tag:blogger.com,1999:blog-19740856.post8830834819449198022..comments2024-03-29T05:29:51.250-07:00Comments on India's housing bubble: Buyers in agony over delayed housing projects in PuneUnknownnoreply@blogger.comBlogger45125tag:blogger.com,1999:blog-19740856.post-21245635968153592302012-01-07T03:23:30.030-08:002012-01-07T03:23:30.030-08:00What fundamentals have changed for commodity price...What fundamentals have changed for commodity prices to go down. Has the interest rates gone above actual inflationbusiness in uaehttp://www.rakca.com/services/business/optionnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-20266827650425238732011-05-10T05:02:17.168-07:002011-05-10T05:02:17.168-07:00Anonymus @ 8:27 AM
1. Only property registration ...Anonymus @ 8:27 AM<br /><br />1. Only property registration of sell deed holds the highest legal value.<br /> <br />2. All other commitments made on the stamp paper holds good, but if denied it takes lot of money and effort to fight the legal battle. <br /><br />Two of my friends have given money to one of the builder in Pune. The costruction is moving at snails pace, virtually stopped. They are neither able to sell it nor able to get back the money.<br /><br />If you have muscle power to take on the builder or ready for the above then go ahead.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-75404347629941112962011-05-09T17:14:56.755-07:002011-05-09T17:14:56.755-07:00Maharashtra Govt. is planning to give additional F...Maharashtra Govt. is planning to give additional FSI of .33 at premium in Mumbai suburban area. I hope that will bring down prices by some factor but again , that is not guaranteed as we are dealing with greedy builders, babus and politicians.<br /><br />But certainly it will reduced TDR rate and more congestion in suburban area.Mumbaikarnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-81014175705537889742011-05-09T17:08:44.338-07:002011-05-09T17:08:44.338-07:00Yield on rent is not good in India, and housing so...Yield on rent is not good in India, and housing societies have additional fees when apartment is rented. So that reduces yield further. <br />This may not be true in all housing societies.Mumbaikarnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-39338084174955583312011-05-09T08:30:27.076-07:002011-05-09T08:30:27.076-07:00Anonymous said @ 11:36 AM
Brother, I too am a ren...Anonymous said @ 11:36 AM<br /><br />Brother, I too am a renter. have been on rent since 2008. When the boom started. I too believe that the bubble has to burst. But why not earn some amount from the RE instead of keeping it parked in an FD.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-69938191635128984172011-05-09T08:27:58.227-07:002011-05-09T08:27:58.227-07:00Anonymous @ 11:36 AM 4:26 PM and 7:03 AM.
Thanks
...Anonymous @ 11:36 AM 4:26 PM and 7:03 AM.<br /><br />Thanks<br /><br />I would like to know the nitty grity of how to deal I mean. <br />How is an investment in real estate done.<br /><br />If i don't want to pay the full amount. I don't want to transfer the house in my name <br />just hold it for a few months and move out<br /><br />what is the procedure the legal documentation.<br /><br />Regarding the comments of Bogus and crook agents. Most are out to fleece you. Have been going out to see buildings and they talk about appreciation in value as that they are gods and know whats coming tomorrow. Also one of the bogus agent tells me that mira bhyander area has BMC water. LOL<br /><br />Please if you experts can enlighten meAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-39949076223379795122011-05-09T07:03:23.411-07:002011-05-09T07:03:23.411-07:00@Anon above,
Last part of your comment is interes...@Anon above,<br /><br />Last part of your comment is interesting and sensible. A cousin of mine moved to a flat in Jogeshwari 2 years back and guess what, during certain festivals goats are slaughtered on the terrace and their caracas thrown out of compound. People are scared to complain, that includes building secretary. Some people have moved out but moving out is easier said than done. <br /><br />Locality should be the first consideration when buying a placeAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-66078413154107596032011-05-08T16:26:22.030-07:002011-05-08T16:26:22.030-07:00@Mira road property seeker
The rates vary from 45...@Mira road property seeker<br /><br />The rates vary from 4500~7000 depending upon location and amenities. It is prudent to avoid semi constructed/planned construction building as there is no guarantee that you will get posession as promised. Lot of people have burnt their fingers by booking with small time builders or thriugh crooked agents. Another thing to look for is the religious aspect of the locality.<br /><br />Good LuckAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-82907107546634288022011-05-08T11:36:42.353-07:002011-05-08T11:36:42.353-07:00Anon above:
