Thursday, April 29, 2010

JLLM touting growth in IT industry

25 comments:

shailesh said...

Anuj Poori says Judge economy by Noodles, Cola and Chips !!! WTF !!! Which coolaid is he drinking.

The IT outsourcing will increase, but key question is what will be the margins. IT has become commodity, margins in India have become very thin. The salaries will support 20 Lakh Rs. houses, but will not support so called 50 lakh to few crore market.

Anonymous said...

95% of the new apartments in Mumbai between 2007~2009, be the cost 5crs or 5 lakhs, are bought by people with outright cash. One can verify these figures from registration records and statistics available with the builders. Now tell, what role IT industry has played in the abnormal increase in prices ? In fact, none. IT sector going up or down, is not going to make a wee bit of difference, at least in Mumbai.

In cities like Pune, Hyderabad, Bangalore and Chennai, the prices are somewhat connected with the IT industry as land prices have risen.

I still believe that the government and the neo rich are screwing us up.

Anonymous said...

Good I saw this video...Looks like a bunch of losers and this guy Anuj Puri is a conman and looks like the biggest loser of the lot..Maybe he is SUUUNNNNNDDDDAAAAaaaasssss BBBBHHHhhhhAAaaaaIiii......hhhaaaiiii....aaaiiii...aaii.ai...

Anonymous said...

Jonny Meghraj is puppet show and Anuj Puri is one of the Popats who just echos what his masters RE morons says There are desperate attempts to keep the hype nothing else which they know otherwise will collapse anytime

Anonymous said...

I agree to most of the comments by the bloggers who are saying that prices will go down. Even I want the prices to go down.
Most of the points like demand/supply, affordability, high borrowing rates for builders are fine.
But what is the argument about the black money, as RE is the only one so called asset which accepts black money. If someone with the black money keeps on buying the flats for long term, he is
1. Converting his money to white.
2. Getting the monthly rentals
3. And even if RE crashes he is not worried as he has invested for long term and his offspring will bear the fruits in the worst case.
Question is are there so many people in India who can keep on buying with the black money? I don't know.
Lowest IQ

Anonymous said...

April 30 (Bloomberg) — Volatility indexes show Europe’s fiscal crisis is jolting markets in Asia’s largest economies, with gauges in China and India jumping as much as in the U.K.

The AlphaShares Chinese Volatility Index, a measure of implied volatility on stock exchanges in China and Hong Kong, has risen 13 percent this week after Standard & Poor’s cut Greece’s credit rating to junk and downgraded Portugal, mirroring the similar measure of investor sentiment in Britain.

India’s VIX index jumped 15 percent on April 28, the day after the downgrades, and yesterday fell 7 percent. The indexes are based on options prices, and assess near-term expectations for the magnitude and rate of price moves.

“When markets react to a big spike in stress they look at simple indicators like a country’s debt to gross domestic product,” Sebastien Barbe, head of emerging-market research for Credit Agricole CIB, said in a phone interview from Hong Kong. “India doesn’t have any dollar debt, but it does have huge local-currency debt.”

India, Asia’s third-biggest economy after Japan and China, has pledged to cut its budget deficit to 5.5 percent of GDP in the year starting April 1, from 6.9 percent last year. At 13.6 percent, Greece’s budget shortfall is more than four times the European Union’s limit.

Anonymous said...

Anon 7:41 am

So what is your analysis on how is this news seems to be affecting the India housing?

Anonymous said...

Anon above:
You guys just cannot get it and are big idiots trying to prove people here how news are related.

Look at India's debt and how the RE is being funded in India. Look at from where the money is coming in India for loans. Look at if India gets downgraded, all the growth is fucked. Look at how the budget deficit is increasing. Will India be able to pay it back? Does India have enough money to pay for the salaries of the Govt. employees? How long can India borrow to live beyong means? Is the growth real or is on borrowed money and stuimulus? Is India going to see the same fate as Europe due to massive borrowings?
Maybe India will sell more stake in PSUs to make up money for deficit and pay its borrowing bills. But for how long???

