Sunday, March 04, 2012

Investors in Mumbai flats want money back Investors in Mumbai flats want money back Investors in Mumbai flats want money back

Times Of India reports. Of all the papers this is TOI reporting.. Again.. Times of India reports :)

Underconstruction investors are screwed big time. Brokers are returning calls as prices are dropping in Mumbai. With good cash one can easily snatch a good deal.  Unfortunately this cannot be said of Bangalore/Chennai or Pune as yet.

MUMBAI: Property speculators and investorswho book flats even before the project is launched are in trouble. Builders who used to take money from them upfront and promised them large areas by manipulating certain spaces in the building, can no longer do so after BMC's stringent building laws kicked in in January. 

Across the city, most builders sell up to 30% of their stock at a discounted rate to investors if they pay a major chunk of the amount upfront. These deals are struck when builders do not even have the basic construction approvals in place. 

Earlier, when building rules could be manipulated to the hilt, developers misused and sold areas which were not part of the apartment. These areas were then surreptitiously and illegally amalgamated into the flat to make it bigger. New rules have upset the calculations of such builders who had promised larger houses to their investors. 

128 comments:

Anonymous said...

NCR RE is still climbing by 15% every 6 months.
No better time to invest than now.

ContractorBhai.Com said...

Here's the link to original TOI page
http://bit.ly/youO8h

Mr Mayank Patel said...

right information sharing, in curent trend real estate as like bubble.

Anonymous said...

Rents are going up in Mumbai - Finally!! Prices are not coming down.

I estimate cost of living to go up and definition of poverty/middle class/upper class changes.

Goodluck getting cheap services.

Pawan said...

@Anon
I estimate cost of living to go up.

I expect that too. And I believe that is what will lead to the RE bubble popping. People will be maxed out trying to fulfill their more basic requirements and won't have money for discretionary expenses like RE.

Anonymous said...

Does anyone know if recently someone bought property for INR 7000 or more psf.. In Mumbai. 2BHK+.

forget builders, like to know mindset of sellers.

Regarding jobs. With high cost of living, poor infrastructure. Many MNC jobs will be lost in coming years, and this will be silent in media and not out spoken as we Indian never like to release bad news.

Call centers jobs are dead. MNC have already started looking at other countries. Next is IT bubble. It many take few years but it will leave a BIG HOLE.

Anonymous said...

Blah Blah Blah Blah, yak yak yak yak.........
Prices are falling!! Builders are in trouble....Real Eastate soon will be dirt cheap...

Now, those deluding bloggers, tell me is there any reality in what you pen. Please dont quote newspapers or some bullshit financial gurus who have no roof on their head. If you step into the market and do a bit of research, you will realize that prices aren't falling. They are steadily going up.
For a change, please start penning some real news

aam aadmi said...

@Anon at 11:32
Cost of living has been steadily going up and with Brent at 123$ it will be hard for the government to hold back the price of oil for much longer.
Discretionary spending is bound to go down. Not a good sign for the economy

Anonymous said...

@Anon at 4.46

I agree a 100% with your post. Unless someone can come up with a real explanation as to what stage of a bubble is the Indian RE in currently. Could it be "denial"???

Anonymous said...

If you step into the market and do a bit of research, you will realize that prices aren't falling. They are steadily going up.

very bold statement, any backing? or just shooting crap from builder and media?

Who and how can one afford these expensive places? any ideas?

Anonymous said...

Robert Vadra faints at Gurgaon DLF golf course

http://www.ndtv.com/article/india/robert-vadra-faints-at-gurgaon-golf-course-182664&cp

Anonymous said...

Robert Vadra faints at Gurgaon DLF golf course

why is this news? Are RE prices going to fall with his fall? Anyways, I don't think anyone cares if he faints, jumps, skips, or anything...

so please post something interesting.

RealityFool said...

If you step into the market and do a bit of research, you will realize that prices aren't falling. They are steadily going up.

Prices are not steadily going up. Prices are jumping 50% every year in most places. That is the problem. If you have doubt, go to the market enquire the prices and keep a record.
Go to the same places/neighborhood after one year and compare the prices.

If the prices are up by 50%
Ask these questions
-------------------
1)What are the new infra projects announced by Govt?
( Are there any new public parks, playground, volleyball/cricket ground for your kids to play )
2)Are those people in that neighborhood started using garbage collection facility
3) Has the Corporation built public toilets and helped to maintain the sanity of the streets


Ask yourself if the price hike is justified!

RealityFool said...


If you step into the market and do a bit of research, you will realize that prices aren't falling. They are steadily going up



And how long the price will go up?
Lets say an apartment costs 50lakhs($100k) as of 2012.

Could you guess how much it will cost in the year 2025 using the steady price theory?

Anonymous said...

"If you step into the market and do a bit of research, you will realize that prices aren't falling. They are steadily going up"

I don't disagree with your statement. If you chart the prices from 1995 todate, you will see a steady rise in prices, some places steep. I just wonder from where the money is pouring into real estate. Could it be the money stashed abroad that advani &ilk make so much noise about. Is the money flowing back into India. One thing is for sure. Those who had stashed money in swiss banks have or in the process of emptying their accounts. Then, they need a place to park their money. Is the parking lot, Indian real estate ?
The whole thing defies logic. No doubt people in the last 7-8 years have prospered. The question is how much. Can they afford 3-4 crore rupee flats ?. May be few, but how come there is a scarcity in spite of building boom.
Your opinions please based on the local happenings, not what is happening in USA, JApan, Italy etc etc

Anonymous said...

Local happening around Pune city:

Projects that launched @2000-3000 on the outskirts (Wagholi and Hinjewadi are the areas I was looking at) some 2 years ago are now selling for 3400-4200 in second sales. Builders are launching new projects in these areas for maybe 200-300 rupees less due to under-construction property. Otherwise, there is no room for negotiation. It's a take it or leave it attitude.

