[dearchichi]

Thank you @ninjatalli for this thought provoking thread.

The buyer needs to (not necessarily in this order):

1. perform a thorough check on the property's health, gather first-hand accounts of the standard of living afforded by it and compromise against the bad with the good
2. be comfortable in the quote of the property and the ratio of white:black it is to be furnished in
3. have the seller's papers verified, and trust that the seller has the originals of all papers with no unaccounted encumbrances or claimants
4. complete a token transaction with the seller/broker, trusting that it will secure the property off the market
5. have the loan/financials come through against that property
6. trust the seller to honor their commitment to attend the registration after the quoted amount has been transferred to them

It takes time to establish trust between the parties, to say nothing about procedural requirements and delays, and I don't believe any buyer, however motivated, would put down money without some semblance of investigation and scrutiny. If negotiations seem to be concluding within a day, my suspicion aligns with what others have suggested - that the involved parties are likely acquainted beforehand or connected through trusted intermediaries. It's plausible that organizing an open day for the property serves as the final push when negotiations reach an impasse, prompting both parties to engage in earnest discussions with the hope of achieving a positive outcome.

Those who tend to look hard before they leap may be at a disadvantage here, more so if they rely on "cold calls" against older, well-established properties. Priming a network of friends and family to discover opportunities in such properties might be the only way forward.

I now better understand why my wife is keen on buying the property that we currently rent out:

- it is by a tier-1 builder in a gated community
- it has less than 200 units leading to lesser pressure on amenities while providing a sense of community
- it is practically next-door to the metro, a mall, a hospital and a school
- it is in a "traditional" area of Bangalore and close to family
- it's owners are trustworthy and non-interfering
- it has no overt discrepancies in the socioeconomic group of residents, ensuring a balanced community
- we have first-hand experience of the quality of life afforded

However, these advantages must be weighed against certain considerations:

- the relatively small carpet area (< 1500 sq. ft.), adequate for our family of three but potentially feeling compact, especially for someone accustomed to a larger house
- the age of the 15-year-old building; a critical factor considering our goal for the property to last a lifetime (assuming 40 more years). Selling a deteriorated flat after 20 years to move into a better one is not a viable option.
- the idea that a dream-house by the mountains, with a bountiful garden amidst verdure is impractical

[GoBabyGo]

Hi, my experience from 2020 till 2023 for purchasing high rise apartment flat in Noida and a builder floor in gated low rise reputed builder place (Sushant Lok) in Gurugram.

I bought a 1800 sq.ft. flat in Greater Noida West in September 2020 at Rs.3720 per sq.ft. Current price in a around my locality is between 7000 to 8500 depending on the builder reputation. I am given to understand from my friends that price will go up to 8000 to 10000 per sq.ft. from January 2024.

My colleague in July 2022 was confused whether to spend 1.32 cr. on a under construction Godrej project in Sector 150 Noida (1900 sq.ft.). Godrej informed that possession is expected by mid 2024. My colleague was confused and after long discussion with me, he agreed and bought (10% booking advance and 40% within 1 month of booking). Few days back I checked with him about the flat position and estimated possession date. He said current price is 13500 per sq.ft. and new projects are launching (by Godrej itself & others) at 18500 to 21000 per sq.ft. price range. Possession is expected in April/May 2024.

My friend bought a 300 sq.yd. builder flood in Sushant Lok 1, Gurugram end of 2021 at 2.40 Cr. Current price is upward of 4 cr.

Interesting part is whenever a reputed builder launch a new project, majority of inventories sold out within 1 or 2 days of launch, specially 2500 sq.ft & more area flats.

It is difficult time for those 95% Indians whose income is not that high.

[anandhsub]

I believe it is the crazy rise in rents that has led to the jump in apartment prices with people fearing flats might no longer be affordable to either rent or buy in a couple of years.

One of my friends' rent was increased in one shot from 35k to 60k and he was in 2 minds whether to agree to the higher rent or shift out when he got to know via his maid about an apartment coming for sale in the same community ( which is 17yrs old now).

