Risk reward ratio is against UC purchase as posted in another thread - reposting here since it was OT in that thread
Chances are high that 2 years later also price will be 4500 only.
Again, 2 years later you might find these risks have materialised:
1. Builder might have run away
2. Builder bankrupt and project stalled
3. Project not completed or still needs 2-3 more years
4. Project is poor quality
5. Project is in court
6. Project has no sewage/water/electricity
7. Project complete but club house pool and other amenities not existing
8. Project complete and RWA hijacked by corrupt and useless people
Isnt it better for end use to avoid all of these? If prices were low, these were acceptable risks.
When prices are high, these risks are not worth it - RTM is better
Omaxe Grandwoods is the standing example for all of these risks for end user - although investors are happy
I think people are missing the point once again.
Investment and own use flat are different things.
If you have to buy a flat in the future, by all means make 30% of savings - or even 50% of savings - into real estate. Sell that to buy your own home.
Take Omaxe grandwoods example. Suppose you needed a flat to live in in 2006 and you booked in grandwoods using loan. You will now have been paying rent plus EMI for 6 whole years - and you still cannot quit your rented flat and go live in grandwoods, because not yet complete. In between in 2008-9, there was a serious risk that Omaxe will collapse and become bankrupt. Somehow it escaped because real estate happened to bounce back.
In a future recession, Omaxe might go caput. That risk still exists.
Remember own home is not an investment - it is end use. If instead of Omaxe grandwoods, you had purchased a ready made flat (say in NOIDA) - you would still be sitting on 200% profit - PLUS 6 YEARS RENT - PLUS PLEASURE OF LIVING IN OWN HOME for six whole years.
On the other hand, for investor, Omaxe Grandwoods has been an amazing return of 200% in 6 years. The risks take have been worth it - the reward has materialised. But it might not have materialised - if Omaxe had gone under. So if you were saving for a future RE purchase and stuck to the rule of 30% investment in RE - you would have been safe because you would have lost only 30% of your savings.
When people buy a flat for own use, they tend to put their everything including shirt into it. If this happens to be UC and the risk materialises, you tend to lose everything including your shirt.
Taking a bank loan for UC property has multiple risks - and is not meant for own use home. Loan for own home, using up big amount of savings and big part of salary for EMI, should be for RTM and not UC.
You can take a bank loan for investment though - if your saving is 30,000 and EMI is 10,000 for investment RE purchase, rest 20,000 going into equity and FD. Not otherwise.
If you want to be safe and prudent. By all means invest in RE provided you know what you are doing and what the risks are.
There is risk in everything, including crossing the road. If you know the risk, you can avoid accidents.
Venky, Grandwoods is still not fully RTM as registry is not being done yet
Take Omaxe grandwoods example. Suppose you needed a flat to live in in 2006 and you booked in grandwoods using loan. You will now have been paying rent plus EMI for 6 whole years - and you still cannot quit your rented flat and go live in grandwoods, because not yet complete
yes one can start living if builder has got completion certificate ...
Then why would anyone register and pay extra money to govt/authority? I know the reasons like papers/peace of mind etc..but it is absolutely not mandatory (you get bank loan, possession, electricity/water connections etc) then why register? I mean what is the incentive to flat owners who register his/her flat Vs ones who doesn't (or can't)