Wednesday, August 05, 2009

Its Official: Property rates in Pune have started to fall

National Housing Bank is the Apex Institution for Housing Finance in India. It is wholly owned by the Reserve Bank of India.
It maintains an index of real estate prices from all over the country.

Look at the data and charts for Pune: property rates have started to fall!

http://nhb.org.in/Residex/PUNEres.php

You can check the trends in 15 cities across India.

This is as official as it can get!

This just confirms our observations and conclusions that the real estate bubble in India is going to burst.

62 comments:

Anonymous said...

The bubble is not only going to burst but make such a big dent in the whole economy as housing was the main force driving the economy for the last 5-6 years. Prices will fall by 60-70%. It'll take time to fall as there is massive Govt. intervention to keep builders happy and keep the bubble propped up to save their own ass from people of India. If it bursts instead of deflating it slowly, it may cause major unrest in the society. The Govt. will let it deflate slowly and it may take 2-3 years easily to see some 50% correction.

Anonymous said...

There is a simple principle, easy money fuels bubbles.

Among other things, the carry trade from Japan was also instrumental in fueling many bubbles over the past few years.

Now there is bigger carry trade from all over the world to emerging markets.

The money is flowing in, so many companies are lining up for QIP, Axis bank, Lanco, Aban, Oubj lloyd, 31 infotech, Taxmaco ... list goes on. If there is going to be so much money in the system, how on earth are we expecting the bubble to burst, I don't know whats going to happen in 3-5 years from now, but in the one one years prices cannot come down, prices can go up though. If you need a house and are getting a good price please go ahead.

Anonymous said...

At some point when inflation kicks in, all central banks in the world would have to increase interest rates and that's then the shit will hit the fan.

Anonymous said...

The new world is calling for lesser salaries and NO to the MBA jobs. A lot of MBAs will be on the streets or making like 20,000 rupees per month as compared to those hefty salaries they used to get. ISB is another bubble to burst.

Anonymous said...

In China, Land Prices Fan Bubble Fears

http://online.wsj.com/
article/SB124940935738805385.html

Anonymous said...

TCS- bench rate has increased to 33% as per internal reports.

Infosys- still seem to stick with 30%.Only 705 employees have something to do in Infy. Rest of them just time-pass.

Mindtree-- is the worst, 42% of the staff have nothing to do. Absolutely nothing. Their benchmark is to make it 35%. If they cant make it by January, the new year is going to be horrendous for many people.

K.Gokul

Anonymous said...

sorry---not 705 it should read 70%.

Anonymous said...

One thing I don't understand is that most people in India and China and worldwide have seen RE prices to become like 400-500% of their original values in 4-5 years. Why are they believing that something that didn't rise that much all their lives is suddenly worth a lot. There has to be something wrong in the market. Instead people are getting into denial mode since they have a bias towards the RE they own and they want to be call millionaires.

WTF, this while thing was never real. People have to believe that it was all paper money and should exit now to cash on whatever they get. They are thinking that RE never goes down. 99% of folks in all countries are foolish and are easily getting robbed by banks and property dealers.

Sanilty will come to them in a few years when nothing would sell and prices would be down by 80%. I was just looking on craigslist and houses are listed for like 8 crores in Delhi. Give me a break. Delhi is full of liars and thieves who don't even pay taxes to the Govt. They also cannot afford 8 crores for a stupid property.

People are hypnotized by the riches of the west. We are talking India which is still third world country. Let massive layoffs happen and time will tell if 99% people of India were right or the sensible 1%.

Anonymous said...

TCS and all body shopping companies in India are toast. They just misused the US visa laws and made money by winning contracts in US by using cheap labour. They will get so screwed that 50% junta will be out of work from these companies by next spring.

Obama is not going to let outsourcing happen easily. The party under Bush for putsourcing and easy money for housing is all over. Now wait for another Republican US president till 2016.

Anonymous said...

And 8 years would be enough to take China and India down the way US has gone down in the last 1 year.

US is seeing massive layoffs. I spoke to one Indian guy and his while team is out of work. He was asking he can get a job at some Gas station. Indians have to realise that RE prices in India are not real and unsustainable. But they get tempted as they don't have patience and are buying into high priced market. Buy , Buy and then cry all your life.

Anonymous said...

US is full of all crazy wall street investors who don't know ABCD of investing. Everyone is investing in BRIC. They are just sitting on people's money in US and moving it to BRIC to make money. That is what is causing SENSEX and HangSeng to go higher an higher. But when they withdraw their money, India will be devastated. They should be careful with investing and have proper laws against foreign investors.

