Thursday, February 10, 2011

Mumbai home prices may drop significantly from record highs

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Mumbai home prices may decrease by as much as 15 per cent over the next nine months as record high prices deter buyers, brokerage Edelweiss Securities Ltd said.

“The festival season of September-November, which typically accounts for a significant chunk of sales volumes in Mumbai, has been a dampener with tepid sales in new projects,” analysts Aashiesh Agarwaal and Adhidev Chattopadhyay wrote in a note reported on by Bloomberg.

Home registrations in Mumbai, India’s most expensive real estate market, fell to their lowest level in 20 months in November, according to brokerage Prabhudas Lilladher Pvt. Property prices jumped between 30 per cent and 70 per cent across India in 2010 with some markets surpassing 2007 record highs, Mahesh Nandurkar, a real-estate analyst at CLSA Asia-Pacific Markets in Mumbai, said in November.

Mumbai developers may be forced to cut prices to revive sales after banks cut down on credit to the sector and loans to builders became due, the memo from Edelweiss said. Development companies are facing rising borrowing costs and less access to credit after a corruption probe into loans to developers, according to Bank of America Corp.’s Merril Lynch unit and Ambit Capital Pvt.

70 comments:

shailesh said...

New Article wish Granted...

shailesh said...

Wringing times for realty developers

The struggle by property developers to repay the debt load they’d taken in brighter times continues. Unlisted property developers are likely to have a problem, even as big listed ones are selling land parcels to meet repayment obligations for the financial year 2010-2011.

For, while the listed developers such as Unitech, HDIL, Parsvnath, etc raised funds through equity via qualified institutional placement (QIP), unlisted companies which were planning initial public offers (IPOs) to finance their projects and deleverage their books are yet to float these, given the volatility in the markets. Over half-a-dozen real estate companies have got final approval from the market regulator to launch IPOs but are waiting for markets to improve. These include Raheja Universal, Lodha Developers, Lavasa Corporation and Kumar Urban Development. Together, they were looking to raise Rs 9,000 crore from markets.

The BSE Realty Index, which tracks the movement in realty stocks, has fallen 30 per cent since the beginning of the current financial year, showing investor apathy in realty stocks.

Home sales in Mumbai have dropped to half, compared to the beginning of 2010, as property prices in key areas have risen 40-45 per cent. Those in the National Capital Region are stable due to slow growth in prices, according to recent data from PropEquity, a realty research firm.

Realty companies are also borrowing funds from portfolio managers and private equity funds at high rates. In September last year, Kotak Realty Fund invested Rs 250 crore in two projects of Emaar MGF, by subscribing to non-covertible debentures. The NCDs carried a rate of 20 per cent. HDFC Venture funds invested Rs 500 crore in World One project of Lodha, by picking up 10 per cent stake in it.

Anonymous said...

Let the new rant begin

Anonymous said...

Spoke to some friends in NCR and they mentioned that prices haven't gone up in the past few months and haven't gone down also. Prices have been stable but toward a downward pressure. Sellers are willing to accept 4-5% lower prices as there are not buyers now.

Anonymous said...

Anon 9:48
Sellers are willing to accept 4-5% lower prices as there are not buyers now.

I have also seen this 5% correction in NCR but this is no good. When Nifty comprising of India's best 50 companies is trading down 20% from its highs and has erased all the gains of last year, why should property prices not reach the early 2010 prices soon? That would need a correction of 25-35% in NCR itself.

As for no buyers, well buyers chase what is going up. Let the govt. announce a 1 Re petrol price hike today and everyone will be running to petrol stations to invest in cheap petrol ;)

- V

Anonymous said...

I salute to Supreme court taking 2G scam seriously in hitting hard on govt to take serious actions on beneficiaries of scam. Lets pray and hope if not 100% at least 40-50% of success Supreme court set standards in putting malign people behind the bars. Price will automatically correct this Corporate, Builder and Politician nexus will not last longer. Aadarsh scam had started the ray of hope for price correction.

Anonymous said...

Anon 10:01,
Supreme court is definitely the only hope left for citizens of this country.

In the last bear market, a lot of real estate companies would have gone bust had it not been for two reasons:
1) Govt pressurizing national banks to give loans to these builders.
2) Money received by these companies by selling spectrum bought cheap in the 2G fraud.

