Thursday, June 27, 2013

One More tax on Properties > 50 lakh?

http://economictimes.indiatimes.com/markets/real-estate/realty-trends/buying-a-property-just-got-a-bit-more-cumbersome/articleshow/20756700.cms

Verbatim from Economic Times.
Copyrights with ET (Bennett Coleman) & TOI

This might help reduce the speculative 10% investor purchases if implemented correctly?
Alternately all properties below 50 lakh will heat up and prices will rise even in low end of market.
Thoughts ?

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Buying a property just got a bit more cumbersome

By Aditya Bajoria

A common saying goes, to know "stress", organize a person's marriage or endeavor to build a house. Consider the various factors which affect the decision on the purchase or building of a house, they range from vastu, legal documentation, anticipated appreciation in value and maybe even the whims and fancies of the relatives. Clearly, factors which may cost a common man, seeking to obtain a roof over his head, many a nights sleep. Well, thanks to the Finance Act, 2013, the stress has been compounded.

Effective from 1 June 2013, taxes are to be deducted at source ('TDS') on payments for the purchase of immovable property (including any land other than agricultural land, or any building or part of a building) @ 1 per cent. Taxes would be required to be deducted @ 20 per cent should the seller not hold a PAN. Such requirement to deduct taxes is triggered should the purchased property's cost exceed Rs. 5,000,000.

Many hoped that the representations of the Confederations of Real Estate Developers of India, requesting for a rollback of the section would be accepted. Non notification of rules to govern such new amendments, hinted at a possible rollback similar to the one performed last year, when similar TDS requirements were proposed in the Finance Bill 2012, but not enacted into the Finance Act 2012.

However, the Government, vide a notification released on 31 May-2013, has notified the relevant rules for deducting such taxes at source. As per the rules, the purchaser is to deposit TDS, vide Form 26QB, which is a challan cum statement, within 7 days from the end of the month in which tax is to be deducted (tax to be deducted at the time of payment or credit whichever is earlier). Further the purchaser is also required to download a TDS certificate, Form 16B, from a yet to be specified web portal and issue the same to the seller within 22 days from the end of the month in which tax is to be deducted.

Buying a property just got a bit more cumbersome. Here's how

 ---------------------------------------END------------------------------------

This might help reduce the speculative 10% investor purchases if implemented correctly?
Alternately all properties below 50 lakh will heat up and prices will rise even in low end of market.
Thoughts ?

 

Continue discussion here

462 comments:

1 – 200 of 462   Newer›   Newest»
Anonymous said...

How will the Tax man verify the purchase price?

I sell the property for 50lakhs
and pay tax for 10 lakhs.

How will you verify?

I see huge potential to track volume and price.

It would be interesting if the Gov publishes the purchase price online.

This will also expose the lie of the builders that only 2 properties are left






Anonymous said...

The bigger catch here is the notification to the income tax authorities that a property was sold. Many times the seller will not file IT returns for benami properties . Those loop holes are closed now. the buyers have to be extra careful on who they choose to buy the property from. I'm not sure what is the penalty for non-compliance. In terms of pricing I don't see any effect on high or low priced properties. In Mumbai 40-50% of the transaction is black so a 1cr deal is 50L in check.

Anonymous said...

Must read link and comments to this article. Very accurate prediction on Gold made two months ago.


http://wallstreetfool.com/2013/04/27/indias-real-estate-bubble-is-about-to-burst-violently/

Anonymous said...

Indian government should follow western world model of disclosing property information should be available to public. Also, they should reward a person for snitching on cash and real SOLD price scam. This will take care of black money issue in RE. In USA, all real estate transaction are available for general public to see , FREE of charge. . I have seen black money transactions in India where only 40% of actual selling price shown on paper , rest becomes black money for seller to invest in RE again !!!!!!

Anonymous said...

40% price in white money is a lot. People buy it like 20-25% white and rest is cash.

GOI will not bring in any measure to prevent it as officials in power themselves have to park their stolen wealth in these kind of RE deals.

Pawan said...

40% price in white money is a lot. People buy it like 20-25% white and rest is cash.

For land deals may be yes but for apartments, white is easily 50-90% now in NCR.

skeptic's ghost said...

Government of Maharashtra already has ready reckoner pricing for Registration, stamp duty and VAT

Chidambaram should move and make it mandatory to use this pricing as the basis for this tax - and exempt only those who are willing to live in the home themselves (with proof)

That may curb speculative buying,
China tried that but failed - when apartments were left unsold at high price - builders went to the banks/borrowers and asked them to take over. No correction - instead of speculative investors, the investors to the banks / finance institutions (mutual funds, bonds etc) are left holding the overpriced units.

Anonymous said...

This will take care of black money issue in RE.

So you want our government to pass laws that will help convict themselves?!?

Anonymous said...

do u think anybody is stupid enough to bring laws which put them in jail. india will inflate themselves out of the problem by devaluing the currency. the best time to buy property is in crisis, in the US too whoever bought in 2010 is coming out ahead big time.

aam aadmi said...

@Above
Yea but you must have cash to buy a property during a crisis, taking on an EMI at the peak of the bubble isn't the way to do it.

Anonymous said...

http://www.theatlantic.com/business/archive/2013/06/gold-was-a-horrible-investment-from-1500-to-1965/277186/

Apparently gold is not as great an inflation hedge as it is made out to be.

Anonymous said...

So what if prices will go up because of falling INR? Even slum dwellers in Dharavi are crorepathis. Across the country pretty much everyone you run into is a Crorepathi. People can afford.

Anonymous said...

Even slum dwellers in Dharavi are crorepathis. Across the country pretty much everyone you run into is a Crorepathi. People can afford.

I think you mean slum lords. Majority of residents in Dharavi are renters.

The slum lords own the dwellings and yes, they are multi-millionaires...

Anonymous said...

Apparently gold is not as great an inflation hedge as it is made out to be.

Gold is the best hedge against modern currencies which have a well established history of evaporating into nothingness...

If you have a traders mentality on the other hand, you will not get it.

ShashankRao said...

In the USA, the private ownership of gold is a privilege, not a right. Congress revoked the privilege of private ownership in 1933 and restored it not so long in 1974. US Govt actually confiscate Gold in 1933 and permit to own Gold only up to $100 back then. Same could happen or repeat in the US or your country. So hoarding Gold is neither going to help you nor economy.

Anonymous said...

><Gold is the best hedge against modern currencies which have a well established history of evaporating into nothingness...

Which part of 'lost over 80 percent of its value compared to inflation-adjusted British pounds over those four-and-a-half centuries.' did you not understand ? Are you saying that gold is not a hedge against the pound devaluation but is a hedge against the devaluation of other currencies?

polt said...

Jason Zweig always writes well, but this one is really worth reading -

http://blogs.wsj.com/moneybeat/2013/06/28/the-intelligent-investor-saving-investors-from-themselves/

And yet I am sure we will have folks in this blog saying India is different, Indian RE is different, etc etc. Some people never learn ...

Anonymous said...

Same could happen or repeat in the US or your country.

Anything could happen. What is probability?

In US, confiscation of any asset is much easier (due to fully transparent records and transactions) as well as presence of strong police state.

In India, you have such fragmented government and state machinery that implementing any blanket asset confiscation (which requires extreme co-ordination/co-operation amongst the confiscating agencies) is practically impossible.

Specifically for gold, unlike anywhere in western world, owning gold is part of Indian culture. Any Indian politician / official even hinting at confiscation of gold is committing career suicide.

Anonymous said...

Which part of 'lost over 80 percent of its value compared to inflation-adjusted British pounds over those four-and-a-half centuries.'


All currencies of any worth were pegged to gold. Now what cut-and-paste mumbo jumbo were you muttering about inflation adjusted pound value over the centuries?

The faith-in-paper based system was introduced in 1970's and is being tested in a big way. Hang on to your governments promises and enjoy the ride...

Anonymous said...

http://daily.bhaskar.com/article/MON-at-100-pc-yearly-returns-these-are-indias-top-cities-for-luxury-housing-investme-4307457-PHO.html?HF-1=

Truth or fiction? 10x multiplier might be highest claimed yet...

Anonymous said...

>All currencies of any worth were pegged to gold. Now what cut-and-paste mumbo jumbo were you muttering about inflation adjusted pound value over the centuries?

Ah. So now the pound is not a currency of any worth, and data from the bank of england is 'mumbo-jumbo' ?

>The faith-in-paper based system was introduced in 1970's .
The US went off the standard in 1933.

> Hang on to your governments promises and enjoy the ride...
Hows the 30% fall in the metal feeling ? Want more? Coming soon.

Pawan said...

@Polt
Nice article link. Thanks.

Once again reinforces the key point - reversion to mean.

The same thing is in force now with our GDP. 9% growth years were an aberration. We are back at 5% and will stay there for most of this decade. And that will knock the wind out of the sails of most high-flying asset classes in India including RE.

Anonymous said...

http://www.firstpost.com/investing/japan-to-india-busting-the-biggest-myth-of-investing-in-real-estate-921239.html

[From the article]
In Japan this led to people taking on 100 year home loans, confident that there children and grandchildren will continue to repay the EMI because they would benefit in the form of significantly higher home prices.

What the idiot author does not take into consideration is Japan in 1980's had a low interest rate and raising yen. In India the people are already crying about high interest rates and rupee is depreciating and along with that sky high inflation. Still people are not taking more than 20 year loan. And frankly most plan to finish with in 8 years if everything goes as per plan.

online property said...
This comment has been removed by a blog administrator.
Anonymous said...

