No one can make up these stories. Truth is stranger then fiction. Here is another article on how land prices in Bikaner a medium sized town in Rajasthan jumped 40 times after Robert Vadra started his investments. It looks like Robert is responsible for the misery of Indian's when it comes to housing.
DNA report is below. Full article is here
DNA report is below. Full article is here
In a flurry of deals between June 2009 and August 2011, Robert Vadra purchased at least 20 plots of land collectively measuring more than 770 hectares in Rajasthan’s Bikaner district, in a region that would see prices spiraling soon after.
A clutch of investors, including Vadra, apparently privy to information on upcoming industrial projects in the vicinity, reaped huge profits with land values appreciating by up to 40 times since 2009.
Click here to read the list of plots
Data from the office of the registrar in Bikaner shows 20 properties Vadra purchased through companies, including Real Earth Estates Pvt Ltd, North India IT Park Pvt Ltd, and Skylight Realty Pvt Ltd. All the deals were executed on his behalf by Mahesh Nagar, brother of Haryana Pradesh Congress Committee member Lalit Nagar. These companies together invested Rs2.85 crore in barren land here during this period.
“Vadra clearly misused his position as the son-in-law of Sonia Gandhi,” said Devi Singh Bhati, six-time MLA of the Kolayat tehsil where most of the Bikaner deals took place. “The land was purchased either in the knowledge that industrial projects would be announced, or circumstances were created to bring projects to the area.”
139 comments:
Well done vadera Ji! we know you will promise free house for everybody in next election, reap the vote and rule Indians.
An excerpt from The Hindu year 10-Sep-2052
Former Prime minister Vadera dreamed of free house for every citizen. And thats why we celebrate his birthday as "Real estate day"
Insider trading is rampant in all markets. Hence, mango man investing in land, stock, commodities or any other speculative market will always be at major disadvantage.
Infact, there have been allegations that even RBI has made or delayed major policy decisions to benefit the powerful political entities essentially allowing them to frontrun the market before the public announcement.
Your odds are better at gambling in a casino. Atleast in a casino you know the game is rigged against you in advance.
Kolayat tehsil where most of the Bikaner deals took place. “The land was purchased either in the knowledge that industrial projects would be announced, or circumstances were created to bring projects to the area.”
Heads I win, Tails you lose. Nice system we have going on here...
The incentives in our society are so skewed that it makes sense why everyone wants to become a financial hustler and become a crorepati overnight.
If you're smart and don't mind bending the rules then why struggle on an invention, discovery or coming up with a new product where odds are overwhelming that you will fail.
Instead, get a MBA and jump into speculation. Produce nothing, earn everything. That's been my career advice to all youngsters since 1999.
http://www.insidermonkey.com/blog/google-inc-goog-insiders-sold-125m-in-shares-before-crash-24463/
So much for the "Do no evil" hogwash. Think any of them will spend even 1 day in jail?
In kalyug, honest person is loser, winners are cheaters.
Sign of the times that Tour de France title cannot be given to anyone since everyone was doping, probably last place "loser" was the only honest person!
Related item:
http://www.livemint.com/Opinion/jEWAcfxTOQ4EXfdLW7roUP/The-officer-who-stood-up.html?google_editors_picks=true
Vadra makes off like a bandit. A honest IAS officer gets transferred. Just another day in shining India///
Can we move on to the next scam please...
Watch and Laugh or Cry. I did both and went to bed really angry. I'm losing respect for my own fellow countrymen. Truly ashamed to be Indian...
http://www.youtube.com/watch?v=nXPB86gXRgU
An honest upright private citizen is being blamed for all the ills that affect this country.
Whats next, Mr. Vadra and his mom-in-law will be blamed for a lack of toilets in this country???
^ 3/10 and F grade. That's the best I can do. You're advised to return to LKG of Internet Trolling.
Chart: Mumbai realty is of the rich, by the rich, for the rich
Two, thanks to skyrocketing real estate prices, lakhpatis of 2005 are now crorepatis in real estate terms. A flat costing Rs 27 lakh in January 2005 is now valued at Rs 1.04 crore in the MMR region. That’s an appreciation of 285 percent! No wonder wealthy NRIs and investors see Mumbai property as a safe haven for their money.