Good luck buying. You really want to ...Anon above:<br /><br />Good luck buying. You really want to own now. It is a dream. Go for it if you cannot wait anymore. <br /><br />If I were you, I would not throw my hard earned money away. Many people in West got trapped in this mess and can never buy a house now for next 10-15 years as they can't get rid of the house they bought at peak. Most bubble places prices are down 50-60% in West.<br /><br />If you cannot wait, choice is yours. Go for it. I'll wait even if I've to wait 4 more years but I'll never throw my money to a bubble. I'm a happy renter.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-80476498788613278982011-05-08T05:35:34.510-07:002011-05-08T05:35:34.510-07:00Hi,
having been reading this blog for over 3 year...Hi,<br /><br />having been reading this blog for over 3 years now.<br /><br />No sign of a burst.<br /><br />Now dont want to wait<br /><br />Want to invest in Mira road.<br /><br />How to go about this (Through broker/direct builder) what is rate . how are terms and conditions for investor flats<br /><br />If some of you can help me on thisAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-41490480470594982982011-05-07T21:49:44.540-07:002011-05-07T21:49:44.540-07:00Mumbaikar,
I myself am in the bear category, but...Mumbaikar,<br /> I myself am in the bear category, but the reason for high prices may be expectations of higher future income. The price for any asset (stocks, bonds, real estate) is simply the net present value (NPV) of all future income from that asset discounted appropriately. <br />For houses the income is the rent that you receive or expect to receive if you were to rent it out. <br />Price/rent ratios of 25-40 in India simply mean that expectations of growth in future rents are high. This is what I think will change over the next few years. <br /><br />Interest rates are rising (i.e. the discount factor in NPV calculation will increase). Furthermore, growth is moderating, this implies slower growth in personal income as well, which further implies lower growth in rental income. This seems to suggest slower (or negative?) growth in home prices.lixnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-46696236493960994502011-05-07T17:39:21.594-07:002011-05-07T17:39:21.594-07:00Now can anyone explain me why prices have gone nor...Now can anyone explain me why prices have gone north so rapidly instead of getting into same old argument of black money??<br /><br />Has India's population doubled in last 5 years- answer NO. Has India's employment doubled in 5 years - answer NO. Has Mumbai's population is doubled in last 5 years - answer is NO. So fundamentals have not changed in last 5 years then why property prices are gone up so rapidly....<br /><br />Potential reason is zero interest money and unprecedented supply is driving all commodity prices...and RE is also one of commodity...When US RE market was hot every one from world has invested in US RE to push it further north. Remember mortagage back securities ?? Now it is payback time. Fed is printing hot money, which is driving commodities and RE too.Mumbaikarnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-49401575640197573432011-05-07T17:36:59.422-07:002011-05-07T17:36:59.422-07:00@Above:
When easy money came in from banksters, R...@Above:<br /><br />When easy money came in from banksters, RE prices started to move up and anyone who was selling made more black money. This became a cycle and anyone who is selling at the peak is making 40% more black money and pumping back into the system. All this will evaporate will falling RE prices.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-50148327835066106672011-05-07T17:26:25.384-07:002011-05-07T17:26:25.384-07:00If you think black money is cause of RE bubble the...If you think black money is cause of RE bubble then you are wrong. People had black money in India since beginning, but then why RE did not appreciated at this rate for so many decade? This bubble is started building slowly since easy availability of home loans. Previsously only bank employees used to get loan easily every body else has to wait for months and months to get load sanctioned. HDFC has changed this world 10-12 years back and most of the private and nationalized banks have followed it. I got my load sanctioned within 7 days in HDFC, so I could buy house, so did