Clearly it's not a buyers market.

I was waiting for the bubble to correct and prices to come back to some affordable reality but sadly it seems I've missed the train.

Now I'm resigned to renting for the foreseeable future.

Anonymous said...

Renting is beter than catching a falling knife.

aam aadmi said...

If you step into the market and do a bit of research, you will realize that prices aren't falling. They are steadily going up

Yawn. As someone already said, use your steady state theory and extrapolate the prices. What's an apartment going to cost in five-six years time using your theory ? 2 crores, 3 crores. Who is going to buy those apartments at those prices given the pathetic rent-price ratio?

To me this sounds like the I wash your laundry you wash mine and we live in a happy economy theory
Either you missed the boat or your boat is about to meet the rock at the edge of the sea.

Anonymous said...

Pos (Posh) bed & Cot accommodation in Delhi- Prime area


http://photogallery.thestar.com/1141639

Anonymous said...

Anon above. It's called survival. Cities and countries always have benefited from poor. I mean big fish always benefits from small fish. more the small fish, lesser work big has to do.

That is the reason India has cheap labor, servants, etc.

Welcome to Metro cities. We need you.

Think what would richie richs do without these poor immigrants.

aam aadmi said...

http://www.financialsense.com/contributors/vedran-vuk/is-a-house-ever-a-good-investment

A good read
Excerpt

For the sake of argument, let's say that prices do keep rising. Eventually, the second owner sells to another buyer for $1 million a decade later. Guy number two also peacefully retires in bounty. Well, where does that leave the third guy? Unless real salaries make an incredible jump in the same time period, no one will be able to afford the home next. The median US worker earning $51K won't be selling such a house for retirement; instead, it will take him until retirement to afford it. In many ways, this "investment" more closely resembles a Ponzi scheme. (Yes, Ponzi schemes work: for those who get in early and get out – as the recent real-estate bubble demonstrated.) Ultimately, there's an upper bound to housing prices – they can't continue rising perpetually with no end.

RealityFool said...

Hyperinflation is waiting for US(A)!

http://www.gold-speculator.com/munknee/51643-hyperinflation-occur-u-s-early-2013-here-s-why.html

Anonymous said...

Inflation or hyper inflation is only for those whose earnings does not rise in proportion to expenses. Majorities are from lower and middle class, whose jobs/businesses are not worth high values.

High class people are considered 'inflation-free' because they are high class because of their jobs/businesses value.

North Indian said...

Nice post and pictures

http://photogallery.thestar.com/1141639

In Mumbai, this is a common scene starting from VT-Churchgate upto Dadar- Mahim-Bandra. The area beyond these are mostly slums

Only the privileged few are living in good apartments but surrounded by slums. Mumbai people can not smell shit as they are so used to it and cant distinguish it from other smells.

Jai Maharashtra, Jai ShivSena

Anonymous said...

Anon above: Either you don't live in Bombay/Mumbai or are envious of not living in Mumbai.

Mumbai is full of crorepatis (+++) and no other city is that rich. It has its charm if you have lived in Mumbai. All my friends from all over India, love Mumbai.. yet to find anyone who says who didn't like to stay in Mumbai. May be I can make you as my exceptional friend.

RealityFool said...

@Anon 1:07

Here is the Statement of PIG bathing in drainage waters

Oh! Boy! This is feeling great!
I like that perfume smell!
Food! mmm Tasty!

Hey! If you have a doubt ask my friend bathing in next street!


Whether you are in the system or outside the system will make a huge difference in the perspective


Accept the problem, Fix it and move on
Deny the problem, Live in self deinial or pretend it is not a problem

Choice is yours!

Sometime back one gentleman was defending the streets as toilets is our culture.
How you look everything matters!

Anonymous said...

Mumbai is full of crorepatis (+++)!!!!!!!!!

wow!! what a sweeping statement!!

My question is why these crorepatis use street as a toilet.Pissing on compound walls like dogs, shitting by the side of railway tracks exibiting their erect organs to passing trains carrying women, spitting paan tambaku everywhere is the culture of these crorepatis!!

Hats off Mumbai!!

Anonymous said...

Anon @1:07

I don't live in Mumbai but every time I fly into the city I'm nauseated by the stench.

Takes a few hours to get used to.

That the nations who's-who calls this city home is also disheartening since if these elites cannot "fix" their own city, what hope do we have for the rest of India?

Anonymous said...

Seems like Mumbai has a BO problem and everyone knows that it is impossible to convince someone who has this problem since they are blissfully unaware of the stench they're carrying around.

LOL

Anonymous said...

Sometime back one gentleman was defending the streets as toilets is our culture.
How you look everything matters!


I think it's about time for India to be invaded again. Only the crack of a foreign whip can put us back into shape.

It seems we've lost the potty training that the British provided us some 70 years ago.

aam aadmi said...

It's a cultural thing, people would rather give donation for building a temple, ask them money to build a toilet and see what happens.

In my own neighborhood one temple and one big statue came up in quick succession, most likely the contribution of some politician to earn goodwill. While garbage lies in the open. Wouldn't the money be better spent building an enclosed garbage dump so that it doesn't spill onto the street? What benefit does a statue provide? I guess the only benefit it provides is that people don't pee near it so that the place stays clean.

Tamilian said...

Sarcastic comments, though true. Mumbai is slowly dyeing by the weight of its population. The elites are so used to the stench & squalor, it has become part of their life. The shivsena mlas/municipal councilors are themselves are product of slums and therefore encourage their growth unabated.
The only reason why the real estate is so expensive is the over population. Just 1% of Mumbai population is enough to carry on this trend for decades.
There is no point in blaming bihari/up bhayyas for the dismal state as these are migrants in search of food. It is the laziness of marathis that has brought mumbai to this state. You elect municipal Councilors from the gutter, and soon you find them turning the place into a gutter where they are comfortable living

Anonymous said...

