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I'm not from Bangalore, but we do have a residential project ongoing in Bangalore so have knowledge on the sector.

I'm writing here as a cautionary tale regarding Stanza Living.

Read the comments on this LinkedIn Post

We were landlords for Stanza Living's PG/Serviced Apartments and wouldn't recommend them to anyone. Ended up evicting them due to multiple issues faced regarding payments, etc. Their service/response was so bad they they wouldn't respond to mails for over a month. Extremely unprofessional. Maintained the premises very badly and have employee's (POC) quitting every 2-3 months.

Would not recommend them, tenants complained the same about them and were requesting us to help with issues which were Stanza's responsibility.

I think the real estate boom is here to stay. When prices consolidate for a long time like they did recently - since 2015 they've either stagnated or went down as the bubble deflated due to demonitization, GST, slow switch to white money etc - then they have ample room to move foraward. In the first phase, prices rise sharply and once they've doubled or so, people talk about bubble etc. However, in my experience, that is never the case since it indicates people are still suspect of the increase. We might see a consolidation for a year where prices go nowhere and hence give less returns than an FD but we will soon enter the euphoria phase and once noone is talking about the bubble (and are exuberant) is when we will see the peak. I stay in Gurugram and while older projects aren't appreciating that much, the newer luxury one are being lapped up immediately. If you have a good property then they're very easy to sell as well.

Real estate, as an asset class, takes time to pick up and time to die down and we're just in the third year. I think the cycle has another 2-3 years to run and the final phase is when we will see prices move up exponentially.

Sure, there are horror stories just like it is with every asset class. Some cryptos have become worthless. Many stocks crash and never recover but as an asset, if one invests in the good projects in good location (which will not be cheap), it can give spectacular returns.

I was looking at the pre-launch prices for Prestige Park Grove and honestly, I can't see the rationale of a +8,500/Sq.Ft pricing. I own an apartment in Prestige Jindal City (also 3,000+ units) and the following are my comments based on the ownership (I don't live there) in such a large community.

1) The owners and residents will be a mixed group with varied behavior and civic standards. It could be quite a shock how varied (and at times poor) the standards, thinking, and viewpoints are.

2) The amenities are inadequate considering the large number of users. This is not apparent when you book looking at the beautiful scale model and the show flats on display.

3) The rentals there are OK (but nowhere near a value to make financial sense to invest such high amounts and take on the high risk). The price appreciation has been decent. I have received offers at ~50% appreciation (I bought this unit in 2019). There is one more opportunity for a jump in appreciation when the metro gets operational (eventually!).

4) Some of these big builders effectively circumvent regulations and get approvals in their favor. The residual risk of such actions eventually gets to the owners.

5) Booking something based on future road/rail connectivity comes with its own risk as the timely delivery of these projects is not guaranteed. The Jindal City station which was supposed to be functional in 2021/22 will be completed only in 2024 or beyond.

Overall, I think the apartment projects in most of the hot areas in Bangalore are grossly overvalued and they are not worth the premium they demand considering what's on offer and the risks attached to these projects. I will stay away from these mega projects with 1,000s of units just based on points 1 and 2.

Have seen from experience, buyers ignoring many sunk costs like brokerage, regd, govt taxes, modifications etc while quoting purchase price. On top of all they ignore Tax on sale/profit. Forget outsiders, am not able to get my own rightful share from my kin.

This is a most valuable piece of advice. Anyone purchasing a second flat as an investment is just enriching the government, brokers and construction companies:)

Living in Pune, I've noticed a tendency (FOMO) towards purchasing a second home during the past two years. Since then, the prices have been rising.

I'm looking for a somewhat larger 3 BHK, but I can't find anything for less than 2 crores. The real estate boom is to thank.

Additionally, I've noticed that folks are having trouble selling their old homes. The concept that a resale property is second-hand has gradually developed. The 10+ years old properties are generally being bought by existing residents of the same complex, rarely by outsiders.