I also hope and pray that Supreme court sends some politicians, bureaucrats and builders to jail. Price correction or not but it will give a lot of hope to a lot of people about the future of this country.
Amen.

- V

shailesh said...

DB Realty may find bank loans drying up; stock falls

At 9:30 am, shares of the company were trading 4.42 per cent down at Rs 121.00 on the Bombay Stock Exchange.

“There is no question of recalling the loan,” said RN Pradeep, chairman and managing director of Corporation Bank , which has lent to the real estate developer. “But surely, we will review the terms of lending. Also, we will not disburse money for projects that have sanctions but not yet taken off.”

shailesh said...

I guess Damage Control in full force. Builders call in their top guns to defend, and salvage.

Real estate outlook: Experts expect prices to soften ahead

I think with CBI now looking at RE companies, everyone should be worried on source of funding for all major builders. Especially, many new names that came into market in last 10 years. Also the viability of their projects is in question. The challenge I always found was builders had heads I win, Tails I win setup.

Patil said...

15% decrease!!!!!! I dont believe this. Still unaffordable to the salaried class. In Malad prices went up from 8000 to 14000 in a years time. Still, home have been selling and there are buyers. My contention is that the prices may fluctuate a bit, but the overall situation will remain same until government intervenes

15% discount may be just a rumour to cool down the people. like showing a biscuit to a dog

Vik said...

Hang on tight guys. World markets are rallying and Indian markets are tanking. We can only blame the inflationist policies of the UPA government for this. Inflation has hit scams too where 100 crores scams are now worth 10,000 crore. Its matter of time before properties fall. I will be imperative for people to not buy apts which are under construction. Who knows if the builder comes up as a part of the future scam the buyers are screwed. The stock market is damaged badly and FII's will not return until the rupee hits 48-50. Without FII money the rupee will be forced to devalue.
The scam hit UPA government will find it very hard to get foreign companies as these new companies will feel that they dont need to pay the thousand crore bribes when the UPA2 goverment has only few months in office.

If Subramiam Swamy is right the scam goes all the way to Sonia's sisters. If this happens, there will be turmoil in the country for the next year or so until a new government is formed. stock markets can easily correct another 20% based on this news.

The FII's will enter when there is doom and gloom.


There is intrinsic growth in the economy however scams and others have robbed the country of thousands of crores of this growth and until that comes back India will create the next set of oligarchs whereas the rest of the country will slog for meaningless living.

Anonymous said...

so how will we know that prices are really going down? listen to builders/media, same folks who tell lies that Rs 1 crore flats are selling like hot cake?

there is no transperancy in the system, so highs or lows are bullshit. Most Indians (including crorepatis) live frugally, they cheat, evade taxes, no moral ethics, what do you expect in that market - a correction?

Recently many scams are into limelight, what happened to Adarsh society, it was going to be demolished - is it?

YES I AM RANTING

Anonymous said...

http://economictimes.indiatimes.com/news/politics/nation/Adarsh-building-to-be-demolished/articleshow/6998713.cms

Dec Jan Feb - 3 months and adarsh building still standing. may be my calc error, 3 months from what date was never mentioned.

This is the way India operates. Still in impression that media/babus/builders/Aam-Admi will improve?

I see these 1000 crores+ scammers on TV, they seem so undisputed and satisfied. Do you really think that people who do 1000 crores scams will be ever brought to justice. never seen and imagined in India.

still ranting

Anonymous said...

Mubarak finally quits. Let's see which country would have the next inflation related revolt. COult it be Jordan, Yemen, Syria, Bangladesh, Indonesia or India?

Anonymous said...

Revolt in India? For what? India is part of BRIC, it is future superpower, highest population, highest RE, economy is growing at the fastest rate in the world.

Why revolt? Everything is great in India.

Vik said...

I had predicted this when this stupid project was launched by Sabeer Bhatia.

http://indiahousingbubble.blogspot.com/2008/07/sabeer-bhatias-new-flop-investment.html


Haryana recommends scrapping Sabeer Bhatia's Nano City project

Press Trust of India, February 11, 2011 (Chandigarh)
Original

The Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) on Friday recommended to scrap Hotmail founder Sabeer Bhatia's dream project Nano City for failing to set up the project in the state.

