Monday, April 19, 2010

Land sharks grab land in Alibaug

One of the most picturesque places in Konkan is now getting destroyed by the land mafia. At this rate there will be nothing left but concrete structures all over the coast. As usual the government does nothing. One more sad tale in a one of the most corrupt states in the country.

92 comments:

Anonymous said...

mumbai is already worst place to live. Do you know driving speed here is just 10-15kmph. Yesterday, It took me 2 Hours To travel from nariman point to Malad Inorbit mall, that's only 40 kms distance.

Keval.

Anonymous said...

Alibaug has the same potential as that of Goa. A few acres obtained now can fetch you crores after a decade. Tourism is expanding at exponential rate and builders are on the look out for coastal places with beaches.

Already I have seen Bihari bhayyas selling chana-sengh etc on the beach side. Some ingenious ones have started makeshift temples on the roadside leading to the beach which acts as their accommodation too. Looks like those who have run away from Raj Thakrey have found better venues to settle down

shailesh said...

In Gujarati, we have a saying which translates to,

"Gold, Land, Women are three main causes of all evils".

DhImAn said...

That's why you Gujjus suck so much at life - you don't spend gold enough, you don't cultivate you land enough and you don't cherish your women enough.

To live life right you gotta spend some more gold, cultivate some more of your land and cherish your women more. Then you'll find that these three are actually the greatest wealth you can temporarily (while you visit this planet) call your own.

Of course, when you misuse them, you end up with stupid sayings like "Gold, Land and Women are the three main causes of all evils."

What's my standing to pronounce this? As one of the richest community in India - look it up - http://wiki.answers.com/Q/Richest_community_in_india

(P.S. Please - this is all in fun, so don't get all serious and all.)

Anonymous said...

Baba , stop calling names. Why are you against gujus. Have they contributed to the housing crisis

Land sharks grabbing land is game of the day for land is money. With the exploding population, land has been becoming dearer and dearer. Some guys with the connivance of politicians grab the land and make money. There is nothing we can do about it. Once the land is grabbed they develop it providing employment to local people. Isn't it better that the land is developed than leaving it at its original state

You guys are jealous because you don't have the capability/skills/might to grab the land

DhImAn said...

Awww, no one is against Gujjus, least of all I. Nor am I jealous. That comment from Shailesh was low hanging fruit - too ripe and too delicious to just ignore.

Anyhoo.

Sadly, humans herd - just like sheep, just like cows. We herd and operate as a herd. Check out Extraordinary Popular Delusions and the Madness of Crowds. This time we are making a collective mistake with real estate, with stocks and with the bubble economy.

It won't end well. If you disagree, I suggest you ask and answer "Why?" - otherwise you risk doing what everyone else is doing. That is, what the herd is doing. And yes, everyone can be wrong at the same time. Everyone agreed on geocentricity too - we all know how that turned out. Everyone agreed about tulips too. And so on.

The point is - this is not about the US or India or EU or Asia - not about USD vs INR, or about black vs white money. This is about herd behavior.

Anonymous said...

DhlmAn:

You are so right,it is about herd behaviour and also policies of all Govts.to promote RE by keeping interest rates low and providing massive stimulus.

China bubble is about to burst with Australia second in line.

Anonymous said...

The country at most risk might be Australia, with an economy driven by commodity exports and a ridiculous housing bubble of its own. I think the country is likely to experience the worst bust in its history.

Anonymous said...

‘China’s rising property prices pose a threat to the stability of Asia’s second-largest economy. Excessive growth in housing prices has directly undermined the ability of city residents to improve their living standards, affected financial and social stability. Local officials who fail to take measures to rein in growth will be held to account.’

Anonymous said...

Lol Nice theory!! Reminds me of a recent news item where a Iranian Mulla declared that earth quakes are caused by women dressing indecently.
You may attribute any theory to this phenomenon, but I'm convinced that this is all about money laundering. Now that another avenue in the form of IPL has opened, my contention is that things will get worse before they stabilize.

Anonymous said...

China, Australia, Bubble, Herd mentality!!!!!!

This is just like two street guys arguing whether Tata is richer or Ambani

Just a matter of curiosity. What brand of dope you are smoking

DhImAn said...

@ Anonymous of 11:00 AM,

Just a matter of curiosity. What brand of dope you are smoking

Obviously not a good enough one, since yours seems to be working far better than mine.

You speak from true ignorance of economics and of human history. I'd like to not sound condescending, but your lack of knowledge forces me to suggest that you do a little study before you start typing on a public forum.

May I suggest you start with Manias Panics and Crashes.

Sadly it is quite useless for the knowledgeable to debate the ignorant, and since the knowledgeable can't become ignorant (how do you unlearn all you know?) - the only way you can have a rational discussion is if you - Anonymous who posted at 11:00 AM - get some knowledge.

Anonymous said...

Anon at 11:00

Get your head out of your ass and think? If you are highly invested, it is time to sell. If you have not bought, wait for some more years.

If you are a thief who has stolen public money and wants to hide it, go to hell as God will take double that amount from you in the years to come.

Anonymous said...

IMF Warns od Asset Bubbles in China, India and Brazil::::

The International Monetary Fund (IMF) on Tuesday urged developing powers in Asia and Latin America to guard against the kinds of asset bubbles that caused wealthier economies to plunge into recession in the last two years.

Conditions were rife for emerging economies to overheat if governments are not careful: "Vigilance is warranted", the IMF said in its semi-annual Global Financial Stability Report.

Investment in poorer countries had plummeted at the height of the 2008 financial crisis. But a quicker recovery from recession than the industrial world, combined with record low interest rates in advanced countries, has turned the table in the last year.

While the return of those capital inflows was to be welcomed, "there's a risk that the volume of these may become too much of a good thing," said Jose Vinals, head of the IMF's Monetary and Capital Markets Department.

Anonymous said...

Mumbai: Interest rates on housing, automobile and corporate loans are set to rise with India's central bank hiking key rates in its monetary policy for this year unveiled on Tuesday to suck excess liquidity out of the system to tame inflation.


The Reserve Bank of India (RBI) also projected India's growth for this fiscal at upward of 8 percent, against 7.2 percent as per the earlier projection, while the annual rate of inflation at the end of March 2011 is projected at 5.5 percent.

Anonymous said...

Anon@ 11:00
Are you one of the high paid MBAs who has no clue about reality but just function for more and more money.

Kanekar said...

Very interesting!! I am skeptical of all the theories floated here as most of them were formulated in the west where everyone is accountable to their actions. Things are different here. Instead of theorizing, just step into the market, talk to some real estate agents/builders/resellers, then you understand the market psyche. Unaccounted money is the major contributor to the present state and therefore reserve banks lowering or upping interest rates have no real effect. Reserve Bank does not have control over the unaccounted money.