many. This has created demand in RE and black money followed the demand. Hence more demand. People may have tons of money, but it is fools world to believe that 95% people r buying properties outright. People with money believe in using someone elses money to make more money. When this flow is tight demand will certainly go down. Correction is bound to happen.Mumbaikarnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-66328606496780010532011-05-07T13:43:30.354-07:002011-05-07T13:43:30.354-07:00QE2 in USA is ending next month in June. That will...QE2 in USA is ending next month in June. That will be a deciding phase for future of Commodities, RE and stocks. All the free money that the world Govts. have been printing is coming to an end. <br /><br />If the economies start correcting too fast, USA will come up with QE3 and other countries will start their printing presses again. So, there would be more pain ahead for Bears as World Govts. are trying to keep the RE bubble intact. But that will not happen forever. Next bubbles to burst are Canada and Australia. China and India will follow. Brazil's would wait another year or so.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-22073538014539089712011-05-07T13:35:36.662-07:002011-05-07T13:35:36.662-07:00Bear above:
If bloggers here think RE will not go...Bear above:<br /><br />If bloggers here think RE will not go down, why are they even here. Let them go and buy more. And we'll have fun when they get a good spanking of falling prices in months to come. I think that all the commodity bubbles etc. were created after the RE bubble and RE has to go down by 60-70%.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-8046449038445781182011-05-07T02:50:54.077-07:002011-05-07T02:50:54.077-07:00@Pawan
>> The chances of any smart engineer...@Pawan<br /><br />>> The chances of any smart engineer, doctor, lawyer catching any of these bubbles and making money are miniscule.<br /><<<br /><br />Believe it or not, one month back almost every indian tom dick and harry in my aquaintance was asking me how to invest in silver through ETF and these included people of every profession in India. I was certain that now these people are going to lose money, and it happened. Why can't it happen in RE ?REBearnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-28125522101319179242011-05-07T01:05:22.557-07:002011-05-07T01:05:22.557-07:00The fundamental problem I see on this blog is that...The fundamental problem I see on this blog is that people are not willing to accept that those who bought real estate 5-10 years back, irrespective of the fact that they got lucky, have seen their money grow 500% in less than 10 years. Whether it can be repeated in RE? Probably not. But will prices go down 70%? Probably not.<br />The next bubble could very well be in Silver, Oil, Gold, Tea, Coffee or Rubber (which incidentally has been the best performing in last 10 years). The chances of any smart engineer, doctor, lawyer catching any of these bubbles and making money are miniscule.<br />So please acknowledge the 'success' or luck of those who made money in RE and keep looking for your 'lucky' bubble.Pawanhttps://www.blogger.com/profile/03969690253002313371noreply@blogger.comtag:blogger.com,1999:blog-19740856.post-36564647079105247562011-05-06T20:56:37.381-07:002011-05-06T20:56:37.381-07:00@Said
>>==> Wrong. Only price of currenc...@Said<br /><br />>>==> Wrong. Only price of currency will decline. but value of assets will decline with only more supply and less demand. Therefore if market has more money and less RE available for buying - Assets will still shine.<br /><<<br /><br />Wrong, if money supply decreases, currency becomes more precious compared to assets. Even though demand - speculative or end user -- may exist, but there is less money supply in the economy, people can not buy since in aggregate they have less money. Banks can also not lend because money supply is short, and this is interesting phenomenon. It happened in 1994 and it happened in 2008-2009. Both the times RE crashed.REBearnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-40268966695836710072011-05-06T20:26:09.437-07:002011-05-06T20:26:09.437-07:00Agree with anon above. Sentiment can shift rather ...Agree with anon above. Sentiment can shift rather quickly. (both ways though:)<br />Secondly, the black money argument is a little weak. If the builders were actually rolling about in black money, why then are so many builders pushing themselves to the brink by borrowing at exorbitant rates (25-30% !!). Something has to give soon. Either prices have to correct, or cheap and plentiful credit has to return so that buyers can return. <br />Note that flat or low growth in prices is also a correction, since in real terms you are actually losing due to inflation. <br />Thirdly, anyone who says India is different,etc should read "This time is different" by Rogoff and Reinhardt. One of the best books on financial history. It chronicles 800 years of booms and busts.polnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-82608052262631854112011-05-06T19:29:46.898-07:002011-05-06T19:29:46.898-07:00Said:
