1. USA Holding > 8500 tons of gold
The US government controls everything, Gold, the fiat currency, crude oil prices, interest rates, nuclear arms, defence technology, everything in short which is of any significant importance. Everythign else they are happy to outsource to countries down the totem-pole
10. India 550 tons of gold held by the government
The appetite of individual investors in India is negligible compared to the holdings in the soverign countries. Per capita a US citizen holds Gold more then any India citizen.
The crash is gold is a reminder to everyone that the middle class gets crushed whenever bubbles are created and gold is no exception. Full article here
The US government controls everything, Gold, the fiat currency, crude oil prices, interest rates, nuclear arms, defence technology, everything in short which is of any significant importance. Everythign else they are happy to outsource to countries down the totem-pole
555 comments:
«Oldest ‹Older 201 – 400 of 555 Newer› Newest»My friend just lost his job at NetApp in Bangalore. They laid off over half the staff. My friend has been looking for a job for almost a year with 10 years of MNC experience.
The Indian IT bubble is well and truly bursting.
Anon above:
Not true. There are many IT people in Bangalore and Delhi still being poached for higher salaries. I know a guy who got hired at 58 lacs in Bangalore doing some IT work.
I think IT workers don't need to worry but keep buying more houses and travel around the world on company's consulting account, all free.
All IT consulting companies are doing great. Their billable rates are high and with rupee depreciating, they have more raises and bonuses waiting for them.
NetApp is some stupid company in storage. They may have laid off one or two people. But overall IT hiring is very strong. I think IT folks should try to double their salaries this year. Average with 10 years experience folks should be making 50 lacs which is close to 100K USD, more than US counterparts.
Easy come, easy go. This new generation has not seen pain and is coming very fast like a storm. Most IT people who are over leveraged are going to get it really bad. Save your jobs and don't worry about RE/stocks. All are in a massive bubble.
@Getafix
Agree that Indians are largely apathetic and delusional as well.
Witness the recent IPL match-fixing. Cricket has for long ceased to be a sport (same way Bollywood is anything but entertainment) yet the masses continue to pour in their hard earned money and time to sustain their delusion. For the uninitiated, cricket and Bollywood are prime "industries" that have long been the domain of underworld/criminal money and illegal activities (prostitution, drugs, money laundering, illegal betting rings etc.)
Yes, India may not experience revolution but our society can collapse regardless.
One only has to look at our cousins to the West (aka Pakis) to realize that you can have a shell of democracy while the core social fabric is torn and underlying systems are completely corrupt and dysfunctional.
To a large extent we are already there.
US is already on road to recovery. in the next few months contracts will increase and IT people will benefit a lot. Boom will be a lot bigger Expect salaries to double soon in IT
Travellers from all across the globe come here in Delhi to explore the monumental beauty. However, in the present scenario as well the city is known for its architectural beauty which is modern and designed in contemporary style by the real estate companies. Almost every part of city has undergone a transformational change.
North Delhi
Surprising how when gold markets crashes, Indians are blaming the west as loosers. The markets crashed not because suddenly there was this huge amount of extractable physical gold found in mines, its because people had paper gold (ETF, derivatives, etc) So people sold their paper gold for other equities. It still takes $1200 plus to mine and refine an ounce of gold. So chill out, if you sold high, be happy. If you held no problems, because 70's style inflation is about to kick in very soon. You can only prinit x amount of paper money. And with inflation all your real estate will go down in value, because no working class people will be able to pay 20% on a EMI or take new loans.
So what dooes a new stock market high really mean:
in 2000 US stock market peaked. I could buy 5 oz gold, 300 oz silver and 30 barrells of crude oil
In 2007 US stock market reached 200 levels at this time I could only buy 3 oz gold, 100 oz silver and 15 barrels oil
In 2013 market has slightly exceeded 2007 peak and now I can buy a little more than 1 oz gold, 50 oz silver and 15 barrells oil.
What this tells me is that I have lost more than 3 times the value of my currency in the last 13 years in the equity markets, unless I purchased selective stocks or purchased real estate in 2000.
It also tells me fiat currency is rigged and screwed and cash is trash.
No bubble bursting folks, if a bowler can be paid 40 L, to give up 14 runs, how much money has the bowlers made over the last few years???? where do you think they invest their 40 L gifts???????? From top to bottom, the whole system is rigged.
Cops, Doctors, politicians, farmers, Bollywoodians, cricketers, and every other piss ant group you know, they are all into this.
it takes $800 to mine, for the big miners, so lots more pain to come. Since I am not super rich, i would like to see a gold crash, just to enjoy the pain on the other side. To be honest, i am jealous of these guys who have crorers, so i want them to fail , hahaha. :)
>it takes $800 to mine, for the big miners, so lots more pain to come
Why is the cost of mining even a barrier? Gold can easily go below that too. Its not as if all the gold being bought and sold is only the newly mined gold. Existing holders can also dump gold and bring down prices sharply (even below cost of production).
Novice Gold purchasers think that Gold should be bought as a counter measure to Central banks' respective currency printing policies. In this digital world they(Central banks) do not have to print currency. They probably be keeping aside serial numbers but don't have to cut Trees to print money. If you Google these words - Money Thin Air, you would know what I mean. Fed or Central bank prints money not to increase inflation but to provide loan to industries, infra or even small town farmer who needs loan to buy tractor or bike. The problem arises if Farmer does get the loan but only selected people get the benefit of infused money. Intensions of Fed's money and FII money are different. All the money infused by the Fed or Central Bank into the system has to be returned to Fed after paying interest AND taxes. Government is not a looser rather they make money in every transaction is made. I wont surprise if someone says money that you see in the IPL is mostly FII money. Whole financial system has become a Casino. Did you every play Casino? Higher the bets, higher the amount you make if you win.
Gold down Rs400 today and now down 20% from its peak. The so called 'XAU' holdings will not save RE in India.
Soon we will test the RE bulls conjecture that black money will save RE.
Black money doesn't mean it's fool's money and isn't freely available :)
And moreover nobody wants to see their asset's value going down.
REstate or XAU, if they aren't giving enough return money will find its way.
>REstate or XAU, if they aren't giving enough return money will find its way.
Aha, but the bulls will counter that black money does not care about returns. All it needs is a place to be parked :)
>Aha, but the bulls will counter that black money does not care about returns. All it needs is a place to be parked :)
I'm not talking about returns. To me it's about safety of my investment. If it starts giving -ve returns, investors of every color will start pulling out.
> If it starts giving -ve returns,
Nominal or real ?
Gold down Rs400 today and now down 20% from its peak. The so called 'XAU' holdings will not save RE in India.
Agreed that RE is in bubble and someday it will eventually burst just like every other bubble on this earth. However just looking at day to day Gold price movement will land you no where and sometimes will be very confusing. For instance, despite Gold price coming down we have London, Sydney, Beijing RE all going up previous month. What will be the exact trigger to cause panic in these markets is anybody's guess.
@Aha, but the bulls will counter that black money does not care about returns. All it needs is a place to be parked :)
As a favor to yourself, go and find out what interest Swiss banks (UBS, Credit Suisse etc.) are paying to their account holders. Then see if you can connect the dots a little better.
The average indian on the street has no clue about the inner workings and how this game is being played. Yeah, you may hear anecdotes or suspect relatives and friends who may have stashed away several lakhs or even crores, but the real game only begins when one deals with 100's of crores.
http://www.moneycontrol.com/news/business/cobrapost-ii-black-money-is-fuel-for-india-story_865496.html
@If it starts giving -ve returns, investors of every color will start pulling out.
You guys seriously need some investing lessons. US treasuries have been giving negative returns for last 5 years, yet demand is robust.
Negative returns on a perceived "safe" investment (such as Indian RE) is superior to meager returns on riskier instruments (such as Indian stocks)
And moreover, per my previous post, if you're "investing" black money, your overriding concern is the ability to keep it anonymous and shielded from the tax authorities. Even a negative return is preferable as long as it beats paying the tax rate.
>You guys seriously need some investing lessons. US treasuries have been giving negative returns for last 5 years, yet demand is robust.
Can you please give me a chart with US treasuries selling at -ve real returns?
>Negative returns on a perceived "safe" investment (such as Indian RE) is superior to meager returns on riskier instruments (such as Indian stocks)
It's very subjective: People will react differently when the returns are -5% and -50%. And RE is as risky as any other asset class, with similar fragility when things around it crumbles.
>And moreover, per my previous post, if you're "investing" black money, your overriding concern is the ability to keep it anonymous and shielded from the tax authorities. Even a negative return is preferable as long as it beats paying the tax rate.
Again please refer above. You'd keep your investment anonymous if it has some perceived future value. If that theory is violated, you better keep cash than investing.
>As a favor to yourself, go and find out what interest Swiss banks (UBS, Credit Suisse etc.) are paying
Everyone knows that they pay near zero interest rates. Your point is ?
It is likely that money that flows out of India is brought back and invested into RE here.
This is done why? Because the swiss banks offer a low return whereas inflation is running at 9% here. A swiss franc effectively buys you less every year here in India(even after accounting for rupee devaluation). You think a corrupt bureaucrat will be ok with that ?
All money cares about returns. Anyone thinking otherwise needs his head examined.
Even a 0% nominal return is effectively a -9% real return in our inflationary economy. This means a 50% fall in purchasing power in 5 years.
>And moreover, per my previous post, if you're "investing" black money, your overriding concern is the ability to keep it anonymous and shielded from the tax authorities. Even a negative return is preferable as long as it beats paying the tax rate.
What would happen if the rates are much lower than the tax rate?
Thanks for providing the information about the gold availability of both the countries.I like your blog it was more informative for me. Please visit our property portal for any king of residential property and commercial property in India.
>It is likely that money that flows out of India is brought back and invested into RE here.
This is done why? Because the swiss banks offer a low return whereas inflation is running at 9% here. A swiss franc effectively buys you less every year here in India(even after accounting for rupee devaluation). You think a corrupt bureaucrat will be ok with that ?
A high inflation strengthens the currency? Logic is not tying up. Why would someone liquidate his investments in Swiss banks and investment in an asset (RE in India) which is likely to give double digit negative return due to inflationary environment.
> Why would someone liquidate his investments in Swiss banks and investment in an asset (RE in India) which is likely to give double digit negative return due to inflationary environment.
Not till now. Inflation was 9%. RE returns were 15% or more till recently.
Now with RE returns slowing down (possibly negative even in nominal terms), money will flow elsewhere in the perennial hunt for yield.
My guess would be that the smart money has long since left. A large set of clowns who made easy money over the last few years simply by flipping properties will be left holding the bag. This was the case in the US. It will be the case here.
Too many people became rich simply by buying and sitting on property.
We will soon realise that the only way to create long lasting wealth is through innovation, productivity and hardwork.
^^ innovation, productivity and hardwork...
LOL. Good joke. Especially the hardwork part...
