Real estate market is showing its soft image. This seems to be a good time to make changes according to the current scenario. Before investing into real estate, one should find the reason behind it. Is this investment for creating asset or it is only for the sake of retirement income? If answer is second one, be ware before investing. Market is fluctuating. Real estate price is about to decline; however it depends upon the region.
Investment in to real estate for creating asset means purchasing house or shop for personal use. Well, in this direction you don’t need to worry much because it is one time investment and this asset rarely gets depreciated.
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I have property in Goregoan(W) a new construction. I bought at peak. Prices from builder is at the same purchase price as I had paid last year. But I think it will go down at least for a shorter period of time. Builder stopped construction of property in the middle. While I am still paying interest on my loan, I do not know what I can do on this. Builder has delayed the construction and that increased my cost. While I bought property for investment, it looks like I made mistake at this time. It seems I have to stick around with it for a while.
ARTICLE ON ACTUAL TREND OF REAL ESTATE AND IT’S FUTURE 31/5/2009.
Rates of Real Estate market in Mumbai are yet to hit more. Because even after 30% current discounted rates, none of the affording customer’s class is available. Over all only 6% customers were registered their transactions/sale deeds in the regional office of the sub-registrar and in detailed survey this sale of flats is classified in two categories Viz.:-1)4% customers are transacted; due to not have any option, other than to purchase the accommodations at the available discounted rates in the market. 2) 2% customers are always remains in the market to deviate their jack pot income. After up to date detailed survey from Mumbai stamp duty and registration Authority, they confirmed real estate sales transactions and in the opinion that, from overall customers only 6% transactions were took place in the last 6 months from above pattern customers and may continue up to May 2009.. If you will glance on the list for sale of flats available with real estate websites and agents/brokers, you will come to know that, not only newly constructed flats but reseller’s flats are still remain unsold from last 6 months, Customers are wondering but keeping mum while transacting the accommodations due to rates are still unaffordable. The basic thing behind non-transaction is loss of the job’s or major cut in the salaries of IT oriented and automobile industry employees. Hence the class of higher income group is absent in the market for whom the builders/developer were boosted the rates and also overtraded the land. On the contrary this previous higher income class is now not even in a position to pay there prescribed EMI. Accordingly their flats are in the door step of loan issued banks for auction sale. Therefore another 30 to 40% fall in the real estate market will only brings the real cash flow in the concern market. Otherwise none of the attractive polices of the builders/brokers will work. In this connection, we may ask one question and that is, which income class has boomed this industry? The simple answer is IT/NRI/Automobile/ construction and ancillary industries. Major employees of this industries s are either loss their jobs or major salaries are cut down. Hence in shorter sense we can say that, none of the persons can make drama of the money. It means real-estate industry has to face the real crises and overcome themselves with the real correction in the property rates and not with the unrealistic strategies applied up to date. In all the property exhibitions, attractive schemes from the builders were launched such as “ stamp duty and registration free from builders”, “No floor Rise”, “discount scheme on sq. feet rates is available for next 2 days”, “flats are in beautiful in natural surrounded area, visit with free bus facility”etc. etc. are proved fail. On the other part Share market index is also start booming after election result, this is all totally adverse atmosphere for real estate Industry. Because share market Index is always hedging type index, works with political activities. Share market investor class is always addictive with hedging type of transactions. Therefore Now and onwards specifically brokers remain alert and not to give any fake information of the rates to the buyers which they did in past few years consistently. Otherwise this market is already crashed and if overdose of the property rates will be given to ultimate customers, this market will collapse with it’s existence as it was happen in the recession of 1991 and 1996. Even new Congress govt. does not have any remedy to boom this industry. Discounted bank interest rates will be treated as placebo, that would never be a real remedy; Govt. will construct new homes through MHADA, CIDCO, DDA authorities @ half of the rates than prevailing. Recent MHADA housing allotment lottery is the best example for it. Even TATA NANO HOUSING Project is also launched for budgeted 1RK and 1 BHK flats and others like Hawre construction co. are in a row to construct only budget oriented flats. This is nothing but danger warning bell for those, whose flats of 2/3 BHK are still remain unsold. Anyhow builders and developers have to cut down the prices though they have over traded.
Thanks and Regards,
Gultulsiyani.
Investment in to real estate for creating asset means purchasing house or shop for personal use. Well, in this direction you don’t need to worry much because it is one time investment and this asset rarely gets depreciated.