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Old 21st March 2020, 08:52   #16
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Default Re: Buying real estate during coronavirus - Advice?

Are you going for a majority of payment through home loan or by cash in hand? But if you're salaried and going for 70-80% of purchase through home loan my advice to you is to wait. Don't splurge your cash in hand. Future salary structure is bleak now. Money will be required in next few months or even years considering corona caused closure of market. I myself restrained from buying a flat last week considering all the insecurities. My case was the home loan option.
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Old 21st March 2020, 08:59   #17
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Originally Posted by anandhsub View Post
My direct contact with the builder says they have enough cash flow and it shouldn't affect the construction pace but you never know. Any way my RERA date is only Oct 2022 so not too concerned at the moment.

Don't have much in terms of advice apart from negotiate hard. Am sure u can get atleast another 5-10% off in this environment.
Which builder by the way? Besides cash flow, coronavirus quarantines or shutdowns will certainly affect the construction pace.
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Old 21st March 2020, 09:40   #18
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Default Re: Buying real estate during coronavirus - Advice?

I have seen quite a few discussions in the last two weeks justifying real estate. Their argument is that real estate wont fall unlike equity/bond. In my opinion, this is ridiculous. Its just that the price is not visible on the screen!. Try selling one in this market. Its a stock market equivalent of lower circuit. ( It was under stress even before corona happened). If things dont get get better, it can lead to a huge GDP contraction in which case everyone will be affected.

As others suggested, please wait till the dust settles. Even if its for own use and you can afford.
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Old 21st March 2020, 11:11   #19
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Which builder by the way? Besides cash flow, coronavirus quarantines or shutdowns will certainly affect the construction pace.
Incor in Whitefield. They are new to Bangalore but bigger in Hyderabad. I am not worried about 2-3 month delays due to the shutdown, just whether the builder will remain liquid and solvent through it.
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Old 23rd March 2020, 10:42   #20
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Originally Posted by mayank0782 View Post
Is it safe to go ahead with the deal ? Any long term potential impacts on real estate which I should be worried about ?
Real estate as an investment was never my cup of tea. I was in your similar situation, moving from rented to own and bought a property in a prime locality in Chennai in December. Your statement seems to show that this property of yours is a necessity. Take a loan and take an insurance on top of it. This insurance is provided by the loan provider itself and the premium will be added to your house EMI. They will cover your EMI for a couple of months if there is an uncertainty in employment. Try to go for maximum loan and try to have some considerable savings in hand to cover your other expense in case of an employment uncertainty. Corona will come and corona will go. As long as you do not consider this property as an investment option, go ahead and buy it and move into your own home.
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Old 23rd March 2020, 13:09   #21
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Default Re: Buying real estate during coronavirus - Advice?

I am in the same situation. Decided on an apartment (resale) in ecity and buying process was on hold since the ekhata was pending.
This was meant to be an investment.

With the corona effect, i am sure i am looking at more delay.
I find myself in the dilemma on whether to hold on or cancel the deal since there is so much uncertainty on the job front.
We don't really know if there are job cuts, salary cuts on the horizon

Funny how a thread popped up on what i was thinking about the most.
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Old 23rd March 2020, 14:26   #22
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Default Re: Buying real estate during coronavirus - Advice?

Anyone looking for fresh investments, it is better to wait out till June at the minimum. By then one should get a decent idea of how the economy will move. If the instability continues further hold for a longer time.

Generally good quality builders would have working capital covered for 3 to 6 months. With Rera some of them may be covered for the whole project as well.

We recently entered a couple of real estate deals. I wanted to Opt-out but could not do that as we already committed to the other party. It is better to be cautious now.
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Old 23rd March 2020, 15:00   #23
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Default Re: Buying real estate during coronavirus - Advice?

If you can delay, it would be better. We are not calculating the impact the labor class will feel when the virus spreads more. Already many staff from the NE and UP/Bihar ran back home when they could. This could escalate much further when the trains become operational. If you track RE firms their stocks have been hit very hard. They are all going to struggle to meet payroll and even buy raw materials in the short term.

We are going through a paradigm shift in the way we work and think. Hold on to your hard-earned money and wait for things to settle
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Old 23rd March 2020, 21:51   #24
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Need some advice here. I am in the middle of finalizing a property(apartment) deal which is for my residential purpose and not an investment as I am renting currently. The deal started more than a month ago when Coronavirus was not that widespread. Is it safe to go ahead with the deal ? Any long term potential impacts on real estate which I should be worried about ?
As you mentioned this will be your primary residence so where is the problem? It is not an investment property and even if it was, there is no problem unless you think millions will die due to wuhan virus and your property will remain vacant with your investment dwindling.

Believe in your decision. You must have verified the construction quality , builder, construction completion, legal documents, loan documents(if you need it), rate of interest, tenure of loan, locality and must have been satisfied by them to reach this final stage. If you have any doubts regarding legality and rules get a loan from a bank even if you don't need it and pre pay the loan amount. Some banks do not levy penalty but it is better to be upright and clear it with the bank.