Time to get a reality check. This is what it takes to create long lasting wealth:
http://economictimes.indiatimes.com/news/politics-and-nation/politician-families-in-business-what-aided-their-meteoric-rise/articleshow/20163081.cms
Well, at least in the West they are discussing Apple, Google, Amazon and Starbucks innovation at work...
... in dodging taxes (aka hoarding black money.)
It is silly for these corporations to tout the line that "we're doing everything within legal boundaries" when on the other hand these are the very same corporations who subvert the laws by lobbying for these loopholes.
http://www.latimes.com/local/lanow/la-me-ln-apple-taxes-20130521,0,7083650.story
And if you don't understand high finance, here's all you need to know:
Levin's committee also found that Apple Operations International reported $30 billion in income over four years but didn't file an income-tax return in any country for the last five years.
In contrast, Joe Blow can't earn 300 dollars without the tax authorities knowing about it!
>Time to get a reality check. This is what it takes to create long lasting wealth:
A small sliver of the population will always use their connections and inside knowledge to garner wealth. It is no different in the West either.
I was actually referring to the vast middle and the upper middle classes which started to believe that buying RE was an easy and a sure shot ticket to quick wealth - the 'double your money in 4 years' syndrome.
If we do get downgraded to junk status by the ratings, expect interest rates to rise causing more pain for the leveraged masses and for our precariously perched public sector banks.
@to quick wealth - the 'double your money in 4 years' syndrome.
If real inflation is running at 10-13% then it's understandable that any tangible/real assets will automatically appreciate relative to the currency.
For middle class, RE is still preferable to gambling in the stock market or various chit funds.
It's easy to blame the average wage earner who is simply trying to secure his family's future. The root cause is again perversion by Central Bank in keeping interest rates artificially low to allow easy access of money to the elite class (i.e. creating inflation) while middle class is forced to take on additional risk simply to preserve purchasing power of their savings.
If bank deposits were earning 15%, stock and RE markets would come down to reality overnight. Not holding my breath...
In summary, if your prediction if for continuation of the loose monetary policy and 10+% inflationary environment, RE is a low risk way to protect savings.
BTW very apt blog on who is an Indian "elite" and definition of middle class in Indian context:
http://india.blogs.nytimes.com/2013/05/17/why-indian-elites-like-to-call-themselves-middle-class/
Please give some thought next time you jump onto the middle class bandwagon.
In a country of 1.2 billion, vast majority on this forum are pretty much the 5% if not 1% club members who have reaped the benefits of the inflation policies in the form of rising stocks and RE and most importantly income/wages have kept up (if not handily beaten) the inflation.
The only thing we're pissed about is the top 0.1% are earning several magnitudes more and crowding out the rest of us 4.99% ers when it comes to purchase of prime assets.
BTW numbers above are not my opinion, this is Census data:
http://indiatoday.intoday.in/story/indian-middle-class-2014-general-elections-votebank-politics-census-population-poverty-line/1/272018.html
If you have a car and internet connection in you household, you are an elite.
Now hopefully you will be outraged at the crores that are being siphoned off in scams and do something pro-active to dismantle the status quo...
This is true of US as well. For last 30 or so years, poor and genuine middle class has been getting poorer.
But the white collar workers (top 20%) were doing great. Yes there was crony capitalism and top 1% were getting disproportionately wealthy relative to the rest but who cared, while the going was good.
Fast forward to 2010 and the top 20% suddenly realize they have been scammed by the 1% ers and so we have Occupy protests.
The IT crowd in India is getting a dose of this painful reality. Ignoring the corruption and crony capitalism is no longer an option.
What good does it do when you are in the top 10% and can't even afford a worry free standard of living.
This gap didn't happen overnight, it took specific policies to widen it and as long as those policies and attitudes are maintained it is only going to widen. Right now 60% cannot afford a home in Mumbai. In 20 years, 80% won't be able to afford one and so on.
If the masses (especially the educated enablers of the 1%) don't awaken the day is not far when a few thousand families will control the entire country just like they do in Saudi Arabia.
This is not hyperbole. Already you have families building entire skyscrapers in Mumbai. Can you imagine, where 1000's of residents can live, that space being occupied by 4-5 people instead!
What will that do to Mumbai real estate prices and who can compete with such wealth and the influence it can buy?
India is now at no. 4 hot RE markets in the World:
http://www.smartcompany.com.au/property/055617-australia-moves-up-to-fourth-most-overvalued-housing-market-but-bubble-risk-subsides.html
>In summary, if your prediction if for continuation of the loose monetary policy and 10+% inflationary environment, RE is a low risk way to protect savings.
Sorry, but this is exactly the thinking that will be proved wrong. With high inflation, people have fewer savings left over for large value purchases. Look at the auto and RE markets today. Transaction volumes have crashed.
Wage growth has also slowed down.
What we can hope for is that our reversion to mean will be benign,i.e. RE prices will stagnate till rents and incomes catch up. The harsher version of this - where nominal prices fall rapidly, recession, job losses, bank failures (2008 all over again) is not in anyone's interest.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10074737/BRICS-risk-sudden-stop-as-dollar-rally-builds.html
The falling rupee is an indication that flows are reversing. For now this may just be some temporary volatility. But if it continues and increases then -
1.Interest rates will have go
higher to save the rupee
2. Funding for RE firms from private equity, etc will dry up. No one wants to invest in an illiquid asset when a currency crisis is around the corner.
Funding for RE firms from private equity, etc will dry up
As far as PE funding is concerned, it has already dried up. That is why Govt is in panic mode and is now okay with a put option covered PE investment in RE when RBI earlier opposed it :
http://www.moneycontrol.com/news/market-news/putcall-options-breather-to-real-estate-pe-sector_877329.html
Birla Corp. (BCORP), an Indian cement maker that reported its first profit increase in three years this week, plans to spend 22 billion rupees ($397 million) to add capacity, forecasting demand will revive.
The company, based in Kolkata, will increase its capability to make the construction material by 48 percent to 13.8 million tons a year by 2015, Executive President G. Jayaraman said in an interview in Hyderabad. Birla, which sells 80 percent of its cement to home builders, will set up three plants to add to its seven factories, he said.
Now that's putting your money where your mouth is. Easy to spout off nonsense online. The bears on this forum have been doing this for years now (and have been completely wrong)
If you had purchased in 2007 you'd likely be very close to paying off and owning your home by now instead of waiting for the mythical price drop which one can rest assured, if it ever happens, you'll have far bigger things to worry about...
Otherwise, watch your life pass by as you wait for rents to catch-up to fit in with bullshit theoretical models and meaningless equations.
watch your life pass by as you wait for rents to catch-up to fit in with bullshit theoretical models and meaningless equations.
To your surprise, you will find these days that rents are stagnant and there is ENOUGH supply of rental homes. I recently decided to move out of East Delhi to Gurgaon, thanks to the divine fragrance of STP, drains, and garbage treatment plants in and around Noida and transyamuna region. And the brokers in both areas confirmed rents to be stagnant with ample supply.
Imagine that when Price to rent is at the highest level and rents not moving up, what will happen to prices ?
On a side note, for those who think Noida is undervalued as compared to Gurgaon, I would say its a crime to make your children breathe toxic air in Noida/East Delhi. I don't know if this is one reason for Noida to be cheaper but do Indians care for it. Gurgaon air is also toxic but the Hydrogen Sulphide odor and 365 days mosquito menace in Noida is a no-no.
Seriously thinking of building/buying a house in Himanchal or Uttaranchal shortly. Any inputs on the best place to live there ? Dharamsala is one that I have heard of and would like to visit.
Gold crashed, did Indian families rush out to sell in the panic like the Western investors and hedge funds? Hell no, instead they lined up to buy more...
Indians believe in long term commitment and relationship, especially when it comes to gold and RE.
Gold and RE are the absolute last things they will part with. Long before an Indian makes their wedding vows, they have been taught never to part with gold or property (unless by doing so they are trading up, ofcourse.) In many ways, gold & RE is their first and sometimes only love...
>Otherwise, watch your life pass by as you wait for rents to catch-up to fit in with bullshit theoretical models and meaningless equations.
Your point is what here?
That buying is better than renting?
That because a cement maker reports higher profits we should all run out and buy homes ?
That mean reversion and laws of economics are alien to India and do not apply here ?
>Gold and RE are the absolute last things they will part with
Tell that to Manappuram and Muthoot Finance who are struggling now because borrowers are choosing to default on their gold loans (in effect parting with their jewellery ).
Even without the gold loan defaults, the fact that Manappuram and Muthoot have become so big is in itself proof enough that people are willing to part with their gold in exchange for money.
Dream on. Rupee is hitting all time lows and NRI's are rejoicing with US economy improving. What makes you think that if you don't buy no one else will?. Oh yeah, if you didn't think that way, you would probably not be in typing bits and bytes in this blog :-)
Rupee is hitting all time lows and NRI's are rejoicing with US economy improving. What makes you think that if you don't buy no one else will?
In the US, these days some houses in Boston get sold within one day of listing, and you can expect a deal to happen within a week in general. No arguments, put your house for sale in India these days and tell me if you able to sell it. Three of my acquaintances haven't been able to sell for the past 6 months. Just try it and you will know the truth yourself.
>Three of my acquaintances haven't been able to sell for the past 6 months. Just try it and you will know the truth yourself.
I'm myself facing this for a year now. I go to see a house, I like it, but the asking price being too high I leave it. The same place is on selling block since then but the asking price has gone up. This is weird. Something which didn't sell for a lower price is quoting at 20-30% premium, what do you call this?
what do you call this?
Hope
what do you call this?
Hope
Or a sellers market...
Your point is what here?
My point is for the innocent bystanders (who actually wants to buy a home) to not fall victim to a handful of bears who have been regularly wrong for the last 10 years.
For every anecdote the bears have, there are 10x opposing data points and trends. Ultimately there is reality on ground which is that of RE appreciating (or currency depreciating, however you want to call it)
If the bears can go into a frenzy when car sales drop (which BTW. has at best a remote connection to residential housing), then surely a rational person would be open to a counter-point that one of the largest cement company in the nation is making a record profit and expanding on the strength of residential housing.
Anyhow, I see no point to arguing with those who have committed their lives to delusion. For them reality is illusion and their own delusion has become reality.
To the Birla Corp guy:
The stock market doesn's seem to share your enthusiasm. Birla Corp is down 16% YTD and is it at the same price as in 2005. Your 10x examples can be easily countered - DLF, Indiabulls.
Maybe you should buy some Birla common with money left after purchasing RE. RE Diversification?
>My point is for the innocent bystanders (who actually wants to buy a home) to not fall victim to a handful of bears ...
So now you are couching your bullishness as social service!!
I have been following this blog for more than a year, but this one really takes the cake buddy.
If the bears can go into a frenzy when car sales drop (which BTW. has at best a remote connection to residential housing), then surely a rational person would be open to a counter-point that one of the largest cement company in the nation is making a record profit and expanding on the strength of residential housing.
