Monday, September 07, 2009

Hitler parody on the Real Estate downfall

40 comments:

Anonymous said...

Saw this at another blog:

I believe in the law.

The law of supply and demand.

We have, for better or for worse, a well established free market. And the laws still apply. Despite what the Federal government wants, the market will inevitably force a correction. To attempt to change that, only forestalls the inevitable. This is the same madness that has occurred in our nation's history time and time again. Government cannot change the law of supply and demand.

Most rational folks now agree that the speculation and price growth in Real Estate could never have been sustained and that the crash was a foregone conclusion. Nobody wants to be the party pooper when the roller coaster is pointed straight up and say "We're crazy man! Let's stop this baby before we collectively go off the deep end!"

We've hit the peak, and how deep the valley of despair grows, and how long real estate stays in that valley is still subject to debate. But I would safely predict that it's going deep(er) and we're talking years not months for full recovery.

There is simply no way to rationalize our way to sustainable economic recovery by printing money around the clock. If we don't pull that band-aid off, our creditors inevitably will.

Anonymous said...

The bust would be large because the boom was so large. Prices have gone up by 300-400% in the past 3-4 years.

Anonymous said...

A real estate crash is usually a slower process than a stock market crash. The reason for this is because the real estate market is less liquid than the stock market.

Anonymous said...

Countries with RE bubble:

United States, Argentina, Britain, the Netherlands, Italy, Australia, New Zeland, Ireland, Spain, France, Poland, South Africa, Israel, Greece, Bulgaria, Croatia, Canada, Norway, Singapore, South Korea, Sweden, Baltic States, India, Romania, Russia, the Ukraine, and China.

Thanks to Alan Gree'D'span.

Anonymous said...

What are your views about Pakistan.

Anonymous said...

On stable grounds
Mona Mehta
Posted online: Sep 06, 2009 at 2006 hrs

The upcoming festive season promises to bring in the much-needed joy to the real estate sector. With improved market conditions, competition has started gearing pace up in the Rs 10,000-crore real estate sector with top builders charting out new plans to launch many residential apartments in the metros in next six months to a year. According to industry experts, residential sector constitutes more than 70% of the total current realty market.

Demand for residential projects in a number of cities is picking up on account of lower home loan rates, property price cuts by developers and job market recovery, indicates a study by Religare Capital Markets. The study expects residential prices in the premium and luxury space to rise 10-15% as valuations have bottomed out in a few locations with property registrations in cities like Mumbai and Pune rising about 20-22% in April-June quarter over January-March quarter.

Supply and returns

Niranjan Hiranandani, MD, Hiranandani Constructions says, “The supply of residential real estate in India is expected to increase by 15% to 20% in metros in the next eight to nine months. During the second quarter of the financial year 2009-10, the supply of ready-to-move properties is only 5%. Our residential projects would be coming up at Powai, Thane, Panvel and Chennai in a phased manner in the next few months.”

Anonymous said...

Since the projects were delayed due to recession, the supply had decreased. Now, that the industry is showing positive signs and the delayed projects are getting completed. “There is a supply in the industry. All those people who chose to wait and watch are now investing in properties thus rates are again going up”, says Jitendra Jain, MD and CEO, Neev Group of Companies. Many developers are looking at converting luxury homes into more than affordable homes and sell them at reduced rates depending on the location. Nayan Shah, CEO, Mayfair Housing says, “We have converted luxury homes into affordable homes by doing away with the usage of premium products, so that flats are provided to them at affordable rates.”

Jain further adds, “We are expecting a minimum of 20% net returns from its upcoming projects in residential development. Rates are bouncing back from rockbottom and it has been noted that since last three months the price of real estate space has already gone high, the price increase is in the range of 15-30% everywhere in Mumbai.”

Due to global recession, a negative sentiment was generated and sales had come to a standstill. As the business in India achieved its stability, people who had postponed their buying decision have now entered into buying market. The lack of enough supply is also one of the major cause in driving the sales. “We do expect that the price increase will continue in the next quarter too,”Jain adds.

