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 ?
---------------------------------------------------START----------------------------------------------------------
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.
 |
---------------------------------------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 ?
500 comments:
«Oldest ‹Older 201 – 400 of 500 Newer› Newest»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.
So, should we believe real estate experts quoted by media?
1. Yes
2. No
3. Only when it suits my preconceived ideas
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.
This is a very good anecdote.
Also applies to residential premises. Frenzy of modern construction, looks great when shiny and new. However, unless upkeep and regular maint. is done, (which BTW. is required more frequently due to our harsh environment) it can quickly turn ugly.
Glass facades, swimming pools and professionally landscaped gardens are great if taken care of regularly but can quickly become liabilities as well (cracked/broken glass, mosquito breeding grounds, insect/pest harbors)
BTW. I have zero faith in Indian building and construction quality. Very few premises would be able to meet basic international standards let alone exceed them. Commercial may be better quality than residential simply because clients are more demanding and have bigger clout.
True, again coming back to the question of cashflows. The level of spend required for the upkeep may quickly overwhelm people. My aunt's house in Deonar for example. This is a new construction and there is wide disparity among the residents as regards making regular payments. This has resulted in nonfunctioning elevators and other problems in the complex. I see such problems aggravating as inflation burns the wage earners inhabiting these premises.
So, should we believe real estate experts quoted by media?
1. Yes
2. No
3. Only when it suits my preconceived ideas
That was assuming you would be more amicable to what an RE agent says.
For me, reversion to mean is all I care to hear.
Hiranandai Defaulting on Loans
DLF selling insurance business after selling land banks to pay of loans
Home Sales Declining
Falling home prices in India's biggest cities and now this -
http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/crisil-sounds-the-debt-knell-for-india-inc-numerous-downgrades-likely/articleshow/21350199.cms
The clouds have gathered and we seem to be heading into a perfect storm. Hang on to your hats folks. Stay liquid and keep at least 9 months of expenses in a savings account/FD. Ensure that you have good medical insurance from a company with deep pockets.
@Above
Malls were always a stupid idea, an invention of the energy rich west. The amount of energy required to maintain a mall compared to the sales they generate is enormous.
As energy costs soar (just wait for the NG prices to go up) owners will be forced to raise rents to maintain a viable business. Eventually we will go back to the old school shopping complexes, open air with lots of hawkers and mom & pop style stores living cheek by jowl with big brands, and that may not be such a bad thing either.
^^^
Amen to that aam aadmi.
I hate these ugly crappy looking buildings. And every time i hear the term "shiny new mall", I can't help but be nauseated.
>> I bet this is state of many malls across Mumbai, Delhi and other cities as well
Yeah, I'm from Bangalore. I guess there would be a few good malls, but the one I usually visit (now & then) in the Total mall on old airport road. It was once buzzing with life, but for the past several,several months, there are very many vacant showrooms, and I see a "mall management company" has been pulled in & it is fruitlessly trying to save face by putting up big covers over those vacant showrooms reading "Fishing for your favourite brand", "Downloading your favourite brand", "Extracting your favourite brand", etc, with appropriate funny cartoons, trying to say that in a few days some big-bang brand is going to rent those spaces. But those hoardings have been there for almost a year, still no takers! Slowly their varnish is peeling & it is becoming pretty plain to see that greedy, atrocious rents are resulting in sooo much space lying simply vacant. And yeah, it has resulted in revenue decline & the mall is slowly, but not too slowly losing sheen.
And earlier, the grocery market on the 2nd/3rd floors of the mall used to have pretty reasonable prices, but now it has become expensive AND that has resulted in very obvious fall in the number of shoppers (I'm never having to wait painfully in a long queue at the billing counters, even on weekends, but about a year and a half back all the 15 or 20 counters used to have serpentine queues)
500 flats sold in two days
courtesy ndtv profit property show 25th Jul, 2013
Things are getting better sang Paul McCartney in 1967
One only need look at bank results to see the state of the economy.
http://www.business-standard.com/article/markets/punjab-national-bank-hits-4-year-low-on-rising-bad-loans-113072600257_1.html
The RE industry will continue its spin and we will continue to see articles like 'Record price per sqft', 'Flats sold out in one day' etc etc.
Keep an eye on the banks. They will tell the truth. (even if they massage the results a bit to hide the rising NPAs).
Another PSB hits a four year low.
http://www.business-standard.com/article/markets/central-bank-of-india-at-4-year-low-on-weak-q1-earnings-113072500127_1.html
If things get much worse, I wonder if the govt can bail them out? Given the bond auctions over the last few weeks, the governments own credibility is being tested.
^^ The only thing more redundant would be a prostitute being tested for her virginity...
read www.mangoman2012.blogspot.in regularly to know about the banking sector and re sector comedy
the point about the total mall on OAR is absolutely right.. its slowly getting into a very decrepit condition. even the total mall on ORR near doddenakundi.. it was great in 2010 when it opened. things have gone continuous downhill since that. with brands moving out more empty spaces and in slow but sure decline.
@Polt
"The clouds have gathered and we seem to be heading into a perfect storm. Hang on to your hats folks. "
You've now been issuing vapid statements like this for nearly the past 5 years. Nothing has happened.
Have you no shame at all?
Houses/flats in India will always be expensive, get used to it. Any correction still makes house/flat expensive. 1 crore getting a 20% correction still makes it a 80 lakh expensive house/flat. Inflation, INR hitting 75, high unemployment, gasoline shooting up, will have no impact on the price.
This is not Detroit, where all the white folks moved out and you have a city going bust. 1.3 billion and counting, with majority of the population under 30, exact opposite of Japan. 5%( elite) of 1.3 billion is 65 million rich folks. I included some of the crooked govt employees in the mix.
I included some of the crooked govt employees in the mix
*some* crooked govt. LOL
Here's how the Indian system works.
Ministers get elected after spending anywhere between 3-5 crore of their personal fortune. Then they have 5 years to recover this amount and make profit. First thing they will do is call the senior bureaucrat under them and ask them to generate income. Then they will seek donations by finding corporates who need their ministry approvals/favors etc.
Majority of bureaucrats are honest when they pass IAS exams, but if your boss forces you to be dishonest else face a transfer or harassment, *most* will give in. Everyone in the chain has to be corrupt otherwise the system will not work. The loot has to be acquired from common man, concentrated as it moves up the chain and translates into tens of crores for the minister, a few crores for the senior bureaucrat, tens of lakhs for the mid level officers and a few lakhs for junior officers and clerks.
This is reality of governance in India. It is top down corruption but common man views it as bottom up since you never interact directly with senior level officers or bureaucrats or ministers. You'll pay the hundred or thousand rupees and move along without realizing the massive positive feedback loop that is being supported through your submission.
Anyone who has worked in leadership position or has observed good leaders knows that if you are positive role model then it's easy to discipline junior staff and they will also respect you for it.
Unfortunately India is operating in leadership vacuum. Good people try to enter and change things but are ruthlessly suppressed by the entrenched interests. After all, this is the only mode of survival for the corrupt who are in power today. They have no useful skills outside of lying and looting the public.
http://www.chicagotribune.com/business/sns-rt-us-swiss-tax-20130725,0,3107812.story
The money that belongs to India's people but has been illegally offshored will singularly pay off our infrastructure bill for the next decade PLUS boost the value of rupee (as dollars/francs get converted to rupees)
If relatively rich nations have shown some urgency to get back their wealth why has a poor country like India not acted?