Anon at 4:15 am
I think you are the idiot here. In 2005-2008 we had the exact same situation, low rates and increasing value of rupee. That dynamic has sharply reversed. We are now in a nose bleed inflation situation, high rates with many people's loan duration extended to 30 years or having extra burden on EMI. Good luck with paying off the loan in 8 years.

Anonymous said...

^^^ I'd rather be an idiot with lots of money than a sage with a langoti.

But to each his own...

Anonymous said...

http://www.firstpost.com/economy/when-it-comes-to-the-rupee-you-aint-seen-nothin-yet-918317.html?utm_source=top_menu



Have fun!

Mangoman said...

Finance Minister at it again. He intimidated RBI to cut rates by telling that 'RBI should understand their mandate in the broader sense'. What a irresponsible statement this has been from the Finance Minister of a country which is struggling to avoid a financial sunami of unimaginable proportions.

Please also read this....https://www.niticentral.com/2013/07/01/manmohan-singh-is-an-economic-disaster-in-charge-of-mounting-crisis-97761.html

Shamelessly the UPA government is trying to buy time until the elections by threatening ( almost) RBI to cut the rates. RBI is obliging so far. That is altogether another issue.

I was shocked to read that we continue to pay huge to our oil imports. Even though they oil commodity prices cooled off. An article in DNA says http://www.dnaindia.com/money/1855943/report-5-years-after-peak-145-oil-india-pays-more-today Rupee has depreciated more than 51% than the time when oil was trading at 145 per barrel. That means we may more than what we were paying to oil few years back.

But strangely we attack gold. That is soft target and inspite of clearly knowing that people buy gold to hedge against killer inflation which caused by RBI and Government, these so called intelligents blaming people. The opposition is not raising any issue over this gross mis management of economy which baffles me.

Better late than never. A life of few real estate agents is not important than a country. We have a raise interest rates by atleast 2 percentage and depreciate Rupee atleast upto 70 per dollar. Unless we do this, we all will go to dust.

If we dont do it on our own we will be forced to take these measures anyway.

Titbits:

2500 crores recovered in mumbai most probably belongs to some powerful person and it is anybody's guess we will never come to know who is behind this? This case will be closed in due course and we mango idiots will shamelessly live in this country......

www.mangoman2012.blogspot.in

Pawan said...

@Mangoman,
If rupee has to go to 70, market will force it there. More important is fuel price de-regulation. When we are paying an equivalent price of 145USD per barrel (I am also surprised to hear this figure) then where does a diesel and cooking gas subsidy makes sense?

aam aadmi said...

@Mangoman
Govt is fighting a losing battle, I see the country and economy in long term decline, the transition will be marked by successes and failures but the curve in general will be point downwards.

The math is really simple, the quality and quantity of resources in general is going down while expectations keep going up. The two shall never meet, 2000 might as well be the decade when we had the highest GDP growth rate.

Anonymous said...

Harvard educated PC knows well, reducing interest rate will fix the economy.

http://www.firstpost.com/economy/singing-to-fms-tune-bank-of-india-cuts-base-rate-by-25-bps-926155.html

Anonymous said...

//2500 crores recovered in mumbai most probably belongs to some powerful person and it is anybody's guess we will never come to know who is behind this? This case will be closed in due course and we mango idiots will shamelessly live in this country......//

I dont see much new coverage

NDTV, news under cities
TOI - no news
IBN - no news
Firstpost - no news
Hindu - no news

Googled "four truck load of cash in mumbai"

REBear said...

Harvard educated PC knows well, reducing interest rate will fix the economy.

This is one of the reasons why I hate this country - finance ministry directing banks how they should do business. Tomorrow they can force me to increase hiring, or hire people from particular class.

Decreasing rates would mean inflation. And hasn't his Harvard education taught him how high inflation is bad for the country when growth is stalled ? My own personal example, I lost my job in Dec 2008, struggled and survived for 10 months mostly on savings when I received the first dollar of income. Guess HOW ? A : It was period of very low inflation - my decent 3 BHK apt rent was 8000/- including maintenance , petrol was 40/-, and so the overall monthly expenses were just under 25k. The landlord could not increase the rent as market was down. It was well worth the risk.

Now compare it with today where the same apartment would rents for 22k including maintenance, petrol is above 70/-, food inflation, kids education, healthcare, everything is high. Considering overall costs of living today, I don't think it would have been easier for me to start self funded business. So this is how high inflation discourages new businesses from coming and without new businesses how will there be sustainable growth ?

Moral of the story - as long as inflation remains high growth is going to remain subdued. And I don't know what it would take this Harvard educated finance minster to understand this simple fact.

Anonymous said...

Encouraging new business?

1.Not enough electricity
2.Sky high rents
3.Sky high labor cost,( my city handles with low cost immigrants(?) from Bihar, and my Govt subsidize their food and healthcare )

No common man can start new business. System is designed to be like that.

Best ever green business for common man would be in
real estate,
marriage related,
education, health care and grocery shop.

Those industries are time tested recession proof (except real estate )

skeptic's ghost said...

Rupee now at 61 - Classic clusterf&@k of an economy - savers in INR have been massively punished.

RE and Gold will meet their dust in INR. If you have investment properties that dont get any rent - you should exit the market now.

Anonymous said...

Haha, you think these politicians guys are dumb? They are not.

They will keep the party going (no pun intended) for as long as they can.

If they can hang on to power for a few extra months even if the long term prosperity of the majority of the country is destroyed then it's an easy choice for them.

After a brief and unimpressive flirtation with democracy, India is slowly returning to it's roots. A country of dynasties where incumbent wealth and power will dominate over everyone and everything.

shruti pandey said...
This comment has been removed by a blog administrator.
Anonymous said...

Inflation is not bad. If inflation is 10% then salaries will rise atleast 15% by the companies. For IT it will be more rise because of down rupee

Anonymous said...

If inflation is 10% then salaries will rise atleast 15% by the companies.

What a foolproof way to make money - ensure inflation to be 10% and salaries automatically rise by 15%, so you make 5% after inflation without additional productivity !!!

The last decade which saw salaries rising by 15% p.a will be a history. No fresher is being hired these days. In one of the govt eng colleges that I know only 9 out of 200 students secured job offer, and guess who hired these 9 ? TCS, and the joining date is in year 2014 ! One of these freshers was told by a company that it'd employees holding diploma are better than you.

It took 4 years for people to realize this, and the result today is lot of seats in engineering colleges are lying vacant. The education bubble eventually did burst.

http://articles.timesofindia.indiatimes.com/2013-05-25/education/39520645_1_new-colleges-engineering-colleges-intake-capacity

Now does that mean there is no demand for engineering graduates ? NO, there is still demand for skilled engineers but unfortunately most of the freshers never paid attention to enhance their skills, attended junk colleges thinking they would still be able to easy money.

The RE bubble has also started bursting in exactly similar way. Once people realize the facts it gets over.

Anonymous said...

^^^ The "Engineering" colleges were bound to go bust sooner than later.

Most were granted certification during the time of Sh. RA Yadav as the chairman of AICTE. The gentlemen was caught certifying questionable colleges with barely qualified faculty for bribes as low as 6 lakh rupees.

But for the 2 other able yadavs, m/s Lalu and Mulayam, he would have been in jail and all licenses cancelled.

Most of the students passing through these colleges would not be able to clear class 12th Maths paper.

Anonymous said...

Just did a quick search of "engg colleges for sale"



https://duckduckgo.com/?q=engg+colleges+for+sale


Engg college business is peaked.

aam aadmi said...

Hiring has indeed slowed down and there is a glut of experienced hands so freshers don't stand a chance.

On an average it takes 6 months in a for a fresher to get productive in a service company and 1 year in a product company. Then there's the overhead of mentoring a fresher, it's time that companies don't have.

Anonymous said...

Did I read it properly? Job uncertainty in India?


RC Bhargava, a car industry veteran and the Chairman of Maruti Suzuki India was more vociferous than Saxena of Volkswagen when he told Business Standard in a recent interview “In India, over 70 per cent of car purchases are financed by banks. An interest rate reduction of, say, one percentage point doesn’t change a person’s decision of buying or not buying a car…With the uncertainties prevalent today, a consumer does not know what his job would be like after a year – whether or not he will have an incremental income, or even a job.

http://www.firstpost.com/economy/mr-chidambaram-interest-rates-in-india-should-be-at-least-17-932115.html

Anonymous said...

Dollar now at 61. The liquidity is slowly but steadily heading back.
As someone said - If you are living on someone else's money sooner or later they will ask for it back.

We are slowly heading into a currency crisis. Right now, there is a slow fall in the R/$ rate, but it can accelerate suddenly anytime. The government probably has a few quarters at most (and not years) to get its act together.

Any external event (China, Portugal, etc) can easily cause a run on the rupee here.

Mangoman said...

10 year US treasury bond up 7%. Hope this screws up indian rupee big time next week.

Mangoman said...

Will it cause a crash in Indian share markets. Let us see what can happen Monday.

9.15 AM Indian Markets Tank by 2-3%. Because already Brazil markets tanked by 3% until now. The dollar index is at 84.70 and US Bond mentioned in title is at 2.706. It makes sense to FII to withdraw their bonds.

10.00 AM Real Estate and Share Markets Welfare Minister Chidambaram will come on TV to convince traders and FII.

10.30 AM Arvind mayaram and Raghuram rajan willl come on TV and put the blame on US currency.

11.00 AM chamcha singh will come and predict the bottoming out of Indian economical slump for 100000000th time.

11.30 AM Rangarajan will talk in CNBC and will gently nudge RBI.

Anonymous said...

Rupee will open around 61.50 Monday AM.

