Tuesday, July 07, 2009

Ackruti City's Q4 results worst amongst listed realty companies

Ackruti City's Q4 results worst amongst listed realty companies

Mumbai-based real estate developer Ackruti City’s fourth quarter results were the worst amongst the pack of listed realty companies. Due to negative sales, its net profit for the quarter ended March ‘09 took a big hit. Despite a slight improvement in the sentiment for the sector, Ackruti could not register any sales. In fact, it had to write off close to Rs 105 crore worth of FSI sold in the previous year. The company reported a 300% drop in net sales in its fourth quarter and its net profit turned red. It fell to a negative Rs 123 crore from Rs 22 crore earned in the December ‘08 quarter.

43 comments:

shailesh said...

City-based real estate firms now are skeptical that their business would look up any time soon. "There should have been some sops to prompt banks to start lending. They have stopped funding the real estate sector for some time now,'' said Ashwin Rao, director, Manbhum Constructions. He says that by not giving any incentive to the real estate sector, the government has failed to create the environment for people to buy a house. "In the last six months, the government has been prodding banks to start lending, but the bankers are being over cautious,'' Rao says, adding that the budget was a huge disappointment.

Builders point out that there are 260 industries dependent on the real estate sector and are affected if the sector does not do well. "We were hoping that at least in the areas of steel and cement, prices would come down and that the banks would be able to cut lending rates,'' said Arshad Ayub, managing director, Oakwood Builders and Infra. He said that people were waiting for the budget hoping for some changes that would enable them to buy a house.

"It's a blow to the industry. We are contributing directly or indirectly to the GDP
and they (the government) should consider our request,'' Shekar Reddy said.

City builders unhappy with budget

shailesh said...

The Next Bubble: Asia Real Estate?

These attempts to revive growth have … resulted in a significant rise in asset markets, particularly property prices. Property markets have seen a meaningful rebound from the bottom across the Asia ex-Japan (AXJ) region, particularly in the financial centers of Hong Kong, Singapore, Seoul, Shanghai, Bangkok and Mumbai. From what we can surmise, property prices have risen by 10-40% in various pockets in the region (unfortunately, most up-to-date official national and city level property indices are not available). Hong Kong and Singapore, which are linked more closely to global financial markets, have seen the sharpest rebound. Price indices in some areas are close to the peak levels seen prior to the emergence of the global credit turmoil.

shailesh said...

Residential property prices to fall 8-10% more in 2009

Amongst the 10 cities covered by CRISIL Research, Pune, Bengaluru and Mumbai have witnessed the steepest correction in capital values compared to the highs seen in the first half of 2008. Capital values in NCR had already started stabilising during the first half of 2008 even as the upward trend continued in other cities. Hence, capital values in NCR declined by only 18 per cent, which is relatively low compared to other cities. The report covers more than 400 areas across 88 micro markets in 10 cities--Ahmedabad, Bengaluru, Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, Mumbai-MMR, NCR and Pune.

Anonymous said...

http://www.thehindubusinessline.com/2009/07/08/stories/2009070851350600.htm

Bankers Warn Developers against raising property prices

Anonymous said...

Does that mean we should buy property now?

Shriniwas K said...

This is turning out to be India's version of the Japanese Real estate bubble. India's non transparent dealings via black money has shielded free fall of RE as people have locked prices.
I see that the bubble will deflate no matter how hard everyone tries. Take my word. There is not going to be revival till Q2 FY2010 in the general economy. for Real Estate the prices will not increase but will stay flat and the Cost of living, inflation will increase and Rupee value will degrade to make sense of present still bloated prices.

Unlike Japan and US where when the bubble burst, the banks bore all the brunt, In India we dont have loan shark banks so the real person to bear this is going to be the common man. Not only will the prices of commodities increase in spite of a global slowdown, the Rupee value will keep tumbling to shelter the builders and brokers and all their balance sheets.

I have a simple suggestion - Buy now if you ar eok with a 10% drop risk. Prices wont fall below 10-15% from todays levels. So if that doesnt hurt then its fine. Buy cautiously. Make sure your job's potential and savings are put to good use.

If monsoon fails (Which I hope it doesnt), then we are going to see a big spike in food and commodities at end of 2009 after the Rabi season. Please beware of that. So plan well. Its not bad to buy but not the very best time either.