Cement is a raw material while cars are an end product and car sales are a good indicator of retail demand, cement is also an indicator but it's a lagging indicator because construction is a big ticket item and contracts which have been signed must be completed. Moreover since there is a bubble, by definition construction is happening while sales are stagnant.
My point is for the innocent bystanders (who actually wants to buy a home) to not fall victim to a handful of bears who have been regularly wrong for the last 10 years.
I don't know what you are angry at, bears on this blog have never said don't buy a house if you want to live in it. If you want one for living purposes, don't wait, go ahead and buy. It's like buying gold for insurance purposes, you really don't care about the price, you go and get some.
It's just a bad investment idea in the long run, that's all. If you've made money in the bubble, good for you, be happy about it.
A nice read -
http://www.firstpost.com/economy/decoding-the-great-indian-real-estate-ponzi-scheme-804277.html?utm_source=hp-footer
Some Highlights of the real estate ponzi scheme-
>>>
companies are using money that has been raised for new projects to pay off interest on debt as well as repay debt. Hence, there is no money left to build homes.
>>
and
>>
The important part here like any Ponzi scheme is that it will keep running as long as the money keeps coming in. And the money will keep coming in as long as people continue to have faith in real estate as a great investment that has given fabulous returns in the past.
>>
And that is the key point. As long as there is 1 single person left believing in the scheme, it will go on.
Now how much time it takes to reach that 1 single person in 100+ crore of population is the point of debate.
Till then, sit and enjoy the show...
-SG
^^^ 100+ crore is not the target market for current RE projects.
The people can afford Marutis but the market is only catering to those who want Ferraris.
Interesting analysis on Indian Housing Bubble :
http://wallstreetfool.com/2013/04/27/indias-real-estate-bubble-is-about-to-burst-violently/
http://www.thebubblebubble.com/indian-housing-bubble/
They call them "shacks" and term these million dollar prices a bubble. In Mumbai or Slumbai as some people refer to it...much worse pigeon holes are sold for million dollars where the infra is so bad that even africa can probably claim to be better...
Million Dollar Shanties
^^ It's the land that is valuable, not necessarily the structure on it.
Even for a newly built skyscraper, cost of land was probably the major component when compared to everything else.
Cement is a raw material while cars are an end product and car sales are a good indicator of retail demand
Let's for a moment agree...
Despite the overall slowdown of India’s automotive market, the country’s luxury vehicles segment – that is those cars which are 4.5m in length, priced above US$32,000 or have an engine size of at least 1800cc – continues to grow at double digits.
Industry experts estimate that annual luxury vehicle sales in India will top 325,000 units by 2020, becoming the third largest luxury vehicles market in the world, behind only the USA and China. These figures are in line with the growth of the key demand driver of luxury vehicles: high net-worth individuals (HNI).
Thanks to the country’s strong economic performance in the last decade, combined with continued GDP growth of above 5% annually, India saw its HNI population reach 205,000 in 2012, a number which is expected to rise sevenfold to about 1.5 million by 2020.
So yeah, can the influx of an extra 20-50K HNIs every year sustain the property boom in tier 1/2 cities. Easily...
In essence, these are the market makers, HNIs investing directly or indirectly (via PE) in the RE sector. Your average Joe Schmoe taking out a 20-50 lakh loan to buy a flat is a side-show.
Will there be price correction? Surely in fringe areas with no services / security, there is always a risk that demand (from the economically weaker sections) will collapse in a downturn as those who have salaried incomes will feel the biggest pinch and think twice about relocating to the remote suburbs.
For the rest of the market, which caters mainly to the upwardly mobile class (aka crorepatis), the demand will continue into the foreseeable future. I don't see the appetite for status and exclusivity dissipating in India's nouveau rich.
The Indian story of the 20 years since liberalization has the makings of a bizarre reality show:
http://luxpresso.com/news-lifestyle/the-indian-hnis-ott-spending-habits/18778
To present an anecdote.
A few months back my uncle attended a wedding of a Mumbai couple in Rajasthan. It was a week long ostentatious display of wealth.
The icing on the cake was the host ordered each of his guests to have their measurements taken at the resort. On the eve of the reception all guests were given a 10,000 dollar suit to wear and keep hereafter (talk about enforcing a dress code)
Apparently, they were able to turn around ~150 suits and gowns within 5 days by outsourcing to a firm in Hong Kong.
And no, this wasn't an Ambani or Tata. The guy who threw this bash is an average corporate lawyer.
does your uncle still wipe his ar$$ with hands or does he go western style, ie tissue paper???? did he force his guest to go tissue paper way?????????:) or take it to the next level, the western way, not even taking shower for a week,but wearing suit????
Lakshmi Mittal to sell London home at a loss for Rs 925cr
Looks like HNI's are doing very well but not one of the World's richest man!!
http://capitalmind.in/2013/05/indias-quantitative-easing-16-per-year-since-1997/
^^ Good find.
The result of this is that India's top 53 people have wealth greater than bottom 800 million!!
Indians are supposedly good at math, yet not many know that you can't have a democracy when the wealth/power equation reads thus:
53 individuals > 800 million.
And no things will not change, the inflationary scenario suits the wealthy and powerful just fine. It continues to make them stronger while the vast majority becomes beholden to politicians and government for handouts...
Just another day in the news cycle, writing is on the wall.
Watching countries from around the world grow and prosper, we tend to assume that global poverty is falling. And in fact, the World Bank says that in 1981 nearly half of the world's citizens were impoverished, that is, they lived on less than $1.25 a day. And today, less than a fifth of the world's population lives in poverty. In raw numbers, that translates to a 40 percent drop from about 2 billion to 1.2 billion people.
But when we dig deeper, it’s clear the picture is more murky. Put simply, most of the reduction in global poverty has to do with one country – China. Take it out of the equation and the numbers look very different.
Let's go back to 1981. Back then, China accounted for 43 percent of the world's poor. The other major contributors were South Asia, with 29 percent, and sub-Saharan Africa, with 11 percent. Fast forward just a decade, and you'll see that China's share of the world's poor began to drop. The trend continues through the 2000s. By 2010, China accounted for only 13 percent of the world's impoverished population. South Asia's share had jumped to 42 percent, while sub-Saharan Africa's share tripled, to 34 percent.
The World Bank data shows that the total number of impoverished Chinese declined by nearly 680 million people in the last three decades. That's about 95 percent of the total global decline. By registering double digit growth for three decades, Beijing has transformed the fortunes of a poor nation within a generation. That's amazing, but it tells you that in the rest of the world, progress has been much, much slower – if there's been progress at all.
There's a lesson here for other developing countries.
Take India, for example. New Delhi also claims to have made strides against poverty. Look at the numbers. In 1981, 429 million Indians lived in poverty. By 2010, the total number of Indians living in poverty was still around 400 million.
Contrast with:
It seems India's rich aren’t satisfied with acquiring RE and homes in Mumbai or London anymore. With their family businesses being managed by well compensated professionals and meetings conducted from private jets at 30000 feet, they’re now angling to buy entire offshore islands to escape from it all.
A recent news report said that though no one was naming names, Indian billionaires have been buying islands near Mexico and in the South Pacific.
Island prices fall in the range of a reasonable Rs8 crore (approx) for 1.3 acres off the coast of New York to Rs1,550 crore for the 3,000 acre Lisbon Island, found off the coast of Portugal.
Super wealthy Indians' buying habits have gone international as these anonymous billionaires join the ranks of island owners like Hollywood stars Johnny Depp, Nicolas Cage, Leonardo DiCaprio and Mel Gibson.
So yeah, can the influx of an extra 20-50K HNIs every year sustain the property boom in tier 1/2 cities. Easily...
Perpetually ? For how long 10 yrs - 20 yrs or 25 yrs ? I'd like to turn the question about when the bubble will burst to bulls and ask how long will this continue.
I have already tackled the theory of the rich being able to perpetuate this nonsense at the expense of everyone else. It's simply not possible, it's like doubling the number lions in a jungle while lowering the number of herbivores.
Even the economy (no matter how absurd) isn't outside the rules of nature.
What slowdown. Now prices are set to zoom.
http://timesofindia.indiatimes.com/city/noida/Noida-land-prices-may-zoom/articleshow/20302896.cms
does your uncle still wipe his ar$$ with hands or does he go western style, ie tissue paper???? did he force his guest to go tissue paper way?????????:) or take it to the next level, the western way, not even taking shower for a week,but wearing suit????
Why stop at 99%? Go western all the way.
Tickling your ass by the Ganges every morning is hardly a sign of progress...
What slowdown. Now prices are set to zoom.
buhuhu...just put your house on sale and know the reality. I am living for 2 years in a so called posh locality as per Indian standards, and in my society comprising 127 apartments, I have never seen more than 1 house put on sale at a time. Now there are 5 houses put on a sale and the figure goes up every week, which is unprecedented. Not a single transaction has happened and more and more people are putting there house on sale.
These are early signs of bubble bursting, and you will hear this in media after 6 months. Put your house on sale and know the reality.
buhuhu...just put your house on sale and know the reality.
One of my colleagues recently bought in a project and 4 week later another one bought in the same project at approx 8% less. Since the deals are still not complete, I can't give exact details.
One of my colleagues recently bought in a project and 4 week later another one bought in the same project at approx 8% less.
The data I mentioned is for East Delhi (Vasundhara Enclave) and is correctly gathered. There are only ready to move houses here, no new projects. Will gather similar data for Gurgaon as I am shifting there next week. I expect similar pain in the system there.
I would encourage everyone to post correct data of their locality without any bias so that we can know if this is trend is local to Delhi or is pan India wide. Just plain simple data like number of houses on sale present and past will do.
http://www.bbc.co.uk/news/world-asia-india-22479055
good luck getting any meaningful reduction in RE prices...
@REBear
I have a few data points for you.
1. A Housing project by DLF on OMR Road Chennai. The project saw 12% annualized appreciation in prices, a lot of houses were booked on the very first day and then cancelled later when people saw that the prices were too high.
2. Frazer Town in Bangalore saw an annualized appreciation of 10%.
3. Langford Town in Bangalore saw an annualized appreciation of 7%.
4. My colleagues bought a project by Purva in Bangalore which has seen an appreciation of 12% YoY.
5. The annualized appreciation in the Bommanhalli Lake area of Bangalore has been in the range of 8-9%.
6. Someone I know sold a flat for 70 L a few days back in Mumbai, the same was bought for 35 L three years ago.
7. The place where my folks live in Kolkata has seen an appreciation of 15% in price.
This data is for the past 3 years.
> I have a few data points for you.
We understand the numbers are given on annualized basis when the recent performance is poor :)
And this is reality my friend.
@Above
Mumbai RE has given annualized returns of over 20%, so no one is hiding that, the point I was trying to make is that RE isn't some goldmine, you have low performing as well as high performing sectors.
You have to watch what you buy, otherwise it's better off investing in an FD or a company debt scheme.
http://www.firstpost.com/economy/tight-spot-realtors-turn-to-lawyers-accountants-to-push-office-sales-824557.html
@aam admi - A lot of these gains are simply in the 'advertised prices'. People invest in an apartment, a few months later the builder quotes more so the existing investors think they too have made a gain.