He didn't have to think twice and contacted the owner and signed the deal before the owner even thought about putting out ads.

If his rent hadn't been increased, he hadn't even thought about buying an apartment in Bangalore. Instead he bought one and his 15yr loan EMI is lower than 60k while the downpayment was just a single year's bonus.

[Bhargav7]

The market has gone from oversupply in the years 2012-2020 to that of extreme scarcity now. Also, the new projects that are coming up are super crowded with hardly any greenery, lack of infrastructure, and poor road and metro connectivity; but still at outrageous prices.

Somewhere, it started making sense to buy a 10+ year old apartment that has good connectivity and comes at a similar price to that of a prelaunch project.

None of the prices make sense at present. But the increasing rentals, which have gone through the roof, make you wonder, how on earth Bangalore became so expensive in just about 3 odd years!

[am1m]

Originally Posted by warrioraks

This combined with the desire to pass on assets to the next generation add fuel to fire.

Originally Posted by androdev

If you are a family man with kids, etc. I would say don't wait for too long. RE prices will never become sensible no matter how long you wait.

Yep, I would say this is the only sensible reason to buy in this sort of a market. RE is a great investment...but for the next generation! So if you have someone to pass it on to, it makes a lot of sense.

Originally Posted by Tutenkhamen

I realised, tech mostly keeps us moving so its not going to be easy to settle on a locality.
Even within Bangalore...

Lots of companies will shift location every few years. For various reasons. I've worked for one such company, they shift every 5 years. And with the only land banks available going to be further and further away from the city, they will keep moving.

Originally Posted by anandhsub

One of my friends' rent was increased in one shot from 35k to 60k...

Yep, this has been happening in the main 'IT areas'. Naturally people are going to start doing the whole 'rent vs. emi' calculation. I completely understand that rationale and such a sudden rise in rent is scary. But I also find it scary to assume that steady jobs and pay raises are going to be a given for the next decade, 15-20 years that the loan has to run its course.

No easy decisions, either way in Bangalore.

[Bhokal]

Real estate sector needs to be controlled and regulated to ensure that affordable housing is in everyone's reach. With crores of people likely to come out of poverty and moving to the cities in coming years and decade, they will need affordable housing. Maybe one should be allowed to hold only 2 properties at a time. Topic for discussion in another thread.

[amavin]

When RERA kicked in a few years ago, many fly-by-night and some established but over-leveraged builders just disappeared. Just see the number of half-done buildings around BLR. Many people lost their lifetime earnings and have sought legal recourse. In some cases, the aggrieved parties have taken over construction as an association to redeem their investment, albeit at an elevated price than first envisaged.

A ready to occupy (with OC, khata) or resale property rids you of all that headache and its premium is seen as the 'price to pay' for the same.

I know of a gated community (not in the CBD/center but close to an existing metro line) from a premium builder where, most times, a house for rent gets settled in less than half a day - putting a message on the community chat group is all it takes. It's even better if you have 2 car parks - rent is higher by default. Mind you, the rentals at this place are higher than the heart of the city for an almost equivalent sized property. There are more messages asking for apartments for rent than the other way around.

[shankar.balan]

Originally Posted by am1m

Yep, t. RE is a great investment...but for the next generation! So if you have someone to pass it on to, it makes a lot of sense.

No easy decisions, either way in Bangalore.

Real estate is an illiquid investment. It is very rarely that some of the fortunate ones realise good gains from property within their lifetimes. I've always advocated and expressed what you said above, about real estate investments being much more a matter of ‘serendipity’ than otherwise (unless of course, one is a Politician or a powerful influencer in the Political-Real Estate Nexus, who can drive the development of any specific area). And indeed, most of these real estate investments usually benefit the next generation(s).