I will not hold my breath unless there is complete change and some true patriots enter parliament instead of the scum we have right now...
BTW. none of this is off topic. As many are slowly but surely coming to realization that even if RE prices fall 20-30% the drops are more than compensated by depreciating rupee, stagnating wages, crumbling public services, increasing taxes, and increasing prices of necessities like food and fuel.
This is reality which is going to hit middle class big time in coming years.
http://indiatoday.intoday.in/story/govts-splurged-while-the-poor-supposedly-ate-for-rs-5/1/296469.html
Bingo!!!
Food security affordable to 100% Indians!
Very soon, Government will decide a tent can be erected for 500 rupees! Yay, no more homeless/shelterless in Mera Bharat Mahan!
When will WE wake up?
Houses/flats in India will always be expensive, get used to it. Any correction still makes house/flat expensive. 1 crore getting a 20% correction still makes it a 80 lakh expensive house/flat. Inflation, INR hitting 75, high unemployment, gasoline shooting up, will have no impact on the price.
To an extent yes but the issue here is that Indian RE is even more expensive than RE in US, this cannot continue no matter how corrupt we are, I am sure Zimbabwe is more corrupt than us but they still went through the collapse.
All this talk about black money are excuses, when a deflationary cycle starts no amount of black money can prevent it. And as I have mentioned before rupee cannot go to 100 or 200, in spite of corruption we are still a democracy and prices do decide elections, at USDINR of 100 or even 90, imports will become impossible and foreign exchange reserves will run dry, deflation will set in. The country cannot run without energy imports.
http://www.firstpost.com/business/car-market-down-maruti-to-make-small-trucks-991073.html
Says everything.
difference between Zimbabwe and India is that Zimbabwe people are ruthless, corrupt and not very bright. Indians are bright and corrupt, which is a very dangerous combo. You will not see any TATA, Infy, CTSH and 100 other companies formed in Zimbabwe.
Look at the wall street crooks getting busted, 50% of them are Indians or they are connected to Indians. we have super brains, but no soul.
And as I have mentioned before rupee cannot go to 100 or 200, in spite of corruption we are still a democracy and prices do decide elections, at USDINR of 100 or even 90, imports will become impossible and foreign exchange reserves will run dry, deflation will set in. The country cannot run without energy imports.
I would beg to differ here. Simply because 100 INR to 1 USD makes imports costlier doesn't mean rupee can not touch that level. Huge debasement did happen in 1990s. Here is the history of USD-INR that I know of :
1937 : 1 USD = 0.47 INR
1947 : 1 USD = 1 INR
1949 : 1 USD = 2 INR
1984 : 1 USD = 8 INR
1995 : 1 USD = 35 INR
http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=18206
50% of them are Indians or they are connected to Indians. we have super brains, but no soul.
People who say India is a country of super brains are a deluded lot. The fact, Indians are only brokers at best ! Indian exporters stand no where in comparison to Chinese and Japanese exporters and this is the one and ONLY cause of current account deficit and weaker rupee. Blaming Govt, RBI for it is a mere excuse, after all which great country(including US) has a competent government and a competent central bank ?
It's the citizens who make the country, not the Govt. I have interacted with taxi drives in Singapore and US and their IQ and knowledge is amazing. Yes, they knew exactly what is fiat currency and what the Federal reserve is doing, they knew what is socialism and capitalism and the flaws of each. Can you imagine an Indian taxi driver with this much of knowledge ?
Taxi drivers in US= Indians, haha.
Go to any university and school, and look at the top level students, it is all Indians. They do put extra time into it, but they are the best students.
Spelling bee contests, 75% in the finals=Indians. You might see one Asian( chinese/japanese), couple of white kids, but it is dominated by Indians. Majority of the doctor graduating in US= Indians. Brilliant people, but majority of these brilliant people become selfish. Very few Mother Theresa among these brilliant people. Even if they do charity work, it is for attention(photo op).
Taxi drivers in US= Indians, haha.
Go to any university and school, and look at the top level students, it is all Indians. They do put extra time into it, but they are the best students.
Looks like either you haven't been there or you don't gather data correctly. My batch IIT-JEE rank 2, Phd from Berkely is working as a software engineer in Facebook ! This is what most Indians are doing there. There are certain exceptional Indians too in the valley, but most were born over there.
^^ Thoda sa insecurity aaya aur bhai sahab ne apna IIT background bata diya - aap Chetan Bahgat key bhai ho kya??
People everywhere are the same. All this 19th century race/class nonsense coming from those with science backgrounds (I assume) has been debunked in 20th century.
We are in 21st century, let's move on to revolutionary ideas. How ironic that in a day and age where the cost of spreading the wealth of information and knowledge has never been cheaper yet so many "educated" people are stuck with obsolete concepts and backward thinking.
For those who doubt the human potential (Indian or otherwise) lookup the documentaries on Super 30.
http://en.wikipedia.org/wiki/Super_30
Imagine if we had more such institutes and a corruption free govt. which fosters innovation and entrepreneurship. We're literally sitting on gold mine of creativity and human ingenuity (in terms of our young population) which can easily catapult India into the top spot in the world but also in keeping with our culture and tradition, bring the rest of humanity forward.
A little humility is good for us all.
^^ Thoda sa insecurity aaya aur bhai sahab ne apna IIT background bata diya - aap Chetan Bahgat key bhai ho kya??
bhai kyaa samajh liyaa aapne ? The point was that when my friend who is JEE rank 2, PGM holder, and Phd from Berkley is merely working as software engineer in Facebook, California, how do you say Indians are the brain who are running US ??? How many of the "best brains" of our country have turned out to be Zuckerberg, Steve Jobs, or Bill Gates ? I have been hearing of this great Indian brain theory ruling the US from time immemorial. And the fact is most of them are doing nothing but just happy being bonded labor (via H1b) just for the sake of not returning back to India.
In addition to the tax burden, a bloated bureaucracy obstructs almost all economic activity, an inefficient judiciary deters potential investors with trials that can last for decades. It has a relatively low education level and a poor infrastructure characterized by potholed streets, an energy supply prone to failure, constantly delayed trains and outmoded communication networks.
As a result, it continues to fall behind internationally as a place to invest.
Any guesses which country this is referring to?
Could very well be India but it's actually referring to #3 economy in Europe, Italy.
This is what bad governance and apathy can do to a developed country. You can extrapolate the damage being caused to a developing country like India.
@REBear
I was talking about short time scales, over the next 20 years can INR go to 100 ? Yes it can, but it would have to be accompanied by generic inflation across the board along with rise in actual consumption.
How many of the "best brains" of our country have turned out to be Zuckerberg, Steve Jobs, or Bill Gates ?
With due respect, all brains are created the same. Unless you have congenital disease or defect which affects less than 1% of humans.
So I will respectfully put forth to you that the best brains of humanity are untapped. They are forced to eat out of garbage and struggle for daily survival. Once unleashed they will create solutions for billions.
Here's a paradigm shift from Supreme Court of India which changed my life and thought process:
"India will not become developed country when poor man has car. India will become developed country when rich man takes public transit."
This was Supreme court of India when passing verdict in favor of improved public transport in New Delhi.
Can be abstracted to any sector of society, e.g. health, education, culture.
