Friday, February 12, 2010

Thackarey vs SRK vs Thackarey

Thousands of articles have been written about the issues surrounding the movie 'My name is Khan'. Hundreds of celebrities have voiced their opinion on it. Tens of politicians have expressed their support for SRK and the Shiv Sena stands isolated on the issue with no one expressing support apart from their own clan.

However as this issue dies down with the Sena having tactfully withdrawing the campaign it has Sena achieved its goal. The very fact of the Chief Minister having to summon all policemen to duty prior to release of the movie proves that the congress is very fearful of the Sena and its ability to disrupt things at will.

I remember the days when I was growing up in Mumbai in the 80s and early 90's, the Shiv Sena had a history of muscle power and citizens used to go to the Shaka pramukh to solve their problems instead of the police. When they won the elections in 1995, the Sena realized that they couldn't continue their rowdy behavior against the ruling government since they were now the party in power.

I now believe that Sena is on its way to those bygone days Raj and Uddhav are leading the aggressive charge in the name of the Marathi Manoos.

I would like to quickly point out that while I detest the tactics of the Raj and Uddhav I find that Congress and the NCP are equally incompetent to handle issues dealing with the ethos of Maharashtra and the Marathi people.

Politics has turned into a game where the party in power is a broker for grabbing land and handling out contracts at a fee. There is no attempt made by the government to 'govern' or take a stand on the 'right' side. This pattern repeats itself at every level, whether it state, central or the city.

We see this is action in the rampant inflation in India where Mr Pawar blames the sweet tooth of citizens for the doubling of prices of sugar. What about Onion prices, maybe Indians like to shed tears more often while the peel more onions then the citizens of other countries.

We now will have the IPL coming up and the tamasha of cricket and movies will drive the news flow. The SRK issue will be forgotten and delirious fans will be rooting for Tendulkar and Sehwag as SRK and Shilpa Shetty egg them along.

India is country of short memories. We have forgotten the deluge which killed thousands in Mumbai in 2005. We've dont remember what happened in the Tsunami in Chennai, the 26/11 attack in Mumbai and the recent floods in AP/Karnataka which almost sunk the famous Raghavendra Swami mutt in Mantralaya and we will soon forget the Pune blasts of Feb 2010.

Jai Ho






58 comments:

Anonymous said...

I actually detest what the congress did to ensure the launch of MNIK. The message obviously was to the muslims that congress will protect them from the saffron brigade and therefore the move was catered towards vote bank politics...

Sometime back UPites and Biharis were being thrashed and thrown into all manners of chaos and the same congress govt did nothing to help them out...What the congress govt. does not realize is that votebank politics is like stepping on an uneven surface to smooth it out. You step on one bump to smooth out and another one is created somewhere else. In this case as far as I am concerned, the congress is as bad as the Shiv Sena. If the Shiv Sena is extremist the Congress is extremist too! In this case the Congress is the extremist muslim party!!!...The right governance is principle based governance. Do everything according to the right principles and not according to ridiculous concepts like vote banks, divisive politics etc...

Anonymous said...

Actually while Congress is a party of appeasement of Muslims - the Samajwadi Party has the fundamentalists (read : Mental) who have stated that Computer education is unnecessary etc.

The point is that with India's governance levels, India is on its way to becoming a Zimbabwe, which is where Bindass Bhai will be proved right, property prices will rise and dramatically but so will decline with a great force the purchasing power of the people and that of the Indian Rupee. Whats worst, India will have a double whammy if that happens as the USDollar is on its way down.

So India has never been governed, its always be run on Ram Bharose.

I would request you to read the following predictions - think about it - some of it could still be possible - http://israelfinancialexpert.blogspot.com/2010/01/11-big-surprises-for-next-decade.html

Anonymous said...

Dubai Says No Offer Made to Dubai World Creditors

By Maher Chmaytelli and Haris Anwar

Feb. 14 (Bloomberg) -- Dubai and Dubai World have not yet made an offer to creditors on the state-owned holding company’s debt restructuring plan, a spokeswoman of the emirate’s Department of Finance said.

The government wants to give creditors enough time to understand Dubai World’s business plan and analyze any future debt restructuring proposal, the spokeswoman said, who declined to be identified in line with government policy.

Dubai World, a state-owned holding company, may offer its creditors 60 cents on the dollar after seven years as part of a deal to restructure $22 billion of debt, Zawya Dow Jones reported today, citing unidentified people familiar with the plans. The deal may be guaranteed by the government and may not offer interest payments to creditors , Zawya Dow Jones reported.

Manmohan Singh - You think ? said...

intially i thought all this to be a publicity stunt...but i guess i was wrong..cus shiv sena wudnt get itself embarrased on purpose...

The Secret Diary of Manmohan Singh.

shailesh said...

