Tuesday, November 18, 2008

Builders in fix as bhais want money back

Shailesh sent this link in the comments sections which deserves to the highlighted. In the past the builders were the target of the Bhai's for exotortion. Now the bhai's help the builders to milk the middle class with the help of the banks. The poor middle class owner who has bought a 50L 1 bed apt at 10,000 rs is paying a handsome profit to the builder, the politician,the Bhai and the bank. Ofcourse now the ponzi scheme is up and the guys with guns are asking for their money back. Money back guarantee scheme of Mantri builders from Mumbai, is now played with a different twist. Now people can appreciate the deep influence of the underworld on the pricy world of real estate. We have times reporters who know about dealings but the police are busy chasing drunk drivers on the streets. The builders are the sub-prime of India.
MUMBAI: Several builders are in deep trouble with the underworld which had invested heavily in their projects now demanding their money back.
Dawood Ibrahim, Chhota Rajan and other dons are known to have invested in real estate projects hoping to make a quick buck. "But with the downturn in the market they are not getting the returns they expected and are asking the builders concerned to return their monies immediately,'' sources in the industry told TOI on Wednesday. The builders' problem is that they have already invested these funds in buying land and old buildings for redevelopment and have no liquidity to meet the demands of the gangsters. But the mafiosi is not known to take "no'' for an answer and is turning the heat on the builders. One of the builders in the western suburbs is reported to have returned a whopping Rs 750 crore to a big-time gangster. Another big player in the real estate market is receiving calls from a Malaysia-based don to give back his money and he simply does not known how to do that. "None of these builders have approached the police since their financial partnerships with the gangs would be exposed,'' sources added. "We are already saddled with unsold stocks. Where are we going to get the money to repay the `bhais?' They are not interested in taking over the unsold flats since it is a dead investment for them,'' a builder observed. For the past several years, many of the builders are known to accept investments from the gangs since the latter are able to give big volumes of cold cash and that too at a short notice. Since there was boom in the market there was no problem in giving the `bhais' good returns on their investments, but the scenario is totally different now. Incidentally, it is not only the underworld which has been financing the real estate boom. Several top bureaucrats and senior police officers too are known to have parked their black money with builders. These persons have also become jittery and are pressing for the return of their money. At least with these type of investors
the builders are not facing much problem because they are privy to details of the ill-gotten wealth of the babus and cops. But with the gangsters it is a different ball game altogether.

49 comments:

Anonymous said...

Big time builders owe lot of money to the traditional money lenders, not so much to gangsters. These money lenders recover the money through gangsters. The police/govt are powerless in this game. The price to pay for defaulting is very high and the debt is carried over to generations to come. This traditional banking system is well entrenched in India, even before the onset of banks. These bankers have network of agents to track down hidden money in foreign banks. In other words, one can't just run away.

Anonymous said...

I think a lot of black money would be gone the way it was earned. I don't see bhais getting money back but I do see crime going high and a lot of homicides as a result.

What a shame for the Govt. They should have taken immediate action when in 2006 truth was revealed in USA. They still gave false consolations to the Indians.

Now, as a result everyone is fucked, both front and back.

Anonymous said...

What the builders are expecting from Bhai’s ? to recruit broker or shooter. This is another interesting aspect of Indian economy, underworld & black money. We need an insight from black economist, Abdulla … where are you my friend ?

Looks like Bhai’s have to write off lot of …. …………….
It’s interesting to know that the recession has not only affected normal civilians but also underworld don. But how this Bhai hedged the real estate investment risk ?

I think this is how the natural equilibrium can be restored. Govt. & police should not get involve into this trouble as they already have lot of other issues to tackle.

Anonymous said...

Abdulla bhai is busy talking to his bhai's..

Looks like this scam is unravelling really fast. The govt. is not helping, money has dried up and all the fools have already been suckered. The smart buyers are not buying the bait.

For some reason, I do not feel much sympathy for these jokers or the bhai's or the corrupt bureaucrats or corrupt police/politician or the marwari moneylenders. Each of them deserves their comeuppance. Payback time!!

Anonymous said...

Keep dreaming about collapse of Indian economy and RE. Wait for a week or two, see where the interest rates are moving. Time will only tell who has the last laugh. All the best too you all Guys who sit on the Comp and predict the market. I am betting on Mumbai because of the huge demand and off course with the change in interest rates scenario.

Bindaas Bhai

Anonymous said...