Definitely dont buy for investment yet...

Anonymous said...

My request to you all is to read this. I am just enjoying reading this.

Market is really dynamic!! :-)

https://www.blogger.com/comment.g?blogID=19740856&postID=1358036449896410895

Anonymous said...

Few of the multiple groups who helped balloon the real estate super bubble are on their WAY OUT. Now they will be having ample time to plant the Ads about Real Estates in the local newspaper instead of company bulletin board. Ohh forgot this..more time to do the online trading....( there will not be any time constraint…whenever they got free time, they did the office work…)

Satyam set to fire another 800

Saturday, July 4, 2009 2:51 IST


Hyderabad: With little resistance coming for the laying off process, particularly from the government, Mahindra Satyam is now gearing up for yet another round of lay-offs. This time, the axe is likely to fall on senior employees at the mid-management level.


According to sources, the company has already informed the employees about its plan to shave off a 'significant number' of jobs.


The scam-hit company has these employees in various categories or 'bands' as the company calls them. "The senior employees in the company in Bi to i-Alpha band are all set to be sent out," a source in the company said.


The company has about 1,200 employees in these categories, ranging from general managers to vice-presidents. About 800 of these employees are likely to be laid off as part of the restructuring exercise.

Anonymous said...

Seeing what Pranab Mukherjee DID NOT do for the RE sector in the budget, the big boys of RE must have really not contributed to the Congress election kitty at all, pissing them off real big. Side effects of the liquidity crunch.

Maybe if they please him now, he will do something in the next budget

Venkat ND

Ajay Rane said...

I am from Mumbai and have been desperately for a apartment. Currently I am living with relatives. Every builder, broker I approached are asking 50-60% in black. It was 20-25% few months back. Now the price per sq.ft is reduced little but the black portion increased. I can get a loan from bank, but banks don't advance black . Does any of you encountered such situation and what steps were taken.

Greatly appreciate for ideas

Anonymous said...

@ Ajay,


Tell them you have recently transfered to Mumbai and work for Income Tax department.

Anonymous said...

Price Discover Mechanism for RE
TRUE VALUE TEST Most people end up buying a property at a price that is more than its value. As a result, they have to either wait unduly long to get a good return or sell at a loss.
Follow these steps to correctly evaluate a rent-worthy property. Assume the asked price is Rs 35 lakh and the down payment is Rs 8.75 lakh (or 25 per cent of the property's value)

Step 1: Expected net operating income (NOI)
This is rental income minus operating expenses such as repairs. This cost excludes EMI

Rental Income - Operating Expenses = NOI
Rs 2.4 lakh-Rs 15,000= Rs 2.25 lakh

Step 2: Annual debt service amount
Lenders want the expected NOI to cover your annual debt obligation. So, they lend in a way that the repayment is covered by the NOI. If the bank wants a debt coverage ratio of 1.15 times, the annual debt service amount will be Rs 1,95,652.17

NOI / Debt Coverage Ratio = Annual Debt Service
Rs 2.25 lakh / 1.15 = Rs 1,95,652.17

Step 3: Debt service ratio
This is the annual debt obligation as a percentage of the total loan

(Annual Debt Obligation / Home Loan Amt)* 100 = Debt Service Ratio
(Rs 1,95,652.17 / Rs 26.25 lakh) * 100 = 7.45%

Step 4: Rate of return on your down payment
This depends on NOI yield and down payment portion

NOI Yield * Down Payment Contribution = Return on Down Payment
[(Rs 2.25 lakh / Rs 35 lakh) * 100 = 6.43%] *
[(Rs 8.75 lakh / Rs 35 lakh) * 100 = 25%]
6.43% * 25% = 1.61%

Step 5: Market capitalisation rate
This is the sum of the debt service ratio and the return on your down payment

Debt Service Ratio + Return on Down Payment = Market Capitalisation Rate
7.45% + 1.61% = 9.06%

Step 6: Property's right value
This is the true value of the property (V). This calculation shows the property is worth Rs 24.84 lakh, which is lower than the asked price of Rs 35 lakh.

NOI / Market Capitalisation Rate = V
Rs 2.25 lakh / 9.06% = Rs 24.83 lakh

NT

Anonymous said...

Read the header for the earlier post as Price Discovery Mechanism - TRUE VALUE TEST

NT

Anonymous said...

