I found the above item very interesting. It has certainly made my mind more firm, as to why the rates of property havent fallen in the suburbs in recent times. Compared to South Bombay prices, which have fallen almost 50% , the rates in suburbs are hardly down by 10% yet. We are seeing a lot of South Bombay families moving to the suburbs. For them selling their property over there and moving over to the suburbs is akin to a status issue. So they are purchasing new properties in state of art building, with best amenities, amenities, which a few south Bombay buildings might also not be offering. In doing so, they dont mind paying the current market rates. This might have certainly led to stabilization of rates.
I was recently informed about a certain gentleman, who had his 50 lacs forfeited which he had invested as a token in a property deal worth 5 cr in Dubai. The fact being that the same property had now fallen to 2.5crs. No he didnt sit tight on his losses, he purchased the property for 2.5crs, added the 50 lacs to the purchase price, and is not stating, ok my property costed me 3 crs, which he feels is still recoverable over a period of 5-10 years, compared to recovery against 5 crs. His statement is that from here even if the prices fall further, it will still be ok compared to original purchase price of 5 crs. Smart person.
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