India Inflation Accelerates to 15-Month High of 8.56%

Feb. 15 (Bloomberg) -- India’s inflation accelerated to a 15-month high in January, adding pressure on policy makers to withdraw more fiscal and monetary stimulus.
Finance Minister Pranab Mukherjee is under pressure from the central bank to raise taxes in the Feb. 26 budget after Governor Duvvuri Subbarao increased lenders’ reserve requirements last month to cool prices. India’s industrial output rose in December at the fastest pace since at least 1994, the government said Feb. 12, indicating strengthening demand.

India’s finance ministry cut excise and service taxes and stepped up spending on roads and power, while the central bank cut interest rates between October 2008 and April 2009 to cushion Asia’s third-largest economy from the global recession. The stimulus was worth more than 12 percent of India’s economy.

Anonymous said...

It will be interesting to know whether the Indian Real Estate companies have taken the "expert" advice from the Wall Street or the corrupt Indian Bank Managers to cook the books. The real estate companies have raised the money by selling the SIVs (Structured Investment Vehicle) while agents (Investment banks) pocketing the commission. After spending that money on "land banks”, they are on the life support provided by the Government. The Indian Bank Managers are getting training, guidance from the Reserve Bank of India to hide the losses on the pretext of "Restructuring of the Loans". Not sure how long this Tamasha will go on?


Wall St. Helped to Mask Debt Fueling Europe’s Crisis

By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ
Published: February 13, 2010


Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.

...

Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care.

...

In Greece, the financial wizardry went even further. In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money.

Anonymous said...

“For about the past 20 years, governments large and small have been selling or leasing out public assets—toll roads, transit systems, even sewers—for one-time cash infusions.

Greece’s crime, apparently, was in trying to bolster public sector wages with its borrowed boodle.

That’s why, in Wall Street’s terms, Greece is one of the PIIGS.

http://www.citypaper.com/digest.asp?id=19761
=========

Now who will bailout Inida? Seem like same Movie in India.

Anonymous said...

PIIGS means:
Portugal
Italy
Ireland
Greece
Spain

It is an acronym with no reference to animal PIG.

Anonymous said...

You need to add UK, not Euro but another candidate for debt crisis...US is into a debt crisis already, only they don't know it yet!

All realty players are deep in debt manure..

Anonymous said...

also need to remember Dubai/Iceland got bailed out. The real reason for all these problems is that politicians wanting to get re-elected and they will do anything to keep the dope going

Venkateswaran K Iyer said...

I am posting here a long analysis of inflation which I wrote in the Chennai property discussion forum, which is slightly relevant to this forum

Hi Economist.

First, I agree 100% that some RE, including at least the roof over your own head, is a total must to guard against inflation.

I differ from you in that I do not think it is currency devaluation which is the main cause of inflation, although it contributed in the past. After 1991, Rupee is in a reasonable free float with restrictions on inflow and outflow which are actually good and beneficial.

India's currency management and reserve banking in the last 15-20 years is impeccable - I think they are both the best in the world, from what we have seen over the last decade. Much better than many free float countries.

There are 3 causes of inflation. First, the most basic is supply demand mismatch. If a thing is scarce, it costs more and as scarcity continues, price keeps rising. Scarcity can be genuine or because of hoarding/black marketing.

Second is monetary policy - an increase in money supply.

Third is competitive disadvantage - which is what results in currency devaluation.

Venkateswaran K Iyer said...

As regards RE, increase in price of RE is in fact nothing but inflation. It affects everybody including you and me.

Re price inflation has been traditional in India because of scarcity factor due to misgovernance reasons. There is 700 million acres of land in India, around 1 acre for every 2 people. Around 250 million acres of this is cultivable.

People cannot build homes in this land because there are no roads - you need a helicopter (or walk/bullock cart as actually practiced) to reach 90% of this land. Cost of land in countryside reflects acricultural output. Average is 50,000 per acre (price of 1 laptop). Highest possible yield of agriculture, as practiced in India is 2 tons of cereal per acre = 40,000 Rs at 20 Rs per kilo. Not counting input costs. Usual agricultural yield without irrigation is around 10,000 Rs per acre. Which is peanuts.

So the value of land is determined entirely by means of roads - if there is road, price is in crores. If there is no road, price is in peanuts.

Second we have bad laws. There are laws in every state which restrict building on agricutural land. There are urban land cieling acts which prevent easy manufacturing of large scale apartments. Tenancy laws are tilted against landlords, who prefer to lock up the flat than rent it (more in Delhi).

All of these create a scarcity of housing, which has the effect of making housing expensive.

Tenency laws paradoxically prevent people from getting cheap rental houses. Otherwise massive tenaments can be erected by companies and rent out 1000 sf flats at 1000 Rs per month (thats all it actually costs). But our govt is wretched and perverse and prevents this from happening by keeping archaic tenancy laws.