Ullu ke pathe Bindas Bhai,
If there is is real demand, then rents would have really gone very high. The rents are low which means it has all been a speculative demand.

If you don't understand economics, stay out of it and go and fuck one of your gay bhais. Idiot.

Anonymous said...

Mirchi Laagee, yes check out the rents vis a viz last year you will come to know. Sorry it is frustrating but all of us will have to live with it.

Jai Manmohan Singh jee, Jai HO, Tussee great HO, pls. revise the interest rates.

Anonymous said...

FUCK CHIDDU MOTHER FUCKER BASTARD. He is going and getting a line of credit especially for the Real Estate sector. Son of a bitch! How can you fuck the middle class like this and not get fucked back? Screw the bhais' , fear the middle class man who will throw the gauntlet and hit back.

Anonymous said...

Where The
JOBS Are In India



Citigroup on Tuesday cut 53,000 more jobs, triggering fears of more layoffs across industries. TOI, however, has decided to be contrarian. Instead of only writing about pink slips, it hunted out companies that are actually hiring. Here’s the lowdown on





FINANCE & CONSULTANCY


SBI to hire 25,000 new hands, according to bank chairman O P Bhat. Fresh recruitment will be done this fiscal—20,000 in the clerical cadre and 5,000 supervisory staff
Bank of India to hire 10,000 over the next few months. This, on top of over 30,000 fresh recruits in 2008-09. In next 2 years, the bank plans to take in 75,000 Accenture will hire 10,000 people in India by 2010, says COO Stephen J Rohleder
Deloitte Touche Tohmatsu, top global mgmt consultants, looking to hire 3,500 in India in 3 years
MetLife, a new private insurance co., will recruit 30,000 agents and 2,000 managers by March 2009, says CEO Rajesh Relan

BPO

Aegis BPO Services will add 1,000 people per month this fiscal

CAMPUS HIRING

IIM Bangalore and IIM Calcutta say all their students have got placements for next year

INFOTECH


TCS to hire 30,000-35,000 people this year, says a spokesperson. TCS made 24,789 technical campus offers for 2009-10, a 13% jump over this year
Infosys is sticking to plans of hiring 25,000 people this fiscal, says CEO Kris Gopalakrishnan. Infosys has made around 20,000 offers for next year
Satyam plans to hire 8,000-10,000 people this fiscal, says HR head S V Krishnan

MANUFACTURING

L&T will hire 10,000 people over the next 3 years, according to CMD A M Naik Maruti has decided to hire 1,000 fresh hands despite the sluggishness in the auto sector, says a company spokesman


This is what The Times of India Mumbai Edition said.

Jai Ho Manmohan Singh.

Bindas Bhai

Anonymous said...

Steep rate cuts likely next week

This the headline of BS

http://www.business-standard.com/india/storypage.php?autono=340638

Jai Ho Manmohan Singh, Tussee GREAT HO!!!!:-)

Bindas Bhai

Anonymous said...

Sensex has increased 300% since 2004 but we still feel that we have lost a lot. 300% increase in property and we feel that it has increased a lot.

Sensex multiplied 7 times before it crashed. Is 3 times increase with a long pause will bring the property prices down or will it go further up after the break.

Come on prperty gurus scream out your views!!!!

Bindas Bhai

Anonymous said...

Just read quiet a few posts, intresting forum but I feel a good majority of people in this forum are loosers when it comes to investment.

Dhoni

Shivaji said...

Ignore Bindas Bhai a.k.a Abdulla, the gangster stooge/real estate broker. Guys like this never give up.

This guy is playing a psychology game

Anonymous said...

I think Bindaas aka Abdulla aka #$%&...is not really a broker, he is someone who has bought property at the top!! Maybe one of those greater fools who is looking for a greater fool!! Funda's never change. Sorry, but Abdulla Bhai and all his bhai's are going to soon loose their chaddi...
His psych. games might influence one or two more suckers. But everyone here is too wise..read what is happening to DLF, Unitech and all the big land bankers!

About investing - its like buffet says: when the tide goes down, you can see who is been swimming naked...All these builder and their backers, brokers and investors are going to be caught with their chaddi's down after the tide goes out.

Anonymous said...

So where is real estate going.

DOWN

Come to think of the economics for demand and supply.

There is a demand destruction and hence prices have to correct.

If property prices shot up 300.00% , then they have to come down by 100%

another effect of reduction in rate is increase in inflation which will make the government jittery in this election year.

