Should I sell my Flat in India now ?

[aryan]

I have returned almost a year back. I have a flat in Pune. I wanted to gather a general opinion if it is the right time to sell.
I was initially planning to just keep it as an investment but couple of my (real estate agents )friends are warning me to dispose it off as quickly as I can because they are together of an opinion that Real Estate is headed for a severe downfall ??. They are saying that for under construction projects the situation is so dire that builders are offering internal discounts ranging from 5 to 20% without much negotiations. They are saying that it would be wise to dispose it off before March before the fiscal year gets over.

What are you guys doing ?
Any suggestions ?

[roxstar]

Is that really true? I thought there was a natural floor to home prices in India, meaning demand outstripped supply so when demand softened and prices fell, the new price points induced new buyers to enter and protect the price floor and then push it back up again?

[sftrade]

20% discount on under construction property will sucker the buyer into waiting endlessly for possession. If the builders are under stress your ready possession apartment should sell at a premium. There is no harm in putting an advt for sale and checking the demand for your apartment. If your apartment is in a good location in any market you should find a buyer.

[drV]

but couple of my (real estate agents )friends are warning me to dispose it off as quickly as I can because they are together of an opinion that Real Estate is headed for a severe downfall ???

At the worst, it’s possible that these “friends” of yours are simply trying to scare you….for sake of their commission.
I can tell you, they do not know any more than you do, as far as future of real-estate in Pune is concerned
I am sorry, I do not know how else to say that.
If I were you I would not pay any attention to these friends of mine.
You already have an Apt..what's the big deal ? You would be better off just floting on whatever market-tide comes your way !

Downfall in real-estate in Indian metros is being predicted for 3-4 years !
It never seems to materialize.
Nothing keeps going up all the time…there may be some correction at some point in future. Believe me no one knows when.
In the mean time prices keep going up….some years the rate of increase is not as much as other years ( thereby correcting down...one can say).

The big picture is true no matter what…..India has and will probably always have severe shortage of quality housing ( at some price-levels in some metros more than the other price-levels in other metros ).

[direstraits88]

What is the price you paid and when? How much is it worth today.

Don't know about pune, but Apartment prices in bengaluru have barely kept up with interest rates over last 5 years. I bought an apt for 50 Lacs in 2006 inside city limits in a large apt complex of 400 + flats. The last verified transaction in the complex is 75 Lacs. You keep hearing Mr. X selling for 90 lacs/1 crore. But if you ask around, it's clear that the RE agent is trying to hype it up.

I get 2Lacs as rent per year which is around 4% return. The last 5 years were considered boom years. The only reason i'm holding onto it is that i plan to move back in next 3-4 years. And it's located inside the city within 3-4 kms from city center/Rail station.

If you don't foresee moving back to pune in next 5-7 years, you can explore the option to sell it. Unlike buying, selling is not so easy..

[aryan]

DrV - I trust these friends.. One is my childhood friend and one is from college. In the past, they have given me useful advices in RE investments :)
The only reason they are saying is the same thing DesiPArdesi is quoting - Selling is not so easy.
DP - Yes, My cousin has a plot in Kothrud which he is trying to sell for 1.1CR and he got no offers. The only one he has got so far is for 81 Lacs. And Hence I know what you are taking about.
I don't see further appreciation. A flat in the same society has already been listed for sale based on the prices quoted in paper. But all the owner has got is just enquiries. And it has been already a month..I know these things take time, But I was thinking better to sell it now rather than regretting later. I have bought this flat in 2002. It is already appreciated ~5 times.

[drV]

All the other reasons stated...including the future of real estate in India are flawed. No one knows....

Inflation is riding high in India and will ct to do so.....real esatate is one of the best hedge against it.

Do you need the money ?
If no, then why sell something ?

If you need money...then its a no brainer..sell it.

[Sid]

It is already appreciated ~5 times.

500% is a phenomenal return by any means. Sell it and put it in FD @ 9.25% interest.

[VS007]

... I bought an apt for 50 Lacs in 2006 inside city limits in a large apt complex of 400 + flats. The last verified transaction in the complex is 75 Lacs. You keep hearing Mr. X selling for 90 lacs/1 crore. But if you ask around, it's clear that the RE agent is trying to hype it up.
...

You are absolutely right, When I tried selling my plot at the market price(listed on craigslist,neighbours,agents..) , got few enquiries but no actual takers. So I am holding than selling and many sellers are in that position and buyers are looking for real bargain.

[mn_op]

Last year was a slow year for Pune RE (don't see any perceptible rate change). It is hard to say where RE will go from here. I see a lot of ready possession flats offerred by builders all over Pune...at fairly competitive rates. I have tried to negotiate but haven't come across any builder who offers 20% discount on the official price.
In Pune, builder ends up spending around Rs 2000 per sqft for a good quality building (land on the outskirts of the city + construction costs)....so to me Rs 4000 is an absolute base price for a flat.
Now, affordability is quite another thing. I still don't understand how a couple in late 20's or early 30's afford a 50 lakhs house....@12% interest on the loan.