True value test

Most people end up buying a property at a price that is more than its value. As a result, they have to either wait unduly long to get a good return or sell at a loss.
Follow these steps to correctly evaluate a rent-worthy property. Assume the asked price is Rs 35 lakh and the down payment is Rs 8.75 lakh (or 25 per cent of the property's value)

Step 1: Expected net operating income (NOI)
This is rental income minus operating expenses such as repairs. This cost excludes EMI

Rental Income - Operating Expenses = NOI
Rs 2.4 lakh-Rs 15,000= Rs 2.25 lakh

Step 2: Annual debt service amount
Lenders want the expected NOI to cover your annual debt obligation. So, they lend in a way that the repayment is covered by the NOI. If the bank wants a debt coverage ratio of 1.15 times, the annual debt service amount will be Rs 1,95,652.17

NOI / Debt Coverage Ratio = Annual Debt Service
Rs 2.25 lakh / 1.15 = Rs 1,95,652.17

Step 3: Debt service ratio
This is the annual debt obligation as a percentage of the total loan

(Annual Debt Obligation / Home Loan Amt)* 100 = Debt Service Ratio
(Rs 1,95,652.17 / Rs 26.25 lakh) * 100 = 7.45%

Step 4: Rate of return on your down payment
This depends on NOI yield and down payment portion

NOI Yield * Down Payment Contribution = Return on Down Payment
[(Rs 2.25 lakh / Rs 35 lakh) * 100 = 6.43%] * [(Rs 8.75 lakh / Rs 35 lakh) * 100 = 25%]
6.43% * 25% = 1.61%

Step 5: Market capitalisation rate
This is the sum of the debt service ratio and the return on your down payment

Debt Service Ratio + Return on Down Payment = Market Capitalisation Rate
7.45% + 1.61% = 9.06%

Step 6: Property's right value
This is the true value of the property (V). This calculation shows the property is worth Rs 24.84 lakh, which is lower than the asked price of Rs 35 lakh.

NOI / Market Capitalisation Rate = V
Rs 2.25 lakh / 9.06% = Rs 24.83 lakh

Anonymous said...

So you assume that you can get Rs. 20,000 rent per month for the 24 lakh property ? I think you should revaluate the figure (either for the rent or the capital cost)
For example, an acquaintance just rented a 2BHK at Ghodbunder Road, Thane (that is supposed to be valued at ~ 25 lakhs-30 lakhs) for the princely sum of Rs. 5000/- pm. The owner has also a modular kitchen and some other furniture, which is included in the rent. If you really start calculating the owner's return on investment-it would be miniscule, compared to any other investment.

Anonymous said...

Daily News and Updates on E-Governance Happenings in India

Anonymous said...

The financial crisis which was triggered due to the default on subprime loans has not subdued at all. The brokers, real estate developers are misleading the gullible buyers or increasing prices by telling stories about the recovery at the end of 2009.

Next crisis “Commercial Real Estate Loans default" is on the horizon and once again more severe repercussions will be felt across the globe.

As Vulture has said -- minimum 50/60% drop in housing prices is guaranteed.


The-Rise-Fall-Of-Realty.


Treasury Works on 'Plan C' To Fend Off Lingering Threats
Troubling Issues in Lending Could Still Disrupt Economy

By David Cho and Binyamin Appelbaum
Washington Post Staff Writers
Wednesday, July 8, 2009


The officials in charge of Plan C -- named to allude to a last line of defense -- face a particular challenge in addressing the breakdown of commercial real estate lending.

Banks and other firms that provided such loans in the past have sharply curtailed lending.

That has left many developers and construction companies out in the cold. Over the next few years, these groups face a tidal wave of commercial real estate debt -- some estimates peg the total at more than $3 trillion -- that they will need to refinance. These loans were issued during this decade's construction boom with the mistaken expectation that they would be refinanced on the same generous terms after a few years.

The credit crisis changed all of that. Now few developers can find anyone to refinance their debt, endangering healthy and distressed properties.

By the beginning of the recession in December 2007, the median midsize bank held commercial real estate loans worth 3.55 times its capital cushion -- its reserve against unexpected losses -- according to the Federal Deposit Insurance Corp.


Borrower defaults increasingly are draining capital from many of those banks, forcing some to close. Financial analysts said losses on commercial real estate loans are now the single largest cause of bank failures.