"We have recommended that the project (Nano City) be scrapped," HSIIDC Managing Director Rajiv Arora said, when asked about the status of the Nano City project.


Read more at: http://profit.ndtv.com/news/show/haryana-recommends-scrapping-sabeer-bhatia-s-nano-city-project-140485?pfrom=home-Business&cp

Anonymous said...

@8.53

When you said India you should have said Kashmir.

What do you think will happen if a million people come out in Srinagar and stand in silent protest saying - Indian army go back?

You think people dont have TV in Kashmir?

The pseudo-intellectuals are celebrating Mubarak's fall - little knowing the satan standing outside our own doors.

Fall of the pharoah is an evil portent - an omen of the apocalypse

Cool Head said...

Now that it is amply clear that the Real Estate lobby was getting large amounts of funds from the 2G Scamsters, it is now only a matter of time before they go down under. With banks reluctant to finance and the 2G source shut down, either they will have to reduce prices to get rid of the huge inventories and generate cash or they will go belly up (taking a couple of banks with them). Either way, sit back, bring out the popcorn and watch the show!

Anonymous said...

cool head, i wish your dream comes true or you wake up from your dreams.

Do you think 1000's of crores worth scammers will ever be brought to justice? People have purchasing power and hence crores worth properties got sold and was bought.

Bank is the last source ever anyone in India goes if they need loan.

I am watching this show for past couple of years and scammers since past couple of decades.

Anonymous said...

If this is not irrational exuberance, then what is?

Rahul Bajaj said...

Low sales unlikely to bring down property prices in Mumbai

http://www.dnaindia.com/mumbai/report_low-sales-unlikely-to-bring-down-property-prices-in-mumbai_1507536

Dumb guys like cool head should read this article

Anonymous said...

Rahul,
RE prices do not depend on articles you are referring to made by paid pimps and journalists who are touting RE will go only high.

Look at the fundamental as to why this whole mess actually happened. RE prices will definitely go down by more than 50% in the coming years. I sympathesize with all the fools and geeedy people who bought in this past few years or who are buying now at the peak.

If you are so sure, go and buy some more RE. Good for you.

Anonymous said...

India's party is getting over. In the short run there would be a massive correction. This downtrend would be there for many many years before the market picks up again for both stocks and RE.

RE is the next bubble to deflate and would cause a lot of pain for Govt., banks, builders and all greedy people who wanted to make a quick buck.


Banks in India have very high exposure and I wouldn't be surprised if Govt. would have to bail them. A lot of NPAs will show up in a year or so and maybe a few banks would fail. Account deficit for Govt. is also a pain to deal with and if Petrol prices go up, it will cause more inflation. Which means higher interest rates and another 20% correction at Sensex.

2011 is not good for investments in India.

Anonymous said...

Rupee is also going to depreciate futher by at least 10% in the coming months. It could be around Rs.50/1USD by June. It is bearish due to inflation fears, FIIs taking money out and Sensex falling further.

Anonymous said...

Interesting point of view how returning Indians get treated. This one is about Microsoft.....
@ http://minimgsi.blogspot.com/2010/06/truth-about-microsoft-global-services.html

Here is an experience of a former Microsoft Employee return from US to its Indian operations.

Actually IBM India is exactly the same, very abusive culture.

shailesh said...

Anon 8:43

Whatever we say about India's IT superpower status, it is basically built on outsourcing, and main driver has been cheap labor. Microsoft is no exception. The salaries in IT in India has to be kept at 1/4th the US salaries to make that value proposition. You may be 10 times talented, but market will pay you only so much.

The only solution out of this is if some Indian startup start creating world class software. That is where the IP lies. That's where one gets challenging assignments. At all other IT companies, you are an outsourced resource available at cheap price.

Anonymous said...

The Microsoft blog was interesing but I very much doubt that the guy is truthful. Most US returnees are kicked out or compelled to resign for not meeting the required standard. Once they land in India, they bribe and get a job and expect to be treated like Ghoras. This normally doesn't happen as the indian manager recognizes their potential but unable to take any action . The guys who bribe and get employed invariably have some sort of pull.

I've seen quiet a fews guys like this and mosr were rejected stuff from US

I used to work for microsoft and currently employed by HP

Anonymous said...