For now I am only interested in, or rather worried, about the coming joblessness that we may see in the near future, perhaps worse than seen by Greece :
http://www.businessweek.com/articles/2013-07-25/greeces-unemployed-young-a-great-depression-steals-the-nations-future#r=rss
Housing bubbles, and in particular Indian housing bubble, are just the tip of the iceberg in the global economic & financial bubbles. Its very hard to imagine what happens when each of the bubbles in this world start bursting one by one. It's clear some people would lose lot of wealth whether its parked in real estate, Gold, bank FDs, commodities. The questions for which I have no easy answer is : Which asset class will offer best protection in case of turmoil ? I fear bank deposits might be the worse, particularly if you have lot of them. My guess is Gold, though it might still fall in value :
http://www.marketoracle.co.uk/Article41545.html
How many of the "best brains" of our country have turned out to be Zuckerberg, Steve Jobs, or Bill Gates ?
Are you kidding?. There is an NRI in this blog itself who projects himself to be better than all these guys put together simultaneously feeling sorry for Indians living a filthy life. Talk to other NRI's and how much he prices himself to be making America successful. And not to forget the in Laws who prides of the NRI as a genius. And you are telling that Indians are only on body shopping contract in US?
IBD UNIVERSAL Central India's Fastest Growing Real Estate Company. Featured Property "KINGSPARK" Bhopal.
Check out : https://www.facebook.com/pages/IBD-Universal/529666190416594?id=529666190416594&sk=app_599788450050788
Which asset class will offer best protection in case of turmoil ? I fear bank deposits might be the worse, particularly if you have lot of them. My guess is Gold, though it might still fall in value
Well you forgot to mention the two most important asset classes. The loyalty of your family and community and useful tradeable skills, money is just another name for faith, back in the day people invested a lot of time in cultivating the loyalty of their community because it was their only social security, we think that we are so advanced that we don't need to do it anymore, that buying a few pieces of paper or some shiny metal coins will save us, they are important no doubt but not as important as the other two.
The discussion is beyond the scope of a blog on housing bubble.
back in the day people invested a lot of time in cultivating the loyalty of their community because it was their only social security
From my personal experience, right from my childhood, I have seen this useful to a certain extent. In difficult times, society might help you to a very limited extent or no help at all. Even close friends or relatives are useful to a very limited extent, if at all. I therefore give it a small weight as compared to money.
The question is under difficult times, banks might confiscate all or part of your deposits, particularly if you cross the threshold (Cyprus did it). Buying RE at bubble prices, you surely would lose lot of money money, depending on the how prime it is. Gold can be bought as an insurance, but not at a very premium price. And housing bubble is but a small bubble in the comparison to the fiat currency bubble, derivatives bubble (held by banks with exposure over 700 trillion dollars), etc. If there were no bubbles, such a question of asset allocation would not arise.
IBD UNIVERSAL Central India's Fastest Growing Real Estate Company. Featured Property "KINGSPARK" Bhopal.
Check out : https://www.facebook.com/pages/IBD-Universal/529666190416594?id=529666190416594&sk=app_599788450050788
@REBear
Well my experiences have been the opposite, I have seen the healing power of a community. Perhaps I was lucky to see a good community.
My point is that people don't invest in social capital anymore thinking that money will save them from everything, however that isn't the case at all throughout history.
If one doesn't find their immediate community helpful then they should find a new one instead and earn their faith and trust because the cops and courts won't save you when the proverbial stuff hits the fan.
http://finance.yahoo.com/blogs/the-exchange/why-m-draining-savings-stimulate-economy-132919961.html
I am hoping people here understand how many people make their living because of RE transactions legitimately.
Hey Guys,
Need some advice.
Im planning to hire a web designer (+ developer if he/she has the skills).
Basic creativity. Not too much work. Pretty chilled out work schedule. Home based. Can also be someone who recently graduated and looking for some experience.
My question is "How much should i pay him/her?". I know the job market is bad.
How about Rs. 5,000 a month for 4 hrs a day.
Let me know what you think and what are the current trends.
^^ r u joking?? ~12k per month for full time?
I am paying more than that to my driver in mumbai for 2 hours driving per day, 5 days a week.
Who said job market is not good?
Bangaloreans replace one set of looters with another.
http://www.ndtv.com/article/india/karnataka-spends-rs-5-crore-on-luxury-suvs-for-ministers-395824
Hearty Congratulations! Enjoy your new masters (or will they enjoy you instead?)
For the record, even the US President does not get a new car every 4 year term.
The job market (not surprisingly) starts to go downhill.
http://economictimes.indiatimes.com/news/news-by-industry/jobs/tapering-growth-forces-companies-to-lay-off-staff-job-market-is-likely-to-get-much-worse/articleshow/21473098.cms
As some commenters before said and the previous news item, the housing bust is going to be a side show to the Category 5 hurricane headed our way. There is going to be blood on the streets.
Fir se katora le ke nikalne ke din aa gaye:
http://www.rediff.com/business/slide-show/slide-show-1-column-is-india-planning-to-take-a-loan-from-imf/20130729.htm
Meanwhile, our fearless leaders continue to live on like Kings!
http://incrediblycorruptindia.blogspot.com/2013/07/karnataka-mlas-feebly-attempt-to-single.html
Looks like a page straight out of Naomi Klein's book The Shock Doctrine.
Run down a country with stupid policies, then issue an IMF loan which will never be paid back because the underlying issues have not been fixed and then acquire the real assets (land, infrastructure) of the country for pennies.
Hope it doesn't happen.
http://www.indianexpress.com/news/bleak-future-for-brics-china-only-exception-ruchir-sharma/1148324/0
Even though we criticize Dr.Subbarao for his actions as RBI governor we have no doubt that he is good at heart. He wants to help but it is unfortunate that he is not able to withstand huge pressure puts up by the
corrupt political bosses, mafia corporates, pimp media and brokers.
However it is confirmed that he is not get extension for another period as confirmed by Mr.P Chidambaram Minister for share market and real estate welfare also holding additional charge of finance ministry. As suggested by Mangoman few weeks back, it is good that Subbarao is moving on. Let us analyse few things now.
1. Already finance ministry started looking for scapegoats to put blame on for the coming economic debacle. Subbarao cannot escape and there are high chances that he will be squarely blamed for the mis management. Better jump out of sinking ship as soon as possible.
2. I like the time bomb he planted in the RBI in the past 2 weeks. That is class act and I think he knew that the government days are numbered and so it is time to show some spine. By planting the time bomb ( reducing repo limit for banks), he made sure automatically interest rates would go up whether govt likes or not.
The effects of the time bomb will show itself in few days time. I mean it.
http://economictimes.indiatimes.com/news/news-by-industry/jobs/tapering-growth-forces-companies-to-lay-off-staff-job-market-is-likely-to-get-much-worse/articleshow/21473098.cms
USDINR @61.07:
http://www.xe.com/currencycharts/?from=USD&to=INR
BRACE BRACE BRACE.........................