Indian RE, Stocks, Rupee, Bonds and Job market are all toast for the next few years.

Anonymous said...

RE crash is still far away. My friend in Pune visited few builders but they increased prices by upto 500 per sq ft. The builders are telling him that they are seeing lot of interest from NRIs especially ones from middle east.

Anonymous said...

^^^^ HAHAHAHA...
"NRI MAN", the protector of the Indian RE.
While for a lot of NRIs, the Indian RE has been little better than "kryptonite" for a couple of years now.

aam aadmi said...

@Anon at 10:18
It's hard to tell if the builders are bluffing or not, ask your friend to find out if any purchases have happened in that area in recent months.

Purchases are the real barometer of RE, AFAIK actual registrations have gone down in last few quarters.

As I found out recently, builders inflate prices by about 15-20% but if you show them the money they will come down to earth.

Anonymous said...

Those who believe that real estate prices are going to crash, are in for a surprise. Builders in Western suburbs of Mumbai, are going to raise the prices by 5~10% depending on amenities. This is the outcome of meeting held at a Juhu Hotel by builders association

Anonymous said...

If builders keep raising prices, doesn't mean prices will not crash. The builders are in bed with bankers and cheaters, but for how long.

My observation is prices are already crashing in many metros especially NCR and Mumbai. No buyers and RE is staying stagnant.

Anonymous said...

>10 year US treasury bond up 7%. Hope this screws up indian rupee big time next week.

Sorry, while I am bearish on the economy and certainly on RE, I do not share your enthusiasm for a fall in the Rupee.

I have elderly parents and relatives, all living off their savings. Inflation is the last thing the country needs now.

REBear said...

I have elderly parents and relatives, all living off their savings. Inflation is the last thing the country needs now.

Alas no body wants super weak currency, it's a nightmare even for me who earns in dollars because it's a perfect recipe for social unrest. And specifically at a time of elections Govt may resort to any means, including special taxes on high earners, partial confiscation of bank deposits of HNIs, and in case of country downgrade expect capital controls, ban on forex trading, and even a financial emergency.

The point is what may happen is not decided by what we want. This great indian economic bubble was manufactured by the Govt to create an illusion of wealth. But as is said, Only when the tide goes out do you discover who's been swimming naked.

Anonymous said...

"I have elderly parents and relatives, all living off their savings. Inflation is the last thing the country needs now."

Well, they benefited from over a decade of merciless asset price inflation and unearned, effortless wealth. Now it is time to pay the piper.

Mangoman said...

Down and out is not referring the rigged up Indian Markets even though Mangoman love to see crash in the Indian markets.

The vegetable prices gone through roof. The budget of ordinary family is affected http://www.business-standard.com/article/markets/vegetables-fruit-burn-a-hole-in-the-pocket-as-prices-go-through-the-roof-113070600586_1.html . Still government is supporting Real Estate brokers community by not increasing the rates. Sadly they are looking ways to cut rates further. RBI is also singing the tune of government which is very bad for the country.

I remember RBI Guv. Subbarao said he will have to raise rates if Rupee falls further. That was when Rupee was trading at 55-56. After that Rupee has depreciated more than 10%. I am wondering what constitutes a fall in Subbarao's dictionary? He is one of the biggest disappointment. He should raise to the occasion.

Either way when Monday market opens RBI has a fight in the hand. I love to see Rupee touching new lows that day. RBI dollars reserves are going down fast as per the latest reports.As I have been maintaining RBI can save face if they do what they have to do on their own instead of being forced by the basic laws of economics.

Monday morning without no doubt chamcha singh ( Montek) will talk about bottoming out. What a cruel guy he is?Most of the vegetables are costing more than 100 Rs per Kg. But when I looked at the inflation barometer our RBI and government follows it says less than 4%. What a cheating?

Mangoman said...


//Sorry, while I am bearish on the economy and certainly on RE, I do not share your enthusiasm for a fall in the Rupee.

I have elderly parents and relatives, all living off their savings. Inflation is the last thing the country needs now.//

This is the biggest mistake we do which is capitalised by the corrupt politicians.

Many have invested in real estate they dont want to see RE fall. Is that mean that should not and will not happen?

Look at the benefits after the crash and you have to take care of your parents either way.




Anonymous said...

I have been out of India for the past 10 years except for occasional visits. What is the current IT scene in India. Are IT people still confident about their jobs and pay packets. I have been working in US for past 10 years and have spent most of the time worrying about layoffs and job cuts

Anonymous said...

>Well, they benefited from over a decade of merciless asset price inflation and unearned, effortless wealth. Now it is time to pay the piper.

For many elderly people, the biggest asset they own is the house they live in. It does not make an iota of difference whether it is valued at 20L or 80L. They do not get any cash flows from it.

They get their income from PPF, pension, post office schemes, etc.
All of which have been eroded by inflation. Not to mention medical expenses which have increased much faster than inflation over the last few years.

REBear said...

I have been working in US for past 10 years and have spent most of the time worrying about layoffs and job cuts

If you are really skilled and the skill is in demand in India, I think your job might be safer as compared to US. But don't think you can't be laid off in India. I was working for a US based company in India where work was good but the company was making constant losses since 2003. In 2008 it appeared company has just enough funds to survive for another 2 years but everybody said that there have been no layoffs in the company in its 10 year history. And people said even if layoffs happen it would happen in the US and Israel rather than low cost India. They were proven wrong, layoffs happened across the globe including India.

And the sad part about Indian layoffs - it was driven by politics as I later came to know. Incidentally, the people who were laid off were the ones who could easily secure jobs anywhere anytime. I later came to know that boot lickers already knew about the list and their managers asked them if they would like the name on the list or not ! Worse, it also depended if you are Bengali or not.

Thank God, today I am far away from all that culture - the layoff was the best thing in my life.

So bear all this in mind if you plan to come back and take a job in India. It's ultimately your call but there is one thing that I would like to add and it's very important for you. Indian companies these days are feeling employees over 10 years experience as a liability; they would love to replace you with a younger guy. I don't think or know if it's the same in US.

aam aadmi said...

About jobs. Always have multiple skills in your bag, the age of being an expert is over.

Moreover if you lose your job it's easier to live in India than in the US, even for US citizens. Things like property taxes are loosely enforced in India and people usually stay indefinitely in their homes without paying taxes but in US you will find yourself on the street within a few weeks of not being able to pay your taxes.

About RE prices, they cannot rise indefinitely no matter what tricks the politicians and builders try to pull off. There is something called "negative feedback" and it's going to kick in very soon (already kicking in)

Black economy is after all a by-product of the real economy and when people have less discretionary money left black money will dry up as well, vegetable vendors won't be able to pay their usual haftas to the cops, traders won't be able to pay what they usually pay the politicians, everyone will negotiate for higher prices and lower taxes (bribe money). Companies will have lower sales and will not be able to pay politicians ad infinitum for land and protection, they will shut shop.

The laws of economics apply to black money as well.

GSM said...

For many elderly people, the biggest asset they own is the house they live in. It does not make an iota of difference whether it is valued at 20L or 80L. They do not get any cash flows from it.

Well, Chidu invented reverse mortgage to specifically to address cash flow and "help" the elderly in a country where there is no Health Insurance or Socialy security. Pretty smart eh?

polt said...

@GSM - Well, Chidu invented reverse mortgage to specifically to address cash flow and "help" the elderly in a country where there is no Health Insurance or Socialy security. Pretty smart eh?

I am guessing you are being sarcastic here. But on a serious note, if any of your elderly relatives are considering a reverse mortgage, please ask them NOT to do so.

The fees involved and the returns make it a very poor deal. As usual, the rapacious financial industry will ensure that most of the gains in this deal accrue to the industry and not the individual. And esp in case of elderly people who may not be in a position to parse the paperwork properly, they will almost certainly get fleeced (even by public sector institutions).

GSM said...

And esp in case of elderly people who may not be in a position to parse the paperwork properly, they will almost certainly get fleeced

I was sarcastic, but help me understand, as long as the elderly are alive, even if the home equity is less than the mortgage value, they can still live in the house right. If so not actually a bad deal for 25 years unless there are some fine prints.

REBear said...

Ashish Dhawan in Apex'13 Summit sees rupee crossing 100/- as a possibility (look after 51 min in the long video below).

http://www.youtube.com/watch?v=C86l4dsm0p0

Anonymous said...

@REBear 10.28PM,
Is that Aricent by any chance? Just curious.

polt said...

Many pages on the web cover the pros and cons of a reverse mortgage. Here is one.

http://money.usnews.com/money/blogs/On-Retirement/2012/12/11/5-reasons-to-avoid-a-reverse-mortgage

In general, if you can avoid it you should. Unless you have absolutely run out of money and the house is all you have let.

polt said...

The comments in that article are also instructive. Both pros and cons are discussed.

REBear said...

@Anonymous at 10:28 PM

Is that Aricent by any chance? Just curious.

No, it's a company called Transwitch.

Anonymous said...

"For many elderly people, the biggest asset they own is the house they live in. It does not make an iota of difference whether it is valued at 20L or 80L. They do not get any cash flows from it. "

See, that's not the way things work. If they owned a house, their net worth has quadrupled period. They can easily take advantage of the price-appreciation by just selling the house and renting (because rents haven't kept up with prices). If they sell an 80 lakh house and rent in their city is Rs. 15,000 per month, then they can afford to pay rent for a whopping 44 years.

"They get their income from PPF, pension, post office schemes, etc.
All of which have been eroded by inflation. Not to mention medical expenses which have increased much faster than inflation over the last few years. "

And the value of their RE have risen by much more than inflation has eroded their savings. There is no free lunch. Sorry, but you can't have a RE bubble and eat too.

aam aadmi said...

