Monday, August 02, 2010

In Mumbai, flat sales drop 30-50% in 4 mths due to inflated rates

Times of India has this article. Looks like they have to tell the truth after all. Buyers have to be wary of the high builtup area which seems to be heading to 50% from the usual 25-30%. Also now a days there is no water supply graned to new buildings until end of 2011. I think by the time 2011 comes, they will move it another few years. Best to buy something ready construction with no water issues.


MUMBAI: Mumbai’s builders seem to have priced themselves out of the market. Sales of apartments, on an average, have dropped between 30% to 50% over the past four months as end-users, discouraged by the high rates, are staying away or postponing their decision to buy their dream house.

But developers are not perturbed. Except in 2008, at the height of the global economic meltdown, they have been riding high on the real estate boom that started seven years ago.

According to sources, most builders have a good staying capacity and can afford to hold on to their prices despite the drop in sales.

A property expert said sales in the suburbs had fallen by more than 40%. "Investors from certain financially rich communities have formed a cartel and are driving up prices. They are trading in real estate by buying flats in bulk and selling in retail. On the other hand, the genuine purchasers are not buying flats at these inflated rates."

It is learned that many developers artificially jack up their rates by, say, more than Rs 1,000 a sq ft, and then play out the charade of giving a discount of Rs 1,000 a sq ft to a potential buyer. Moreover, in many residential projects, the difference between the built-up area and the carpet area is now almost 50%.

More here

74 comments:

Dajiba said...

Be cautious of TOI reports. This is the worst corrupt newspapers and its promoters are the very people responsible for blck marketing and corruption. Do not base your financial decisions on newspaper articles as most are there to help corruption.

Desi Batman said...

Wow... now we can all afford to buy house!! yeeeaaaaahhhh. oh read headline again, this time carefully - "flat sales drop 30-50%".. oh sales and not the price.

As I mentioned in my earlier other posts. These are mind games, rise RE prices by 100% year over year for 7 years and then reduce by mere %50 of the peak prices, effectively making RE price to 650% of original affordable price.

and the music continues...

Anonymous said...

The drop is much more than 50%..As the bubble grows and the greed and blatant lies of the builders grows,inventory levels are atleast 50% in Mumbai and if you keep moneyacross table, builders are eaily negotiating 25% minimum across prime localities..SO friends,the day RBI acts tough and hike rates to contain severe inflation and banks do not restructure loans to builders anymore, we will see places like Parel back to sub 12-14k and suburbs back to sub 6k..Patience is the key and not to lead into marketing gimmicks and lies of the builders..Its all going to crash by atleast 30% and we will see some big financiers/builder and some rotten politicians money getting wiped out..

Anonymous said...

Use the thumb rule, if a common man cannot buy a decent apartment, no way it is going up. This needs to be defined and analyzed by experts to decide what is bubble of property at any given point of time. IMHO only people with disposable income or speculators buy at or around peak of real estate bubble. This should influence common man with median income.

Anonymous said...

I had lunch with a Chinese Professor yesterday and we talked about the issue of corruption. He mentioned to me that in China you get the death penalty for corruption. wish that India had such a penalty, we would not have enough rope to hang all the b*st*rds, plus it would bring down the RE prices too with it.

Anonymous said...

I don't live in Mumbai. But, I see stories of waterlogging and infectious diseases in Mumbai all the time. How does a city that has massive infrastructual problems deserve such high real estate prices?

Here is an interesting link on Wikipedia that might shed some light:
http://en.wikipedia.org/wiki/Dutch_Tulip_Craze

Rahul Bajaj said...

flat sales drop 30-50%!!!!!!!!!!!!!

Reason:

Shortage of new ready possession flats

If you are on the lookout for new flat, just go and find out yourself . No new flats available between Andheri and Goregaon. Some available for resale ask 20% more than the builders price, so genuine buyers postpone their decision to purchase.

There is a acute shortage of accommodation in Mumbai, so the prices are going up.

Anonymous said...

Well said Rahul, Anon: 7:58 stop bull shitting tell us which builder in Mumbai is giving discount of 25%.