Anonymous said...

There was a report published in US today that 41% of the US mortgages will in default by 2011.

That means almost half the US would be defaulting and Indians are buying houses. People from China and India will be most stupid to invest and buy RE in this market as houses in these countries may be offered for free in 2-3 years and still there would be no takers.

Anonymous said...

Asian property investment market regains momentum in Q2

http://www.channelnewsasia.com/stories/marketnews/view/447018/1/.html

Bindas Bhai said...

Friends, Good time to invest in Residential (Bangalore)and commercial (Pune). My personal reading is these two areas will give good returns and is more or less safe even for long term view.

Just do your homework properly before taking a call.

All the best.

Bindas Bhai

Anonymous said...

MindTree to cut 15% salary of R&D staff
6 Aug 2009, 1156 hrs IST, PTI

NEW DELHI: Bangalore-based IT firm MindTree said it will cut salary by 15 per cent of about 200 staff in the research and development (R&D)
division to reduce costs amid the global economic slowdown.

"The utilisation levels had fallen below 60 per cent and hence the decision to cut salary by 15 per cent was taken. This would be applicable on employees in the R&D services, who are neither on an customer-approved project nor on an internally-approved project," MindTree Senior Vice-President and Global Head (People Function) Puneet Jetli said.

The cut would be applicable from August 1, 2009, and affect about 150-200 people, he added. MindTree employs 1,100 people in the R&D division.

"This salary cut is, however, for a short-term. The salaries will be restored if the employee gets assigned to a customer project or the utilisation levels cross the threshold of 65 per cent," Jetli added.

He said selective pay cut was better than measures like layoffs, across-the-board pay cuts or putting people on the 'virtual pool'. Jetli said the company expected a turnaround soon.
"There are signs of recovery. There might not be a drastic growth, but the situation is stabilising," he added.

Despite a net profit of Rs 54.54 crore in the first quarter of FY'10, MindTree, in view of the continued uncertainty in global markets, has revised its revenue guidance for this fiscal to $255-270 million.

Parimal said...

The RE prices rose more than the salaries. The RE prices rose only on basis of 2 factors:- Investors/speculators & IT chaps who used to pay illogical prices for hopeless properties.

A 300%+ hike in RE prices in 3 years was sufficient to see a bubble. The per capita income in Pune is far less (not even 1/10th) than Adelaide, Austraia, yet the properties in Pune & Adelaide were going for same prices!! What's more, at the price which you pay at Aundh one can get a bigger & better house in New Jersey, USA, not to forget worldclass infra available in these cities.

The stoppage of constructon work, projects getting indefinately delayed or abandoned is the best e.g. to gauge the real scenario on the ground.

Anything which goes beyond the purchasing power of the buyers is bound to fall.

Anonymous said...

Guys,
http://www.mybangaloreproperty.com/Homes.aspx?tabid=1420926&__ts=1249552274441

Here is a calculator which will calculate your affordability and suggests to whether buy or rent.

As I checked, in Bangalore renting is profitable vs buying at prevailing rates.

Anonymous said...

When the financial crisis started in 2007-08, all the self-proclaimed "Consultants" and their lapdogs in media indulged in the gibberish of more IT business coming to India due to merger and restructuring business happening in US. After experiencing the brutal reality of lay-off and reduced salary they must have been licking the wounds.

The fallout of reduced US-Consumer spending is loud and clear. The boom which fuelled the mass hysteria about Real Estate is on the verge of collapse.

Let the speculators (techies),builders jack up the prices artificially and hold on to theM. There is a limit to the extent with which their government friends and private investors can go e.g. roll over of the debt for the long term, supply of cheap money from foreign hedge funds.

Underwater’ Mortgages to Hit 48%


Aug. 5 (Bloomberg) -- Almost half of U.S. homeowners with a mortgage are likely to owe more than their properties are worth before the housing recession ends, Deutsche Bank AG said.

The percentage of “underwater” loans may rise to 48 percent, or 25 million homes, as prices drop through the first quarter of 2011

As of March 31, the share of homes mortgaged for more than their value was 26 percent, or about 14 million properties, according to Deutsche Bank.

Further deterioration will depress consumer spending and boost defaults by borrowers who face unemployment, divorce, disability or other financial challenges, the securitization analysts said.

The share of borrowers owing more than 125 percent of their property’s value will increase to 28 percent from 13 percent, according to Weaver and Shen.