Local governments are constructing new land parcels in established regions for builder lobbies (and sometimes they don't even bother to suffix annexe lol:), preventing developers from redeveloping old complexes and charging exorbitant fees for those new flats. People are approaching developers for new flats, while owners of existing apartments are demanding the same price for their 20-year-old flats. This arrangement is only working in favour of real estate syndicates (builders, politicians, bureaucrats).

What is the remedy?
I believe that in order to stop price increases, which are currently being governed by the builder lobby, consumers should consider purchasing resale properties.

Owners of resale houses should set realistic expectations and avoid being swayed by recent pricing trends for newly constructed homes.

My recommendation would be to purchase an apartment in a complex with a larger land parcel if you intend to sell your flat later. The expansive landscape has a great impact on potential buyers.

Make an effort to make your apartment resale-ready by purchasing at least two parking spaces, one of which should have an EV charging station.

Disclaimer: I'm from Pune East, and these are just my personal opinions based on what I've learned while looking for a place to live over the past year. I've additionally created a checklist that I feel everyone should go over with the seller (builder or person) before purchasing a home. I'll post that list another time.

Same is the case with South Bengaluru. A 3bhk with 1300 carpet area sold at 75lakhs a decade ago is now costing twice of that.

Reason given is price went in maintenance and upkeep for decade long period and interiors demands such price hike. The resale apartments are charged same as new apartments.

With construction being so poor I'm looking at plot and constructing myself in vernacular architecture.

If you guys know any plot projects in South Bengaluru please share.

That's a 7% CAGR pre-tax, btw. Hardly the best of the returns after you have paid tax on capital gains.

Do you mind sharing the cost and sqft of commercial property ? DM me if you do not want to make it public.

Land on the outskirts of Mumbai ranges around 1.2 to 1.5 lakh per Guntha (agricultural land) and even more if it is a N/A commercial/industrial land.

I am in discussion to buy agricutural farm land in Gujarat but getting the right land with all documentations up to date is a big headache. I had to let go a good deal on a 2 acre land as the documents were not in order.

Regards
Diesel

Need Suggestion To buy: 15yr old Flat near to Highway vs New Flat far inside
My in-laws are looking to buy a (2BHK) house in Hyderabad, to move in from Chennai. They will be spending their retirement life here. Plan is to shift in around 4-5 years.

Property - A: Came across flats in an Old Community for 75L:
Pros:
+ Full fledged community with many many recreational areas
+ Vast space. (UDS 50yd for a 2BHK), (land prices are about 1L per yd in that area currently)
+ Layout is to our taste (vastu and personal preferences)
+ Close to our home
+ Supermarket and Medical store inside the community
+ 1km to Highway and Metro
+ Dmart 300m away
+ Good choice of flats available (floors 1, 2, 4, 12)
+ 500 family strong community with good maintenance record

Cons:
- 15yr old Property
- Interiors need minute refurbishing (1-2L)
- Low resale value


Property - B: There are plenty of good new flats for 80-90L, but far from actual city of metro.
Pros:
+ New property
+ Good resale

Cons:
- Atleast 10km or 30mins away from us, and metro
- Need to spend around 10L more for interiors
- UDS around 30yds max
- Owing to personal preference (requiring properties with ONLY square or rectangular layout of community), 95% of the communities would be stricken off.


Need suggestion is following aspects:
1. Does A deserve the current quoted price?
2. When we choose to sell A (in 5yrs or 30yrs), does it have ANY value at all?
3. I was thinking - at the end of A's lifecycle, it can be demolished and a new apartment can be constructed. We would have advantage of close proximity to Highway. - is demolition even possible
4. In A, any problems in future (if) would be rectified quickly, since it would effect 500 families.
5. 95% chances that (Any) Property B would be a standalone apartment, far from us. Recreational things or even proper amenities cannot be guaranteed too. So, for a happy retirement, could A be the better choice?
6. Sure, we don't know about the real estate situation after that many years. So, just go ahead and book what we like today (Property A)? But no, we do need returns of atleast what we invested today.