The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, masks the full extent of the housing crisis. The trend foreshadows even more financial losses to come for lenders as many of these homeowners are expected to continue to miss payments and eventually fall into foreclosure.

Anonymous said...

SIMPLE RULE: Rent or Buy?

For self occupation, in USA, the simple rule is that if the property is priced more than 200 times monthly rent, it is better to rent than buy.

So if you can get a flat for 5000Rs rent, you should buy it only if it is for 10 Lakhs or so. If it costs 20Lakhs, you are better off renting.

India traditionally has high RE values. I wonder what the multiple should be. I stick to 200 only.

At 15000 PM rent, 30 Lakhs is what I am willing to pay. I can buy a juggi. Or a flat 50 KM away.

Venkat ND

Anonymous said...

I dont know how much the text books fundas are relevant to Indian RE.

I am seriously in problem. I need a house in Malad. The current rate is minimum 8k for a descent location in Malad west.

I had visited this builder called Harish Mota in March for a property near Orlem Church, he had offered me at 7k. Now he is asking for 9k and unwilling to negotiate even Rs.100.
If i buy now i will make minimum 20 lakh loss. He claims if i come in Diwali the price will be 10k.

God know where is this heading :-(

Lester

Anonymous said...

The Government has come out with a proposal that a person cannot buy more than 1 flat in affordable housing scheme. His immediate kins will also not be allowed to buy another flat. This will be implemented in Delhi from April 2010.

Govt. Plugs Illegal Profits for Builders

This is a death bell for real estate companies. Once this is success and fetches more votes for the state governments, It will be replicated in other states and segments as well.

It is the final Prick in the Balloon of RE. By n3xt 5 years real estate will nor more be an investment haven. Having more than one flat will be considered as hoarding and legally termed as black marketing.

Those who cab wait for 15-18 months can get much better deals as demand is diminishing and huge supply is underway.

Anonymous said...

How will this help in reducing the price? It is mentioning that you cannot buy in the same building. In fact because of crook builders we will suffer.

Just in case if i want to stay along with my parents in the same building i cannot.

This is crazy, screw the builders by taxing appropriately instead of taxing genuine buyers.

Shriniwas K said...

@Anonymous/Lester Screw that builder - I am 100% sure you will get a decent deal in Malad, Goregaon. The Key is not to succumb to any increase now. The Fake stock market rally was over after the budget, now the markets will correct to the real prices. I am sure that builder will find no taker even after Christmas :) ... I would suggest you to push for sub 7k levels. Look for the rates in 2004 end through 2005 middle. The rate today shouldnt be more than 10-15% from there.

Anonymous said...

http://economictimes.indiatimes.com/Sensex-trips-13500-support-as-FIIs-exit/articleshow/4763315.cms


This was well known that the rally was fake and now the sensex should plunge substantially.

Bindass Bhai is nowhere to be seen. Also the builders increasing the rates and trying to con buyers by saying that rates will increase now, better buy right now before its too late is also laughable.

Good Joke Builders and Brokers we will wait for you to crawl behind a rock and the prices to come to sensible levels now.

Even if you want to do QIP/Shares selling on share market you will not get enough money to hold prices for much longer.

One more thing I want to stress is that hoarders and black marketeers go along with economic cycles. For example if there is a shortage of sugarcane in one season, suddenly you will see hoarders cornering all sugar supplies. They will never try to hoard sugar when there is an abundance of sugarcane in one particular season. Similarly, if builders, investors, brokers are trying to hoard and drive up prices in the face of a huge inventory overhang, then its extremely laughable, because try as they might, they will not succeed.

shailesh said...

Maytas property buyers protest outside Raju home

People who have purchased flats at the Maytas Hill County, a residential and commercial real estate project taken up by Maytas Properties, an unlisted company promoted by the family of Satyam Computers founder B Ramalinga Raju, today staged a protest before Raju's house at Jubilee Hills.

"The EMIs (equated monthly instalments) are killing us. We are paying for nothing,'' said Sujani, one of the flat owners. She wanted the company to expedite the construction and also insulate Hill County from any possible attachment by any of the investigating or government agency.

The owners said that a majority of them have already paid the full amount towards the purchase of the flats and were paying EMIs in the range of Rs 50,000 to Rs 1,00,000 without taking possession of them. They said that the flats were not ready and in some case were nonexistent.