It does not mean transactions are taking place at that rate. Besides builders have to quote higher or else face a lot of angry pre-existing investors.
In such cases, we start to see offers and gimmicks like free parking, 10gm gold, 20/80 scheme, etc etc. This is to give a discount, but the headline gathering Rs/sq.ft rate is higher.
@aam aadmi
Thanks for the past data. But what I am looking for is most recent data, like if there is a spurt in the number of houses put on sale in your locality, because thats the most authentic info that one can gather.
It's happening here in Delhi for sure with a record number of houses put on sale all waiting for transactions. One may wonder why it happened all of a sudden ? The reason is simple - contrary to expectations rents have not moved up at all and the alleged market prices are up 30%, so everyone decided to put it on sale. And these are black money transactions, so those who say RE is only a parking place for black money need to think again. When yields do not increase as per expectations, money irrespective of color finds an exit.
Okay so the cookie ain't crumbling yet.
The friend who got the apartment at 8% less got it because the owner is buying another property with that money. Seems like there is a huge rush for this new project (its from DLF) and another one of my colleague has also booked in the new DLF project hoping to exit in six months - by the time the second installment becomes due. This friend has taken a huge bet because he has paid only 1/16th (which is a very substantial sum) of the total apartment cost. He is hoping he does not have to make the second payment. The party is still on guys!
You have to watch what you buy, otherwise it's better off investing in an FD or a company debt scheme.
What you have not accounted for is that even if the returns are 10%, if we take a leverage of 10:1, it will look like 100%.
Guys I am staying seawoods estate nerul navi mumbai.price for 3 bhk here is being quoted for 3 crs.same flat fully fernished is available on rent for 35000 only and even for such low rents for a house worth ? 3 crore you will have difficulty in finding tenants .same is the case for palm beach road. Is this not sign of bubble.
@Pawan
Ok so what I can understand is that levered buying with margin money segment is still active. But what about the ready to move houses transactions ? Do you see the number of apartments put on sale increasing significantly ? And how much is growth in rents in your locality this year ?
@REBear, Pawan - "Ok so what I can understand is that levered buying with margin money segment is still active"
A lot of margin players are already in trouble. They never intended to pay more than 10 or 20% of the cost , but now with transactions falling sharply, are stuck with an illiquid asset in a slowing market.
Study after study has shown that in asset bubbles very few people make money. Most people end up buying close to the top and lose money (in real or nominal terms). The smart money has already moved on by then.
In fact, a recent study of the gold ETFs in India showed the same thing. ETF Buying was at its peak about a year or so ago when gold climbed from 25k to 31k.
@ReBear
Do you see the number of apartments put on sale increasing significantly ? And how much is growth in rents in your locality this year ?
Not sure since I am not scouting for such info. I post if I come across anything interesting.
As for rents, they go up 10% every year like clockwork.
But if someone bought in the dip of 2009, their rental yields from the 2009 buy price is now 5-6% - very good I would say even if you ignore the capital gains.
hi,
nice post you have share, Nimbus Golden Palm Village project in Noida Sector 22A
>Guys I am staying seawoods estate nerul navi mumbai.
In your case rent has to catch up. 35K for a furnished 3BHK in Seawoods is low.
Having stated that, a 3Cr flat in Seawoods is beyond all logic of utils of cash.
>As for rents, they go up 10% every year like clockwork.
Not here in BLR. Many places rents have stagnated due to high inventory of rentals.
A friend of mine stays in Brigade gateway (opp Orion mall). 3BK rent was around 27k. Now another owner in the same building with a bigger 3BHK flat (about 200sqft more) is offering his flat for the same rent.
BTW, I never understood why apartments at higher floors cost more, when the rent you can get is the same !
BTW, I never understood why apartments at higher floors cost more, when the rent you can get is the same !
In North India, lower apartments demand PLC.
Does anyone know why Purvankara is taking out half page ads in all newspapers and asking people not to buy a home now.
Is this some kind of a "reverse psychology" based marketing campaign? If so, this is one heck of a "desperate measure" during "desperate times".
Is the Brigade Gateway rent with or without maintenance ? commonfloor lists 3bhk ~35-40k.
>Is the Brigade Gateway rent with or without maintenance. commonfloor lists 3bhk ~35-40k.
Not sure. Might be without.
BTW, I never understood why apartments at higher floors cost more, when the rent you can get is the same
Depends on the local psychology. In Gujarat, after earthquake, high rise apartments were actually discounted.
Also, considering the piss poor fire fighting and emergency services in India, high rise living is a gamble.
Benefits are greater privacy, improved insulation from noise/air pollution and generally a feeling of being removed from the filth visible at the street level...
>Benefits are greater privacy, improved insulation from noise/air pollution and generally a feeling of being removed from the filth visible at the street level...
Yes, but why then are rents the same? Surely the same logic should apply to rents as well.
http://www.business-standard.com/article/companies/inventory-level-in-ncr-mumbai-hyderabad-doubles-in-3-years-113053000834_1.html
Correction in prices is almost inevitable. What remains to be seen is how much.
Note that this is just the inventory reported by builders. Add the investor holdings and we are looking at massive oversupply.
Developer can give freebies, etc in place of an explicit discount to get some sales going. Wonder what investors will do.
> Benefits are greater privacy, improved insulation from noise/air pollution and generally a feeling of being removed from the filth visible at the street level...
I live on a high rise building on the 11th floor & let me tell you that noise levels are the same as a lower floor, especially vehicle horns & the irritating reverse music. Air pollution & dust is also about the same, we do get a lot of dust. I do agree on the privacy part.
Rupee is going up again. Now NRIs will start buying properties and make life difficult for common man. No hope for RE prices to come down due to loaded NRIs
^^^ I am not sure where this misconception arises from that the NRIs are loaded.
Most of the guys I know are fairly well placed professionals in middle to high management positions and yet they struggle with traveling expenses, fees for the various classes their kids attend and mortgages, among other routine expenses.
Now NRIs will start buying properties and make life difficult for common man. No hope for RE prices to come down due to loaded NRIs
I have statistics here too. Last year I went to US and I met several friends as well as other NRIs too. Out of 10 people I asked, 8 already had Real estate investment made in India and 2 had no interest whatsoever. Going by this random sample, I don't think there is a significant percentage of NRI buyers left in the market.
And guess what, all these 8 NRI friends have invested in projects that are delayed and are happy collecting delay penalties by the builders. ALL of them gave the logic that if they were handed possession, they would have to spend on registration, make final instalment and its better for the project to be delayed !!!
http://capitalmind.in/wp-content/uploads/2013/05/image61.png
See this very interesting chart and map it with the housing bubble.
Our GDP is now less than what it was in the shock of 2008.
It keeps getting crazier. The DLF project I mentioned in my earlier posts which was the buzz amongst RE speculators has been stayed by court within two weeks of its launch and getting 'completely sold out'. The sad part is that one of my colleague is also invested in it.
More details:
http://www.hindustantimes.com/India-news/Gurgaon/DLF-s-Gurgaon-project-hits-court-roadblock/Article1-1068082.aspx
/// yet they struggle with traveling expenses, fees for the various classes their kids attend and mortgages, among other routine expenses.
What? My neighbour is in USA and his father says he makes 5.5 lakhs per month. That is a huge amount per month to make.
^^ That really isn't that much to make even in India anymore.
Moreover, may be the neighbor, in typical Indian fashion may have given in to fatherly price and overstated the amount perhaps. Or may have omitted to mention that the tax to be deducted.
What? My neighbour is in USA and his father says he makes 5.5 lakhs per month. That is a huge amount per month to make.
Not a lot of money at all. Its mere 10000 USD/month or a meagre 120K USD per annum salary. Take into account federal taxes, state taxes, cost of living, retirement saving, kids education, etc. You are charged for both water in and water out and the bill is significant as compared to India. If you own a property there, property taxes are significant. You won't end up saving even 2500 USD per month. That is the reason lot of my NRI friends earning over 150K have taken personal loans in US to finance property purchases in India.
guess what, all these 8 NRI friends have invested in projects that are delayed and are happy collecting delay penalties by the builders. ALL of them gave the logic that if they were handed possession, they would have to spend on registration, make final instalment and its better for the project to be delayed !!!
something doesn't compute. on one hand builders are facing cash crunch and are paying out above market interest to banks/PE. At same time they are OK with paying penalties to retail customers?!?
What is this business model and why didn't I learn this in B-school? Kuch to ghotala hai.
keeps getting crazier. The DLF project I mentioned in my earlier posts which was the buzz amongst RE speculators has been stayed by court within two weeks of its launch and getting 'completely sold out'. The sad part is that one of my colleague is also invested in it.
Why is it sad? Sensible folks who are not participating in this madness should be extremely happy when morons willingly line up to hand their money to chor companies like DLF.
It is 100% correct that Indians don't learn anything until a bamboo gets rammed up their behinds. The sooner it happens to a lot of these speculators the better for everyone.
"Developer can give freebies, etc in place of an explicit discount to get some sales going. Wonder what investors will do."
Their daughters. In some buxom cases, their milf wives.
http://www.business-standard.com/article/companies/mallya-wants-rs-4-500-cr-in-damages-from-kfa-lenders-lessors-113053100806_1.html
This one is the heights !! He claims they were 'rough' on him :)
Our banks troubles have just started. First KFA (7000cr), then Winsome diamonds (5000cr), HDIL, DeccanChronicle ... If growth does not pick up , the list will get much bigger.
"That really isn't that much to make even in India anymore.
Moreover, may be the neighbor, in typical Indian fashion may have given in to fatherly price and overstated the amount perhaps. Or may have omitted to mention that the tax to be deducted."
If that (120,000 dollars per year pre-tax) isn't a lot to make then let's all move back to India.
here are examples of pre-tax salaries in USA:
truck driver earns $60,000 per year working 60 hours a week.
Pharmacist (4 years college and 4 years additional pharmacy school) earns 110,000 to 120,000 dollars per year
Engineers can earn between $60,000 to $120,000 starting depending on how smart you are and whether you have undergrad or masters.
Programmers/IT field/computer people can earn between 60,000 to 150,000 depending on extent of education, skill level, and experience. Many high tech jobs are in high cost of living areas (california).
College lecturers/professors earn between $30,000 to $200,000 depending on field, expertise, amount of publications/research grants, experience. This is at University of Michigan Ann Arbor.
Janitor earns $30,000
Teacher earns 45,000 to 60,000.
Doctors earn 180,000 to 600,000 after residency training
Lawyers/attorneys earn 40,000 to 120,000 starting depending on school and skill level.
Accountants earn 60,000 to 120,000 depending on type of practice and skill level. This range is excluding exceptional rare examples that exist in some corporations.
These figures are for the majority of people in their respective fields. Of course, there are outliers both above and below the salary ranges. These salaries are for the majority of locations in the USA. In places where the cost of living is very high (california, NYC) then the salaries are on the higher end to subsidize the cost of living.