The builders went to the FM with a begging bowl ? Why?

NO CASH FLOWS

another thing is history tells us that re is a cycle goes up then down then up , Now is the time to go DOWN ONLY.

SO KEEP YOUR CASH IN YOUR BANK OR WHERE EVER U KEEP BUT DO NOT BUY FOR ANOTHER 3-6 MONTHS

Shailesh said...

Nice article.

World financial slump slams slowdown on India

Shailesh said...

Normally, I don't trust politicians or policy makers, but may be this time is different.

If there is political intent, then ‘that’ dream home for ‘those’ millions is actually not that far .

Ajay said...

There is a building coming up in malad west near ryan school. Few months(9) back, I was told by the builder that the booking rate for a flat was rs. 7000 per sq ft, not a paisa less. Now( begining nov) the builder is quoting Rs. 5000, not a paisa less. Few investors have booked the flats and 80% of the flats are unsold. 3 years back, the booking rate was 2500, half of what he is quoting now. My estimate is that, in another six month he will be forced to sell at 2500~3000 rate or even for less incurring losses.

My point is that, the same situation prevails all over Mumbai. The big builders like hiranandani, Raheja etc are either failing to see the reality or up to some tricks only known to them.

Hold on to your cash and wait until the prices reach 2003 level. You mat even be lucky as the prices may reach 2001 level , just when the bubble started building up.

Shriniwas Kulkarni said...

Desperate builders will have to distress sell in a few months.

Prices for second hand homes in Pune are already slipping to 2004-05 levels. I have been following Pune Rates from 1997 when it started slumping, it hit near to 1500 in Kothrud until 2002. From there today the rates were quoted at 5000. But I recently saw ads for Apartments at rates near 3000-3200. I see them dipping no less than 2600 though. Think about it logically if rates grew from Rs 500-600 in 1992 to Rs 1500-1600 in 2002, so Rs 2500-2800 in 2010 is a very realistic rate in good areas. I guess the endgame will be who cracks in the pressure - brokers, small builders or large builders ... someone will hint buyers like me who are bargaining and push rates down. But I honestly doubt rates will drop below 2003-04 levels.

Abdulla, Bindaas bhai be damned but the truth is that we should be prudent to realize the value of property an leverage on this fortunate time (next 9 months) to get a great deal.

Anonymous said...

Even after layoff people in Indian should not worry as there is a good opportunity to make more money by becoming real estate broker. Yes , 2% broker.

See the calculation & you will be amazed,
Minimum property price in metro is 50lakh, so if you will sell a single apartment in a month you can make 2% of it i.e. 100,000. So your annual income will be 12, 00,000 without any tax. If you will see the past record, every broker used to sell 3-4 apartments per month. i.e. whooping 36,00,000 per year , all tax free. I bet you, you can’t make this kind of money unless you are CEO of the company, which is remote possibility.
Considering the worst market condition you can sell 1 apartment in two month still not bad, 6, 00,000 per annum. So guys don’t waste your time in fighting with 2% Bhai, become a broker & compete him.

Warning: Now a days builder are not entertaining broker as they are only interested to make their commission high & not to sell any property. So some builder has started own advertising activity to catch potential buyer.

Vulture.

Anonymous said...

Shrni,

In Baner the rate will stabilize between 1800-2200. In Nanded City 1500.

Anonymous said...

Boss I dont have any interest in influencing you all because today a customer is confused even after reading a credible news paper leave alone this site(with due respect).

I am here to present my views which i feel a majority of people will not agree because they want to buy a house. I am no one to predict the market. All I am saying is the following.

1) Mumbai still has a huge demand for homes.
2) Limited availability of land.
3) Corelation of stcok market to property market is lost.
4) Govt will push growth and doing so will drop interest rates sheer out of complusion.(Hopefully the inflation rates will come further down in comming months)
5)Politician shelfish interest by not bringing tarnsparency and also not increasing FSI.
6)Certain sectors Financial, Diamonds and garments willl only take time to come out of this financial mess but most of the other Industries will come stronger.
7) People will immediately start comparing EMI vs Rent.

Now it is up to the customer to buy looking at good discount or waiting for so called crash which may or may not happen.

At times vultures go hungry or will be left with bones so learn to catch your own prey.

Personally I am buying now and i am getting good deal and choice of flats, which i feel i can sell later with two to three years horizon

All the best to you all!!

