tag:blogger.com,1999:blog-19740856.post3416678478962867415..comments2024-03-28T23:30:16.420-07:00Comments on India's housing bubble: State of DenialUnknownnoreply@blogger.comBlogger36125tag:blogger.com,1999:blog-19740856.post-44815622566153424482009-03-23T14:20:00.000-07:002009-03-23T14:20:00.000-07:00Came across this blog when searching 'Raheja Acrop...Came across this blog when searching 'Raheja Acropolis'. I got a *negotiable* offer on Friday (20th Mar'09) for a 3B unit at this place for Rs. 7250. I was told the launch price a few years ago was Rs 3500 but also that it had shot up to Rs 12500 in the heady days of the 'bubble'! Personally I am not interested because Deonar was never on my shortlist. The right price point for Chembur (methinks) is Rs 6000. Based upon the price offered to me and given the current mood I expect this threshold will be reached by the end of year 2009. In another recent case that I know personally, in Dec '08, my cousin bought a 2.5 BD apt at Rutu Towers, Thane @ 3600 psf. The builder's asking price had been Rs 5600 psf (i.e. about a 36% reduction)! Just something to keep in mind. Cash is king - if you have the money and you are willing to negotiate, there is a deal waiting for you at whatever is your price point.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-43964315859940551182008-11-22T12:07:00.000-08:002008-11-22T12:07:00.000-08:00well right now , real estate is feeling the heat o...well right now , real estate is feeling the heat of global meltdown.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-85815719258409976692008-10-22T21:18:00.000-07:002008-10-22T21:18:00.000-07:00Dear Observer,I wish you all the best. I would sug...Dear Observer,<BR/><BR/>I wish you all the best. I would suggest you to keep looking for ready properties now and look at only investor who wants to sell and come out even if means giving 30 to 35% discount.<BR/><BR/>Remember it is always fear that brings in opportunities for others. Wish you all the best my freind and trust me being an investor myself i now for sure that it is impossible to predict any markets.<BR/><BR/>At the most we can predict a temporary slow down or short term boom<BR/><BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-9754908241929457632008-10-22T12:25:00.000-07:002008-10-22T12:25:00.000-07:00to understand the nature of the reality market we ...to understand the nature of the reality market we need to understand its 'Life Cycle'.although i m also trying to figure out a lot of things about economy.<BR/>in my views the property is also a product.so it has a PLC i.e. the product life cycle.now the bottoming out of this PLC takes around 8 years and it takes only half time(arnd 4-5 years) for peaking it out.<BR/>the current boom was started around 2003 and it lasted for almost 5 years till 2008.<BR/>now why it takes so much time in the process is that the nature of the product is such that u cannot build a township comprising certain hundreds flats overnight,it takes a couple of years.and in those years a lot of overnight builders, speculators jump in the markets and then starts speculation and 'greater fools theory'.<BR/>i thnk the last boom in property market was in the 1993-1994 when same things happened during those times.and from there it took almost 8-10 years for the markets to bootom out.<BR/>regards.<BR/>AbhishekAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-2091477268250995082008-10-22T06:20:00.000-07:002008-10-22T06:20:00.000-07:00Mr. Anil,I do not know who anonymous above is who ...Mr. Anil,<BR/><BR/>I do not know who anonymous above is who posted comments about 1BHK flats and another quoting me. I have always used my ID (Observer) to post messages. If you have any doubt about this, please contact the administrator of this blog and ask him to check the IP address of the "anonymous" posters, and my IP address to confirm.<BR/><BR/>Now, I agree that investors who bought a few years ago are probably in no need to sell, since they bought before prices reached their peak. My advice is geared towards first-time buyers. I am a potential first-time buyer myself, and therefore, like any customer, I would prefer not to overpay for housing. Just like builders form a cartel to keep prices high, I do not think it is wrong for buyers to warn other buyers to hold on.<BR/><BR/>Observer.