As a result, people pay the same 1000Rs rent for living in a slum in Dharavi. Actually much more.

Govt gains in multiple ways from this scarcity. Politicians finance and are financed by crooked builders. High value RE is a good hiding place for black money as well as corruption money. Congress traditionally has juggi jhopri vote bank - so they try to keep people poor. Their modus operandi is - you have to vote for me otherwise you lose even your juggi!!!!! Nobody publicises the fact that Congress laws are what created the juggi in the first place.

In any case, after 60 years of mismanagement, the scarcity of flats remains. At the pace in which govt is creating roads, there is going to be flat scarcity for my lifetime at least.

Venkateswaran K Iyer said...

But my fear for the near future is that multiple factors are converging to cause inflation all together.

First, the RE scarcity has been magnified by recent prosperity - salaries are up and a lot of people are looking to buy. People in their 50s, 40s, 30s, and even 20s are all entering the RE market at the same time. Last time this happened in 2004-2007, we had RE hyperinflation. Flat prices tripled in 3 years.

As long as our economy does well, this trend will continue.

Second, there has been good monetary action by RBI but exceptionally incompetent fiscal policy by the finance ministry. This includes NREGA, 6th pay commission and loan waivers. We have overspent govt funds crazily and this has caused an increase in money supply which makes inflation inevitable. This will be reflected in RE price. The govt servants and puclic sector undertakings have all got salary rise and arrears which will inevitably go to RE. It will also stoke inflation of food - where also poor govt policy has caused scarcity by destroying agriculture (17% of GDP last I heard).

Third, monetary policy of the whole world is loose and over 5 years is bound to increase raw material prices for oil and base metals, both will impact RE constructin cost.

Finally, currency movements in both directions will cause RE price inflation. If Rupee strengthens, then it means our economy is doing well and there will be more people quieing up for flats. If Rupee weakens, raw material costs will go up making flats more expensive to build. At the same time s o f t w a r e outsourcers will get a competitive advantage and will see pay rises - increasing demand for RE.

Venkateswaran K Iyer said...

There is one other thing - which many people who talk demand and supply do not understand at all.

In USA there are 18 million more dwelling units than there are households. 18 million vacant homes. But year on year the number of households is increasing because of immigration and more children by christian rightwingers.

In Europe, number of dwelling units equals number of households, with a mild excess which varies from country to country. There is a decline in number of households year on year due to declining population.

In Japan, number of dwelling units equals number of households. But number of households is dropping precipitously due to massive aging and population decline.

In China, number of dwelling units which in India will be called "pucca" exeeds number of households (YES!!!!!!). Everybody has a home, a TV, a cycle, a washing machine. Most current dwelling units are more than adequate by Indian standards. New housing is aspiratinal i.e. a luxury, as people earn more and want to better their lifestyle. Population is plateauing and is likely to face a 50 year slow decline followed by a precipitous drop much worse than Japan.

Venkateswaran K Iyer said...

Now you all know what India is. The vaaaaaaaaaaast majority live in tents/juggi/footpath/village huts without electricity.

A small percentage of this mass moves out of poverty every year. This will create a demand supply mismatch for the next 100 years. If India shows even 5% growth sustained for the next 20 years, there will probably be a 50% mismatch over this period i.e. there will be only half as many dwelling units as compared to households with income enough to buy/rent a flat.

Shortages and RE price inflation is inevitable.

Better buy now. RE price has only one way to go and that is up.

Current flattening is a buying opportunity, before the relentless RE inflation continues.

I do not anticipate good road building by Indian governments for at least 15 years. The only thing which can prevent RE inflation is road building. If govt builds roads, then it will dull the RE price inflation somewhat.

Since political parties are the main beneficiaries of RE price inflation, including election funding, it is in their self interest to misgovern India.

Venkat ND.

PS> Please do not bash me, I am not BB

Anonymous said...

Mr. Iyer,

First, thanks for the well-researched post. It is always nice to see numbers behind conclusions and you have done that. I think two things are missing.

1) Just like you have made projections for future demographics, you should make projections for future infrastructure. Roads and highways are being built at a crazy pace in India and this could change the pricing structure. Comments?
2) A significant part of the buying power in India is due to software/IT service employees. This is expected to taper off in the future as the Rupee appreciates, earnings (in dollar terms) decline and jobs move to cheaper economies like Vietnam and Phillipines. How is real estate going to track that.

I still think that RE in India is in a massive bubble since the cost of renting the same flat in cities like Bangalore is 1/4th the cost of owning it.

Prices may not go downhill for a long time, but they will probably stay where they are and let inflation catch up with the prices in a few years.

Ashok

Bindas Bhai said...

