Thursday, November 05, 2009

Home prices up in 15 cities, shows Residex

The new index of residential price movement – Residex, released by the National Housing
Bank (NHB), shows a mixed trend among 15 major cities.

As many as nine out of 15 cities, covered by Residex across the country, have witnessed hardening of residential property prices. Prices of homes have recorded a decline in cities such as Delhi, Bangalore and Bhopal, between December last year and June, but the same went up in cities such as Mumbai, Kolkata and Chennai, among others.

Prices of residential property in Mumbai have increased by 5.98 per cent between December and June, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices of residential property in Ahmedabad increased by 27 per cent in the same period and during the same time, Faridabad, the neighbouring city of Delhi, reported price hardening to the extent of a whopping 36

Article Link here

40 comments:

Anonymous said...

The reverse is happening in USA. The homebuyers are dumping the houses back to the lenders ( greedy Bankers).

More walk away from homes, mortgages

The lenders in turn have raised the Credit Card Interest Rate to 30% . It is a vicious circle.

Home foreclosures increased 22.5% in third quarter 2009 vs. third quarter 2008

Foreclosures Map

Anonymous said...

God bless her soul

BANGALORE: Infosys Technologies, India's second-largest software exporter, said on Thursday its chairman's wife sold company shares worth $92 mi
llion for setting up a venture capital fund.

Sudha Murthy, wife of Infosys co-founder and chief mentor N R Narayana Murthy, sold 2 million shares, or about 22 percent of her total holding, on the Bombay Stock Exchange on Thursday, the company said in a filing.

Last month, Narayana Murthy, who co-founded Infosys with six other software engineers in 1981 with $250, had sold a total of 800,000 shares worth $37 million to set up a venture capital fund which he plans to set up in India.

The company said the Murthys have confirmed they did not plan to raise further capital for the fund.
Click here to comment on this story.

Anonymous said...

The higher the prices go up in India, the deeper would be the fall. It is just amazing that how the country is run by fools and a lot of fools riding this bubble.
It is a wait and watch game till the whole thing unwinds. But when it unwinds, a lot of people are going to lose a lot of money and peace of mind for life as the money involved in this game is more than what a normal person would earn in a lifetime.

Dexter said...

Housing (structure) is consumption items. It will go zero slowly if not maintained by putting more money into it every year. So value of structure normally declines in real terms.

The land underneath is supposed to maintain its value (in real term).

The kind of bubble mania going on is insane. Eastern europe is falling apart slowing and next lag down will be trigger by that group.

India has a hugh housing bubble supported by Govt and RBI.

One day this is going to end badly.

Either worthless Rupee as fiat currency.

or

Crash in housing.

In my opinion it will be the later.

Anonymous said...

If the rupee becomes worthless..

A lot of us will take a rod and run after Manmohan, Chidambaram and others...

They can't make an easy escape!

Anonymous said...

http://timesofindia.indiatimes.com/biz/india-business/Its-official-Food-prices-biting-buyers/articleshow/5201288.cms

Inflation biting "aam aadmi" in India..

Govt. has been printing money freely and is now very cunningly blaming it on drought (acts of god) and black marketeers (those murky unknown people under the protection of politicians and possibly the politicians families)...But refusing to acknowledge the impact of asinine govt. policies, corruption and quantitative easing policies..

As you folks no doubt know, the govt. taxes directly everything under the sun and then taxes you indirectly by printing money..

Anonymous said...

Grim REALITY

Joseph L. Shaefer, November 06, 2009
Are We Becoming a Nation of Renters? Investing for the New Housing Dynamic


I read recently that the average percentage of their total net worth that currently-retired Americans have tied up in this one illiquid asset is somewhere near 80% . More than three-quarters of most people’s net worth consists of equity in their homes! The numbers are roughly the same for Boomers.


This fact has massive implications for both the real estate market and the stock market.

In order to pass a portion of their net worth to their children and grandchildren, or to pay for their living expenses as they live longer than ever before, many homeowners will have to pass the house in which they live on to their kids – or sell it in order to pay for their own assisted living or other expenses.

Anonymous said...