Bindas Bhai

Anonymous said...

TO ALL:
I think the peak of Indian housing was mid 2008. If a property at the peak was 1 Cr, it will be worth 30 lacs, if it was 2Cr. it will be worth 55lacs and if it was 3Cr. it will be worth 80 lacs in the times to come.

No matter who does what or says what, black or white money, corruption or builder scam, or consumer speculation or greed, THE PRICES WILL COME DOWN IN 6 MONTHS TO 2 YEARS TO SUSTAINABLE LEVELS AS I MENTIONED ABOVE. PLUS:
--PEOPLE WILL START REALISING THAT 1CR. IS A LOT OF MONEY.
--LOT OF LAYOFFS ARE COMING AND CONSUMER SPENDING WILL GO DOWN.
--GOVT. AS USUAL WILL JUST DO LIP SERVICE.
--MBAs WOULD BE TREATED LIKE SHIT IN THE COMING YEARS.

Anonymous said...

Typically in a developing economy 50% of development happens with Hot money, this will not come to India for some time but eventually it will come as dust settels it may take a couple of quarters.

India is among the few countries with good potential and it will shine. The world will look at India in couple of quarters. None of the Inidan banks have lost money because as per the policy RBI did no allow our banks to invest in any of the US derivatives.

Why are the people over here trying to create a scare and behave like God to time the market.

I am sure everyone over here knows that this scare is only to protect their own interest hoping people wont buy and property prices will crash.

With politician and builders nexus it is very unlikely that your dreams will come true.

Someone mentioned earlier about demand destruction, I agree with him but there is still time,( i amy be wrong) who expected oil to touch $147 and when people started taliking about oil reaching $200 what happened we all know.

History has shown that it is very difficult to time the market and reverse always work when it comes to common man.

Friends pls dont time the market if you are getting minimum 30% discount in good areas, go ahead and strike a deal. It works around 100% reduction on 300% increase.

Bindaas Bhai

Anonymous said...

Bindaaas Bhai,
You are a bindaas chutiya.

What the fuck are you are talking and what is your analogy. If you have to buy, go and buy. This blog is not for you.

Behanchod, all these people who are losing money will curse you till your death. Shame on you. When you don't know about something, keep your mouth shut. If you know a lot, go and buy flats. Don't ever try to come to this blog bastard...Did you get your MBA from IIM Ahmedabad? Those are the fuckers who screwed it all up. Saale sare madar chod chor hain.

Anonymous said...

There is no need to get hyper and abuse. I can understand your frustration and others over here. I am not getting any pleasure by posting this comment.

I am just giving my side of the story. I strongly believe that people who read must know both sides of the story before taking any decision.

Sorry if I have hurt you that was not my intention.

Anonymous said...

Techville's Top 5 plan to recruit 80k in 2008-09
http://economictimes.indiatimes.com/articleshow/3734113.cms

RBI makes recast of realty loans tougher



Loan Rollover To Attract NPA Tag


Sangita Mehta & Vijay Gurav MUMBAI




INDIA’S struggling real estate sector is set to come under further pressure in the coming weeks as the Reserve Bank of India (RBI) has made it tougher for banks to ‘restructure’ loans, forcing them to cut house prices or risk being starved of bank funding.
Banks often resort to restructuring loans — a practice aimed at preventing loans from being classified as bad — when they sense their borrowers are facing difficulties in repaying loans. In a typical restructuring, banks give borrowers more time to repay the loan by extending the loan tenure, and sometimes, even at reduced interest rates. Such an exercise enables banks to keep their non-performing assets (NPA) ratios under check and their books clean of the stigma of dud loans.
But in a little-known directive issued earlier this year, the central bank has ordered that the moment a loan to a builder is restructured, banks must classify the account as an NPA. However, for restructured loans in all other sectors, the account can continue to be treated as a so-called ‘standard asset’, thus sparing banks from having to make large provisions in their profit and loss accounts. The inability to restructure loans easily is forcing banks to put pressure on builders to cut prices, sell properties and service loans. Builders are usually left with little choice as an NPA tag will make it difficult for them to approach other banks for funds.
“We are putting pressure on the real estate sector to reduce property prices. In such times, even if they are able to keep their head above water, it would be fine. They have all had a good innings so far. Now, they have to learn to live with thin margins,” said TS Narayanasami, chairman & managing director of state-run Bank of India, and the chief of industry body — Indian Banks’ Association.