Anonymous said...

Interesting. After going through the 8 comments, I want you go through my comment and comment on it

1. 'Lowest IQ' in fact has the highest IQ among you plus he has common sense

2. The bullshit about other countries, borrowing, debt etc doesn't make any sense in our real estate scenario. I consider this mere hallucination.

3. No doubt, IT guys are paid well but are not a position to play any significant role in our black economy.

4.Imagine someone having 100cr unaccounted money. Is there any other way to safeguard his future other than real estate.

5. Gone are the days when one could stash money in safe heavens . With the rapidly developing technology this could turn out to be the most unsafe places

6. The exploding population needs roof on their head. Migration to other countries to escape problems here might become extremely difficult in the future.Best investment is investing here. The safest sector is real estate

7. In view of all the above, I very much doubt the prices will drop.

DhImAn said...

Anon @11:39 AM

1. 'Lowest IQ' in fact has the highest IQ among you plus he has common sense

OK, but irrelevant. Just like Stephen Hawking has higher IQ even. True, but irrelevant.

2. The bullshit about other countries, borrowing, debt etc doesn't make any sense in our real estate scenario. I consider this mere hallucination.

Ah, but am I in the dream of the butterfly? Have you heard of Godel's incompleteness theorem?

The point I'm making is that you are making a statement, while simultaneously offering absolutely no reason why it is "bullshit" and a "hallucination". Perhaps it is you who is hallucinating?

3. No doubt, IT guys are paid well but are not a position to play any significant role in our black economy.

No doubt, you have never heard of leverage. A single IT guy can pay a small sum and book one or a half dozen flats. He can then wait for a bit and flip them. Then he can repeat the process. This will increase prices and otherwise play havoc with statistics that indicate prices are rising. Look up "velocity of money". Leverage combined with high velocity will make it appear as though the RE bulls are dead on.


4.Imagine someone having 100cr unaccounted money. Is there any other way to safeguard his future other than real estate.

But if there were another asset class that offered what RE does today, then wouldn't RE crash? As a prudent investor isn't it worth at least exploring the idea?

5. Gone are the days when one could stash money in safe heavens . With the rapidly developing technology this could turn out to be the most unsafe places

Well, a return to the old days would be a return to gold, not to real estate.

6. The exploding population needs roof on their head. Migration to other countries to escape problems here might become extremely difficult in the future.Best investment is investing here. The safest sector is real estate

Yes, people need a roof, but why in cities? They could equally well go and live in a village, where a roof is cheap.

7. In view of all the above, I very much doubt the prices will drop.

You are analyzing based on insufficient knowledge and insufficient data. Like the blind man who has no knowledge that elephants exist, and is only feeling the tail, calling it a rope, you are drawing an erroneous conclusion.

Anonymous said...

DhImAn:

What does your ID mean? Is it "The Man"? Even if its not, you are the man.

You have more correctly analysed the situation. RE thinktank will keep on posting absurd things. I just read that SBI has extended 8% rate till June 30. Looks like these banksters don't get it in their heads. Wait till a few of these banksters in US are behind the bars like Goldman is going criminal investigation. Very soon Indian banksters will also get a lesson when even one of them starts defaulting on their obligations. So far everyone is thinking that RE will not drop and their investments are safe. Once it starts going down, it will be in a freefall.

All the corruption will come out in the coming years. There is no way RE can be at the prices where it is today in India or even in China or Australia. The masses just don't get it.

Anonymous said...

I agree!! SBI's O. P. Bhatt is getting advice from Sundaas Bhai and Sussuu's..

Anonymous said...

The Indian Banksters have bailed out the real estate sector which was on the brink of collapse. They have just postponed the inevitable crash by restructuring the debts. The foreign cheap money and the unholy nexus of Bankers-Real Estate crooks - Politicians have wreaked havoc in the life of a common person.