A few days back I said the newer banks will have to increase deposit rates and here it comes:
http://www.moneycontrol.com/news/press-release/yes-bank-hikes-base-rate-to-1075_928154.html#toptag
The stock is down more than 10% on the news. The time of sucking saver's blood is over.
peene lagaa hoon main pehle se jyadaaa, pehle se jyaada main marne lagaa hoon :)
What I dont understand is why is there no expressions of anger or despair by people. I mean are we so rich as a country that none of these things have the slightest effect on us?
hey! nice post.. i would like to follow this blog..
http://www.business-standard.com/article/news-cm/karnataka-bank-drops-to-52-week-low-as-bad-loans-rise-113073100605_1.html
Banks under stress
http://www.thehindubusinessline.com/opinion/columns/lokeshwarri-sk/colour-of-fii-money/article4967068.ece
Looks like not much dollar has left.
Will rupee come back to 55 ?
What I dont understand is why is there no expressions of anger or despair by people. I mean are we so rich as a country that none of these things have the slightest effect on us?
Memo from our political leaders to aam aadmi:
Bollywood gossip ko follow kar aur IPL team ko cheer kar.
Middle class apathy is what they've been successfully counting on and so far the "educated" middle class hasn't disappointed...
http://incrediblycorruptindia.blogspot.com/2013/07/indians-continue-to-throw-their-money.html
^^ Bread and circuses all over again.
http://en.wikipedia.org/wiki/Bread_and_circuses
But we're rapidly approaching a state where bread is becoming too expensive and circuses are becoming less and less entertaining.
http://www.hindustantimes.com/India-news/AndhraPradesh/Telangana-triggers-protests-suicides-clamour-for-more-states-grows-across-India/Article1-1101346.aspx?hts0021
A day after the Congress pushed for Telangana’s statehood, similar demands for smaller states were further stoked across the country.
Downgrade for stock market.
http://www.moneycontrol.com/news/economy/goldman-downgrades-india-to-39underweight39_928791.html#toptag
Economy really slowing down. But realty prices will continue to double and triple (\sarc)
http://economictimes.indiatimes.com/news/economy/indicators/Factory-PMI-close-to-contraction-as-orders-sink-in-July/articleshow/21524548.cms
JP associates back to 2009 lows. DLF just 5% away.
Kalpesh
Lungi Dance Lungi Dance Lungi Dance!!!!!!
Watch P Chidambarams Lungi Dance on national News channel Everyday. Lungi Dance will increase as economy gets worst.
DLF unable to sell Aman resorts. One prospective buyer gave the token in Feb and then refused to pay further.
http://www.moneycontrol.com/news/business/aman-resorts-sale-talks-not-restricted-to-adrian-zecha-dlf_928858.html#toptag
http://www.livemint.com/Industry/L9y6wQ67kuBg0DVUOrm8LO/Yes-Bank-raises-FD-rates-by-up-to-50-basis-points.html
And it begins. Everyone is raising deposit rates to attract money.
And it begins
And there are more things that have just seen the beginning, namely the Nehruvian economics of micromanaging the country.
http://www.livemint.com/Money/L1mWy5AwBhYNPE43LPhhLI/RBI-norms-on-gold-imports-may-deal-a-blow-to-domestic-jewell.html
Also one of my friends who works for a small hedge fund had personally shorted INR against USD through ICICIdirect account and had been rolling over positions since May. He received a call from ICICIDirect to further submit documents for KYC. Not only this, he was asked what is his profession, what is his salary, and also asked to submit salary slip at the branch !!!
The information posted is here is very true..but ti take a house or property with the help of property dealer is not a very difficult task...Real Estate in India
DLF and JP both available at 10% of their all time highs i.e., 90% drop.
>DLF and JP both available at 10% of their all time highs i.e., 90% drop.
Still risky to buy them. Going from 90% to 95% drop may not seem much, but that is actually a 50% drop from here.
http://www.business-standard.com/article/markets/do-not-catch-a-falling-knife-113080200329_1.html
Same applies to housing now. If you have held off till now, it will not hurt to wait for a year or two more.
http://www.dailymail.co.uk/indiahome/indianews/article-2382734/Return-sand-mafia-Illegal-mining-runs-night-Noida-suspension-SDM-Durga.html
what will happen in this country?
^^ Seems like everything these days is built on sand. A fitting metaphor indeed.
And then we have this, structures literally collapsing due to sub-standard materials and cutting corners:
http://online.wsj.com/article/SB10001424127887324867904578594910653137292.html
http://www.firstpost.com/economy/will-pay-only-in-black-one-example-that-proves-all-that-is-wrong-with-indian-real-estate-1005769.html
great example of how the money is being recycled to keep the bubble up.
-SG
Such an incompetent Govt, not seeing the current economic crisis, instead pushing for freebies like Food Security Bill and DA hike for Govt employees.
http://economictimes.indiatimes.com/news/economy/finance/govt-likely-to-announce-10-da-hike-next-month/articleshow/21594179.cms
Keep on dreaming
Delhi leads world in real estate price rise
Of course, this is a paid news for the bears in the blog
@Anon - "Keep on dreaming
Delhi leads world in real estate price rise "
Trailing news. Nothing unknown here.
Check out sales over the last 6-9 months. Now that is a leading indicator.
Of course, this is a paid news for the bears in the blog
Totally fake news, it's correct for Hong Kong, Singapore, and other mature markets because of transparent data. In case of India there is no reliable data available and this just doesn't match the data I collected. For instance, I personally visited Jaipur in Feb 2012 and in conversation with a friend who is a lawyer as well as a real estate agent got all the rates & quotations. The rates of good societies were in the range of 6000/- psf. Two months back I took few numbers from Magicbricks & called few owners in Bani Park area. You will be shocked to hear the responses. One of the owner was lethargic in response and said "yeah I want to sell it but I am not getting close to 85L so have put it sale on hold". Hence there is no increase in "market prices" in the last 18 months there !
And Delhi, I have mentioned it so many times about East Delhi...needless to repeat. Believe media reports, see this "
http://www.business-standard.com/article/beyond-business/south-delhi-goes-south-113071901040_1.html
Go to IREF archieves and people are saying the same thing is true for West Delhi. One person on IREF mentioned that brokers in West Delhi are saying "Sir all kind of properties are available, select area, select floor, select location type, select amenities, build quality, but don't waste our time if you are not a serious buyer".
http://www.moneycontrol.com/news/cnbc-tv18-comments/hdil-promoters-defaultinterest-payment-indiabulls-fin_930658.html#toptag
http://articles.timesofindia.indiatimes.com/2013-08-03/pune/41032312_1_quotient-advaniji-chocolates
Need more big guns to come out and come clean about the sorry state of affairs.
If the system is rotten to the core, why aren't there more prominent whistle blowers.
Common people can make generalizations as they are not privy to the inner workings of the political machinery but really expect the likes of Advani to come up with more concrete allegations.
It's time to put our leaders credibility to tests by judging their actions instead of simply cheering their bhashan. Talk is cheap...
Orbit Corporation defaults on 96 crore loans
http://economictimes.indiatimes.com/markets/real-estate/news/orbit-corporation-defaults-on-96-crore-loans/articleshow/21637773.cms
Oh!!no I thought Real Estate never falls????
RE default tsunami is coming RE bulls
USDINR all time low at 61.54. RBI hikes repo rate and money flows out of equity markets. RBI doesn't hike or lowers rate and money flows out of bond market. Looks like it is checkmate !
I remember a very fantastic comment of one NRI I met in Newark Airport last year. I asked him why he hasn't bought house in Raleigh where he has been living with family for 10 years and instead invested in an under construction property in Noida instead. His reply "yahan khareedna aasaan hai, bechna mushkil, India mai kabhi bhii bech do profit pe' (it's easier buying here in US but exiting is difficult whereas in India exit is profitable anytime).