Hot foreign inflows have made realty unaffordable to locals. The vast inflow of capital pushed up land costs and the spiralling prices invariably pushed actual consumers away from the sector. Instead, investors with surplus cash were roped in. Since an investor-driven market is less transparent and has a lot of complexities, it began to attract a lot of black money.
The result? Sky-rocketing property prices. Price and cost of flats in MMR increased at a compounded annual growth rate of 22 percent since the infusion of foreign capital!
Private equity should only be restricted to capital-intensive assets such as commercial and hospitality, while residential should only work on sales proceeds, says Kapoor. It is this private equity investment in the unregulated real estate sector that has resulted in the sharp rise of billionaire wealth in India.
According to an article titled ‘Where Do India’s Billionaire’s Get their Wealth’ published in the Economic and Political Weekly, 43 percent of the total number of billionaires, accounting for 60 percent of billionaire wealth in India, had their primary source of wealth from rent-providing avenues: think sectors like real estate, infra and construction, “because of the pervasive role of the state in giving licences, reputations of illegality, or information on monopolistic practices.”
The current breed of politicians/leaders has ZERO stake in future development of our country. They've already planned for their families to settle "abroad" so it only makes sense for them to loot this country as much as possible.
Vote out of the major parties. In US folks don't have a choice. In India we have literally 100's of parties to choose from.
In the next election cycle, mute your television sets and simply find out who is the poorest / modest of the candidates and vote for them.
Educate yourself, but more importantly educate the young generation so they don't fall into this trap and make the mistake that the current generation made in selecting it's leaders.
Repeat every election cycle.
The 30 year period from 1990 to 2020 represented a golden opportunity for India to emerge as a truly 1st world country. Instead we have squandered the opportunity and have become an increasingly corrupt and divided society with the biggest disparities in income.
We simply cannot afford (both literally and figuratively) to repeat such mistakes.
My sincere appeal to every educated Indian who understands the gravity of the situation to take action, even if it is as simple as convincing fellow family members and co-workers. Yes, let's start a Ponzi scheme which will actually work in favor of the country and in doing so be beneficial to ALL it's citizens.
So much for cut and paste theories of credit expansion, interest rate policies and assorted high faluting language.
India doesn't have a bubble in housing.
India has a bubble in corruption. Until this bubble is pricked expect high prices coupled with pathetic quality of life.
When DLF has to "compensate" middle men like Vadra to the tune of tens of crores that price is baked into the project. It will be reflected in the cost that the end user has to bear.
Prosecute the corrupt and require all the dealings to be completely transparent and we will get to a free market in housing which will ensure lowest price and best quality for retail buyer.
1st step towards recovering from a disease or bad habit is to acknowledge it's presence.
Europeans have recognized this and are out in the streets.
Americans are realizing this slowly.
Indians and Chinese are going to realize this soon.
http://www.amazon.com/Plutocrats-Rise-Global-Super-Rich-Everyone/dp/1594204098
Join the revolution!
>When DLF has to "compensate" middle men like Vadra to the tune of tens of crores that price is baked into the project. It will be reflected in the cost that the end user has to bear.
But the end user is not willing to bear the cost anymore. Sales have fallen and are approaching 2008 levels.
http://ksmfinanceindia.blogspot.in/
Shameless bankers....
Now the shameless creatures are pitching for ratecut as RBI policy is expected on 30th Oct.
My hunch says even if they extract 25 basis point rate cut, that is not going to save their ass.
A big bang slow down will come and it is here to stay to remove all the excesses....
http://ksmfinanceindia.blogspot.in/2012/10/shameless-bankers-of-india.html
What I find unbelievable is that the media and the people in the know are pretending that all that is being spilled out about Vadra and other politicians is somehow news.
Anybody related with the real estate business all over north India (at least), has known that since Ms. Gandhi came to power, Vadra is known to be an active participant in almost every major Real Estate deal.
In fact it used to be said that no major land deal took place without the blessing of Vadra.
I frankly think that we as a country should thank Mr. Vadra for his "MIDAS TOUCH" which has helped turn vast areas of worthless, barren land into gold.
And if this country wasn't the banana republic that it is, the whole family as well as more than half the politicians irrespective of the parties they belong to should be sent to the gallows.