Home prices will decline another 14 percent on average, the analysts wrote.

Anonymous said...

Why do people make foolish arguments like properties in Pune are more costlier than Adelaide? Enlighen us what are these prices and then we will see what is more expensive.

Anonymous said...

http://economictimes.indiatimes.com/Markets/Real-Estate/Long-way-to-go-as-top-9-realtors-net-dips-76/articleshow/4862392.cms

Anonymous said...

hey Genius anon at 8:24:
If you don't have the Adelaide data how can you call someone else foolish. Look in the mirror and maybe you can see a fool

Anonymous said...

---"When the financial crisis started in 2007-08, all the self-proclaimed "Consultants" and their lapdogs in media indulged in the gibberish of more IT business coming to India due to merger and restructuring business happening in US. After experiencing the brutal reality of lay-off and reduced salary they must have been licking the wounds."------


Hey rocket scientist, please do your homework before posting, I don't know about "self proclaimed consultants" (probably I can count you as one) .. but I can say there is some analysis to be done here

.. IT stocks have been having a hard time since Feb 2007 (rupee started strengthening around that time), I know this accurately since I emptied my IT portfolio at the time... I sold infy at 2080 in April 2007 ... it's back to same level now (infy had gone to 1100 levels at one point) .... .... I'm an ex-TCSer and personally don't like indian IT companies that much (some personal bias at work there) but the results this quarter have definitely surprised all and sundry ... so no licking wounds there .... in fact people stuck in IT stocks since 2007 are moving out now ... good resistance I must say .. but still stocks have moved to amazing levels ..

SO GUYS PLEASE DO UR HOMEWORK BEFORE POSTING ... this is REALLY FRUSTRATING .. and besides mindless posting would mean blog looses it's importance ....

Anonymous said...

Guys check this out ...

http://www.cnbc.com/id/32300097

There is massive money printing going on in the US (and elsewhere)... our govt is also doing it's bit ... more money in the system usually translates into higher inflation, Asset prices go up .... (basic macro principle)

Couple of days back ... Somebody asked on this blog...why we talk about US when discussing Indian property Market. Well, I guess, people need to understand why Indian bubble happened in the first place .... Indian economy is more open now ... institutions outside the country can invest more freely than ever before .... Our markets are more coordinated with global markets, which has been happening ... Again, More money in the system means asset prices go up .. thats what happened. This is why interest rates are co-orelated to inflation... Anyways .. inflation has to happen first for the interest rates to go up ... there is a lag effect there ... No shit hitting the fan now ...unless RBI does a japan CB ... (Read about Japanese credit crisis for more on this) ... but govt. borrowing needs to be kept in mind .. so interest rates won't go down in the near term ... inflation would surely rise ... but in the absence of a knee jerk reaction from RBI I don't there would be a crash.

For the time being I can see two big risks ...

Swine flue and the after effects of monsoon failure ... Lets see how these pan out, before making predictions about property market crash .....

EX-TCSer

Anonymous said...

I think under the current circumstances, it makes sense to rent instead of buying. Especially for those who come from small towns and now living in big cities.There is a huge difference in rent and EMI. You can put the savings in FDS, diversified large cap mutual funds. (And if you have time to analyze, then put some money in blue chips when the price looks attractive. Dont ever buy at a single time. Accumulate over a period of time)
That way u will have peace of mind. Whereas if you buy these over priced properties (even if u can afford it), you will have less liquid and compromise.

Anonymous said...

@ 10:09 AM Mr surprised and sundry speculator....

The recent profits posted by the IT companies are the result of so-called "Operational Efficiency"...the cost overheads/salaries of the IT employees have been reduced by hook or crook e.g. involuntary attrition.

There are no new entrants in this Real Estate Bubble due to unemployment, reduced salary & bleak feature. The people who took massive loans are struggling to pay the EMIs. It is just a matter of time this bubble gets burst.

Anonymous said...

Ex-TCSer:

TCS is lucky not to have a fool like you with us anymore.

If you can't see the housing bubble in India, you are a moron.

CMD
TCS

Anonymous said...

TCS likely to lay off 1,300 staffers

8 Mar 2009, 1012 hrs IST, ET Bureau

Fired TCSer, Chennai, says: TCS already laid of 3000 people mostly in Kolkatta, HyBad, Chennai centres and the count 200 is just to show that TCS is stable and also the UPA govt doesnt prefer to let the layoff news flood in as it is the Election time. TCS recruited heavily just to show they have a pool of resources to do any kind of work and get big contracts...but that strategy doomed this yr. First Ramadorai has to be fired for over recruiting and investing in hedge funds and poor policies in TCS. then gradually managers and then team members...but TCS always does it in reverse order.
[11 Apr, 2009 1832hrs IST]

Anonymous said...