Prosecutors last week charged Advanced Solutions founder Anjan Dutta-Gupta, 58, with using subcontractors to funnel roughly $10 million to Ralph Mariano, 52, and his relatives over more than 10 years as a bribe to help secure more than $120 million worth of Navy contracts. Dutta-Gupta and his wife, Indrani, resigned from the firm Thursday.

Estimates of Advanced Solutions’ total headcount have ranged from about 100 to nearly 150 in NJ and Fairfax, VA. King declined to provide an employee total in interviews last week and this week.

Advanced Solutions' management is coordinating with state agencies and other companies in the three regions where it has offices to help its workers find new jobs, King said.

"Thank you for your years of outstanding service," King wrote to close the e-mail. "It has been my honor and great privilege to work with you. Fair winds and following seas."

Dutta-Gupta was arrested Feb. 6 and is scheduled to appear before U.S. District Court Magistrate Judge Lincoln Almond on Tuesday.

Bindas Bhai said...

July 2010 I had posted this.

People who have held on. Please wait till June 2011. I personally feel that the overheated market like Mumbai is in for around 50% correction.

I dont believe in timing the market but there are lot of indication which has made me write this post.

All the best.

Bindas Bhai

Bindas Bhai said...

Posted on July 2010

Thanks Laaloo for your kind words but this is only my judgment, I could be really wrong.

Prices in Mumbai will further rise, now at a greater pace. Sellers (re-sale flats) will keep increasing the price even if they get the customer for the price they have quoted. Builders will launch lot of new projects during Diwali and will be see fairly good sales during pre-launch. Investors will be the main buyer and a lot of hype will be created in the media justifying RE as a good investment.

Suddenly we will find there are no good flats on the block. Greed and fear will start working. Welcome to the final lap which will work atleast for three to four qtrs. 95KCr debt of builders will swell along with unsold inventories in first qtr 2011.

Banks will start getting jittery including RBI, builders will put a brave front till June 2011 but will not be in a position to hold on further.

Prime properties will still have demand but me too properties will be thrashed in just two qtrs. From greed fear will set in but this time sellers will be scared.

All the best.

Bindas Bhai

Bindas Bhai said...

Posted on July 2010

Desi Batman said:

Refer your comment 8:39 AM

I can understand the point you are trying to make but those are obvious points and the majority will get sucked in because of this point but trust me for a crash we need the markets to move further up atleast 50% by April and then you will see minimum 50% fall i.e. 25% from todays price.

This is purely my guess i could be wrong but if i had to buy i would wait and scare the shit out the investor/builder and take a discount of atleast 35% from todays price.

Demand/supply/affordability will defy logic when fear sets in.

Please dont pass any personal remarks against me or for me.

All the best guys.

Bindas Bhai

Bindas Bhai said...

Hey Guys builders have gone on record to reduce the price. Lets wait and watch.

The bubble may be set to burst again
Rising interest rates, tighter lending norms, poor sales—they all add up to an imminent slump in property prices

http://www.livemint.com/2011/02/14232213/The-bubble-may-be-set-to-burst.html?h=A1


Bangalore: Property prices in major Indian cities, including Mumbai and New Delhi, are set to slump by as much as 30% in the next three-six months as rising interest rates and tighter lending norms have led to a sharp drop in demand for homes.

Also See | Slump Ahead (PDF)

“Softening in prices would begin in a month or two if sales continue to be low,” said Adhidev Chattopadhyay, an analyst at Mumbai-based Edelweiss Securities Ltd. A Credit Suisse note on 19 January forecast that property sales in India may decline unless prices are cut 10-30%.

The Reserve Bank of India (RBI) has signalled borrowing costs will rise further after increasing interest rates seven times in the past year to curb price rise. It has also tightened lending norms for the purchase of property to rein in surging prices. Even as the supply of residences outstrips demand, property developers, who need to repay an estimated Rs14,000 crore to banks by the end of the financial year, are facing the spectre of loan defaults as dropping stock prices make it difficult for them to access equity markets, and banks tighten lending.

contd...

Bindas Bhai said...

“A consensus is emerging that we are seeing the tip of a slowdown or a semblance of a bubble and the nervousness is evident on a pan-India level,” said Amit Goenka, national director, capital transactions, Knight Frank India.

The Bombay Stock Exchange realty index, a measure of 15 property stocks, has dropped 26% in the last year, compared with a 17% rise in the benchmark Sensex. The realty index has plunged 25% this year.