Jobless rate tops 10 pct. for first time since '83
By CHRISTOPHER S. RUGABER, AP Economics Writer

WASHINGTON – The unemployment rate has surpassed 10 percent for the first time since 1983 — and is likely to go higher.

Nearly 16 million people can't find jobs even though the worst recession since the Great Depression has apparently ended. Many economists worry that persistently high unemployment could undermine the recovery by restraining consumer spending, which accounts for 70 percent of the economy.

Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent , the highest on records dating from 1994.

One sign of how hard it still is to find a job: the number of Americans who have been out of work for six months or longer rose to 5.6 million, a record. They comprise 35.6 percent of the unemployed population, matching a record set last month.

The average work week was unchanged at 33 hours , a disappointment because employers are expected to add more hours for current workers before they begin hiring new ones.

Anonymous said...

Anonymous said:

-----------------------------------
If the rupee becomes worthless..

A lot of us will take a rod and run after Manmohan, Chidambaram and others...

They can't make an easy escape!
-----------------------------------

Indeed rupee has become worthless. You just don't realize it. Rs1 of 2000 is approximately 18ps now (average price is 6x now). It is just that people become so habituated with it and try to hold it as less as possible. People in fact try to profit from it, and don't chase Manmohan/Chidambaram. As US experiment has showed, aam aadmi is the eventual bagholder in one or the other way, AND culprits DO GET AWAY.

Anonymous said...

Chidambaram, Pranab and Manmohan are getting away with mass murder right now.

They are bringing back the eighties. And the crisis of 1991.

No matter how many rods you pick up and how however hard you run, those buggers are getting away scot free.

YOu had the chance to vote out Congress six months ago and again a month ago. Why didnt you?

Venkat ND

Anonymous said...

Guys above:

You are saying Rupee will become worthless or worth less?

HB

Anonymous said...

I think what the Indian Govt. is trying to do is to make a new standard in buying power of Rupee. Say daal is worth Rs. 100/kg and it was Rs. 20/kg before the Chidambaram mess. 5X is what we get. Similarly for other commodities it is approx. the same. Now in housing, if a house was Rs. 25 lacs, it is now more than a crore. Basically 4-5X again. Salaries have also been doubled for all the Govt. employees.

Now, the worth of rupee in a sense has fallen 4-5 times. It still doesn't show in the dollar-rupee conversion because India is copying all easing policies from US and USA has also a very low dollar but not that much inflation as is in India.

Now the question is:

--What is the future of Rupee?
--What would be the USD/Rupee conversion rate in the next year or so and when RBI starts raising rates?
--What would happen to Rupee when Sensex comes back to its senses around 8000 or so?

Wise people: Any thoughts?

Anonymous said...

Mannu, Chiddu and Pranab...these are the rascals who have screwed us :(

Bastards, after cutting all forms of taxes, doing all forms of reservations and screwing us from all sides, now whatever savings we were collecting for future security is also getting eroded. At this rate, I will be working till 80, have no house and be barely eating daal/roti..

There are two choices - become a govt. worker or become a maoist/naxalite!

If I sell of my conscience, convert to SC/ST and kiss some politicians feet..

The other way is to live like a king, do good and maybe leave this world early but at least not die everyday and get robbed by these bloodsuckers...

I did not vote for these fuc*ers...maybe I can give them my vote in a different way...

Dexter said...

We gut feeling says this is going to blow sky high in India.

1 crore for an apartment ?

While people in USA with Average family income of 50k USD are not able to afford houses worth 250k, then how can indian workers can afford same 250k houses in metros in India ?

Some day this will crash hard.

Anonymous said...

Food Inflation!

Even in recession time, India is facing severe inflation in food prices. Really, people started eating more? No it’s a supply side glut. Ohhhh… means even after giving all subsidies for years, the agriculture is still not efficient, no the market flooded with paper commodity made it soared.
Different people are attributing different causes.
We have seen number of drought situations in past, what else changed this time?

