I would like to say one thing that Increasing prices of property is totaly manuplated by Cong. govt. & Builders. I am not from any Political party but think when BJP was in Centre Govt.that time lower middle class persons also have purchsged house. But now could not. It is not matter to stay on rent or in own home. it is matter to think about how to make life messarable by Ruling Govt. They wanted more & more tax from service class and this amount will shift to swis bank by politician in personal account with help of scam. Please foregive me in case of poor English.
RE:Property Prices
by on May 02, 2007 01:46 PM Permalink
I beg to differ slightly. I am no Congress supporter and in fact my sympathies have always been with BJP. But the facts are different. The economy overheated due to sudden increase in borrowings. Also I know a lot of people who borrowed money from any means (personal loans, Credit Cards, friends and family, etc.) to invest in the booming share market. Home Finance is just a component of the rise in borrowings (albiet a largest one at 35%). I do not think even the BJP could have done anything much. Government can intervene to an extent (and this govt has done nothing) but cannot control a Market based economy. But the BJP will always enjoy the benefit of the doubt.
RE:Property Prices
by psycho on May 01, 2007 12:01 PM Permalink
ur are right. congress is of No use. For 50 years they were in power , did nothing BJP made attempt to change a lot of things, and some thing did change.(in just 5 yrs) congress won't be using the aam admi slogan for next election. they would be trashed
RE:Property Prices
by janmajoy c on May 02, 2007 04:16 PM Permalink
i hate the congress govt and i pray they dont come to power..but then there are ppl with vested interest who are FOOLS vote for these cheap congress folks
RE:Property Prices
by pradeep kumar on May 02, 2007 01:09 PM Permalink
What a crap.. If the property prices are not increasing then the economy is not gropwing. So If BJP in power the property prices dont go up.. then country is not growing.. remember that.
If you have 25 L in hand then 1. you can buy a house and save 15L in 20 years and your may be appricaited if the area does not get congested after 20 years 2. you can go fixed deposit and your money will be multiplied by 8 i.e. it will 200 L and the money spend in rent will be 15 L so your net money will be 185 L after 20 years. and you can move back to your home town instead of staying in metros as after 20 years your home town may be more peaceful area and will be in better position. 3. you can invest money in some other bussyness can earn(or loose also) depends on your bussness skills
RE:25 lacs,my foot
by vishal rawat on May 01, 2007 04:24 PM Permalink
Renting the house in Delhi is certainly better option. In a locality like Dwarka, you can easily rent in a 3 BHK society flat for less than 10000 Rs. per month and the initial deposit is just three months rent. While if you want to buy the same, you have to shell out atleast 45 lakhs. In 25 lakh you cant even buy a 2 BHK DDA flat while 1 BHK is simply not available vishal
RE:25 lacs,my foot
by Pavan Bhandari on May 01, 2007 11:35 AM Permalink
Mr.Khan come to pune, i'll get you 2BHK@ 25L in a descent locality and off course Pune is not overcrowded as Mumbai.
Below is the EMI ( monthly outgo ) for 20 lacs loan @12% p.a. monthly rest (a) 10 Years - 28700 ( Total outgo 34,44,000/- ) (b) 12 Years - 26280 ( Total outgo 37,84,320/- ) i.e. just by taking an extra burden of (a) Rs. 6,660/- OR (b) Rs. 4,240/- , Mr. Kumar will save (a) Rs. 18,45,600/- OR (b) Rs. 15,05,280/- So, while going for Housing Loan Please try to take the tenure as less as possible Thanks
RE:All Rediff Viewers - Please Consider This - Important
by on May 02, 2007 01:48 PM Permalink
Very rightly put. I borrowed for 10 years only at 7.5% fixed rate (Nov,2004). I have been lucky so far to be spared from a rate revision.
just wait for few months in case you want to buy the house.both sensex and real estate is artificially high rated(courtsey chidambaram and montek singh ahluwalia).most people are wanted to sell the proprety at high price but are finding no buyers and slowly prices are crashing day by day.most of the prices of stock and realty are at least 4 times overrated.what happened to our economy injust 1.5 years to justify these prices just wait ,crash is coming.