Kanekar said...

TOI news item:

NEW DELHI: ‘Mr Lalit Modi has had a trail of failed ventures and defaults till four years back but has a lifestyle now that includes a private jet, a luxury yacht and a fleet of Mercedes S class and BMW cars all acquired in the last three years.’

Bottom line:

Lalit Modi succeeded in screwing Shashi Tharoor but also got screwed in this process. The point is, the amount of wealth one can acquire if one is in a position of power.

In India, everyone is corrupt that includes Reserve Bank of India.

Don't put your hopes too high on the corrupt govt and its institutions

Anonymous said...

RBI has to raise rates more aggressively. They would work. 25 basis points does nothing.

RBI woulod have to raise rates by another 3% or 300 basis points in the coming 4-6 months to tame inflation.

As far as corruption goes in the west, Wall Street is running the Oval Office at White House. Greed and corruption is all over.

DhImAn said...

Kanekar,

Hmmmmm, let me address what you said point by point.

I am skeptical of all the theories floated here as most of them were formulated in the west where everyone is accountable to their actions. Things are different here.

That's exactly like when Westerners say that they are skeptical of Ayurveda because it was formulated in the East, where things are different.

In other words, they dismiss a theory not because it is right or wrong, but because it originated elsewhere.

I could ask you which theory you speak of - but you said you are skeptical of all theories - including even those that you have not heard of, such as that which is popularly called "Austrian economics", but should properly be called the theory of Human Action, which I recommend you look up.

Instead of theorizing, just step into the market, talk to some real estate agents/builders/resellers, then you understand the market psyche.

Ah, so these real estate agents, builders and resellers are economists? Or perhaps they can predict the future with accuracy. Perhaps they are omnipotent?

This is what happens when ordinary people like you, Kanekar, abandon your God given ability to think and start following the herd.

The reality is that builders, real estate agents and resellers are amongst the least educated people - think back - all the smart kids in your class became engineers, doctors, scientists, researchers. The second tier became lawyers and bureaucrats - then came teachers and professors, and so on - and finally the bottom layer, i.e., the absolute scum - became politicians, real estate agents and builders. If you believe them over your own intelligence, then you deserve to be misled.

continued....

DhImAn said...

... continued

Unaccounted money is the major contributor to the present state and therefore reserve banks lowering or upping interest rates have no real effect.

Money has an effect on prices. More money chasing less goods implies higher prices. Regardless of whether the money is accounted or not, bribe money or honestly earned money. RBI expands money supply. Every single rupee, every single paisa that is in existence was conjured up - fully accounted for, by the way - by the Reserve Bank of India. Who eventually gets his hands on it and spends it is irrelevant. It is also quite irrelevant how the spender acquired the money, and whether or not it is "declared".

As long as monetary expansion is rampant, Gresham's law will come into play and that hot money will be spent. In other words, create a liquidity flood and it must flow somewhere. Right now it is real estate. It was tulips before, and technology stocks a while back.

In the history of humans on this planet, there has never been a case of wild monetary expansion that did not fuel a bubble. And there hasn't been a bubble that did not burst.

Now if you had spent years studying human history, and the mathematical theories of systems and their stability you would see what I say as self evident. Sadly, you haven't and so you won't.

Reserve Bank does not have control over the unaccounted money.

It doesn't need to. As long as it can create money out of thin air, the money will flow somewhere. Manipulating interest rates and taxes - i.e., monetary and fiscal policy - can control the direction of that flow somewhat, but who cares? Herd behavior accomplishes what dictators and emperors can't.

The only prerequisite for that is an uneducated, gullible populace; and judging from the commentators on this blog, such a populace is abundant.

Finally, let me leave you with this thought - in a zero sum game, everyone can't be a winner.

sindbad said...

@DhImAn, Excellent points! I would love to hear an equally objective and logical rebuttal from the "bulls".

Anonymous said...

Very interesting discussion. I'm more confused after reading through the blog. The arguments presented by M/s Kanekar & DhImAn are thought provoking. However, both have failed to address the direction of housing market, i.e north or south.

As someone mentioned earlier, the money laundering IPL will certainly create further problems in the housing market. For once, Bal Thakersay has been right.

DhImAn said...

Anon @11:15 AM

Let me address the question of market direction.

Think of it in terms of speed. Let's assume you are in a car going at 50 km/h, but there is someone who arbitrarily changes the definition of "km". In other words, every second or so, a "km" expands a little or shrinks a little. Now, let us say that you change your speed so that the speedometer now reads 60 km/h.

Are you going faster or slower?

Obviously you can't answer with any degree of certainty because the length of the "kilometer" has changed since you measured 50 on your dial. If the new length of the kilometer is less than 5/6ths of the old length, then you are going slower, even though your dial now reads 60.

It is the same with money. The RBI, the stock market, the banks - all by virtue of their operations change the purchasing power - or value - of money on a small, but constant basis. Long term, the value of money has a pronounced downtrend, meaning that money loses purchasing power over time.

You may pay more for a flat in terms of Rupees in the future, but those Rupees will have less value too.

So it is rather meaningless to discuss whether or not the nominal price - just a Rupee number - will increase or decrease.

The important question is - will flats become more affordable? And the answer is - in the short run, no. In the long run, say after 5-10 years, with absolute certainty.

This is the characteristic of any bubble. In the short run, while the bubble is expanding, prices rise exponentially, making for low affordability. Then later, when the bubble bursts, you can get the same thing for a fraction of the earlier price.

So finally, in nominal Rupee terms, I would guess that prices would rise for the next few years till an eventual bubble burst. Then prices would collapse and stay down for an extended period. Look at every other country on Earth that had a bubble and you'll see.

And the best advice in investing is - buy low, sell high. Thinking laterally, this implies that as prices are on a rising trend, you should be on a selling spree; and as prices begin a descent, you should be on a buying spree.

For those who would have you believe the opposite - buy while prices are on an upleg - this is the worst investment advice you'll get.

Anonymous said...

@DhImAn

Thanks. Appreciate for replying

Regards

Anonymous said...

@DhImAn

For most parts what you is correct except for that the market is going to tank soon than in 2-3 years as you mentioned. I think the market will start tanking very soon. With BJP fighting for inflation, 85% of Indians being unhappy, and the current unsustainable economic model would crash things down.

What is needed is just a "chingari" from say Greece or Dubai or even India Defaulting on their obligations..

People here say Australia, CHina, EU etc are not related to India. Well, India is doing the same things what other countries have done in South Asia. This massive bubble will take the whole continent down for many-2 years, not just India but many other countries.

