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Effect of development charges on price,

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   Farruk
Friday, July 10, 2015 01:05 PM 
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Dear LRE
Can u plz put some light on the effect of announcement of development charges on the prices of Prism plots ? Some ppl frequently indicate that prices may drop a little. If so what is the reason don't they know now that these charges will be imposed later?????
Ahsan Ali replied on Friday, July 10, 2015 03:09 PM 

The development charges put psychological pressure on the investors particularly if they are holding more than one plots. Secondly, if the market fluctuates than prices drop and accumulated expanse is high for the plot holder. In case of prism the expected charges are much higher than before, which may result in offloading extra weight which in turn will bring oversupply in the market resulting in correction.
Farhan replied on Friday, July 10, 2015 03:16 PM 

Ahsan Ali. I need your e-mail ID.Thanks
Farrukh replied on Saturday, July 11, 2015 08:53 AM 

Does it mean that if expected dev charges are normal (not higher as presumed)then no likely changes or correction??
Ahsan Ali replied on Saturday, July 11, 2015 10:07 AM 

Market has it's dynamics and price increase and decrease always keep happening at a particular interval of time. Development charges refer to one variable and price changes are subject to many variables such as status of the development, construction activity, substitutes etc. The correction is expected but it may result in appreciation if prism is undervalued currently, which I doubt. The idea of long term hold is simple, if you can afford hold it for atleast 5-6 years and don't worry about corrections. If you can't than there is an issue and you have to decide a right time for entry or exit.
Farrukh replied on Saturday, July 11, 2015 06:05 PM 

As an investor, holding for 5-6 yrs is no issue; rather the issue is holding vs re-investing at better place. If holding Prism plot for 5-6 yrs is considered sufficiently beneficent despite mkt variations/ correction then its ok. Otherwise, selling and reinvesting can always be done. My concern is RIGHT TIME for exit from Prism keeping in view likely risk factors. @Ahsan Ali
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