For the cost of living, median house prices are on the range of 150,000 to 250,000 (outside of california and NYC area). Where I live (in a major metropolitan city in midwest) a house in suburbs at 3000 square feet (with additional garage and basement spaces) costs $300,000 on a 1/3 acre land.
Cars cost half the cost as in India because of lack of 100% import taxes. Gasoline/petrol costs a lot less here. As an example, you can lease a BMW with zero dollars down for $328 per month (18,000 rupees). With insurance, gasoline, and lease cost it turns out to about $700 (38,000 rupees). Most people in USA buy SUVs or large cars because they have most value for dollar spent. Usually people don't buy luxury cars such as BMW unless they can easily afford it or are status obsessed.
Average Indian (not sure if it's household) in USA earns $90,000
To think that anyone can earn more in India in their respective profession compared to USA is completely false in most (99%) cases.
The Minimum wage forced by the federal government is $7.25 per hour. Considering average of 40 hour work weeks, that amounts to about 66,000 rupees a month. I know in ahmedabad/gujarat someone who has completed the entire CA sequence or has a B.tech degree is lucky to have a starting salary of 50,000 rupees a month. Basic roti-kapda-makan...housing is much lower cost in USA, clothing is probably about 2 or 3 times more expensive than in india, and food is subsidized by US government in addition to food stamps for the poor. Milk costs about 15 rupees per 500 mL if you convert dollars to rupees. And a vegetarian diet is very low cost in USA.
Considering the fact that a janitor earns 30,000 per year you can imagine that if an indian were to become a janitor in USA (most don't) then he would have a better quality of life than someone who is supposedly "well educated" with a CA or B.Tech degree.
The people who think it is possible to earn more in India (outside of rare business examples, typical house flipping, or corruption) only think that way because they surround themselves with exceptional success stories. Or they only want to think of the success stories.
@anon above:
Clothing is cheaper in USA if you got for brands. Levis jeans in India is 2500 Rs and you never get even a one rupee discount on that while in USA I always find them on sale for 30 USD. Same for Tommy Hilfiger, Nautica etc etc.
If that (120,000 dollars per year pre-tax) isn't a lot to make then let's all move back to India.
Can you afford two full time maids and a driver in that salary in USA? In India people do.
"Clothing is cheaper in USA if you got for brands. Levis jeans in India is 2500 Rs and you never get even a one rupee discount on that while in USA I always find them on sale for 30 USD. Same for Tommy Hilfiger, Nautica etc etc."
Lol. Most people in USA don't even care about name brands (except for the status obsessed people).
"Can you afford two full time maids and a driver in that salary in USA? In India people do."
I've seen those maids and drivers. The maids are dirty. They don't even wash your dishes properly. And they're dirty as hell. In the US, there is not much of a need for maids.
In India, having a driver is a necessity (for NRIs). And putting up with a driver is a nightmare.
And paying $200 each per month is hardly something to boast about.
Furthermore your logic suggests that many people in india can afford 2 maids and a driver, and thus they earn more than 120,000 per year.
Only in ahmedabad/gujarat do people claim that affording maids/drivers in india signifies more income than $120,000 in USA.
Also an income of $120,000 in india is probably 1 in 10,000 people.
In USA 1500 out of 10,000 people have that income.
In USA 1500 out of 10,000 people have that income.
So you agree 120K is no big deal in USA. I rest my case.
"So you agree 120K is no big deal in USA. I rest my case."
Please don't make claims on my behalf. On an income of 120,000 there are 15% of people making more than that. However, $120000 per year is more than what 85% earn.
You rest your case? What are you trying to argue about or prove?
My point is: If $120,000 per year isn't a lot to make then let's all move back to India. $120,000 is a big deal however in the USA the income inequality is less than in india. Therefore a lot of people make a really good income.
Can you explain why IBM, microsoft, yahoo, etc set up office in gurgaon and hire lots of employees there?
Gurgaon is your city. I've been there several times this year and I can only think of 2 reasons. They want to penetrate the indian market or they find it lower cost to hire in india.
"Most of the guys I know are fairly well placed professionals in middle to high management positions and yet they struggle with traveling expenses, fees for the various classes their kids attend and mortgages, among other routine expenses."
"Not a lot of money at all. Its mere 10000 USD/month or a meagre 120K USD per annum salary. Take into account federal taxes, state taxes, cost of living, retirement saving, kids education, etc. You are charged for both water in and water out and the bill is significant as compared to India. If you own a property there, property taxes are significant. You won't end up saving even 2500 USD per month. That is the reason lot of my NRI friends earning over 150K have taken personal loans in US to finance property purchases in India."
If someone in USA cannot live off of 120,000 per year then they don't know how to manage their money. There are people who won the lottery and within a few years they're bankrupt. If you don't know how to manage money than no amount is enough.
It seems a lot of people have not lived in the USA or don't know how to budget their income in that country.
Just for fun I tried to consider a sample budget in Gujarat in a so-called "mega city"
These are in rupees per month:
Car (5 lakh) 12,500
electricity: 2000
food,restaurants: 5000
phone: 500
Petrol: 4000
house (30 lakh): 16500
clothing: 3000
scooter: 1000
So one needs to spend 44,500 rupees per month in a megacity in India. This is for a single person budget, with no family help or inheritance, and living minimally with certain value adding luxuries (phone, air conditioning, car/scooter, etc). This does not factor into luxuries not adding value (buying same shirt in a mall versus traditional indian store).
Marriage costs, kids education costs, maid/driver, support family members (parents, wife, etc) are not factored in for this budget.
also, forgot to mention...one can take public transportation (BRTS) and rent a house. This will forgo car costs, petrol costs, and house loan costs.
But remember that drunk guy singing the popular kolaveri di song. Without these things he will remain a virgin forever.
^^ LOL.
Yes, the vast majority of humanity survives (and from a purely evolutionary perspective, even thrives and manages to multiply) on less than 2000 USD per year. So perhaps one can take some comfort/inspiration in that.
And here we have softies complaining about 120K not being enough. This is pathological greed pure and simple. It's easy to point that out in others (e.g. when a millionaire banker craves for a little more) but hard to detect in our own self.
"And here we have softies complaining about 120K not being enough."
The problem is that you could be an NRI making 120K a year (or even 240K per year) and that would still not be enough for you to buy a house in any of the metros (save perhaps Calcutta).
^^ It's exactly this entitlement attitude that the 1% have which will lead to the downfall of the entire human race (forget about the untold collateral damage to other species that's already baked in)
Right now, there are 6.93 billion humans (assuming 7 billion total population) who would HAPPILY switch places with anyone earning 60K. (99% of humans make less than 34K USD per year)
The planet is being raped day and night so the 1% (includes almost everyone on this blog) live their choice lifestyles but the TRAGEDY is that even such an enormous sacrifice by the rest of the planet is NOT ENOUGH!
This is why, there is no hope for humanity. Those at the very top have blinders on and will take the rest hostage to the very end.
Enjoy your penthouses and SUVs while you still can...
http://www.business-standard.com/article/finance/indian-bankers-suit-up-for-war-on-debt-defaulters-113060300069_1.html
Inevitable. Political pressure can hold off market forces only for so long. Eventually, it starts to become a matter of survival for banks.
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/hatchbacks-enter-slow-lane-hyundais-i20-bucks-the-trend-records-19-growth-in-sales/articleshow/20401529.cms
Suprising. I thought that atleast the hatchback market would stay stable. But looks like people are shifting to cheaper cars (Eon, WagonR, etc). Whats next - the Nano ?
The problem is that you could be an NRI making 120K a year (or even 240K per year) and that would still not be enough for you to buy a house in any of the metros (save perhaps Calcutta).
Buddy, that's a pretty reckless assertion considering recommended home price is 3x annual income. 120K USD translates to 360K USD which is plenty to purchase a lavish home anywhere in India.
Problem is that Maruti-wala wants a Honda. If he gets Honda, he craves a BMW. When he gets the BMW, he will complain about not being able to afford a Ferrari.
http://www.firstpost.com/business/dlf-reports-first-ever-quarterly-loss-of-rs-4-cr-on-slow-home-sales-829825.html
I am guessing that sales are slower than reported as no one would want to show a loss when your stock is sinking.
@Anon at 9:01
Nano is a good car for the city (which covers most use cases), I don't know why people curse it.
"Buddy, that's a pretty reckless assertion considering recommended home price is 3x annual income. 120K USD translates to 360K USD which is plenty to purchase a lavish home anywhere in India."
ِAre you a professional idiot or do you just pretend to be one? 360K USD is around 2 Crore. You really think you can purchase a "lavish home" in Mumbai, Delhi or Chennai?
Have you been living under a rock these past few years?
"Nano is a good car for the city (which covers most use cases), I don't know why people curse it."
I guess it is the embarrassment of being seen in one.
Are you a professional idiot or do you just pretend to be one? 360K USD is around 2 Crore.
Before that what you need to question is what great thing you are doing in US that you cannot do in India with a network cable that you should be paid 6X Indian salary.
Completely agree with Anon at 1:50 AM. I work for a major MNC in India. Given the cost pressures, it is becoming increasingly questionable to pay morons 120K for jobs that code monkeys can do at a fraction of the cost.
The monkeys that "can do at a fraction of the cost" work in a country that has power cuts 16 hours a day. This means that in between the Facebook refreshes, gmail lookups, Whatsapp chats, cricket discussions, watercooler conversations on the RE market, they get around 2 hours of work in...and that's on a good day.
Second, if I have to have a meeting with the aforesaid code monkeys, I have to travel 24 hours, land in a crummy airport, be served at immigration by government jerks that make Beavis and Butthead look like they graduated from Swiss finishing school, drive on pothole driven roads lined up on both sides with human excrement and haggle with taxi and auto drivers not to be fleeced with blunt shears for the right to do so.
Third, even assuming I make it to the office of the aforesaid code monkeys (wading through the flood water from the point where the taxi won't dare venture further), I still have to pay first world rent and property prices for the office even if it floats on a pool of raw sewage bordered by slums on all sides.
Looking at the entire picture holistically, it is just not worth it to do business in incredible India for the nominal (i.e. imagined) "savings". One can save himself a lot of money, angst, stress and headaches by simply hiring a skilled American, Russian, Chinese or heck even Indian in the US whose real wage (factoring in productivity increases and accounting for the actual costs of doing business in India) is actually lower than hiring one of those code monkeys in India.
@Anon Above,
Curious, when you are kicked out of your job because you are a redundant genius and that US does not need your services, aren't you going to fcuk come back crying to the same third world country?
Agree a 100% with everything Anon @4.31 writes.
I travel to India several times every year. I have never seen any lavish home yet. Hell, even hotels suck. I paid 6500 rupees per night in north india in a city of 3 million. And even after paying that much, the hotel sucked. Everything was dirty, unkempt, poor service, and the staff was completely unprofessional. And that was supposed to be the best hotel in that city.