Anonymous said...

Anon 6:59 PM

But China also has the property bubble which is bigger than India. Please refer to some of the previous post in this blog.

We enjoy the freedom that the countrymen in China can't. China executes more people every year than any other country. In early 90's I read in one of the newspaper that that year some of people were executed included the crimes like stealing a toothbrush or stealing a tennis racket.

Chinese workers have to work in inhuman conditions. And they were not allowed to form an union earlier. Recently as per WTO norms they are able to form it and you can see as a result there were some strikes.

Our democracy has flaws and it needs to mature. But the prime reason of the issue is that we do not participate, we only comment. We move out of the country blaming the system. But we forget that the country in which we have migrating to, built their system over a period of time. They also had corrupt people but some generations took up on themselves to change it.

Yes India is not right but we cannot make right by some extreme laws.

samix said...
This comment has been removed by the author.
samix said...

anon at 5:17 am , is your blood group B +ve ?

Anonymous said...

@ Rahul Bajaj 3:23

Wow!! so much for shortage. Why this shortage now? that means all the previous years people didn't have place to stay?

Reality is that investors buy flats in bulk (read discount) from builders when new construction is going on. They hold on till construction is complete or till the time they can hold on for high returns. This gives impression of high demand and shortage.

So theoretically it is true there are no new flats available.... but are they not really?

Poor end users have no choice to give in and buy with absurd price, after all they are left with limited choices.

Are you new to this game or just naive?

Desi Batman said...

Anon @ 5:17 AM
"Yes India is not right but we cannot make right by some extreme laws."

Correct. In India, corruption is now part of law and day to day life. Corruption is no more exception and no more shameful. It is respected and demanded.
Show me a single place where corruption is not requested, not accepted and not demanded.

Nothing changes on its own. Either we accept it or needs to have laws to fight against it. Unfortunately, we the Indians have accepted it... that too with open and welcoming arms.

Anonymous said...

Everyone is manipulating statistics. The GOI is saying inflation is reducing because the WPI is now 9.something, however, what does this matter in the ground? Prices of all commodities are still sky high!

Same with builders and newspapers..30%-50%...where do they pull these figures from.

Like someone said long time back - lies, damned lies and statistics!

Anonymous said...

Desi Batman

I disagree with you on the statement that there is corruption everywhere. With my experience I can tell you that in RTO Pune you don't need to pay bribe or don't have to go through the agent to get your work done.

I am not saying there is not corruption or there is little corruption. Yes the corruption is there and it is really concerning. But have someone tried denying to pay the bribe? We just pay whatever is asked by the builder without seeing whether we get a receipt for that.

I haven’t bought a house yet, but one of my friends has. His builder asked him Rs 3000 as legal fees for the registration, which he said will be given as bribe. My friend asked him whether he can do the registration himself and not pay the amount. The builder accepted it and amazingly my fried could do the registration without giving a single penny as bribe.

Desi Batman said...

@ anon 7:36 AM

"I disagree with you on the statement that there is corruption everywhere."

You disagree.


"I am not saying there is not corruption or there is little corruption. Yes the corruption is there and it is really concerning. "

Then you agree. Please make up your mind.


"But have someone tried denying to pay the bribe? "

I have... here is the list I have dealt with:
police, traffice police, RTO, customs at airport, at customs offices, at port, at post office, at passport office, at MTNL, BMC, at university colleges, etc..

Some issues were several years, some recently and some ongoing.

WTF you are talking about, Yes, work will be done without bribe, at what cost? with several influencial calls and/or several hot agruments.. All were painful memories, the insult and agony that one has to go through when you deny bribe.

Do you feel calm and peace if you see a policeman?
Do you feel at ease and confidence when you step into Pune RTO believing that work will be done without bribe?
Do you feel that you don't have to fight resistance when you deny bribe?

I don't want this thread to be converted to corruption enlightment discussion so I will stop here and go out to cool my head (remembered some of SHITY Indian corruption releated memories.)

Anonymous said...

Desi Batman

I still disagree with your commnet of TOTAL corruption.