Cash would be king. I mean white money and the money hoarded by white collar thieves in India.

Anonymous said...

"NOT" hoarded by the white collar theft and bribery.

Anonymous said...

Real Estate Mouthpiece addmitting Housing Bubble --

Buyers shy away as realty gets costlier

22 Apr 2010, 0624 hrs IST,Avinash Nair,ET Bureau

There are numerous other young buyers who have not been able to buy homes after prices skyrocketted by about 30% since property markets picked up pace in August 2009. “In the last few months, we have seen several short bursts of price rise, so much so, that in spite of increasing our budget by Rs 10 lakh we have been unable to buy a decent living space within the city,” says Ms Parekh who till recently was working as a researcher with ISRO.

Anonymous said...

US Housing Bubble burst in full swing after a short lull

Foreclosure rates surge, biggest jump in 5 years

By ALEX VEIGA, AP Real Estate Writer Alex Veiga, Ap Real Estate Writer – Thu Apr 15, 7:32 am ET

LOS ANGELES – A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

Anonymous said...

DhImAn said

That's exactly like when Westerners say that they are skeptical of Ayurveda because it was formulated in the East, where things are different.

In other words, they dismiss a theory not because it is right or wrong, but because it originated elsewhere.


What crap are you talking, What are the Pharma MNC's doing in Inida for almost 90 years. Please be logical when you want to put across your point. Every Market is different forget US and India even Pune and Mumbai is different.


DhImAn said

Ah, so these real estate agents, builders and resellers are economists? Or perhaps they can predict the future with accuracy. Perhaps they are omnipotent?

We are hearing this logic for almost three years now from various people like you who perhaps would have gone and brought a flat after writing for years. Do let us know when you buy a house

Anonymous said...

@ DhImAn

Excess money will always inflate the asset prices and working class like us will suffer. You are trying to time the market which is very dangerous.

It is 2 early to say when the prices will correct/crash, all depends on demand, supply, liquidity and affordability.

DhImAn said...

Anon @ 10:01

What crap are you talking, What are the Pharma MNC's doing in Inida for almost 90 years. Please be logical when you want to put across your point.

So, we have here the last refuge of the ignorant mind - an ad-hominem argument. I didn't bring up pharma MNCs in India. You did. It doesn't address the point I was making - that the origin location of a theory has nothing to do with its validity.

Do you have a counterpoint to my point? Or are you just ranting because my logic disturbed you somehow?

Every Market is different forget US and India even Pune and Mumbai is different.

OK, lets see now. You are saying, "real estate is local". Then I submit to you - there are local bubbles in the local real estate markets. Who said anything about an India-wide or worldwide bubble? And who cares if there is one giant worldwide bubble or a million local bubbles?

I put forward to you that for the purposes of rational analysis, either case is equivalent. If you think these two cases are distinct - i.e., will result in different outcomes, please, without losing your cool, state why.

And you'd be doing yourself a favor by keeping your language clean. People who swear in the middle of a nice discussion on economics don't get taken seriously.

DhImAn said...

Anon @ 10:01 (contd)

We are hearing this logic for almost three years now from various people like you who perhaps would have gone and brought a flat after writing for years. Do let us know when you buy a house

Umm, read what I wrote about herding. Because people herd, it creates momentum, like stampeding cattle. It is difficult to stop a stampede, or change its direction. But once the herd changes its direction, it becomes nearly impossible to bring it back to its original direction.

Precisely because of this, markets keep rising till they crash - rather than going up and down gently. Once again, I reiterate that this has nothing to do with the US, or Greece or Japan or India. It is just the nature of markets and human action.

I have no desire to buy a flat in a city or a house when prices are irrational. Naturally I will buy when and if prices make sense, and if they don't I'll never buy.

But if you have money to spare, and you won't need to take on massive debt that will endanger your financial stability for the duration of the loan then by all means go buy a house now. If you have to borrow to buy a house or a flat, you are going to make a mistake.

This is because you really can't afford that flat; and you are renting money to live in it. You can either rent the flat, or rent the money (interest on the money is the rent on it) - and you are choosing to rent the money, which is a far more risky and dangerous game to play.

It's called trading on margin, and is the cause of quite a few failed marriages, divorces and suicides.

Anonymous said...

Anon @ 10:10

...You are trying to time the market which is very dangerous.

I am not trying to do anything, so no worries. Really. I'm neither trying to buy nor sell a house or a flat or anything else. I'm merely an indifferent observer. I was just stating a general investing principle; buy low, sell high - and pointing out that now, when prices are so frothy, it is like buying high. Makes no sense.

It is 2 early to say when the prices will correct/crash...

I agree - I have no idea when the market will crash. Nor do I care. The point is that it either will crash or it won't. If it does, I'll be cool, because I am not invested in the market. If it doesn't I'm still cool, because I am not invested in the market.

I do need a place to live, and bcause so many people have bought houses and flats, the rental supply is plentiful and cheap. Of course there are other, sometimes better ways to invest the difference, so what do I care?

DhImAn said...

That last comment was from me - DhImAn. Don't know why it showed up as Anonymous.

Anonymous said...

DhImAn

You are giving Ayurveda as an example and hence i spoke about Pharma MNC's thriving in India for more then 90 years. Indians have accepted Alopathy.

Frankally speaking comparing US market to India does not make any sense . You will notice in coming years money will flow from west to India. Urbanisation is less then 30% and India has lot of opportunities unlike west. I recently came across a vacancy for a support function (middle mgt) in an MNC willing to pay 30L PA.

We need to bear in mind that lot of couple with fat salaries and high aspiration is also driving the market besides investors.

You guys are trying to time the market which i always said is very dangerous.

BTW what goes up will always come down but who knows what the up and the down is.....

DhImAn said...

Anon @ 11:22

You are giving Ayurveda as an example and hence i spoke about Pharma MNC's thriving in India for more then 90 years. Indians have accepted Alopathy.

Thank you for proving my point. I was telling the exact same thing to Kanekar - just as Indians accepted Allopathy, and just as the west now accepts Ayurveda - we should judge economic theories on their merit rather than "be skeptical because they were formulated in the west".

I put it differently - saying that what Kanekar said was tantamount to a westerner dismissing Ayurveda without knowing anything about it, based only on the fact that it was formulated somewhere else.

Of course it is also tantamount to an Indian dismissing Allopathy because it was formulated in the west.

Since you rightly pointed out that this is not the case, and that Indians have in fact accepted Allopathy, you are effectively saying that we should also give due consideration to Economic theories, even though they may be formulated elsewhere.

Which was my point.

So, what is yours?

Anonymous said...

yes i buy your point on the above

Anonymous said...

