Tuesday, September 22, 2009

HDFC Rate cutter offer

In the mortgage business the more you know the better it gets. Ignorance is definitely not bliss.
HDFC has comeup with a scheme called "Rate cutter" for the existing Loan customers . In this ,if you repay 0.5% of the outstanding principal, your interest will come down to 9.5 irrespective of your present rate. If you repay 1.5% , then it comes down to 9%.
There is a huge win for everyone since the differential payout could be in the 30k-50k range but the interest savings are in the lakhs. I have no idea why they don't publicize this but some friends have benefitted from this and are very happy. Hope more folks benefit. Also check with your local bank to see if they are able to match this offer. Enjoy and spread this news. This Diwali is definitely going to good for the HDFC loan borrowers. Kudos to Deepak Parekh for this.


Anonymous said...

am a bear but i cannot fathom how long the patience of bears like us will withstand. The prices have honestly not reduced so the point saying now is the time does not hold good. while prices have shot up it has not fallen down. I am seeing the patience of many bears like me withering off. I believe i can withhold for another coupla years. then i gues si have to partake my hard earned money for a dingy place. I believe i would have two options then , the dollar could have devalued so much that settling in US would make more sense though i dont want to. else i might have to go to a smaller town which has not seen the price rises as seen in chennai bangalore mumbai or NCR. The job opportunities might not be there but i guess a decent schooling system and medical infrastructure would be present. will not pay 4500 per sq.foot for a place with no proper roads, sanitation and electricity. it is such a shame that though we have the money we are not able to purchase a decent place to live. talk about india being a place to live. my foot !! wish the RBI and their crony bank network have the balls to demand repayment of debt from the builders. unless that happens the inevitable is going to prolong as much as it can .

Average Middle class Indian Buyer

Anonymous said...

It is a long road for going down and then a very long road to go up again. It might take 2-3 years for the prices to fall by 50% and then another 8-10 years for the market to rebound again.

The prices that you see of RE today are year 2025 prices. If you buy now, you maynot see any appreciation for 15 years and will see a downfall in between, but hold on to your assets till 2025 to avoid any losses on your investments today.

Anonymous said...

Priciest streets see sharpest fall in 24 yrs
Posted: Wed, Sep 23 2009. 12:59 AM IST

Edinburgh: The global recession is taking its toll on even the priciest shopping streets, where rents have plunged the most in at least 24 years, according to Cushman and Wakefield Inc., the largest closely held real estate broker.

Mumbai had the steepest decline worldwide, at 64%, the broker said.

The last 12 months have been one of the most difficult periods ever for the retail sector, John Strachan, global head of retail at Cushman and Wakefield, said in an emailed statement. The impact has been much more significant as the full impact of the downturn has been realized.

Shop rents are falling worldwide as household and consumer spending contract and unemployment rates rise, prompting retailers to curb expansion plans. Financial companies have fired 286,400 workers in the past year, according to data compiled by Bloomberg.

GK said...


i am still waiting for you. I got a so called 'insider' in the marketing team. My team mate's friend.

From what i know thru him, even the shangrila project didnt have clearance, when under construction. But after new BJP govt formed, they have managed to get the clearance. But then money flow is still not healthy for this proj, so it is still going slow.

I might give the first installment in a day or 2. So please get me the details what you as soon as possible.

Also i went thru the old message from this blog. But Tower 1 is completed. So i will be getting what i am seeing. Atleast that is what i hope.

GK said...
This comment has been removed by the author.
GK said...

Some time back even icici offered such "rate cutter" "offer".

Doesn't these offers sound little sad? I mean, when the rate was rising, there was no such "offers". It was automatic. But now when the rates have goes down for several months now, and they did very little for the old customers. And now you have a offer. You have a relief. You have to pay just 0.5 or what ever to get to lower EMI. And they wont talk publicly about it. if you go to the friendly hdfc branch and YELL at them, then they will reveal this wonderful offer to you.

This is exactly what happened to my friend who had taken loan with icici. After paying a penalty of 0.5% his rates are now at 9.5 or so. And then, this indian middle class consider thi as God send offer from that bloody KP.

Seriously, what is wrong with you Vik?

