If you hope to buy when market is down, bear in mind that interest rate will be very high at that point and employment will be at lowest level. So buying when property market bottoms is also a dream situation.
And as soon as property prices bottom out, investors & NRIs will jump in with cash to buy those cheap properties and then common will follow the trend in panic again. That will drive the prices up again.
RE:all you hopeful people
by Ram Krish on Jul 31, 2008 10:10 PM Permalink
Amitabh, obviously you are young in age. Therefore you do not understand that markets are not run on mathematics and logic alone (otherwise the richest people on earth would be mathematicians and logicians :).
Its run on the two human traits - Greed and Fear. These are the ones that create cycles (although natural cycles are governed by other factors as well). Greed creates boom legs (eexcessive ones like this creates super-booms once in 60 years). Fear creates bear and super-bears.
Please note that when EVERY SINGLE investor and analyst was looking at 25000 (just 7 months ago on New Year's eve), the market topped and then crashed. Similarly, the Real Estate bottom will not be reached in a great hurry. There will always be 'investors' and 'NRIs' with cash in hand. But REAL BOTTOM will be reached when NONE of these people will have the willingness or courage to buy because of the continuous and severe damage the many down waves will have done to their confidence and optimism.
And this damage will ensure that prices will decline by 50% to 75%, BEFORE the bottom is reached. I have seen 5 bear markets in Stocks and 2 in RE. And this BEAR is estimated to be the REALLY BIG Tsunami which even I have not seen. RE will first have to become a HATED sector before it bottoms. Thats the law of nature.
RE:all you hopeful people
by Vijay K on Jul 29, 2008 05:11 PM Permalink
In an way what you are saying is about the Demand and Supply equation that will set the prices of Flats.
Unfortunately i dont think in case of Real Estate that is always true.... I personally know of a Raheja Tower in Andheri.. where the builder does not want to reduce the rate even thought there are empty flats in the Tower and it has laready been 8-9 years since the Tower was built.