In November, RBI asked lenders not to loan more than 80% of the value of a property priced at more than Rs50 lakh. It also asked banks to increase the risk weightage of property loans of more than Rs75 lakh to 125%, making it more expensive to lend. Risk weightage assigns the minimum amount of capital that lenders have to maintain, as a percentage, depending on how risky a loan is.

“This was an additional factor along with the price rise which directly impacted investor sales in the higher end of the residential market,” said Chattopadhyay.

“The loan-to-value ratio being capped at 80% effectively reduces the purchasing power of a homebuyer,” analysts Aashiesh Agarwaal and Chattopaday wrote in a note to clients. “With a homebuyer having to cough up additional 5-10% equity for buying a house, he may have to delay his purchase decision, leading to a fall in incremental sale volumes.”

The drop in residence sales has led to an increase of inventory in several cities. Mumbai has been the worst hit with about 88,000 unsold flats in the metropolitan region. About 25,000 of them are within the city limits of India’s commercial capital, according to a survey of 2,400 housing projects in Mumbai, conducted by property researcher Liases Foras.

Recent home sales data suggest it may take as many as 22 months for the inventory to be cleared in cities such as Mumbai, Delhi-NCR (National Capital Region), Chennai and Hyderabad, said Pankaj Kapoor, chief executive of Liases Foras.

Residential sales tumbled 15% in Gurgaon, 20-25% in Greater Noida and Ghaziabad and almost 40% in Faridabad during the last two months of the past year, according to PropEquity Research.

Data from across India shows that only 15% of the home deals struck between April and September were at prices less than Rs2,500 per sq. ft, suggesting it is now difficult to buy even a 1,000 sq. ft house for less than Rs25 lakh in most cities. As a result, volumes have begun to slow and new bookings reported by major developers have been lower than expected, Credit Suisse said in their report.

“Builders have started negotiating across the table and are willing to cut prices by 10-15%, but prices need to fall further to become affordable,” said Kapoor.

Some prospective buyers have now decided to delay their purchases until prices fall.

Vishal Jain, 35, has taken a break after six months of house-hunting every weekend. Jain, who runs his own optical lens business, wants to shift from his one-bedroom apartment in Ghatkopar, a Mumbai suburb, to a two-bedroom home in the Malad-Kandivali area, another suburban destination. He has a budget of Rs45-50 lakh.

contd...

Bindas Bhai said...

“Even if I stretch my budget by another Rs10 lakh, there is nothing available other than properties in 25-year-old housing societies,” Jain said. “So I can either move further north, towards Dahisar, or wait for another six months.”

Indiabulls Real Estate Ltd, which is developing the “Bleu” project in central Mumbai at prices that are 15-20% lower than its earlier luxury projects, has also laid out simpler terms for its buyers to ensure sales.

A price correction will help propel volumes, said developers. Analysts predict a 15-20% correction in prices in NCR and rest of India, while “overheated” markets such as Mumbai and Ahmedabad would see a fall of 20% and above.

“If demand is low, we may correct prices,” said Vikas Oberoi, managing director of Oberoi Realty Ltd. “We have corrected prices earlier and we will do it again.”

In Hyderabad, the Telangana agitation has hurt both property prices and sales. In Bangalore, home to companies such as Sobha Developers Ltd and Prestige Estates Projects Ltd, sales have been stronger.

“You need to keep a price that will be accepted by the homebuyer,” said J.C. Sharma, managing director at Sobha Developers. “India is growing and we know people can and are willing to spend now.”

The decline in sales, however, has not slowed building activity. Construction in central Mumbai continues, with textile mills being torn down to make way for luxury housing and shopping projects.

An estimated $10 billion (Rs45,000 crore) of new housing projects are in the pipeline in the Lower Parel area of the city, with large developers such as Indiabulls, Peninsula Land Ltd, DLF Ltd and Lodha Developers Ltd in the fray to sell about 10 million sq. ft of luxury housing at an average price of Rs15,000-20,000 per sq. ft.

Knight Frank’s Goenka said that despite sluggish sales of premium homes, residences that cost Rs20-40 lakh will find buyers.

contd....

Bindas Bhai said...

