RE:Assumption are not right.
by saravanakumar m on May 02, 2007 01:25 PM Permalink
rightly said. I wouldn't even agree for the rent of 7000. I am living in Chennai. The house which gets you rent 7000 would cost you around 50 lacs. This article is meaningless........
RE:Reality check required
by Quasim on May 03, 2007 10:08 AM Permalink
It will be foolish to think that you cant get a good property for 25 Lakhs. you can definitely get.
RE:Reality check required
by KN VENKATESH on May 02, 2007 12:14 PM Permalink
What happens to 525000 in case , the person lives on rent. with 12- 20 % return from MFs, the person will have a huge sum at the end of 20 years. Also , situations like recession, job loss can prove all math wrong.
RE:Reality check required
by Nitin Srivastava on May 02, 2007 02:24 PM Permalink
The first thing here we are discussing to have property on loan. The second thing market is so volatile and you can't predict about the future it might go crash then what you will do?????
RE:Reality check required
by pradeep kumar on May 02, 2007 01:03 PM Permalink
yes venkatesh, a property will easily cost 40 lakhs. So buying the property does not make sense here when u can get it for rent at 13000/- per month.
The author has not consider one more thing. India is a growing economy, In a growing economy city's will grow faster then coutry's gorwth. so is the real estate. Rents will defnetly shoot up. If I compare with other cities like DUbai a dessert city where the rent is almost 1 lakh pewr month.. Go for buying properties guys. People who thought of this mathematics in B'lore are home less now..
With raising interest rates, home loan defaulters are raising in alarm ratios. So we should also see resale of houses/ flats also. The prices may or may not come down due to high FDI and 100% funding from foriegn companies.
First of all the scenario should be understood by the common man. Housing, residential very much in shortage. demand is in 500%. since the politicians are corrupted, black money was invested in the housing, real estate,sez's etc., I will quote a small example. To start with Tamil Nadu. Tamil Nadu OMR-IT Projects, Banglore road Poonamalee- sripermbaddur SIPCOT & Industrial Zone, Now 3rd Industrial Zone at Tiruvallore & Redhills. None of the area Residential Housing was not promoted by the State Housing Board nor the private Builders. lacs of employees every day going from the city by company busses to work in these Zones. Adding salt to the injury IT Minister Dayanidi Maran wooing all Industries to bring to those zones and established. Now Homes are in shortage. 700000 homes are shortage in Chennai due to the new work force came from other states & other than Chennai. Once upon a time TNHB is one of the competitor for the private builders & the prices are in control. Since black money came into the housing lands to make white, 270 square yards are openly quoating at 40 million ruppee which is higher than the LONDON rates. As per Income Tax statics that many rich people are not in the books. but free money to & fro but no vigilance. Whereas in Hyderabad More Houses are available not the Industries/IT's. Similarly all over the country imbalanced growth, no balance between the Residentail homes verses Incomming people from various pockets. Housing Boards should be revived and make houses available for the common man.
Anyone planning to buy a house/office should postpone their decision by 4-6months coz Real estate pices are going to cool down soon. With rising interest rates there are not many genuine buyers in the market only big investors who have pumped in black money. We have seen unrealistic hike in prices for the last 2years and similarly we'll see realistic cool down in coming 2years. This is not my personal opinion, but based on facts & views of leading HFCs like HDFC,ICICI,GEmoney, etc. We are already seeing the corrections in big metros (like Delhi, Chennai,Mumbai,B'lore,etc) and soon we'll see it in smaller metros too (Pune,Hyderabad,Chandigarg,etc). It's also nature's law that anything and everything that rises very fast without sound base, comes down equally fast.
