    Re : Should one really wait for Price Crash?

    Originally posted by abk View Post
    I know people who pledge their ornaments in banks just to buy(upgrade) plasma TV's .and the reason is just that his neighbour just got one.see it was neither need nor his fancy. such cases exist in millions and easy loans will only hasten up his idiosyncracy to buy the plasma.So all buying(homes to holiday packages) do not fully obey the diktats of the mrkt or the wisdom of the wise.
    Ha Ha !!! This is typical Indian Women Attitude. If you neighbor buy a Swift you wanna buy Swift Desire car... Cat Race. This will lead an end of the earth.
    Today I have see one small news in TV. This is economics down turn season.
    In Punjab there are farmer who is not able to have one day full meal. But in other side farmers are buying BMW/MERC... And believe it or not they the sales has jumped to 100% for luxury car. What a irony
    Either land or AIR and FOOD. Choice is yours.

    Comment

    • #42

      #42

      Re : Should one really wait for Price Crash?

      Interesting discussion brewing up

      So if there is a rise in Luxary cars sales.. do we expect a rubb off here? Anyways, I would like to close this discuss soon.. but there are several senior folks in this forum who can also help by commenting on - should we really wait..
      Manoj Misra

      Get a different view...

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      • #43

        #43

        Re : Should one really wait for Price Crash?

        As per me we can wait for few more months !!! Until and unless real estate price are not coming to a realistic one. 2009 will be more worst than now.
        Either land or AIR and FOOD. Choice is yours.

        Comment

        • #44

          #44

          Re : Should one really wait for Price Crash?

          Have said it enough

          We may need to wait for another 1-2 years in my opinion. Anticipate real bottom in the 2010 - 2012 region.

          Real pain still to begin.

          cheers

          Comment

          • #45

            #45

            Re : Should one really wait for Price Crash?

            Real pain still to begin?

            Wiseman: I think we need a bit more debate on this.. I have not seen anyone really coming up with facts to prove your point incorrect. At least I am yet to see a forceful point countering your views. Will still wait for some more time before we put this discussion thread to end!!!

            Cheers,
            Manoj Misra

            Get a different view...

            Comment

            • #46

              #46

              Re : Should one really wait for Price Crash?

              Read my post under "uninhibited exuberance"

              Originally posted by Manoj Misra View Post
              Wiseman: I think we need a bit more debate on this.. I have not seen anyone really coming up with facts to prove your point incorrect. At least I am yet to see a forceful point countering your views. Will still wait for some more time before we put this discussion thread to end!!!

              Cheers,

              Manoj,

              I did some calculations relating to the future to scare the readers on this post under "uninhibited exuberance".

              To sum up, if you buy at 2.4 crores per ground and hope for a 25% CAGR over next 20 years (some geniuses do believe it and espouse it on this forum to palm off their property to the unwary!), you need to find a buyer at 104 crores for 1200 Sft and this amount at 35% pa shoots up to 485 crores.

              Take your pick.

              1. Either you find a sucker to buy your property at such astronomical amounts (meaning that the rupee will become like the Zimbabwe $ by then)

              2. Or the returns need to be very, very poor over the next decade and more, so that people's salaries catch up with these prices (we discuss the unviability of this case a little later down the post)

              For case 2, further one of 2 things can happen:

              a. Prices can crash and then go up slowly to provide pedestrian returns

              b. Prices can stagnate for a long time and achieve the same result

              So, what it means is, if someone bought now, it is like locking the door to the dungeon and throwing away the key for a long time. Because, in the next decade or two, selling will not be much of an option as price appreciation will be very slow, if at all. nd much of this time you will actually be making a loss since, net of interest your profit will actually be negative. Has anyone on this post thought about the future 20 year out and calculated the pain?

              Besides, you know how IT salaries are already making India uncompetitive. Do you think salaries will rise by 15% - 20% every year for next 20 years? Dream on!!!

              Besides, with our population rising so fast, there will be scarcity for most essential commodities, greater competition for jobs and this will put continuous pressure on salaries keeping them low, while keeping expenses always rising faster than salary.

              So, with rising prices, your not-so-fast-rising salaries will put pressure from above and you huge monthly outflow (1.5 lakhs pm) will keep the pressure on from below, squeezing the ba**s out of you! . That is, if you can actually earn 2 lakhs or more per month continuously for next 240 months.

              No way out of this and prices will, at best, stagnate for a long period of time and at worst, crash and come back after a decade or two.

              Now you know where that statement came from!

              cheers
              Last edited December 20 2008, 12:10 AM.

              Comment

              • #47

                #47

                Re : Should one really wait for Price Crash?

                20 years is along time

                [quote=wiseman;10075]Manoj,

                I did some calculations relating to the future to scare the readers on this post under "uninhibited exuberance".

