You will find a series of steps by the financial services (builders are an important part of that) to make you buy a house. What all will they do:

  • go on media saying that the Real estate industry is in deep trouble.
  • say that RE prices have fallen over the past 12 months
  • what they mean is the rate of increase is only 9% but their borrowing cost is 12% p.a.
  • scream that since prices are lower in 2016 as compared to 2014, they are in a recession
  • ask Jet Lee (he needs classes in economics and banking) to reduce interest rates
  • tell you how there is tremendous value in buying a flat in Slumbai at Manhattan prices with 4th world infra
  • tell you it is a great time to negotiate because the poor builder will drop prices of your 1 bhk from 1,84,59,565 to 1,84,22,114.
  • remember I have NO BUDGET for financial education, and they have a few billion dollars to hide articles like this.

What is the truth?

  • With ease of operating with good net connection, there is no need to be in Slumbai or its suburbs
  • even if you do not live in a slum your support staff does
  • Mumbai’s average income is Rs. 7 lakhs and the price of a house is Rs. 1.5 crores + 1.5 crores interest. Cruel.
  • Media, financial services, builders are talking up the price, laugh at them
  • If RE prices are going up, why are rents staying at 1.5% of the ‘market price’ of the house?
  • Panvel has to quote at Powai prices for you to make decent returns in Panvel 🙂 not impossible, it might take 23 years
  • Landlords throwing you out every year is a media / movie myth. Landlords need tenants just as badly.
  • Do not buy a house for appreciation, use an excel sheet to see if the IRR is true
  • Do not go by anecdotal stories. I can provide you enough in equities and RE – and equally useless
  • Do not buy houses for your children to use ‘when they come of age’.
  • Your kids are too smart. They will run away from this city/ country.
  • Rents remaining constant and housing prices going up is proof that a bubble is being created?
  • Is RE in Mumbai a bubble? Yes. Please keep your mouth shut. Messengers are usually shot.

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  1. sir please coin a term for madras like slumbai – beautiful

    sir one joke i read translated from tamil

    what is the difference between madras auto driver and real estate agent ?

    autodriver will say that place is too far even if the place is 2km away

    real estate agent will say very close to chennai even if place s 200km away

  2. Agree with everything especially, with good internet connection one can work from anywhere!
    If only road infra improves – and boom of sprawling suburbs(USA style, with good roads connecting city center’s), i mean real far off suburbs like beyond Panvel take off!

  3. There are a few truth we must accept

    1. Residential property has never been or will never be affordable in India

    2. Property prices for a retail guy will never crash and I am not talking about some distant far off locations like Ambernath etc…

    3.Treat your owned house as a consumption asset not a investment

    4. Either you can afford than buy a house that you want to live rather than living in a chawl or in a jungle or continue on rent

    5. Do not become a slave of your house I mean dont pledge your 20 year earnings to buy that house.

  4. Slumbai – Nailed it! I’ve often thought myself into a headache how did we get to paying first world RE prices in 4th world cities. While a proper 3BHK in singapore costs just 1.5 crores.

  5. Same situation here in Bengaluru too.
    Recently rumours (might become true !!!) are being spread that multiple big IT companies are planning to get out of Bengaluru and move out, hence RE is going to crash in Bengaluru.
    If Roti, Kapda and Makaan are basic necessities, how come the first two are not investments ?!

  6. In bnglr you had to pay 1 month rent when you vacate. So some owners simply want you out after one year as they can get this one month rent extra. The worse some owners(rarely) will say you had to pay 1 more month rent extra if you vacate before 11 months (total 2 months). They won’t say this clause when you give advance and this will clause will appear directly in rental agreement by which time you would had joined the new house and nothing you can do.

  7. I have rented my (independent – not an apartment) house in Bengaluru but without the 1 month rent for every 11 months clause. There are some good landlords too!! 🙂

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