To all above, where is heaven on Earth, where is this 'Happy' place?

Anonymous said...

To above

The place is Mumbai, located in the west coast of India. Worldwide it is known as Bombay. The ghatis living in this city named it Mumbai as mumbai mata is a ghati deity.
Most people in this city live in slums. Privileged ones live in apartments. 24 million people live in 300 sq. km area, thus making it as the densest city in the world, 800,000 per sq.km. This figure in never published for unknown reasons.

Out of 24 million people, 50% follow islam and the rest hinduism. The muslim population is growing at an exponential rate that it is estimated, this city would be 80% muslim by 2050

Anonymous said...

@Only the crack of a foreign whip can put us back into shape.

Take an Indian and put him in US and all of a sudden the trashing and spitting on the sidewalk stops. Patiently waits for his turn in a queue. Starts yielding to pedestrians, stops honking indiscriminately, obeys all traffic rules etc.

As soon as that person is back in India, starts thrashing the place like it was a step child.

Obviously there are exceptions but they are few and far between. If not for the fear of the white man's authority a vast majority of Indian's will quickly degenerate to their tribal origins.

Anonymous said...

The elites are so used to the stench & squalor, it has become part of their life.

You have to be completely oblivious but then again, the elites spend most of the time inside their golden cages so perhaps they have a re(de)fined sense of their reality.

Anonymous said...

http://quicktake.wordpress.com/2010/07/14/fake-indian-currency-note-the-root-of-it-all/

Anonymous said...

RBI cuts CRR by 75 basis points..yawn....the saga of wealth transfer continues...

Anonymous said...

Realty sector returns in 
India at an all-time high

http://www.khaleejtimes.com/biz/inside.asp?xfile=%2Fdata%2Fbusiness%2F2012%2FMarch%2Fbusiness_March183.xml&section=business

Anonymous said...

^
// According to property experts, investment in residential property projects is currently preferred by investors, since the demand for homes in the metros and Tier II cities is virtually limitless. //

Woah, I'm probably the poorest guy in these metros because I can't even afford 1 BHK.
Whatever happened to times when you could buy a sweet 2bhk house for under 25 Lacs. I missed the goddamn train.

Anonymous said...

Now RBI has reduced rates, will Indians Banks lend more and will buyers borrow more is the question. If not, reducing rate won't help to jack up prices.

On other thought, if economic in India is doing so well (as per above article), then what is need to reduce rates? hmm...

Anonymous said...

Have been following the price trends very closely over the last 2 years. Amidst this talk of this builder going to be bankrupt, that one not doing well at all, have been seeing RE in bangalore increase by roughly 15% every year. what is going on. is there no regulation. what cost 70l years back is 90l now. even my friend in us mentioned being able to afford 1 in US but not in India!

Anonymous said...

Buying property in USA or UK would be a better idea. At least you'd get good rent. Shit, you could even find a company to take care of the house for merely 3%-5% fee.

Fuck this insanity. I will forever remain a tenant, unless of course renting becomes unaffordable too - then railway station zindabad.

GSM said...

Have been following the price trends very closely over the last 2 years. Amidst this talk of this builder going to be bankrupt, that one not doing well at all, have been seeing RE in bangalore increase by roughly 15% every year. what is going on. is there no regulation. what cost 70l years back is 90l now. even my friend in us mentioned being able to afford 1 in US but not in India!

I have seen that too in Bangalore. But guess what they are only sellers price. The same property not getting sold for 70L is getting listed for 90L. I can assure you if there is no recession for a couple of years, it will get listed for 1.25 crores (never mind not getting sold for 90L). But when there is a crisis, it will take just an year for it come back to 50L. I saw the same when a property selling price in 2007 was 95L and the same property came down to 55L by 2009

Anonymous said...

very much true indeed. do you see any chances of recession? for me, it looks the perfect settling for the mother of all recessions is in the making. renting is king.

Anonymous said...

@ GSM, It is such a cynical attitude among builders. But the unfortunate reality in this country is that people are stupid. They cant even do basic yield calculations. Too much of groupthink and the need to fit in , debt slavery be damned

Anonymous said...

Article in HT on a recovery agent for banks and how she goes about sealing properties of defaulters. Also mentions that many times the wives of defaulters sell jewellery to pay off debt:

http://epaper.hindustantimes.com/PUBLICATIONS/HT/HD/2012/03/11/ArticleHtmls/DELHIS-DIFFERENT-MINDS--On-the-difficult-path-11032012004001.shtml?Mode=1

Pawan said...

@Anon 4:10,
Interesting insight.
It is surprising how everyone talks about the money they made in RE but no one talks of the dirtier side.
Recently I came to know about two such deals/situations.
In one, a buyer payed the token amount and was given 2 months to pay the full amount. When they went back with full amount, the seller refused to do the sale saying that prices have gone up and the old price does not hold good. When the buyer wanted their token back, they were told that they would get their token back when the seller sells (read if he is able to) at the higher price.
The second instance is that of a project in Gurgaon I recently enquired about. It is selling for just 100 psf more than the launch price even after two years of launch. Why? The builder has just done the digging work and nothing more. Buyers have already made 45% of the payment. Ideally in this case, sellers should have been ready to sell at any discount and get out.

samix said...

With respect to the recent central bank action this is what Jeff, neilson from bullionbullscanada.com had to say

Slashing bank reserves is both stimulative and inflationary. If the banks don't have to hold that cash they will lend it out or "invest it" (i.e. place bets) and thus drive up asset prices.