Venakt,

Nice piece of work, here i must point out that India is now emphasising on roads but still there is a long way to go. Congress at the center is anyone guess where RE is going go.

Keep yourself invested buy 1BHK if you cannot afford 2BHK.

Bindas Bhai

Venkateswaran K Iyer said...

Ashok, I agree totally with you - price will stay same. MAybe 10-20 % downside - noticed recently in NOIDA - is all.

Regarding roads - I wish our govt was building roads like crazy. Unfortunately it is not. Whatever it is building in the name of roads is also very poor quality. I am not seeing enough road building around Delhi to impact RE prices.

As I said earlier, Rupee appreciation will benefit general economy and manufacturing. Rupee depreciation will benefir software.

Either way one groups will do well and will queue up to buy RE.

That doesnt mean I am bullish on RE. If you are renting and dont have own flat and your job is geographically static, now is still OK to buy a flat on loan.

If you already have own flat, then you should not buy a flat on loan. Accumulate money and when you have more than enough, buy a flat - using some 30% of net asset value. This may mean buying a small flat. Buy for own use only - i.e. buy to secure your children's future.

Inflation means buying now before price goes up. But you should buy only for you or your children's use. Do not buy thinking rental yield will provide income - in inflation and flat scarcity you may not be able to evict tenants who may default with impunity. You know India - there is no law and order here.

RE is not the place for get rich quick thinking. That only crooked builders can do. Normal people should just be sensible and be aware of inflationary impact and safeguard themselves - without thinking they are financial geniuses for making a flat booking.

shailesh said...

(MUMBAI, INDIA) -- Land, apartments and single-family home prices in Mumbai are on fire.

Apartments that sold a year ago for Rs 17,000 ($3,650 USD) per square foot to Rs 18,000 ($3,865 USD) are now selling for Rs 27,000 ($5,798 USD) to Rs 30,000 ($6,441 USD) per square foot.

The Jaypee Group last week sold 600 residential plots in the Greater Noida Expressway area near Delhi for Rs 36,000 ($7,730 USD) per square yard. Today the same land is priced at Rs 39,000 per square yard. Brokers speculate the dirt will touch Rs 42,000 ($9,018 USD) later this month.


Mumbai Map

The Business Standard newspaper in Mumbai notes, "After a year of sanity, when property developers were reducing rates, even in premium (development) areas, it's a rewind (today) to 2007 and 2008, when prices had more than doubled in as many years on the back of strong buyer and investor demand, as the stock markets boomed."

Pranay Vakil, chairman, Knight Frank India property consultants, tells The Business Standard, "We have seen an up to 30% rise in home prices in the last six months.

"A lot of pent-up demand came into the market around Diwali. That, coupled with strong NRI (non-resident Indian) interest, has led to the rebound in prices."

He adds, "Most NRIs have invested in Mumbai property this time."

shailesh said...

Mr. Iyer, All valid arguments, but you are ignoring basics, which Income Vs Home prices. If incomes are not capable of affording the home prices, all these arguments fail.

As I posted in above article, Builders point to such articles and lets say ask for Rs 30K per sq ft. So for modest 1 BHK flat of 600 sq ft, you need 1.8 crore. Suppose one were to take 60% of that on loan, that is still 1 crore. The EMI for that would be 1 lakh per month.

In order to afford 1 lakh emi, income should be at least 3 lakh per month. So annual gross income of 36 lakh needed.

Now tell me how many percent of your middle class earn 36 lakh?

No body, not even FED in US agreed there was bubble in housing. They gave lot of reasons, just like you did. They had to pay hand over fist for that stupid argument.

Show me any study that gives percent of indian population by income brackets and resulting amount of housing demand and supply built in each year. Then I can agree that demand is significantly more than supply. Till then its all anecdotal evidences.

shailesh said...

Mr. Iyer - See the presentation here, esp slide #6. Out of total 24.7 million needed supply, only 0.04 are for MIG and HIG group. Most are for EWS group, which can not afford the house prices of today.

I don't see why India can't produce enough houses for at least 40,000 MIG and HIG group. I don't see why there should be supply shortage for this group.

power point

Anonymous said...

Can someone explain the broker mindset in India to me? I have been monitoring a couple of flats in an upscale area in Bangalore for the last six months. A 3BHK was listed for 1 crore and a 2BHK for 60 lakhs 6 months ago. The properties are on the market and obviously not selling.

I recently checked that they have raised the prices to 1.1 crores and 70 lakhs respectively. Using free market economics principles of demand and supply, I would call the sellers or their brokers morons. Any idea why someone in their right senses would do this?

Venkateswaran K Iyer said...

Shailesh, you are talking short term

I am talking long term.

Is there an oversupply today? Definitely. Close to 50,000 HIG type builder flats in Gurgaon are vacant. Around 5000 flats in Dwarka are vacant.