Dhiman,

Your argument is good but please make your heavy words clickable to a dictionary. I have very bad vocabulary and I have to open up the dictionary pages 2-3 times for your each comment.
I must be in the one of the lowest level of people by your intelligence classification but please consider me.
;-))))
Keep on writing you are doing good.

DhImAn said...

Anon @ 1:04 AM:

OK, thank you for that.

Now my other points were:

Firstly, I am not trying to time the market. All I am saying is that based on an understanding of Austrian economics, of system design and stability analysis, of chaos theory and of human history it appears highly probable that there is a bubble in real estate markets in places like Mumbai, Pune, Bangalore etc.

If this is true, then the bubble is bound to burst someday. It is like you are on a train sitting at a platform and you see another train moving towards you, on the same track and at 100 kmph.

I'm simply saying that if this is the situation, then getting off the train is the only rational choice.

My second point is that you can go ahead and buy a flat or ten at any time if you have the money to do so. But if you don't and you need to take a loan, then what you are doing is a margin trade - you put a small down payment and the market loans you the balance to acquire the asset.

If you do this, and the bubble bursts, you will be liable for your loan payments, but won't be able to sell your asset to cover. You will become a debt slave - earning and paying off the loan. If you die, you'll leave your family in bad shape, with debt. This is a guaranteed way to ruin and despair.

So my point is based on simple survival instinct. Don't borrow money to speculate in a bubble, or even suspected bubble market.

Thirdly, and based on economic theory and based on human history, the biggest growth in a bubble is not when the rich put in their own money. This kind of growth is seen when the common man, usually illiterate in economics, decides to beg, borrow and steal to speculate in the bubble.

The smart money exits at this stage, having made handsome profits from the earlier rise in prices. They sell into the rise, leaving the common man stranded with debt and hugely deflated asset prices.

The common man, straddled with unrepayable debt then either becomes a debt slave or commits suicide.

Now if you disagree with any of these three points, I invite you (and everyone else) to continue this debate - we'll all learn.

DhImAn said...

Anon at 1:33 AM.

You have got to be kidding me. In your post I see 0 grammatical errors and 0 spelling errors.

You also got and spelled "Dhiman" correctly.

And even more, you seem to be getting the thrust of my argument.

That puts you in the top 1%, classified by intelligence.

Stop being so modest.

Anonymous said...

Dear Dhiman

What you are saying, i have been hearing for the last three years, request you to go thru the archive and let the forum know what is new this time.

Let us wait and watch and we will see how things unfold but one thing is for sure neither you nor i can predict the market.

All the best!!

Bindas Bhai

DhImAn said...

Bindas Bhai!

Hmm. Think of the Thanksgiving Turkey. (Or a bali-ka-bakra). He is fed since his birth and from his viewpoint, man is the best of all creatures, completely harmless, and who will continue to feed him forever.

This is the theory of the Thanksgiving Turkey - all the time, till Thanksgiving actually comes. In that one instant, the bird is slaughtered and the whole theory comes crashing down.

My point is that just because you've waited for three years to see a market crash and it has not happened does not mean that the market will never crash.

You said: "one thing is for sure neither you nor i can predict the market."

Speak for yourself! You may not be able to predict the market, but I absolutely can.

For instance I predict that the market will crash. It will also boom. It will also oscillate somewhat, and be stable sometimes.

In other words, I can predict what it will do with absolute certainty. I just can't predict when.

That's intended to be partly humorous.

Here's the partly serious part.

We can make contingency plans simply based on the "what" - without worrying about the "when".

For instance, we can plan for our death - which is absolutely certain - by writing wills, or by buying life insurance; even though we don't know the "when".

What's your plan for those who buy at bubble prices when the market crashes?

Anonymous said...

I'm generally a silent reader and after a long time am seeing some decent inputs without names being called. good job! keep those inputs coming.

in 2004, i was hunting around mumbai and even then I had found the prices to be generally high, so decided to wait and accumulate more cash for larger downpayment in future. Today, On hindsight, it was a foolish decision, I can't buy at today's prices for I would need to leverage twice as much as in 2004.

Bottomline is you can't time the market. This bubble would crash, but the so called 'bottom' would be at a much higher level which could be beyond many's comfort level. my 2 cents!

cheers, MB

Anonymous said...

MB,

When things crash, people herd for the exit.

So, the bottom might surprise people on the downside is my experience. In the US the prices fell drastically and this is despite the intervention of the Fed.

Think on the +ve side! The bottom will be far lower than 2004 in India I would think...

DhImAn said...

MB, I agree with Anon @ 11:01 AM. A crash is a non-linear event; i.e., the trend line, which is a smooth line, is broken and shows a sudden jump.

With non-linear events, who knows where the bottom will be?

Meanwhile, when you can rent for half your EMI, you can invest that other half and still make money.

Anonymous said...

Dhiman,

Considering the last part of your sentence "you can invest that other half and still make money" for the comment @11:10am, where would you invest your money considering the liquidity glut? I don't consider Gold as an investment, rather a hedge and a max holding of maybe 3% in a portfolio.

DhImAn said...

I'll reply in detail if you want, but gold is not an investment. Gold is money. Thus, if your portfolio were 100% gold (and I mean the physical, shiny, glittering metal, not ETFs or mining stocks), your investments would be zero.

Investment is something else - and at this time, commodities are good as investments. Commodity stocks are good, as are mining stocks. Oil is good, and agriculture is also good. Hospitals, pharmaceuticals, medical equipment makers - all fine. This is because all these companies produce human needs, and while prone to business cycles, won't generally collapse and die without warning.

Besides as population grows, the demand for these things grows; if you see a reversal in population trends, get out of these "human needs" sectors.

Anonymous said...

From Greenspan...no not from "Bubble Greenspan"...or..who solved every economic problem by "Greenspan Put"

Gold and Economic Freedom

Published in Ayn Rand's "Objectivist" newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967.

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

....
....

This is the shabby secret of the welfare statists' tirades against gold.

Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.

If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Bindas Bhai said...

Dear Dhiman

If you keep saying it is 10 AM in the morning, you will be true but once only in 24hrs. This is what we call timing of the market.

All the best to you.

Bindas Bhai

DhImAn said...

Bindas Bhai: If you keep saying it is 10 AM in the morning, you will be true but once only in 24hrs.

If I keep saying "You're going to die, you're going to die", I'll be right only once in your lifetime. But that will be a non-linear event. One moment you are alive, the next not alive. You did not grow older linearly, you just ceased to be.

Hopefully, you will see that the frequency of being right - once a day, once a lifetime, once a MahaYuga - is irrelevant. What matters is that when that event happens, how will you be prepared for it?

Also, since that asynchronous event could well be tomorrow - what have you done to prepare for it?