Please do not try to manipulate what I said just because you want to make a point. Please read carefully those 2 lines are different.

I am sure India is changing and will change for good if we try !!!

Kasbekar said...

NOT TRUE
Reality is that investors buy flats in bulk (read discount) from builders when new construction is going on. They hold on till construction is complete or till the time they can hold on for high returns. This gives impression of high demand and shortage.

No one in the right mind would buy block of flats in mumbai even benami. If you are familiar with mumbai real estate, it is inviting extortion. it is a disclosure to gangsters of the black money one has access to. To curry favors from underworld, the builder himself may provide information on such investment.

As Rahul Bajaj said, there are few unoccupied new flats in mumbai in east/west suburbs.

The solution to housing cost is government building large scale housing projects on the outskirts of the city with proper infrastructure. Now, this seems to be a impossibility as government machinery itself is involved in large scale land scams and construction industry indirectly.
Things are unlikely to change unless some revolution occurs

kasbekar said...

If one wants to buy a flat in mumbai suburbs costing 1cr, he has to shell out 45% in blacks which is 45 lakhs, 5% down payment in white and rest can be obtained from a bank for which ---he needs 1-2 lakhs to bribe bank officials. To summarise, one requires 52 laks cash outright. Now the person who has 52 lakhs cash, certainly can raise 45 lakhs but he needs banks help so that he doesn't fall on income tax radar.

How can we expect a price decline when so much corruption is there in the system. I too feel that the bubble-gibble theory can not be applied to a system like ours

Kasbekar said...

How true is the following statement:

Mind-numbing corruption, galloping food inflation, blood-curdling Maoism, life-ripping terrorism (homegrown and otherwise), daylight loot of natural resources (State-sponsored and otherwise), burgeoning trouble in Kashmir, States simmering from within and so on.

India in the year of the lord 2010 is, to put it in Confucian terms, living in interesting times; just over a year after the “nasty jolt” the Congress-led UPA gave the BJP-led NDA in the 2009 general elections.

M.J. Akbar - The Sunday Guardian

Desi Batman said...

@ Kasbekar 9:03 AM
"No one in the right mind would buy block of flats in mumbai even benami. If you are familiar with mumbai real estate, it is inviting extortion. it is a disclosure to gangsters of the black money one has access to. To curry favors from underworld, the builder himself may provide information on such investment."

Correct. What do you think these investors are? Person dealing in crores of Rs doesn't have political and underworld connections? Do some home work please. Try to dig and get to some inside connections to know the truth.


"Things are unlikely to change unless some revolution occurs"

SO TRUE. I concur.

Desi Batman said...

@ Anon 8:22 AM
"I am sure India is changing and will change for good if we try !!!"

Please highlight two words in your statement. "if" and "we"

Anonymous said...

Human Flesh Search!

People talk about revolution and change. Yes, we need to do it, yet there's fear.

I recently saw the movie V-for vendetta again and would highly recommend it.

There are things like WikiLeaks, anonmous bulletin boards etc..by which we can expose the shenanigans.

How do you destroy corruption? By exposing the people behind it! You say nothing will happen? Well this is the internet not someone's owned newspaper...try and see..

Anonymous said...

Anon above:
Make audio and video clips when people exchange money. Put them on youtube. Then have media look at it and people decide.

Desi Batman said...

Well looks like this thread needs more on corruption feed.

Corruption is open and rampant. Anyone read on CWG or just are busy counting money made or to be made in RE.

Did anyone ever dream of corruption free India... I did and woke up scared... thank god it was just a dream! ;-)

Anonymous said...

I don't understand why people are so fussy about the corruption. Most of the people who think there is rampant corruption have already ran away or are in process of running away.
So please leave us (poor and corrupt Indians) alone and be happy in your newly wedded country. We too are happy for you.

Bindas Bhai said...

By August 2011 we can expect Chembur (Diamond Garden) to be around 10k/sqft on carpet area.

All the best guys.

Bindas Bhai

Thambi said...