Close to 1 Lakh flats are proposed to be built in NOIDA. Another 1 Lakh in Gurgaon.

It will take 5 years to clear this backlog.

Yet, 15 years from now, you will look back and say - I am glad I decided to buy in 2010.

If buying already built flat, buy after 3 years. If booking unbuilt flat, book now - thats what I feel.

Survival can become difficult if there is inflation. Having own flat helps in survival - you need very little to survive if rent is not required.

Venkat ND

Anonymous said...

"Survival can become difficult if there is inflation. Having own flat helps in survival - you need very little to survive if rent is not required."

The above statement does not makes sense if one is paying a mortgage. Right now, monthly mortgage payments are 5 times the rent. If all hell breaks loose in the economy and survival is important, how do you expect someone to pay 5x to the bank compared to 1x to the landlord?

Only if you own a flat that is fully paid for, can you make such a statement. But then, if you start paying mortgage today, that will take 20 years or more.

Owning always makes more sense in the long term. But, under the current situation, renting and waiting makes more sense. Right now, India is in a bubble like silicon valley in 2005/6.

Anonymous said...

By Elisa Martinuzzi
BW Magazine

March 1, 2010

Finance Minister Papaconstantinou Jason Alden/Bloomberg

Goldman CEO Blankfein Ramin Talaie/Corbis

Goldman Sachs (GS), Wall Street’s most profitable securities firm and a boon to conspiracy theorists the world over, has angered EU regulators over its role as Greece’s enabler—helping the Greek government mask the severity of its debt problems early last decade. Goldman designed an off-balance-sheet currency swap deal that delivered a windfall to the Greeks shortly after they entered the euro zone.

Now there’s evidence Goldman may have also misled investors when it managed the sale of $15 billion worth of Greek bonds in subsequent years, according to a review of bond prospectuses by Bloomberg News. No mention was made of the Greek currency swap in sales documents for the bond offerings in at least 6 of the 10 sales the bank arranged for since the 2002 currency transaction.

Anonymous said...

Dr Doom: China Will Drag Down US Stocks By 20%
Wednesday, 17 Feb 2010 ~ Fast Money

In a rare interview, one of the Street’s most influential strategists sounded the alarm about the next leg down.

And the trouble will likely start overseas, that’s according to Marc Faber, author of the “The Gloom Boom & Doom Report”

You may know Dr Faber by his moniker of “Dr. Doom”, and when this man talks, markets listen. He correctly identified the tech bubble, and now he’s setting his sights on China.

Specifically, Dr. Faber is concerned about the way in which Beijing’s decided to slam the brakes on growth — via a sharp reduction in lending.

That he says, will drag down any and every company that soared higher during the recent China boom.

“I would not buy Chinese stocks here,” Faber tells the Fast Money desk

Anonymous said...

China in a dilemma as home prices soar.
Wed Feb 17, 2010

SHENZHEN, China (Reuters) - In the hard, exhaust-choked reality of his days trawling Longhua’s clogged roads, taxi driver Zhang Bo’s ambition to buy a small flat for his young family has slipped out of reach for now.

Housing Market

Like many Chinese who covet real estate as a symbol of stability and social stature, Zhang is dismayed at the alarming climb of apartment prices in his adopted city of Shenzhen in southern China.

“People can’t afford new flats anymore,” said Zhang, 28, who drives a taxi to make ends meet after his small electronics factory went belly-up during the financial downturn last year.

“It’s a very distant goal for us. Something we can only dream about,” said the spiky-haired native of Hubei province, who takes home around 6,000 yuan ($880) in cab fares a month. He likes to joke that he now has to work three months just to buy one square meter (three feet) of residential space in the city’s suburbs.

Venkateswaran K Iyer said...

@Anon 3.39

I agree absolutely. Mortgages are horrible things.

I think the right time to buy is around 35-40 years of age when one has children, good savings and reasonably sure of geographical location of job.

I am a firm believer of saving and making outright purchase / paying CLP payments from salary and savings.

Usually this means buying small and inexpensive flats - well within one's means.

Buy a small 2BHK and live simply is my motto. One doesnt need more (greed is a different thing).

Taking a loan is justified only for first flat for oneself and only when job is secure.

Second flat? Only for your children's future needs. Loan is not justified for this (purchase price becomes 1.8 to 2 times actual cost)

Anonymous said...

i have been reading this blog since last 4 years and reading prices will fall !!!

when???????????????????

Anonymous said...

price rise is proportional to the demand. The population in cities has been rising dramatically, so as prices. Don't expect any decline as our population is increasing rapidly so as the wealth of corrupt.

If and only if, the Maoist insurgency that is engulfing cities successfully spreads to cities, then the prices will reach a realistic level

Anonymous said...

Please read'that is engulfing cities'

as engulfing some rural areas of India

Anonymous said...