I never said there is no bubble in India ... the question is whether it's going to burst in the near term. The possible scenarios are .. the bubble bursts and prices crash .. or we have a soft landing wherein prices remain stable for a while and then demand catches up with the supply.

Real estate traditionally has boom and bust cycles but if prices remain stable for sometime, demand starts to catch up with the supply.

Check out TCS figures, you will know what they are doing .... TCS doesn't want their senior guys to stay in the company .... employess with 7+ exp are a liablity for the company ... this has been there model since ages ... TCS used to have the highest attrition rates in the IT industry .. FC Kohli (co founder of TCS) has said 10 -15 yrs ago ... A good atrition rate is healthy for the company. It's true that they are not hiring in big numbers but check the numbers, it's kinda stable, no alarm bells yet.

Besides, Indian growth story is not built upon IT alone, infrastructure is another big story .... Money is coming in, more money in the system fuels demand ... QIPs helps companies to spend to increase capacities(power, infrastructure), that creates more jobs, more jobs means more spending, infrastructre jobs will compensate for lag in IT hiring. It is a chain reaction .... AGAIN BASIC MACRO ECONOMIC PRINCIPLE.

You can call me a fool or moron or anything u like, but there is a logic, precendent or fact behind what I say ... I request that everyone do some research so that we can have a healthy discussion ....

I'm still a real estate bear ... actually missed the property bus ... would very much like the property prices to crash, but wishful thinking doesn't help matters.

Anonymous said...

Ex-TCSer above:
I hope you have a proper daytime job after getting fired from TCS. Try to keep your current job and stop worrying about RE for others. Job market is not good for anyone now days.

As regards to prices not falling, if you are really a bear just believe in yourself. You'll see your wishful prices in the coming years. You don't have to convince yourself that the prices will not go down.

These cycles come and go many times in a person's lifetime so no one has missed the bus. Time will come again for people who didn't buy at at least 50-60% cheaper prices. There is no race going on that who has how many flats and is owner of how much worth. It is all in your mind and other people's mind.

Bears just want to make sure that they don't overpay for something that is worth less. It is very simple why would someone want to pay 1 crore for a flat that he feels should not be more than 35-40lacs. And he knows somewhere in his gut feeling and looking at the world economy, that prices will fall eventually, maybe slowly, but FOR SURE.

CMD,
TCS

Anonymous said...

When the whole thing falls, it is a chain reaction too and will take down everything with it.

Anonymous said...

Ex-TCSer

Your thinking seems to be very simple. More infrastructure spending, more jobs, more growth...blah blah.

Prices go up today in expectation of future asset appreciation and econmic well being.

When there is no bright future for the next couple of years, thanks to US, the incremental spending,which is the main cause of prices going up, dries up, leading to a downward pressure on prices.Of course there will still be spending,but with the incremental spendinng tap off, things look downhill.

If IT doesn't recruit, infrastructue will....ok agreed. That will only suck up a portion. remember that India needs atleast a 7% growth just to get 75% of its working age population to get into jobs. With 6% growth, you cant even manage to put people into jobs.And even if you find them jobs in Infrastructure, they are not going to get that fancy salaries any more. You can expect anything from 20-25k for a person with 5 yrs experience.Hardly enough for a person with family.is it??

And US recession is not going to end anytime soon.
For US to return to growth, we need some more years and a mighty innovation.

Till then sit tight, and just enjoy the RE investors pain.

REAL ESTATE PRICES ARE GOING NOWHERE BUT DOWN.

K.Gokul.

Anonymous said...

Gokul Ji,
Even if India spends on infrastructure, it has to be from loans from the IMF and World Bank which increases further deficits for the country. And this money is all loan and India pays high interest rates to keep the loan.

And with corruption at highest level, I don't see even Infrastructure doing any good. It is just stupid Business Schools in US are propagating Globalization and investing in BRIC. So is the music Wall street is singing of going to India and China. If they all had to play with their own money, I bet you no one would invest in these countries as they all know what is coming in a few years. They will suddenly see all their positions in Sensex and Hangseng and the both these markets will fall by 50% at least in a few days.

Bindas Bhai said...

