Comments on: How much would you give for a 1BHK flat in Nanganallur?

By: prabukarthik

prabukarthik — Wed, 10 Feb 2010 05:55:43 +0000

BNB,

Thanks for the link. I am yet to read it fully though..

By: prabukarthik

prabukarthik — Wed, 10 Feb 2010 05:16:25 +0000

Arunmozhi,

Thats true. But even that comes at a fair price, i suppose.
The exercise is an attempt to quantify the seemingly unquantifiable

By: prabukarthik

prabukarthik — Wed, 10 Feb 2010 05:15:29 +0000

vatsan,

Tell me at what price will it make sense. If you want to buy, at what price will you buy?

By: BNB

BNB — Mon, 08 Feb 2010 16:01:15 +0000

On a related note, check out this link: Why We Keep Getting Poorer: High-Cost Housingl

By: Arunmozhi

Arunmozhi — Mon, 08 Feb 2010 15:21:50 +0000

I thought this topic would attract flurry of responses..but find the otherwise surprising.

While considering only the economic factors, I would agree that taking a 20 year loan is not advisable.

But considering the factors like the peace of mind that you get while living in your own house (though pledged to the bank) the interest you pay to the bank is worthwhile.

The negative factors like, the way owner of the house puts his whims and fancies as conditions is a big let down.

By: vatsan

vatsan — Sat, 06 Feb 2010 17:01:23 +0000

Assuming he takes a 30 year loan, and of course pays an interest of 15% on that. It does not make sense. Assuming that the inflation is almost 7% per annum for the next 30 years, then the flat would have to show a CAGR of 22% for it to break even.

Assuming that the money was invested elsewhere it would definately show higher returns, maybe 3% annualised if he didnt borrow. He is def better off without taking the loan since it hinges on another idiot buying the flat at a higher cost

PS: Flats depreciate in value since they cannot be altered, but land will def show positive returns.