I too have been reading the blog for many years and now believe in the predictions of sabalseshu, bindasbhai likes. Most of the blogger s here have been comparing India with countries in europe/america and drawing satisfaction in the recession they are facing. I would rather be happy if they compare India with countries with similar stature, like pakistan, bangladesh, south america, africa etc. and arrive at their conclusions

Venkateswaran K Iyer said...

@Anon 5.17

Believe me, if and when prices do collapse and fall, there will be so much fear and delays/defaults in RE that you (and I ) will not be able to take advantage at all.

After 10 years in stock investing, I realised that timing is impossible.

After 10 years in internet (only 1 year on this blog) I also realised that doomsday predictions are very common on internet. One has to learn to ignore - or give apropriate weight - waiting for such predictions to come rue is silly. They rarely ever come true.

Venkateswaran K Iyer said...

@Anon 6.37

Do you realise that Maoists (and all other types of communists) are brainwashed by China for subversion of India and bring about its collapse?

If Maoists hordes overrun our cities, they will probably guillotine you and I and take everything we have including our flats. If you survive, you will wear a steel collar, speak in Chinese and work in a slave camp. No need to worry about flat.

@ Anon 6.46

Bindas bhai is probably Subbaleshu as well.

Although BB is unpopular here, I liked his old tag - dont time, dont time, dont time. I believe in this.

PS. Bashers, please do not bash me, I am not a broker and I am not BB.

Anonymous said...

The prediction in this blog is coming true!
I am buying a 3 BHKflat in bandra ( near a dusky bollywood babe's residence) @ Rs 64.34Lacks!!
The peak price was 4.34 crores ,so this is called real fall!!

Venkateswaran K Iyer said...

Enjoy!!!

http://www.businessinsider.com/henry-blodget-man-bulldozes-house-before-it-gets-foreclosed-2010-2

sabbalseshu said...

@Anonymus 9.38AM

Would you consider selling it to me for 64.34*5. You will harvest a profit of 3.22Cr. All expenses incurred including stamp paper etc will be borne by me. 3.22Cr is a nice sum. Safe investment will fetch you about 30 lakhs per month.

If interested contact me

Sabbalseshu@gmail.com

Anonymous said...

Sure Sabbal...

I need all white money and please provide your details. There is no shortage of fools like you to give me 5 times. Provide your phone number (not e-mail ID) and we'll go from there.

Again, all white as I don't steal money from Govt. of India and I'm not a thief.

Atul said...

@Sabbalseshu and his contender 'Anonymous'

Both of you are being childish. Why don't you people discuss reality instead of indulging in a fictitious auction game. As a resident of Bandra west,Mumbai, I know that prices have skyrocketed. Price for aq.ft concept is no more valid in assessing the value of a apartment. It is more like a auction where the highest bidder gets the flat. For every available apartment, there are 100's of bidders. So the value of property has reached beyond imagination

In Bandra, the black/white ratio is 75:25. Therefore you find the newcomers in Bandra are mostly government officials or their relatives whom the income tax department wont dare to touch

Anonymous said...

Anonymous who is buying house for 64L please post details.

Anonymous said...

http://www.propertyheat.com/2010/02/21/think-before-you-invest-in-real-estate-sector/2454/

Anonymous said...

Another article to awaken realty owners wannabe

ALL asset classes go through bubble and deflation phase without exception. This is true for Real Estate too...people who sink their life long savings into RE will suffer a lot in the longer term. If they wait till prices cool down, they will do the wise thing.

Worse, if they take a loan for buying the house, with the impending interest rate hikes in Budget, they will not only have bought houses at the peak but also suffer fantastic rate hikes. This might bankrupt quite a few people. Remember RE is illiquid. If you do not believe, try selling your house for the inflated prices being quoted..

Don't listen as*holes like Venkat and Sundaas Bhai, they are pimps for the RE whores.

Anonymous said...

64.34lakh apartment in bandra west!!!!!!No way. A 3 bedroom apartment in far of place like kandivili/borivili costs not less than more than double of 64.34 lakhs. If it is from reputed builder, it is around 1.2 ~1.5 crores.

I dont know how people can afford such exorbitant prices . I am on the lookout for a customer for my apartment in andheri versova (everyone talks about rate being 1.7 cr but yet to get a firm offer)and plan to settle in Panchgani where I have a place far from the slums and pollution.

Anonymous said...

Cong Govt. admits to faulty policies leading to inflation

So much for morons like Venkat! The easy liquidity policies of the Cong Govt has led to prices going up through the roof and what's more, we will have inflation for quite some time to come. But as far as housing is concerned, prices have only one place to go ---downwards!

Bindas Bhai said...

Current price will form a base and will start shooting once again from Sept 10.(Mumbai market) Kindly buy now or else you will end up paying more.