"The land belongs to us. We should not be victimised for the mismanagement of the parent company (Satyam)," said another flat owner. He said that Maytas Properties had already collected full money from them but has not spent it on the project. Accordingly, it needs another Rs 150 to 200 crore for completing the pending work.

shailesh said...

Jerry Rao ropes in HDFC for nano-home project

BANGALORE: Playing his second innings as an entrepreneur on the fast wicket, Jerry Rao has roped in home finance
major HDFC as a strategic
investor in his new low-cost housing venture, Value & Budget Housing Development Corporation.

Value & Budget Housing will utilise the equity capital largely to acquire land assets. It will make use of options such as construction finance and presales to customers to fund project execution. Initially, the company has plans to set up two pilot housing projects on the north and south fringes of Bangalore where it may look at building up to 2,000 dwelling units in the sub-Rs 7 lakh price segment.

The buzz around nano-housing is getting louder with several unconventional players jumping on to the bandwagon. For instance, Matheran Realty, a PE-financed firm in which AIM-listed Eredene Capital has invested Rs 100 crore, is building a 15,000-unit complex in Karjat.

Tata Housing is building a low-cost project in Boisar. Two ex-AmEx senior directors have set up a dedicated low-cost housing finance firm. In Bangalore, Janagraaha founder Ramesh Ramanathan too has similar plans.

Anonymous said...

I have a question regarding buying mumbai real estate. Why do you everyone quotes a builder rate, is it not possible to buy old properties. As far as I see in manhattan and nearby areas the prices have come down but mostly in the older apartments/buildings where a guy needs to liquidate urgently. Is that not possible to do in Mumbai (south mumbai mainly cosists of old buildings just like manhattan). Does anyone know what will be the negotiable rate in Prabhadevi/Malabar hills/Colaba etc for these old buildings and what was the rate in early 2006.

shailesh said...

Small housing projects can make big profits: Jerry Rao

Anonymous said...

Vik, looks like you have come around to my point of view, that it is better to buy now before inflation wipes out the Rupee.

Anon@8.12, I agree totally with your view. There is oversupply.But if you research the market, you will find that oversupply is in the premium/luxury market (>50Lakhs). Nobody built affordable i.e. 20-30 Lakh flats in the last 5years. Demand in this segment is inexhaustible for the next 50 years.

Also rent as a proportion of cost is favourable in this price range. One can think of getting a renter for 15000 bucks for a 30 Lakh flat. Nobody will pay 30000 rent, even if the flat is a 60Lakh luxury one. Even if they do, they will think of renting close to work, not in the boondocks where the flats have come up recently.

I doubt if anybody is going to rent the luxury flats built recently (those who can afford such a rent have purchaed 3 flats each!)

If one is thinking to buy a luxury flat now, I would say OK if you are going to live in it. Not OK as investment - wait for at least one more year.

Affordable range flats are not going to correct any more. Builders have been bitten once - they wont oversupply this time. They will trickle in small number of new projects for the next 2-3 years and will slowly start raising the prices as inflation (cement, steel, tiles) kicks in. They have purchased land at high price for luxury flats with high margin. They will not want to build cheap flats on them if they can avoid it. They will keep as much land as possible with them for 2-3 years, waiting for market to improve, then launch more luxury flats at even higher (inflatin adjusted) prices.

Just to satisfy my curiosity, can anyone tell me how much is the EMI per 1 Lakh loan (for 15 years) currently?

I need it for calculation. At Rs.1000 pm EMI for 15 years, repayment is of 1.8 Lakhs on a 1 Lakh loan. In India's history, a 10 Lakh flat has always been worth more than 18 Lakhs after 15 years - not forgetting rent received/saved which hasnt been accounted. Will a 30 Lakh flat be worth over 60 Lakh after 15 years? I have no doubt. It is a great leverage play.

But I dont want to spend all my salary on an EMI for something that will be valuable when I am old/dead. So I never leverage.

If you have 30 Lakh in hand, it will double in 9 years in a safe bank FD at 8%. Will a flat bought today for 30 Lakh double in as many years?

I am not sure.

Venkat ND

Anonymous said...

Venkat,
Banks will pay you interest and the money will double at 8% in 9 years. And if you buy a flat using that 30 lacs, you may see half of it in 8 years. Cash is king in todays market. As regards to inflation, the world will see a major deflation cycle first. Which means prices will go down for everyhting as there would be very less consumers.