Only hope is that people will wake up and vote out the corrupt CONgress government in the next election.


Are real estate prices supported by your branch manager?

People had stopped buying real estate.
Salaries were being held back - the days of the guaranteed 25% annual increase were over.
Jobs were at risk.
Offices were empty.
Businesses were closing down.

Real estate developers were about to go bust.
They were desperate for cash.
There was no money inflow from the sale of real estate.
But there were debts to be repaid.
And the real estate developers also had payment obligations for all the land that they had agreed to buy as they went about building their "land banks".

In this environment, what were the PSU banks doing? They were pretty busy lending money for real estate.


RBI tells banks to do a realty check

25 Sep 2009, 0407 hrs IST,ET Bureau

RBI’s unstated concern may the nature of deals that these SVPs have entered into. In the past five years, the Indian real estate sector has received close to $20 billion foreign direct investment, a chunk of which has come into multiple SPVs floated by builders to promote special projects. Tagged with this money, mostly in the form of quasi debt, are tough conditions, which local builders have to meet to avoid loan recall and litigations.

Anonymous said...

Todays times properties news paper edition was of 16 pages, normally its about 8 pages and last year when real state prices collapsed by 30%, there use to be only 4 pages of this news paper edition.

You can check yourself by visiting this link (valid only for 7 days)
http://epaper.timesofindia.com/

This itself suggest property market is in TOP OF BUBBLE RIGHT NOW (Lots of supply available but at speculative prices).

All it will take to defuse this bubble is some kind of crises situation which will crash real state prices by at least 30% in coming 3 years. Example, RBI increasing landing rates by 1%.

Extension in number of pages in times property itself shows following things:
1) There are tons of new projects coming up in city who are advertising in news paper.
2) There are tons of investors ready to sell their property at booming prices.
3) Tons of useless reporters are paid huge amounts to inflate this bubble by writing useless articles to sell advertising space (archna sinha, times property?).

This all means, tons of supply for new property is coming in which will kind of balance property demand in coming 2-3 years.

Anyone, who will now invest in real states will get bitch slapped by nearly no return in next 10 years.

At present, prices are not falling because nobody wants to sell at low price because builders are able to hold prices due to continues supply of money. IT companies are publishing robust results and salaries are ever increasing but you may have failed to notices average home in mumbai subrubs is selling for $150,000 - $200,000. Average IT employee salary is still $1200 per month and after taking incom tax he only earns $800 from which he has to pay super expensive food prices and now days fancy lifestyle which will cost him minimum $200-$500 / month. So all he is left is with $500 to repay his housing loan on which monthly interest itself comes to $1000/month!!! LOL and I am not even counting he has some kids which itself cost $200-$400/month and god bless them if he lost job and face some accident.

One of my friend who makes $2000/month is not able to buy house in thane because it cost $120,000 to buy decent home in thane and spends $1000/month out of his earning and is not getting load for more then $50,000. Now imagine if he lost his job or something went wrong with his financial during loan repayment period, his whole family will be on road.

In outsourcing world, this are not as roasy as TCS and infosys wants us to see, its because the are BIG , they are able to aquire contract from boeing and such companies who get billion dollar defense contracts from our government.

Hence, I highly recommend, if you are looking forward to buy home now, don't by and wait for atleast 12 more month.

SabbalSeshu said...

Dream on, for dreams are free. Tons of supply ???? that too in Mumbai? Property ads. are an effort to fish for higher prices and you guys just conclude that there are no buyers.

Step into the market and find out yourselves.
I don't want to dispute your book theories, world economy , IT industry, Roles of Banks etc etc. I'd just like to say that all this crap doesn't hold true in a highly corrupt society like ours.

If you want to find out the actual situation, just go and talk to few builders. They won't lie to you as sooner they get rid of the homes they build, the better off they are.

Anonymous said...