F*#king thieves...
// What I find unbelievable is that the media and the people in the know are pretending that all that is being spilled out about Vadra and other politicians is somehow news. //
Well that says it all about common man in India. Timid creature.
What I find unbelievable is that why does one have to play on the tunes of these elites. Stop buying the things they sell for unreasonable prices, demand more from your employers. Let's say cost of milk is increased to Rs.1000 per litre. What are you going to do? Stop buying... just don't buy for 1 week, see what happens next. I'm sure no impact... now stop buying at same time onions (just e.g.)... see some impact.
Economies can be controlled by either side - elites or masses. But alas, in India it is ONLY elites.
Vadra is not at all a big player in this market. There are bigger scamsters in the market like this one, i.e. Nirmal Singh Bhangoo. He is chairman of Pearls Empire and accused of floating several Ponzi schemes :
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&Continuation=0&BaseHref=ETD%2F2011%2F06%2F28&ViewMode=HTML&PageLabel=1&EntityId=Ar00100&AppName=1
Now he is seen applying for Australian Immigrant visa; probably wants to run and take away all the ill-gotten wealth, or who knows if he has become scared to die from Dengue virus in India - after all, from all his wealth he can not buy air quality, get rid of mosquito menace, and all sorts of bonuses that accompany the choice of living in India.
http://www.newstrackindia.com/newsdetails/2012/10/21/134-Indian-tycoon-applies-for-residency-in-Australia-to-promote-business-interests-.html
But the end user is not willing to bear the cost anymore. Sales have fallen and are approaching 2008 levels.
I think you're missing the point. End users are already bearing the cost.
Just because you didn't buy RE in the last 20 years doesn't mean your quality of life has gone up or remained intact. If anything, you're facing greater problems and less services since middle men are scaming all the money which should rightfully go to the government (i.e. for the people's benefit)
Also, when a commercial outfit has to buy space it pays this cost, which is passed onto the retail customer.
Nobody is doing any charity work in the whole chain and the end user is where the buck stops.
Just like inflation, corruption is a silent tax on everyone. All the benefit is going to a few corrupt parasites while society at large decays and eventually collapses.
Just because you didn't buy RE in the last 20 years doesn't mean your quality of life has gone up or remained intact.
>Disagree. Standards of living (at least for the educated middle and upper classes) have gone up.
>If anything, you're facing greater problems and less services since middle men are scaming all the money which should rightfully go to the government (i.e. for the people's benefit)
Disagree again. With the advent of the internet, I hardly ever have to go to a govt office for regular transactions (taxes/bills/account statements, etc). Yes, for the one time transactions like getting a electricity/water connection bribes may still be needed, but that too is on its way out. ( Some cities have now outsourced these to private players. Others will follow)
Also, when a commercial outfit has to buy space it pays this cost, which is passed onto the retail customer.
>Agree. My point was more to do with residential RE. Folks have mostly stopped buying.
Root cause for the bubble.
http://capitalmind.in/2012/10/bank-credit-growth-slows-and-crowding-out-effect-is-visible/ (See the second chart which shows that credit growth was about 30% pa) from 2004 to 2008
This too shall pass ...
@Anon - "This too shall pass ..."
Basic rule - What goes up fast comes down faster. No country in history has been immune to this rule. Never ever.
All the queens men (and son-in-law) can't put it together again :)
I don't agree that this thing is about to collapse, I think we will suffocate in this sh*t for quite some time before this thing implodes, and it's got a lot to do with human psychology.
People react very well to a sudden crisis but respond very poorly to disasters which unfold slowly, it's also known as the sunk cost fallacy. For example people sell their useful stuff to pay a mortgage even when it's unsustainable to pay more EMI's or when they keep living in a dilapidated neighborhood because they 'grew up' there. Similarly people will tolerate 'inflation' and slowly eroding wealth as long as there is a mirage of 'growth' somewhere.
The Royalty, the courtiers and their cohorts have for centuries kept the plebs in subjugation with nary a cry, forget a revolution.
That is how it has always been and that is how it will always be.
Anyone who thinks or expects differently is living in a fool's paradise.