All the best Guys!!

Bindas Bhai

Anonymous said...

Feb. 23 (Bloomberg) -- India will borrow a record 4.6 trillion rupees ($100 billion) next fiscal year as debt payments double and the government only gradually withdraws policies to support economic growth, a survey showed.

Debt sales may rise 2 percent in the 12 months starting April 1 from this year’s 4.51 trillion rupees, according to the median forecast in a survey of 13 economists and investors before the Feb. 26 budget speech in New Delhi. The fiscal deficit may narrow to 5.5 percent of gross domestic product, from a 16-year high of 6.8 percent, Chakravarthy Rangarajan, the government’s top economic adviser, said last week.

India’s credit rating may be raised from junk if Finance Minister Pranab Mukherjee provides a comprehensive plan to roll back fiscal stimulus and improve government finances, Moody’s Investors Service said on Feb. 19. At the same time, Mukherjee needs to safeguard growth in the world’s second-fastest growing economy after China to boost tax revenues, Goldman Sachs Group Inc. said.

“Higher government repayments is expected to push up government borrowing,” said Deepali Bhargava, an economist at the Indian unit of ING Groep NV in Mumbai, who predicts bond sales will increase to 5.2 trillion rupees, the highest estimate in the survey. “The budget deficit is likely to be curtailed due to expected higher revenues and partial rollback of the stimulus measures.”

Anonymous said...

BB:
Can I get your phone number please for a friend.

He mentioned that he has listened to you and bought 2 flats. He said he needs your number as he will come and beat the shit out of you in case the prices drop in the near future.

There would be many other people looking for you. I've told my friend to contact Google and get your login details, IP etc and record it for future use.

I hope prices don't fall.

Bindas Bhai said...

Anon 8:50

People who have acted as per my advice has only saved around 25 to 35% till date. Please let me have your mobile number i will contact you.

Please don't take things personally i am only expressing my opinion and gaining a lot of knowledge from people like you. Sometimes some guys abuse me but doesn't matter, we all have emotions.

All the best guys !!!

Bindas Bhai

Venkateswaran K Iyer said...

Good Bye Vic.

If you cannot take the trouble to moderate properly, I do not want to be here.

Bindas Bhai said...

Dear Venkatesh,

Pls. do not go. We need people like you around. I really like your post.

Vik, I would sincerely request you not to be biased and kindly delete unwanted mails. This forum must help people take informed decision on RE. Earlier if you had moderated the post properly a lot of bulls would have participated and this forum would have been more helpful to a lot of people.

Once again Mr.Iyer please do not stop posting as there are only one or two people in this forum who are misbehaving.

Bindas Bhai

Anonymous said...

The current house prices are exorbitant and they are not supported by the fundamentals i.e. monthly salary,income. All the talk about the rise in home prices due to demand is simply crap. It is well known fact that the prices are being held at this artificial level is due to the grand bailout of these real estate companies / builders by the Reserve Bank of India and the Government of India.

Please check the below links.


RBI's move to restructure bad loans saves banks

According to CARE Rating Agency data, top 12 banks had restructured assets worth Rs 32,530 crore in the first quarter ended June 2009 taking their total restructured assets to nearly Rs 73,000 crore.

In December 2008, the RBI granted permission to restructure accounts that are likely to turn bad. The objective was to give a temporary relief to the industry which was in distress as a result of the liquidity squeeze.



Are real estate prices supported by your branch manager?


But estate developers have a friendly banker.
That is why property prices have fallen "only" by -20% and are now heading up again!

So, why this sudden friendship?

Well, we had a national election coming up.
Politicians possibly need money to fight elections.
Though this may be a coincidence.

And then many politicians - across political parties - possibly have someone they know from their family in the real estate business.
And they needed to rescue them.




Woes of home loan borrowers


When the problems faced by home loan borrowers were brought up during a meeting with the RBI governor recently, one of the RBI officials suggested that these problems can be taken to the banking ombudsman.
However, what the official did not know is that the ombudsman is not borrower-friendly. It would be nice if the RBI could do a sting operation at the ombudsman’s office to know how difficult it is for anyone to get justice.


The RBI allowed the banks to Restructure the loans when the real estate sector was on the verge of the collapse. It is the deposits of the hard working people which has rescued these crooks. The Bank didn’t take the permission from the depositor whether it agrees to bailout the crook or not. Since you ( the common man) has deposited the money i.e. lent the money to the Bank, it is at the discretion of the Bank to loan that money to the third party i.e. builder eventhough the bank knows that it is immoral. The Bank very well knows that the crook is going to suck the larger amount of money by propagating the false propaganda of "Buy now or the prices will rise".