@REBear
If Rupee goes to 100 petrol will cost 120 per liter. Looks like Ashish Dhawan has taken that into account.

Demand will crash long before that.

aam aadmi said...

^has not taken that into account

Anonymous said...

^^ Fortunately for those on fixed incomes and the poor in India the law and courts move at a snails pace so the real impact is minimal compared to a country like US for example where all the poor were driven out of their homes to make way for the yuppies as property prices rose in "revitalized" downtown areas of major cities.

India still has a semblance of true social security in that respect.

Anonymous said...

INR in toilet after currency symbol was introducted
GOI to default in March 2014
Austerity/furlough begining March 2014
S&P downgrade India to Junk Status
INR upto 80/USD in March.

Any bets.

REBear said...

If Rupee goes to 100 petrol will cost 120 per liter. Looks like Ashish Dhawan has taken that into account.

Oh Ashish Dhawan is a very smart PE player in India who understands ins and outs of the Indian economy. In the interview he expressed shock at the RBI and Govt position to maintain CAD around 2.5%-3% instead of targeting 0%.

Yes lot of demand will crash before 100/-, possibly Govt in election year would do extraordinary things not to pass on import hikes to voters, like banning or even confiscating Gold coins above threshold, capital controls, and even capital controls for NRIs or financial emergency if the loans due by March 2014 . are not renewed. What ever is the bottom for INR, whether it is 80/- or 100/- capacity for exports will need time to build. Lot of money will be used for productive capacity and move out of Real Estate.

Anonymous said...

> They can easily take advantage of the price-appreciation by just selling the house and renting (because rents haven't kept up with prices).

Yes, lets just ask 65 year olds to sell, move to a rented house and be at the mercy of a landlord. Who needs these wrinkly old people around anyways right ?


Sorry, but that sounds like a 'if you cant have bread then eat cake' solution.

Anonymous said...

http://www.business-standard.com/article/finance/rupee-falls-below-61-dollar-to-record-low-113070800087_1.html

I wonder if this is even newsworthy now. It almost has a sense of inevitability about it.

aam aadmi said...

like banning or even confiscating Gold coins above threshold, capital controls, and even capital controls for NRIs or financial emergency if the loans due by March 2014

They can ban gold imports but they can't confiscate them, government doesn't have the manpower to do that. Capital controls will come too, we may just return to pre-1991 days when people used to take out dollars in tooth paste tubes.

I think it's a good time to load up on gold if one can do it. Legal coin sales may disappear in a few years, I see an artificial gold shortage on the horizon.

Anonymous said...

record-surge-in-mortgage-rates-mortgage-rate-affordability-incomes

[From the article]
Based on someone being able to purchase with a $2,000 payment, $450,000 was doable at 3.4 percent (just in May) versus $375,000 to $380,000 this month. In other words $70,000 to $75,000 would need to be shaved off in price to keep the affordability in the same playing field.

Sounds like another housing bubble going bust.

Anonymous said...

What is the big deal with rupee going down? It is going to increase exports, IT profits and bring in more foreign income from NRIs. For indians it will mean a rupee hike on petrol. I dont see this impacting average Indians so badly

Anonymous said...

http://www.zawya.com/story/NRIs_most_loyal_investors_in_Indian_shares_FIIs_will_be_back_BSE_CEO-ZAWYA20130708031146/

The title says it all. NRIs will prop up the rupee

Anonymous said...

The title says it all. NRIs will prop up the rupee

What are they waiting for, rupee crossing 70/- ?

Anonymous said...

For those who think "rich" NRIs are there to bail out read this :

http://www.emirates247.com/news/borrowing-at-120-per-cent-to-remit-money-to-india-suicidal-financial-expert-2013-07-01-1.512679

Anonymous said...

Also this article :

http://economictimes.indiatimes.com/news/nri/nri-real-estate/will-rupee-depreciation-bring-nri-real-estate-investors-back-home/articleshow/20972529.cms

Anonymous said...

"Yes, lets just ask 65 year olds to sell, move to a rented house and be at the mercy of a landlord. Who needs these wrinkly old people around anyways right ? "

What you're unable to see is that everything has a price. Those 65-year olds became Crorepathis through effortless, unearned effort, without having to expend the sweat, labour or taking the risks required to attain a net worth of circa US$200,000 (a princely sum in most countries in the world, including developed countries). All they did was buy a house and they became wealthy, just like that. For having done nothing at all.

Now, obviously, such effortless wealth on a national scale in a country of 1 billion people in a developing country where over 50% don't have access to a toilet is not sustainable. A price MUST be paid. That price is inflation.

The 65 year olds can't have it both ways. They can't continue to have a first world net worth with developing world everyday prices. If everyone is a Crorepathi, then prices necessarily have to go up to incentivize your Crorepathi butcher, baker and candlestick maker to make it worth their while to carry on their occupations.

The smart 65 year olds will sell out now and cash in their Crore (while the "RE prices can only go up in India" myth is still alive).
Of course such smart people are far and few between.

Anonymous said...

I dont understand why one should expect a 65 year old person to sell his house, especially if this is the one he is living in, and be a tenant for the rest of his life.

Regardless of what price the home was purchased, it was purchased with many many years of hardwork, sweat and savings, especially in a time when the concept of mortgage/easy money was not available in India.

So if a 65-year old person became a crorepati now - you need to compare a salary of a 35 year old person who purchased a house 30-years ago; to that of a 35 year old person now. They made pennies then compared to the rupees that you make now.

Let the elderly have their place that they earned with hardwork. Someday they can proudly pass it on to their children/grandchildren.

Anonymous said...

5-6 years ago NRIs were classified as Not Required Indians. Not these very people who coined the definition are looking to the NRIs to douse their burning rears...Typical Indian behaviour...... "Help me I am falling"

Anonymous said...

>The 65 year olds can't have it both ways.

Actually they can. All they need really is a positive real rate of return on their savings. And if this means having a high nominal interest rate that could bring down RE prices, so be it.

They own the house outright, paid for through decades of diligent saving. As I said before, the price of their house does not make a damn difference to them .

Why should their financial savings be used to bail out over-leveraged house horny 30year old IT engineers?

Anonymous said...

http://timesofindia.indiatimes.com/business/india-business/Indian-realty-to-gain-sheen-among-NRIs/articleshow/20979442.cms

Keep dreaming while NRI's are rejoicing. Of course bears will label it as a paid news

Pawan said...

@Anon
Keep dreaming while NRI's are rejoicing. Of course bears will label it as a paid news

Read the comments under that article. There are some NRIs there too.

Anonymous said...

To
Anon @10:41pm

Kindly check the comments for the article from NRI. They also believe that it is planted articles(Advertisement in the disguise of News).

REBear said...

Malaysia in 1997 vs India in 2013 - Doesn't it sound too similar ?

http://en.wikipedia.org/wiki/1997_Asian_financial_crisis#Malaysia

"Before the crisis, Malaysia had a large current account deficit of 5% of its GDP. At the time, Malaysia was a popular investment destination, and this was reflected in KLSE activity which was regularly the most active stock exchange in the world (with turnover exceeding even markets with far higher capitalization like the New York Stock Exchange). Expectations at the time were that the growth rate would continue, propelling Malaysia to developed status by 2020, a government policy articulated in Wawasan 2020 . At the start of 1997, the KLSE Composite index was above 1,200, the ringgit was trading above 2.50 to the dollar, and the overnight rate was below 7%.
In July 1997, within days of the Thai baht devaluation, the Malaysian ringgit was "attacked" by speculators. The overnight rate jumped from under 8% to over 40%. This led to rating downgrades and a general sell off on the stock and currency markets. By end of 1997, ratings had fallen many notches from investment grade to junk, the KLSE had lost more than 50% from above 1,200 to under 600, and the ringgit had lost 50% of its value, falling from above 2.50 to under 4.57 on (23 January 1998) to the dollar. The then premier, Mahathir Mohammad imposed strict capital controls and introduced a 3.80 peg against the US dollar."

Anonymous said...

http://economictimes.indiatimes.com/news/nri/nri-real-estate/indians-bought-3-5-billion-us-realty-in-year-ending-march-2013/articleshow/20979848.cms


Looks like Rich people and NRIs are making wise decisions

Anonymous said...

There will always be winners and losers.

Even during global crash there were those who made billions.

In this environment, NRIs are clearly winners while those with rupee denominated income did not jump up by 10% in the last quarter is a loser.

Don't blame NRIs, blame your own government for allowing rupee to go down the toilet with irresponsible policies.

Anonymous said...

Watch out !! GOI is not going to allow Rupee to sink below 61 mark until the next election. However, there is a critical limit for every action and the compounded decline when GOI is in no position do control, will likely cause devastating effect and all the gains achieved since mms took over as PM., are going to be wiped out

This isn't doomsday theory but the impending reality

Anonymous said...

IMF cuts India’s growth forecast to 5.6 percent for FY 2014

http://www.firstpost.com/economy/imf-cuts-indias-growth-forecast-to-5-6-percent-for-fy-2014-943805.html

It has started..I bet that the real growth rate would be far less than 5.6.but the effects will definitely take some time to be seen.

SG

Anonymous said...

After equities, gold, rupee was there any doubt at all that the rot would slowly but steadily spread to RE ?

Mumbai Realty: The cracks are showing — Prices drop 11.2% in Western Suburbs - http://stockmusings.com/mumbai-realty-prices-drop-in-western-suburbs/

Prices still rising in other parts of the cities. But clearly anyone buying now will probably be left holding the bag.

aam aadmi said...