Anonymous anne, 1129 PM

Indians living abroad may despise corruption but have no reason to vent their frustrations here. Those who are expressing their opinion are people affected and are mostly resident Indians

You may be knowing about justice Dinakaran who amased billions by land grabbing and corruption. This m.fuker was appointed as chief highcourt justice of karnataka. but because of the protests, now he has been offered the post of chief justice of Sikkim.

It is not difficult to guess why. This guy must have blackmailed the supreme court judiciary that he would not go down alone. He must be holding documents pertaining to rampant bribery by the indian courts.

Now tell me, when those upholding law are utterly corrupt, how can a common man expect justice.

Thambi said...

Bindas Bhai anne,

Are you pulling our legs. Why are you posting wrong information. Oru b/r second hand flat is 55 lakhs in a dilapidated building. carpet area may be 350 sq.ft That is 15000 sq/ft

Please dont fool us anne

Bindas Bhai said...

Dear Thambi,

What I wrote is what i anticipate the price by August 2011. I feel there will be a correction/crash and the price mentioned in my earlier post is taking the correction into consideration.

All the best,

Bindas Bhai

Anonymous said...

Thambi Bhai,
well said. Even our lady president is involved in land grabbing through her brother. This is our culture, so no big deal

India need population control. One way to do it is starving the population and let them live in shanties is being carried out en mass currently. Starvation and diseases are the best way to get rid of the scum

Jai Hind

Desi Batman said...

@ Anon 11:29 PM

"I don't understand why people are so fussy about the corruption. Most of the people who think there is rampant corruption have already ran away or are in process of running away."


Your statement in better words: In India 'you either exploit or get exploited'. Also how about 'Can't beat them then join them.'

Desi Batman said...

@ Bindas Bhai:

If I read you correctly, we are going to see economy slow down? or black market in control? or some civic revolution?

What other factors make RE prices correction imminent?

As long as people have ability or confidence to pay the money (ransom) asked, this RE absurd prices will continue.

And if you are right... and if you are right, the downward trend will cause cascading effect of RE prices falling. No one wants to loose money, investors will have to loosen their belts.

Anonymous said...

Desi Batman

It's upto you what you understand in your "better words". All the best.

Anon @ 11:29 PM

Anonymous said...

Thambi,

No one but you pulled your leg when you bought that apartment @ Rs15000/sqft. :-))

Jokes apart, did you really bought it so expesive? Or you bought it few years ago and now the value has rose?

I would suggest sell now if you get a buyer and stay on rent for a year and 2. And then buy again once the rates go down.

Thambi said...

@Anonymous 7:32 anne,

You misunderstood me. I dont own a flat. In fact, I wish i I had but can't afford. I don't have enough Paisa and my salary is is not great, just enough to pull me through. Luckily i am not married.
I don't think i can ever buy a flat in mumbai unless i win lottery. In case if i do, i will move away to my place near chennai. I am fed up living in a matunga railway quarters.

Desi Batman said...

Mumbai makeover... Mumbai chawls set to become real estate gold mine. The builder lobby is ecstatic :

http://www.tehelka.com/story_main46.asp?filename=Ne070810mumbai.asp

So RE music is growing loud, but is it meledious... time will tell.

Anonymous said...

China planning stress tests on realty for impact of bubble bursting

Banks were instructed to include worst-case scenarios of prices dropping 50% to 60% in cities where they have risen excessively, the person said. Previous stress tests carried out in the past year assumed home-price declines of as much as 30%.

China’s property market is beginning a ‘collapse’ that will hit the nation’s banking system, Kenneth Rogoff, a Harvard University professor and former chief economist of the International Monetary Fund, said July 6.

Bindas Bhai said...

Dear Desi Batman,

What you have asked you is a good question which is very normal thinking. At this juncture I would not like to speculate on any of theses aspects. What i have done is some number crunching with my own experience.

If you look at real estate returns(25 years +) in Mumbai it is around 12% CAGR and 10k/sqft(carpet area) is what Chembur diamond garden must command. Currently the price are around 20k which is almost double.

I do agree that this logic is not as simple but real estate bubble can only be predicted (to some extent) with some historic data of that particular area.