A lot of these morons here don't know anything about life outside of India. They simply believe the BS that you read on the indian newspapers, especially the articles pertaining to life in other countries such as the US.
And if someone is hired in the US and paid 120k per year, why are you assuming that he or she must be a moron?
@Anonymous at 4:31 AM
Second, if I have to have a meeting with the aforesaid code monkeys, I have to travel 24 hours, land in a crummy airport, be served at immigration by government jerks...haggle with taxi and auto drivers not to be fleeced with blunt shears for the right to do so.
You can't imagine how much I can agree with you and my plight. I read people saying coders in US don't deserve 120K. Others say 120K is a lot of money for good life in India. I STRONGLY contest this and offer my testimony here. I am self employed techie and I make much more than 120K in India by sitting and coding at home. This is no show off or anything untrue, but to give you an example that what you get by paying enormous taxes in India. Here are some of my experiences. Please read them with patience.
Last year I had to go to US for attending a conference and 8 months before I applied for renewal of my passport. And I was literally harassed so much by small clerks and officers, had to spend more than 3 hours continuously in line meeting PRO in Passport Office multiple times only to hear that I will receive my passport "shortly". Finally after 6 months I had to hire a tout for the service. He just took 4000/- and I could not believe that I received my passport within 3 days.
Recently I left a house in East Delhi and shifted to Gurgaon. Reason ? Filth and smell of Hydrogen Sulphide in the air, mosquito menace 365 days a year. Surprisingly, none other resident had any problem there but I was firm that I need a better place for my family's health. My mother, father, wife, child have lost such a good social circle that was built there as a result of move and I really feel sorry about it. Would this happened in a first world country, ever ? Who is to be blamed ? The Government, the people who do not protest. You moved from a place which you and your family liked because the government doesn't care about living conditions and sanitation. Filthy apartments there cost 1.5 cr, are they over valued, sure but i would have definitely made a compromise if living conditions were okay for the sake of my family.
And how did I got house in Gurgaon, after all I am a business man and landlords require company lease. These people are so dumb they think only MNC people with "high" salary can continuously pay rent. The concern of my Landlord was how can he be ensured of continuos rent payments if my business suffers ? I offered full 11 months rent in advance. Next, I had to face uneasy questions starting from my personal financial details, income tax filings, questions about my family, reason for an intercaste marriage in family !!! And why did he take so much pain and not give house to me right away ? Answer : Because I was offering 2000/- more than the market rent, that's it, and that's there worth really.
Next I moved to Gurgaon, hired some movers and packers for service and was shocked at the service despite premium rates. They were extremely lazy, truck did not arrived on time and we could not move in the afternoon as it was no entry time now. The truck driver told me that only 2 days back, a Judge took his service and he smoothly traveled in a no entry time just by showing his ID card and police men who stopped the track ended up saluting him !!!
For my professional service I have hired tons of Indians on contract which are much cheaper. End result ? Shoddy quality work delivered and quality deteriorates if you hire them continuously - being nice is highly underrated in India, you have to be tough in order to extract work. For this reason I have to work with contractors in Europe, US who deliver superior quality work at a much higher price. If after decades the salary level of Indians has not gone up, I would attribute quality and professionalism from my long experience.
Overall, people who think that you can buy life in India with money, think again. Particularly NRIs thinking of returning should read this post and make sure these things do not bother them if they want to return.
Have you been living under a rock these past few years?
Don't lose the plot.
If you think that a 2 crore home shopping budget is not enough in India all I can hope is that you have a nice life...
And if you seriously think that 2 crores can buy you a "lavish house" in India, I got a nice arch (gate) in Mumbai I would love to sell you.
people who think that you can buy life in India with money, think again.
You have to be in the top 0.01% in India to be able to buy everything/anything with money. In case you've forgotten, the worlds most expensive homes and the most ostentatious displays of wealth are in Mera Bharat Mahan.
There are Lamborghinis and Ferraris being driven on the same pot-holed roads that serve as communal toilets and sleeping pads for the homeless.
This is the problem. The 0.99% who willingly enabled the 0.01% while the rest of the country was left high and dry.
The growth story (the benefits of which have largely gone to the top 1%) can be summarized in a simple equation:
Private profits = Corruption(Public wealth and resources)
where Public wealth and resources = Environment + Natural Resources + Manpower
Now, watching the anguish of 0.99% as the greed and excess comes full circle is hilarious.
In a system foolishly motivated by self-interest and profit at all costs, without any accountability/responsibility towards the broader society what were you expecting, Utopia?
anon @11:11AM
I could live lavishly in a home costing 50 lakhs which BTW is twice the price of my current home.
So it's a relative thing and depends on how you prioritize whats most important in your life.
"And how did I got house in Gurgaon, after all I am a business man and landlords require company lease. These people are so dumb they think only MNC people with "high" salary can continuously pay rent. The concern of my Landlord was how can he be ensured of continuos rent payments if my business suffers ? I offered full 11 months rent in advance. Next, I had to face uneasy questions starting from my personal financial details, income tax filings, questions about my family, reason for an intercaste marriage in family !!! And why did he take so much pain and not give house to me right away ? Answer : Because I was offering 2000/- more than the market rent, that's it, and that's there worth really."
Asking those personal questions (not about money issue) in renting a home in india is sort of expected. If I had family there, I wouldn't want people with poor moral/ethical values living nearby. You were a stranger to him and there are a lot of people in india who cheat/deceive others. Your landlord just had to make sure.
Recently I left a house in East Delhi and shifted to Gurgaon. Reason ? Filth and smell of Hydrogen Sulphide in the air
REBear, this is not to pick on you but to highlight the key difference between Western society/environment which we all have come to love and appreciate.
In the West, folks will not simply move over to the next virgin area. They fight for their rights but even more importantly they fight for the rights of their fellow countrymen.
It's David vs. Goliath everywhere. In US, common folks fought hard and lost many times but in the process they've also secured some big wins that have ensured clean air, water, preservation of their forests, wildlife and natural resources.
Contrast that in India where tiger is going to become extinct in our lifetime but reality is that there are more foreigners who are taking meaningful action on this issue than Indians!
If you extrapolate your behavior/decision then hypothetically one day you (or your progeny) may find themselves trying to secure passage on a spaceship bound for a different planet.
A much easier task would be to connect with like minded people, educate and create awareness in your neighbors and start demanding action and accountability from the elected representatives.
There are completely powerless people in India doing that. Surely the educated can have a greater voice and bigger impact than a jungle tribal...
"You can't imagine how much I can agree with you and my plight. I read people saying coders in US don't deserve 120K. Others say 120K is a lot of money for good life in India. I STRONGLY contest this and offer my testimony here. I am self employed techie and I make much more than 120K in India by sitting and coding at home. This is no show off or anything untrue, but to give you an example that what you get by paying enormous taxes in India. Here are some of my experiences. Please read them with patience."
So that's great you make more than 120K dollars per year sitting in delhi/NCR/gurgaon area. Congrats! you must have worked hard in your education to build up that skill. However, not everyone in india can be that talented/skilled in order to garner 120k income.
I am from a business family in the US and through my education/profession (not counting business/investments) I am getting job offers of $180,000 to $450,000 per year. We have plenty of investments in real estate in india that are going up in value. However, there are a lot of people who think an income of 45,000 rupees per month after getting a CA degree is enough in a city where a 3BHK costs 80 lakh rupees. And they have so much arrogance that they want to be addressed as "CA First name Last name"
Extended family in india showed me a girl whose income was 15,000 rupees per month and she wanted to talk about 500 dollar (28000 rupees) purses and eating out in places that cost 2000 rupees per meal. Her parents lived in an apartment and father was an engineer and mother was homemaker.
I worked hard in my education/career to get where I am. This is how most hard working people are in the world. But in India, a lot of people will be screwed over because they don't want to work hard and spend money.
^^ Sounds like you're seeking a life partner but she needs a sugar daddy.
Although with your level of income and "status" it would be hard to avoid such proposals as you fit the profile of the typical target of gold diggers.
In the end, this is your life, you need to evaluate what's important. You are in a position to take a few months perhaps even a year off and conduct this search yourself.
Who knows you may end up discovering yourself in the process...
All the best!
"^^ Sounds like you're seeking a life partner but she needs a sugar daddy.
Although with your level of income and "status" it would be hard to avoid such proposals as you fit the profile of the typical target of gold diggers.
In the end, this is your life, you need to evaluate what's important. You are in a position to take a few months perhaps even a year off and conduct this search yourself.
Who knows you may end up discovering yourself in the process...
All the best!"
I already postponed my career a whole year for this. Between 4 and 5 trips in past 2 years. Parents looking in india by travelling there 3 times a year. This year alone, we put in 14,000 kilometers in the car we have there.
Personally I don't care about status. The only reason why I am looking there is to find someone with sanskar. The effort to bring someone to the US and help her adjust should have justification (beauty, sanskar, intelligence, at least something).
You're lucky that parents are giving you freedom of choice inspite of coming from a business family.
Varna yeh business wale apni aulad ki shaadi bhi business transaction samajh ke kar dete hai...
Regarding sanskar, whatever you do, do not import from Tier 3 city/village. She may be pretty, intelligent and have all the right habits but she will not adjust to American life.
Everyone of my friends who got such a girl have returned back to India after a few years. One got divorced after his wife refused to return after an India trip.
"You're lucky that parents are giving you freedom of choice inspite of coming from a business family.
Varna yeh business wale apni aulad ki shaadi bhi business transaction samajh ke kar dete hai...
Regarding sanskar, whatever you do, do not import from Tier 3 city/village. She may be pretty, intelligent and have all the right habits but she will not adjust to American life.
Everyone of my friends who got such a girl have returned back to India after a few years. One got divorced after his wife refused to return after an India trip."
In my family, the belief is that a proper life partner is intangible wealth.
Most indians have a misconception about life in america. You can adjust to all the luxuries in the US but you have the freedom to keep your culture. If anyone has a problem with your culture, then they're infringing on your rights. Anyone who takes pride in their good indian values is someone I respect.
According to our culture, wife apna husband se prem karti hai to udhar ghar bana deti hai. There is essentially no problem for any girl to adjust in USA unless there is problem with the husband. The Tier III city/village girl that you're describing is the sort of life-partner that my family and I are looking for.
^^^^^
Is this a freaking "Matrimonial Advice for NRIs" forum now???
All of the above.
Im sure half of you are not good looking or dont have the charm to impress a girl.
You are only interested in making money and securing a property lol
Learn other skills. They will help you in the long run. Learn how to love and respect girls around you instead of just 'finding' her for the sake of getting married.
What I do not understand is why the fcuk these NRI's need a Indian Girl after having such bad opinion. Oh yeah..Sanskar..Do the American born Indians have less of that..
Asking those personal questions (not about money issue) in renting a home in india is sort of expected. If I had family there, I wouldn't want people with poor moral/ethical values living nearby. You were a stranger to him and there are a lot of people in india who cheat/deceive others. Your landlord just had to make sure.