Shubh Chintak

Anonymous said...

Shubh Chintak, while I am in agreement with you, I think the deflation has been happening for the last 6 months. Rest of the deflation in RE is going to be relative - to galloping inflation in essentials (I expect that to start in 2010 and last till 2014). RE prices will stay the same till 2012 while everything else will go up in price. 2012 onwards RE prices will also go up as cement, steel and tile prices also go up.
So 2012 wil be the time to time the market with built up property. For upcoming projects, the time to time is NOW!

Venkat ND

Anonymous said...

@Venkat
Your statement-nobody built affordable flats in 20-30 lakhs in last 5 years is patently wrong. A lot of us have purchased 2 BHK/ 3 BHK flats for about 18 -22 lakhs 4 years ago in Thane. The fact is that the builder lobby has jacked up the prices of these flats by as much as 2 and half times in the last five years, which is ridiculuous. Even today there are several completed buildings that will be sold off in a jiffy if the rates are reduced, so demand does exist, but not at price points of 50 lakhs or 70 lakhs in Thane-especially when people remember buying these very same units for 18- 22 lakhs just 4/5 years ago.

Anonymous said...

@Venkat:
The price of RE that we see today are for year 2025. So, you are right the prices may stay same but not till 2012 but 2025. Or they will go down till 2013-14 by upto 60-70% and then go up again to the prices we see today by 2025.

And there is so much supply/inventory till 2020. Moreover, if there is real demand, rents should go up. If rents go up it means there is inflation. Since we are in a deflationary cycle, rents are going down, 70-80% the demand that we see in the market is speculative demand.

It will all correct to sustainable levels in 3-4 years. This whole thing has already happened in the US. Do not listen to people saying we are different or our area is diferent or India has black money. I think this black money can push the property prices further down as official prices are what get registered and not people take in black. The high availability of houses would take the premium away (which is black money).

Shubh Chintak

Anonymous said...

@anon 8.36,

I was talking about Gurgaon, the market I am interested in. In 2003 one got for 18-25 Lakh, a 1800 Sq feet big good quality flat. That is the approx size of almost all major i.e. big developer flats in that area. Nothing in the 1000sf range. Now it is for 50Lakh plus after correction.

There is and has been an endless amount of flats in the 20-30 Lakh range in Ghaziabad/Indirapuram, but that is a crime infested poor quality concrete jungle. Who wants to buy there?

@Shubh Chintak,

I totally agree that rents will go up with inflation. I also totally agree that rents will deflate for the next 2 years as supply comes in at Dwarka, NOIDA etc. But I know how rents have gone up where I live (south Delhi). At the lower range, from 7000 to 11000 for a 1BHK. Not so much in the slightly higher range 2BHK (12000 to maybe 15-18000 depending on the renter). But mark my words, when inflation kicks in (in about 3 years) prices will go through the roof. See, a person can live on 15000 per month now. So a house given on rent can sustain a person. When 15000 stops sustaining food expenditure, rents will go up as will RE price.

By the way, the average good school in Delhi now costs 5000 per month as fees after the pay commission. Keep that in mind as well.

Venkat ND

Anonymous said...

Venkat:
If rents go up, if inflation kicks in, Govt. will raise interest rates to very high by say 400bp to control inflation.

House prices have to go down, no matter what. It might take longer though due to unneeded intervention from the Govt. I think the Govt. will fail in its policies by mid next year due to soaring budget deficits and stupid fiscal policy.

Anonymous said...

@Anon7.30

I agree totally. Interest rates will head up to 13-14 percent in a year or so. Bearish for RE prices in the short term (2-3 years).

It will also cut down fresh supplies and make rental income unattractive at current levels of rent. Ultimately, as supply contracts, rent will jump like crazy to keep pace with 15% bank deposit rates (which we saw in the 80s in India and USA)

I have seen high interest rates and high RE price appreciation ocurring together in the mid 80s and mid 90s. This govt is clearly harking back to 80s style economics (as it has these last 5 years and also with this budget).

As you point out, there is no urgency to respond to "BUY NOW before prices go up" kind of pitch. There is no urgency, prices will stay at current levels for the next 3 years (or fall, but not in Gurgaon)

Anonymous said...

last post (1.22 PM) was by me,

Venkat ND

Anonymous said...