One more reason for the prices not coming down because the lot of money has been raised via shadow banking system i.e. QIP ( the real estate company is selling itself), Hedge Funds, Mutual Funds, black market, Sovereign wealth fund etc where the cost of the money is very high. It has nothing do with the supply demand equation.

I know some of you are engineers, graduates in science etc and so you have studied and resolved complex problems related to Fluid Mechanics, Strength of materials etc. You spent a lot of time scrutinizing the facts and establishing the veracity of the claims by conducting the experiments. So please do the same thing with the "Economics". Please don’t take anything for granted and try to dissect the phony conventional statements. Try to understand the hidden motives of the bigger players who are on the lookout for every possible sucker with their friends in Media and the Banking industry.

Anonymous said...

@ Iyer Saar,

you are not being realistic. You cut and paste articles from some bullshit journals that don't make any sense in the present market. After all what do you want to prove.

I am a house hunter and can not afford to buy anything at the current prices. I also hope that prices go down. I've been watching the market and don't to a sign of it. Few people who have money are holding the majority population at ransom. There is nothing we can do.

Just go to any posh mall in mumbai and just observe the purchasing power of some people. These are the neo rich who dictate the commodity prices. The government is corrupt and they don't do anything towards tax evasion, black marketing etc.

Anonymous said...

Realty Stocks take a nosedive

The article(Being ETOI no doubt biased and yet..) says current sales is at 90% of the peak sales!! Which means there is an inventory overhang of immense proportions...

If one looks at the stock charts of DLF, HDIL, Unitech and India Bulls..all of them have nose dived. In fact they look like they are dropping from a cliff!

So much for the shenanigans of sundaas bhai and quickgun venkat rascal anna!!

Vik said...

Guys,

Lets not stoop to low levels and call each other names.
I know that buyers are extremely agitated that the government and the RBI in collusion with banks is doing its best in keeping prices from falling. The restructuring of loans and the absence of regulating black money is a reason why prices are so high. Citizens are angry but helpless.
There is a segment of people which has benefitted from this and they are holding everyone hostage.

India has gone thru high growth in the past however all good things have to end and we will see the end of bubble in the days to come.

To start the crash all the government has to do is to get a list of all buyers of properties greater then 1 crore in Mumbai/Delhi and then ask them to explain the sources of their income. The skeletons will start tumbling off the closet.

Maybe an RTI petition can be submitted to get this list. Just like in Zillow.com we can get a list of the sale prices, someone should do the same in Mumbai.

Any takers ?

Anonymous said...

NEW YORK: US home prices unexpectedly slipped in December but the annual rate of decline slowed, reinforcing the housing market's rocky road to Where has US bailout money gone?

The S&P composite index of home prices in 20 metropolitan areas declined 0.2 per cent in December, matching the dip in November, for a 3.1 per cent annual drop.

A survey had forecast that prices would be unchanged for the month and down 3.2 per cent annually following a 5.3 per cent annual drop in November.

The S&P/Case-Shiller US national home price index, which covers all nine census divisions, fell 2.5 per cent in the fourth quarter from the same time a year earlier. This measure, like the 20-city and 10-city indexes, have seen smaller annual declines all through 2009.

The national price measure had been down 19 per cent annually in the first quarter, 14.7 per cent in the second quarter and 8.7 per cent in the third quarter.

On a seasonally adjusted monthly basis, the 20-city index rose 0.3 per cent in December, S&P said, matching the November increase.

Despite this steady improvement, much of it on the back of government incentive programs that will end this spring, prices in December reflected the hurdles still facing US housing.

Unemployment hovers just under 10 per cent, foreclosures are running at a record pace and banks still own a massive amount of repossessed properties yet to be placed on the market.

All could test prices anew. "Many of the secondary markets, which were away from the center of the initial problem, are starting to feel the effects of the crisis," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

"While affordability has improved, confidence about the outlook has not, so there's hesitancy to move on purchases," he said.

Fifteen of the 20 metro areas saw price declines in December compared with November.

Three of the markets, Charlotte, Seattle and Tampa, posted new low index levels as measured by the past four years, erasing any gains seen in the past few months, S&P said.

Anonymous said...

Vik,

What a joke, sad you expect the impossible to happen

Anonymous said...

Problems for Real Estate Sector

1) Price Rise for Cement, Steel
2) Price Rise for Petrol, Diesel resulting in increased transportation costs
3) 10.3% Service Tax on the payments made for Under Construction flats. (Before the completion certificate of the Flat.)

All these factors would make Flats more and more unaffordable for buyers.

Also, the RBI and Banks will not be able to continue restructuring the loans forever, which are given to Builders and Real Estate Companies.

Seeing this high unaffordability, Indian Real Estate would start crashing in coming months.

Buyers, do not buy and do not get trapped.

rajni sharma said...

Hey this is really very nice post...
Nd one of your best post...Thanks
Flats in kolkata