I have a feeling that the UPA will keep this bubble pumped till election in 2014. Chiddu looks quite happy to pump in more money and keep the bubble inflated...but then the flip side is that at the current moment most mango people know this is a bubble and its at ridiculous levels. So its going to look very stupid to mango people that the UPA is encouraging and abetting such stupid schemes...Its a bit like China with its ghost towns, India also has its empty apartment complexes and under construction apartments....At the end of the day, real estate is a commodity industry and has to succumb to booms and busts...so the fantastic bust has to come. Where we all will get the opportunity of a lifetime.
Having seen the US bubble bust, I can say that bubble Bust in India is a sure bet. The only challenge will be sellers, builders, politicians will fight tooth and nail to stop it. But nothing has worked in US, and nothing will work in India. Having said that Real Estate busts are not pop, they are more like slow motion train. On top of it, in India, public never knows the real transaction details due to black money involvement. So don't look for big news announcement for bubble bust. The time the buy RE will be when no-one will be talking about it again.
rising healthcare costs, rising food prices, zooming home prices,stagnant salary, fear of layoffs. this is going to spiral out pretty badly.
@At the end of the day, real estate is a commodity industry and has to succumb to booms and busts...so the fantastic bust has to come.
Keep fantasizing about this fantastic bust which is never going to happen.
Chor govt. will rape every productive sector of the economy to keep the game going. Remove one chor and the next is ready to take his turn.
How many politicians and elites have jumped into the RE sector. These are the guys who are making the rules. They have it figured out.
Only black swan event like war or famine can bring down RE in India. Otherwise, this rigged game will continue forever. There are 1.2 billion slaves whose labor can be tapped for generations.
Every Indian will be born to slave away on his mortgage payment. We may see return of multi-generational debt where parent takes out mortgage and payment continues into next generation...
^^^ I agree a 100%
@9:53. Agree 100%. No chance for the comman.
Now I guess we should apply for peons and drivers positions in Neta's office rather than being engineers and officers.
http://economictimes.indiatimes.com/news/politics/nation/peons-clerks-and-drivers-are-directors-in-netas-firms/articleshow/16935656.cms
@Anon 9:53 PM
What is that you are implying? play the game? be part of corruption? keep buying RE - but how, I am not rich and cannot afford to buy/loan.
All I can do is pray to God to shower me with cash, diamond and gold.
^ Tough luck there, mate. The golden rule in India is that if you are not rich, you definitely are a loser.
^^^ OK, then I'm a loser by that term. Now, next part - how do I become rich?
beg, borrow or steal? hmm....
@Anon - "Otherwise, this rigged game will continue forever. "
Do not attribute to greed or malice what can simply be explained by economics.
All money starts out white. So blame the RBI if you will. But the RBI had no option but to increase money supply. Otherwise the flood of dollars that headed to India during 2002-2008 would have pushed up the rupee astronomically and hurt our exports. Even with all this creation the rupee touched 38/$ in 2007.
The economy could not produce enough to handle all this creation. So the money flows into stocks/RE leading to price inflation (both assets and consumables). Now the dollars are not flowing as eagerly as they once did, so all the rupees that were created have weakened. 54/$.
It's like any other economic cycle. And no one (certainly not our politicians) has figured out how to prevent these cycles. Moderate them maybe, but prevent - NO.
Of course it also helps that we have a cultural affinity for RE.
I hate it when the discussion veers off into "it's hopeless, nothing will happen" kind of talk. I am a cynic too but the objective kind.
Not that I have very high hopes from this blog, but this is a done to death kind of thread. Crashes can and will happen everywhere, even in India, we are not so special. All the things that people recount exist everywhere else as well. Things like corruption, cultural affinity for gold and RE, a culture which promotes rigid hierarchies etc etc, they exist in almost all oriental cultures in small and large degrees.
My original point was that people should not expect a sudden doomsday kind of scenario, collapse can play out in the long term as well, the slow gut wrenching kind which makes people pray for a rapture, and I guess I should remind people that the concept of India is around 60 years old, not every part of India looks and feels the same. So all this talk about Indians being like this or that is a load of gibberish, Indians are more varied than Europeans.
^^^ What's your time horizon? Because in the long run, we're all dead.