Gurgaon is not NY City and honestly is no where near NY city in terms of employment or riches or talent or history. Gurgaon is all a hype and is going to get fucked royally. Prices even in NY city are going down drastically.

Anonymous said...

Prices in NY city have hardly fallen.

It is Arizona, California, Florida, places where the RE rose like a rocket, fell back to earth like a stone.

What can one get in NY city for $50,000? Thats the cost of a flat in Gurgaon, which I agree is a toilet, but still better than NOIDA (A toilet with burglars and dacoits thrown in)

Venkat ND

Anonymous said...

Venkat,
NY City is seeing massive fall in prices especially now in Manhattan also. And the prices will keep falling in NY and other US metro areas for another 3-4 years.

First the suburbs fall and then the main city all over the world. Suburbs are already down substantially and the downtown areas are getting hit now. There is no force on earth that can stop this fall.

And this stock market rally is another illusion as the stocks would retreat back by 20% in the US.

Venkateswaran K Iyer said...

@anon 1.30

Maybe one should buy abroad- $50,000 will fetch a reasonable flat in any of the places mentioned below: (Got this from Indian Realty News)-

Meanwhile, with real estate prices at an all-time low across borders, buying property abroad is suddenly making sense to affluent Indians. “The property slump is not just confined to India. Prices have crashed considerably in the US, the UK and the Middle East and many Indians are seeing this as an opportunity to buy property there,” Rajesh Goenka, chairman of Axiom Estates, the London-headquartered provider of property services in India.

So much so, high net worth Indian investors are spoilt for choice: sea-facing villas in picturesque Mauritius, studio apartments and country cottages in Britain, condominiums in Singapore, and super-luxury homes in the Gulf. But of all foreign locales, Dubai is the most sought after, say brokers familiar with the latest fad. “Dubai is the hottest destination for celebrities and the rich on the hunt for a dream home. However, real estate prices were so steep allthese years that very few could afford property there. Now as the slowdown has hit the Dubai realty market also, rates are down by 30-50 percent,” Goenka said. “Buying property in Dubai attracts no government tax and even if you put your property on rent, the income is completely tax-free,” said Syed Mazaz, the Mumbai representative of Dubai-based real estate brokerage, Better Homes.

According to him, property prices in Dubai are comparable to those in Delhi or Mumbai - starting from as low as Rs.3 million ($62,000) for a studio apartment in the International City project in Dubai to Rs.15 million ($309,000) for a two-bedroom luxury apartment facing the sea. “Tell me, can you get a similar bargain in Delhi or Mumbai? I'’m getting many enquiries and about one-third of them end up buying a home in Dubai,” Mazaj said In Europe, Britain is the favourite destination for Indians planning property investment. “The UK has a huge NRI population and attracts a large number of Indian professionals. No wonder people are buying property there. We alone are receiving at least 100 queries for the UK every week, leave aside other consultants,” Goenka said. “However, in most European countries and the US, the preference is for studio apartments and two-bedroom sets,” he added.

One such interested buyer is Noida-based businessman Subham Agarwal. “Both my children are studying in the UK and I feel that they may ultimately settle down there. So taking a house there is not a bad option when property prices are at an all-time low,” Agarwal told JITO. Adding: “I am planning to buy a studio apartment for my children.” Countries such as Singapore, Mauritius, Thailand and Malayasia – where prices have dropped up to 30-40 percent in recent months - are also attracting Indian investors. In Thailand, a two-bedroom apartment costs around Rs.2.4 million ($49,000), and can go up to Rs.40 million ($824,000) for luxury apartments. In Singapore, this would be in the range of Rs.2.6 million-Rs.26 million ($54,000-536,000) for similar accommodation, while it will be between Rs.3 million ($62,000) and Rs.12 million ($247,000) for two-three bedroom apartments in Malaysia.

In Mauritius, super luxury villas are going for Rs.20-30 million ($412,000-618,000). Apparently, for India’s affluent circles, these are ’steal deals’ - getting a second property abroad at domestic rates. Explains Jaideep Singh, head of the India desk at global property consultant Knight Frank: “People are buying property abroad because these are as expensive or sometimes even cheaper than in India, which makes it perfect for getting a second, or a third home.”

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