On the current residential market scenario, Abhishek Kiran Gupta, Head, Research, Jones Lang LaSalle Meghraj says, “All things considered, price rises at this early stage of recovery would not be considered either warranted or wise. Overpriced locations and projects corrected so steeply in the recent past would have conveyed a clear message. Nevertheless, demand for residential property is high in end-user driven markets and is witnessing little supply. Here, developers who have managed to offload a sizable component of their projects are now beginning to test price stretchability to establish whether the market is able to sustain such upward pressures, and whether further rises can be initiated in such locations in the future.”

Anonymous said...

Launch and delivery

Raheja Developers have been planning a slew of developments in Gurgaon region, with the projects expected to be ready between the end of 2009 and early 2013. Dharuhera residential rates are in the region of Rs 1,200 per ft2 till Rs 1,600 per ft2 depending on the location and other specifications. Sohna residential rates are in the region of Rs 10,000 till Rs 12,000 per yard2. Prices in Gurgaon have already started firming up. Dharuhera and Sohna will see upward movement after a period of around three months or so.

Competitor, Godrej Properties is planning to launch five to six new residential projects and two commercial projects in the financial year 2009-10. Milind Korde, MD, Godrej Properties says, “In Ahmedabad, we are launching Godrej Garden City soon. In Kolkata, Godrej Pramanik will also be launched. Besides, Godrej Hill is coming up at Kalyan apart from Planet Godrej in Mumbai. We have completed 1.7 mn ft2 Phase I of Godrej Waterfield in Kolkata and 6 lakh ft2 of Phase II is currently under construction. We are soon planning to launch two new commercial properties, called Godrej Genesis in Kolkata and Godrej Eternia in Chandigarh. In Ahmedabad and Kolkata, apartments would be offered at the rate of over Rs 2,000 per ft2.”

According to Korde, Godrej Properties hopes to achieve 20% to 25% returns from the upcoming projects in the near future.

Delhi-based Parsvnath Developers are planning to launch five to six new projects in the next six to nine months in tier II and tier III cities. It includes, Parsvnath City each in Sahranpur and Lucknow apart from other residential projects whose brand names are yet to be decided. Pradeep jain, Chairman, Parsvanath Developers says, “We are expecting 15% to 20% returns from the upcoming projects.”

Recently, Mumbai-based Neev Group of Companies had launched a residential project at Parel. According to Jitendra Jain, CEO and MD, Neev Group of Companies, “In a month of its launch, we sold 80% of the project. Few projects lined up for launch in next eight months are — Andheri, Khar, Vileparle, Mulund and Lower Parel.”

With such a positive response, developers and the real estate market are hoping to end the year on a positive high.

http://www.financialexpress.com/news/on-stable-grounds/513362/#

Anonymous said...

Looks like BB has been busy posting a barrage of articles under the guise of Anon. The purpose of all these articles is to place convincing arguments to shake buyers from the fence!

Its very clear that there was a supply over hang with all the ghost townships and now there is even more supply coming in. Builders are still going the QIP route to raise more capital and also are going into deeper debts/holes.

Meanwhile this coterie of builders and agents are conspiring to create another ludicrous story of scarcity which would seem partly convincing because of the recent recession (which by the way is still not over) and supply being constrained...

The truth of the matter though is that the prices are too high and builders are refusing to come down. It does not make sense to buy and squander savings. While on the other hand one can rent and stretch one's savings for a longer time..

Anonymous said...

Rent and Wait! Rent and Wait! Rent and Wait! Rent and Wait! Rent and Wait! Rent and Wait! Rent and Wait! Rent and Wait! Rent and Wait!

Anonymous said...

Amazing Clip Vik!!

All you need to do is show this clip in every post. So Hitler's real estate agent says -

1> Buy now or be priced out!

2> House prices always go up!

3> Its different in this area, luxury houses in this area and demand means it will always go up!

Let's see what the likes of BB and his many aliases are saying -
1> Its different in Mumbai. There is too much demand in Mumbai!

2> Buy now or be priced out!

3> In Mumbai prices always go up!

Ha Ha Ha Ha Ha Ha Ha Ha..

Guess there is no difference between real estate agents anywhere in the world. They all say the same thing. LOL

Well we are not Hitler, with Idiot sign on our foreheads...

Anonymous said...

U.S. Consumer Credit Fell by a Record $21.6 Billion in July
By Vincent Del Giudice
Published: September 4, 2009

Sept. 8 (Bloomberg) -- U.S. consumer credit plunged more than five times as much as forecast in July as banks maintained more restrictive lending terms and job losses made households reluctant to borrow.