Ex TCSer

I totally agree with you that liquidity will drive the market as it has done in the past. I personally feel there are good deals available in lot of pockets across India.

Bears have been predicting about the so called crash for last 4 years and now even if they are proven right by 20 to 25% correction it is no big deal especially when RE has grown between 3 to 5 times.

Time will only tell who is right. The future for India looks very bright and will only look up in medium and long term. This is the right time to buy in most of the pockets and if they miss the bus again these guys will go thru lot of hardship.

By April 10 will see Mumbai, Pune and Bangalore going up substantially now you have the choice to either buy or wait for the so called crash.

All the best, guys.

Bindas Bhai

Jey said...

Most IT companies have a "virtual pool" concept now. A person who becomes non billable goes immediately into this pool. Once in that pool, the salary will only be about 30% to 50%. The salary the IT cos claim will be restored on becoming billable again. But I've seen people who have been in this virtual pool for more than 3 months and not getting billable.

On another note I'm seeing some Top IT cos also promoting people at this point in time. Those the cos think that are great employees.

Most IT cos also have given negative guidance.

So in sum total, I'd err on the side of safety now and wait and watch. Cash is king now inflation nor not

Bindas Bhai said...

I always believe that RE is area specific but these are the clear signs of liquidity driving the market.

Pls. do not buy any RE on the outskirts of cities. Guys who can afford 1Cr plus without bank loans must look at A class property in Pune. Trust me it will pay of very well.

Bindas Bhai


Wealthy investors revive Asian residential markets
Wed. August 05, 2009; Posted: 04:50PM

Aug 04, 2009 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX) -- JLL | Quote | Chart | News | PowerRating -- With the global economy expected to recover by the second quarter of 2010, activity has resumed in residential real estate in key Asian markets including Singapore, Hong Kong, Shanghai and Beijing, according to the international property consultant Jones Lang LaSalle.
Signs of a pickup began emerging in May as low interest rates triggered the investments by cash-rich individuals, said Alastair Hughes, JLL's chief executive for Asia Pacific.

He said very low deposit interest rates had attracted wealthy people to shift from savings to investment in real estate as low mortgage rates were also a draw.

"Residential prices in the four cities are bouncing back due to resuming demand," he said.

Residential property was the first segment to pick up, signalling the beginning of the cycle of economic recovery. Within 12 to 18 months after that, JLL believes other property segments will follow suit.

Mr Hughes said the bottom of the residential market was in February.

Bindas Bhai said...

In Singapore, buyers who made deals were mostly Singaporeans. In Shanghai and Beijing, they were local buyers and some were expatriates while in Hong Kong, buyers were local Chinese and expatriates.

Discussing buying behaviour, he said: "When the offering price is supposedly 20 and the market price is 15, property buyers in Hong Kong will bargain at 10, but Japanese buyers will ask when the price will reach 20 again."

Mr Hughes recalled that in 2007, there was a lot of cheap money that attracted investors to the market, pulling more equity into the market, so real estate prices climbed up.

As businesses grew and people needed more space for expansion, office rents that year went up, except for Thailand where politics hurt sentiment.

But a year later, everything turned upside down.

In the first quarter of 2009, office rents tumbled by 20-60 percent year-on-year, depending on the country. Capital values were down by 20-50 percent. The take-up rate of new office space dropped by 90 percent while property deals were dramatically low or 70 percent fewer than a year before.

In Singapore, the office space market shrank sharply due to decreasing demand from shipping, financial and real estate businesses. Shrinking demand and more new supply resulted in a 60 percent drop in rents in the first quarter of 2009, compared to the same period last year, said Mr Hughes.

The situation was quite different in Bangkok as little new office space supply had entered the market in the previous few years.

According to JLL's research on additional office supply between 2009 and 2011 over eight cities in seven countries, the top three markets likely to face falling rents will be Shanghai, Beijing and Singapore where 50.8 percent, 40.2 percent and 32.6 percent more supply will be added respectively.

"There's too much supply in those markets," he said.

In Bangkok, there will be an additional 4.7 percent and in Hong Kong 5.9 percent.

In Mumbai, the supply would almost double with 93.7 percent more office space added but the total amount in square metres would not be so high as Mumbai had very few quality spaces, he said.

"In terms of investment opportunity, I think offices are the most attractive as it is going to the bottom," he said.

Mr Hughes admitted the recession had hurt JLL's business in the first quarter of the year. Its two traditional income earners, leasing and investment, dropped but the other three major sectors did well. They are property management, facilities management and property advisory. For the Thai market, "economic growth, political and legal sustainability, predictability and transparency are the keys," said Mr Hughes.

http://www.tradingmarkets.com/.site/news/Stock%20News/2463226/

Bindas Bhai said...