Tightened bank lending, declining equity markets, private equity funds demanding steep returns and negligible property sales have compounded the trouble for property developers, said Pujit Aggarwal, managing director at real estate developer Orbit Corp. Ltd.

Indian real estate has always relied heavily on bank financing, with outstanding banking loans to the real estate sector having increased 33% in the past 21 months to over Rs1 trillion, according to Credit Suisse.

Analysts say the pressure is mounting on developers from all sides.

Hari Prakash Pandey, vice-president, finance and investor relations, Housing Development and Infrastructure Ltd, said that if the environment is hawkish—be it the government or financial authorities—decision-making is impacted, affecting business growth.

DLF, the nation’s largest developer, said after its third-quarter earnings that it is banking on a series of new properties to generate cash flow and partly pare its Rs20,694 crore debt.

DLF may not meet its sales forecast of 12 million sq. ft by March, as about six of its new projects have been delayed, and due to price rises in recent months, said Angel Broking Ltd in a 1 February report.

To make problems worse, banks may further tighten lending to property developers after DB Realty Ltd and Unitech Ltd have been linked to ongoing investigations into the allocation of telecom spectrum. Lenders are turning down new loan proposals and may also take a close look at the proposed end use of loans that have already been sanctioned, but not yet disbursed to real estate companies.

“Investors want to know whether the money borrowed by developers for real estate purposes are being used for what it is actually meant or are being diverted elsewhere and they want to be doubly sure,” said Rajiv Sahni, partner, real estate practice, Ernst and Young India.

madhurima.n@livemint.com

Anonymous said...

What's alarming, aside from very high inflation, is that obesity and pollution rates are very high.

In fact, in most cities the pollution is so high that you can easily get vitamin D deficiency. So compound weak bones with a heavy person, and you got lots of health problems. My auntie who is 40 years old has health problems that are seen in 60 year old people.


It seems that the obesity epidemic is growing as fast as housing prices. What's worse is that being overweight in India is egosyntonic. They don't necessarily view being overweight as a bad thing like most americans. So, there's no hope they'll try to tackle that problem.

Personally, I am a very fit man having a body weight most americans would love. When I went to india, my relatives were trying to arrange my marriage with people who were 3 times bigger than me.

On top of this, pollution also damages the blood vessels, making it more likely to clog with debris....therefore lots of stroke and heart attack.

Anonymous said...

Welcome back, Bindas Bhai.

Are you now in the RE will crash by 50% bandwagon along with Vulture - who has also currently come out of hibernation?

I am NOT - RE price will keep pace with inflation.

Even now - except in Bombay which has gone crazy - one should be buying RE as the only hedge against inflation - apart from gold.

Prices of 2-3000 psf will become basic construction cost pretty soon with inflation effect - these prices will never again be seen.

Even now, 2-3000 psf sounds like chickenfeed looking at how much we pay for so many other things

Bindas Bhai said...

Dear Anon 9:59

Areas which have gone up by 50% after july 2010 will correct more. I don't know how much but my guess is by April to Ganpati festival the correction in Mumbai can range from 10% to 30%. We need to see how the markets react after that.

I still stick to my ground rules people who can pay the EMI with no problem ,negotiate hard with the builder and buy before Ganpati. I am not saying market will go up after that but we don't know.

IT sector is looking up and this can cause demand in future. Commercial office space has also picked up which clearly means hiring is happening. Yesterdays paper was talking about attrition levels going up.

Very difficult to take a call but if you like the project ask for 30% discount and wait.

All the best guys.

Bindas Bhai

Anonymous said...

Anonymous @9.58

"Jiski biwi moti uska bhi bada naam hai.." Sign of prosperity man...

Anonymous said...

To add to Anonymous @9.58 comments:

Schizophrenia along with obesity is on rise in India. Someone dreaming of marrying a girl/boy 3 times his/her weight is an prime example

shailesh said...

Banks to review DB Realty exposure

While it plans to invest Rs.8,000 crore in land acquisition, it has 20 million sq. ft of construction under way in Mumbai and a proposed 40 million sq. ft of development in the pipeline.

Nearly 12 high-end residential, commercial and hospitality projects of DB in Mumbai are currently waiting for approval by the BrihanMumbai Municipal Corporation and the Maharashtra Housing and Area Development Authority.