Consumer credit fell by a record $21.6 billion, or 10 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $15.5 billion in June, more than previously estimated. Credit fell for a sixth month, the longest series of declines since 1991.

Rising unemployment, stagnant incomes and shrinking household wealth are casting doubt on the strength of the economic recovery. The category of credit that covers car loans also plummeted by a record amount, even as the “cash for clunkers” auto trade-in program helped push up personal spending in July.

GK said...

Following extract is from BNP Paribas report...

Investors drive Chennai project sales

Property market revival driven by investors

We visited flagship projects of Unitech and DLF in Chennai and HDIL’s
MIAL project in Mumbai. Our checks with company officials and brokers
suggest that the recent surge in demand has been largely driven by
investors attracted by discounted pricing. Unitech-Arihant’s Chennai
project has been largely subscribed by investors who are currently
willing to flip the ‘Ananda’ and ‘Brahma’ properties for a premium of
INR20,000-30,000 per unit. Chennai constitutes approximately 22% of
the 6.9m sqft sold by Unitech in 1QFY10. Property investors continue to
hold the ‘key’ to a developer’s survival in the bear market. More than
80% of recent launches have been largely lapped up by investors as
projects have not received building approvals, which has held up banks’
ability to provide housing loans for the projects. Also, a low upfront
booking amount (Unitech’s Unihomes require only INR100,000 booking
deposit) has boosted investor interests. Prices have begun to hold up in
Chennai albeit low volume with few developers (DLF) even raising prices
marginally.


Construction progress update: DLF, HDIL +ve, UT -ve

We saw incremental work being carried out at DLF’s Garden City project
in Chennai, which, currently, has only sold 1,700 units (as against April
2008 mgmt estimate of 2,304 units). DLF has effected a INR100/sft
increase in prices for its Chennai project. There has been no significant
construction activity carried out at both of Unitech’s sites in Chennai
(Ananda/Brahma and Unihomes) as both projects wait for final building
approvals. Construction progress at HDIL’s Kurla project appeared on
track to meet the Phase 1 deadline.

Only 20% of TDRs will yield premium rates

We met HDIL’s management who sound upbeat about the recovery in
the property market and expect TDR prices to continue to rise. They also
highlighted that negative news flow (protests, etc) during execution
phase of MIAL Phase 1 (after January 2010) seems inevitable. HDIL has
acquired two new redevelopment projects that can add INR17/share to
NAV. Mgmt also highlighted that land acquisition for Phase 2 will mostly
be in suburbs implying lower land cost (capex for HDIL) and also
significantly lower TDR price assumption. HDIL has already sold 45% of
10m sqft of TDR it will generate from the prime Kurla area.

Anonymous said...

Its stupidity to buy Real estate now.

Rent, gentlemen.You will not regret it.Or if you choose to buy, you will regret in leisure.Be ready to lose your hard earned money on losing the poker with RE devils.

The best thing for you to do is DO NOT LAND UP AT THE RE agents doors FOR ENQUIRING THE PRICES. tHEY WILL PSUCHOLOGICALLY DEFEAT YOU. tHEY HAVE SEEN HUNDREDS LIKE YOU.SO DONT FALL PREY, DONT GO NEAR A RE agent AND SEE THE PRICES OF RE GOING DOWN AND DOWN IN A YEARS TIME.

K.Gokul.

Anonymous said...

Hi,

New Vashi hunter here.Any agents reading this blog?

Anyway I have a requirements -In MORAJ Residency Palm Beach road,I need 3 BHK with Stilt own parking.My offer is 46.5 L ,all white in one shot( I have negociable 51 L Offers.Can Give 1.5% commission insted of curret norm of 1%( That can be arranged in part cash)I can spend additional 1 L on another own stilt parking.
Make your offers to mumbai10000@gmail.com

Remember - Need 1052 Sq Ft ,If there is no work in flat noissues,need clear title and NO TOP FLOOR.
I CANNOT PAY ANY PART IN BLACK
Any + or - please mail....

BB pls can u help?

Anonymous said...

anon@7:30 AM or @Above

Hi BB!! :))

Anonymous said...