This is NOT the action of a central bank which is worried about inflation. Worse, low bank reserve levels but HIGH interest rates are a very dangerous combination: banks lending out LOTS of money, but at rates which will cause MANY borrowers to default if times suddenly get tough.

In short, this seems to be a central bank that cannot DECIDE if it wants to fight inflation or stimulate the economy - and so it will likely FAIL AT BOTH...the "deer in the headlights syndrome".

http://www.bullionbullscanada.com/bulletin-boards/17-talk-economics/16586-brazil-continues-rapid-cuts-in-interest-rates#16667

Anonymous said...

guys, i'm giving up and throwing in the towel. my own personal belief echoes the sentiments many are sharing on this blog but the reality is that over the past 4 years i've seen co-workers, friends and family move on, take the plunge and settle down.

so last week, the wife and i started looking for properties in a couple of areas and even though i'm cringing at the thought of paying "US prices" for a house in India, guess what, i'm already doing that for every other modern convenience be it a laptop, iphone, a decent car and even the fuel for it.

i'm also afraid that no matter how much we try, government policies will always favor the property buyer vs. the renter and my savings will simply not be able to keep up. just like in the US you are now seeing mortgage principal reductions schemes etc. if push comes to shove, GOI will probably end up doing the same.

all the best to all of you and i hope you will wish the same for me.

Anonymous said...

Anon@ 10:51am
"i'm cringing at the thought of paying "US prices" for a house in India, guess what, i'm already doing that for every other modern convenience be it a laptop, iphone, a decent car and even the fuel for it."

Are you kidding? Indians have to pay twice if not more of the US price for the stuff that you mentioned. Pick up anything. Indians in India earn in Rs and spend in $s; that too in India only. How long can this last?

samix said...

The fake currency smuggled into India activities, which are true are just being used by the GOI as a scapegoat to blame gross economic mismanagement and nepotism on someone else.

The amount of fake currency that is smuggled each day into the country may be nothing compared to the amount of money printed and created electronically by the central bank each day.

Anonymous said...

ohh I thought fake money was created in India. No? If some other country wants to print fake money - why Indian currency? why not any other currency?

Fractional banking creates far more money than black, fake and white. good part is - it is legal. It helps debters and sinks savers.

Unfortunately, all over world to boost their growth numbers this is the easiest path.

....AND THIS WILL NOT END WELL. One deflation period and Hell's hell will break loose. India having no strong laws, not money but might will win!

samix said...

ohh I thought fake money was created in India. No? If some other country wants to print fake money - why Indian currency? why not any other currency?

Oh yeah If I could I would rather print dollars or Euro!

Pawan said...

guys, i'm giving up and throwing in the towel.

It is alright dude. Life is too short. Have fun and best of luck.

skeptic's ghost said...

To: Anon@ 10:51am - who wants to buy

Many here on the blog are saying that housing is not a bad buy if you want to live in it asap - its only investment properties that are being debated.

Inherently there is always value in owning ones own place, however overpriced it may be. That value is in stability, status and a permanent place to call home and not be at the mercy of landlords.

Ive always said on this blog that only a war or insurrection will bring down prices. Ive also said that India's bubble will not implode like US/Japan not only since the GoI will bail people out but also the demography of people wanting to move to good neighborhoods in city

People here are angry that they missed the bus - well you should have done your own research.

Pawan said...

@Skeptic
Many here on the blog are saying that housing is not a bad buy if you want to live in it asap - its only investment properties that are being debated.

How did you get that idea? I don't speak for everyone but my thoughts are totally opposite of it.

If I am buying to live, I should buy a good home at a reasonable price because then I will be paying for it for the next 10-15 years as well as live in it.

On the other hand if I am looking to flip after 10% appreciation, I don't care what I am paying as long as I can pay the 10% down payment and sell in 3-6 months having doubled my 10%.

Anonymous said...

It maybe true that people in India value owning property more than in other countries. But that doesn't mitigate the fact that these people don't have the money to buy it at today's prices.
If you look at real estate transactions most of the apartments are bought by people who already own other properties. These are the rich, who think of real estate as the safest investment option. In one building i know in bangalore 4 apartments are owned by a single person. First time buyers are forced to rent.

Anonymous said...

Good points. RE prices are not coming down (owners have no reasons to sell for less in country like India). So only possibilities are

1. live shit quality life
or
2. start earning more (everything gets shit expensive).

I'm counting on #1 and trying to catch up with #2.

Anonymous said...

@Anon above

Talk about 99% vs. the 1%

It's alive and well in India. How long before the masses boil over.

As an example, we are one famine (local event) or oil shock (global event) away from a crisis.

Then skeptic's theory of war/insurrection will play out.

Everyone needs to ask the question: Is this the type of society / country we want for ourselves and our children?

Anonymous said...

//It's alive and well in India. How long before the masses boil over.

As an example, we are one famine (local event) or oil shock (global event) away from a crisis.

Then skeptic's theory of war/insurrection will play out.//

NEVER. Nope this war/etc..etc.. won't happen in India. We (Indians) are known for centuries to suck it up and adjust to surroundings. At the most we will hold bandh for half a day, that too if some politics is played.

There are too many poors in India, why are they not protesting? are they taken care of in past and current economies? What is going to change for them as they are already living in shit.. only difference is more people will be living in shit.

Hope was on Anna H. But that is lost too.

Anonymous said...

// Hope was on Anna H. But that is lost too. //

Haha, no. You really thought that guy cared about the poor people? A demagogue that tried to play the politics - that's all.

Anonymous said...

As long as GOI law doesn't crack down on illegal black money and they don't back consumer protection, RE is bound to increase.

When taking loan, builder wants his money on time irrespective what they have promised. Try missing couple of payments to builder what he does to you and vice-versa builder misses deadlines to deliver flat on time what you do to them.