Pls. do not buy any RE on the outskirts of cities. Guys who can afford 1Cr plus without bank loans must look at A class property in Pune. Trust me it will pay of very well

I meant A class commercial property.

Anonymous said...

Now business standard is behaving like ET

Realtors rebuild hopes on rising home sales

Raghavendra Kamath / Mumbai August 7, 2009, 0:20 IST

After a long hiatus, home sales are finally back on track. Sales of major real estate developers have more than trebled in the June quarter compared to the preceding three months, amid growing expectations that the good times will continue to roll.


Consider this: DLF, the country’s largest real estate developer by market value, has sold 2,500 apartments in the first quarter of the current fiscal, compared to nearly 600 in the quarter ended March 2009. In the preceding quarter, DLF had sold just about 120 apartments.

Unitech, the country’s second largest property developer, went a step further and sold 5,000 units in the first quarter, compared to 300 to 400 apartments in the preceding quarter.

Delhi-based Parsvnath Developers did 100-odd transactions against 25 to 30 in the previous quarters, and Omaxe reported sales of 700 units, compared to 200 in the same period.

“After a few difficult quarters last fiscal, we have seen a fairly good first quarter of the current fiscal. The economy on the whole has been showing signs of recovery, and activity in real estate has picked up,’’ DLF Vice-Chairman Rajiv Singh said.

Almost all of them are convinced that the future looks bright. While DLF’s Singh said he expected the market to improve, a Unitech spokesperson said the market would pick up in the second quarter, though demand would be mainly for affordable products.

“It is a good time to bargain-pick now,” said Ravi Ramu, director of Bangalore-based Puravankara Projects.

That the first-quarter sales are no flash in the pan is reflected in the fact that developers have lined up around 60 million square feet of new launches this year, more than double last fiscal’s bookings.

DLF plans to launch 8 to 9 million sq ft of city centre projects in Chennai, Kochi, Delhi and Gurgaon and 5 to 8 million sq ft of mid-income housing projects in the National Capital Region and southern cities. Unitech has launched buildings covering 15 million sq ft since April and plans to launch an additional 15 million by March 2010.

Apart from lower interest rates and affordable housing, the reduction in the number of fence-sitters has helped in a major way. ICICI Bank Chief Financial Officer N S Kannan said buyers had been postponing their purchase decisions in the hope that prices would fall further.

“There is a general sense now that prices have stabilised,” he said, adding “our disbursements, month-on-month, have increased and we would like to play in that market based on our current strategy on pricing”.

Though Kannan was not willing to comment on a specific number, sources in the bank said it was expecting a 20 per cent growth in disbursals in the second quarter.

SBI, the country’s largest bank, has set a monthly home loan disbursal target at Rs 2,500 crore compared to Rs 1,500 crore disbursed over the last few months. The bank is targeting a home loan growth of 30 per cent in the current fiscal against 21 per cent in 2008-09.

Anonymous said...

HDFC, the country’s largest home loan lender, saw its disbursals rise 22 per cent in the first quarter and expects the trend to continue.

While several property developers have ventured aggressively into Rs 20-Rs 60 lakh apartments and launched properties that were 20 to 30 per cent lower than the prevailing rates, interest rates have also softened in the last six months, which eased the monthly loan pay-outs of home buyers.

In December, the Indian Banks’ Association (IBA) and its members in December had announced new rates, under which loans up to Rs 5 lakh was offered at 8.5 per cent and those between Rs 5 lakh and Rs 20 lakh at 9.25 per cent.

Private sector banks have also reduced their retail lending rates 50 to 100 basis points in the December 2008-June 2009 period.

Analysts are also gung-ho. Pankaj Kapoor, chief executive of Liases Foras, a real estate research firm, said the momentum would increase after Diwali. “Now we are seeing a momentum for some time, lull for the next few days and then momentum. This will change as the economic recovery gathers steam,’’ he said.

http://www.business-standard.com/india/news/realtors-rebuild-hopesrising-home-sales/366216/

Anonymous said...

@Anon above:

Do not go by the low interest rate advertised by banks. It is applicable for only first year of repayment. After that the rate returns to normal floating rate. Generally home loan repayment runs more than 20 years and discount on first year is peanut compared to total payout.

Check SBI's T&C applies at the end of the add.

shailesh said...