Anyone been here? How is the response?


http://yourgatewaytoindia.com/

India’s top developers to showcase premium projects to Non Resident Indian (NRI) diaspora in Santa Clara and New Jersey

April 22, 2010 Mumbai

The Times of India, India’s leading publication is organizing the first ever realty expo in USA titled ‘Your Gateway to India 2010’ to enable NRI Indians to invest in India’s booming USD$1.2 trillion economy. The Realty Expo will be held in Santa Clara on May 1-2, 2010 and on May 8-9 in Edison, New Jersey – two major hubs for Non Resident Indians (NRIs) in USA. Twenty leading developers will showcase their residential projects across India. The A-list developers participating include the Hiranandani Group, DB Realty, The Wadhwa Group, Nahar Group, Rustomjee, Godrej Properties from Mumbai, Jaypee Group from Delhi, Paranjpe Constructions from Pune, Confident Group, Reddy Constructions, Mantri Developers from Bangalore & Vijay Shanti from Chennai among others.

Commenting on the first ever realty expo in the North American markets, Sujoy Ghosh, Director, Times of India, stated “Given the long term growth story of India, real estate is probably one of the best asset classes for NRIs to enter at this point in time. We have put together a delegation of some of the finest Indian developers to showcase their projects to Indian Americans in New Jersey and Santa Clara. We are sure that Indians settled in America will find the platform engaging and enable them to make the right real estate investment decision”.

India’s population will rise to 1.7 billion by 2050 and will overtake China as the world’s most populous nation, according to the United Nations. It is entirely possible for India to move into the rarified domain of double-digit growth to be the fastest-growing economy in the world within the next four years.

Sujoy added, “Given the fact that there are fears of a double dip recession in the US market, it is prudent for Indian Americans settled in the USA to maintain a forward plan for the future by investing in real estate in India. Given the growth potential of India and also to build a risk-free hedge, it is the best time for Indian Americans to invest in the real estate pie back home and also ride the long term India growth curve. The two home shows in Santa Clara and New Jersey will bring together leading Indian developers under one platform. We foresee this to be one of the best interaction platforms in the real estate industry at the moment”

Nipun Jain, Senior Manager, MRICS, Colliers stated “Lately, many NRIs are planning to come back to India and are actively looking for properties for investment. They rent these properties till their return and use them later for their accommodation. Forums like these provide excellent opportunity to NRIs to meet developer face to face and understand about property in detail before buying.”

About the Times Group

The Times Group is India's largest media & entertainment conglomerate. The Times Group is a leader in the publishing business and an emerging leader in internet, music, retailing, multimedia and now broadcast. Brands create a "brand culture" where the organizing principle for all activity centers on delivering the brand promise to customers. A successful brand culture has been created when everyone in the organization thinks and acts on the idea that "I am the brand."Our brands maintain the leadership position in the marketplace by offering the best quality products and services to our consumers.

Anonymous said...

Anonymous @ 3:33 PM

Good analysis. The reckless IT guys are now out of market since the era of sitting at onsite and serving the outrageous loan is over. After having been kicked off from onsite, they are left in the lurch. The IT companies are screwing up the employees to keep the margin since they have been shafted by the clients with the steep cut in the billing rates.


Just check the fallout expressed in the comments of the following posts. The IT guys took the gamble and now are paying through the nose.


TCS to offer salary hikes, step up hiring

19 Jan 2010, 0645 hrs IST,ET Bureau

TCSers, Bangalore, says: Hi , I am a permanent employee in TCS , I am suggesting to TCS recruitment team , Please do not recruit peoples who are specialized in particular domain because the category of most of the people like a labor . TCS spoiling the carrier of specialized people. From the salary increment point of view, it is also a waste company . In Media we always get news about salary hike of 20 or 25% but in realty there is no hike for employee who get lower salary , hike is valid for only senior most people who already receive huge salary.