I feel living on a rented house is much better choice than to purchase/build own house.I state on the ground: Due to big boom, in cosmos and other cities where around 85%population lives, houses were made by individuals on local housing boards authorities land, so houses are now easily available on rent. If landlord wants to vacate his premises, tenant will get another house in the same locality easily. 2.He will get 40%/50% tax rebate under section10(13) of the Income Tax Act. 3Further now it is often seen that people used to get transferred or go out for better job opportunities .In that case too, they have to rent out their house and live on rented house, in the new city. 4.It is also important that the family need not to stick to their own purchased/built house, in case they want to change premises, as per their wish. 5.Further if they have fund say 80% of the house cost(Borrowed money), they can better invest it in attractive schemes/mutual funds/Bank FDRs o government Infra structure Bonds and earn Income Tax benefits under 80C. 6.It is often seen that due to over enthusiasm ,people used to take housing loan but pay much higher amount as interest, which cost to their family betterment, their children's better schooling, their better personality development and at last at the time of their entry into job market, they find that their children are not up to the mark .Why? They are left with insufficient funds to look after their families. At last i feel that making a prosperous family is better choice than making a house. Yes making a house is better option for investment purpose, but you should have surplus fund to invest .Also making a house on our own is much cheaper than buying a house from multinational infrastructure housing companies, who earn exorbitant profit out of their actual spending on house building .Certainly making a single house is much cheaper option. Ravi Sharma r_kantsharma@rediffmail.com
How can you forget important factors of the game. Buying a house also entails an appreciation over the years which almost nears your total calculated expenditure for buying a house. Moreover you get an additional benefiot of tax rebate.
2.Calculating the NPV with the asset created and the oppurtunity cost which in case of real estate is very high the rent option fails totally. 3. After repayment the you live there for free and without rent
The Rent/Buy calculation indicated here is definitely not applicable to a diverse, big country like India where even within in tier II cities the cost of house or rent vary widely based on location, facilities, demand / supply, etc. Many parameters that to be considered can be selected based on your actual experience to arrive at critical decision for the serious buyers / renters by following the link which definitely provides a more realistic calculations. So I suggest all readers to see INTERACTIVE RENT / BUY calculations by NY Times at the following link.
Its a quite average article which one undergoes in every walk of life. However, its good for high earning men/women. But, when it comes to the matter of a low salaried Govt servant, below the rank of a section officer, whose gross salaries start from 4000 to 16000 PM, he could not buy any sort of accommodation except rely on the govt. accommodation which needs to be vacated upon supperannuation. Here, I would like to mention, a govt servant cannot even buy a house being offered to the Economically Weaker Sections (EWS) coz, the clause mentions very particularly, that a person's income should not exceed 25,000 or 36,000 per annum. When this factor comes into consideration of whether you want to buy, ther is no way for a govt servant coz, his salary goes to over 48,000 PA thereby denied an EWS house as well. Even if he stays on rental basis(until he is allotted a govt. accommodation, which may take atleast 8 years on an average), he has to suffer a hell in a city like delhi, where the rents for a small 1BR house ranges between 3500-5000 in a far locality in delhi which is just inaffordable for a low salaried govt servant. These kind of problems are commonly faced by a low salaried govt servant in Delhi. Lastly, I would like to say, the low salaried govt servant cannot buy an asset for himself or live on rental basis and thereby, forcing him to live in unhygenic conditions and eating unhealthy food and inviting all sorts of diseases and also forcing some people to resort to some kind of other source for living, provided he is not caught and in case he is caught, he gets suspended and loses the 2nd job as well. So friends, plz do not resort to go for secondary jobs while ur serving the govt as you may land in trouble. Friends, lets wait and watch whether if any government would show some mercy on the low salaried govt servants. Thanks for reading my article. Plz write to me in case you have any views / opinions on my article.
RE:what about low salaried govt. employees ?
by Anamika on May 01, 2007 01:31 PM Permalink
you brought up a good point but when u write " lets wait and watch whether if any government would show some mercy " does it mean that ppl in govt job are not beacause they deserve it; but because govt is merciful to them. if some one think that he deserve more then find ways to generate more and leave the govt job for those who are appropriate for that job.
RE:Please dont publish such crap
by praveen r hakki on May 01, 2007 11:53 AM Permalink
Please see INTERACTIVE RENT / BUY on NY Times on my post above (also copied below for your reference). Here can select all the parameters and make your own calculations. http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?ex=1178164800&en=030cb4c6466792a7& ;ei=5070
Excellent customisable graph at your finger tips!!