What ??? Does this happen in a first world country, ever ? Is it not intrusion on privacy. In a first world country, at the max the landlord just verifies your credit score and that's it. Landlord typically looks at you with suspicion if you say you work from home and make a living. And this is magical America my friend which enables you to make several hundred grands every year using the thin internet cable and by working at home.
Not convinced, tell me which first world country requires two neighbours vouching for you for issuing your passport, which country does police verification for issuing passport ? This is a third world country my friend, kindly accept it.
"Sanskar"???? Ghanta...
The only sanskar most INdians have is a false sense of pride in their "culture" which in other countries is spelled "crookedness".
We have plenty of investments in real estate in india that are going up in value.
My advice would be to do the homework for timing exit. That "going up" in value is fake as I have found in Delhi. Previous year, a person put a house on sale for 1.1 cr and it could not be sold so he put it on rent. Next year, other people put to on 1.4 cr and none of the houses could be sold so they again put it on rent. How do I know if prices are up if there has been no transaction ?
And they have so much arrogance that they want to be addressed as "CA First name Last name"
That's what I typically hate. I have seen name plate on a house suffixed with "B.Tech IIT", "Advocate", blah blah.
Extended family in india showed me a girl whose income was 15,000 rupees per month and she wanted to talk about 500 dollar (28000 rupees) purses and eating out in places that cost 2000 rupees per meal.
If you are like me, just ignore those proposals. If you can, I would advice to get married to a westener rather than Indian. It would be extremely hard to find a good match in India. I am lucky I was employed in an MNC when I got married. If I were doing business at that time, it would have been extremely hard to get married :)
http://india.blogs.nytimes.com/2012/09/24/who-wants-to-marry-an-entrepreneur/
A much easier task would be to connect with like minded people, educate and create awareness in your neighbors and start demanding action and accountability from the elected representatives.
I tried it hard, no effect. Some people said they simply close their doors when air smells. Others said there is no smell. I met one fellow who was an advisor in Ministry of IT. He said, "Oh the smell is due to nearby STP and also depends on wind direction, sometimes it is too strong". Still it's a non issue for him !
Now compare it with west and read this article carefully. Similar smell was continually observed in a low income area of New York in early 1990s, the govt was reluctant to fix the problem as it required over $100m of investment, and how people, environmentalists fought for it terming it "Environmental Racism".
http://www.umich.edu/~snre492/ny.html
My dear REBear, I am not surprised by apathy towards living conditions shown by your neighbors.
All people care about is how much money they and you make and how much their RE investments have appreciated.
This is the only topic of discussion in any social setting, whether it is friends or family.
If at all people talk about "quality of life", they confuse it with "standard of living".
I have actually had discussions where I have been shouted at that I keep cribbing about worsening quality of life when almost every one now has cars and flat screen TVs!!!
Ignorance is bliss. And an ignorant population is even a greater bliss for its rulers.
http://content.magicbricks.com/housing-prices-rise-by-around-1-pc-in-20-major-cities/?fromSite=toi&utm_source=toi&utm_medium=referral&utm_campaign=toi-mb-whitelabel
1% rise last quarter. Too early to call it a correction, but at least we do not have the absurd QoQ price increases that we have seen in recent years.
http://content.magicbricks.com/housing-prices-rise-by-around-1-pc-in-20-major-cities/?fromSite=toi&utm_source=toi&utm_medium=referral&utm_campaign=toi-mb-whitelabel
Please do not use Magicbricks, 99acres, or Residex data for tracking housing prices, they are meaningless and unreliable. For instance, Magicbricks and 99acres published 30% yoy appreciation in prices in Vasundhara Enclave region of East Delhi. However there were no transactions happening in that area, and the few actual transactions that happened were the kind of stressed sales to financiers at much lower prices than "market rates". There is no reliable home price index in India.
If you want reliable data, get hold of a truthful broker in your area, or bribe a small broker to get hold of actual number of transactions and prices.
KFA saga is hilarious? See this:
http://www.firstpost.com/business/look-who-wants-a-banking-licence-sahara-839985.html
"However there were no transactions happening in that area, and the few actual transactions that happened were the kind of stressed sales to financiers at much lower prices than "market rates". There is no reliable home price index in India."
True. "Market rates" in India is defined as the prices that Sellers want for their properties instead of what the definition means in the rest of the world: the price at which the property would change hands between a willing buyer and a willing seller.
As long as "market rates" continues to be defined as the prices that Sellers want for their properties in India, we can rest assured that "market rates" can "only go up".
As long as "market rates" continues to be defined as the prices that Sellers want for their properties in India, we can rest assured that "market rates" can "only go up".
Agreed. Tired of seeing flats on selling block for more than a year however the asking price keeps going up since everyone else has started asking a higher price.
@Anon
//As long as "market rates" continues to be defined as the prices that Sellers want for their properties in India, we can rest assured that "market rates" can "only go up".//
I visited an fully completed apartment, and checkout their "few" available apartments. I had no intention of buying but just to want to peek into the new apartments in India.
Construction completed an year ago.Community has a movie theater and no place for kids to play
Seller claimed to have only 7 apartments are available out of 150.
Builder is not willing to negotiate on the price, rather he was showcasing me other apartments which he is currently building.He compared the prices with upcoming project and wanted me to feel that I am getting a deal.
He has 3 other apartments under construction. He had a loose talk with other agent about very few apartments availability in their other projects.And made me feel I better hurry.
Surprisingly he dint put any pressure on me to buy.He was not pestering me like Amway agent. He acted as if he has got lot of buyers and I am not important to their business and 7 fully constructed apartments lying vacant for more than an year is not much of a problem.
Looks like our builders have enough money to hold onto the prices and they have all psychological tools to influence the average Joe.
Looks like our builders have enough money to hold onto the prices and they have all psychological tools to influence the average Joe.
That's a common behaviour of builders from past several years. Do they have lot of money ? NO, they don't. Is anyone supporting them to hold ? YES, of course. Are they politicians, black money holders ? No, it's just beyond their capacity. Who is it then ? BANKS. Yes, it is banks and financial institutions who are supporting them. It's a perfect recipe for upcoming Indian financial crisis.
"Yes, it is banks and financial institutions who are supporting them. It's a perfect recipe for upcoming Indian financial crisis."
And when the banks go broke, the RBI and GOI will bail them out citing the bogeyman of "deflation" just like Unca Ben and Draghi are doing in the West.
Ultimately it is always the tax-paying working stiff that gets shafted. ALWAYS.
@REBear - "Please do not use Magicbricks, 99acres, or Residex data for tracking housing prices, they are meaningless and unreliable."
Fair, but the problem with any index is that it can only track reported data. Lets say last quarter 3 homes sold for an average of 50L, and this quarter only one house (say of same size, but better quality, has more balconies, etc, etc) sold for 55L. This will show up as a rise of 10% in home prices, whereas it really is not.
This is a problem even with indices that rely on better data such as the ones found in USA/Canada etc.
What we should look for is a general trend in price and volume. The actual magnitude of change might have ups and downs on a monthly basis.
As for magicbricks ,etc remember they make money when homes sell. Homes sell when prices are rising. When they are falling people wait on sidelines. So there is a bit of a conflict of interest with these sites.
Residex (IMHO) might be truer.
What ??? Does this happen in a first world country, ever ? Is it not intrusion on privacy.
You are only entitled to privacy as long as you stay within confines of your home/private property. The moment you step out (physically or virtually) to interact with the world you give up your privacy rights to the respective service providers and government. Ever read the privacy agreement on Facebook for example? If you are in public space then anyone can take your pictures, record voice and video etc.
FBI/DHS are recording each and every move you make online and have algorithms that are building your profile.
Coming back to renting, yes there are equivalent checks in the West as well. It's called credit check and background check. And there are many other specialized checks which will go into details of each and every portion of your life but the above 2 are most commonly used by landlords to track your full financial and background. It will unearth your whole life history, where you went to school, if you got arrested, traffic tickets, divorce etc. etc.
I work in "Big Data" application for a major financial institution and you'll be amazed at the things that are tracked.
Your bank knows more about your private life than your closest family members.
What I do not understand is why the fcuk these NRI's need a Indian Girl after having such bad opinion. Oh yeah..Sanskar..Do the American born Indians have less of that..
Let's call a spade a spade.
Sanskar = Indian code word for virgin
It's open secret that American born Indian girls have their cherries popped by high school. Plus they are more likely to keep in touch with their ex-boyfriends or get new boyfriends if husband turns out to be a lame duck.
This is reason why even parents of American born Indian boys prefer to arrange their rishta with someone from the motherland.
Also a reason why many 1st generation families beat a hasty retreat to India where the chances of preserving the hymen of their daughters prior to marriage are much greater...
Anyhoo, back to the topic of Indian RE:
http://www.moneycontrol.com/news/business/ncr-indias-most-speculative-property-market_861256.html
Now the worrying part is that the NCR residential market has an estimated 140,000 unsold units
Wow, if this is true, we just have to wait for the fuse to be lit. Let the fireworks begin!!!
"It's open secret that American born Indian girls have their cherries popped by high school. "
Well, these days it's not like Indian born Indian girls are keeping it "in the box" either, so to speak. Your chances of finding a virgin girl of marriageable age in India are lesser than your chances of being struck by lightning with a winning Powerball ticket in your pocket.
In any event, hymen-reconstruction surgery has made this whole issue moot. Today anyone can become a "virgin" with the most minimal investment.
^^^^especially when marriagable age is now atleast 25 years old for women.
It just defeats the purpose of remaining faithful in a marriage and is associated with a lot of emotional baggage.
http://www.thehindu.com/news/national/approval-for-bill-to-crack-down-on-unscrupulous-realtors/article4782163.ece?homepage=true
One small step forward? Or is it going to have a lot of loopholes?
And, I request the well-educated, bright readers (err.. writers) to please refrain from posting unnecessary, degrading stuff like in the previous 3 comments at 5:57 PM, 5:47 PM & 7:30 PM (not a personal attack at the authors of the comments!) Thanks for understanding!
... and please cleanup the unfortunate comments (5:57 PM, 5:47 PM & 7:30) if it's possible, and maintain the sanity & good reputation of this blog. Thanks!
http://timesofindia.indiatimes.com/city/mumbai/Worli-flat-clocks-second-biggest-deal-ever-at-Rs-1-18-L/sq-ft/articleshow/20434776.cms
Just when I thought RE prices will go down this deal came as a dampner. No way there is a slowdown in RE after this deal man
You are only entitled to privacy as long as you stay within confines of your home/private property. The moment you step out (physically or virtually) to interact with the world you give up your privacy rights to the respective service providers and government.