This is what we call timing of the market.

If by "we" you mean "I" then that is your definition, and it is incorrect. As the vast majority of humans understand it, this is not timing the market. This is simple contingency planning.

Timing the market would be if I bet that the market would crash on a certain day and sold short. In that case, I could well be wiped out if the market did not crash on that day.

Let me close with this thought: Not going long is not the same as selling short.

Bindas Bhai said...

Dear Dhiman,

Precisely that is what i am saying you are trying to time the market anticipating a fall. Greed is our enemy we all want to buy low.

A lot of people anticipated the same and did not buy even in Feb 09 when the market had corrected. I feel the prices in Mumbai will double vis a viz Feb 09. During this period Chembur was almost Rs8.5k (premium bldg) (diamond garden). A lot of people like you waited hoping to catch at 5k. These guys wanted to time (bottom fishing).

Urbanisation, demand & supply, Liquidity, affordability, aspiration and political will are the factors which will drive the market and not comments from so called experts.

I feel Chembur(Diamond Garden) will reach 18k by May 2011. Let us wait and watch about the so called crash when it comes and what the bottom will be.

All the best guys.

Bindas Bhai

Bindas Bhai said...

Urgent need for reforms
With 590 mn people in cities by 2030, a business-as-usual approach will mean urban India will look like one giant slum

http://www.business-standard.com/india/news/shirish-sankhe-urgent-need-for-reforms/392777/

Worth reading will give us some dimension where we are heading for.

Bindas Bhai

Anonymous said...

ICICI Bank back with 'teaser' club, cuts home loan rates
23 Apr 2010, 0700 hrs IST,ET Bureau

http://economictimes.indiatimes.com/personal-finance/loan-centre/home-loans/home-loans-news/ICICI-Bank-back-with-teaser-club-cuts-home-loan-rates/articleshow/5846452.cms

DhImAn said...

Bindas Bhai, Good points. I appreciate your participation in this civil and rational debate. Let me address your points one by one.

Precisely that is what i am saying you are trying to time the market anticipating a fall.

Not timing the market, no. Just waiting for prices to regress to the mean.

Greed is our enemy we all want to buy low.

I've never heard anyone say "buy high" and claim that that is good advice under any circumstances. Why would I want to shoot myself in the foot and buy high? Of course I want to buy low. This is not greed, it is basic common sense and survival instinct.

A lot of people anticipated the same and did not buy even in Feb 09 when the market had corrected.

I've never said don't buy - all I've said is that if you have to take a loan, then don't buy. If you are an Ambani or a Tata or a Gates, then by all means, buy a dozen or a thousand flats.

I feel the prices in Mumbai will double vis a viz Feb 09.

You could very well be right. Your Feb 09 call was right on the money - good call.

But, and this is important - India has suffered at least 17% inflation officially - perhaps closer to 25% in reality since Feb 09. This means that the money you pay for the flat has lost at least 25% in purchasing power since then. If your flat appreciated by more than 25%, you are ahead of the game.

If it even appreciated by 24%, you still lost 1% in real terms.

Meanwhile, like some Anon was saying, people have gotten 30% and even 50% salary hikes since Feb 09.

So for them, isn't that flat, even though more expensive in nominal rupees - more affordable today than in Feb 09?

continued...

DhImAn said...

During this period Chembur was almost Rs8.5k (premium bldg) (diamond garden). A lot of people like you waited hoping to catch at 5k. These guys wanted to time (bottom fishing).

Who can blame them? We all want to maximize our ROI (return on investment) - or value.

Buying something when you can afford it, even though the price has risen - is always preferable to buying when you really can't afford that thing and you have to borrow.

If lending money yielded a lower return than trading real estate, banks would become real estate brokers. But they don't - they prefer to lend money, that being more profitable.

Therefore, it must stand to reason that borrowing is always more costly than waiting and buying even at a higher price.

Urbanisation, demand & supply, Liquidity, affordability, aspiration and political will are the factors which will drive the market and not comments from so called experts.

Markets are creatures of opinion. They are being driven up by comments from so called experts on television. I am merely presenting the other side of the story. After all when hundreds of RE agents keep chattering that prices can only rise, we do see a rise don't we? So why can't the other direction be true as well?

I feel Chembur(Diamond Garden) will reach 18k by May 2011.

That may well be. But like I said before, Rs 18,000 is just a number. If suddenly everyone started making Rs 1 crore in salary per year, even Rs 18k in Chembur will be low. It is all relative to the purchasing power of money.

Without that you may as well say, "An elephant is big." and think that that is the absolute reality.

But from a logical standpoint, one must ask - compared to what? Surely it isn't big compared to a Boeing 747.

Let us wait and watch about the so called crash when it comes and what the bottom will be.

There will be a bottom in real terms alright. In nominal rupee terms, who cares?

I'm merely advocating a time honored principle - don't stretch your feet beyond your blanket. (Corollary - if your blanket is big, then go ahead, stretch.)

However, you seem to be saying "Buy now, buy now."

Why?

DhImAn said...

Urgent need for reforms...urban India will look like one giant slum

Then why would anyone want to buy a shanty in a giant slum?

Bindas Bhai, now you seem to be giving reasons why the real estate market will crash.

Bindas Bhai said...

Dhiman said:
I've never heard anyone say "buy high" and claim that that is good advice under any circumstances. Why would I want to shoot myself in the foot and buy high? Of course I want to buy low. This is not greed, it is basic common sense and survival instinct.

In this case you have shot by not buying in Feb 09. Greed or timing whatever you call my friend

Dhiman said:'ve never said don't buy - all I've said is that if you have to take a loan, then don't buy. If you are an Ambani or a Tata or a Gates, then by all means, buy a dozen or a thousand flats.


Tell me how many of us can buy flat without taking a loan. My advise will be take loan but EMI should not be more then 40% of your net income

Bindas Bhai said...

Dhiman said:You could very well be right. Your Feb 09 call was right on the money - good call.

But, and this is important - India has suffered at least 17% inflation officially - perhaps closer to 25% in reality since Feb 09. This means that the money you pay for the flat has lost at least 25% in purchasing power since then. If your flat appreciated by more than 25%, you are ahead of the game.

If it even appreciated by 24%, you still lost 1% in real terms.


What about the money which was kept in the bank, how much value has it lost?

Dhiman said:Who can blame them? We all want to maximize our ROI (return on investment) - or value.

Buying something when you can afford it, even though the price has risen - is always preferable to buying when you really can't afford that thing and you have to borrow.

If lending money yielded a lower return than trading real estate, banks would become real estate brokers. But they don't - they prefer to lend money, that being more profitable.

Therefore, it must stand to reason that borrowing is always more costly than waiting and buying even at a higher price.