@REBear
Deflation is a given at this exchange rate, our population simply cannot maintain consumption rates required to run the economy.
There will be another fuel price hike soon and another round of inflation. Despite what people say buying a house is still a discretionary item, people would rather rent a small room and put food in the bellies of their children.
http://timesofindia.indiatimes.com/business/india-business/CNG-prices-to-jump-by-up-to-Rs-11-7-due-to-gas-price-hike/articleshow/21651722.cms
Orbit Corporation defaults on 96 crore loans
http://economictimes.indiatimes.com/markets/real-estate/news/orbit-corporation-defaults-on-96-crore-loans/articleshow/21637773.cms
Oh!!no I thought Real Estate never falls????
RE default tsunami is coming RE bulls
Hopefully LIC can recover it's loan from these chors.
Otherwise, privatize profits, socialize losses theme will continue...
The company had secured loans from LIC Housing Finance through personal guarantees executed by its directors Ravikiran Aggarwal and Pujit Aggarwal.
http://mmb.moneycontrol.com/india/messageboardblog/message_thread/18527532/20327532
From the message
Things seem to be steadily going from bad to worse for real estate companies, even as property prices are not showing signs of cooling off. A couple of weeks back, Hiranandani Palace Gardens, a subsidiary of Hiranandani defaulted on a Rs 76-crore loan to Tata Capital. Yesterday, Indiabulls Financial Services claimed that HDIL promoters had defaulted on the interest payment on a Rs 46 crore personal loan. Today’s Economic Times has a report on Mumbai-based realtor Orbit defaulting on Rs 96 crore of loans from LIC Housing Finance. Shares of sector leader DLF are not too far from the Rs 100- price target that Canadian research firm Veritas assigned to it in March 2012, when the stock was trading at Rs 218
It is too early to say if all this will lead to softening of realty prices as builders resort to distress sales to reduce debt. Repaying loans of public sector banks may not be a priority for realty companies. But it won‘t be so easy to dodge private banks, NBFCs and even private financiers, who are less tolerant of late payments or defaults. One can’t say for sure if a portion of the funds borrowed by commodity plant owners on the National Spot Exchange was finding its way into the real estate market. Remember, the cost of funding on NSEL was only 14-15 percent, while realty companies have to pay as high as 24 percent to private financiers.
Small builders will sell first followed by mid sized builders, the big fish who have deep political connections will go down last taking the system with them.
http://www.business-standard.com/article/companies/realty-sector-stares-at-more-defaults-113080601046_1.html
They got away easily last time around (2008 during Lehman crisis). This time our banks themselves are struggling.
HDIL promoters defaulted, Orbitz real estate defaulted. Who is next ?
Dream on. Every family in AP has someone in US. They are going to stimulate at least AP realty thanks to rupee depreciation
http://www.moneycontrol.com/news/real-estate/hyderabad-property-prices-seen-rising-15-after-6-months_931607.html#toptag
@Dream On -
From the article 'In adjoining regions like Gachibowli and Kondapur property is available at Rs 2,800-3,500 per sq.ft rate, which is still lower than 2008 peak prices, "
How do you explain this? .Almost 50% fall in real terms. Plus added loan interest.
Realty News Club brings to you excellent advice on investing in different real estate ventures. We help you decide upon the property that would suit you the best.
www.realtynewsclub.com
Very Good Blog it is actually useful for me. Keep writing and happy blogging. Great blog post. Really looking forward to read more.
ATS Noida.
the fact is that the population is so high in India that there would never be any fall in demand for new/good housing. the people with RE will never let price to fall. at a certain time, there would be a significant demarcation between the have's and the have not's.
http://bangaloremirror.com/article/10/20130807201308070515461371f34352b/Varthur-booming-despite-subpar-infrastructure.html
oh.. theres too many posts here.. for posts>100,
thread=thread_new()
The Irish property system, which is
similar to India's due to the absence of a price-tracking database (like the MLS) has now crashed:
http://sg.finance.yahoo.com/news/why-irish-real-estate-finally-192459215.html
This shows that however non-transparent and dubious your system might be, sooner or later, economic forces will take over, and the prices will come down to their intrinsic levels.
If the politicians really want to preserve their property value, they should make the system more transparent, no less. It is in everyone's best interest to do so.
One of my colleagues has put his apartment for sale in Sarjapur Rd area but buyers are quoting 10% lower. He has priced it according to the prevailing builder rates in that area.
This week I saw another flat resale where the owner is asking for 80L but buyers are not offering more than 65, the highest bid went only up to 70, the flat is under mortgage and I don't know for how long the owner can hold it.
It's quite clear that 'real' prices are a lot lower than the builder quoted rates, RE bulls may be a lot less richer than what they imagine.
60 malls come up in last one year
Of course it is a paid news here..
I like your blog. It’s very nice. I always read your informative blog post. I want to add some real estate project information with the help of your blog please click hear. Victoryone Amara.
It's quite clear that 'real' prices are a lot lower than the builder quoted rates, RE bulls may be a lot less richer than what they imagine.
You have to take black. If seller insists on white then pool of buyers is smaller and rates will be lower i.e. buyer will demand discount for cutting you a check for the full sale price.
there would be a significant demarcation between the have's and the have not's.
There already is. The haves don't give a rats ass about India. They are all about exploiting the country to the max and taking off as soon as the going gets tough.
Indian corporates are following the East India company model all over again. Two faced liars who on one hand participate in bribery and thievery while on the other hand decry the lack of "progress" and actively shift their wealth overseas.
If this trend continues, what will result is a shell of a country with all it's natural wealth systematically looted and a mutilated corpse left behind to suffer a slow painful death.
http://www.economist.com/news/international/21583285-growth-slows-and-reforms-falter-economic-activity-shifting-out-india-made-outside
http://www.dnaindia.com/ahmedabad/1870485/report-curious-case-of-disappearing-hills
et tu Modi...
The media silence is shocking! (NOT)
only 2 things will make RE fall..
1. natural calamity
2. man-made calamity
http://capitalmind.in/2013/08/rbi-really-means-business-takes-upto-88000-cr-out-via-cash-management-bills/
If short-term rates do rise to 12-14%, that really will hasten the end of our great Indian RE bubble.
Stay liquid folks. You are not going to like whats coming next. Equities will get hammered. Debt funds too. But if you hold on for 2-3 years, then the higher rates will eventually compensate for the initial drop in the debt fund NAV.
10-15 years back, 12-14% rates for loans were considered normal. Interest rates are reverting back. Going from 9.5% to 14% is a 40% jump. Get a calc and see what that does to the EMIs.
Vik, Please remove the Spam comments by the builder RE agents!
To Anaonymous above who posted the 60 malls coming up link, that is nothing new. It takes at least 3-4 years after planning starts for the mall to be opened to the public. So the plans for these malls started when the bull run was on. This is a trailing indicator. Let us know how many more NEW malls are bieng PLANNED right now? Any guesses?
@polt
If short-term rates do rise to 12-14%, that really will hasten the end of our great Indian RE bubble.
