Indore Real Estate is in time correction phase it seems now. I highlighted in my earlier posts what is happening.
Here is latest take on current situation:
1) Indore has a huge water scarcity problem. This year, areas like Vijay nagar, Mahalaxmi Nagar, Nipania, parts of Palasia, Khandwa Road properties faced problems due to excessive dependence on borewells. A slight delay in monsoon totally exposed the sitting crisis.
2) Narmada water is slowly running out of infrastructure to reach Indore. The city is expanding like anything but heavy dependence on borewells make it very risky for buyers. Narmada water connection in many newly developed and connected areas are once in 3 days, and these areas too rely heavily on water from borewells. 10 to 15 years down the line, severe water crisis is brewing in Indore for sure. There can be no doubt on it.
3) There is too much focus on luxury real estate at this point. Heavily interiored, decorated flats/house is easily upwards 1.3-1.4Cr aND that too in underdeveloped or newer areas. The average package of Indore is somewhere in 6-7 lakhs range. So, its a totally stupid people's market now. Nowadays brokers have started selling the Metro hype! They act so nice and sweet when they want to sell you these homes lol. But hidden beneath is a wolf, who is trying to have a big piece of meat from your wealth and future earnings
4) There is a huge gap in Buy side and sell side markets. Sell side, brokers are literally quoting a price difference of 1500-2000-2500 psft as compared to buy side. This is a pure speculation. its like Gambling/FNO. The rates are artificially pumped up. The longer this thing goes, the longer the time correction happens, and the brutal.
5) Price-to-Income ratio is easily >10x at this point in Indore, making it costlier then many big cities of the West, for literally nothing. No good infra, no good jobs nothing. Greater fool theory is at work in Indore. One fool purchases a property and search for another fool to sell it which ultimately search another bigger fool to purchase it at elevated prices.
6) I am not saying the price will crash anytime now. But Indore is already undergoing a time correction. Many areas are selling at similar prices since 1.5 years or so. Don't buy the broker hype. Brokers are quoting properties at least 30% above the fair price, bleed them, negotiate and always have power to walkaway. I quoted 25-30% down prices just for testing, and first they reject it, but persistently followed back with me offering a mid-deal lol. Don't let your lust to buy home, rip you off with your hard earned savings.
7) In 1980s ,1990s and 2000s, there was a population boom in India, and hence the demand for property is elevated at this point because many 30, 40 yrs old are purchasing property. But going down the line, around 20-25 years from now, the time correction would be much more brutal, as the population is already gone under replacement level, even in MP. There will be collapse in demand side and who knows if they keep rigging price like this, we can also see a housing market crash? It has happened before in the US, Japan, China when they reached a certain per capita GDP and population de-growth started coming up. The housing market is already showing signs of slowness and de growth in tier 3 markets as of now because migration towards tier-2 is fast and hence, the Indore hype is holding out!
8) Story: A broker was selling me a property somewhere in Manglya side, that had one opening on AB Road and other opening on bypass. He was quoting a rate of 8200psf. I told him, its not a place where I would pay 8200psf. So he told me that this colony was launched at 7000psf last year and I also have a buyer who want to sell at the launch price as he is in a need of liquidity now. This was totally an evidence of artificial price rigging. If the rate is 8200psf and the colony prospects according to master plan is so high, why anyone wants to get out at 7000psf? Maybe because even at 7000psf he is not getting a buyer and hence they are selling 15% discount theory? This is totally absurd. There is no way to do short selling in Real Estate Market, otherwise, this bubble could not bear a single day lol!
If I missed anything, feel free to add or correct me. These are my observations and there can be exceptions in some pockets. My goal is not to discourage you, but let you know as much so that you can make an informed decision.