Let the readers decide on your view whether to borrow at a lower price or wait and collect the money and buy at a higher price. Please remember House is a basic need and a stock or gold.

Dhiman Said:Markets are creatures of opinion. They are being driven up by comments from so called experts on television. I am merely presenting the other side of the story. After all when hundreds of RE agents keep chattering that prices can only rise, we do see a rise don't we? So why can't the other direction be true as well?

I always take a call on fundamentals and cycle and not based on experts. I will listen to them but my call is purely on my conviction.

Bindas Bhai said...

Dhiman said: That may well be. But like I said before, Rs 18,000 is just a number. If suddenly everyone started making Rs 1 crore in salary per year, even Rs 18k in Chembur will be low. It is all relative to the purchasing power of money.

Without that you may as well say, "An elephant is big." and think that that is the absolute reality.

But from a logical standpoint, one must ask - compared to what? Surely it isn't big compared to a Boeing 747.

You sound like a poet we all know that if the salaries go high then all the asset class across the board is likely to go up.

Dhiman said:There will be a bottom in real terms alright. In nominal rupee terms, who cares?

I'm merely advocating a time honored principle - don't stretch your feet beyond your blanket. (Corollary - if your blanket is big, then go ahead, stretch.)

However, you seem to be saying "Buy now, buy now."

Why?

All I am saying the prices will go up in Mumbai. Let the people decide when they want to buy.

All the best.

Bindas Bhai

Bindas Bhai said...

Dhiman Said:Then why would anyone want to buy a shanty in a giant slum?

Bindas Bhai, now you seem to be giving reasons why the real estate market will crash.


I hope you have read the article. It is the question of perception, you saw the negative aspects but i saw the hidden opportunity.

DhImAn said...

In this case you have shot by not buying in Feb 09.

Don't make me repeat that whole affordability/purchasing power logic again. I've already answered this.

Tell me how many of us can buy flat without taking a loan.

If someone can't, then he shouldn't. You're making me repeat the same logic, Bhai.

Make a counterpoint, or a new one. I've already addressed this.

My advise will be take loan but EMI should not be more then 40% of your net income

OK. So for a reasonable 1000 sqft flat, one needs about Rs 1 Crore, assuming Rs 10k per square foot.

If you borrow Rs 80L for this flat at say 8% fixed for 20 years, your EMI will be about Rs 67,000.

If this is 40% of your net income, then you should be making net Rs 1,67,500 per month, or about Rs 2.6L per month before taxes, or about Rs 31 L per year before taxes.

A safe estimate is not 40% of net - it is actually no more than 20% of net. That way, a years worth of salary is worth 5 years of payments and is manageable in case of loss of job etc.

By the safe estimate, you'd have to earn Rs 62L per year, gross to be able to comfortably afford today's prices.

Either way, this is already a bubble. A simple way to judge that is that this flat of ours won't fetch Rs 67k in rent per month. Which makes it a liability, not an investment. By definition a negative ROI is a liability.

Your turn.

DhImAn said...

What about the money which was kept in the bank, how much value has it lost?

More than real estate.

So you are saying that real estate is at least a better investment than keeping money in the bank.

I totally agree. Right now you are talking about investment, so then borrowing money to buy a house is the worst of them all - you are, after all, giving your money to both the real estate industry and to the banking industry. If one is bad and so is the other, then the sum is worse.

Please remember House is a basic need and a stock or gold.

So you are saying that real estate is a basic need - don't worry about it as an investment.

My counterpoint is that you can rent for a fraction of your liability. If you borrow money, you have acquired a liability. Common sense would dictate that you choose the lesser evil - the lower liability - renting.

Of course, if you can buy outright because you have cash then voila - go buy.

DhImAn said...

All I am saying the prices will go up in Mumbai. Let the people decide when they want to buy.

Sure, but will affordability in Mumbai go up or down?

DhImAn said...

It is the question of perception, you saw the negative aspects but i saw the hidden opportunity.

What hidden opportunity?

Besides, why are you listening to this "so called expert"?

Bindas Bhai said...

Dhiman said:Don't make me repeat that whole affordability/purchasing power logic again. I've already answered this.

You are not addressing my question.

Dhiman said: If you borrow Rs 80L for this flat at say 8% fixed for 20 years, your EMI will be about Rs 67,000.

If this is 40% of your net income, then you should be making net Rs 1,67,500 per month, or about Rs 2.6L per month before taxes, or about Rs 31 L per year before taxes.

Either you need to fall in this bracket of income not necessary single income can be double also, people also upgrade selling their existing house or buy in the outskirts if Mumbai. I know people have limited choice but unfortunately this is hoe property cycle moves. It will discount ten years future earning before it crashes and will remain stagnant for another ten years types.

Dhiman said:I totally agree. Right now you are talking about investment, so then borrowing money to buy a house is the worst of them all - you are, after all, giving your money to both the real estate industry and to the banking industry. If one is bad and so is the other, then the sum is worse.

People who have missed the bus will talk in your tone this is expected but later when the fear sets in guys like you will buy property just before the crash. Please dont take it personally this was just an example.

Dhiman said:So you are saying that real estate is a basic need - don't worry about it as an investment.

My counterpoint is that you can rent for a fraction of your liability. If you borrow money, you have acquired a liability. Common sense would dictate that you choose the lesser evil - the lower liability - renting.

Of course, if you can buy outright because you have cash then voila - go buy.


So finally getting into semantics to escape. Let the people decide whether it is their need or investment to each of its own.

A lot of people stay on company's acco and after retirement either they shift to kalyan using their PF money or go back to their village. It is the question of their priorities.

Dhima said:Sure, but will affordability in Mumbai go up or down?

We will discuss about the same in May 2011 i.e if you are around.

All the best.

Bindas Bhai

Anonymous said...

Vik,

I think you should ban bhai from participating in this blog

Shub Chintak

Anonymous said...

Shub Chintak,

I disagree with you. I feel Bindas bhai is having a healthy argument. Just because we think that the market is going to crash and someone doesn't, you cannot make such comments.
Otherwise how we are different than the land mafias, builders?
I agree with Dhiman on his points, but Bindas bhai also have some right points which are effectively countered by Dhiman.
At the end RE is not going to rise or fall just because of the discussion on this blog.
But what this blog is doing is educating the people, and helping them to hold their decision to buy.
We need people like Bindas bhai as his questions are the very same questions of a buyer in this market. If people finds counter to these questions, then it might help them to reverse their decision.
At the end, Congratulations Dhiman and Bindas Bhai, for having healthy discussion.

Lowest IQ on the earth

DhImAn said...

Bindas Bhai:

You are not addressing my question.

