Dear Mario, If you are closely monitoring the real estate situation in Goa and the rest of India, you will find that while property rates have increased manyfold in the last five years the rise in RENTS for residential properties have only increased marginally. Any economist will tell you what this means is that the local DEMAND for residential housing has been satisfied. What is driving prices through the roof is other factors. In Goa's case it is wealthy Indians flocking to Goa for holiday homes. This has all the makings of a BUBBLE. This is being repeatedly pointed out by Swaminathan, Deepak Parekh (chairman HDFC) and others.
To give you an example of this, a friend of mine bought a flat in Mumbai for about Rs. 1.5 crores, he rents it out for about Rs. 1.5 lakh a month. For a penthouse close to your residence in Miramar that costs almost Rs. 1.5 crores, you will not find anyone to rent it even for Rs. 30,000. Even the worst performing India specific mutual fund would give you annual returns of 15-25% and much more if you are a smart investor( and invested in S. Korea specific funds). So you are effectively losing upto 37.5 lacs a year in this manner. Secondly, as a foreign national you are losing another significant percentage of your returns because the Rupee is deliberately and continuously weakened against the dollar, pound, euro, etc. The only thing you have going for you as a foreign national who has bought property in Goa is that the property price is increasing very rapidly, however since you are not in touch with the "real" estate situation in India, you are unaware of all the BUBBLE warnings being issued just as you were unaware of regulations when buying your property from touts( they are not worthy of being called real estate companies). Hence you will be proved an IDIOT in any one of the following ways: 1. When the BUBBLE bursts. 2. When Rane and Co. take over your properties. 3. Now at the height of the real estate boom it is very difficult to sell your property because, all the registrations of sale deeds(of foreign nationals) have been put on hold. 4. When Mopa comes up and the rest of the Konkan coast starts developing(This is a smart investment right now!) But mainly you are an IDIOT because you are investing your money in a volatile market of whose fundamentals you have no idea of. However if you have a Goan connection you will have more access to information regarding the situation in Goa and will find it much easier to dispose of the property at the right time. The Property value WILL remain the same regardless of your ethnic background. Mario, as a man who is interested in economics you should know that residential real estate is a good investment when local DEMAND drives the prices up(since that type of demand always shows predictable behavior). Otherwise your investment is like speculation on the stock exchange. For speculation in real estate you cannot be sitting 5000kms away with no connection to the local scene. Regards Sunith Velho Panjim-Goa I know several "foreign nationals of non-Goan descent" who purchased property in Goa a few years ago, and the property has more than quadrupled in value and the value continues to increase. > So, can Jim or Sunith please explain how these people are "idiots"??? > And, while you are at it, can you please explain how property values, which are based on supply and demand, vary depending on whether the investor is a Goan or non-Goan? > _______________________________________________ Goanet mailing list [email protected] http://lists.goanet.org/listinfo.cgi/goanet-goanet.org