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-58018925489063153952008-10-22T04:52:00.000-07:002008-10-22T04:52:00.000-07:00Dear....It is very easy to reply out of context, t...Dear....<BR/><BR/>It is very easy to reply out of context, thanks for you mathmetical skills. I am really impressed. What i was quoting was in my earlier post was that investors who has brought 3 years back does not have to panick even if the interest rate goes up because his EMI is more or less covered by current rent.<BR/><BR/>I never said that future will see this kind of growth or for that matter growth at all. I am just saying that in Mumbai property prices wont crash as lot of members in this blog predict.<BR/><BR/>BTW why do you sometimes come as observer and sometimes as anonymous.<BR/><BR/>Thanks AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-27440357186029635382008-10-22T04:10:00.000-07:002008-10-22T04:10:00.000-07:00Doofus Anil, can you real estate brokers even read...Doofus Anil, can you real estate brokers even read? No wonder you guys are so confused! I always had a low opinion of real estate brokers mental abilities in the US. Looks like in India also it is the same, or maybe worse.<BR/><BR/>Let us go through this step-by-step so your simple mind can understand. <BR/><BR/>a. Price of your 2BHK 3 years back 40L, EMI 35K/month, OK? And now you are saying the CURRENT price for your 2BHK is 1.3cr. Ok, fine, whatever, accepted. Let Shankar dude rest in peace.<BR/><BR/>b. Now, what did Observer say? He (assuming Observer is male) said, the CURRENT RENTAL YIELD is 2-3%. Your EMI is based on a price from 3 years ago, not on CURRENT sale prices, understand?<BR/><BR/>c. So, for someone buying TODAY, the price is 1.3cr and EMI will probably be around 1.5L/month. Got me so far? Or are you confused already? Take a deep breath, and read it ten times and now let us proceed.<BR/><BR/>d. So, unless in 2011,the rent for the 1.3cr apt bought TODAY (2008) jumps up to 1.5L/month, the RENT WILL NOT COVER THE EMI!!!!<BR/><BR/>The only reason your rent is able to cover the EMI today is because you bought your apartment before prices tripled! Why, oh why would rents for a 2BHK jump to 1.5 lac per month in another 3 years in Mumbai?! You think IT salaries in Mumbai will be 50-60 lac per annum in the next couple of years? What are you smoking dude? Can I have some? You real estate broker guys need to get out of Mumbai once in a while and see the world.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-61170124012781256582008-10-22T03:25:00.000-07:002008-10-22T03:25:00.000-07:00Dear Observer,Request you to call 022-66414343 spe...Dear Observer,<BR/><BR/>Request you to call 022-66414343 speak to one Mr. Shankar Narayan the manager and ask him about Acropolis 1. Pls. ask him the current price and the launch price 3 years back, maybe you will know what i am talking bout.<BR/><BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-28526234899922694912008-10-22T03:06:00.000-07:002008-10-22T03:06:00.000-07:00Dear Observer,what more proof you want when I aski...Dear Observer,<BR/>what more proof you want when I asking you to call Raheja, who had launched the project @ Rs. 3300 and today it is 12500. Pls. call Raheja's office and find out for yourself and then you can comment.<BR/><BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-30900899477924347492008-10-22T03:01:00.001-07:002008-10-22T03:01:00.001-07:00Yes Gopal you are right Gera is capable of doing t...Yes Gopal you are right Gera is capable of doing that. Most of the builders in Mumbai make up for the entire cost by selling 25 to 30% of sales. How will he reduce the price for the balance property when he already recovered the cost of the entire project. Top it all buliders are going slow on just started projects and about ot start project. I feel this can also lead to imbalance in demand and supply. Let us wait and watch.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-76328334048177833442008-10-22T03:01:00.000-07:002008-10-22T03:01:00.000-07:00Anil said: "Yes today the 2 BK is costing 1.30 Cr....Anil said: "Yes today the 2 BK is costing 1.30 Cr. I guess you need to put a little more effort to read and Comprehend."<BR/><BR/>Mr. Anil,<BR/><BR/>I would suggest you should follow your own advice first. Here is the relevant paragraph that I am cutting-n-pasting from my comment above. Please read it carefully and let me know if you need me to write it in Hindi or Marathi. I will leave it to others on this blog to judge who has a reading comprehension problem.