Current scenario is not the same as what happened in 95 but having said that the FSI and other aspiration has also doubled. This is purely my guess, could be totally wrong.

I feel the market needs a small trigger to fall and this I feel will again come from USA.
All the best!!!

Bindas Bhai

Laloo Prasad Yadav said...

Come on guys.... Bindas bhai is here. Why no one is bashing him..?? Probably this time what he says is appeasing you guys.

We close our eyes and don't want to see the reality. If some one tries to point it out, not only we disagree but also attack.

Coming to correction predictions...

here Indian equation has many parameters. Black Money, Corruption, NRI Money, Unmatching population growth, So called GDP growth, change in the mindset of Indian investors, and many more....

With so many variables, analytical solution is almost impossible. Now comes a numerical/ empirical solutions. This depends solely on past data. Real time data is never fits in any of the harmonic trend, which makes the prediction almost impossible.

We can just discuss about the possibilities. And probably give strength to our convictions and feel good about future.

well.. lets just enjoy what ever comes. lucky one will be saved and unlucky ones will get screwed.

shailesh said...

The CBI is worried that Niranjan and Surendra Hiranandani, brothers and co-owners of the Hiranandani Group, may try to leave the country. They’re accused of defaulting on ` 9.36 crore due as provident fund for their employees for 2003-2004. Recently, they’ve ignored summons to appear in court.

The Hiranandanis have also been at the centre of another controversy. Hiranandanis had entered into an agreement with the MMRDA and the state to develop the 230-acre land under the Urban Land Ceiling (Regulation) Act in 1986, to build smaller flats for low- income groups in Powai. Instead, it created and sold mammoth luxury flats.

CBI issues look-out notice for Hiranandanis

Anonymous said...

Banks are not worried about 50% price drop. What they have advanced towards housing in term of mortgage is 45% of the market value. Even if prices go down by 60%, they are in the green. Black money factor in real estate is going to vanish, but investors are not worried to loose the this part of illegally hoarded money.

But this scenario is unlikely as the interest of politicians, govt officials and bureaucrats is at stake

shailesh said...

The Ochre Mountain

What's happening?

* Residential property prices in Mumbai and NCR are increasing sharply; average increases of 18-20 per cent over the past 12 months
* Ready possession properties in both cities are seeing as much as 40 per cent spikes in prices
* Price of housing in both cities is reaching a crisis point; unaffordable for the middle class

Why are prices zooming?

* Large speculative demand in both cities; 65 per cent of NCR purchases speculative in nature
* Some relief over the economy revival; buyers pay premiums for ready possession, willing to take a risk on future projects as investments
* Builders in JVs with land owners are holding on to exorbitant prices, especially in Mumbai

Desi Batman said...

Anonymous 3:19 AM

"Banks are not worried about 50% price drop. What they have advanced towards housing in term of mortgage is 45% of the market value. Even if prices go down by 60%, they are in the green. Black money factor in real estate is going to vanish, but investors are not worried to loose the this part of illegally hoarded money.

But this scenario is unlikely as the interest of politicians, govt officials and bureaucrats is at stake "


Very well summarized. Thank you.

Anonymous said...

I found this interesting article while browsing internet. Thought i would share it

Condos that cost less than cars

http://ca.finance.yahoo.com/personal-finance/article/cnnmoney/condos-that-cost-less-than-cars-20100802

Even in Dharavi a hut costs more than $15000 and I was astonished to read that a condo can be bought in Florida, USA for this amount.

Desi Batman said...

Anon above 6:47 AM

"Condos that cost less than cars"


Please do not compare USA to India. There is whole difference of culture, thinking, work ethics, financial game, real estate dealing, climate, etc etc.

These countries cater to different class of people.

Desi Batman said...

@ shailesh 4:41 AM
"* Ready possession properties in both cities are seeing as much as 40 per cent spikes in prices
* Price of housing in both cities is reaching a crisis point; unaffordable for the middle class"


- If middle class and below middle class are not buying then only rich are buying.
- So what happens to non-rich class? At these prices they have no choice to but to move of the rich class location. Therefore I expect boom in tier 3 and tier 4 cities.