While it might be true that it brings relief for people stuck at higher int rates. It might also be true that this relief is temp.

What if tomorrow rates starts climbing? What if tomorrow the inflation shoots up again? Will hdfc or icici pay 0.5% to customer, to inc the rates again?

This is not an offer. It is a Bloody fraud. Probably that's why they are ashamed of talking about it publicly.

KP is just another devil, another business man, out there to suck every last drop of blood from salaried class. HDFC is no better than the ICICI.

I got one good suggestion guys. Forget about bubble or bust or boom or what ever. Emigrate to Canada or to New Zealand may be. At least, as a customer, you wont cheated, whooped by every crook. And then your life style will be way better.

Abeer Bagul said...

This is great news ...

Bear in mind that 1.5% is prepayment, not processing charges. So the money you pay is to yourself only.

For people who are bashing the initiative of the bloggers, bear in mind that they can post here only because bloggers are taking time off from their personal lives to maintain this blog.

No one is getting hidden benefit from maintaining this blog.

You are free to express your opinion about boom or bust, but dont make personal attacks. You are wasting your own time.

Vik said...

you mean DP. I am just trying to help some folks who don't know this news. I think the housing market is overvalued in many areas but there is still no news from ICICI bank about defaults. I am waiting for the kind of negative news from the Indian banks similar to the sub-prime blowup. I am skeptical about Mumbai and I'm begining to suspect that the black moey component is > 60% for many of these properties

Anonymous said...

GK -

Tower 1 seems to be fine. But there are issues with approvals across the 200 acrs land. My friend booked T3; its more than 3.5years now. Common facilities are still under development; please confirm once again.

Is it 3200+registration or 3200+other charges+registration ?

I completely agree with you about HDFC Bank and its gimmick.


Anonymous said...

Abeer -

What GK is saying is perfectly correct. Dude take it in a right sense.


Anonymous said...

Need a seprate thread- SAHARA property scam

( By NEW Vashi ....and Old Chembur...HUNTER)


Hawa Mahal?
By: Amit Kumar and Prawesh Lama Date: 2009-09-23 Place: New Delhi

A Delhi magistrate and his brother, among thousands, paid a lakh each to book flats under what they thought was India's largest housing project. Six years later, the company claims it never offered homes

SPREAD across 217 towns and cities and involving thousands of middle-class investors, it started out in 2003 as arguably India's biggest housing dream.

Six years later, many of these investors say the dream has left them sleepless; that not a single brick has been laid in Gurgaon, Mumbai or any of the promised locations under the Sahara Swarn Yojna and Sahara Rajat Yojna.

The Sahara group rubbishes their grouse, saying it had never promised anybody homes under the scheme (read story on Sahara's clarification). It also says aggrieved parties were offered their money back.

However, forms that subscribers were made to fill up under the scheme carried location options of the property, among other things.


Abeer Bagul said...


Apologies if i misunderstood your post :)

Called up HDFC call center.

One correction required is that the .5% is not repayment of principal, it is processing charges.

Still it is a good offer, even though the .5% processing charge is totally unnecessary. Why cant they just reduce rates voluntarily?

Anonymous said...

I do not know why somebody would pay US prices for homes in India. The infrastructure difference between the two countries is like night and day.

GK said...

Kannan, I guess after all the delay t3 foundation has just about started. Adarsh took them for a long hard ride. It is really sad. To a large extent it is true even for T2.

Yes, i am going in for T1. Hopefully. It is 3200+7.5lkh+reg.

Vik and others. All bad blood in my previous post is directed at hdfc and icici. Not at Vik or at his post. Infact i thought he had put this up in a sarcastic manner. Yes, it is good that he posted, now hdfc customers who are regular here will know about it. Yes, this is bad as we as a customer had to pay a penalty for the getting the rates down, which, should happen automatically.

Anonymous said...

Excellent analysis of why the Stocks across the world are rising up instead of bad economy, huge unemployment, reducing wages i.e. in absence of whatsoever fundamentals to support the rally..