Large economies such as India can kick the can down perpetually. And demographics are clearly in favor of further can-kicking.
A RE bubble will not burst in a vaccum. In India, it will be *preceded* by job loss (good paying jobs in IT and manufacturing will have to evaporate) and/or severe shortages of necessities (fuel, food) due to skyrocketing inflation.
In either case, many people will be mad, at losing their job, at getting screwed by the builder, politician etc. that "investing" would become the least of your worries.
Ofcourse, nothing will get rid of the opportunistic who will exploit each event to rile up their constituents.
You think places like Mumbai are unfriendly for those from North right now, wait till the economy really goes down...
But the RBI had no option but to increase money supply. Otherwise the flood of dollars that headed to India during 2002-2008 would have pushed up the rupee astronomically and hurt our exports.
I'll give you one answer and let you figure out the rest,
Ans: Central banks are in the pockets of elites.
Q: Who makes the rules if dollars can flood Indian markets?
Q: Who makes the rules where the dollars can flood the markets (i.e. in which sectors)?
Yes, we'd all like for markets to follow economic theories like precise algorithms being executed by an impartial computer but then no economic theory can account for a 50 crore payoff to a Vadra type middle man that results in a 40x jump in prices...
A view from our cousins to the West (note not much difference)
http://pakobserver.net/detailnews.asp?id=179536
Author's conclusion:
I see the social turmoil created by erroneous policies in economics but worse than that is see the makings of an explosive society that might erupt any time.
@Anon at 5:09
I don't know the time horizon, but clearly the days of 15-20%, yearly jumps in prices are over, you might still get properties which get an appreciation like that but it won't apply to most properties in town. Continued exponential growth like that is impossible, it will slow down after a while or you could argue that it has already slowed down, given the hullabaloo about interest rates and bank NPA's, and then after some time it will decline because the economic engine cannot live without growth.
You are right, RE bubble won't burst in a vacuum, there will be a lot of problems in the future. I agree completely.
As far as I am concerned, I am not in this rat race. The cities in India are not worth living in anymore, everything has turned poisonous, from air to water. There are rats and mosquitoes everywhere and scores of hawks in the sky to complement them. I will watch this one from the sidelines.
AAm admi:
And all the dogs on the streets. They scare me to death. I dony don't walk anywhere now due to stray dogs.
> Central banks are in the pockets of elites.
>Q: Who makes the rules if dollars can flood Indian markets?
The production of dollars might be human controlled. But where they head is certainly not. Money will flow where investors expect better returns.
From 2002-2008 that happened to be India and China. May be it will continue, maybe it wont. Currently the dollars are flowing out.
>Q: Who makes the rules where the dollars can flood the markets (i.e. in which sectors)?
You can make a rule, but does not mean that the money will flow in there for ever. Once again - cash follows returns not rules. Its as simple as that.
Keep fantasizing about this fantastic bust which is never going to happen.
Believe me when most people like you throw in the towel, that is when we are the peak. Just like 2007, the prices are at a all time high and sales at a low. Most of the sales that are happening are only speculative trades. It just needs one prick in terms of mass layoff announcements to scare the end user and then you see the magic unfolding.
Anon at 8:06
LOL. I think the dogs are ok. For some reason they don't attack me. Although I am worried because dogs are disease carriers.
Instead I am more worried about the piling heaps of garbage on the roads everyday and the increasing rat population. It stinks and there are flies everywhere.
I live in Bangalore, anyone else from Bangalore here ? Anybody notice the astronomical rise in the number of hawks and eagles in the city, a few years ago there were none and now they are everywhere, wonder why ? It's the explosion in the number of rats in the city. I see eagles swooping down in the morning and practice those airborne attacks you see in National Geographic everyday.
It's a serious threat to the city, the city is ready for a major epidemic in every way imaginable. I wouldn't be surprised if there's a plague outbreak in the city.
aam aadmi,
I am from Bangalore as well.
Interesting point about hawks - I've been wondering why so many keep soaring around my apartment.. First, the sparrows vanished, then the crows (never thought I'd be missing crows). Now, we have pigeons all over the place, crapping on my balcony, etc
BTW, we don't get cauvery water - its tankers only & nobody seems worried about that either.
was planning to r2i and had booked a 3BHK from a leading builder here in Bangalore. Just decided its not worth it with the price (which would take 2 generations to repay for a tax paying comman) and the filth around. an epidemic is closeby. thanks to this blog. i do not belong to this rat race. not worth it.