Don't blame NRIs

Who is blaming them ?? I thought they were the knight in shining armor who would save India.

Anonymous said...

Folks prepare to save your self from coming unrest than worrying about real estate capital values.

http://www.bloomberg.com/news/2013-07-09/ruble-to-real-roiled-with-no-brick-in-brics-13-9-billion-lost.html

Anonymous said...

^^ Atleast Brazilians have shown some balls and are holding their politicians accountable for their misdeeds.

Highly doubt if this happens in India even with such dire statistics:

http://blogs.wsj.com/indiarealtime/2013/07/09/where-they-stand-four-key-corruption-investigations/

http://www.indianexpress.com/news/all-political-parties-are-corrupt-believe-86---indians-transparency-international-survey/1139640/

86% Indians believe political parties are corrupt. So why not come out and vote for an independent candidate?

I suppose the remaining 14% surveyed were direct beneficiaries of the corruption.

aam aadmi said...

Highly doubt if this happens in India even with such dire statistics

That is because unlike Brazil this is a collection of countries, not one single country. Every region has it's own consciousness and burning issues.

Cool Head said...

Vik,
Please remove all the spam posts by the RE brokers with their links. It only helps them rank better in Google.

Anonymous said...

http://economictimes.indiatimes.com/markets/real-estate/realty-trends/high-end-realty-deals-a-house-in-dharavi-slum-beats-posh-central-mumbai-flats/articleshow/21009402.cms


Now I've heard it all but this is quite a shocker.

Never imagined that a slum hole in Mumbai would be costlier than a posh 3 BHK bungalow anywhere else in India! Heck, for 1 crore, I'd even manage a nice townhouse in most major US cities, rupee devaluation notwithstanding!

Anonymous said...

^^ Many of the rules that govern the rest of the city's real estate do not apply to properties here. For instance, there's no formal registration of properties and no stamp duty. All deals are based on power of attorneys, sale agreements and a no-objection certificate.

Not bad for a completely off the record black property.

No electricity or water bill, no property tax. Plus guaranteed windfall when redevelopment happens.

From my first hand accounts, most of Dharavi RE is indirectly controlled by politicians and their henchmen.

Anonymous said...

http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis/realty-companies-to-take-a-hit-in-q1-as-property-prices-decline/articleshow/21048900.cms

Real Estate said...
This comment has been removed by a blog administrator.
Pawan said...

Interesting read:
http://globaleconomicanalysis.blogspot.in/2013/07/china-urbanization-growth-fallacy.html

Anonymous said...

http://economictimes.indiatimes.com/news/economy/policy/rbi-announces-fresh-steps-to-tackle-rupee-volatility/articleshow/21089962.cms

Mangoman said...

Before going to today's bashing, please read the blog post of Mr.Deepak here. According to him, RBI has raised he interest rates.http://capitalmind.in/2013/07/rbi-effectively-hikes-rates-2-sets-limits-on-repo-usage/

But now do you know whether banks are continuously borrowing more than the 75000 Cr set by the RBI? I mean how it will hurt the banks unless otherwise they are having to use MSF on daily basis. What is the daily borrowings whether it is crossing 75000 Crs consistently?

So far these bankers were doing easy money business. Get some cheap money from RBI which is forced by corrupt UPA government and lend them to real estate brokers. When the repayment term comes they replan the loan repayment until idiot mangoman takes these loan as housing loan or whatever bull shit they call us. Those days are easy money are over. Now it is time to Indian bankers to do business as per the book. Identify the business analyse the margin and then lend. Since now most of the Indian business man turned brokers and not ready to accept a margin of anything less than 40% it would be a tough ask. Otherwise what can define that almost all top business house in India dabble in real estate?

Ok. Now what? Since interest rates are going to go up it would be very interesting. Fraudsters who are ready to sell even their wives for a rate cut are going to get crushed in this financial sunami unless they understand what is real business is.

It is sad that guys like businesses of Ratan Tata who never comes on broker channels to beg for a rate cut, is not doing that good. His tata steel and tata motors are not doing good. I feel for it. But that is what life it.

Another interesting aspect I have observed yesterday wherein WPI inflation figures are released during market hours as it is perceived to be good news for market. Is it not amounting to fraud in government for they said they are going to release all these ( gdp, inflation and iip) after market hours?

Anyway Chidambaram will come on TV and will tell that what RBI has done is just a eye wash or hog wash. It is just a ploy to shore up the currency and bankers need not worry that the government and RBI will find some innovative ways to give money to real estate brokers supported by banks. Am I right?

www.mangoman2012.blogspot.in

Mangoman said...

This half hearted measure of luring FII's into bond market should backfire. Unless RBI directly hikes the repo rates to screw the broker mafia

aam aadmi said...

Good move by RBI

Anonymous said...

Very good move by RBI, little late though. They should also suck up a lot more excess liquidity. It will definitely crush the RE nonsense.

Sensex and Nifty will be down a lot today.

Pawan said...

Interest rates up.

Who could have imagined that it will be currency that will force the hand of govt. Everyone believed that interest rates can only go down. Once again proves the point that things happen when they have to happen. Just that it is hard to predict where the final blow will come from.

Pawan said...

@off-topic: I have written a small article in FakingNews User generated content section on Real Estate. You may like it. http://my.fakingnews.firstpost.com/?p=36379&preview=true&preview_id=36379&preview_nonce=5fa59be461

Anonymous said...

Faking news says -

"You do not have permission to preview drafts."

aam aadmi said...

Right on cue you have an 'assurance' by the FM (to his builder friends) that rates won't go up.

http://in.reuters.com/article/2013/07/16/india-finmin-idINDEE96F03B20130716

The RBI's steps to curb rupee liquidity are aimed at quelling excessive speculation and volatility in the forex market and should not be read as a prelude to policy rate changes, Finance Minister P. Chidambaram said.

The whole thing looks more like a farce every day that goes by.

Cool Head said...

All the Kings horses and all the kings men
Could not put Humpty Dumpty together again.
This is going to be the India RE tale...

Anonymous said...

Time to uncork the champagne you guys! I think this is finally going to lead to the RE crash as affordability takes a further hit with already high inflation. I feel sorry for those souls that now are surely going to pay higher EMIs coupled with racheting costs of living.

sunny chaubey said...

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Pawan said...

"You do not have permission to preview drafts."

Working link:

http://my.fakingnews.firstpost.com/2013/07/16/kabul-islamabad-included-in-ncr-property-prices-immediately-shoot-up-by-50-there/

Anonymous said...

Waiting to see what tricks does the government have to avoid a full blown recession now. I am sure they would have a couple still.
Still can't believe they built the whole "India Story" based on hot money flows while basically instigating the common man to part with his savings for these thugs to usurp.

Anonymous said...

Sucking liquidity out of market means less borrowing activity.

Less borrowing means less business activity

Declined business activity means less GDP growth

Less GDP means , High CAD/GDP ratio.

High CAD ratio means less value for currency

Am I missing something?

REBear said...

Waiting to see what tricks does the government have to avoid a full blown recession now

I don't want to sound pessimistic but I see lot of bad things happening. Oberoi Realty results show they haven't been able to sell even 40% units of last five year average, Ashok Leyland results show 150 cr loss, M&M, Maruti layoffs...rupee fall, inflation spikes, and massive food security bill to the tune of 3.14 lakh cr (in actual) creating social problems. Congress party can engineer riots in case things go out of control and declare emergency in the worst case to stop Modi from coming to power.

Anonymous said...

//food security bill to the tune of 3.14 lakh//


food security bill will be funded by cutting diesel subsidy.
Congress planning to increase 50 paise per month till subsidy value becomes zero.

I think thats why Maruti cut diesel engine production no petrol engine production





aam aadmi said...

@REBear
Here's my prediction, Congress barely wins 2014, mostly through horse trading and free money. After that there is a severe economic crisis in 2015, within a few months after that a mid-term election is called, Modi romps home.

I hope I am wrong.

Anonymous said...

http://www.firstpost.com/economy/centre-clears-13-sectors-for-fdi-hike-allows-100-in-telecom-960455.html

Desperation setting in now for the dollars . Unlikely to help in the near term. With the economy tanking, it would take a brave-heart to invest here.

Anonymous said...

^^^ The government is lifting its skirt like that old ugly hag of a hooker no one wants to buys services from anymore. HEHEHEHEHE....
Apologies if I offended any sensibilities.

Anonymous said...

aam aadmi said...

"Here's my prediction, Congress barely wins 2014, mostly through horse trading and free money. After that there is a severe economic crisis in 2015, within a few months after that a mid-term election is called, Modi romps home."

This is exactly the scenario that is being discussed in Delhi between people in the know.

Lets how bad the common man gets screwed by all this.

Pawan said...

Congress barely wins 2014, mostly through horse trading and free money.

This is not a bad scenario because then they would have to reap what they harvested. Worse would be that they set up a puppet PM giving outside support to Mulayam, Nitish whoever and then pull the plug midway thus allowing them to prove that only Congress is able to give stable full-term-lasting governments at the centre.

REBear said...

@aam aadmi, Anonymous above

I don't know who comes to power since food security bill might swing lot of votes in favor of Congress party if implemented correctly. In any case, I see middle class badly screwed. Four of my friends earning over 20L in job met me personally in the last week. One of them has invested all the savings in a number of plots in Rajasthan and his money is stuck now - no buyers at even 20% less price ! Another one keeps bothering me for a huge loan as he is unable to sell his flat in Greater Faridabad and has booked another flat in Bangalore. Third one went to US for 3 years, came back to Gurgaon early this year and now is looking for a job, but is unable to find one for several months. The fourth one works for a quant trading hedge fund since past 13 years(including 10 years in US) and his company is not giving promotions, and always keen to replace him with junior guy. This guy however is not leveraged but finds his future uncertain.