The ROI via Rental on RE is poor- perhaps 3-4% max. One’s best hope is locational development driven windfall gains. It is probably better to spend money on rent than lock up lots of capital by buying. That's just my opinion. But it is not to say that I'm some wise man. Though I held out for a long time sticking to my guns, I too have fallen prey/victim to the tide of opinion and peer pressure and so on, as regards investments in real estate.

[am1m]

Originally Posted by shankar.balan

It is probably better to spend money on rent than lock up lots of capital by buying.

I hear you, and this is my opinion too. But I wonder if I'm wrong. I see people all around me, much younger, willing to take the plunge. Taking loans to buy multiple properties sometimes, renting some out. I'm wondering if perhaps I'm just too risk averse. 20 years ago I was teaching my cousin how to ride on my Shogun, on the ORR, in the middle of the day! Today it's bumper-to-bumper traffic there on the same stretch of road, at all hours of the day. And bumper property values. But I also see the kind of properties, esp. quality of construction, kinds of neighborhoods, and wonder if it's all just a big bubble.

[hothatchaway]

Originally Posted by shankar.balan

Real estate is an illiquid investment. It is very rarely that some of the fortunate ones realise good gains from property within their lifetimes. Ive always advocated and expressed what you ste.

My thoughts are identical. Let's say I take out a home loan of 80lakhs (assume the entire cost is funded by the loan) at a rate of 9% and repay in 10 years. I would end up paying 40 lakhs interest on that, which means I end up paying 1.2+ cr for a property worth 80L at the time of purchase. Instead, if I were to invest the monthly emi of 102k and get an overall return of 9% (equity plus debt) I would have almost 1.9 cr after ten years.

What would the 80 lakh home be worth at the end of 10 years? It may very well be much higher than 2 crores if it's the right area in bangalore. But I would have to dispose of the property to realise the gains. May or may not be easy.

I have neither factored in the rent I will be paying if I don't buy nor any maintenance costs if I do. That is because buying a house and actually getting to live in it is not a given for most of us on this forum!

[m8002?]

While RE may not be good investment ( and provide the same returns in all locations ), I will always advocate biting the bullet and buying 1 home for own use. All this renting stuff will go out of the window the day your landlord asks you to vacate - especially if you have school going child(ren).

The feeling of owning a house/home has a much more intangible value that cannot be measured in rupees.

[Turbanator]

There's never a wrong time to buy a home if it's your primary residence. Financial benefits, etc, are just a bonus. No other asset can match the kind of security/ confidence it creates.

We lost our father when he was 44 and had just completed the construction of a new house in Chandigarh, the earlier one being in the colony where he was employed. Our Mother brought both of us siblings with many difficulties, and I cannot even think of the situation if we were to look and pay for rent in those days.

Also, in my own earning life, I have earned some money wherever I invested and missed many golden opportunities, especially during 20-21. Many properties here in Gurgaon have increased two times in the past two years

Start with something of a smaller value, but try to stay in your own home.

[DigitalOne]

Is what is being written about the trend in whole of Bangalore or just the micro markets of Whitefield, and eastern ORR areas?

Because what I see is one upcoming builder taking out full page TOI ads, for about an year now, for their projects in Kengeri/BG road/Kanakapura road etc, and giving offers (see today's TOI).

Are there two Bangalores?

[ninjatalli]

Originally Posted by DigitalOne

Is what is being written about the trend in whole of Bangalore or just the micro markets of Whitefield, and eastern ORR areas? ?

My experiences were of south-central area. One of the other posts talk about a apartment complex in west of Bangalore. You get the gist.

[dearchichi]

Originally Posted by shankar.balan

The ROI via Rental on RE is poor- perhaps 3-4% max.

This is a pretty good return since it's is above the capital appreciation of the property and is also often inflation adjusted (8-10% increase YOY).

If one assumes that the capital appreciation on the property only meets inflation, we get an "assured" 3%-4% return above it, which is a pretty good one for any investment.

I agree, however, that investment in real estate in general is a very concentrated and illiquid one, and one might be better off renting unless it is resided in for a long period (couple of decades).