<BR/><BR/>Observer<BR/><BR/>----------------------------------<BR/>Anil said: "Some investor like who have brought the house with bank loan, trust me most of them are more or less covering their EMI with their rents."<BR/><BR/>The above statement is quite absurd. I have provided numerous examples on this website where the rental yield is around 2-3% for many properties in Bangalore, Chennai and NCR. I will try to find if there are some examples for Mumbai also. At current home loan rates, it means that the EMI is approximately 4 TIMES the monthly rent. Yes that is right. 4 TIMES!<BR/><BR/>Only if the property was bought more than 3 years ago does the rent cover the EMI. That is because the property was likely to be almost 1/3rd the price then. Hence, it makes sense for those who bought property a few years ago to hold on to those apartments. However, for new buyers, the current prices just do not make sense. Especially with the precarious employment situation, the fact that today's rents will not even come close to covering the monthly EMIs is highly relevant.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-3779147433006969832008-10-22T02:54:00.000-07:002008-10-22T02:54:00.000-07:00Dear Observer, I want to thank you for the work yo...Dear Observer, I want to thank you for the work you are doing. You have saved me from making a big mistake a few months ago. I am now seeing a few of my colleagues in IBM Daksh in Pune getting laid off. Twelve of my colleagues on a project got cut. How will they manage their loan? Also, the builders are putting pressure and telling all lies like there are only 2 flats available and buy now. I am specifically talking about Gera properties in Kalyani Nagar. I found out through a friend that almost 25% of flats are empty and others are sitting with NRI investors in that complex. It is made for trading rather than for actual living. Please continue your good work. Gopal.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-12847231962717806732008-10-22T02:50:00.000-07:002008-10-22T02:50:00.000-07:00Dear Observer,Yes today the 2 BK is costing 1.30 C...Dear Observer,<BR/>Yes today the 2 BK is costing 1.30 Cr. I guess you need to put a little more effort to read and Comprehend.<BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-65093268748283498162008-10-22T02:35:00.000-07:002008-10-22T02:35:00.000-07:00Dear Anil,I just want to add, dont waste your time...Dear Anil,<BR/><BR/>I just want to add, dont waste your time on this blog. If you could read the site ID it says housing bubble. Here you will find only people who wants the property prices to fall are only there barring a few like you.<BR/><BR/>I have been visiting this site for almost a year and got carried away, last week i went and brought a 3 BHK flat at MCHI exhibition held in Mumbai.<BR/><BR/>I think i have made a good decesion , I had negotiated @ 11.00% with HDFC and today after reading i called HDFC about the rate cut. They have promised me that they will reduce the rate by atleast 1% by Diwali and same will be passed om to me as my loan although sancitioned has not been disbursed.<BR/><BR/>This forum is full of useless people wanting to predict infact a couple of days back one jerk predicted that US will go down to drains and he was aware about Lehman and Merriyl collapse three months back.<BR/><BR/>Stay away from this site, these guys will never look from builders eyes, they feel builders are fools are they are only right. If you still want to continue be ready to get even abused. Last year I was abusing guys like you now it will be some other guys turn.<BR/><BR/>CheersAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-16406536312958415602008-10-22T02:09:00.000-07:002008-10-22T02:09:00.000-07:00So a 1BHK costs 60L in Chembur, but a 2BHK costs 4...So a 1BHK costs 60L in Chembur, but a 2BHK costs 40L? Cool.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-8762549078150256332008-10-22T02:01:00.000-07:002008-10-22T02:01:00.000-07:00Dear observer,I have brought 2 BHK @ Raheja Acropo...Dear observer,<BR/><BR/>I have brought 2 BHK @ Raheja Acropolis Chembur and my total cost was 40L, today @ peak my EMI with HDFC for 30L loan is Rs.35,534 and I am getting rent of Rs. 45000 pm. If you feel I am bullshitting pls. call Raheja and ask what was the price 3 years back and today for 1075 2BHK area what is the rent going on. <BR/><BR/>I sincerly hope you call them and find out.