Realty cos may have to cut prices


“Just banks reducing interest rates will not help in reviving sentiments; builders will have to bring down prices for buyers,” Mr Narayanasami added.
Bankers say demand for home loans has fallen because buyers are waiting for property prices to fall. “Banks have taken the initiative by cutting home loan rates. Prices of cement and steel too have fallen, but builders have not reduced property prices,” said MV Nair, CMD of Union Bank of India.
Although the RBI relaxed some bank lending norms for the building sector last weekend, it has remained quiet on the issue of restructured loans of builders.
Analysts have expressed concerns over the financial health of the real estate sector. City-based retail broking firm, India Infoline, fears the liquidity situation of developers could worsen further if banks refuse to refinance maturing debts of real estate companies and maintain the credit freeze on their accounts.
“We reckon that debt maturing over the next 12 months for developers like Unitech, Sobha and Puravankara is higher than our estimate of these companies’ revenues over the corresponding period. The situation with Omaxe, Parsvnath and Ansals also remains precarious, owing to large land advances and high receivables”, it said in a research note.
The building sector has seen a raft of credit downgrades amid refinancing concerns and bankers say the sector has little choice but to cut prices. “If a builder does not pay, banks would either initiate a recovery proceeding or restructure the loan. A recovery proceeding often results in lower realisation. This, hopefully, should indirectly put pressure on builders to bring down price and go for negotiated sales,” said SA Bhat, CMD of Indian Overseas Bank.


As a buyer what will you do after reading the above article.

Anonymous said...

Banks may seize the realtors assets due to non payment of dues. Read more of it here.

http://profit.ndtv.com/2008/11/19220817/Will-realtors-really-slash-pri.html

Anonymous said...

Baner rates will come to 2200 not 1800. It takes just one builder to trigger the collapse - if Builders who dont lose by reducing rates announce lower rates, they will attract huge number of new customers. DSK did that in previous slump by announcing DSK Vishwa project. Same thing will happen now.

Moreover if Rupee falls to 55 Rs per dollar, a year's salary in US will buy me a nice house in Pune :) Poor Abdulla will have become null - ah by then :) I will sure put Abdulla one rupee in his bowl then at Babajan Chowk!

Anonymous said...

Great to hear that with one year salary you can buy a house. Thats the point I am driving. A decade back you needed typically 15 years Indian salary(single income) to buy a house but today with high salary and double income we can buy with approx 6 years salary.

This is the point i am drving and that is the reason I feel as soon as the interest rates comes down buying will start again.

Bindas Bhai

Anonymous said...

Inflation at 8.9%: Experts see sub-5% by Mar end

http://moneycontrol.com/india/news/economy/inflation-at-89-see-sub-5-by-mar-end-say-experts/367061

With the above news it is anyone guess where the interest rates are heading?

Bindaas Bhai

Anonymous said...

Inflation declines to 8.9%, RBI may cut rates

http://www.business-standard.com/india/news/inflation-declines-to-89-rbi-may-cut-rates/14/12/49818/on

Bindas Bhai

Anonymous said...

Bucking the slowdown, telcos up hiring plans

http://www.business-standard.com/india/news/buckingslowdown-telcoshiring-plans/14/16/340784/

Anonymous said...

Barun Roy: The urban reality

ASIA FILE
Barun Roy / New Delhi November 20, 2008, 0:14 IST

Three million people are migrating to cities in developing countries every week - a third of which are slums already.

http://www.business-standard.com/india/news/barun-royurban-reality/14/30/340679/

Pls. read this article to kniow the future demands of homes in cities across the developing world.

Anonymous said...

@ all the real estate BULLS that are posting here- I think those of you who are harping on the demand for homes in cities are missing the elephant in the room. Of course, there is a HUGE demand for homes in India. The question is at WHAT PRICE? If you have studied even rudimentary principles of economics you will understand what I am saying. Of course the demand is there but not at todays hyperinflated prices. That is exactly the whole point of this blog and if you have not understood the title at all no sense in posting hype over here. The very fact that slums are increasing and Mumbai is the slum capital of the world PROVES that huge demand exists, but prices are too high and unsustainable. Result-slums all around.

Anonymous said...

Pls. read my mail posted at 12.15 you will get some idea about what i am saying. Choice is your to buy with 30% discount now or wait for the crash.