What is also in question is the PE fund-raising plan to pay for old land acquisitions, new projects and its hospitality business. While the firm has to pay Rs.800 crore this month for the Bandra Government Colony project, it also needs money for project execution.

“It will be very difficult for the company to raise money now and in the future. It takes time to build confidence of investors. The market, including banks and PE investors, will not react positively to real estate now,” said a fund manager at a domestic real estate-focused PE fund, who didn’t want to be named. Calls to the cellphone of Shahzaad Dalal, chairman and chief executive, IL&FS Investment Advisors Llc, which had invested in the firm, went unanswered.

Anonymous said...

"Anonymous @9.58

"Jiski biwi moti uska bhi bada naam hai.." Sign of prosperity man..."




In the US, not being overweight is seen as prosperity and a social status symbol.

Anonymous said...

"To add to Anonymous @9.58 comments:

Schizophrenia along with obesity is on rise in India. Someone dreaming of marrying a girl/boy 3 times his/her weight is an prime example"

Lol. I didn't see this comment coming.

Anonymous said...

Anon 9:59
RE price will keep pace with inflation.

Rents keep pace with inflation not prices. Rents have become double in last 10 years - 7% up every year will get you there. RE prices in the same time are up 3-5 times. If prices are not following inflation on the way up, why should they follow inflation on the way down?

- V

Anonymous said...

In Ahmedabad (suburb areas), you can expect to pay 10,000 rupees a month for rent for a family of 4. College tuition costs are 100,000 per year and up. Even the cost of milk is around 16 rupees per pint.

For the common man, this is excessively high. In fact, many of the costs are exceeding prices seen in the US.

When inflation really pressures people, something will give. People may start to realize that it's cheaper to import many products such as food and will eventually put downward pressure on the rupee.

it feels like over the past 10 years, the quality of life has gone up only 50% but the cost has gone up at least 500% to 1500%.

Anonymous said...

Anonymous &:17


Excellent point. We may see clear trends in the coming few months

Anonymous said...

I forgot to mention that the same 10,000 rupee per month rent was going at 5,000 rupees 6 months ago.

shailesh said...

The Swan Song Now

This week, the CBI submitted that Balwa’s firm, DB Realty, had set up Dynamix, a company that was into investments. Dynamix in turn “invested” in subsidiary company Kusegaon that would lend money as a non-banking financial corporation. Funds from Kusegaon then travelled to yet another group company, Cineyug. And Cineyug, CBI now has records to show, put in Rs 206 crore in Kalaignar TV, a channel in which Karunanidhi’s second wife Dayaluammal (mother of M.K. Stalin and M.K. Azhagiri) and daughter Kanimozhi jointly held 80 per cent of the stake.

Anonymous said...

Shailesh,

You would be naive to think that A Raja has the guts to do 2G scam without backing of his bosses back in TN. Raja is just a crony who will be replaced by a newer one. And no body in this country dare raise a finger at Karunanidhi.

- V

Anonymous said...

Hey BB welcome.Nice to see you back. Now this blog has got some life. Cheers ¡¡

Anonymous said...

I have got downpayment of 60L to buy property in Bombay - central line Between Dadar to Thane. Need 2 bedrooms, full electricity, and water, need decent society. Possible or my dream?

Anonymous said...

to anon above.

Come to the US...you can get 3 bedroom easily

Anonymous said...

to anon above then why not in amchi mumbai? What is so different in USA than in Mumbai about RE? Infact people in Mumbai earn far less per capital than USA.

dhoom said...

Hello Bindas bhai,

welcome back.

Anonymous said...

"to anon above then why not in amchi mumbai? What is so different in USA than in Mumbai about RE? Infact people in Mumbai earn far less per capital than USA."

The problem with india is that there are too many people wanting resources. Resources that are very limited.

Think of it this way. In the US, there are 1000 people competing for 800 resources. In India, there are 10000 people competing for 80 resources. There lies your problem.

Just today in Delhi, I heard about severe water shortages. And it's still february. what will happen in the summer season.

Anonymous said...

anon above - so rich will have privilages because they have money? doesn't affordability change supply demand curve.

I don't about delhi, but bombay doesnt have water or electric shortage right from churchgate to dahisar and VT to kalyan.

should I smell coffee to wake me up?

Anonymous said...

In India, the rich have special privilages. They also dictate how the law works for them. Those who have money are above the law in India...it's unfair but true in India.