RE bubble crash will be a corollary as interest rates will have to rise to prevent the overvalued rupee from reaching real value. Just look at the rate at which forex reserves are dwindling.
http://economictimes.indiatimes.com/markets/forex/indias-forex-reserves-down-at-277-17-billion-as-on-august-2-rbi/articleshow/21728555.cms
I don't see any other way in the short term to save the rupee other than by curtailing its supply. And this would hurt everything, from economy to RE.
To add to woes, look at the previous NRI remittances figures - 60 billion USD. This means 1 million NRIs transferring 60000 USD every year to India. At least 40% of this 60K USD goes to real estate according to various reports. Just halving of this remittance figure anytime could cause panic. If these middle class NRIs buy RE in USA or Dubai on mortgage, by no means they could remit another 60K to India. And this is already happening, many NRIs have started buying RE in USA or Dubai where they live.
@Above:
More than 50% of the so called NRI remittance is India's black money coming back through places like Mauritius or Dubai route as NRi money.
Many NRIs don't even make $60K per year especially in mid-east. Also in US if someone makes even $120K , sending $60k is very diffcult with all the expenses/taxes.
Many NRIs don't even make $60K per year especially in mid-east. Also in US if someone makes even $120K , sending $60k is very diffcult with all the expenses/taxes.
Thats a good point, but they still do ! How do I say this ? Because my NRI friends have taken personal loan in US as well as Dubai to finance a house purchase in India. Some have taken a loan from Indian banks in which case they pay EMIs through remittance.
This is the first hand data of how NRIs are remitting 60k. It's not black money my friend that is coming through remittance. I also do have a first hand data to show there is not so much black money that is stashed abroad by Indians as is claimed, but I can't do it on a public forum for various reasons. All I can tell you for sure is most of the black money is coming back via FDI route rather than remittance. And the majority of that sum stashed abroad is already back in the past decade.
http://www.bbc.co.uk/news/world-asia-india-23628419
Who's going to deflate the buffalo bubble..
LOL
And the majority of that sum stashed abroad is already back in the past decade.
If true, rupee will soon be worth less than toilet paper as all this money rushes for the exit in the upcoming collapse...
// Because my NRI friends have taken personal loan in US as well as Dubai to finance a house purchase in India //
Agreed. My neighbor took the loan in US for 8% interest rate on personal loan to pay off his rupees debt with 11% interest while exchange rate was 53.
Now he is scratching his head
As for interest rates, another thing is that historically Indian interest rates have had a spread of about 7-8% over US interest rates. That was the premium we had to pay to attract foreign funds.
If the Federal reserve does start slowing down QE, and US long term rise to say 4 or 5%, that alone will force the RBI to increase rates or watch helplessly as all the dollars flow out.
Here are very interesting figures of NRIs and PIOs on Ministry of Overseas Indian Affairs website.
http://moia.gov.in/writereaddata/pdf/NRISPIOS-Data(15-06-12)new.pdf
Key Figures :
Total NRIs : 10 million
NRIs in US : 0.92 milliion
PIOs + NRIs in UK : 1.5 million (don't know the number of NRIs stand alone)
Europe, Australia, Singapore, etc. : 1 million
Overall there are at max 3.5 million NRIs who have high income. And assuming a family of 3, it implies max 3.5/3 ~ 1.2 million remitters. Even if they remit 25000 USD EVERY year, it equals 1.2 * 25000 = 30 billion USD of remittance.
The remaining 6.5 million NRIs, assuming a family of 1 in the worst case, if they remit 2400 USD per annum it implies 6.5 * 2400 = 15.6 billion USD of remittance.
So in the best of best estimates remittance figures can be 30 + 15.6 = 45.6 billion USD. And this assumes 25000 USD per annum on an average by 1 million NRI families.
If the govt reports 60 billion USD of remittances per year, it means the excess money has gone in high value transactions, namely Real Estate. And now you know the magnitude of this bubble and how violently it would burst. NRIs will have to write off there purchases as NPAs in their own balance sheet.
Anybody has more data to share, welcome !
Here is more accurate data on remittances :
http://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/01ART120410.pdf
38% of remittances come from US, 18% from Europe(including UK), 27% from Gulf. These cover 83%
of total remittances. And I need not say what falling rupee or even improving US/Dubai real estate means to India !
http://economictimes.indiatimes.com/news/news-by-industry/jobs/why-the-current-slowdown-may-be-the-worst-ever-for-job-seekers/articleshow/21749355.cms
http://economictimes.indiatimes.com/news/news-by-industry/jobs/tougher-days-for-job-market-as-need-based-hiring-peter-out/articleshow/21718463.cms
This more than anything else will affect the RE market. Ultimately all markets are held up by the end-user demand. Investor selling to investor is a ponzi that will someday crash if end users are not found.
Changing jobs is currently difficult. But layoffs have not really started in the white collar jobs. They will. Probably soon.
When that happens, the black money, population, corruption, etc holding up RE theories will be repudiated. We are looking at a triple whammy of high inflation, high interest rates and job losses. All those iphone and honda city EMIs, will start to pinch more now.
We are not different. We never were. The credit bubble of the last decade simply fooled us in to thinking of ourselves as some kind of a soon-to-be superpower.
@polt: your podtd sr eye-opening, undiluted and w/o prejudice. nice links. it is apparent prices are unsustainable anymore.. but with the massive population we have, there will always be a demand. if the govt marked rates are itself 8k in a place like indiranagar in bangalore, which makes a 1400 sqft home more than a crore, how do you think prices will fall and to what level? the haves and havenots divide has become permanent.
Oh my god Anon at 11:02 pm. Are you really that dense? You are missing the entire point made by Polt. The RE sector cannot be set apart from the general economic malaise. Basing what the rates quoted are today does not guarantee that the same price will hold in the future. Given the poor economy, home prices will go southward.
http://content.magicbricks.com/will-rs-20-40-lakh-apartments-in-hyderabad-become-history
Dream on
Dream on
Finally after one year of listing my close relative sold a house at 25% less of "market price". You know why ? Because of fear of mafia grabbing the house since everyone(including mafia) knew that the house is on sale, and there was enough waiting.
http://articles.timesofindia.indiatimes.com/2013-08-09/india/41237371_1_parikshit-sahni-balraj-ji-preet-nagar
It's good that the house has been able to find a buyer at 25% less price, in a few months the market is going to get completely illiquid !
http://capitalmind.in/2013/08/cash-management-bills-go-at-11-70/
Short term rates now at 11.70% !. It does not necessarily mean long term (home, car loans, etc) should be the same. Nevertheless, it is a taste of things to come.
http://economictimes.indiatimes.com/markets/real-estate/news/illegal-sand-mining-durga-shakti-nagpal-episode-may-push-up-house-prices-by-upto-10/articleshow/21792613.cms
no water but 6000 psft. amazing! http://www.thehindu.com/news/cities/bangalore/overconsumption-parches-out-whitefield/article5016251.ece
Headline news in the economist today on the sorry state of economic affairs in India :
http://www.economist.com/news/international/21583285-growth-slows-and-reforms-falter-economic-activity-shifting-out-india-made-outside
Anon at 12:38
Yes it's quite common in Bangalore, depending on outside sources for drinking water is one thing but getting all your water via tankers is quite another.
What happens if there is a diesel shortage or a prolonged strike ? Do you take your family and board a train or start digging with a shovel. Unfortunately people don't think that far, we have only two modes...complacency and panic.