Infosys may have seen 4,000 staff exits in February
12 Mar 2010, 0705 hrs IST,Chandra Ranganathan,ET Now

Venkat ;( still with Infy, Bgl, says: Infy has set a huge impression in the outside world using media. I dont know how this survey conduting organisations give Numero Uno status. Apart form all these policies which is discussed there is more to add like night shift allowance (250 Rs /day) which is nothing compared to other companies, no shift allownace for doing early morning and late evening shifts. No money for oncall support, instead you pay 50 % of the total broadband billl from your pocket and do charity work for Infosys. Tranport is hell for people working in IMS who needs to work in Shifts. Be careful before accepting offer from Infy, because the figure what you see in offer letter is what you NOT get in your salry slip.



Let the Real Estate Brokers, Bankers, Real Estate Companies play the game.

Never interrupt your enemy when he is making a mistake
- Napoleon Bonaparte

Anonymous said...

There is no way prices should reach to the level what we see today when there is huge supply of 'land' available in mumbai.
95% of Mumbai building are 4-5 floors only.The famous Marin drive seaview buildings in one of the most expensive areas of Mumbai are 50 years old and are of 5 story. Potentially 10000+ new multi story buildings could be constructed sooner or later causing massive supply of flats. Likewise suburbs like Andheri and Mulund have 90% 4-5 story building which could be demolished to make a way for multisotried apartments.Again a massive supply of flats. Recently Godrej opened up large tract of the land they owned for realty. So in future there will be only flats and flats everywhere in Mumbai. Last but not least 60% of Mumabi lives in slums occupying same percentile of land area of Mumabai. That area will surely be opend up for multistory buildings.

Since builders are not touching these areas yet it only means they must have huge inventory of unsold flats. Once they get rid of it they will turn their eye to there areas.

Builders always work in tandem. They collectively make price increase decisions. Did you ever read stories about any Carporate wars between builders? Anyone escalating price war? You wouldnot because they work as one body and makes the final call about property prices. You and me can't do anything to control propert prices. Only a major global or local (calamitic) event could trigger price fall.


They have no option but to jack up prices to make some profit after having had bought lands at extranomical prices in 2007.

shailesh said...

High food costs force Indians to do more with less

Take M. Sakkthivel, the cook at a temple in Machimal Nagar, a fishing village not far from south Mumbai's financial center.

Each day Sakkthivel prepares a pot of sweet ground rice as an offering to Tirupati Balaji — a south Indian god, who sits on a throne draped with marigolds.

He used to use 7.7 pounds (3.5 kilos) of sugar to prepare the prasadam, or offering, but with spiraling prices, he's cut back to three.

Sakkthivel and the local pandit, or priest, have made their own sacrifices to keep their god in sweets.

"We used to drink tea whenever we wanted," he said. "Now we avoid it."

The residents of Machimal Nagar say rice, potatoes and onions cost about twice what they did two years ago.

Officially, food inflation neared 22 percent in December, a 17-year high. By March it had eased to 16.7 percent, with the cost of wheat 14 percent higher than a year ago and pulses like the lentils known as dal — a crucial source of protein in a nation full of vegetarians — up 31 percent.

shailesh said...

Rush: Cheap home loans will end in two months

Banks currently offer home loans at interest rates which are lower than their prime lending rates (PLR). The Reserve Bank of India is trying to stop banks from this practice. A new base rate system will be introduced from July 1, 2010, which will not allow banks to lend below the published rate. The base rate is expected to be 8-9% and banks will not be allowed to lend money below this level.

In such a scenario, if a bank wants to continue the scheme, its base rate will have to be low enough to accommodate teaser rates. “After June 30, we will have to figure out if we can accommodate it as by then the base rate will be in force,” said an SBI official from SBI.

shailesh said...

Sales drop 50% as realty prices get unreal again

Mumbai developers, who witnessed a revival of sales at hefty prices in the past six months, are now up against buyer resistance. With demand dropping like a stone, the sale of residential flats across segments has nosedived, property experts said. The drop is as high as 50% in some segments.