Nothing has changed other than commodity exchange in India. After getting beating from rest of the world the speculators are betting on food need of developing countries. In 2007, govt. set “Abhijeet Sen” committee to investigate the role of futures exchange on prices & as usual the so called elite members of committee gave convoluted decision. Considering the election time, Mr. Sharad Pawar stopped the trading in few commodities, then the prices stabilized. After election govt. resumed the trading & Mr Pawar is advising the benefits of commodity exchange.
Lot of people may not be happy with this, but the grain merchants & rich farmers [Old ally of Mr. Pawar] are very happy.


http://www.moneycontrol.com/news/economy/
howgovt-plans-to-tackle-soaring-food-prices_423092.html

http://www.mcxindia.com/

http://www.fmc.gov.in/htmldocs/Abhijit%20Sen%20Report.pdf

Vulture.

Anonymous said...

Folks here:

I did my MBA in the US from a premier institute, paid close to 80K for the degree and still no job. I'm on OPT. I'm hoping to get something in a month or so that would pay 60K.

When I look at the news, I see companies here hiring people from Indian B Schools and paying decent money. Is it really that they are getting hired at good salaries or it is just a hype from these schools. I think the unemployment in US is so high that a lot of Wall Street firms would have some common sense to think about US and higher US grads who pay taxes in US and paid through their nose to get the MBA degree.

I also feel that MBA maybe a worthless degree in the years to come due to massive theft going on in a lot of companies which will be revealed sooner than later.

Anonymous said...

Fellow Bloggers:

What do you think about Gold? Indian Govt. is stupid to buy it at the bubble price. The world is laughing at India. Maybe it is something IMF made them do to cover up India's deficits.

Anyway, time will tell. I would buy Gold when it is $400 per ounce. Now Oil will go high too. Wtf is going on all over. People are stealing trying to make profit all over the world with no regulations. Looks like G-20 meeting agenda is to make these stealing schemes from their own people. We are now in a new Greedy world with no ethics or morality.

Worship Money, no matter how you get it!!!

Anonymous said...

gold has topped. stay away from it. Its over priced for the time being..

Anonymous said...

India is being run by crony capitalists. Greedy bastards.
Time is coming to for them to get fucked hard as people can';t take it anymore.

Anonymous said...

Worth less? definitely.

Worthless? God, I hope not.

Global currencies are in a relentless race to the bottom. All the central banks have decided to inflate their way out of trouble, trashing their currencies in the process.

RBI seems to be the most conservative of the lot. They spotted the housing bubble first (in 2006) and raised sector risk. They did not lower rates to zero in 2008. And they are already raising rates in 2009, unlike everyone else. I like the RBI viv-a-vis the fed. Quite as good as ECB in fact.

The best of a bad lot.

Venkat ND

Anonymous said...

Looks like all these events in the world will lead to a world war. The nations who win the war will rule again. I hope china gets destroyed in this. LOL

Anonymous said...

An MBA in finance is not worth the paper it is printed on. Just a way for the college to make money now.

Close to a million unemployed finance guys at lower levels. Where are they going to get jobs?

Cant even become realtors :-)

An MBA in marketting is something else now. But marketing guys have to work hard! Not cushy jobs like the banksters.

Consulting may be the way to go. All those businesses to restructure for the new global situation!

China is not going to get destroyed, LOL guy. It is going to do the destroying.

Guess who is in its cross hairs now? Who is right between China and all that delicious oil?

We will be laughing from the other side of our face soon.

Venkat ND

Anonymous said...

Pankaj says stock market to go down by 10% in India in the next 6 months.

http://www.bloomberg.com/apps/news?pid=20601091&sid=aRtRe3.qCWNo


I think it will down 10% pretty soon and in 6 months it may be close to 10,000.

Anonymous said...

Parag says market to go down by 2,500 points.

http://publication.samachar.com/pub_article.php?id=6402261&nextids=6402261|6399806|6399807|6399808|6398490&nextIndex=1

Shriniwas K said...

#Food Inflation -

Thought INR US$ conversion has remained the same over the past year, the US has little or no Inflation -

Milk here is just $1.50 for 3.8 liters (maybe slightly more in NY, FL and CA) Thats still only Rs 25-28 per liter.

Sugar is $2.29 for 5 lbs thats about 42 Rs per kg.

Wheat and Corn have always been cheap here than India.

