[AWD]

I was planning to buy a property for a couple of months but have postponed all big purchases, depending on Corona outcome. If the situation worsens, its sure to affect almost all things, property prices will surely go downwards. Even if situation hits a Plateau, still it will take time for people to come to terms with normal living. Moreover these are times where one should channelise energies towards living a safe life & buying only essentials for doing so.

Whatever deals there are right now, better deals are going to come in future because market is going to take a hit. Buy only if its of utmost importance to you & can't do without it.

[fiestarry]

Hold onto your cash! The way things are headed, the markets will drop further and 2008 will look like a good time.
With cash in hand you can get much better deals from both builders and resales alike.

[mac187]

I have paid almost 80% amount for an under construction apartment for investment purpose. There were some delays and the revised completion date was in Nov this year. I am sure the same will get delayed further, I am not too concerned as remaining payment has to be done at the time of the handover.

If you are looking to purchase apartment/ landed house at these times, my advise will be delay the same. With the current situation we can expect the interest rates to lower and you will have a upper hand while bargaining with builders. Individual buyers may still hold on with their rate expectation but thats just how the market is.

Liquidity will be a big factor for atleast 6 months. Salaried class like me can forget bonus, increments and promotions for 6 months to a year from now. We plan our finances for the worse.

[pradeepkc]

If you are paying cash to buy the property and have enough cash backup to last you for sometime, I would say it should be okay. If otherwise, I would strongly advice you against it. I may sound paranoid here, but like they say, only the paranoid survive.

I feel this is just the beginning. We still have a long way to go and I feel there's going to be a lot of changes. Events like these happen once in a century and we don't really know how this is going to pan out in the next couple of years. We will definitely rise up out of this as we always have, but it will bring large changes with it.

I am in the middle of getting a home constructed and now I am not sure how to proceed.

[adithya.kp]

Lets assume the cost of construction remains more or less the same. What about the land price?. There is no such rule that land price cant come down.
I watched an interview of builders. One of the participants ( Brigade or something) said the expectoration of land owners was unrealistic. I was listening to the quarterly con call of ashiana housing. He said the land price own by about 30% in some of the locations they operate at.
Btw both these are well before corona happened. Not the recent interview.

As for holding on to the stock, that is possible only if the company is debt free. Even for the companies, where the debt/equity doesn't look very high ( I mean > 1), it may not be easy. Because usually the equity portion is not liquid cash. Its an investment in the other projects/land back etc.

Originally Posted by Kontoo

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.

[V12Doc]

You are going to see some fiscal stimulus from the RBI and the government to stop people going NPA during this time so I dont expect a crash happening as real estate crash usually happens due to high inventory and high motivation to sell which wont really be the case. India is a very under-banked country with most people anyway holding their houses in cash and many small business are also mostly debt free or low debt to income as banks usually are very strict in giving business loans and do so on very high debt service ratio. Once this goes away ( 4-6 weeks) you will see normal life continue as is. Residential investment anyways is going to be long term so you shouldnt be very worried

[Durango Dude]

Real estate and investment don't go hand in hand. It's madness to "invest" in an apartment, it's not liquidity and realtors sell "pipe dreams" and "rental incomes" that are non-existent. An apartment has become a depreciating asset; you can't give to kids as when they grow up you may have to do major repairs and you may not get the cooperation of your neighbors for repairs, if it involves leaks coming from their premises. Most of the realtors are strapped for cash and in dire straits though most will be seen plying in swanky cars and living in plum properties. The real estate "bubble" will be the first to burst after this Corona 21 day lockdown announcement. Apartments aren't going to appreciate, if you're able to sell it at cost price (which means heavy loss) consider yourself lucky.

[sgiitk]

Remember the market is in a decline. So this may be a good time to buy. Only loans may he not available. So if you are a cash buyer go ahead.

[gkveda]

One unknown parameter people are forgetting here is, the invention of a vaccination that prevents corona. Once a vaccine is found, everything would become normal.

So, suggest to go ahead and fulfill the need. Who knows, tomorrow, if world ends, the dream, need and satisfaction of living in the own house may remain unfulfilled. Live everyday of your life. Stay safe

[abhi7013]

Originally Posted by Durango Dude

Real estate and investment don't go hand in hand. It's madness to "invest" in an apartment, it's not liquidity and realtors sell "pipe dreams" and "rental incomes" that are non-existent.

I agree to all your points as long as it is directed towards apartments alone. But would have to disagree with the generalized statement made in the first statement of your post.
I've seen real estate investments bearing fruit in just a few years' time and hardly any investment going bad. But buying an apartment is a different topic entirely. It can hardly be called an investment.