BTW we are not looking at low end jos seekers as target audience but educated double income migratory population.

Anonymous said...

Funny thing happened, I wanted to check Vigaharta Row House Project at Panvel. The builder till a year back was booking at sub-1500psf, is now charging Rs.2200psf. Whats worst is that the quality of construction is really aweful and though there are roads around, so are slums and all kinds of small buildings. Its not live in nature and luxury as advertised. Its is near an industrial belt, extremely polluted and dirty. Is the builder dense for some reasons, people are buying. Its a horrible unclean place. And the top selling point is nature and unpolluted air - which is completely false, there is load shedding almost everyday for 4 to 6 hours during the day at times in the evenings, one of the weekdays it could be as long as 16 hours. No direct water supply, its supplied thru' tankers and not really potable. What does it take for people to come to their senses in this inflated high ego real estate market?

Anonymous said...

THE INTEREST RATES DEFINITELY BE SLASHED AS THE FM IS FOLLOWING USA PHILOSOPHY ALL OVER. BUT THE MILLION DOLLAR QUESTION IS WOULD IT HAVE A REAL IMPACT IN HOUSES TO SELL. IT MAY GET SLIGHTLY BETTER, BUT MAJORITY OF BUYERS WHO WERE SPECULATORS ARE NOW OUT OF THE MARKET. NO SENSIBLE PERSON WOULD WANT TO CATCH A FALLING KNIFE.

Raju said...

I agree with Anonymous(5:22 AM) totally. FM or the Banks do not guarantee that the interest rates on housing loans will remain fixed. What if, it goes to 14%.

It is foolishness to venture into housing market relying on FM or the banks. FM's tenure is going to be one more year, after which he will enjoy the wealth he has amassed by screwing up the common man in the name of liberalization. What will happen to people like us. We wont have a roof on our head

Raju said...

Bindas Bhai and some Anonymous bloggers here are trolls. Their aim is to whip of passions. It is best to ignore them.

Well educated people have a mind of their own are are blogging to exchange information/experiences. This was not possible some years back and people like us were cheated by people like Abdulla/Bindas Bhai. They are bygone days.

Thanks to Vik for starting the blog so that people can exchange information. Home is the most prized possession for people like me, and I would research well before I invest my limited hard earned money.

Shailesh said...

Now, Dharavi project bidders want govt to sweeten deal

“In a different market, there would not have been any fears,” said MHADA vice-president and CEO, Gautam Chatterjee, also officer on special duty for the Dharavi Redevelopment Project, admitting that the liquidity crisis has led to several queries and requests for some sweetening of the proposed deal from the bidders.

“The bidders have expressed reservations on some of the conditions ¿ for example, a bank guarantee for 10 per cent of the project cost and an upfront payment of 10 per cent of the premium amount they quote,” Chatterjee said.

For now, he said, officials have advised each of the 19 consortia to remain active participants in the process and present their design masterplans to government officials and an expert committee next month, regardless of whether they choose to place a financial bid later.

Needless to say, when the project moves into the financial bidding phase, there would be stiff negotiations on the conditions, which now weigh severely against the builders. “With the total project cost now estimated at Rs 15,000 crore, ten per cent of the project cost for each of the five sectors is about Rs 300 crore. Who will raise that sort of credit now?” asks a representative for one of the firms in the fray. “Then there is the cost of building not just the commercial spaces, apartment blocks and the tenements for rehabilitating existing slumdwellers, but also developing schools, hospitals, fire stations, etc.”

The Dharavi Redevelopment Project aims to rehouse approximately 57,000 slum families in free homes, to be built by investing real estate developers who then exploit the special FSI of 4 for commercial development.

I get feeling that FSI of 4 will probably get increased. Any one of these projects if get started, it will be doom for rest of the builders in Mumbai.

Shailesh said...

Expensive land buys put developers in a bind

Builders, especially in Mumbai, who bought property at steep prices are finding it tough to sell or develop the land.

Vijay Associates (Wadhwa) Developers acquired a plot of land in Mumbai’s new central business district, the Bandra Kurla Complex, for Rs821 crore, paying around Rs5.04 lakh a sq. m in what was then touted as the most expensive land deal in Mumbai by analysts and media. The company is yet to start developing this land.