According to realty experts, rentals have touched the nadir during the last couple of months. Many IT companies or those who had far bigger spaces than their requirements are moving to compact offices.

Many buildings of DLF, including their Cyber City, and commercial buildings near Golf Course in Gurgaon have seen a crash in rentals, by up to 45-50 %. The space that was not available even for Rs 110 sq feet is now easily available for Rs 50-55 per sq feet, says Rajat Mahajan of Integrated Pan Realty Solutions.

Rentals take a nose dive; corporates moving into furnished office

BTW: I just rented an office space in outskirts of Mumbai and pay only Rs. 15 per sqft per month. It is probably Grade B office space.

shailesh said...

Dubai dream is over as thousands rush back home

Thousands of young Londoners are returning from the Middle East as dreams of a six-figure salary and sun-soaked lifestyle turn to dust.

Experts today said professionals who moved to Dubai during the height of the boom are flooding home after losing their jobs — with some abandoning flats, cars and credit cards in the rush to return to the UK.

Anonymous said...

I am from bangalore living in a traditional bangalore place (obviously everything is accessible) Saw a site a month ago. The price quoted seemed to on the higher side. I asked what the final price that he can offer. He said about 1% less than the quoted. I didn't proceed further. Today after i got a call from him saying he can give it for 10% less than the initial value. I asked if that was the final price? He asked to come and discuss. I kind of liked the site. But i have decided to wait. Because i know there are no takers.

Anonymous said...

What a change in just one year!.....

Mumbai, July 18 Tata Consultancy Services has not filed for a single H1B visa this year mainly due to its focus on shifting more work to low-cost destinations such as India and China.

Rest of the article below:
TCS makes no H1B visa application this fiscal

Anonymous said...

Guys,
The employment report that was released in US doesn't count 150K people who stopped taking unemployment benefits. The unofficial Unemployment rate is easily -15% in US. In many states like Michigan, California it could be as high as -23%.

So, tighten your belts. It is going to spillover all over the world with many job losses in India and China too. Forget about RE rising for the next 8-10 years.

Anonymous said...

The bankers, techies, speculator, brokers and the "expert" in news media who have been harping on the "bottoming of the real estate prices" on the basis of 'Green Shoot Theory' don’t get discouraged. Please continue the troll and buy the stocks of real estate companies, hold on to the artificial high prices. Because you are not the only one. You have someone to bank upon who predicted in 2005 that there would be no housing bubble in the USA.

Why to blame only the Fed chairman? We had our own Finance minister P Chidambaram declaring the Real Estate sector as the growth engine and wringing the hands of Public Sector banks for rolling over short term debt for a longer tenure.

Please check following link

Bernanke: There's No Housing Bubble to Go Bust

By Nell Henderson
Washington Post Staff Writer
Thursday, October 27, 2005

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs, incomes and the number of new households.

"House prices are unlikely to continue rising at current rates," said Bernanke, who served on the Fed board from 2002 until June.

Bernanke did not address the possibility of local housing bubbles or the risks faced by individual borrowers or lenders in a slowing market.

AK said...

BB,

Thanks for your advise, I think i will look at Pune and my budget is 3.5Cr. What kind of ROI can i anticipate.

Please let me know any good project you have in mind.

Awaiting your reply.

AK

Anonymous said...

True, DLF has sold 2500 units this fiscal compared to 600 units last fiscal.

But gentlemen, read between the lines.

The inside information is DLF has sold around 1500 to DLF Assets Ltd.The property has changed hands from DLF to DLF Assets LTD.So the properties are not tied down to the balance sheet of DLF.

The same with other RE majors.

I am sure the herd instinct in many people would push them towards buying flats thinking not to miss the rush.

But, just sit relaxed. This whole RE edifice is coming down,brick by brick.
Only inactivity in RE will make you rich.Remember that.

K.Gokul.

Bharat said...

Hey Gokul,

Literally, million rupee observations!

Inactivity and patience are key to any investment activity. The wise investor waits till the price comes down so drastically that any fool can make money out of investing and sitting tight for a long period of time.

RE is bubbling and frothing right now..the RE players are trying to pull one last con and then one more con if possible.

BB seems to have updated his vocabulary so as to sound literate and be able to pull more cons...

Nevertheless, the key is to sit tight and watch the RE bubble come apart. BB says its been 4 years since we started talking about the unfolding of the RE bubble..well its been 4 years worth waiting in the sidelines and not joining the fools who have paid premium and now are laboring with EMI slavery...

