Real Estate Bubble In India

Discussion in 'Visa Bulletin and Priority Dates Retrogression Iss' started by AAA_USA, Nov 6, 2006.

  1. AAA_USA

    AAA_USA Registered Users (C)

  2. atyagi73

    atyagi73 Registered Users (C)

    Not a good news

    Thsi si not a good news for people like me who are planning to buy an apartment. Should I wait ?
     
  3. GaramChai2go

    GaramChai2go Registered Users (C)

    I don't think it makes sense to buy now. The thing is cost of real estate is so high and infrastructure is still weak (mainly because of corruption). There is no proper power, water...etc... it is liking buying hell for the cost of heaven. I would not like to become a slave because of this bubble or whatever it is. Realtors are really cashing out from innocence of middle-class people.
     
  4. marlon2006

    marlon2006 Registered Users (C)

    Buy !

    Ironically, I bought property in my home country in South America. Prices continue very low, and actually decreased. Just to give you an idea, I bought a decent 3 bedroom house there for $20K.

    If you guys have chances to buy in India while prices are still OK, buy it. It really seems that the balance in power will shift and we will see more value in India and China in the coming years. Here in the US I predict that things will decline gradually from now on.


     
  5. mariner555

    mariner555 Registered Users (C)

    Tyagi,
    it depends on where you want to buy and what the current price is. I think there is definitely a bubble in bangalore ..you need to see long term prospects, cost of house in relation to salaries ..in other words can an average person afford it now ..if yes, then you should go ahead ..for eg ..from what I hear it costs 65 lakhs (indian rupees) to buy in bangalore ..can a average programmer afford it ..(maybe yes, but it would eat up all his savings) ..long term bangalore may decline since other places (pune etc ) are coming up
     
  6. manohar77

    manohar77 Registered Users (C)

    plots

    Instead of buying appartments/houses, that are expensive and lot of maintenance involved, you should go for plots/farmlands where the documents are clean and legally sound.
    The reason is that the plots appreciate faster than the appts. No maintenance is required and lesser headaches. Most important, its easier to sell them as well.
    As far as the mkts are concerned, hyderabad outskirts are really hot, you can get returns of more than 100% in just 6-12 months. But be carefull of the legal papers, you need to go through the right channel/right trusted people, period.
     
  7. GaramChai2go

    GaramChai2go Registered Users (C)

    It is same trend anywhere you go, even in the remote areas. Price have gone up atleast 4-5 times in last 3 years. Foreign investment is eating it up.
     
  8. AAA_USA

    AAA_USA Registered Users (C)

    Hyderabad outskirts

    As manohar pointed hyderabad outskirts in really hot. People are buying like crazy out of speculation and its all the speculators who are driving it up like anything. 100% appreciation in 6 months means itself that is speculation. Frankly do you think there are so many jobs(including software) that are coming up in order to drive up the prices like 2 crores/acre, 30 kms away from the city.

    Of all the speculators NRI's are a major chunk.
    Talking to a friend of mine in Hyderabad who bought 13 acres on Warangal road.

    He and his friend paid for 4 acres in that. Rest all the money came from indian amercans.

    Do you think India is in such a boom that it is going to makes sense to buy an acre at 2 crores, 30 kms from hyderabad after Ramoji City.

    Please correlate this with the real estate boom in USA.

    I dont think it is going to die down anytime soon.

    Please read the following article from RBI governor:
    http://www.telegraphindia.com/1061102/asp/business/story_6948764.asp

    Please share your thoughts for further clarity for NRI's who are planning to be a part of the boom.
     
    Last edited by a moderator: Nov 6, 2006
  9. AAA_USA

    AAA_USA Registered Users (C)

  10. manohar77

    manohar77 Registered Users (C)

    corrections/price adjustments/cooldown

    I think even with the price corrections/price adjustments/cooldown, the real estate is going to stay hot as the purchasing power of the local people have increased a lot in the last 3-4 years. After the Delhi metro project connected all the outskirts townships to the main city, the prices multiplied like crazy. Well as the infrastructure (like water/transport/power) improves in these cities, there wont be any stopping in the real estate mkt.
    The new mkts for the NRIs that I would suggest for appts would be pune/gurgaon/cyberabad/bangalore. Why? Because most of the NRIs are from an IT background and these are the places where all the MNCs and the local big giants are setting up their shops. Thinking of the future where you go back for good and want to settle down in your own house, you have to start picking up right now as the prices then will be definitely out of our reach.
    About buying a property in US, the houses here appreciate so slow that the amount of return is far better just by putting the money in a bank for mere %age. I would strongly suggest not to buy a house here is US if you have plans to go back. It takes atleast 4-5 years to just breakeven after all the costs are taken out.
    Just my 2 cents on this...
     