In 2005, Kohinoor Consolidated Transport Network Ltd bought the defunct Kohinoor Mill located on a 4.8-acre plot for Rs421 crore. Work on the project is stuck and the firm has been unable to sell the property. The same year, India’s largest developer by market value, DLF Ltd, bought the 17.5-acre Mumbai Textile Mill for Rs702 crore. Three years and many changes in design later, the company has only now finalized plans for the land.

“We will either develop and sell it outright or sell it off in its prehttps://www.blogger.com/comment.g?blogID=19740856&postID=1358036449896410895&page=1sent condition. We have been speaking to various buyers.” Yeah Right !!!

If Big guys are struggling, forget about small builders. They will be toast. Resist any buying, Market is correcting. Don't catch the falling knife.

Shailesh said...

HDFC-HDFC Bank merger possible: Parekh

“We will wait-and-watch for some time before taking a final call on the interest rates. The deposit rates in the system have to come down first before cutting the lending rates. And, I do not rule out the possibility of more monetary measures being implemented by the Reserve Bank of India,”Parekh added.

He said HDFC witnessed a decline in bulk disbursements of loans in the month of October. The average size of housing loan that got disbursed by HDFC in the initial six months of the current fiscal was only around Rs 14 lakh.

Parekh also said housing loan disbursements would gain momentum only after the country’s real estate sector witnesses the expected correction in prices. “Many builders in Chennai have already lowered real estate prices by around 25%. A possibility of something like this happening in other cities including Mumbai cannot be ruled out,” he said.

Parekh indicated that a crisis of confidence prevails in the Indian banking sector currently, as the banks do not trust one another in the current scenario. “However, I do not foresee that any Indian bank would collapse. If such a situation arises, I am confident that the regulator would allow a takeover in the Indian banking space to avert the crises.”

HDFC is safe guarding itself by merging. They can not survive just staying lending corporation anymore. And the last paragraph says it all. If we go down, Government will take us over. Wow, what a noble idea? Whatever happened to Free Market capitalism.

Shailesh said...

Buying flats FMCG style

The fall in the Mumbai real estate is real, even if builders and developers do not want to publicly acknowledge that things are pretty much down in the dumps. Sales have crawled to a stop, registrations are down, construction activity is slowing down and new projects are being deferred. The city’s real estate developers are trying every trick in the book to woo prospective buyers. One builder has a buy-one-get-one-free offer — if you pick up a flat in Santa Cruz, you get one free in a faraway Mira Road suburb that you could presumably use on the weekend — though why this idea is attractive has not been unexplained. Another builder, who recently had painted Mumbai with hoardings about his new projects, has come out with another innovative idea. The builder concerned has taken to flooding potential customers with e-mails offering housing loans at 7.9 per cent — provided by the developer.

Anonymous said...

This is a very clever Vulture, who keep watch & pick up only at right time.
Strategy is perfect, if market will go up, will make money through brokerage(2%) ,
so we can cash out from uptrend without holding property. [ Competition dekh ke gili ho gai, Bhai ki.]

If market goes down we will buy property to make profit in future.

Bhai , if you need any property please let us know we will charge only 2% upfront & will show you property from our huge database(which is only increasing) in any area , any location but at our price tag.

So guys, let it fall then pick up, minimum half price is guaranty next year.

As builders are not ready to reduce the prices, Bank has decided to sell at much reduced prices, yes the summer sale is coming soon.
http://economictimes.indiatimes.com/Markets/Real_Estate/RBI_makes_recast_of_realty_loans_tougher/articleshow/3736438.cms

Stop the interest rate nonsense; in US the interest rates are 7% still no one is ready to buy any house at 30% less price.

Vulture.

Anonymous said...

Vulture is flying high and dry for last two years despite the market correcting to almost 30%.

Keep flying till you get tired of paying rent or compromise on life style.

No sooner the interest rates fall let us all see what happens.

Bindas Bhai

Anonymous said...

My Dear Bindaas,
Interest rate cuts would have very minimal difference because:
--Even if RBI cuts rates, it is not necessary that banks would do the same. They may in fact increase the rates as there is a major financial crunch all over the world.
--Most speculators are gone, so 70% demand is already vanished.
--The sentiment that housing always goes up has gone from the market.
--Right now masses are worried how to save their jobs and not how to buy houses.

You should also get a real job and get a life.

Aparna said...

Vulture investor and Shailesh, nice articles!! Keep up the good work. We need more aware and enlightened people like you to prevent us from making emotional/foolish decisions and falling to the trap of people like Abdulla/Bindaas Bhai.

Thanks.

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