See bigger picture ?

Anonymous said...

@NEVER. Nope this war/etc..etc.. won't happen in India.

The middle class are like frogs being boiled alive and in many ways prefer to be part of the problem than the solution.

The word "sheeple" has never applied better to any one than your typical white collar, office worker.

Be it in giving bribes or escaping taxation, the sheeple are about as active participants as the elites. The only difference is the middle class bakra will bank a few lakhs here and there and think he's outsmarting everyone else whereas the political and business elites are getting away by robbing the entire country blind.

Witness the 2G spectrum scam. That was probably the most egregious. Now imagine how many thousands of crores have been siphoned off in various other business licenses, government contracts and land dealings.

samix said...

As long as GOI law doesn't crack down on illegal black money and they don't back consumer protection, RE is bound to increase.

This is like asking the GOI to crack down on itself!

polt said...

Bust accelerates in parts of AU. Tier-1 cities mostly flat though.
http://www.news.com.au/money/property/property-prices-battered-in-parts-of-australia-amid-heavy-discounting/story-e6frfmd0-1226297242759

I expect it will be similar here. Tier-2 cities will drop first. Chandigarh has dropped almost 30% in the last year.

For years, folks kept saying AU was different (Chinese demand, mining boom, low interest rates, govt will never allow prices to fall, etc). Finally, it is turning out the same as other countries.

aam aadmi said...

As long as GOI law doesn't crack down on illegal black money and they don't back consumer protection, RE is bound to increase.

Haven't we heard this logic before somewhere? The thing is that a black money economy only thrives in the presence of white money. If the MNC salaried class in India disappears so will this real estate as happened in 2009.

Do you expect all the black money wallahs to buy all the flats in the market and then sell it among themselves? This is a ponzi game and it needs innocent suckers to keep the game alive.

DingDing said...

@samix

lol

RealityFool said...

As long as GOI law doesn't crack down on illegal black money and they don't back consumer protection, RE is bound to increase.

This statement is wrong. in democracy people are responsible.
Rich people create trust funds and dont pay taxes. Even if they pay, they pay after expenses
Poor people take freebies and eNjoy the life.
Middleclass pays taxes and doesnt involve in electoral process.

Anonymous said...

//Haven't we heard this logic before somewhere? The thing is that a black money economy only thrives in the presence of white money. If the MNC salaried class in India disappears so will this real estate as happened in 2009.//

Fall will not be significant. At the most 10%.


//Do you expect all the black money wallahs to buy all the flats in the market and then sell it among themselves? This is a ponzi game and it needs innocent suckers to keep the game alive.//

Correct. Black money flow has to increase as it has been increasing for number of years. Who and what is there to stop this? White money is just to show on books - not really in play. Been to government office and corporates ... how they cheat on manipulating books.

Anonymous said...

//Haven't we heard this logic before somewhere? The thing is that a black money economy only thrives in the presence of white money. If the MNC salaried class in India disappears so will this real estate as happened in 2009.//

Fall will not be significant. At the most 10%.


//Do you expect all the black money wallahs to buy all the flats in the market and then sell it among themselves? This is a ponzi game and it needs innocent suckers to keep the game alive.//

Correct. Black money flow has to increase as it has been increasing for number of years. Who and what is there to stop this? White money is just to show on books - not really in play. Been to government office and corporates ... how they cheat on manipulating books.

Anonymous said...

Indians don't protest and try to topple corrupt Government, they just keep adjusting. India needs people who want to adjust their surroundings and not themselves. Why put up with lack of water, lack of power, lack of sanitation or basic amenities taken for granted in the rest of the World. If the Government can't do it, change the damn government, do it yourself, form grous that can taken on GOI. Academics, Religious groups, Media can be a good counter-balance to GOI apathy.

rant over for today.

Anonymous said...

//This statement is wrong. in democracy people are responsible.
Rich people create trust funds and dont pay taxes. Even if they pay, they pay after expenses
Poor people take freebies and eNjoy the life.
Middleclass pays taxes and doesnt involve in electoral process.//

What freebies do poor people in India get and by whom? Shelter? food? education? clothes? WHAT exactly?

Rich people DO NOT CARE. Most of them have tons of black money and always on hunt to invest, lately it has been real estate... forget trust funds, etc...

Middleclass are happy go, they are happy that their RE is increasing, MNC jobs pays are increasing, they are the one keep rich rich and poor poor. They want to be rich, but at same time they are living like poor. They take pride in buying iphone and ipads, but would fight over buying tomatoes at cheaper price for just Rs.2

India does not have so called democracy. It is family run propitiatory business where everyone is happy where they are.

RealityFool said...

What freebies do poor people in India get and by whom? Shelter? food? education? clothes? WHAT exactly?

May be you have not heard of Tamil Nadu

Free Rice
Free Power + ( Free 12hrs powercut )
Free Health Insurance
Free Sheep
Free Cow
Free Grinder
Free TV + (Subsidized cable Connection)
Free Fan
Free Mixie
Free Laptop
Free Land
Free Cloths
Free 100 days work of salary (Federal project )
Free house was promised by Karunanidhi and even gave them the tokens.but he was not elected
Subsidized trip to Jerusalem and Mecca

Tamilnadu CMs paid bribe to poor people with middleclass taxes.

middleclass people are not realizing they are working 4 months for Govt.
that means they work four months to support their poor brothers. Great people indeed

tamilian said...

Ref. to above
80% of Madrasis defecate in open, but more own a mobile phone: Census.
Why isn't Tamilnadu Govt constructing public toilets instead of doling out goodies etc. More people die of communicable diseases than out of starvation in Tamilnadu.

Regarding pilgrimage, i dont think the govt subsidizes. Most tamils dream of going to singapore and Malaysia than to some fuckall religious places like jerusalem . Ayyappa pilgrimage is a exception where they can indulge in all sort of orgies

RealityFool said...