                To sum up, if you buy at 2.4 crores per ground and hope for a 25% CAGR over next 20 years (some geniuses do believe it and espouse it on this forum to palm off their property to the unwary!), you need to find a buyer at 104 crores for 1200 Sft and this amount at 35% pa shoots up to 485 crores.

                I dont agree on assuming somethings cannot happen in 20 years

                consider this
                3 years back land at many places in orgadam,sripermbundur was 1000/cent,I ridiculed the broker that these are jungles and i might never find a buyer at these places. today the same places are commanding prices of 150000-200000 per cent.
                if something like this can happen in 3 years same things can happen in 20 yrs.
                you just cannot ridicule it (as i did 3 yrs back)
                AND IF EVERY PREDICTIONS BASED ON STATS AND ESTIMATES WHERE TRUE WE WOULD NOT BE DISCUSSING THIS HERE. i would have purchased the land at orgadam for 15 lakhs and would have sold it at 15 c and would have been vacationing

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                • #48

                  #48

                  Re : Should one really wait for Price Crash?

                  Chennai RE price trend

                  Originally posted by Manoj Misra View Post
                  Friends, more thoughts on this subject please?
                  My experience in the last 6 months period on the trend:

                  01) In the projects with fast progress and expected completion within the next 3 months or so- less reductions. If you stretch, it may go upto 10 % of the earlier prices.
                  02) Ready to occupy flats in good locality- very limited reductions. Depends on the builder-quality of construction and the buyer's ability.
                  03) Yet to start projects and delivery 24 months etc. - decent reductions like 15% can be possible along with the payments alternatives.
                  04) Non water logging areas as could be seen from the recent rains- the reductions are not very much encouraging.
                  05) But the fact remains, not much of real sales are happening and the buyers are waiting for the prices to come down appreciably where as the sellers are holding on, possibly due to pressure tatics from a handful of Builders who control the RE market in Chennai. I do not know how long can they hold on. But cracks are being seen now. Most builders also fear that if they sell the unsold flats now at lower prices, they may have to give the advantage of the lower prices to the already booked flats also. This is another deterent in the prices coming down appreciably.
                  06) Builders also eagerly await the house loan interest rate coming down so that the enquiries/bookings can increase.
                  07) In a nut shell, it looks like a near cartel in some localities holding on to their guns, fuelled by the black money doing its bit in Chennai in not coming out with prices to reduce reasonably.

                  More expert views?

                  ks2071746

                  Comment

                  • #49

                    #49

                    Re : Should one really wait for Price Crash?

                    Should one wait for the crash?.

                    The markets can go only in three directions. Up, Down and Side.

                    What am I going to do, if there is a crash(down) or if the market is flat. what is my investment objective.

                    Am I going to buy a house or land to living or investment purpose. How strong is my bank statement( cash flow).

                    Do I have the funds ready or looking for a loan?. How am I going to prepare for that.

                    On the investment point, what I am looking for. What is the(ROI) Return on Investment expected.

                    Is it a capital gain or cash model model.

                    How many properties I am going to buy. Is it one or two or three. What is my capacity(Savings= Income - Expense),

                    how can I improve that.

                    Am I prepared to buy a property if there is crash. What can I do if the market is flat.

                    It is always better to be prepared, instead of praying or dreaming for a crash or thinking of timing the market.

                    No doubt yr 2009 and 2010 will offer the best investment oppurtunity both in stock market or real estate.


                    Are you prepared.

                    ( Interest rates, oil prices, inflation, boom and bust are the natural cycles of the economcy).

                    Comment

                    • #50

                      #50

                      Re : Should one really wait for Price Crash?

                      Should one wait for the crash?.
                      The markets can go only in three directions. Up, Down and Side.
                      What am I going to do, if there is a crash(down) or if the market is flat. what is my investment objective.
                      Am I going to buy a house or land to living or investment purpose. How strong is my bank statement( cash flow).
                      Do I have the funds ready or looking for a loan?. How am I going to prepare for that.
                      On the investment point, what I am looking for. What is the(ROI) Return on Investment expected.
                      Is it a capital gain or cash model model.
                      How many properties I am going to buy. Is it one or two or three. What is my capacity(Savings= Income - Expense),
                      how can I improve that.
                      Am I prepared to buy a property if there is crash. What can I do if the market is flat.
                      It is always better to be prepared, instead of praying or dreaming for a crash or thinking of timing the market.
                      No doubt yr 2009 and 2010 will offer the best investment oppurtunity both in stock market or real estate.
                      Are you prepared.
                      ( Interest rates, oil prices, inflation, boom and bust are the natural cycles of the economcy).

                      Comment

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