<BR/><BR/>Thanks<BR/><BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-47919118789957441672008-10-22T01:52:00.000-07:002008-10-22T01:52:00.000-07:00Dear Observer,Mumbai cannot be compared with Banga...Dear Observer,<BR/><BR/>Mumbai cannot be compared with Bangalore. We at Mumbai know that the quality of life is not great but we still love the place and we still want to stay. I was born here and lived my life thru and i love this place.<BR/><BR/>There are lot of people like me in Mumbai who would prefer to stay and live here and they are the guys who buy.<BR/><BR/>Bangalore is a great city and I really dont know the dynamics of property market over there. I would not like to comment about it, all my comments are purely about Mumbai and not even New Mumbai and ThaneAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-1820691251683078982008-10-22T01:47:00.000-07:002008-10-22T01:47:00.000-07:00Anil said: "Some investor like who have brought th...Anil said: "Some investor like who have brought the house with bank loan, trust me most of them are more or less covering their EMI with their rents."<BR/><BR/>The above statement is quite absurd. I have provided numerous examples on this website where the rental yield is around 2-3% for many properties in Bangalore, Chennai and NCR. I will try to find if there are some examples for Mumbai also. At current home loan rates, it means that the EMI is approximately 4 TIMES the monthly rent. Yes that is right. 4 TIMES! <BR/><BR/>Only if the property was bought more than 3 years ago does the rent cover the EMI. That is because the property was likely to be almost 1/3rd the price then. Hence, it makes sense for those who bought property a few years ago to hold on to those apartments. However, for new buyers, the current prices just do not make sense. Especially with the precarious employment situation, the fact that today's rents will not even come close to covering the monthly EMIs is highly relevant.<BR/><BR/>Anil said: "Developed countries will further look at India to cut cost. This will be a win win situation for both India and them. Trust me I completely agree with Vinod Dham when he mentioned in ET a couple of days back saying India will only strengthen further because of our entire set up of Democracy and strong financial system besides descent quality manpower."<BR/><BR/>I do not think anyone really in the US, even Mr. Dham, appreciates the magnitude of the recession that will hit the developed economies. India is a high cost country for outsourcing. Also, clients are actually canceling large projects. Unemployment in the US is projected to reach double digits by late next year. And if Obama becomes President, he has promised to cancel tax concessions for corporations which outsource projects. He has also promised to outlaw outsourcing of all US Federal/State Govt projects which are supported by the US taxpayer.<BR/><BR/>The dollar is projected to drop by a factor of 2-3 by 2010. Why? Because the US has a massive deficit of 10.5 TRILLION dollars which is going to seriously affect the credit rating of the US. The reason it is becoming strong now is because of deleveraging, where institutions, pension funds, hedge funds and others are pulling out of emerging markets, commodities and other investments and repatriating the money into cash at home. However, this process will not last. Once the dollar drops back down, oil prices are going to go back up.<BR/><BR/>Secondly, with a weak dollar, a severe consumer recession and unemployment and restrictions on outsourcing under an Obama administration, how will IT companies thrive? 76% of IT exports go to the US. Will Indian IT wages go up with a US in recession and a weaker dollar? If Indian IT wages do not go up, who is going to buy those 60+L apartments? Please read the NCAER survey results that I had posted a few minutes ago under another later post. People need to think beyond the next month or two, and draw their own conclusions accordingly.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-45003064185351549162008-10-22T01:43:00.000-07:002008-10-22T01:43:00.000-07:00Dear .....Yes situation have changed from last yea...Dear .....