Why isn't Tamilnadu Govt constructing public toilets instead of doling out goodies etc
This is question I asked in many forums.

But finally understood about democracy. People get what they deserve.

Biharis elected Lalu and are migrating to other cities for job as they missed opportunities during 1995-2005.

It will be the same for TN people.
They will have to migrate to other states looking for power/water and Job. Tamilians are just a decade away from the disaster.

They have to pay for all the free toys bought from leverage sooner.
they are already out of electricity.Other problems are waiting to happen.

Anonymous said...

//Free Rice
Free Power + ( Free 12hrs powercut )
Free Health Insurance
Free Sheep
Free Cow
Free Grinder
Free TV + (Subsidized cable Connection)
Free Fan
Free Mixie
Free Laptop
Free Land
Free Cloths
Free 100 days work of salary (Federal project )
Free house was promised by Karunanidhi and even gave them the tokens.but he was not elected
Subsidized trip to Jerusalem and Mecca//

There were farmers doing suicide all over India. India has poorest people on earth, who do eat and shit at same place, where were these programs then?

Any GOI program that does not benefit well being of their citizens is as good as not having programs.

Nothing is free. Freebies are only for black marketers/ cheaters -be it rich or poor.

Anonymous said...

@Anonymous anne, 9:21 AM

The programs that you mentioned were/are available to Tamilnadu Citizens. Now, I guess you live in Maharashtra where you are deprived of all basic amenities because of high corruption and goondagiri. So, your people commit suicide. This is essentially your state govt problem. You don't expect jayalalitha feed ghatis, do you

ainglec

AnonymousLulz said...

India was and is a land of slums -
Go go Google Earth and look at satellite picture - especially Pune - Outside the walled pre-British town - every locality has large slum surrounded by neighborhoods -
Mumbai is even worse where the slums and railway tracks are so full of people and shit, that people just sleep on the footpath or inside pipes.

This is the reality - to have planned urban development - government should help by easing land rules, providing road connectivity, public transport, water, sewer, electricity and garbage collection - everything else follows - If government cant provide, it should allow regulated private companies to provide it -
Instead the corporations and state govts have been utterly useless for last 4 decades in India -
Even Lahore and Karachi look better from satellite pictures at least.
No freeways, no connectivity, no water, no drainage, no playgrounds, no garbage collection - only 2 crore flats surrounded by slums

Even in cities like Delhi and Bangalore where infrastructure projects have been pushed through there is rampant corruption -
and in new cities like Navi Mumbai, Gandhinagar, Gurgaon, everywhere the infrastructure is in distress.

These endemic problems are more worrisome than merely increasing wealth via gold and RE investment - as someone said - whats the use of driving a Porsche in India if it has to pass over streets laden with human poop and cowdung.

samix said...

I think people do not revolt in India because our masters are very very cruel, I think if ever a meaningful protest develops the one's that take part in it will be terribly tortured not just them, but their entire families spanning 7 generations.

Secondly there is absolutely no institution that Indians can depend on that will come to their rescue if the protests become bloody so they adjust because they have no choice and many take the path of least resistance, ie leave India, because their skills are in demand.

Someone commented that Indians behave better in the west and other places, because we are afraid of gora or foreign masters, I do not think that is the case, when a Indian person is taken from India and put in a foreign country, they realize that they are respected for being human, judged for what they have to offer and appreciated even at the most smallest of achievements, this is the reason for the massive change that occurs to them and they start to give back.

I may be completely wrong though on all counts.

Anonymous said...

Debt ridden India makes claims on its insurance company. http://bit.ly/yxuhiG

Getafix said...

Just like beauty lies in the eyes of the beholder, the worth of real estate too lies in the mind of the buyer/investor.

The non existent roads may be filled with people poop or cattle, there may be tankers carrying water in and sewage out (hopefully different ones), electricity may only be available from "soundless generators" but if the potential user deems in his mind to pay crores for a shoddily built dwelling, he will!!!

Real Estate in India will keep appreciating 30-35% annually till eternity, despite all you naysayers.

Which means an apartment which costs 1.5Cr today will cost 10Cr 5 years from now.

I am saving to buy a 10'X10' piece of land somewhere high in the Himalayas. Half of that space to sleep and the other half to grow hash!!!

aam aadmi said...

http://in.reuters.com/article/2012/03/14/india-railways-borrowing-idINDEE82D05Z20120314

The railway ministry plans to borrow 500 billion rupees from the market through the Indian Railway Finance Corporation (IRFC) in the 2012/13 fiscal year, Railway Minister Dinesh Trivedi said on Wednesday.

Our government is on a borrowing spree, anything wrong with this picture ???

Realty Minister said...

Nice Post.Thanks for sharing information about real estate. Real estate in India

Anonymous said...

...."The railway ministry plans to borrow 500 billion rupees from the market through the Indian Railway Finance Corporation (IRFC) in the 2012/13 fiscal year, Railway Minister Dinesh Trivedi said on Wednesday....."

Borrowing is a corporate norm. By investing or buying shares, you own part of the business, however small it is. Borrowing doesn't mean that the govt is bankrupt.

High real estate prices are due to population boom. People are competing to acquire the best living places. The underdogs are pushed to the huts and allowed to breed in filth and squalor. It is not the govt s fault that someone marry s 4 wives and breeds 4 dozen children increasing the slum population

Bharat Mata Ki Jai

Anonymous said...

strongly agree with 8:20pm above. just look at the teeming number of people on the roads. a pathetic failure for the govt. the population time bomb is ticking.

Anonymous said...