And these are all highly educated people with high salaries, and if these people are in trouble imagine where the economy is heading. Real Estate is the last thing to worry about, the coming tide will be very painful for everyone. Social unrest, spurt in crime, etc is the thing that one needs to ride over.

Pawan said...

@REBear,
Your prediction of unrest already coming true:
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/maruti-violence-district-magistrate-imposes-section-144/articleshow/21112249.cms

Anonymous said...

^^^ PAwan, when you make a man (or a population) addicted and dependent on dope, the only way to keep him happy is by giving him a bigger quantity progressively. If you stop, the addict loses it and can get violent.
Congress over the last decade has made people addicted to ever increasing salaries and exponential increases in land prices for the owners.
This I think was the main reason the runaway inflation wasn't bringing about the unrest that it was expected to.
What are they going to do now that the party looks to be over.
I think the Food Security Bill is their expected hedge against this.
Whether they succeed with this or not remains to be seen.

Anonymous said...

In any case, I see middle class badly screwed. Four of my friends earning over 20L in job met me personally in the last week.

Investments are never supposed to be risk-free.

And with all due respect to Mr. Gecko, greed is never good.

Anonymous said...

Your prediction of unrest already coming true:
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/maruti-violence-district-magistrate-imposes-section-144/articleshow/21112249.cms


This is just blatant suppression of free speech and workers freedom to protest.

India is joke democracy where you can gather in the 1000's, cause disruption and be unruly as long as your cause is "approved" e.g. in support of a Modi or a Sonia.

But even 5 people assembling to protest for a "non-approved" cause e.g. blue collar workers rights, is something our democratic institutions simply cannot cope with...

Judiciary once again proves why it's ranked up there as the most corrupt institution after politicians and police.

Anonymous said...

While morons here are dreaming, NRI's racking up properties like never before.

http://content.magicbricks.com/nri-interest-in-gurgaon-realty-up-as-rupee-touches-historical-low/

REBear said...

While morons here are dreaming, NRI's racking up properties like never before

You will be shortly clear who is moron. Oberoi realty, one of the most reputed builders in Mumbai sold just 23 apartments in the first quarter of this financial year, where are NRIs ?

http://www.oberoirealty.com/pdf/2013/Q1FY14_Results_Analyst_Presentation.pdf

(Look at page number 20)

Anonymous said...

I am a "mean to reversion" sort of guy and it doesn't particular benefit me to see the RE bubble POP.
But I do look forward eagerly for the inevitable to happen just to see the noses of these RE Bulls/idiots rubbed in dirt.
The smug b@$^##*s.

Anonymous said...

Correction: *"reversion to mean".
Oops!!!

aam aadmi said...

How addicted are we to cheap credit ?? Here's your answer.

http://www.livemint.com/Money/lJUUdglOChDzb5NNVXr7CI/RBI-opens-special-liquidity-window-for-mutual-funds.html

A sharp fall in the net asset value (NAV) of liquid funds after a slump in bond prices, combined with fears of a persistent squeeze on liquidity in the banking system, spurred many institutional investors to seek redemptions on Tuesday, resulting in a rush at commecial banks.
According to MF industry estimates, debt-oriented funds faced withdrawals of around Rs. 25,000 crore on Tuesday. On Wednesday, however, according to two top officials at two different large domestic asset management companies (AMCs), debt-oriented schemes saw redemptions of just Rs. 15,000-20,000 crore, which is normal by industry standards. 10-year benchmark bond yields stayed high on Wednesday and ended at 8.05%. The yield on India’s 10-year benchmark bond surged to 8.2% on Tuesday following the apex bank’s measures to suck liquidity out of the banking system. Bond prices and yields move in opposite directions.


In short RBI is in a catch 22 situation, if they raise the rates there is trouble, if they don't there is trouble.

Anonymous said...

to Anon at 10:42 pm
I share your thoughts. I want the leveraged RE buyers to lose everything they have

Pawan said...

I share your thoughts. I want the leveraged RE buyers to lose everything they have

Govt. loves RE. It is a sector which generates huge employment for zero-skilled people and generates taxes and incomes for govt. RE will be protected as long as it could be. Which means we will see much worse conditions on other sectors before RE goes down.

After recent RBI attempts to defend INR, we have forex left only for six months of imports. If INR falls further, the six months period gets further shortened. Expect a shortage of all imported goods soon most importantly subsidized fuel - diesel, LPG etc.

The only bad thing is that elections are just a year away and this govt. will somehow make it work till then leaving the next one to hold the baggage.

aam aadmi said...

I share your thoughts. I want the leveraged RE buyers to lose everything they have

Be careful what you wish for. A bubble won't burst in a vacuum. The RE bubble in US took out the world's economy with it.

Same here, a bubble burst(already happening) will wreak a lot of misery on a lot of people who had nothing to do with it.

Anonymous said...

//I want the leveraged RE buyers to lose everything they have//

So RE buyers come to street and when you lose your job due to recession, you feel good looking at them, don't you? What a sadist you are (in fact most on this blog)!!

REBear said...

What a sadist you are (in fact most on this blog)

Well truly the commenter didn't realize what he said I am sure. When fire catches in your neighbour's house and in most other houses in your community it's likely your house want be spared either. The way I see this blog is to understand the underlying cause of the bubble, the effects of it build up, effects of bursting, and most importantly how to insulate your self when it bursts.

Anonymous said...

When fire catches in your neighbour's house and in most other houses in your community

Well, some people would cook with neighbour's fire and sell it back to them ;-)

Anonymous said...

NRIs net-net near 0 gains - those who invested at 40/- per USD and planning to exit at 60/- would face a 20% capital gains tax too if there is any gain.

http://www.livemint.com/Money/1J8C9YqDn2x7XLGZ0tNKXI/Investing-in-real-estate-is-not-that-simple-for-NRIs.html

Also read

http://www.livemint.com/Money/t1MEWbokxd6PO6LgjLpQGP/Foreign-exchange-fluctuations-have-a-tax-impact-too.html

Anonymous said...

>> So RE buyers come to street and when you lose your job due to recession, you feel good looking at them, don't you? What a sadist you are (in fact most on this blog)

But didn't "most on this blog" already advise those buyers not to get into this ponzi scheme & burn their pockets (& coats too), and warn them already about coming to the street? What more can they do?

Anonymous said...

>> So RE buyers come to street ...you feel good looking at them, don't you? What a sadist you are

He wold feel happy that a cancerous tumor has been killed, and all the remaining cells can breathe easy. A small number of non-cancerous, but vulnerable cells too would have been killed, but that is no reason to keep the malignant tumor alive and growing alarmingly.
Once the RE vampire is killed, every other business - from fruit-seller to tour operators to restaurants can get respite from ever increasing unbelievable rents and can get more customers, since people wont be spending all their pay on housing loan and be forced to stinge on or completely cut off other things. Of course the improvement wont be immediate, but will take a short while. If you are worried over that short while, the cancer will kill you.

REBear said...

from fruit-seller to tour operators to restaurants can get respite from ever increasing unbelievable rents and can get more customers

Oh do you think restaurants can expect same or higher footfalls or people would start planning vacation to Goa or Mauritius if the bubble bursts ? You are unable to see a serious economic disaster is approaching the country. Most of the population in the country is unproductive, and most of the fertile farmland has been converted to builder land. How well a country with 1.2 billion population survive this tsunami, time will tell.

And in most of the parts of country RE has already crashed, there are no media reports about it. I told about my friend who bought land in Rajasthan and is not finding buyer at 20% less of 2010 price. An uncle of another friend of mine told that prices in various parts of Punjab are down 30%-40% and lot of people sold there textile mills to buy lot of RE. There is NO mention of this in the media, he says.

Anonymous said...

And in most of the parts of country RE has already crashed, there are no media reports about it. I told about my friend who bought land in Rajasthan and is not finding buyer at 20% less of 2010 price. An uncle of another friend of mine told that prices in various parts of Punjab are down 30%-40% and lot of people sold there textile mills to buy lot of RE. There is NO mention of this in the media, he says.

I met a resident Surat who used to work in diamond polishing industry. He told me in 2008 GFC many committed suicide in Surat who were working in Diamond Industry. There was no media reports of this. This too in so called Modi' raj.

I bet there will be many who will abuse me for stating this forgetting conveniently people who died and their family members how they must be suffering. What a pity were so many business bosses and corporate heads are in shows for showing intent to invest in Gujarat which may have materialised less than 2% over last five years there is no security net unemployment benefit, health cover for families etc for those who contribute so much too state as well as country financially

Anonymous said...

Water issues in Bangalore:
http://www.deccanherald.com/content/341815/groundwater-contamination-poses-serious-threat.html

& Mumbai has the opposite problem:

http://timesofindia.indiatimes.com/city/mumbai/Mumbai-could-face-floods-Report/articleshow/21145304.cms

aam aadmi said...

@REBear
I am not surprised, bubbles never pop in a month or two, they take years to build and years to burst, it's the media which would like us to believe that things happen only when they are looking.

We all have a bias for the spectacular which is why we miss obvious problems that manifest slowly. I expect the crisis to eat up the periphery (villages) and then move to the core (cities), at which point media will proclaim that the bubble has blown up.

Anonymous said...

The only bad thing is that elections are just a year away and this govt. will somehow make it work till then leaving the next one to hold the baggage.