I'm sorry - which one? I thought I've addressed every point you've brought up.

Either you need to fall in this bracket of income not necessary single income can be double also, people also upgrade selling their existing house or buy in the outskirts if Mumbai.

Upgrading by selling existing house is different - you already have the money in that case. In that case you fall into my category of "I have money, how should I spend it?"

I know people have limited choice but unfortunately this is hoe property cycle moves. It will discount ten years future earning before it crashes and will remain stagnant for another ten years types.

Now you're confusing me. This is essentially my argument about a bubble and a crash. If you know this is going to happen, then why not simply wait for ten years? In real, inflation adjusted terms what you said is exactly what I am saying.

People who have missed the bus will talk in your tone this is expected but later when the fear sets in guys like you will buy property just before the crash.

What tone? Oh, you mean the tone of a stone cold rational who isn't confused about the markets?

Sorry, that was also just low hanging, ripe fruit. But seriously, what tone?

So finally getting into semantics to escape.

Nope. Haven't changed my points even one bit, so no escape, semantic or not.

Let the people decide whether it is their need or investment to each of its own.

That is self evident, ultimately everyone decides for himself. What I hope to do is increase the knowledge level of people so that their decision is based on better information and better knowledge. By contributing to this debate, you are doing exactly the same thing, and can no more influence someone's decision than I can. That doesn't make one of us right and the other wrong.

We will discuss about the same in May 2011 i.e if you are around.

OK, but I also want you to also think further out, say 2020 - and make the call now. After all, your Feb 09 call was spot on with respect to prices (not necessarily with affordability though).

So make a price and affordability call for May 11, and for May 2020.

DhImAn said...

I think you should ban bhai from participating in this blog

Why? He is participating in a civil manner in a debate that is raising everyone's awareness by presenting countering viewpoints. I thank him for that.

Anonymous said...

I am probably one of many silent readers on this forum. While I agree to Dhiman's points, I dare say I would have not been able to articulate them as well as he has. Well done!

I feel after a long time I have seen logical debate, without crude language. It seems to have pulled BB out of self imposed exile as well!! Welcome back Bindas Bhai (though I disagree with almost everything you say!!!)

My 2 cents on the topic: rental returns, increase in prices normally oscillate around a mean (trend line) with a cycle every 7-12 years. While the overall trend is no doubt upward, in the short term (2-4 years) prices can move in either direction.

Right now, rental returns are extremely low, prices have risen much faster than inflation (over last 5-6 years). Seems we are set up for a fall.

When this fall will come, how much it will fall by, etc. is impossible to predict, and I wont even try. All I know is, I am ready to wait: and loose out in the process if I have to.

Anonymous said...

"Right now, rental returns are extremely low, prices have risen much faster than inflation (over last 5-6 years). Seems we are set up for a fall."


Or - maybe rents will go up instead?

Anonymous said...

If you are expecting prices will fall, you are a fool.

If you are expecting prices will rise like they did in 2004-2008 then also you are a fool.

Buy property if you want to live in it, for investment there are allot more options. Think you are getting only 3% returns in RENT and if prices don't rise you will earn only 9% in 3 years and inflation will be 30-40% and you will actually loose money.

Due to inflation, Indian Rupee is going to loose at least 40% of its buying power in next 3 years thus people salary will grow at least 20-25% in next 3 years. This will compensate for current high prices hence prices will not fall.

If you are buying property now, you are actually paying for 2014 prices but hey what can you do if you want place to live?.

Property prices will never fall more then 10% due to continues supply of black money. When builders start project, they are backed by black money investors without any interest thus giving them power to hold prices for long time.

All other people posting about US, Australia and other theories are fools sitting in United States or some other place where there is no population and have robust infrastructure. In India its different and its crazy.

Remember, rich are getting richer and poor are getting poorer, this will continue to remain same otherwise congress government should not have come back in power in last election.

Jay

Dexter said...

DhimAn,

Glad to see your thinking is same as mine. I have been reading about austrian theory for 1 year now completely agree with you. I am able to see hydonics in the mainstream bubble economics.

Anonymous said...

BB,

Welcome, Nice to see you back. Kindly keep posting because the information you get is what finally matters. Till date what you have said has come true.

I am a desperate buyer but cannot afford and i am just waiting for the day when you will write that RE is likely to crash.

Now this forum has a very mature audience unlike past.

Dhiman: We also want you to participate actively. I must say that you are really adding a lot of value to this forum...

Keep posting guys

Anonymous said...

Bindaas Bhai,

Hats off to you and your assessment of the market, its coming true with each passing day. I really appreciate your views and your honesty in sticking to your guns. Be it RE or Stock Markets you have always hit the nails in the right place.
Just hope that all the serious end-users of RE paid heed to what you said and bought in the temporary trough that we saw beginning end 2008 to mid 2009. I just write on once in a while though I haven't missed reading a single post on this Blog and Indian Real Estate Forum for the past 18 months.
Thankfully I didn't blink even once while buying in the opportunity phase last year. The price of my property in Pune has appreciated 30% since. Though its only on books and doesn't make any difference to me as I am not an investor I don't think I would have been able to gather enough courage to buy at current prices.
And I followed what I learnt from some good souls here and on IREF - ready possession or resale at bargain basement in a house of my choice, no compromises.
I was just wondering where is our vulture with 50% guarantee?

Cheers,

NT

Anonymous said...

Bindaas Bhai,

Hats off to you and your assessment of the market, its coming true with each passing day. I really appreciate your views and your honesty in sticking to your guns. Be it RE or Stock Markets you have always hit the nails in the right place.
Just hope that all the serious end-users of RE paid heed to what you said and bought in the temporary trough that we saw beginning end 2008 to mid 2009. I just write on once in a while though I haven't missed reading a single post on this Blog and Indian Real Estate Forum for the past 18 months.
Thankfully I didn't blink even once while buying in the opportunity phase last year. The price of my property in Pune has appreciated 30% since. Though its only on books and doesn't make any difference to me as I am not an investor I don't think I would have been able to gather enough courage to buy at current prices.
And I followed what I learnt from some good souls here and on IREF - ready possession or resale at bargain basement in a house of my choice, no compromises.
I was just wondering where is our vulture with 50% guarantee?

Cheers,

NT

DhImAn said...

Congratulations for buying your dream flat, NT. I agree, Bindas Bhai made a good call.

Do you mind sharing the price, your loan amount, interest rate, duration of loan and your monthly income? Or did you just pay cash outright and buy it?

I just want to find out how affordable the flat is for you. Kinda like a case study.

In my book, if:

1. You have ready cash - black or white, I don't care;

2. This is going to be your primary residence;

3. You don't anticipate having to move away from this city over the next 5-10 years, or will eventually settle here;

4. You don't care where prices go - you only want to plant your roots;

then go ahead and buy.