Gasoline averages at 2.75$ for 3.8 liters (about Rs33 per Liter)

Even if you do NOT take the standard of living comparison
Petrol, Milk and Sugar in US is cheaper than India. I really feel that Indian Rupee should be actually 60-70 to the US$, but is being held up by phony stock market rally which involves US fraud investment banker money and Arab oil money (which is stolen from all of us)

I am still shell shocked at how people re-elected Manmohan Singh and Ashok Chavan. It seems as though people want to suffer, they want the nation to perish, they want opposite of Progress which is the (I call it Italian National) Congress.

From those 2 results, I feel that people deserve to be punished. One thing is certain, India is more and more turning from a promising vibrant economy to a phoney Ponzi scheme run by Chidu, Mannu and their cronies.

Dexter said...

India's economy is much more difficult to understand.

Income inequlity is at extreme in India and that makes us very prone to bubble economics. The improvement of last few years in being extraploted in future, which may not pan out.

I would rent out for next 2 year and see which way things are turning: Deflation or Inflation.

The affordability is out of wack in metro. A cheap apartment is 40Lakh and I don't know many people who can afford this. Even for someone earning 12L a year it is a difficult task without help from parent's saving.

Either inflation brings earning to price ratio back into sensible zone or deflation will bring the price down.

My gut feeling is for deflation as that is being entrenched by slowing credit growth in banking sector.

Anonymous said...

I think in the year to come these two things will happen:

--Rupee to near Rs.60/USD.

--Housing values to drop by 20-30% and by another 20-30% by 2011-12.

--A lot of layoffs and unemployment.

--Salaries to go down by almost half.

--Interest rates to go up and this will also not prevent Rupee fall.

--Govt.may change if corruption by top politicians is not controlled.

Dexter said...

Fall of Rupee by 25% and increase umployment at same time is not possible.

In real sense all currency fall in value over time (inflation) but each currency falls at different rate (they are all float).

Fall in a currency normally leads to jump in exports in local currency. Imports may fall due to domestic subsitution. Both of these lead to more employment locally not less.

Anonymous said...

Dexter:
Exports will only happen if the consumer spending in west goes up which is not possible for at least a few years. They are themselves fighting huge unemployment.

As regards to unemployment, right now more people are working than needed due to housing/stock bubble in India. Once that deflates, there would be a lot of layoffs in banking, loan industry, financial sector, engineering jobs and construction.

India is not innovating anything. It is just false customer spending that the west is banking on and are pushing their products in India. Once housing falls, consumer spending in India also will suffer a lot. False ATMs will be shut down.

This is just different this time. No economic theory can prove what will happen. It is one of those Greenspan's irrational exhuberance.

Anonymous said...

Here’s Roubini’s argument. The Fed is holding short-term interest rates near zero. Investors and speculators borrow dollars cheaply and use them to buy various assets - stocks, bonds, gold, oil, minerals, foreign currencies. Prices rise. Huge profits can be made.

But this can’t last, Roubini warns. The Fed will eventually raise interest rates. Or outside events (a confrontation with Iran, fear of a double-dip recession) will change market psychology. Then, investors will rush to lock in profits, and the sell-off will trigger a crash. Stock, bond and commodity prices will plunge. Losses will mount, confidence will fall and the real economy will suffer.

“The Fed and other policymakers seem unaware of the monster bubble they are creating,” writes Roubini. “The longer they remain blind, the harder the markets will fall.”

Haven’t we seen this movie before? Well, maybe.

Like home values a few years ago, asset prices have risen spectacularly. Since its March 9 low, the U.S. stock market has gained more than 50 percent. An index of stocks for 22 “emerging market” countries (including Brazil, China and India) has doubled from its recent low. Oil at about $80 a barrel has increased 150 percent from its recent low of $31.

Anonymous said...

To Anon and Dexter:

Rupee will get devauled by 15% or so in the next 3 months as the USD is going to appreciate faster than we thought by about 10% in the next quarter.

Anonymous said...

Forget Mumbai and its high property prices, Indians are looking for better (and cheaper!) options in New York. After the meltdown in the US property market, house prices there seem to be within the range of Indians as can be evinced from the fact that Indians now account for close to 20% of all realty sales in Manhattan and 30% of all enquiries made.

