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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