RBI may tighten rates till mid-2011 - Credit Agricole

- means there will more and more black money dealing.
- does it really matter if rates rise if most of the dealing (greater than 50%) are in black.

ONLY THING THAT CAN TAME ABSURD INDIAN RE MARKET IS DOWN-ECONOMY OR CIVIC-REVOLUTION.

Anonymous said...

As long as people like Rahul and Anon 5:38 PM exist, builders will keep hiking prices and make merry..Buddy try negotiating and I have seen builders in suburs, Thane and Parel area willing to offer anything between 15-25% discount on selected projects once you keep money across table..This is no Bullshit..you stupid buyers..

Desi Batman said...

@ shailesh said...
CBI issues look-out notice for Hiranandanis


Media talks like Hiranandanis are lowlife criminals and are on hide. What a pathetic joke. We all know how this works in India. Super rich already know way out of this mess. Why now go after Hiranandanis for offense done almost 10+ years ago.

Looks like someone in hierarchy didn't get cut or wasn't happy with cut. All this hopla is to little more cut and things will be OK.

Anonymous said...

Anonymous 9:11AM chacha,

can you kindly list the names of some 'negotiable builders ' This info will be useful to so many of us who don't know how to proceed
Thank you

Bindas Bhai said...

NTC looks at Bangalore, Indore for land auctions

On Wednesday, NTC started an online sale of its 8.38-acre Bharat Textile Mill property in central Mumbai. On the second day of the three-day auction, the bid price reached Rs1,175 crore, against a reserve price of Rs750 crore. Among the seven bidders in the fray for the property are DB Realty Ltd, Indiabulls Infra Estate Ltd, Peninsula Real Estate Management Ltd and Videocon Realty and Infrastructure Ltd. The auction ends on Friday and, according to analysts’ forecasts, should reach Rs1,500-1,600 crore.


http://www.livemint.com/2010/08/05213223/NTC-looks-at-Bangalore-Indore.html?atype=tp

Good news guys welcome to the last lap, as mentioned earlier Mumbai is in for correction. For any normal person the above news will make him feel that prices in Mumbai will further shoot up but the question we need to ask is about the feasibility of these kind of projects. This news is a great news for the bears in true sense. It is just matter of time you will see panic.

A lot of builders have converted malls and office space into residential RE. These guys also claimed that they are in affordable housing but quietly backed out this because of greed and now once again focusing on high value projects. Readjusting their product portfolio to maximise their profits.

Please wait till June 2011, maybe earlier to see prices drop.

Chembur (Diamond Garden) 10k on carpet by June 2011.

All the best!!!

Bindas Bhai

Anonymous said...

Has somebody hacked into Bindass Bhai's account?

PropertyTeam said...

Honduras Welcomes You !!!!

http://www.trujillobeachecodevelopment.com/?ref=googcon&gclid=COqQr_XjpKMCFRMeDQodL1er3Q

Desi Batman said...

I think what we need is a big jolt from USA economy. Just like we had in 2008.... and all fall down.

Just like Bindas Bhai said, bigger the builder's high priced investment, better the bear market will be.

Oh by the way... is inflation down? Are the prices of commodities back to affordable prices? are we going to have another one day bandh?
Not so soon. People will live in shambles as long as price tag is hyped upto 500%.

Anonymous said...

Bindas Bhai, You the man, you made my day. Keep it up, I like your posting in new Avatar.

Anonymous said...

Bindas Bhai:

You seem to have great timing instincts. Can you please share your thoughts about bubbliness of markets outside Mumbai (Pune, Bangalore etc.). Do you think they are also due for a crash?

Anonymous said...

Mumbai Real Estate :
Check out latest land deals of 1500 Cr for mere 13 acre land...

It is MUMBAI .....

Such deals happened because there are buyers,,

So stop dreaming and get back to work.
Irrespective of you call it as black money, at the end its money.

and in Mumbai , you can convert 1 khokha from black to white as cheap rate as @ 1 peti , per khokha.. if you want to check goto Heera Panna ..