A New Bubble Of the Fed's Creation
By Steven Pearlstein
Wednesday, September 23, 2009

As it was printing all that money, the Fed was also lowering the interest rate at which banks borrow from the Fed and each other, to pretty close to zero. What didn't change was the interest rate banks charged everyone else. As a result, "spreads" between what banks pay for money and what they charge are near record highs.

So who is borrowing? By and large, it's not households and businesses, which are reluctant to borrow during a recession. Rather, it's hedge funds and other investors, who have been using the money to buy stocks, corporate bonds and commodities, driving prices to levels unsupported by the business and economic fundamentals.

Anonymous said...

U.S. Aug mass layoffs rise, manufacturing worst hit

Wed Sep 23, 2009 11:28am EDT

WASHINGTON (Reuters) - The number of mass layoffs by U.S. employers rose by 533 in August from July, with the manufacturing sector the hardest hit, Labor Department data showed on Wednesday.

The number of mass layoff actions -- defined as job cuts involving at least 50 people from a single employer -- rose to 2,690 last month, affecting 259,307 workers. That brought the total of mass layoffs so far this year to 21,184.


While the broader economy appears to be recovering from its deepest and longest recession in 70 years, unemployment continues to rise.

Venkateswaran K Iyer said...



The article says "This index, released Wednesday, is an "apples-to-apples" comparison of similar homes in so-called "move-up buyer" neighborhoods. It compares the prices charged for 2,200-square-foot, four-bedroom, two-and-one-half bath, single-family homes in more than 300 markets around the nation.

The overall U.S. average for such a house is $363,401, but in Grayling, it sells for just $122,675, the most affordable market in the nation.

La Jolla, on the other hand, is the most expensive; a comparable house there goes for a cool $2.125 million. That more than $2 million disparity is up from 2004, when the spread between the most expensive and most affordable towns was $1.5 million."

If I had sixty to eighty Lakhs lying around, I would buy that 2200 sf 4 bed room house for 125-150,000 dollars right now.

A two bed rom pokey litle flat in Bombay? No thanks, not for me.

Anonymous said...

BB waiting for your call.

You have gone into hiding

Anonymous said...

BB is fucking himself. Market downfall has started. See what happens in October. Sensex is going back to 8000. RE will be down by 50-60% in next year. BB will hibernate forever.

Anonymous said...

GK -

Did you check Divyasree Elan on Sarjapur road. If you are going for Apartment; it is better than Adarsh.

Anonymous said...

Anon @ 9.36PM

If I am f****ing myself, just imagine the size I have.
You should be ashamed of your size (Jalaaye to Burnol Lagaaye)

Anonymous said...

The above message is posted by me.

Bindaaas Bhai

Anonymous said...


Bangalore: Builders and developers Orange Properties failed to refund its investors despite assuring the High Court of Karnataka that all depositors would be repaid in four equal installments, investors alleged on Wednesday.

The first installment was to be made on September 1, but the firm failed despite repeated reminders, an investor, Mahanand of Jayanagar said.

"Despite reminders and several requests, the company has been telling us for the past 10 days that they will issue demand drafts in accordance with the undertaking made before the court. The second installment was due on September 15. Now the company seems to have forgotten the date of the second installment also," he alleged.

Another investor, who preferred anonymity, accused the police of cold shouldering the issue. "We are worried that our investments will be lost. Our money is supposed to be returned to us in four installments and none of the installments have been made so far. We suspect that the promoter of the company, Vijay Tata Ravipati, might one day disappear, leaving us in the lurch," he lamented. This investor had earlier complained to the city police commissioner, Shankar M Bidari.

The city police had filed a first information report against the promoter on July 25, following which Ravipati approached the court.

Anonymous said...

Common Sense
MISH'S Global Economic Trend Analysis

Dear CC

You do not need articles. You just need common sense.

Here are some things you should consider.

#1) How much are home price out of whack with rental prices? (i.e. What does it cost to own vs. rent a similar house? Keep in mind maintenance, property taxes, etc.)
#2) How much above the trendline growth in price appreciation are home prices selling? (Was there an unexpected or unwarranted acceleration in prices over a number of years?)
#3) How much have home prices appreciated vs. wages?

Any of those significantly above their trendline is a huge warning sign. When bubbles burst, prices will not only revert to the mean but overshoot as well.