Property rates are not going to go down. Corrections are needed but financial institutions have too much money tied to it to let it slide. Even if it did remember it is not your investment property. You are buying it to live in it. Registry office may be closesed in your town, bank withdrawls may not go through but things will go back to normal in a fortnight. Rebate of 2% is given on the registration tax if property is registered in the name of a woman and 1% if a woman is co-owner by almost all states.

If you like it, buy it, if you have the means. Remember old flats have depreciation rates of 2% per year. Check the society rules. If it is a new construction, how will builder handle the flat maintainence, is it a co-operative society? Also remember you can walk away at any moment. You are under no obligation and compulsion. Be strong, be firm. My suggestion is to always involve an experienced elder in these matters. You will be surprised what experience brings to the table. Good luck.
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Old 23rd March 2020, 23:20   #25
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If the deal is sweet and you think that the locality will develop in next 5 years, then, go ahead and book it.
I see a challenge in moving to the new one. With the shutdowns happening and the Govt running at 20% workforce, registration may not be possible until April 15th or so and even availability of packers and movers will be a problem. Pay a paltry advance and wait for the govt to restart the system.
On a side note, did you compare the medical facilities in the current locality and the new one?
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Old 24th March 2020, 00:59   #26
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Please DO NOT purchase this flat yet (as long as it is not impossible for you to stay without it).
As it has been already said, India is underestimating the power of this virus (by a huge margin). Businesses are going down, and the worst is yet to come.
Please do not lose your liquid cash now. Pre-owned flat or new flat, prices will see a sharp drop in the very near future. This is because there will not be enough people in the market who will have money to buy these flats.
Hold your rented place a bit longer, and definitely your money. Your are already blessed to have major part of your net with in cash (I assume) during these desperate times
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Old 24th March 2020, 08:34   #27
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Default Re: Buying real estate during coronavirus - Advice?

Please mention if you are going the liquid cash in hand route or financing the deal from the bank.
It is better to wait, like what others have mentioned.
The Rupee is undergoing major fluctuations at the moment and until the COVID-19 situation improves, it is better to put big ticket purchases behind.
The markets are bleeding red at the moment, construction and infrastructure activity has come down to an all time low and yes, apartments are available for discounts as inventories are piling up.
Keep the cash with you at present as you never know when you require it. Post this situation, it would be better to get the same at a sweet deal by negotiating hard. You can negotiate with the builder to wait. They are in no option to make you hurry as the situation is such all over the world.
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Old 24th March 2020, 08:42   #28
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Default Re: Buying real estate during coronavirus - Advice?

I'm of the opinion that grocery, milk, medicines and things of daily use should be the primary concern at this point in time. Businesses are under tremendous pressure as buying activity is a very, very distant horizon from what we can see. Few of my friends are operating on 50% salary starting this month, so cash is really precious right now. Will those jobs exist, that's another question! Take an informed view in 6 months' time.
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Old 24th March 2020, 09:36   #29
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Default Re: Buying real estate during coronavirus - Advice?

Real estate prices are quite stable and low already. With the impact of the virus and the Dollar going up, there is bound to be an increase in the prices of input materials in the short to mid term. While the builder may not have the option to increase prices (owing to subdued demand), I do not see prices of apartments going down as the cost of construction is going to remain the same, if not increase.
If someone is in the market to buy a house for their own use, then you should go ahead provided you have the cash/ loan tied up.
I can also tell you for a fact that most developers are operating at a profit of 10% or lesser contrary to what the common public thinks. They would rather hold on to the stock than sell at a loss, except in exceptional cases when they have a few units left in a project and they just want to exit.
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Old 24th March 2020, 10:05   #30
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Default Re: Buying real estate during coronavirus - Advice?

I bought an apartment and registered it last Wednesday 18th March. I got it at a decent price and the entire complex is sold out. This is for own use, so not for investment.
This is bought through part cash/part home loan.
I had engaged an interior designer, but because of the lock down, the work cannot start. This might take some time, but I have planned for it and I am ready to wait it out for up to three months. This is the only concern I have. Apart from this I do not have any regrets.

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Originally Posted by Kontoo View Post
Real estate prices are quite stable and low already. With the impact of the virus and the Dollar going up, there is bound to be an increase in the prices of input materials in the short to mid term. While the builder may not have the option to increase prices (owing to subdued demand), I do not see prices of apartments going down as the cost of construction is going to remain the same, if not increase.
I agree with you, there will be inflation once things starts to get better. This is to account for the loss of money most industries are facing due to the crisis. Many input materials will see an increase in prices affecting the overall costs. This will be across industry, not just real estate.
Also Govt might hike taxes or stamp duties to make up for the financial distress. Already we are seeing hike in excise duty for fuel which is the reason we are not seeing any reduction in fuel prices though there is huge fall in crude prices.

At the end of the day, do all the calculations and go ahead with your purchase only if you have the financials sorted out and are holding the apartment for a long time (>5yrs)
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