Says Pranay Vakil, chairman, Knight Frank, property consultants: "It is a different dilemma. On the one hand, demand for land has begun. On the other, demand for residential prices is slowing down.

shailesh said...

Complete article on previous post,

City developers, who witnessed a revival of sales at hefty prices in the past six months, are now up against buyer resistance. With demand dropping like a stone, the sale of residential flats across segments has nosedived, property experts said. The drop is as high as 50% in some segments.
Says Pranay Vakil, chairman, Knight Frank, property consultants: "It is a different dilemma. On the one hand, demand for land has begun. On the other, demand for residential prices is slowing down. The number is big, compared to last October-November. Those two months saw many flats being sold even as developers increased prices to almost the peak levels of 2008.''
Sandeep Sadh of Mumbai Property Exchange says it is a weird situation. "In South Mumbai, where there are no new constructions, people are deferring buying due to high prices even in resale flats. In contrast, despite having a large number of flats available in the suburbs, buyers are unable to buy due to unrealistically high prices.'' Sadh says his clients are sitting on the fence and have deferred buying till after August when prices may just become a bit realistic.
While high property prices is the biggest reason, Anuj Puri, chairman, Jones Lang Lasalle Meghraj, says the increase in mortgage rates had added to buyer worries. "One reason (why sales picked up earlier) was that pent-up demand from end-users and investors got fulfilled," Puri said.
"By investors, I do not mean speculators, but those who want to rent property out or sell it after a few years.
"Demand is now stagnant, which is right. But I fear that if prices go higher, it will result in sales dropping further. It will be a challenge for developers to tackle.'' Experts say the drop is significant for the peak season (March to May), when sales are usually high. During these months, prospective buyers come out in large numbers to purchase property for various reasons.
Though they grudgingly accept that high property prices are leading to slower sales, developers seem reluctant to take the first step in reducing prices.
"Sales have slowed down. Like other builders, I realise prices are high. But people seem to be accepting the rates, and bookings are happening. So, when will correction happen? I cannot say,'' says Hiren Patel of Atithi Developers, and adds: "But one has to accept that input costs have increased. Prices of cement, steel and sand have increased four to five times. It is bound to have a bearing on prices.'' Stating that sales have not been affected, Abhishek Lodha, director, Lodha Group, says high prices have affected the industry by 20%. This view was echoed by DB Realty.
Venkatesh Iyer of Siddhivinayak Real Estate Consultants says the number of inquiries he gets seldom translates into actual sales. "People's budgets have become constrained, as prices have increased exorbitantly. In Chembur, prices have jumped from Rs8,000 per sq ft to Rs10,000 per sq ft, to almost Rs14,000 in six months. High prices have affected the resale market the most, as owners find the next new flat to be more expensive,'' said Iyer.
A negative fallout of recent trends is developers have increased the carpet area-to-built-up area difference to 50%. "This is dangerous. The government must clarify the issue,'' said Vakil.

Anonymous said...

@ Anon @ 3:33 PM
You are absolutely true about IT folks.Excellent analysis.

Sometime back a friend of mine came to onsite for few months of work. During his stay he didn't even go to restaurant just for the sake of saving money so that he could use that saving towards the loan repayment.

Why do you want buy expensive property and spend your prime of life repaying mortgages?

I would stay in a rental place until time is right to buy property.



You dont to live in parent's house anymore because now you want your's own. Similarly your kids are not going to stay with you when they grow up. What is the use of all this? Stay is a rental place, go different places, see the world. Our youth period is priceless.It is not going to come back again.

One has to remember - "Insecurity is given but fear is optional"

jai Maharashtra!!

Anonymous said...

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0uVT.A.qRA8&pos=5

Dubai markets tanking on weak real estate. I don’t understand. CNBC told us the Dubai World debt crisis was “contained.”

Anonymous said...

Only RE can give these kind of phenomenal return.

http://timesofindia.indiatimes.com/NEWS/City/Mumbai/Snobs-pay-more-for-old-SoBo-buildings/articleshow/5884401.cms