How to predict Real Estate Returns?
Let us accept it, predicting is difficult especially if it is about the future.
Having said that let me tell you that predicting RE returns and prices is possible in an advanced country where you have the following information available in a public forum:
Prevailing rents, local taxes, local growth rates, infrastructure, number of new licenses for construction issued, the demographic details of a place, details of transactions, registered brokers filing details with a regulator, etc.
In a country like India where all this information is either not available or available only to a few people, seeing a trend is very difficult. So people come up with theories which look correct, but is completely wrong. Let us look at this:
Virat Kohli has 5 scores of 22, 282, 67, 0, 184*
If I gave you the details of his diet, sleeping habits, gym timings, etc. etc. will you be able to say what will be the NEXT 5 scores? No. However people think that they can predict the price of RE on the basis of the past few years.
For example take a place like say Kharghar in Navi Mumbai. From about 2006-2009 the prices moved up very slowly, and frustrated the investors. However from 2009 to 2011 the price rise was exponential, and prices went to a nice new high in 2011. However from 2011 to 2014 it has been growing at a slow pace and many of the builders and brokers are struggling.
In 2014, there could be a ‘next’ step of prices going up and may go up till say 2016.
If you want something in common, 2009 had an election, and so did 2014.
Makes sense? NO, NYET, NEIN, NAHI.
It is convenient for the human mind to find such a pattern – and it may (or may not) be right. That is the risk.
The best thing to do is to see the year by year diagram of the prices over a 20 year period – and see the periods of growth and stagnation. Be ready for the ‘time correction’ to be followed by a spurt. And a spurt to be followed by a ‘time correction’. However, when the demographics of a locality changes, the logic of price change also changes.
Difficult to predict? NO. Impossible – especially if it is your own money.
Jatin Visaria
Find “RE” , Replace All with “Stock”…ditto same….
Hitesh
Dear Sir ,
a query on Mutual fund , I am investing in MF from last 5-6 yrs , did some investments in wife name and than discontinued a, some how I forget which MF -I bought same for my wife name , is it possible to get CAMS statement as it only gives through email only not with PAN card details
(like I am getting for my MF investments though email option)
regards
kuntal
I have been following your blog for about a year- this is my first comment. I am a profefessional, who finds it difficult to find time to do research on stocks (and one who does not believe in spoon-feeding). My question is- will I get left behind in the Indian growth story by investing in mutual funds only? 4 diversified equity mutual funds across capitalisation & fund houses? Sounds ok?
Kuntal
Francis Xavier R
@ Hitesh
1)If yr wife e-mail id is registered in the folio, then go for consolidated statement (Karvy+CAMS+Sundaram) in CAMS website or Karvymfs website.
2)if e-mail id is not registered then you can try with PAN info.
Here u need to go to CAMS/Karvy/Sundaram offices to get a statement against yr wife PAN number.
3)If both e-mail id and PAN info is not available, you can track using the Bank details registered in the folio. But this option is a difficult one and u need to spend more time at the RTA’s (CAMS/Karvy/Sundaram) office.