This has been a hot topic and only topic in our family for the last week. Requesting you guys for your suggestions so that we can put an end to this conundrum soon.

Thanks a lot in Advance!

I don't have the answer, but one thing to be aware of with older properties is the possibility of redevelopment. If the property is near a new infra development like a Metro, the chances are that the FAR would have increased a lot since the time the building was constructed. So, in about 15-20 years, the property might be eligible for redevelopment, if the majority of the tenants agree for such a thing.

This is a desirable thing for most tenants, since they get money plus a new flat in a new building. Might not be a good thing for a couple in retirement, you might be looking at 3-5 years away from the place while the builder puts up the new project. May not be applicable, but just something to take into consideration.

It's a straight choice between quality of life for the residents today, and potentially higher economic value for their descendants in the future.

Only you can answer which of the two you value more.

Thanks for the quick replies!

I have only heard about this being a possibility, but never seen any re-developments done before in my circle in Hyderabad. How is it in other cities? Is it even viable (Cost implications vs owners affordability)?

and How does the prices fare for say, a 30yr old community in other cities.
(Most of the Hyderabad's new and trending life is going far to outskirts from the city. Trending areas 10yrs ago, have now become an old city).

Current properties that I checked might not have same fate, since they are pretty close to IT zones (HitechCity) currently.

Thanks for the additional and valid point. Added to considerations.

Thanks for pointing out the most important aspect.
If choice is left for me, I would blindly go for the Community for their retirement life. This is what I had done with my parents as well.
Thing is, my in-laws are the ones who are strongly thinking about the 'returns'. I did give them my standard answer - The decision about the house that we live in should mostly be comfort driven, than investment driven.
The second house (if any) can take the place of investment options.

I just wanted to be sure myself before assuring them about the future value of the property.

Have seen a couple of cases, 30-40 year old apartment buildings, the apartment association voted to go in for redevelopment and most of the tenants agreed. The place was a prime location in Mumbai, so the builder was ready to even foot the rental bills for the apartment owners while the project was being re-done. Was still profitable for the builder because property prices in Mumbai are insane and with the new FAR, the builder was able to put up up several new floors. Residents were also happy because they got a new flat in a new building along with some good money. But for those 3-4 years, it's a hassle having to live elsewhere, all the negotiations with the builder, calculating how much each tenant was entitled to based on the size of each apartment they owned previously, convincing the tenants who didn't want the new development, fear that the builder might stop the project, litigation, etc etc.

Right now, the building where my in-laws have lived for the past 40 years is being considered and the initial discussions have begun.

Depends on whether the cost of redevelopment makes sense for the builder, against the present FAR and property value. For older buildings in the center of the city, it's a no-brainer, but depends on a lot of things in other areas. So it may never happen for a lot of buildings, just something to be aware of as a possibility.

Went through the same a year ago, when parents moved to Bangalore to retire.

Their parental instinct to leave something behind of value for their kids is understandable and noble, there's often also a 'I need to die under my own roof' aspect for their generation.

That said, a sense of community and ease of mobility become the two most critical factors in a retired life, even if they think right now they're ok compromising with those for better 'returns'.

After looking at several options, we finally chose a spacious gated community, a 5-year old (unused) 6th floor flat with on-campus amenities, senior residents for company and metro/highway connectivity nearby. The metro proximity by itself has done wonders for their quality of life, esp. my mother's who can't drive but now criss-crosses town at the slightest pretext:). Dad hates driving in the city, so his driving is also majorly left to our highway trips while they conveniently visit friends and extended family using the metro.

Property prices are notional to an extent to begin with, appreciation/depreciation depend on a bunch of factors outside our control, and the good years they'll live in the house is worth more than the $$$ delta to gain if/when sold later.

I'd love it if my parents' home appreciated considerably or even held its value, but if it gives them a happy existence for their remaining years, it would've served its primary purpose and I wouldn't mind writing it off eventually if it came to it.

Option A eyes closed and without a doubt.