RE:crap!!!
by Himanshu Srivastava on May 03, 2007 10:31 AM Permalink
I think this topic cannot have one conclusion. It will depend on person to person.
There are pluses and minuses for both part. However, owning a house gives one a sense of stability, a place where he is sure his dependants can live even incase of an eventaulity! Moreover, having an asset is always benefitial, not only for its appreciation in terms of monetary value, but it can be very useful incase of dire emergency(ies). Incase of pepole with switchable/ transferable jobs, owning a house in a city/town where one intends to stay after retirement gives a great peace of mind. The rent for a acco in another city can be cross-compensated by the rent he may get from his permanent property. The author has not taken into account the brokerage charges, which become subtantial (10%) of annual rent. Considering other misc. charges i.e. shifting expenses (and I dont say only those on the day of shift, but other expenses), time and mind involved in constant search for a new house from one house to another are very important factors. The entire money that you spend goes down without any returns... FINALLY, IF THESE CALCULATIONS WERE TRUE, NOBODY WOULD HAVE CONSTRUCTED / BOUGHT A PROPERTY, and THERE WOULD HAVE BEEN NO HOUSES TO RENT!!!
RE:Rented House v/s Owned
by Adharshila Consultants on May 01, 2007 10:34 AM Permalink
Further, I would like to add to the above, is that the appreciated value of the house (which is yours today for Rs. 25,00,000/-) after 20 years, even considering a dismal 6% appreciation per year shall be a whooping Rs.80,17,840/-. Should this NOT be subtracted from the total Expenditure, and see the result- which is cheaper??
But author compared Monthly rent of Rs.13,500/- against a Rs.25 lakh own house. Acoording to todays trend in the market, if you are able to get a property for Rs. 25 lakh, in the same area the house rent will be around Rs.5000/- only. He considered Rs.13,500/- rented house, then he would have taken a Rs.70 lakh for a brand new house in the same area.
(See my message before this one). Taking the data from Praja's message - If the rental is 5000 per month and 60,000 per annum. The intrinsic value of the property should not be more than 16 times the annual rent, say about Rs. 9.6 lacs. Thus, if the current market value of the property is Rs 25 lacs, the return on it is Rs. 60,000 or about 2.4%. Thus, better go for rent - and as a sideline, buy two plots some distance away. Five years down, sell one plot and make the house on another.
RE:Good article
by amit gupta on May 01, 2007 10:31 AM Permalink
I hope U had not seen the Movie "Khosla Ka Ghosla" which is near to a true story. Government should do some thing to bring down the property prices as this boom is artifical created by Builders & property dealers nexus.
The article is a very good starting point on the topic.
Sometime back I read a thumbrule - In case the rentals is less than 6% of the value of the property - Go for rent, else Buy a house.
Recently I met an old rich man who has made good amount of money to explain his approach - he said - "buy land which will be inhabited 5 years from now". (the logic is, if lots of people are already staying there, then the prices would have appreciated, and further rise is unlikely to happen).
On Option one may consider - Buying plots a bit away from the city (a place which will become good five years hence) - and buy multiple plots (2-3) side by side. Later, you sell off one plot and with that make the house construction.
One more approach I have seen is making houses and keeping provision for expansion of units, that can be rented out. I have also seen some people coming up with separate 1 bedroom units, which can serve as Home Stays - this largely will apply to big cities.
RE:Build a House or Rent
by Ganesh R on May 01, 2007 10:21 AM Permalink
Cling on the gentleman's advice. He's right. However, there's also risk that, what if the land value does not appreciate? So selecting the place becomes more important which cannot be read anywhere, but comes from experience. Seek that old gentleman's advice.