It's a myth that switching political parties will result in any meaningful change.

Virtually every politician has vested interest and earns equally well from RE/builder lobby.

Perhaps a handful of exceptions but we all need to share responsibility and help bring in big majority of independent candidates to see any beneficial action taken by our government.

Anonymous said...

Indian builders evolving much faster than aam aadmi...

Latest tactic: Why fudge land records when you can make them disappear entirely?

http://articles.timesofindia.indiatimes.com/2013-07-17/mumbai/40634598_1_missing-files-case-taj-mahal-hotel-nexus

Anonymous said...

http://zeenews.india.com/news/bihar/raids-yield-over-rs-20-cr-assets-from-bihar-adm_861994.html

This is not even a big shot politician. Merely an additional district magistrate that too in one of the poorest regions on the planet.

At this rate, India can only be saved by removing all Indians!

Anonymous said...

The joke called the TOI property supplement had an article that stated that once the economy revives , RE is poised for a sharp uptrend like 2003. I mean, do they really think their readers are fools ? There has to be a limit to being ridiculous !

Anonymous said...

To Anon above
The property supplement is nothing but shills for the builders.
What baffles me is the complete lack of judgement shown by the sheeple who read it and will be shortly led to slaughter. No amount of logic will ever convince them. I think that justifies the schadenfraude people on this board.

REBear said...

This is not even a big shot politician. Merely an additional district magistrate that too in one of the poorest regions

It is said almost all politicians, their relatives, govt officers, film stars, every "big shot" owns a property in Gurgaon. Didn't the prices still tank by almost 30% in 2008 ?

Anonymous said...

http://www.indianrealestateforum.com/real-estate-noida/t-amrapali-slashed-rates-all-projects-61738.html

Might be the one-off exception now. But if tough times continue, this could soon become the norm with other builders too.
Expect nervous investors to 'front-run' this process by lowering prices on their own holdings too.

Anonymous said...

http://www.indianrealestateforum.com/real-estate-noida/t-amrapali-slashed-rates-all-projects-61738.html

Another micro market sample :

http://articles.timesofindia.indiatimes.com/2013-07-19/lucknow/40678984_1_real-estate-market-properties-buyers

polt said...

http://www.business-standard.com/article/beyond-business/south-delhi-goes-south-113071901040_1.html

The richest of India are now shying away from RE. In Real estate, prices follow sales. Almost always. First sales fall, sellers hold on for a while, reality bites, and then they reduce prices. No different anywhere else in the world.

The writing on the wall was evident last year itself when the RE industry started reporting sharply falling sales and increase in inventories (esp in the biggest markets of Mumbai and NCR). Expect small investors who have bought on margin to capitulate first.

REBear said...

Oh Amrapali reduced prices by more than 20%, where are the NRIs ?

On a side note, FM imposed tax on Gold and now silver imports have started going up. These people think that they can fix current account deficit just by banning Gold.

http://www.business-standard.com/article/markets/silver-imports-shoot-up-as-prices-drift-to-multi-year-lows-113062601067_1.html

REBear said...

http://www.business-standard.com/article/beyond-business/south-delhi-goes-south-113071901040_1.html

Actually price crash has happened not only in South Delhi but across Delhi and Noida. Gurgaon is yet about to catch fire.

And btw, Vadra resides in New Friends Colony which is mentioned in the article as one of the affected areas by the slump. I heard from some members on this forum that politicians, black money, blah blah will keep the prices steady :)

Pawan said...

Truth comes out bit-by-bit:
http://economictimes.indiatimes.com/news/economy/policy/fdi-reforms-might-not-rein-in-cad-former-rbi-deputy-governor-subir-gokarn/articleshow/21176299.cms

Anonymous said...

Most people who bought in the last year or two will soon be facing the spectre of 'negative equity' (loan is greater than home value).

This will also make banks worried. To maintain loan to value ratio, they will ask home owners to make an additional lump-sum payment to restore the ratio. This happened in 2008, when some home-owners had to do this. Not easy to pony up 5-6 lakhs when your finances are already stretched due to the existing EMIs and high inflation.

REBear said...

Guys discover another Island or relocate to a first world country. This country is just not good for your children.

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/despite-rbi-guidelines-significant-number-of-banks-recovery-agents-harass-defaulters-the-age-old-way/articleshow/21198812.cms

aam aadmi said...

http://timesofindia.indiatimes.com/business/india-business/80-dip-in-gold-imports-linked-to-rampant-smuggling/articleshow/21198956.cms

In another case in Ahmedabad, DRI officials apprehended a consignment where capacitors of picture tubes of TV sets were made of gold. "Unless you have specific information you can't catch such consignments. Who would break open a TV and look at the capacitor of its picture tube for smuggled gold. Though we have had good success, we believe a lot of consignments are finding their way into the country," said the officer.

The headline should have been "The return of Haji Mastan"

aam aadmi said...

@REBear
It happens in other places as well, unless you manage to get the VISA for Scandinavia or Canada.

http://www.firstpost.com/world/ukraine-rape-draws-outrage-over-official-impunity-973107.html

Anonymous said...

Agree with Anon at 11:23. An additional point Id like to add is that how much is the organic cashflow for most people? I would guess not a very high number. Exactly the reason why rapid rupee devaluation, inflation and rising EMIs have hit discretionary purchases like cars. Now it is going to expand to other items. A full blown recession is on the way.

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

The exuberance of the last decade is clearly ending. Stocks, bonds, gold and even the 'unbreakable' RE are all reverting to mean.

In all the RE hoopla and the race for capital gains, very few cared for underlying income streams.

We forgot a basic relation -
1.Prices are driven by credit and sentiment in the short term, but ultimately growth in income levels is what drives them.
2.Rents are driven by income.

One only had to look at rental growth and yields to see the over valuation in most (but not all) places. Now
1. Sentiment is rapidly turning negative
2. Income growth is flatlining
3. Credit is still growing, but not as fast as before.

Unless you absolutely really have to, do not buy a house now.

aam aadmi said...

@Polt
Need to watch Price-Rent ratio closely, there's a bottom to the falling RE prices and it's determined by inflation, many people (including me) made the same mistake while judging stock market performance. Inflation must be factored in while making any prediction.

When RE reverts to inflation adjusted prices it's time to buy.

polt said...

@aam admi - "When RE reverts to inflation adjusted prices it's time to buy."

Agree. But in reality, it is hard to say when prices are correctly adjusted for inflation. Do you take 2001 as the base or 2005 or ...?

IMHO, The best time to buy any asset class is when it has ceased to be a topic of discussion at dinner, parties, etc, where people brag about their paper gains or about how they know someone who knows someone who got a 3x gain.

When there is complete indifference or even a revulsion towards the asset class, one should jump in. Right now we are seeing this in the stock markets. Remember the IPO mania of 2005-2007 when paanwalla's were stocking IPO forms. Most of those IPOs turned out to be complete duds. Currently no one even talks about stocks or Mutual funds. Infact, equity MFs are seeing record outflows from retail investors. For someone with a 10-15 year time frame, right now is an excellent time to start/continue a equity SIP, stay disciplined even if the market falls 20-25% from here. One is rewarded richly only if one buys when no one else is buying.

RE will also reach this stage. Might take 2-3 years or more from here. But it will get there. As Baron Rothschild said rather dramatically 'Buy when there is blood on the streets, even if it is your own blood'.

You know, we might even see some of our esteemed MLA/MPs reporting lower assets in the next elections, given their extensive land holdings. Low probability but still possible :)

Anonymous said...

'Buy when there is blood on the streets, even if it is your own blood'.

What else do you except from baron rothschild. He runs and controls the world and creates such situations.

Obama is a bigger pony to baron than manmohan is to sonia.

Anonymous said...

http://articles.timesofindia.indiatimes.com/2013-07-20/edit-page/40682011_1_david-cameron-spurious-drugs-tragedies


Now this is why you would want to relocate. Or simply participate in democracy and help elect better leaders by educating the common man who is unaware of basic democratic concepts (apart from following the herding instinct into the polling booth every election)

After all, there are Sonia, Modi, Lalu and Pawar equivalents in almost all parts of the world yet the difference between a success and failed democracy is the ability of the electorate to discern and differentiate.

Anonymous said...

"When there is complete indifference or even a revulsion towards the asset class, one should jump in. Right now we are seeing this in the stock markets."

Are you blind or just deluded? The SENSEX is at 20,228, not far off from its all time high. The index keeps going higher every day. Rest assured that there is no "indifference" or "revulsion" towards the stock markets.

Pawan said...

he SENSEX is at 20,228, not far off from its all time high.

Please adjust for inflation.

polt said...

Are you blind or just deluded? The SENSEX is at 20,228, not far off from its all time high. The index keeps going higher every day. Rest assured that there is no "indifference" or "revulsion" towards the stock markets.


1. The market is where it was 6 years back. Adjust for 8% p.a inflation over these years. The numbers are worse in midcaps (See CNX Midcap index).
2. Check the equity MF holdings and their trend over the last year or so.
3. The only thing holding up the markets is the (now waning) FII enthusiasm. A mild jolt from China/Portugal/Greece/Name-your-country-here will be the tipping point and they will rush for the exits with their dollars. As I said, it could well be that we will see a 25% or more fall from here. But one cannot time it, one should not try to.

Anonymous said...

HI All,
I am just curious as to how a salaried person in say Gurgaon or Bangalore with 20lpa afford to buy a 2 or 3BHK. If he/she is renting, how much does he save on average pm? to buy a home?

REBear said...