In MUMBAI everything else may go down, but direction for Property is only UP..


If don't believe in this, then keep dreaming, keep waiting ..

Desi Batman said...


@ Anonymous 10:14 AM

In MUMBAI everything else may go down, but direction for Property is only UP..


People who could afford to buy were only ones who had tons of money and/or who had (owned or bought) properties before the price rose to sky high. i.e. there were many who could afford.

So basically the past buyers or people with money will be benefiting... if the future buyers can afford to buy.

My friend, for game to continue, you need players. Players in these games are the future buyers.

Now, the future buyers are ruled out because of the absurd prices. So I am thinking where will the sellers find buyers?

Did you ever played game of monopoly? Sure the there will be single person who collects the most win.... but then GAME ENDS because there are no more players.

Make sense or want to keep ranting?

Thambi said...

@Anonymous 10:14 ,

what is khoka and Heera Panna. Are you some kind of Badwa of Bhais.

Whatever you are, the purpose of spewing bullshit is to discourage people from positive market research. Don't waste your time as the bloggers here have definitely have higher IQ than yours

Anonymous said...

As I understand from bhai log treansaction from Dubai, one Khoka is Rs. 1 Crore and 1 Peti means Rs. 1 Lakhs. Which translate to 1% deal from black to white.

Anonymous said...

hi desi batman,

i totally agree with you.

investor always needs buyers to offload their investment.

so investor needs to create panic by way of raising prices (with or without fundamental) or make scarcity (genuine or artificial)of their product.

this situation slowly leads genuine buyers or small time speculators to panicky buying
which is commencing point of bubble.

people having enough money on hand & not treating their house as investment will not going to suffer in case he is buying at todays rate. but people buying on emi needs to think twice or thrice before jumping on.

this party only stops when collapse of monetary system will take place in western world.

today USD is available at 1% a year to big banks which is converted in India @45-47 rupee & available to elite people of India who are also part of RE investors. all this money is fueling various type of bubble worldwide.

so there will be a collapse but no one knows where we are in bubble.

it looks like the party may take some more time to reach its climax.

Anonymous said...

I found this interesting article while browsing internet. Thought i would share it

Condos that cost less than cars

http://ca.finance.yahoo.com/personal-finance/article/cnnmoney/condos-that-cost-less-than-cars-20100802



I hear that investors from all over the world including India are now flocking to the USA to buy cheap property. Especially in places like Florida and Detroit where house can be had for the price of median annual income. Please send some Marwadis over..Need more investments in USA

Bindas Bhai said...

I dont know whether I am in a position to time the market.I strongly believe that no one can time the market. The best is not to be greedy buy when you see value and sell when you find something of better value. Bottom fishing is very dangerous.

I don't know much about Bangalore market how much it has appreciated etc but know for sure if Mumbai shakes you will feel the tremble even at Kanya Kumari the % may vary from location to location including Mumbai. I am currently invested in Pune and i know for sure with Mumbai even Pune will correct. I strongly believe Pune will become a Metro city in few years. I am betting on Kharadi. I know even this will correct if Mumbai shakes but I see value and hence i am willing to risk.

I am not trying to sell Kharadi to you guys because I know for sure when Mumbai falls, Pune will also go down.

Last but not the least Please do not time the market and buy where you see value and only IF YOU CAN AFFORD.

Remember the beauty of bubble is that we really don't know how big the bubble is but history is an interesting subject. Some bubbles will burst on their own after growing to certain size but for some you need to prick. We felt the prick in 2008 which deflated the bubble could have been worse but for congress coming back to power. Now if there is a prick there will not be any support and hence the fall will be more then 2008.


All the best.

Bindas Bhai

Anonymous said...

Bindas Bhai, great analysis. I totally agree with the points you raised. We need professional company which is beyond political manipulation and give very accurate rating on bubble to warn potential users.

Anonymous said...

30-50% is less, my real state broker friend told me times are very bad, transactions are not happening at all because of high prices of flats, he is not able to sell any flat in july 2010 where he used to sale 2-3 flats on average.