It's the supply demand curve that's making everything unaffordable.

I have a question for everyone here: If I go back to India and invest in real estate, make money, get PAN card, pay taxes, and deposit in a bank, will I be able to transfer that money to a US bank?

I was always under the impression that you can't, but it seems that state bank of india's website says you can transfer up to a million dollars per year.

Anonymous said...

I am looking for a 2BHK in thane , ready posession , can anyone let me know good projects , looking from west , ghodbunder , pokhran ,

Budget 70 Lacs all incl ( I know that its rather low but none the less is what I can afford)

Tired of convinving my family whats the advntg of rent vs buy , need to move soon...

Nothing beyond Thane

Bindas Bhai said...

Anon above

Honestly would request you to wait till this June and then take a call. Trust me you will thank me for this. Meanwhile start doing your ground work.

shailesh said...

to anon above then why not in amchi mumbai? What is so different in USA than in Mumbai about RE? Infact people in Mumbai earn far less per capital than USA.

The main issue is infrastructural gap. After WW2 US built huge roads which connected whole country via Freeways, State & Local Roads. In addition, US put in appropriate policies to continuously get tax revenues to fund maintenance and construction of new roads. The other commodities like Water, Electricity, Natural Gas etc... are supplied by private companies, so government does not have to bother with them. In addition, US has better property laws, whereby converting agricultural land to residential is not a major issue. This unleashed large supply of vacant land for residential purpose.

On the contrary, India's corrupt and socialist policies has hindered infrastructure growth and supply of land. People say US has 3 times land, and population is 3 times smaller compared to India. Because of that India lacks resources. I don't think that is true at all. If you want evidence, just fly across India in Window seat of a plane and see down. You will see that, We have ample land, much more than our population's needs for housing purpose. It is basically this land is not connected and lacks basic infrastructure. Navi Mumbai did not become popular for almost 30+ years, just because it lacked efficient connectivity. This extreme socialist policies (they call it Land reform, but it has essentially enriched the babus and netas) and lack of will for creating proper financing, the citizens have to pay through nose for even basic things.

Having said that some things are much better now then lets say 10 years ago, but sudden influx of capital/credit from west, has created huge speculative bubble.

shailesh said...

Mumbai densest city in Asia

Mumbai: As many as 27,000 people live per square km in Mumbai, making the metro one of the densest cities in Asia, as per the Asian Green City Index.

Anonymous said...

Based on all above RE understanding. If I have to stay in Bombay (not matter where I work) I have to earn more. Mean I have to charge more for services and products that I provide by business or on salaried job.

Only exception from my above statement is that I have inheirited or already have RE fully paid.

Anonymous said...

Obviously, india is still a developing country. So there will be rapid price changes on real estate and uncertainty about the prices of everything.

Anonymous said...

@anon I don't about delhi, but bombay doesnt have water or electric shortage right from churchgate to dahisar and VT to kalyan.

should I smell coffee to wake me up?

Maybe you should.


http://timesofindia.indiatimes.com/city/mumbai/2/3rds-of-Mumbaikars-walk-a-mile-for-water/articleshow/7511798.cms

Anonymous said...

Anon above... may be not.

as someone in the comment section of above news replied:

When only 50% of people in Mumbai live in Slums, how can 2/3rd travel 1.5Km for water. The headline is wrong, it should read as 2/3rd of people living in slum travel 1.5Km for water.

Anonymous said...

correction not going to happen. Stocks could go down, but with 1% of the total population making millions of dollars per year, they can afford to buy multiple properties at crazy prices. Problem is the aholes politicians who make millions, a hole cricketers making millions and ahole IT CEO's making millions. India does not have the land that US has, so dont expect much correction. Population- villagers dont use condom, they still are churning out 4-5 kids, so how the f do you expect land prices to go down. If India's population was half a billion, then you will see land prices go down. India is f'ed up.

Anonymous said...

Three ways land prices go down 50%.

Tsunami
Bin Ladin makes a visit
Large Meteor makes a visit with Bin Ladin.

Anonymous said...

too many projects has stopped work at godhbander road in thane however at hiranandani estate flats are still selling like hot cake. Don't understand logic here!

chethran said...

Thank you for the info. It sounds pretty user friendly. I guess I’ll pick one up for fun. thank u


Villas in India

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