<BR/><BR/>Yes situation have changed from last year, I wont get an investor but my friend I will still get an end user maybe it will take some time then last year but I will be able to sell. BTW I still have friends ready to buy at 6oL in my area if you have any pls. send me your mail ID i will contact you.<BR/><BR/>I have realised that there are some people in this world who have missed the bus earlier and they are the ones who keep druming about the dooms day in economy and crash in realty. I will ask them if they have their own houses, how many of you will sell your house cheaper then the market price now?<BR/><BR/>Thanks<BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-54380538153774981262008-10-22T01:18:00.000-07:002008-10-22T01:18:00.000-07:00I am from Bangalore. I visited Mumbai a few times,...I am from Bangalore. I visited Mumbai a few times, and resolved never to live there even if I was offered 2lakh Rs/month as salary. Just the enormous number of people and unrelenting crowds everywhere. Unsanitary conditions, and acute lack of open spaces, and chawl like apartments are a turn-off for me.<BR/><BR/>Yes Bangalore has deteriorated compared to 10 years ago, but there are many parks in every sector, wide roads, and lots of open spaces in the suburbs of Bangalore like Whitefield, Sarjapura and other areas. Most IT companies are located in these areas.<BR/><BR/>I have seen one or two Mumbai apartments in Chembur, of a distant cousin of mine, and I would consider it a jail sentence to live in one of those apartments. No sunlight, constant noise, and a cramped feeling all the time. I would consider paying 60L for such an apartment as a huge joke. That cousin has moved out to Gurgaon a couple of years ago, after he visited that place and saw the open spaces.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-5547224271422756642008-10-22T00:11:00.000-07:002008-10-22T00:11:00.000-07:00Anil.Try selling your 1 BHK whcih is more than 12 ...Anil.<BR/><BR/>Try selling your 1 BHK whcih is more than 12 years old at 60 lakhs.<BR/><BR/>I bet you won't even get 10 lakhs today. <BR/><BR/>Situation has changed man. Wake up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-337780464390098532008-10-21T23:46:00.000-07:002008-10-21T23:46:00.000-07:00Dear Observer,Thanks for your valuable insights.ab...Dear Observer,<BR/><BR/>Thanks for your valuable insights.<BR/><BR/>about: CRR cut: Request you to read times on India yesterday edition the front page showing commodity price falling more then 50%. Kindly remember inflation is a cycle once it goes up it keeps going up and when it comes down the same applies. Also request you to read today’s ET, the banks have already started cutting home loan rates. BTW this is also on the front page. I am not saying there will be significant improvement in property sales but trust me it will send positive signals to builders and people sitting on the fence will start rethinking that they may miss the bus again.<BR/><BR/>Pent up demand for home: I don’t know if you are a Mumbaite or not but let me tell you historically in Mumbai majority of the old building did not have the concept of Two, Three and off course Four BHK but thing have changed since then. I am sure instead of price coming down the builders will once again focus on 1 BHK and this has already happened. Raheja's have started doing 1 BHK projects at Chandivili.<BR/><BR/>about: property price: I am talking with my own experience I had brought a 1BHK house at Chembur Diamond garden paying 17L in 96, today the same is available at 60L. I would request you to pls. calculate the CAGR and let me know. Here I am not talking about the black and white part I am talking about the total cost. Kindly note this property I brought was immediately after the crash.Pls. work out the return it is below 10% but mind it varies from area to areas but again the difference will be miniscule on an average. I would request all the people you are reading this block to do this check and post out your comments. This will help all of us to understand and pls. try to be honest. We will take the sample after the crash , this is where the market corrected and came to realistic level.