Either you have completely missed the point or don't want to acknowledge sheer incompetence of Indian system as a whole and people in particular. I am not denying that govt agencies need to do background checks and collect your data. As you said in the west you need credit score for renting, which is just a number telling whether you can pay rent or not. Compare this with landlord asking details of all your bank accounts, income tax filings, and so on. Your SSN would reveal your criminal records. Compare this with police requiring your 2 neighbours, who possibly don't even know you, to vouch for you for issuing passport ! This is sheer incompetence where police wants to shift the burden on neighbours rather than itself should anything go wrong. Not convinced - I was asked to also get signatures of 2 neighbours of a house which I left 6 months back !!! Further, the neighbours should be owners of the house (not tenants) along with proof of their address , without which police verification would be incomplete. That day I vowed that my next passport would not be of this country.
And you continue to get harassed due to incompetent Indians EVERY day. I yesterday bought an Air Conditioner, and delivery was delayed for 2 days without prior info. And when the person came for installation, it was found that there is no 3 pin plug supplied with either AC or stabiliser !!! I called the dealer and he said "Sir it's your mistake, you should have known that plug is not supplied with AC" !!!!!! And it's the most expensive AC available in the market. Can you imagine what kind of incompetence is rampant in this country ? Based on this incompetence alone, I know for sure that there will be complete chaos when the RE bubble crashes and no one will have any clues what to do, and crime skyrocketing. I met a person from Japan who told me that despite bubble burst there, people are still honest and he hasn't seen any increase in criminal activity in so many years.
http://zeenews.india.com/news/nation/indian-mps-meet-us-lawmakers-over-immigration-bill_852946.html
Seems like India is worried excessively on blocking export of it's people. After all, people is only what India exports.
... and please cleanup the unfortunate comments (5:57 PM, 5:47 PM & 7:30) if it's possible, and maintain the sanity & good reputation of this blog. Thanks!
All started because one genius NRI wanted to show how filthy we living in India are and how great and successful he is living in US.
http://profit.ndtv.com/news/market/article-property-stocks-fall-after-cabinet-approves-real-estate-bill-323032
Funny thing, real estate.
Biggest impact of drop will be to people who actually bought at recent highs hoping for even bigger gains. residential property in hyderabad
Anon at 11:19,
I too wonder what these Gods gifts to mankind are even doing on a filthy country's housing bubble blog. It is probably the discrimination and racism they get from the white man :)
They want to share the love
http://www.moneycontrol.com/news/business/realty-bill-to-pushproperty-prices-by-40-50-brigade_891085.html
One small step forward? Or is it going to have a lot of loopholes?
One may wonder why Govt is pushing for RE regulatory bill at this time. Is it for middle class votes ? May be, but I don't think that is the main intent of Govt. I am convinced this is just an eyewash to improve perception of NRIs and PE funds to bring in more forex in the country at a time when we have around 7 months of import cover, and rupee is near all time lows. If the rupee falls to 65, there will be massive panic as NRIs who invested would lose severely, PE funds will find it difficult to exit, etc. I think RE regulatory bill is an act of desperation to save the massive economic bubble of the country from deflating.
// http://www.moneycontrol.com/news/business/realty-bill-to-pushproperty-prices-by-40-50-brigade_891085.html
This guy is an idiot. You can push property prices all you like but you need buyers to buy them at hose prices. Currently the cheapest flat in Mumbai costs 1 crore. You add 50 lakhs to it. Where will the common man bring that amount of money.
I am convinced this is just an eyewash to improve perception of NRIs and PE funds to bring in more forex in the country at a time when we have around 7 months of import cover, and rupee is near all time lows
Y'r right, it's all due to slowdown Private Equity funding and an urgent need to get inflows.
http://www.vccircle.com/news/real-estate/2013/06/05/how-will-new-real-estate-regulations-affect-property-market-india
You add 50 lakhs to it. Where will the common man bring that amount of money.
Who says Mumbai property is for common man. Common man is going to be servant, dependent on the 0.01% for job, food and shelter.
As long as you're useful to the elite, you get to keep a job, else you're fired. In future, if you are useful you'll get some rationed food and rented room, else you're out in the street/jungle.
In an increasingly resource constrained world, where money is concentrated in the hands of the few, that's the end game.
Who says Mumbai property is for common man. Common man is going to be servant,
You are grossly underestimating power of common man. If common man can not afford mumbai, ultimately jobs will move out of Mumbai to a different city thus putting pressure on rentals. If there is no viable alternative to Mumbai within India, jobs will move out of India. There is no way RE prices can continue going up indefinitely without commensurate increase in rentals. And the rentals are determined by common man.
RE in India is toast. It is just hanging by a very thin thread and this thread ready to snap.
Sell, sell and sell. All RE and stocks are in a major manipulation. If you don't believe, don't sell and see it for yourself in the coming year. I think Rupee will crash to 60 soon in like 6 months.
RE will probably correct by 60-70% especially in metro areas.
You are grossly underestimating power of common man. If common man can not afford mumbai, ultimately jobs will move out of Mumbai to a different city thus putting pressure on rentals.
If this was so, we wouldn't have 50% slum dwellers. Expect that number to rise to 60%
Common people move where jobs are, not other way around.
I want to thank the poster who predicted a few weeks ago that Rupee would slide again.
While everyone's been shouting about the Rupee's demise, his prediction was precise.
One could also say that the RE is already sliding, in dollar terms. If you work in IT, your position is probably hedged but for people who import raw materials, they have been royally 'screwed'.
Yesterday the GOI also raised import duty on gold to 8%. I think it just reeks of desperation and will not fix anything, it's only going to encourage people(including me) to buy even more.
http://www.firstpost.com/business/dark-truth-marutis-bhargawa-is-right-and-experts-wrong-on-economy-846903.html
One could also say that the RE is already sliding, in dollar terms. If you work in IT, your position is probably hedged but for people who import raw materials, they have been royally 'screwed'.
Good thing that rupee depreciation is calibrated over a period of 2 years else we would have had a situation like Argentina in 2001 or Brazil in 1980's. Too bad the Goldman guys couldn't take a leveraged bet like they did in other countries.
10-20% drop in rupee
+
10-20% drop in prices
= shopping bonanza for NRIs
Anon above,
Most NRIs are trying to save their jobs and not worried about investments. Both IT and Finance jobs are not doing well in EU or USA. The labor types in Middle east don't have that kind of money.
Even Indians are now worried about their jobs. The RE market is toast for the next decade.
http://www.thehindu.com/news/national/builder-profits-soar-as-master-plans-proliferate-in-gurgaon/article4753735.ece
This is pretty explosive. At very least merits CBI investigation. Would like to see professional agencies act as such for a change.
Follow the money, it can't be that hard.
If there is no viable alternative to Mumbai within India, jobs will move out of India.
There has been no viable alternative to Mumbai in India since the last 30+ years. What has happened?
Folks still pour in routinely. While the vast majority of newcomers are hoping to strike rich, there is a small but relevant percentage of Indians who have "made it" and would like to be associated with the right address/status.
This will ensure Mumbai RE (especially in the desirable "status" areas) remains overpriced for the foreseeable future.
On the Mumbai alternative thing...
It's been happening for last 10 years or so, folks who are not from Mumbai don't prefer to relocate to Mumbai. The reason being extremely high rents.
The same amount of rent that gets you a 600 sqft pigeon hole in Mumbai will get you a 2300 sqft apartment in Bangalore complete with a pool.
Finance professionals have no choice so they have to relocate, for other industries there is absolutely no reason to do business in Mumbai, even Maharashtra folks prefer Pune to Mumbai.
// Even Indians are now worried about their jobs. The RE market is toast for the next decade.
THis can be easily solved if the government brings in a rule that companies cannot fire people. These companies should also think about the person getting fired, his family etc
In surat,90% residential and commercial project are delayed delivery 2-4 years due to liquidity crunch.Many projects even not started.rent is also going down in Textile market bcoz slowdown in business and over hyped rents.Some builders doesn't allow investors to sale flat in vesu area on discount(no registry below builder rate).Investors & brokers are saying no transaction is happening.Even prices are falling significantly but no transaction.So what is "market price" of flat when no transaction is there.I know some projects in parvat patiya,surat where 6 months before price was quoting 2500/-s.f. and now no transaction even paper ad of 1700/- negotiable .
>> Finance professionals have no choice so they have to relocate, for other industries there is absolutely no reason to do business in Mumbai, even Maharashtra folks prefer Pune to Mumbai.
@aam_aadmi : very good point!
In fact, Pranab Mukherjee tried to create an alternative banking hub in Kolkata (Rajarhat), where both real estate and skilled finance professionals are cheap. This was done under the communists.
I don't know where things are under the new "crazy lady" led government. I guess scrapped!
The problem with Bombay and Bangalore is that the cities don't have any competition and so, they do whatever they wish to. If we had "second cities", a lot of sense would prevail or business would be lost a la London vs. NYSE...
>THis can be easily solved if the government brings in a rule that companies cannot fire people
Companies that cannot fire also do not hire. That is why contractual employment has increased sharply over the last decade or so. Temping companies like Teamlease have done quite well during this period and now have over 75000 employees.
Yes, I agree that humans cannot and should not be treated as use and throw machinery, but probably better to make it easier to fire and mandate a certain amount of severance pay.
New post please, we will have two pages of comments pretty soon.
Rupee at 60/USD today.
Also look at the riots happening in Brazil. Same India story. Just happening there first.
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Gold crash caused problems right across the world. Seeing as the wonderful UK government sold off all their gold reserves made little difference there!!
whathouse.co.uk
I don't know why some people are talking about gold falling in dollar-terms between 1980-2000 because during the same period it multiplied many times in Rupee-terms & was a nice hedge against inflation, which is its most potent use!
And it's irrelevant to an Indian whether gold falls further on Comex (unless one is trading on Comex). India is a third-world country with third-class government, which will continue to devalue Rupee till who knows when, so I'm looking to buy some on the recent fall, I'll buy some more if there's another big fall in gold-price.
There's a reason why it had VOLUNTARILY used as money by many prosperous civilizations for thousands of years while paper money, sooner or later, has always returned to its true value - nothing!
Its scarcity ensures that it retains its purchasing-power in the long-run, compared to paper-money, which governments always willing to issue more & more of because it's very profitable for them.
Besides, even in dollar-terms, yes, gold did fall drastically after the bubble burst around about 1980 but what happened to its purchasing-power? Well, I don't have statistics for other goods & services but a google-search found price of oil, which was $37/barrel in 1980 & $16/barrel in 1999, which means that even you could buy more or less the same amount of oil even if you'd bought gold at the height of its bubble, & I'm sure the goes for other goods & services, food, clothing & whatever, that you'd have been able to buy more or less the same amount of STUFF, & as I've said, that's its most potent function, as a hedge against inflation, which is scarce, durable, fungible, malleable & easily transportable, all the qualities that makes it one of the best assets to do what it does best - protect against perpetual devaluation of the government-inked toilet-paper!
Of course, if someone had bought it at the height of its bubble for trading/investment purposes then that would have been a disastrous decision but as a hedge against inflation, (which was at dangerously high levels at the time & could have led to a total economic & currency-collapse of U.S. if Volker hadn't allowed interest to rise), it did its job!
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