//Unfortunately people don't think that far, we have only two modes...complacency and panic.//
People in this blog however think only light years ahead which will never happen in their lifetime and only one mode...doomsday preps ;-)
People in this blog however think only light years ahead which will never happen in their lifetime
How many light years it took for rupee to go from 40/- to 61/- ? People like you wouldn't have ever imagined rupee at 60/-, its only genius on these blogs who predicted it long ago when NRI were remitting money at 40/- to India :)...Just wait for another 6 months to see how the dollar debt of over 150 billion is repaid or rolled over if you want to see what the crisis looks like. Good luck for surviving the crisis.
If any bear has made low ball offers or bought RE recently would appreciate if you could share some details.
What is known as doomsday prep used to be known as common sense a century ago. Actually the term is western and meant to persecute people who try to stay independent and live outside the system.
If someone tried to sell you a flat 30 years ago where you'd have to truck in water you'd think they were crazy. Nowadays it's the new craze.
http://profit.ndtv.com/news/cheat-sheet/article-to-defend-rupee-govt-set-to-tighten-gold-electronic-goods-import-325719
Start buying your TV, Fridge now.
So basically everything will get costly.
Salaries had doubled. Now stagnant or lower.
Cost of living will double now.
So common sense says... RE will go down very soon. The 10 year cycle is coming to an end 2003-2013.
The prices have to go back to 2005 levels.
INDIA SHINING -> INDIA WHINING in just over 2 years.
The prices have to go back to 2005 levels
When adjusted to inflation ! That part is critical. If your discretionary income hasn't kept up with inflation you won't be able to get anything out of the housing bubble bust.
"When adjusted to inflation ! That part is critical. If your discretionary income hasn't kept up with inflation you won't be able to get anything out of the housing bubble bust."
But even after adjusting for inflation, were RE prices really "lower" (in real terms) in 2005 than in 2013? I remember RE prices being equally unaffordable then. What kind of percentage decline are we looking at if current real prices are going to decline to 2005 levels?
Ok another prophecy of mine came true and capital controls are back as last ditch effort by Govt to save Indian Real Estate - this means govt has sensed the property bubble crashing ! The outward remittance limit of 20000 USD/annum by resident Indian has been reduced to 75000 USD per annum
http://www.firstpost.com/business/its-1991-once-more-rbi-clamps-capital-controls-on-india-inc-1033877.html
Q1. Will this move impact rupee slide ?
A. No. The total amount of remittances abroad by resident Indians under LRS was not even 1 billion USD under any year.
http://portal.indiainfoline.com/datamonitor/External-Sector-Annually/International-Finance/Outward-Remittances-under-the-Liberalised-Remittance-Scheme-for-Resident-Individuals.aspx
So, in no way this can improve current account deficit as this is a paltry sum.
How is it related to Indian RE ?
A : Indian residents have been purchasing real estate in Dubai, US, UK using this. A family of 5 people transferred 200*5 = 1 million USD per year to purchase property abroad. Now with Indian RE slowdown and Dubai & US RE booming, Indians were purchasing property abroad. Now with the limit of 75000 USD, a family of 5 can not transfer more than 75*5 = 300K USD per year so that limits there property purchases abroad. That means GOI is forcing people to purchase property only in India.
Nevertheless, this would encourage hawala, Gold rather than buying RE. I personally have been badly impacted by this move, right time to move out of this country. I hope lot of other small exporters would be thinking the same way.
@REBear
Correction : You can't buy any property abroad. From the link you provided
In fact, the RBI has gone one step further and simply banned the purchase of property abroad. The press release said: “While current restrictions on the use of LRS for prohibited transactions, such as margin trading and lottery would continue, use of LRS for acquisition of immovable property outside India directly or indirectly will, henceforth, not be allowed.”
Now since the WPI shoots up and currency is on the verge of collapse the 'ready to sell wife for a rate cut' lobby is conspicuous by their absence. These idiots are responsible for the collapse of economy by forcing the RBI to cut rates or preventing the RBI from raising rates. Now seeing the economy collapsing these idiots are absconding. This is the sorry state of affairs in mango republic.
On one hand RBi still is giving money to banks at 7% (repo) and paying banks at 12% ( latest cash management auction). It looks outright idiotic. The system is screaming to raise interest rates. To satisfy some selfish crooks RBI is not raising the rates.
Government and RBI joined hands to destroy the country. The main opposition party inspite of knowing all this mismanagement keeping mum because they know the impending collapse will help their cause.
Today WPI increases by 1% points than last month and Rupee closes at lowest point. Government and RBI has come up with some panic measures which will be brused aside by markets on Friday. Mangoman again reiterating his view.
RAISE INTEREST RATES BY 2 PERCENTAGE. SCREW ALL THE REAL ESTATE BROKERS. THE COUNTRY WILL BE OKAY. DO YOU HAVE IT IN YOU RBI?
@aam aadmi
Correction : You can't buy any property abroad. From the link you provided
Thanks for pointing it out, that is outrageous ! I looked at it after posting it.
Infact just to be double sure that people do not transfer 200K * 5 for purposes of buying property abroad RBI has lowered it to 75K. Because if RBI did not lower it, people can use other methods to buy property, such as by specifying the purpose of remittance as a loan given to an individual or company abroad and then buying RE.
http://www.livemint.com/Opinion/nA7weZ15IHZe1My1LjlQWP/Once-upon-a-time-in-India.html
Another bubble is now bursting
Deflating housing bubble at heart of Netherlands’ economic blues
http://www.ft.com/intl/cms/s/0/b0bc12ce-05b3-11e3-8ed5-00144feab7de.html
From the article - "High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/intl/cms/s/0/b0bc12ce-05b3-11e3-8ed5-00144feab7de.html#ixzz2c3ZHP9Sw
Prices have fallen 21 per cent since their 2008 peak, leaving 30 per cent of all Dutch mortgage holders underwater, owing more than their houses are worth. Few experts think the bottom has been reached, and with their net worth falling, homeowners are spending less."
We will have a similar behaviour here. When home prices fall, people feel poorer and spend lesser, hurting the economy further and thus fueling a further fall in home prices.
sensex down 770 points and no comment here? :)
itna saaaannnnnataaaa kyon hai bhai:D
Abhi to sirf shuruwat hai zalim,
rota hai kya,
aage aage dekh,
hota hai kya.
Yeh desh khokla ban gaya hai, iska ehsas deshvasiyo ko ab tak hua nahi hai.
sensex down 700, so what, it will rebound. Bought some Banks today. 5 years from today, i think IBN will get you 100% return. 2008- C, JPM, MS, GS all got whacked and they have given crazy return over the last 4 years. Indian Banks in much stronger position today than US banks in 2008.
Houses are expensive and it will remain expensive, get used to it. A day laborer working on a construction site makes 1000 INR per day, plus you have to give him food and 1 hour break.
Anon above:
I guess you should buy more bank stocks. Good for you till you get whacked.
Get your head out of your arse and smell coffee. Look at the beiginning if the end that is coming. Did you see that Moody's downgraded 3 Indian banks and 4th on negative list.
Indian RE sector is going to see a 60% decline in the next 12 months. It will go down faster than it came up. RBI would have further increase rates which will kill it faster than people could have thought. Rupee will keep plunging.
Indian Rupee at 62.72 at Oanda.