-Bharat

Anonymous said...

I am a Financial planner from Mumbai. Truth is bitter, most of my clients who were planning to buy a house have already started buying or seriously looking at closing the deal.

Personally for me it is a loss that they choose property as an investement over MF or insurance. I know we can never trust the media but RE momentum has already started in Mumbai.

Anand Vyas said...

This is a repost for the attention of people who might not have read my earlier post:

The real estate has been appreciating at a steady rate and this scenario in Mumbai is unlikely to change in the foreseeable future. The availability of land to construct more housing is limited whereas the number of moneyed people is growing at a rapid phase. This new class who really want to make mumbai as their home would not hesitate to spend the major portion of their earning towards owning a home.

Those who expect real estate bubble to bust and see a southward movement of prices are just imaging things as there is 'NO BUBBLE'. The price increase that mumbai has been seeing is a natural phenomenon moving proportionally with demand. Mumbai creates millionaires everyday and these people compete for the available space in the city that has given them riches.

I used to have a 6 figure annual income a few years back. Now that has reached 9 figures thanks to the mumbai consumer market. I would pay any amount to live in this city. There are thousands like me who would do the same. All the builders know this and they use it to their advantage.

There may be bubbles elsewhere in India, but definitely not Mumbai.

Anonymous said...

@ Anand Vyas 5:50 AM - "The price increase that mumbai has been seeing is a natural phenomenon moving proportionally with demand"

Go ahead and buy the properties since you are not the alone in OBSERVATION and pronouncing the RIGHT prediction.

Please check following YouTube link -

Ben Bernanke was Wrong

Cynic said...

Mr. Financial Planner - how many of your clients are buying houses? 5? 10? How many of your friends clients doing so? 10? 20?

Yet, you generalize and say everyone is buying homes instead of M/F's or Stock...I doubt you are a financial planner or any good if you are one..

Secondly, you made an assessment by saying the truth is bitter...That statement clearly illustrates your bias for the sweet thing..which is that RE is reviving. So, your assessment on the RE market needs to be ignored..because you are biased.

Mr. Andy Vyas, your assessment is that millionaires are made everyday in mumbai..statements like that are more hype than statistics. You say you are making 9 figure income...I highly doubt that you are talking about rupees..maybe 9 figures in paise..Your conclusion is purely subjective and hype driven. So you and the financial planner and BB are all making noise..trying to distort the signal.

Anonymous said...

If you are from Pune, there is interesting movement started - Housing Self Help group. check this out -

http://dreamhomeinpune.blogspot.com/

Anonymous said...

Cynic,

I have around 200 clients and atleast 22 have brought house in last three months. They have stopped their SIP's for EMI.

Truth is bitter because most of the Jhonnies over here think that RE is not moving. I was responding to Gokuls post of 4:52.

Bharat/Cynic/Retired Old Man: I agree with BB that you are the same frustrated Retired Old man. The streaks are clearly visible.

Cool Head said...

@ Financial Planner
22 clients out of 200 is 11%. So are you saying "most of" means 11%? I suppose "most of" should mean > 75%? So have more than 150 of your clients (out of 200) have switched from MFs, shares, bonds, etc to buying houses?

Anonymous said...

Cool Head,

What i meant is most of the people who want to buy a house. Among my clients atleast 35 people have clear intention/need to buy a house and in this 35 almost 22 have brought or on the verge of finalising a house.

Trust this clarifies!!!

Shriniwas K said...

Will the swine flu scare bring down Pune demand from people outside Pune who want to buy ?

Anonymous said...

Bindas Bhai says

Friends, Good time to invest in Residential (Bangalore)and commercial (Pune). My personal reading is these two areas will give good returns and is more or less safe even for long term view.

Just do your homework properly before taking a call.


The Liar used to say that he only knows about Mumbai and that he never argues on other locations. Now he is talking about Bangalore. This goes on to prove that he is either a broker ot he is the same TCS Guy I have heard of who is big time speculator in Real Estate and spends his office time on share broking websites.

PropTiger.Com said...

Due to the heavy demand by the Pune properties buyer, the developers have started exploring Wagholi as one of the potential location around 2007. a number of row houses have been launched over here with the capital value of 5-7% annually. The prevailing rates of properties in Pune in the Wagholi region ranges from Rs 3100 to 3500 per sq ft, while the residential projects in Pune for sale in this region about three years ago was Rs 2000 and about a year ago was Rs 2500.

Property in Pune

Real Estate Pune

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