Only FOOLS are buying who don't care about their money or have lot of money in their hand. Everybody knows prices are going to come down because people simply can not afford it!

Anonymous said...

Mumbai the filthiest of all metros: Study

MUMBAI: For the first time, the government has ranked 423 class 1 Indian cities on the basis of their sanitation standards, and it may come as no surprise that Mumbai ranks not just lowest amongst the four metros but with its 46th position falls behind even cities like Kanpur and Guntur. Navi Mumbai with 11th rank is the city with best sanitation in Maharashtra.

Anonymous said...

Real estate brokers, builders, land mafias and political leaders are making a last minute effort to skim money from public. Keep away only then the market will correct. They might do paper transaction to show some movement and make desperate gullible buyers from making commitments.

Anonymous said...

Prices are increasing by 5 lakhs in a 3-3 weeks time. I started searching flat in bhandup Mumbai in Apr'10. Prices were 55 lakhs for 770 sqft 1 1/2 Bhk flat today same flat is quoting at 65 lakhs on 8th Aug'10. Who the hell in the world can afford such price rise.

Desi Batman said...


@ Anonymous 9:11 AM
Prices are increasing by 5 lakhs in a 3-3 weeks timeow. I started searching flat in bhandup Mumbai in Apr'10. Prices were 55 lakhs for 770 sqft 1 1/2 Bhk flat today same flat is quoting at 65 lakhs on 8th Aug'10. Who the hell in the world can afford such price rise.


Only mumbaites, delhiets can afford these price. how? Many people have made fortune when they bought same flats when price was 10 lacs. People upgrade from their old property by putting little money top of it.
Also, given the inflation in reality 50 lacs is not really 50 lacs. Think about this... what could you buy for Rs. 100 today vs. 8 years ago.

Only people whose earnings have not gone up in sync with inflation will be impacted.

As I said earlier, this shit will end when there are no more or less buyers. I believe we are already in that phase. Investors are now holding to the RE... but how long? Wait and watch the show till the end, hope you will enjoy fireworks.

I'm planning to get out (basically I am pushed out with unaffordability of living) of this country will I have chance. When things improve I can be back.

samix said...

I read the newspaper today and it says that oberoi builders tried to raise 14cr with an IPO but were able to raise only 7cr.

I guess this news itself says a lot about the potential that investors now see in this area

Desi Batman said...

Indiabulls Real Estate wins Mumbai plot for Rs 1505cr

Strategy is to first win plot even at high price and then pursue government to raise FSI. Builders have been following this plan for past few years. If they don't get more FSI, I would assume the deal at which builders bought plot would be in great losing deal.

Flats in Mumbai said...

Wonderful article.Very interesting topic indeed. Thanks to the author for explaining the facts so lucidly.

Looking forward to seek more of your fantastic post. Also, I have shared your website in my social networks! I feel the fact as investors buy in bulk and do not sell the flats. This gives an impression of high demand and shortage.

Anonymous said...

Why price of RE increasing day by day corruption every where
new construction watchman/ store keeper/ top bottom example if 10 load / truck sand delivered watchman / store in charge signed 15 load/ truck ( 5truck/load) shared money around INR 50000 all this three party (store keeper/watchman/supplier)
That extra cost covered from customer (new flat purchaser or investor) not only sand same scene other thing like cement / rod etc
And corrupted government authority like license and permit around 60 permission need for build building
Where 1 truck owner became 6 trucks owner within 1 year ( any how haram ka haram jatha hai just wait and watch)
Now a days 50% loading no problem for govt authority they getting easily (money) that money covering from customer
Other industry facing problem like rent, electricity, transport, fuel definitely in future faceing crise possible
Politician leader not interested anymore they interested in their own business politics how generate vote strategy for next election etc
Like other country everything decided by municipal corporation rent / only carpet area price payable and depend on calculate parking area, playing area, garden area should be mandatory
My great india not worried about anybody anything, we elected person , govt officials also
Any amitkum5566 * gmail.com

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