@GK "More than 80% of recent launches have been largely lapped up by investors as projects have not received building approvals, which has held up banks’ ability to provide housing loans for the projects. "

Thank you for the post

This provides the explanation for the uptick in the real estate prices. Genuine buyers please dont spend your hard earned money to buy these overpriced flats.

Let these investors i.e. IT Techies, Brokers, Bank managers, listed real-estate ( who have been defaulting on the loans and fully exploiting the LifeLine provided by Reserve Bank of India, ) crush under risky bets.

Anonymous said...

What's the comfort pricing?

Back in 2002-2003 timeframe, 2BHK flats in Aundh (DSK, Kumar, Sreeji) were costing around 16 lacs. Fast forward to 2005-2006, the same flat was costing around 32 lacs. Now in 2009 the quote is around 50 lac. In new complexes like Vatsalaya Vihar, people expect upto 60 lacs for their 2BHK flats. Note that back in 2002-2003, people thought 16lac was too much price to pay for a 2BHK, back in 2005-2006, people thought 32 lac was too much to pay for a 2BHK in Aundh. There would always be different opinions about the costings. The point is, prices do go up. How long they can keep going up? No one knows for sure. Please stop comparing US housing market and India housing market. Both are totally different, for example, people in India don't use houses/flats as ATM machines. Market would keep on going up down, you have to find your comfort pricing. If you can afford 50lac for your dream house/flat, go for it. Afford not only financially, but as well psychologically. If you think you can sleep well every night after making such huge investment, don't wait for anything...

JS

Anonymous said...

@JS ..thank you for the information...It was a special class of speculators i.e. reckless IT Techies who helped ballooning the real estate prices in Aundh...dont worry the sanity will be restored soon


The looming big crisis of Interest-only mortgages....

As an Exotic Mortgage Resets, Payments Skyrocket

By DAVID STREITFELD
Published: September 8, 2009

~ With many of these homes under water — worth less than the loans against them — many interest-only mortgages will soon become unaffordable, as the homeowners have to actually start paying principal. Monthly payments can jump by as much as 75 percent .

~ Still, interest-only loans represent an especially large problem. An analysis for The New York Times by the real estate information company First American CoreLogic shows there are 2.8 million active interest-only home loans worth a combined total of $908 billion .

~ The interest-only periods, which put off the principal payments for five, seven or 10 years, are now beginning to expire. In the next 12 months, $71 billion of interest-only loans will reset. The year after, another $100 billion will reset. After mid-2011, another $400 billion will reset.

~ While default may be a long way off, the prospect is already dampening the couple’s spending habits. They are postponing the new windows the house needs. They recently bought a 2005 Nissan Murano instead of a new car, and they have put off buying a flat-screen TV.

Anonymous said...

You are again back to US markets.
I thought this is blog for India Housing Bubble...when you say "don't worry the sanity will be restored soon" what does it mean? You expect prices to fall back to 2002-2003 levels? How on earth its possible?

JS

Anonymous said...

JS,
You are a moron. If something can go up in an insane way, it can go down also in the same way.

All the countries below have housing bubbles and they were not fueled by growth but by easy liquidity that was spent all over the world.

India is no different than other losers in other parts of the world. If prices in US have come down by more than 50%, what is Indian market. US Govt. has supplied more money than India's 2 years of GDP and still couldn't control the downfall and you are saying the fall is not possible.

United States, Argentina, Britain, the Netherlands, Italy, Australia, New Zeland, Ireland, Spain, France, Poland, South Africa, Israel, Greece, Bulgaria, Croatia, Canada, Norway, Singapore, South Korea, Sweden, Baltic States, India, Romania, Russia, the Ukraine, and China.

You should go and get some more flats as housing always goes up and will go up further. Loser.

Anonymous said...

Calling me a moron does not change anything dude. What makes you think that liquidity would go away just like that? If you are expecting a fall of prices to 2002-2003 levels, you are expecting too much....

JS

Anonymous said...

@JS

You are slow but you are getting the point! At least you are asking the right questions, not think it through..

What happens when prices go up do to excess liquidity? Well, first ask the question do prices of assets go up due to excess liquidity?

Second ask the question what happens once prices go up in an extreme fashion due to excess liquidity? Do they come down? Let's see where prices have been bubbling in different asset classes as a result of super excess liquidity - Would the US or Japan be a good example?