//Borrowing is a corporate norm. By investing or buying shares, you own part of the business, however small it is. Borrowing doesn't mean that the govt is bankrupt.//

First of all Government is not business or corporate, it is NON REVENUE generating unit. It's job is to govern and regulate. It does not have any products or services to sell. If government is running like corporate or business, then they should be profit making, if not, it CAN BANKRUPT itself.


//High real estate prices are due to population boom. People are competing to acquire the best living places. //

Wrong. High real estate prices are because of necessities are used as investments. What if investors can buy all fresh water? Still wanna blame it on population. Go travel India, there is enough land for all of us. Another issue is government not zoning lots of land for residential, Infrastructure, etc.

//The underdogs are pushed to the huts and allowed to breed in filth and squalor. It is not the govt s fault that someone marry s 4 wives and breeds 4 dozen children increasing the slum population//

Government should put measures if over population is going to impact well being of majority. What happens if you have pet dogs and they start breeding like rabbits. You are the governor in your house.

samix said...

It is not the govt s fault that someone marry s 4 wives and breeds 4 dozen children increasing the slum population

1961 census report:
As per this the incidence of polygamy (having more than one wife) are as follows

Adivasis (15.25%)
Buddhists (7.9%)
Jains (6.72%)
Hindus (5.80%)
Muslims (5.70%)

RealityFool said...

http://economictimes.indiatimes.com/markets/real-estate/news-/cci-accuses-dlf-of-imposing-unfair-conditions-on-magnolia-flat-owners-in-gurgaon/articleshow/12226174.cms

due to the change in the number of floors, there has been a change in the floor area ratio and density per acre for the project.

Anonymous said...

Do you think so many buyers do not read contract/agreements made by builders? Mind you, buyers are FULLY AWARE. Buyers think all contracts/agreements are just formalities (sab chalta hai) and are just happy that their RE will increase in value every year.

Even if you want to contest, no one really know how to, moreover they have absolutely no faith in system.

There have been instances builders have agreed to return money, but buyers backed out and suck it up. GREED.

I feel we are at no point of return on suffering, if RE will fall - people will suffer, if it doesn't fall - people will still suffer (high cost of everything).

Why does everyone push on growing economy, rather than stable economy.

skeptic's ghost said...

@Anonymous

Stable economy will imply that the poorest of the poor will continue to remain that way - exploited and miserable.

The only system that has kind of worked has been a -
Capital investment and private enterprise system - helped by a trade friendly, secure regulatory state, with easy access of raw materials, energy, land and water to private enterprises.

All other systems have either perished by war or revolution or have perished by prolonged stagnation.

The problem of India is that the lines between private players and the state (legislative/bureaucratic/judicial) are non existent -
the elites are elites in one name or the other - its either that or a very lethargic yet predatory state that fails to do what it supposed to and fails worse in what it is not supposed to do

Example - Air India, Coal, Gas, BSNL-MTNL, banks etc - is not government business - failure

Other example- law and order, road, public transport, health infra, regulation of resources, control of spectrum, aviation rules, health standards, business ethics, - is the govt's job but it fails at it too


As I said before - people want capitalistic gains for what they own but want socialist price controls for what they want to own

Anonymous said...

@Stable economy will imply that the poorest of the poor will continue to remain that way - exploited and miserable.

I don't agree. Stable economy implies minimum/zero inflation. i.e. no hidden tax on poor and fixed income class.

Stable economy can also grow at an organic rate that is tied to the people's ability to save and re-invest and also absorb losses from their ventures.

On other hand growing economy fueled by credit/debt rather than savings (i.e. stable growth) strictly benefits the very few rich who have access to credit via their "connections" or already accumulated assets which can be used as collateral to secure the first access to money.

Armed with this government sanctioned credit line the rich can then go shopping in the stock market, real estate, gold, food commodities... you name it. Not only are they he first buyers, rest assured they are also the first to get bailed out when things go south. i.e. Their gains are privatized and losses are socialized.

So while it may be human nature to demand price controls for things we like to own, it is actually only the rich who are enjoying the utopia of socialized losses and privatized gains.

In the meantime, rest of us can sit back and watch the show.
Some may even participate and be lucky enough to enjoy a few gains but the long term (long as in generational) destruction to society as a whole is baked in.

Witness the decline of the West. For the first time the latest generation of US young adults will experience a lower quality of life and retire poorer than their parents.

Anonymous said...

In old days king and queen was absolute rulers. Everyone else worked for the benefit of king and queen and their chosen ministers / generals.

We had dynasties that comprised of the 1% that ruled over the 99% peasants for centuries. If peasant protested against king or queen or their friends he could be jailed or even executed.

Thank GOD things are so much more different today with all this democracy and elections business...

Anonymous said...

Guys, beyond speculating on a black swan event can we logically conclude what will be the trigger(s) for a real estate downturn in India?

As I see it, unlike the US where subprime borrowers provided the fuel to the speculation fire, the RE market in India is primarily fueled by the IT crowd (both domestic and NRI)

Reason being IT industry brings in huge forex wealth into the country and can play the game where if rupee depreciates they make bigger profits and higher bonuses/raises.

Are there any IT experts who can tell us if they foresee a slowdown or even a crash in IT? If these buyers were to hold back or vanish from the scene then IMO RE will be in a free fall and builders and lenders thinking will also change.

Or alternatively if you see an uptick in IT hiring and salaries. In that case it would be a bullish sign for RE in the cities that are dominated by IT.

Anonymous said...

In 2G scam, INR 1600 was stolen from every man, woman and child of India.

If someone stole 10 rupees from you and you caught him 9 out of 10 of you would probably give him a sound thrashing.

Here, 1600 rupees have been stolen from every one in the country and the thieves have been caught. How many have paid attention and demanded that strictest punishment to be meted out?

samix said...

Here, 1600 rupees have been stolen from every one in the country and the thieves have been caught.