The SENSEX is at 20,228

Indices in India are not reliable. For instance, stocks like Suzlon that have fallen 90% are removed from index. Weightage of Export oriented stocks(like TCS) is increased as they perform well. So how do I compare index with what it was in 2007 ? Ask anyone who holds stock portfolio in 2007, you will find Reliance bought above 2500/-, Reliance Energy bought above 1500/- , and so on. These were the heavy weights in 2007. Even though indices have returned above 20000 & 6000 respectively, people who bought stocks in 2007 haven't seen losses trimming.

I would not agree fully to the hypothesis that one should buy asset when no one is talking about it. Try executing it on individual stock like JP Associates or Suzlon and you might invite trouble. Infact some economists have started believing that the growth era of last 250 years would be a history soon. And I think that the way the above hypothesis works is it presumes growth in long term.

REBear said...

I am just curious as to how a salaried person in say Gurgaon or Bangalore with 20lpa afford to buy a 2 or 3BHK. If he/she is renting, how much does he save on average pm? to buy a home?

20 lakh CTC is too less for buying a house in Gurgaon. I would guess your take home would be around 1.35 L per month or so. Rent including maintenance would vary between 28k-38k for a "good" quality apartment. You can compromise on quality and even rent something for 15k too of course. If you opt for society with 100% power backup you might pay 13/- per unit for power usage. Kids education cost can vary between 6000/- pm to 18000/- pm depending on school "quality". I am writing few things in quotes because I believe nothing in India is actually superior quality - most of the time people overpay for something assuming superior quality but in fact it is not.

One of the basic assumption of the bubble theory is that prices are not in sync with incomes. If you say that not many people in Gurgaon earn over 20L per annum but RE is unaffordable for them, then there is a bubble.

Anonymous said...

http://articles.timesofindia.indiatimes.com/2013-07-13/lucknow/40553428_1_18-broad-sectors-engineering-and-telecom-sector-latest-survey

IT guys retain their "big spender" crown. Obviously these will be mgmt. or senior folks who have better job security and not recent hires who are worried about layoffs or being benched.

The luxury market in India is pegged to grow at 25% in 2013 till 2015.

IT and Financial jobs is what I would be watching to forecast RE trends in metros at least. As long as hiring and salary growth is robust in these sectors there is negligible risk of asset price correction in these cities.

Anonymous said...

One of the basic assumption of the bubble theory is that prices are not in sync with incomes. If you say that not many people in Gurgaon earn over 20L per annum but RE is unaffordable for them, then there is a bubble.

With the global economy structured the way it is, the vast majority (90+%) will be the have-nots. This reality has yet to dawn on many Indians. (Fact: Bangladesh has fared better than India on the social index from 1990 to date)

On the flip side, even if 10% Indians have lifestyle similar to Londoners or New Yorkers, India would beat these developed countries in raw numbers.

Anonymous said...

so you are saying that most salaried people with 10+yrs of ex in Gurgaon earn >20lpa? with the nos you have given, 30krent+10k+misc ~20k. its like being able to save~20-30k pm. how does one buy a home then. if he/she is not able to buy, then where is the demand coming from.. has money all value??

polt said...

>I would not agree fully to the hypothesis that one should buy asset when no one is talking about it. Try executing it on individual stock like JP Associates or Suzlon and you might invite trouble

Sorry, I meant broad asset holdings like an index fund/ETF (equity or bond) or an REIT or a precious metals ETF, etc.
Making a concentrated bet (like JP or Suzlon) is just asking for trouble.
With housing, one has to make a concentrated bet. Even then, better to buy when everyone else has given up on it.

REBear said...

its like being able to save~20-30k pm. how does one buy a home then. if he/she is not able to buy, then where is the demand coming from..

Now you are slowly approaching towards the cause of the bubble. As you said, with decent living one with 20L salary can't expect to save more than 5-6 lakh per annum which assumes living in full power back up society on Sohna Road or Nirvana County, sending your kid to a reasonably good ranked school, house hold expenses, shopping, and a trip to Goa or Kerala once a year, and trips to your home town a couple of times in a year.

So how are people buying RE in Gurgaon or for that matter any metro city in India ? One obvious answer which everyone would say is people with black money, politicians, builders, film stars, business men, NRIs, etc. and yes its true these people do have holdings. However, this is merely an eyewash as the supply is too huge to be just absorbed by this class alone. I ill now tell from my own experience who are the majority holders :

1. Middle class speculators : These are the MAJORITY stake holders. My previous 3 landlords fall into this category, and all my neighbours in the current and previous apartments. And they make less money on an average than you ! Lot of them have bought early or were originally allotted. And they bought more in between by selling their other properties in tier 2 towns + taking loans and putting their savings.

Are these people buying today, I don't see them except some who are betting money in under construction property in "emerging areas", where they believe they can profit quickly.

2. Working couples making over 30L per annum together taking mortgage loans, but most of them are booking under construction property it seems.

REBear said...

And btw, I went to East Delhi yesterday for a party. Things are really bad, no house is selling and most are not even finding tenants. The bubble has really burst in Delhi, though the winds have still not reached Gurgaon.

As a desperate measure to revive sales, Delhi govt has now revived GPA deals :

http://timesofindia.indiatimes.com/city/delhi/General-power-of-attorney-based-property-sales-can-be-registered-again/articleshow/21260424.cms

aam aadmi said...

http://www.firstpost.com/investing/consumerism-at-its-peak-average-credit-card-spend-jumps-42-978423.html

American disease comes to India. I guess makes sense given the inflation.

Kalidasa said...

This is thread crap really - owner of this blog, can you please make this a post of its own?

http://www.firstpost.com/investing/japan-to-india-busting-the-biggest-myth-of-investing-in-real-estate-921239.html

An eye opener...

skeptic optimist said...

Bhenchod all these RE agents - is there a way to prevent them from posting crap project links here ?

john smith said...


Your site is really informative.


real estate in india
real estate mumbai

polt said...

http://www.business-standard.com/article/finance/rbi-clamps-down-on-easy-money-again-113072300920_1.html

Rising interest rates were a given. This has been standard solution in other countries too. The question is how much will they have to rise ?

Expect some screaming headlines in the coming months about rising EMIs.

Anonymous said...

Hi polt
Agree with you on rising EMIs. My question is how long can the powers that be not talk about this elephant in the room. There seems to be heavy pressure to underplay this in the mainstream media

Anonymous said...

>My question is how long can the powers that be not talk about this elephant in the room. There seems to be heavy pressure to underplay this in the mainstream media

Eventually, it will come down to the survival of the banks, esp the smaller banks. The stock market is already worried. YES bank fell 10% today.

Anonymous said...

@REBear - "And btw, I went to East Delhi yesterday for a party. Things are really bad, no house is selling and most are not even finding tenants. The bubble has really burst in Delhi, though the winds have still not reached Gurgaon."

It probably has reached Gurgaon too. Owners still have high valuations in mind, but the real value is found only when the house is put on sale.
The fall in RE prices is usually in slow motion. And with some months or even quarters of rising prices in between. Of course the builders will try and spin these occasional price increases into some media hype. But ultimately prices will resume their slow but relentless fall.

davelindahl said...
This comment has been removed by the author.
Anonymous said...

Dream on

http://www.ndtv.com/article/cities/record-deal-shakes-bandra-realty-in-mumbai-396723?pfrom=home-topstories

Anonymous said...

CNBC has a daily 'Property Show' which was always unabashedly bullish on RE. Today they had a debate and virtually all the participants agreed that prices, esp in new launches are falling.

IMHO, if a new house is selling for less, existing houses will also have to repriced by their owners/investors.

Pawan said...

Dream on

From the article (which you posted but did not read):
While this would be the highest paid for an apartment in Bandra-Khar belt, real estate experts say this cannot be taken as a yardstick for properties in the area.

Anonymous said...

I visited a prominent Mall in Mulund which was early built Malls having a large atrium (if I may call it). I visit this Mall once in 3-4 months since its opening maybe 7-8 years ago. My last visits since a year or I have noticed this Mall now declining in footfalls as maintenance.

Its second floor seemed to be unoccupied so did the large sections of adjacent 4/5 storey building. Moreover a prominent space occupied by a retailer in home furniture vacant. It was shocking me to see this.

The roof have was leaking over large areas include entry and exit points. Further, it appears the Mall was constructed in hurry without taking waterlogging conditions. The apathy is this that the escalators and several entry points are now have three feets baricades which one has to climb which is inconvenient and ugly.

The surrounding place was decline dirty unkept and worst were the toilets. The washroom on ground floor was in repairs. While gents urinal was after functioning. Those functioning had no water connection at all strewn with paan stains, There were pigeons entering the washroom and living and the toilets were filthy smelling. What a pity a Mall which used Television music shows for its promos now is reduced to a 70s shopping centre on decline.

I bet this is state of many malls across Mumbai, Delhi and other cities as well. Wait for the big rot to set in our economy and see the state of many of these Malls which are in oversupply. Interestingly Thane city seems to have many Malls in ratio terms wonder what its state is.

I see grim future for these Malls and I hope they will not become factories in the future or Detroit hangouts.

Save for 4 or 5 Malls I see a grim future for these Malls. One in City centre One in Central suburbs and may be 2 or 3 in western suburbs.

Interesting save for Phoenix in Lower Parel which has high footfall the condition of washroom tell you the real story of Mall upkeep of which I saw Inorbit and Infinity at Malad, Oberoi in Goregaon, RCity in Ghatkopar not very clean but relatively clean. Of course one cannot blame everything on housekeeping shoppers are responsible too.

I heard one small Mall in Malad station never really took off.

i think there should be a authority for Malls. Interestingly Gurgaon the Mall city I wonder what its future will be

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