Finally ask the question - Have prices of houses which used to be super high halved and are still in the process of correcting..

You will then find the likes of BB and other morons coming in and saying but India is different..prices here are going to keep going up.

Lastly, do a research of all the bubbles in history and you will see that somewhere close to the peak people were saying - "This time its different, we are different, prices here will keep going up"

Then you will see that in all these places and to all these people as incredulous as it seemed there was a mega bust where prices crashed to subterranean level...

Prices will not fall in India? Just wait and watch! But then it has not happened till now....is no guarantee that it never will! In fact if it has not fallen till now, in all probability it soon will...THINK!! THINK!!

Anonymous said...

Anon 4:50

Let me admit that you and i are the biggest Moron. We have been predecting crash since last couple of years but now with excess liquidity around this wont happen in immediate future.

Guys i went wrong and would not like to mislead this forum any further. Now i would advise you to buy but only if you are comfortable paying the EMI.

My apologise.

Vulture

Anonymous said...

I don't know about you Vulture(If you are indeed Vulture and not BB masquerading as Vulture).


But the extrapolation from excess liquidity to inflation is not straight forward. There has been excess liquidity in the US as well from 2001 till now..yet we are seeing RE prices plummeting and I suspect they are going to go down quite a distance because of Alt-A, option ARM resets and the Commercial Real Estate crash..

In India, RE companies are practically on the edge of a precipice! They are surviving because of QIP and practically hanging in there from their fingernails!

Let's wait and watch, people who give up at this last leg up are going to regret forever (or at least for the next 20-30 years that they are trapped in the EMI cage). I think as a lot of experts have speculated in India the interest rates will start inching up in October/November and that will be one of the nails that will bury this coterie of Builders/Brokers/Politicians/Black Money Criminals..

Wait and watch!

Anonymous said...

Anon above:
I would be happy to see more people buy. People do not get a lesson until they learn it themselves. Let them buy and face the consequences.

I think US economy is so big, they are somehow trying to weather this storm and would come out of it successfully in another 5 years. But India will get so fucked as the Govt. has no money to repay all the bad loans. Moreover, the Govt. is going to borrow money to pay the salaries as per 6th pay commission. Huge budget deficits in future for India.

All this India shining story was a sham. All the young folks will get hit hard as they grew up with so many fantasies that will never mature in their youth.

Say for example a lot of fresh grads are sitting idle at home. A lot of people paid money to get degrees with aspirations to go to US, are coming back to India. Unemployment is going to be a major issue for the next few years. And salaries will be cut down by almost half. Govt. will look stupid by raising the salaries by 100%. Thank you Dr. Singh.

Anonymous said...

There will be a catastrophe in India when all this unveils. India is one of the most corrupt country run by corrupt people who want quick money instantly.

People steal money and call it black money instead of calling themselves as thieves. What a shame and this is going on on the watch of Govt.

A lot of shit is going to happen for India and Indians when shit really hits the fan. A land of thieves that thrives on black money and thieves that do this business openly.

Shame on India and Indians who deal in black money and steal from Indian Govt.

Anonymous said...

Anon said:9:04
Shame on India and Indians who deal in black money and steal from Indian Govt.

You seem to be a real frustrated A$$ hole. We are proud of India and not like you. A$$ hole you are a real failure!!! :-)

Anonymous said...

Hi Vulture @ 5:25 PM

I second your thoughts.... BB is right....

Retired Old Man

Anonymous said...

BB is still a bastard he conned me of 10K with his site WWW.koolclubmumbai.com I will never ever forgive him


Retired Old Man

Mcrealton said...

The demand for residential projects in many cities is picking up on account of lower home loan rates, property price cuts by developers and job market recovery! I know of a certain website which promotes a real estate company. This company deals with buying and selling of US property. The company builds and manages profitable real estate investment portfolios for its clients through investments in highly profitable foreclosure homes and REOs.

Bindas Bhai said...

Dear Vashi house hunter,

I don't have any knowledge about New Mumbai properties. I would request you to do proper homework and close the deal at the earliest. 10% price difference should not be the reason for you to buy or not.

Todays news is talking about a Cuffe Parade flat which has been sold at 93k /sq ft. All asset class will go up and hence pls. keep your self invested.

Vulture,

I am happy that at least now you have seen the hard realities of the market.