They were caught housed in first class hotels(prisons), fed, entertained and then were allowed to go home too.

The big fishes are out, the small fries are still in. By the way just some days ago I came to know about another corporate practice where the big shots who have actually committed the stealing buy people to go to jail for them!

For example in a firm X, the CEO defrauds the people in a 2G scam for a 100crore rupees. When the heat turns on, he asks his junior, who is unknown to the world to take the blame on himself and go to the Jail, in return he will pay the Junior 20crore rupees.

So now even if people are punished it's no big deal,because that guy may just be making money with every day that he spends in Jail, whereas the real culprit is out partying and having the best time of this life!

Anonymous said...

http://www.economist.com/blogs/banyan/2012/03/indias-census-results?sort=3#sort-comments

Anonymous said...

Here's an ad:
3BHK Luxury Apts Starts at Rs. 63 L - Gurgaon

63 lacs starting. Haha. Apparently prices will never fall.

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Anonymous said...

"3BHK Luxury Apts Starts at Rs. 63 L - Gurgaon"

Where is this sir? Let me quickly go and book all flats at this rate...thx for giving information for such a cheap RE..

China Hard Landing said...

While we are discussing about Indian Property Market, China is actually undergoing hard landing and prices - especially property prices are deflating faster than Indian developers can raise prices or SuperBuiltUp Area ratios. Listen in here - http://www.bloomberg.com/video/88398512/

Anonymous said...

We should really be worried about India.

China can slow down but they have huge surplus dollar and gold holdings. Also they have hoarded several critical commodities and the Chinese government has also bought energy stakes abroad.

What has our government done in the meantime. What strategic investments have been made on behalf of the country and it's people?

All the gains of the boom years have been privatized, by hook or crook.

Common man can't even get basic necessity like reliable water or power supply.

As Warren Buffet once said, you have to wait for the tide to go out and only then you'll find out who has been left naked.

Getafix said...

Most people posting comments here write how worried they are about the future of the Indian Economy.
Who cares about that.
How does it affect the Real Estate sector.
As everyone knows, the Indian Real Estate boom will outlast and outlive all recessions, depressions and other doom and gloom scenarios.
After all, "Real Estate prices never go down" and they never will!!!

Anonymous said...

@getafix
lol :)

four seasons opening in bangalore..apartments starting only 3cr. :)

Anonymous said...

@11:20 AM
Ramprastha Rise

aam aadmi said...

The budget is out, looks like the govt is trying to goose the stock markets in every way possible. Trying to suck in the ordinary tax payer to park their money in stock market.

This is like a copy of what the US has been doing.

aam aadmi said...

A gift to all NRI folks on this forum from the govt. Now you have to declare all your foreign assets to the govt. Houses, bank accounts everything. Enjoy.

Pawan said...

Finally govt. provides an exit route to real estate investors. You can sell your property and invest the gains in stock markets or SMEs - no tax on that! If you do not lose that money in 1 year, you can take it out without paying any tax. All RE gains are now tax free.

Anonymous said...

New York Times article on Indian Banks

It really looks like a depression style scenario is building up for India and China..

samix said...

A gift to all NRI folks on this forum from the govt. Now you have to declare all your foreign assets to the govt. Houses, bank accounts everything. Enjoy.

I do not think that anyone is going to declare anything, what can the Indian government do ? Seize the assets in a foreign land ?

Anonymous said...

Was this the worst budget considering the inflation in India.
what do the members think?

Anonymous said...

//I do not think that anyone is going to declare anything, what can the Indian government do ? Seize the assets in a foreign land ?//

But they can severely limit what those NRI can do here. They can, but I don't know if they will.

Anonymous said...

I am a student in the USA(came here last year) and have witnessed this property boom since 2006 in my first year of engineering. We were back then looking for a flat in and around Malad West and the rates quoted were around Rs. 6000. However we were not able to finalize the flat as we were falling short of around Rs. 20 lac. Yesterday I heard from my day that he had been to Kalpataru builders in Kandivali East and they were asking for Rs. 1.8 cr for 2 BHK. I am stunned and frustrated at the stubbornness of these rascals. Even though half the flats are empty, they are still full of pride. Their sales team talks to you as if they are doing you a favor by even talking to you. I have decided its not worth coming back to India at all. Hopefully, I get a job here.Then I will call my parents here. Wish life could have been different.:(.

Spaze said...

Interesting and informative post! Thanks for posting.Spaze is one of the real estate developers for Commercial Properties in Gurgaon.

Anonymous said...

I am a NRI living in US for the last 14 years. I had purchased 2, 2bedroom investment flats in Andheri for 18 lacs in 2002 (Yes they were that cheap back just 10 years back). I recently sold one of the flats for 1.75 crore, and I am looking to sell the other one as well. I have invested that money in real estate in US (silicon valley). A condo in downtown San Jose costs about 1.2 crores and can fetch over 1 lac in rent. Thats what I call a sweet deal! I plan to buy few more condos here in US once I get rid of all my real estate investments in India. Investing in pproperty in Mumbai is the worst possible investment right now!

DhImAn said...

NRI said: I recently sold one of the flats for 1.75 crore, and I am looking to sell the other one as well.

Perhaps you know what you are doing, but I have only one word of warning for you.

IRS.

Artificial Grass said...

Across the city the most of the builders are sell up the stock for a discounted rates for the investors if any pay a major chunk of the struck buildes.

Shaily Jain said...

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Anonymous said...

guys here is a factual article on mumbai RE bubble n it will definitely burst some day

http://www.forbes.com/sites/greatspeculations/2012/10/03/greatest-real-estate-bubble-in-modern-history-has-yet-to-really-burst/

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Real Estate Companies in Indore

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Real Estate Indore

deepu said...

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property in Indore

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