You are living in your own world. RE is a me...Said:<br />You are living in your own world. RE is a mere investment and when it loses its lustre, it will start off selling with people who already have a lot of equity. SUppose someone could make 1 crore profit, would be willing to take 80 lacs if he can sell. Then people wil start cutting down on profits and eventually more and more RE will come to the market.<br /><br />Do not forget that majority of sales are through cheap credit and once loans are hard to get, RE has no wheere but to collapse. Tt is all about the easy money from banks to both consumers and builders.<br /><br />It will happen so quickly that people like you won't even have time to save even one house from not going down in value. India is no different than the west but more screwed up and prices can fall even 80%.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-835747340149420722011-05-06T18:48:04.586-07:002011-05-06T18:48:04.586-07:00For above:
Indians will sell when the sentiment g...For above:<br /><br />Indians will sell when the sentiment goes down that RE is going down. You'll see investors becoming sellers. Inventory will pile up. People will be ready to take a loss to get out of the RE.<br />Your thinking that people will wait is all in your mind. <br /><br />When it happens it will be a self fulfilling prophecy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19740856.post-41314953009234589722011-05-06T13:15:09.580-07:002011-05-06T13:15:09.580-07:00We need to understand that most of the Indians are...We need to understand that most of the Indians are not pressed to sell their RE at loss. They will hold on RE until they have extremely extreme needs. They will go hungry once a day, stay a shoddy life, will not move to another state / location for better opportunity, will beg relative and friends for money even when they are living in 2 crores worth apt. <br /><br /><br />What is that will make any Indian sell their RE for less than what he bought for?==>noreply@blogger.comtag:blogger.com,1999:blog-19740856.post-16921581336535012412011-05-06T13:10:47.244-07:002011-05-06T13:10:47.244-07:00To add to black money argument, looks like people
...<i> To add to black money argument, looks like people<br />do not understand basic economics. The real estate decline in 2008 in India, where was black money? The answer lies in the overall money supply in the market. Money supply<br />was reduced in year 2008 as evident from following charts(Look for India chart):</i><br /><br />==> Black money has been in existance since decades, now it is at exponential growth rate. In 2008 black money didn't decrease, it was on sideline - waiting for better and secured investment. <br /><br />Want to see the fun - Ask yourself - What if all the RE transactions are tracked, taxed and accounted. Basically if every individuals all earnings are audited, all business earnings and expenses are audited. And there are HUGE penalities with strong law enforcement what will happen?<br /><br /><i>Overall it's the overall money supply coupled with interest rates which govern currency flows, part of which becomes black money. So if black money or white money supply shrinks, so do asset prices.</i><br />==> Wrong. Only price of currency will decline. but value of assets will decline with only more supply and less demand. Therefore if market has more money and less RE available for buying - Assets will still shine.==>noreply@blogger.comtag:blogger.com,1999:blog-19740856.post-61549618270339382812011-05-06T11:56:57.482-07:002011-05-06T11:56:57.482-07:00Bear above:
Exactly. Doesn't matter black or ...Bear above:<br /><br />Exactly. Doesn't matter black or white, people should understand where this money came from? It didn't exist 5-6 years back. Either GOI is printing, or taking too much loans, or too much FDI or a combination of all of these.<br /><br />RE has to correct by 70%. Otherwise I'll never buy. I'm better off saving my money @10% in banks. I don't want to catch a falling knife. Those who are bulls may catch it but mine is hard earned money and not stolen money like many other Indians have.Anonymousnoreply@blogger.com