In fact, India and China are replacing the buyers from Eastern Europe. To put things into perspective, as reported in a leading business daily, average price per sq ft for a Manhattan East side condo is US$ 1,249, while that for a South Central Mumbai apartment is US$ 1,319. This is proof enough that property prices in India are still high at the current levels and there is enough room for them to fall further. But the builders in India just don't want to get the hint!

Anonymous said...

I am planning to buy a house in houston...texas is super cheap right now compared to houses in mumbai!

Houston: 4 bedroom and 3 bath houses with yard for $250,000 and covered garage! Weather is nice and hot, winters are pleasant..

About 1.2 crores..for the same price you get a shitty 2 bhk condo in smelly slumbai! and you have to deal with the sundaas bhai's of the world..

Shriniwas K said...

@ Texas Boy
Grab the first time home buyer $8000 tax credit if you are buying. Here in Arizona (which is one of the worst hit by the US real estate bubble) prices are still falling. People are afraid if they buy and the price fall by more than 8k.

4 bed 3 bath 2 car garage homes from 140k US$ within 2 miles from any major Phoenix freeway. Upmarket localities like Scottsdale and Tempe are also winding down.

@Others .

Rupee vs Dollar vs Gold

Gold though seemingly a dead investment seems to dictate true value of money.
In 2002-2003 Gold hit bottom of INR 4500
from its previous rise. today its INR 16000
Vis a vis the value of the US$ too is no better.

we should consider the comparison of INR with all major currencies not only US$. The moment gold is pricey enough, governments will start selling gold, as Gold is not a job generating investment, its just a piece of useless metal.

Anonymous said...

And maybe Gold is high because USD is low. Investors are seeking safety in buying Gold.

Anyway, GOI is ending stimulus measures in a month or so. RBI would raise interest rates. India can only grow if the West grows to fulfill export orders and IT business.

The West is not going to grow anytime soon at least till their housing mess is resolved and it might take 3-4 years. In the meantime India will see what the west is seeing now starting next year. Lower RE prices, very less loans and higher unemployment.

Anonymous said...

Anon @6:59 PM MBA Guy,

Wish you all the best. I hope you find the job you are looking for.

Is this situation happening only to international students who need visa sponsorship or are native students also facing this situation? I think you guys should blog your current situation so that students from India do not get take huge loans and fall into this sh*t.

For the National Association of Realtors "Now is the best time to buy real estate" ALWAYS . Similarly these business schools always advertise "Business school is Gold. If not immediately you will make money tommorrow." Some of the false sheen need to come off.

Gadadhari_Bhim

Vik said...

@ 6:59 :
Would you like to blog your situation and discuss the advantages/disadvatages of the MBA degree for international students ? Pls post your email address and I will add you as a contributor to this blog.

what you are saying is 100% true. Media as we all know is rigged, even more so in India

Anonymous said...

Hello bloggers and bears:
Do not sweat the current rally of stocks both in US and emerging countries. It is just momentum driven carried out basically by weak dollar. As dollar corrects which it would as Central Banks would have to raise rates all over to prevent inflation, the stock markets would tank back. It is not real and don't get fooled by the numbers.

As regards to MBA:
I think it is the most stupid degree a person can earn. It doesn't carry the value that you pay for. If you pay similar amounts and become a doctor, you carry more value and add value to the society also. MBAs are all over are coming up with Financial Engineering scams to loot masses. Same is with marketing folks who come up with stupid data and market analysis to promote products and call you at home all the time. Same is with Supply chain to outsource everything and then try to get it home cheaper. The only MBA field that makes some sense is Accounting as it deals with real laws and has a CPA/CA exam tied to it. MBA is not as bad to get, it is the salary bubble associated with it that causes it to look unreal. I think MBA degree is in a bubble and so are the salaries of MBAs. It will blow off in the next 2-3 years when fresh MBAs will not find jobs.

Most MBA schools in US are now factories. They are selling these degrees by offering part-time, full-time, executive MBA etc. Now these B schools are trying to tie this up to other countries to sell their degrees for 80K in China and India. There is no shortage of fools in India or US and many will line up to get the MBA stamp on their resume.

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