You cannot possibly go wrong in buying a land, be it residential, commercial or agricultural. In my point of view, real estate is the best vehicle to get on board for assured returns. BUT, you need to know where and on what to invest on.
Buying an apartment is hardly an investment. It's a liability as you end up paying more and more on maintenance as the apartment gets bigger. Just a waste of capital. I intend no offense to anyone who may have views contrary to this. The reason i tell this is because, just half the money that you pay for an apartment could have bought you a more worthy real estate that would have escalated in price quickly.
It's no big deal to own a flat/apartment in a huge complex, as opposed to having an independent home as the land belongs exclusively to you (constructing on the land is again a different matter).

As far as investing at this point in time is concerned, if you have the moolah, just go ahead and invest! But in cities like Bangalore, one has to be careful on what he/she's getting into, especially residential lands as there are many cases of fraud being reported. Agricultural land would be the best bet, somewhere near your native city!

[Durango Dude]

Originally Posted by abhi7013

I've seen real estate investments bearing fruit in just a few years' time and hardly any investment going bad. But buying an apartment is a different topic entirely. It can hardly be called an investment.

You cannot possibly go wrong in buying a land, be it residential, commercial or agricultural. one has to be careful on what he/she's getting into, especially residential lands as there are many cases of fraud being reported. Agricultural land would be the best bet, somewhere near your native city!

The time that real estate yielded high returns are all long gone. Now the saying would be to take care of ancestral property and be secure.

You can't be sure of the land you're buying and if you don't have an eye on your land and don't secure it with a fence and earmark it, in a few months time you will not recognize your piece of land and will have to get it surveyed and will have to get a lawyer and that means more expense. Real Estate is just a pipe dream and unless you're into it and very well know what you're getting into, I suggest you don't buy it for investment purposes.

[Kontoo]

Originally Posted by adithya.kp

Lets assume the cost of construction remains more or less the same. What about the land price?. There is no such rule that land price cant come down.
I watched an interview of builders. One of the participants ( Brigade or something) said the expectoration of land owners was unrealistic. I was listening to the quarterly con call of ashiana housing. He said the land price own by about 30% in some of the locations they operate at.
Btw both these are well before corona happened. Not the recent interview.

As for holding on to the stock, that is possible only if the company is debt free. Even for the companies, where the debt/equity doesn't look very high ( I mean > 1), it may not be easy. Because usually the equity portion is not liquid cash. Its an investment in the other projects/land back etc.

Land owners have more of a holding ability than developers. Also in the current scenario, most developers opt for a joint development or a joint venture as opposed to an outright purchase as it would result in blocking of capital for the developer. Land price like any other commodity is driven by supply and demand and with land (at least ones without litigation) in limited supply, I do not see the prices coming down.

As for developers holding on to stock, if your logic is correct, developers wouldn’t have so have so much of unsold inventory of apartments in the market as is the case now with quite a few developers.

[Kontoo]

Originally Posted by Durango Dude

Real estate and investment don't go hand in hand. It's madness to "invest" in an apartment, it's not liquidity and realtors sell "pipe dreams" and "rental incomes" that are non-existent. An apartment has become a depreciating asset; you can't give to kids as when they grow up you may have to do major repairs and you may not get the cooperation of your neighbors for repairs, if it involves leaks coming from their premises. Most of the realtors are strapped for cash and in dire straits though most will be seen plying in swanky cars and living in plum properties. The real estate "bubble" will be the first to burst after this Corona 21 day lockdown announcement. Apartments aren't going to appreciate, if you're able to sell it at cost price (which means heavy loss) consider yourself lucky.

Your statement is too general in nature. Real estate is an investment with a long term perspective and has in most cases yielded decent returns, at least in India. I would even put my neck on the line and say that now is a good time to invest as the prices are reasonable in most cities.
Of course, you cannot time the real estate market and this is true of the stock market as well.
The real estate market is moving towards consolidation post RERA, NBFC crisis etc and this will help prices to also consolidate as the smaller players are all set to vanish.

Mods: Sorry for the back to back plate. Please merge if necessary

[handsofsteel]

Agreed that the economy's going to be worse off for the Coronavirus. But if one sector's going to crash, my pick would be real estate. Face it.. With discretionary spends at an absolute rock bottom, vanishing (migrated?) labor likely to be in no hurry to return, locked investments, supply chain disruption, could things get any worse for the industry? I think a massive shakedown and consolidation is on the cards with bigger players probably buying out smaller firms. What, however, would be the effect on homebuyers? Is this a good time to go bargain hunting? Especially for ready to move in projects? Would like to know members' views please.
Mods kindly merge if a similar thread exists.

[Warwithwheels]

I have already started getting emails from few of my builder contacts offering referral bonus for successful referrals of "Ready to Occupy" units. The referral bonus ranges anywhere from INR 25,000 to 1,00,000 plus.

The pressure to liquidate the ready to move units is already showing up! Liquidity is the name of the game!