Comment by kamaal | Hacker News Reader

Comment by kamaal | Hacker News Reader

India isn't just rich in the general top 1% argument sense. India's upper middle class is quite rich. And more importantly invisible and hides everything. This has been possible largely due to a combination of real estate prices going up due to urbanization, conservative spending and a rich investment driven culture.

The other factor is gold savings. Most families have a large amount of it, and provide good insulation against inflation.

Pretty much bulk of India's middle class got rich in the post 1992 era, when the market were opened up making it easy to do business. The software riches came due to US money flowing in, the salaries were high. And most people got to travel abroad. And given foreign exchange factor most people made a killing till 2005. Back then it was easy to get US visas and work there. The dollar paid 35 rupees a piece and land prices in most Indian metros(especially Bangalore) were quite cheap. People who bought lands anywhere in peripheral Bangalore have seen their wealth increase by crazy factors.

The other factor is again opening up of mass private sector hiring, subsequent growth in economy and the stock market.

And lastly of course, corruption, nepotism and dowry market.

Is the real estate market still good? I have family abroad and want to invest.

That depends on what time scales you are looking at.

Also staying Abroad and investing in India isn't a good thing to do. Sometimes there are encroachment issues.

That's only if you buy land. Not if you buy an apartment or fully constructed house.

Not good. I've been tracking the prices in Mumbai which has the most expensive market with the least supply in India and prices have not moved since 2014. There is potential for drastic fall as per the unsold inventory which may take over 7 years to sell based on current sales numbers. The Delhi-NCR market has seen drops of 20-25% as its a much bigger market and developers do not have the financial muscle compared to the ones in Mumbai.

> There is potential for drastic fall as per the unsold inventory which may take over 7 years

I have been hearing that for the last 7 years.

Depending on context, does the potential for an event go away when the event does not occur for a long time? Much of the time I'd say that that has no information value whatsoever, and sometimes it may actually signal worse to come. So by itself I would claim the piece of data that you mention, accepting it at face value, is meaningless.

Its not quite out in the open yet, but it is happening when you sit on the table and negotiate. A prime builder in the most prime location (BKC) is offering nearly 30% off on initial quote after a few rounds. There is humongous over supply in areas like Goregaon and Worli/Lower Parel. As per industry sources there is very little movement for properties north of INR50m which is essentially every apartment >=2br south from Bandra onwards. Builders like Oberoi have still not managed to sell flats which have been ready for 3-4 years in Goregaon, resulting in the recent 25% * 4 years scheme. It's a matter of time till they capitulate. Even otherwise, if they stay at old rates, they're effectively falling on account of inflation every year.

There is also a clear change in the sales pitch. 4 years ago the pitch was about "investing". Now its about "end use". Clear sign of ending of investor fueled bubble.

Thanks everybody, you saved me a lot of money. I had completely different information about the market.

Not really. Liquidity is a major problem. Properties sit n the market for years sometimes (as my dad's) before finding a buyer at supposed market valuation (which, in my view, is highly inflated)

Residential property is overpriced and supply exceeds demand. It's unlikely prices will fall - in India people would rather hold on to property than sell at even a slightly lower price - but you would have to be in for the really long haul to realize a decent profit.

Could you elaborate on the dowry “market”?

https://en.wikipedia.org/wiki/Dowry_system_in_India

Basically if you are a able male with a good income and family background, you ask for top money as gifts during marriage.

Dowry is not so common among the (upper) middle class these days - with the exception of certain communities especially in Andhra/Telangana. Gifts are certainly given when the bride's side can afford it, but seldom extravagant and rarely asked for.

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