Vik,

Prices will jump from here further not only in Mumbai but also in Pune within two quarters.

All the best guys.


Bindas Bhai

Anonymous said...

The inevitable has started to happen. For almost 11 months we have held the view that USD will start to depreciate and inflation will pick up. The talks of an alternative IMF currency has started to materialise. China has started settlement of regional trade in yuan. The incremental Chinese reserves will see a move into other currencies - euro, yen... The mighty dollar has started to feel the heat.
G20 meeting last week has ensured that the monetary and quantitative easing will continue. This is good news for equities and commodities but bad news for the USD. Gold has seen a big move up and the sheer liqudity will take it a lot higher. This is inspite of the fact that the demand side of the equation has not changed ie India the largest importer of Gold has seen a consistent decline in imports throughout this calendar year. There is no point talking about the fundamentals as it does not make sense.
The flight to finite assets and higher yielding currencies has begun. The danger is that it can turn into a stampede. The EURUSD could see all time highs of 1.60 being taken out (I am of the view that for EURUSD, 1.9-2 levels will be achieved). Indian equities should continue to trade higher.

Anonymous said...

We are of the opinion that the nifty and S&P 500 will continue to edge higher. The disconnect between global equities and China will get more pronounced. The monetary tightening of China is more to do with their excessive lending (USD 1 trillion was lent in the first 6 months of this year by the Chinese banks) and almost a bubble like formation in their credit markets. Not to mention the Chinese pig farmers and stock bokers borrowed money to buy copper futures and took physical delivery. We are of the opinion that the credit tightening is a prudent measure by the Chinese regulators to prevent a structural bubble formation. There could be a scenario that the selloff in Chinese equities will see increased money flow in the Indian markets. We maintain our view of 5200 on the nifty. The up move will be a slow and grinding one rather than a fast & furious one.

shailesh said...

Why Bubbles Happen

Everyone involved in the bubble falls victim to “disaster myopia” (meaning they’re too near-sighted to see the longer term risks) either because they simply can’t imagine a downturn happening, or they assume the probability of it happening is so low that it really isn’t worth worrying about.

People often make poor economic choices because they are overly optimistic about what they will do in the future. For example, people transfer credit card balances over to cards with high long-term interest rates because they believe they will pay everything off before the much lower teaser rate expires. (Most don’t.) Borrowers who default on payday loans typically pay interest amounting to 90% of the loan’s principal before they finally give up and stop making payments.

One study of a health club found that members who worked out on average just four times a month chose to pay a monthly membership fee of $85, even though the gym also offered a pay-as-you-go rate of $10 per visit. When people are polled about their beliefs as to what they’re going to do, there often is a refusal to accept reality.

There’s also a more cynical way to look at things; when completely unsophisticated “investors” are clamoring to get into a market, in general it means that the market is at, or very close to, a top.

Anonymous said...

@Shailesh,
Glad to see you are still posting. BB has been attacking people with galis and this has been convincing people not to post here. He started with Bharat and then went on to attack others including vulture and recently you.

His purpose is to drive out everyone from this place and then spread disinformation.

Cool Head said...

The excess liquidity that you see sloshing around now is just the monies released by various governments (like the US TARP). The banks, instead of lending it to real businesses have moved it to emerging markets and other highly risky ventures to make a quick (but risky)buck. What will happen once the TARP, the Chinese bailout money and other monies stop? Simply, we will have a bigger crash of gigantic proportions. THEN the REAL fun will start.

GK said...

Vik,
We need to start a separate thread on this. Shows how corrupt the builders are...

http://www.moneycontrol.com/news/cnbc-tv18-comments/i-t-dept-raids-hdil-premises-sources_415033.html

What were the charges? According to sources, the IT department alleges that HDIL has suppressed its profits by claiming excess expenditure. So, in short in a nutshell, the IT department has alleged tax evasion against HDIL. These raids, which began in the morning, were mostly based around the Bandra area and we also understand that there was another small player – Seaside Developers – based in Kandivli, who is also under the scanner of the IT department as far as the entire investigation is concerned.

Ramiro said...

Real estate sector has seen this change all of a sudden.Thus the new concept of foreclosures is growing up faster.The website suggested by Mcrealton is very informative and awesome.

rajni sharma said...
This comment has been removed by the author.