<BR/><BR/>Exports: I just want to tell the forum one thing. Money has not evaporated from the face of our earth it is only that currently money are in wrong hands in US and the globally banks are paranoid reluctant to lend. We all know that without lending no banks will survive it is just matter of time(months). India it is matter of few weeks max maybe 8 weeks.<BR/><BR/>In US money from bad people will come eventually come into the system, in the meanwhile countries like India will have lot of additional opportunities. Developed countries will further look at India to cut cost. This will be a win win situation for both India and them. Trust me I completely agree with Vinod Dham when he mentioned in ET a couple of days back saying India will only strengthen further because of our entire set up of Democracy and strong financial system besides descent quality manpower.<BR/><BR/>I personally look this an opportunity let us see in coming months whether I am right or wrong.<BR/><BR/><BR/><BR/><BR/><BR/><BR/><BR/>Correlation of sensex and housing: There is a major correlation between sensex and housing market but again it is limited to the extent of Investor. ROTI, KAPAD AUR MAKAAN has nothing to do with stock market. Last one year investors are out of the market and some investor had the time to liquidate their stock. Some investor like who have brought the house with bank loan, trust me most of them are more or less covering their EMI with their rents. Why would rent go up for residential sector year on year if their was no demand ? YES I WANT TO ADD THAT DUE TO IMBALANCE IN DEMAND AND SUPPLY IN COMMERCIAL SEGMENT. COMMERCIAL PROPERTY IS BOUND TO HAVE A SET BACK temporarily.<BR/><BR/><BR/>Govt. can cut interest rates, but that will weaken the rupee and drive up inflation : <BR/><BR/>Again as I mentioned earlier inflation is cyclical and it looks like the inflation has started coming down, currently the priority for government is clear and that is to drive growth. Pls. wait and watch for the credit policy which will be announced on 24th Oct, I am sure this will give us some indication of Govt priorities especially for people who have not understood enough signals coming from RBI.<BR/><BR/>Unless the Govt increases the FSI the property prices is unlikely to come down in near future. Manhattan it is 10, Tokyo 25, Mumbai majority areas it is only 1 and additional 1 is TDR.<BR/><BR/>Thanks,<BR/><BR/>AnilAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-87732658973708671462008-10-21T10:03:00.000-07:002008-10-21T10:03:00.000-07:00"not to be impatient" in my above post."not to be impatient" in my above post.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-12161757760725202552008-10-21T10:02:00.000-07:002008-10-21T10:02:00.000-07:00Dear Observer,You really are a keen observer.Whate...Dear Observer,<BR/>You really are a keen observer.<BR/>Whatever you are saying is 100% correct.<BR/><BR/>People need to wait and watch and be impatient. The downturn doesn't happen overnight like stocks. It will take easily 6 months for people to get to reality and come out of state of Denial. Then they will start lowering prices only jab peeche se danda parega and there would be no buyers.<BR/><BR/>I had predicted stock below 10K on this blog 4 months back and now I think they will go to 8000 mark.<BR/>The properties will get crushed.<BR/>Denial doesn't help, living in reality does.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-57301116559443216752008-10-21T08:05:00.000-07:002008-10-21T08:05:00.000-07:00I guess according to Anil and SabbalSeshu housing ...I guess according to Anil and SabbalSeshu housing is unaffordable to the middle and professional class since they dont have black money. He is right on this account. I have no black money whatsoever since TDS gets cut from my salary. I would love to not pay tax but then I would be behind bars. The only buyers will be people with 80% black. When these guys got register their properties and try to register a 1cr apt for 20 lakhs in the registrars office, the registrar will tell them "Alibag se hain kya ?" They will in turn propose to auction the property at 40-50L :).<BR/><BR/>The bottomline is that builders are screwed since they have taken high interest loans from the black market and the lenders are hounding them for their money. They could sell some at high black rates to pay off the lenders but then their profit is zero.<BR/><BR/>tough luck buddiesAnonymousnoreply@blogger.com