  11. AAA_USA

    AAA_USA Registered Users (C)

    Hyderabad outskirts

    Manohar,

    Just how long would you think, it is still a good buy in Hyderabad outskirts?
     
  12. atyagi73

    atyagi73 Registered Users (C)

    How about Gurgaon/Gr Noida

    I was planning to buy around Delhi(like in Gr Noida/Gurgaon). Now I am thinking again about it. It is ridiculously costly. A decent 3BHK apartment is above 5 million INR. Is it worth it ?
     
  13. GaramChai2go

    GaramChai2go Registered Users (C)

    Ironically many people of this forum talk about going back to India. Maybe you can not afford it there anymore, it would be better if you buy something in here. :eek: :eek: :eek:

    Think about it. Same 3BHK which used to cost 15 lacs 4 years ago , now it requires 50 lakhs. Means whatever your earned in last 3-4 years will go in that appartment. Instead We should have stayed there and bought that apartment.
     
    Last edited by a moderator: Nov 6, 2006
  14. marlon2006

    marlon2006 Registered Users (C)

    I have an Australian friend who told me the same;
    He came to the US in 2001 and he could have bought a property in Australia for US$90,000. Now prices for houses in Australia have tripled. People need to watch emerging places and make investments early.

    Few weeks ago I bought 72 acres of land in South America, however I am not lucky as you guys living in India, Australia, etc. I expect no boom there.


     
  15. AAA_USA

    AAA_USA Registered Users (C)

    Interesting answer for the real estate boom

    Whenever I talk to my friends in india as to who is having that much amount of money to buy properties at this exorbitant price, they say "NRI's"

    Do you guys agree? That is a very consistent answer I get from all of the friends.
     
  16. GaramChai2go

    GaramChai2go Registered Users (C)

    Probably they mean Non-reliable indians.
     
  17. AAA_USA

    AAA_USA Registered Users (C)

    Good sense of humor.

    Lets accept the fact that Indian outsourcing industry is booming and all the big companies are posting more than 2 billion’s in revenue.

    All said and done, how many people in Bangalore or Hyderabad or Madras would be getting more than 1 lakh/month because of this software boom. There doesnot seem to be proportionate price increases of properties to the revenue increases of all these software companies. Is it a feel good factor in india or speculation or is there really that much happening in India.

    Your thoughts please……

    Trying to ascertain, if there is still some steam left in real estate market before going ahead with investments. I am sure many of you may be in the same situation as I am.
     
  18. manohar77

    manohar77 Registered Users (C)

    still a buy

    aaa_usa,
    I think there still are places around hyderabad you can invest. Take a look at shamshabad where the new intl airport/ fab city/ nanotech park are coming. I bought a couple of farmlands there on which 60% of the plot can be used for a house, they have almost quadrupled in 2 years. Also any APHB/HUDA collaboration with private firms is a sweet deal, like the malaysian project (rain tree park) - reason (land/project documents are clean and legally sound, I always stress this part to my friends, coz there are a lot of fraud schemes in HYD/DEL, you have to be really careful, hence the need of a very trusted person - either your/spouses' parents or relatives). You can also go for vishakapatnam where the IT industry is slowly poping up. There has been a big rise in the pharma companies setting up their r&d centers.
    Also, if you buy a house, you will have to pay extra to get a parking spot and also the wood work for the tenants. But again, its a good investment as the rents these days for good locales in hyd/vzg are ranging from 10k to 15k rupees.
    Also, you should be aware of is that once you try to sell the property you bought a few years back, its sometimes tough to sell as well.
    Also, never go for independent house, the maintenance (mainly water) is going to be really expensive. People in Hyderabad pay almost 1500-2000 monthly for their appts. tanker for water. Imagine their woes in summer...
     
  19. GaramChai2go

    GaramChai2go Registered Users (C)

    One thing I have been reading. It is not NRI, but it is still foreign investments.
    Real estate in USA has ceased so now they want to suck Indian real estate market. So unless you have big sum of money so that you can do a gamble.
     
  20. manohar77

    manohar77 Registered Users (C)

    empty appts

    Thats true, if you go to hyd/del and look at the appts there, most of the new construction have been bought by NRIs and they are lying empty without any tenants. One reason for that is sometimes you get into situation where the tenants refuse to vacate (the sweet pains that come with it).
     

Share This Page