US 10 year bond yields at closing high of 2.83 and as per technical studies it is poised to touch 3.5 soon. This is going to cause much problems. FII will run for cover from Indian markets as US yields are much better than Indian yields after adjusting to hedging costs.
Indian stock crash yesterday is a precursor for the things to come.
When Mangoman was begging for rate hikes he was ridiculed. Now the history repeats and idiots who decide economic policies are made to eat humble pie. UPA screwed the country handsomely and almost 30% of Indians investing in real estate to neck deep and praying for rate cut. All businesses are involved in real estate and praying for rate cut. My dear stupids, if everybody want to sell the plots and flats at higher prices, who the hell is going to buy from you?
Who is earning nowadays? Do you know for the past 2 years how many jobs created in the country? Do you know 70K engineering seats are vacant in Tamilnadu alone?
Subbarao's parting time bombs starting to burst.
1. The repo limit controls indirectly increased the rates. Now it is matter of time to increase rate really.
2. The capital controls measures last week is the last nail in the coffin.
Thank you Dr.Subbarao, you have given back to the government in the same coin. Let us hope the excesses are swiftly blown away.
Next in line. Real Estate of India. The government is hell bent to save the brokers community and now it is time for them to face the hard realities of life.
SOVEREIGN DOWNGRADE IS SO NEAR. IF THE RATINGS AGENCIES DO NOT ACT NOW THEN WE MAY HAVE TO DOUBT THEIR INTEGRITY AS WELL.
www.mangoman2012.blogspot.in
Lungi Dance, Lungi Dance, Lungi Dance,
Lungi Dance!!!!!!!!!!!!
Lungi Dance, Lungi Dance, Lungi Dance,
Lungi Dance,!!!!!!!!!!!!!!!!!1
Watch This monday Lungi Dance!!!!!!This time whole UPA Will do lungi dance along with chidu.
http://www.blog.happionaire.com/2013/08/what-is-truth-behind-falling-rupee.html
The truth behind the falling rupee?
Is this really the reason?
IMO stock market is largely irrelevant, it's a trailing indicator in any case.
I didn't care when it was going up and neither will I worry when it goes down. If you want the macro picture look at natural resource prices, energy prices, historical cycles and environment.
you buy when there's blood in the streets. This is not dot come bubble, when stocks that made 0 profits, but had high market cap. Indian banks very strong compared to other banks around the world. You can sit home and do the commentary, while in 2020 these banks would have doubled or tripled. PE is not 100, but close to 10. These banks have existed for years and they will still exist 100 years from today. Would you rather buy a shi* hole property for 1 crore or invest in a banking stock today????
http://timesofindia.indiatimes.com/business/india-business/Gold-scales-to-eight-month-high-at-Rs-31525/articleshow/21880604.cms
To all the morons who were shouting about Gold price crash, here it is. People who went and bought gold after the crash are now making a killing. Same is happeing with RE. There is no crash
Dear Anonymous above,
We all knew this is going to happen.
There are good number of investors like you believe in Media(news supplied by mostly by Fund companies or rich bull investor). No doubt India is #1 Gold consumer in the World. Media is saying festive season is starting soon and Indian buyers will 'any way' buy Gold. What would investor like you would do after reading this? nothing but invest in ETF or Gold coins/bars. If buyers in India fell for it again this time then naturally Gold prices will go only up until festive season is over. new game has been started by Gold Bull, if Indian buyers keep buying Gold despite of Gold price increase , then investors will be winners else big time losers. I think Indian buyers are going to decide future Gold rally in next few months.
Same is happeing with RE. There is no crash
I hope by RE, you mean Indian RE. There are no real time quotes available for RE prices in India but this may be useful for you :
http://newindianexpress.com/nation/South-Delhi-real-estate-prices-dip/2013/08/12/article1730216.ece
Excellent commentary by Jim Rogers why he is shorting India, and the facts and myths of India & it's Govt.
http://www.livemint.com/Companies/pqNgQUDoOPsQCli4EgZLMM/Jim-Rogers-Why-Im-shorting-India.html
The truth behind the falling rupee? Is this really the reason?
Corruption is reason for all societal and economic ills.
Mango men get easily distracted and miss the forest for the trees.
Critical thinking is virtually non-existent.
Political and economic elite the world over have mastered the art of creating confusion and deception.
Majority has given up and taken shelter in a mental bubble.
Who owns the "news", who supplies the "entertainment"? Who owns the brands and who defines our "aspirations"?
Excellent commentary by Jim Rogers why he is shorting India
Come on now, are we that foolish to expect F grade politicians and "leaders" to manage a slowdown let alone deal with a crisis.
The only claim of accomplishment our leaders can make is that they got the most votes (mostly through coercion and bribery, but that's a subject for another day)
That'd be like sending a critical patient to a doctor who paid his way through med school and expecting a benign outcome.
To all the morons who were shouting about Gold price crash, here it is. People who went and bought gold after the crash are now making a killing. Same is happeing with RE. There is no crash
If govt had done the sensible thing by raising interest rates by 200-300 basis points you wouldn't see this rush into gold. Having said that I personally never mentioned that gold was going to crash, I am agnostic about Gold. I buy it irrespective of price as an insurance. It was common practice to buy a small fraction of your income as insurance back in the day, it's only now with all the financial shenanigans that people think about returns on everything, from Gold to Houses creating all sorts of problems.
As far as RE is concerned it's already crashing, my colleague put his house on sale (Bangalore) a few weeks ago and he is willing to sell it at break even cost just to get some liquidity. Similar situation with a lot of builders, if you show them cash, they will give you amazing discounts. Don't go by advertised prices, they are blown up by at least 10-20%.
@anon
Would you rather buy a shi* hole property for 1 crore or invest in a banking stock today????
I agree whole-heartedly with this point. If India has to grow, its banks have to grow.
More truth emerges:
Farallon’s investments in Indiabulls’ real estate projects were the first ever foreign direct investments ( FDIs) in the realty sector in India and the PE fund has made 1.3 times the return on its investment, made in 2007.
Link:
http://www.firstpost.com/business/indiabulls-real-estate-buys-back-pe-investors-stake-in-7-projects-1042951.html
Oops. It gets better. The 1.3 times return is in INR terms!
hello.
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Rupee at 63, bond yield at 9.2% and Brent Crude at $110.
And people still think that RE will do well. I guess we are in the first stage out of the five stages of grief..."denial"
Govt (considered the safest borrower) pays 12% for short term debt !
http://capitalmind.in/2013/08/the-government-is-borrowing-for-one-month-at-12-24/
Long term yields also creeping up.
http://capitalmind.in/2013/08/bond-markets-crash-all-yields-above-9/
Maybe this is all temporary volatility, but it shows signs of serious stress in the system.
Maybe this is all temporary volatility, but it shows signs of serious stress in the system.
It's hardly temporary, we've had such a long bull run in the credit markets, why should the bear phase be temporary ?
http://www.moneycontrol.com/news/business/reversing-trend-axis-bank-hikes-base-rate-by-25-bps_937760.html
Interest rates have nowhere to go but up.
Continue discussion in new post plz.
people in india have become really rich. they dont mind shelling out 150-200k USD for a rat hole in a s$$t place. no water, electricity or any semblance of road, traffic control, pollution control.. man india has truly progressed.
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There is a factor on tax and price . if you buy or sell a property about 50-70 lakhs , and it have a vat . and it will also about 10-15 lakhs so what will be the amount .
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