Friday, November 28, 2008
A goldman sachs analyst shared his expectation the other day on cnbc of realty prices correcting 30% or more across much of india in general and in mumbai suburbs and bangalore in particular. In nutshell - he expects a 30% drop from current levels and doesnt see a quick recovery (likely 3+ years). Had been on a "housing tour" last weekend with a couple of friends who recently bought apartments here in borivali; at prices ranging from 6000 to 6170 per sqft. So if we are to believe the analyst, we could see prices dipping to 4200 in borivali in a year or 2. As a one of the friends pointed out that day, banks are currently requiring about 40% equity from home-buyers a sharp increase from the comfortable 10% till only an year or so back. (I remember 10% of the apartment price + stamp duty was all it took to buy a house in 2004 in an all-white transaction). How many middle-income fellas have that kind of cash to put on the table? Not too many i would imagine; especially with many people's funds "blocked" in the present sensex sub-9000 equity market.