Note that housing markets will vary based on availability of jobs, local wages, and amenities. Thus, cities like Vancouver and Toronto will carry premiums just as San Diego, Chicago, and New York do. However, premiums are not unlimited. The desirability of San Diego and Miami did not stop a crash in the US. It will not stop a crash in Vancouver either. Moreover, desirability can change at a moment's notice as happened in Florida and Las Vegas.

Your question is not really about Canada given the same metrics apply to London England, Sydney Australia, Shanghai China, or anywhere else. Simply put: The more out of line those factors are, the bigger the bubble. And the bigger the bubble, the bigger the crash.

There may be other considerations, but financially speaking, if home prices are out of line with rental prices, wages and wage growth, and jobs, you are better off renting. The more out of line they are, the better off renting you are, anywhere worldwide.

Regardless of rental prices, don't be a debt slave to your house and don't buy just because home prices are going up!

At times it may seem that greater fools are everywhere. However, that is the way things always look at market tops. Here's three things to always keep in mind:

1) The pool of greater fools is not endless.
2) Unlike stocks, houses are not liquid.
3) Sentiment can change on a dime, far faster than someone can sell a house. That applies double for condos.

Finally, if mortgages in Canada are recourse loans (you cannot just walk away), you need to be all the more cautious.

Use common sense, not emotion. Don't get trapped.

Anonymous said...

India Outsourcing: Pay is down, competition is up
24 Sep 2009, 1352 hrs IST, BusinessWeek

Still, even at a time of revenue declines and heightened competition, profit margins for the largest Indian outsourcers have been improving-much of it, say analysts, coming from companies freezing and cutting pay for their engineers .

shailesh said...

Below-market price attraction in Delhi, Mumbai home market

While the prices were lower than the market, the lowest effective price was 39 per cent higher than the lowest price it had charged during the first phase of the project this April. At the time, DLF had sold all 1,356 apartments on offer under the first phase in a single day; a prime factor was that their lowest effective price was 32 per cent lower than the market price. This time, claimed a company spokesman, it was more than 25 per cent lower than the market one.

Apartment prices are upwards of Rs 6,000 a sq ft in the area. In the second phase, the company charged Rs 6,750, Rs 7,500 and Rs 8,000 a sq ft, respectively, for the apartments, which ranged from 1,210 to 2,720 sq ft each. There was a discount of Rs 500 a sq ft for timely payment and a 8.5 per cent discount on down payment. Hence, the effective selling price, which includes both discounts, is about Rs 5,677, Rs 6,363 and Rs 6,820 a sq ft, respectively. The company additionally charged for parking and for those wanting a preferred location.

shailesh said...

Tata Housing enters affordable housing segment with 'New Haven'

shailesh said...

Unitech offers discounts for Worli homes; what's the catch?

With the recent spurt of demand in the property market, the days of pre-launch booking for investors is back. CNBC-TV18 has learnt Unitech, the country's second largest real estate developer is now selling apartments in its Mumbai project to potential investors, ahead of its launch, at a whopping 75% upfront payment. CNBC-TV18’s Priyanka Ghosh reports.

Swami said...


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Anonymous said...

NRIs are in soup due to rising job losses, defaults on credit card, housing loans..

Card Defaults Surge in August to 11.49%

By Peter Eichenbaum

Sept. 23 (Bloomberg) -- U.S. credit-card defaults rose to a record in August and more losses may lie ahead as delinquencies climbed for the first time since March, according to Moody’s Investors Service.

Write-offs rose to 11.49 percent from 10.52 percent in July, Moody’s said today in a report. Loans at least 30 days delinquent rose to 5.8 percent from 5.73 percent. “Early- stage” delinquencies, or loans overdue 30 to 59 days, surged to 1.65 percent, from 1.41 percent, signaling higher losses in coming months. Banks typically write off loans after 180 days.

Card issuers have struggled with rising defaults as the recession drove up unemployment to 9.7 percent and the impact of income tax refunds waned. Credit-card defaults typically track the U.S. jobless rate since consumers tend to fall behind on payments when their income dries up.

Anonymous said...