In fact, if you have cash outright, buy a dozen houses - even for investment. That way, if you lose, you'll only lose your money. If you invest on margin, you'll lose your own money and others money (from whom you borrowed) and be in bigger trouble that you can imagine.

Anonymous said...

http://epaper.livemint.com/ArticleImage.aspx?article=24_04_2010_010_005&mode=1

Anonymous said...

The US homebuyers who defaulted on the loans or simply walking away are splurging on the goodies. How long will this charade go on? In the process who toiled hard throughout the life are getting shafted.


Rotten Sham Recovery

More evidence has arisen that the "strategic default" consumer spending thesis is correct - and that the economic recovery on the whole is based on a rotten sham.

The economic "recovery" we are now witnessing is based on theft, greed and deceit. It's a giant rip-off, a rotten sham. In this sleazy imitation of a free market economy, liars, cheats and deadbeats are the ones getting rewarded.

Anonymous said...

DhlmAn,

Cash outright? Even if I had that much I would not buy it that way. Bringing in a bank (like SBI, BOB, etc.) brings the security of due diligency and security.

Anyways, I am salaried and so had to do a 25:75 myself and bank resp.

It was brand new unoccupied which I bought as a resale.

I took the loan from SBI on 8, first year and 8.5 2nd and 3rd. I am also using their Maxgain facility whereby one can deposit surpluses to reduce interest burden on their housing loans.

DhlmAn I know exactly where you are coming from when you talk about looking at my purchase as a Case Study. You want to understand the psyche and thought process that goes in when salaried individuals make these decisions so am with you on that.

Even I have the same fears - job loss, salary correction etc. but you know what, I made two big mistakes of not buying in 2004 haggling on price, worrying about EMIs, etc and in hindsight I would have fully paid those houses had I started then.

The rate I paid last year was INR 3100 all inclusive in North-West Pune. Though I am not an investor, I do know that the good Investing Champions of the World are more worried about the downside when making a bet. I think I covered myself very well there, it can never go there in this lifetime.
Upside, feels nice but I don't care much now.
Here is why I think that INR 3000 is a Resistance Level for ready-possession good properties:
Labor, Cement, Sand, Interest Costs, and thousands of other costs will never allow prices to come below this level. Mind you, I am not talking about the Land Costs at all!

Cheers,

NT

Jayant said...

@NT 6:07 AM

You have not answered the following critical question

What is your monthly salary (not the fake paper salary showed on the offer letter) and how much is the EMI? i.e. the salary component towards this monthly obligation?

What is the "TOTAL" cost i.e. flat price+ Parking Charges + MSEB onetime payment etc?

Anonymous said...

If you had extra money to invest in India, where would you put it? Stock market, gold or real estate? There are lots & lots of people with extra money, what are they to so?

DhImAn said...

Well, Jayant asked the questions that I wanted to, so - we are waiting, NT.

And Bindas Bhai - where are you? I was expecting a response from you...

Anonymous said...

Anon@7:16

Depends on whom you ask the question. If you ask the likes of Sundaas Bhai, they will advice you to invest in Chembur area...where you will easily get 30% compounded annual growth over the next 10 years.

Of course omitting to say that if you invest 10 L in such a fashion you would get 1.8 cr!!

If you ask someone else, they will tone their answers depending on how they can get some benefit from your money...Its like a wise man said - never ask a barber whether your hair needs cutting...

Make your own decisions or the sussuu's and sundaas bhai's will have you for a snack.

Anonymous said...

SUNNDDDDDAAAAASSSSSSS BHAAIIIYEEE!!!

Anonymous said...

Some people never grow up

Anonymous said...

some people never grow up

Anonymous said...

Jayant @7.15, DhlmAn @12.47

As I already mentioned I bought in a resale so INR 3100 is an all inclusive rate - MSEB, Club, Parking. Paid only Registeration & Stamp Duty over and above this which you guys know but just mentioned.

Infact I paid this rate coz its an excellent product, should classify as a Premium Property and would rank at number 1 in the vicinity. Rates in the surrounding areas were hovering around INR 2600 - 2800 all inclusive for under construction and 2800 - 3000 for ready possession properties when I bought last year.

I think the problem with many is they will plan and strategize, do a lot of research if they are buying the lastest LED Flat Panel TV, nothing wrong with that but when it comes to buying a house they become gullible. I have seen many getting influenced and making impulse purchases. Mostly by the crafty Builders and their teams who hallucinate buyers. The poor innocent buyer gives into their spells as he envisions his dreams getting fulfilled. Enough of this consumer mindset thing for now but here's something more interesting to my story.

I began looking seriously at Pune from an Ad in a leading Bombay Newspaper for Paranjpe Magnolia in June'2006. The rates quoted were INR 2600 then and I loved their layout, had heard only good things about Paranjpe but I had some personal financial issues so could not make any commitments there. It got sold out and then began looking at Camellia and Crystal Gardens but never liked them so much. Also, at the back of my mind I wasn't ready to commit as I believe in - Maal deekhao, Paisa lo.

Come April'07 I got interested in Palash 1.0 but again it was just starting construction. Then I went around sight-seeing and saw Kumar Shantiniketan - how could people pay INR 3000 base rate to the most crappy layout is what I left that place feeling. There was just around 1 1/2 building constructed if I remember right and I thought living there we could know each day what ingredients went in cooking the daal at our neighbours place in the adjacent building.

And to answer your last question - I had been saving for a few years so I could have easily paid even 50% of the property down but have invested in Agricultural and NA Land in other places(values quadrapuled so far in 3 years). Land with 7-12, fencing, clear titles, etc etc.
I too don't believe in Paper Salaries, read CTC. I believe in hard currency, the one that gets deposited in your bank at the end of every month - that is what your salary is. I am not stretching myself at all on the EMIs.

I had written two pieces on this blog early last year urging all serious buyers to think through and zero-in on their dreams. Hope that many gave it a serious thought.
Cheers,
NT (Neutral Territory)

Anonymous said...

NT here.

Forgot to mention one important thing guys - had looked at Park Street Sapphire Park as well in April'07. Rates quoted were INR 2700 - 3100 base plus a lot of extras; some of it was Greek for me. Liked their phase I Ruby Park in ready possession but rates were high. All in all felt that this was going to turn out to be a concrete jungle. What's the point of having and paying for a 60 X 20 feet swimming pool with a significant portion of the 800 families and their kids would also want to jump in; a clubhouse where I will have to wait for 2 hours in the queue to await my turn on the Treadmill/Elliptical.
So gave up on that.
Thanks:-)

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