Residential property prices may go down: Knight Frank India
24 Sep 2009, 2105 hrs IST, PTI

MUMBAI: Global property consultancy firm, Knight Frank India, on Thursday said prices in the residential property segment are likely to decline in a
short time. "We feel prices of residential segment may go down over a period of time," Knight Frank India Chairman Pranay Vakil told reporters here today.

The residential segment may see a robust demand in certain markets, he said, adding that it was also a good time for property developers to invest in land.

Demand for real estate at this stage is a combination of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and a corresponding increase in property prices, he said.

Today, property buyers are worried that prices may go down after they purchase property and projects may not be completed on time, Vakil said.

Knight Frank today launched a book titled Real Investment-a real estate investment guide for India. The book seeks to lend a helping hand by covering all the information that one may require while investing in real estate.

The book compiles the perspectives of real estate industry experts to help deepen knowledge about real estate and consider it as an asset class.

Commenting on the book launch, Vakil said, as property advisors, we continuously work with some of the best minds in the sector. We felt the need for a single credible source of information, for which we brought together the best minds in the business.

This book makes the seemingly daunting task of delving into the real estate market simpler by offering tips on how to make real estate a lucrative investment option."



Anonymous said...

I think he is saying that RE prices will decline and then it would be a good buy for investors to jump in.

Whatever he says, RE has to decline by more than 50% in coming years. You buy or don't buy is your choice.

Anonymous said...

where is the price drop? i am trying to buy home since last 2 years, prices are not falling in mumbai! i am very frustrated.

Anonymous said...

Subprime Crisis II
Vivek Kaul / DNAFriday, September 25, 2009 2:13 IST

Worryingly, these subprime loans from the FHA require a down-payment of just 3.5% of the value of the house being bought . This means just about anybody with a little bit of money lying around can take such a loan, irrespective of whether he or she in a position to repay.

The result is for all to see. In a report released on June 18, the US Department of Housing and Urban Development, which oversees the FHA, had said the rate of default on these loans exceeded 7%. Also, more than 13% of these loans had been defaulted on by more than 30 days.

"Of course it is very risky," says Saxena. "However, politicians only care about the near-term outlook so that they can get re-elected. Who cares about the outcome 10 years from now? The bartenders are back again, giving more drugs to the addict so that the party can keep going . Needless to say, they don't care about the long-term health of the addict," he adds.

"Subprime lending should be strictly private sector, buyer beware. No government guarantees," says Rubino. Experts feel these loans will lead to another crash in the days to come.

"I am sure it will lead to another epic bust in a few years time. When central banks start raising interest rates again, then we will see another massive crash ," says Das "It depends on the size and scale, but if it is government guaranteed, it will inflict losses on the government rather than on private bank balance sheets."

Anonymous said...

Housing Crash to Resume

Housing Crash to Resume on 7 Million Foreclosures, Amherst Says

By Jody Shenn

Sept. 23 (Bloomberg) -- The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.

The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said .

The amount of pending foreclosed-home supply has been boosted by more borrowers going into default, fewer being able to catch up once they do, and longer time periods to seize properties because of issues such as loan-modification efforts and changes to state laws, the New York-based analysts wrote.

Anonymous said...

Anon at 5:10:
You said:"i am trying to buy home since last 2 years, prices are not falling in mumbai! i am very frustrated."

My dear Anon, myself and my friends waited since 2002 till 2008in US to buy. We saw one full cycle, but were sure that prices were not real. We all have bought now in the last 6-8 months here with prices 60-70% below the peak prices.

I think 2 years is nothing for RE cycle to go down. My neighbour bought in 2005 at twice the price I paid. He is very frustrated.

I would suggest that cash is king. Do not rush into it as it is a losing proposition to buy now. Wait for another 2-3 years to see the real prices.

Choice is yours. Do not get tempted and don't succumb to pressure from your family. My "in-laws" started thinking that I'll never buy and the Indian mentality to own is very strong. I think Indians feel that if someone owns a house is doing very fine in life. My logic had always been that if I can rent at 1/3rd the price, why should I pay the mortgage especially in a falling housing market as I could not count into the future appreciation. The current housing prices are the prices you'll see in 15 years time. But there will be a major crash cycle in between where the prices will go down by 60%.

You decide.

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