Hi Aam admi!
Me from b'lore too. The garbage mennace is bringing us face to face with the end result (not really the end, there is still much more I guess) of quick, undeserved growth (fake growth).
About hawks, I never saw one BECAUSE the place where I stay is so crammed with apartments and we'll have to strain our necks to peek at the sky :P. There is hardly 2 feet btwn my apt & the one behind mine. Even moon & stars are a rare sight, let alone hawks. And when I drive I dont dare to look up at the sky. I should try to walk outside & watch for hawks.
I was searching for a house more than a year back. After some searches, I gained more first hand knowledge (NOT the gyann given by the builder's sales-walas!) & decided to halt my search. Well,
In Bangalore, even now, I think there are more terrestrial hawks - sittin in real estate & related offices - than avian hawks :D Hope the avian hawks don't read this, or they'll get mad at me for equating them with blood suckers..
Sara
No need to change your location guys. Let's be happy as our family is growing.
Indians have history of living happily side by side with animals and pests - elephants, camels, cows, goats, donkeys, snakes, horses, hens, parrots, crows, sparrows, dogs, cats, rats, mosquitoes, red and black ants.
Hawks and Eagles are new generations add-on and are welcome.
We will adapt them in our vivid culture and as always they will also adapt our culture and likings.
Rajat Gupta has been sentenced to 2 years of rigorous imprisonment for Insider Trading. The Vadra bubble in Bikaner referred to in this article is also insider Trading. Granting that it is India, Vadra should spend atleast 2 months in Jail under appropriate Acts. There should be big campaigns on Facebook for this demand, but doesn't seems to be the case so far.
Anonymous said...
AAm admi:
And all the dogs on the streets. They scare me to death. I dony don't walk anywhere now due to stray dogs.
I recall having read an article which corelated the prosperity to the stray dog population.
The gist of it was that Indians are able to consume (and waste) more food (especially meat) which ends up in the dumpsters / roadside garbage.
Darwinism takes care of the rest.
BTW. it's kind of ironic to blame the dogs when Indians themselves cannot control their own animal instinct to breed in ever increasing numbers.
Anon @4:47 AM
I think you're confusing Red Indians (i.e. native americans) with East Indians (i.e. the original Indians)
Native Americans are the ones who truly worship nature.
Indians, on the other hand, will exploit anything and everything if it promises to make them wealthy.
There should be big campaigns on Facebook for this demand, but doesn't seems to be the case so far.
I don't think Facebook types (i.e. IT/MBA/MBBS professionals) want to see the bubble burst.
These are your typical aspiring class (i.e. upper middle class wanting to be rich) Most likely they (or their parents) already own property (which has appreciated in value) and are basking in the crorepati effect.
Infact, when the bubble bursts, it wouldn't surprise me to see a campaign on Facebook urging the government to restore the inflated prices!
This is how even the well educated get co-opted by a corrupt system. Nevermind that future generations will suffer untold misery.
http://www.firstpost.com/india/why-aspiring-india-has-started-hating-its-poor-497664.html
Author correctly lays out where we went wrong.
First step to a solution is to first understand the problem.
And there is hope:
Delhi, for example, has more cars than other three metros combined but the majority of its residents do not own vehicles. For all its structural flaws and teething problems, the dedicated bus corridors (BRT) of Delhi were a move towards the right direction for decongesting roads of too many private vehicles by offering convenient public transport.
But the plan required cars to sacrifice half the road space to plebeian buses. When a few VIP cars were penalised for trying to evade traffic jams by taking the bus-only lanes, a PIL urged the Delhi High Court to scrap the BRT as too many vehicles piled up on the car-lanes. After nine months, the court threw away the petition last week with a sobering judgment: “A developed country is not one where the poor own cars… but where the rich use public transport”.
http://www.thehindu.com/news/states/in-chhattisgarh-a-lifeline-gone-without-trace/article4026428.ece
Population going on an upward spiral & farmlands disappearing in the name of development. It doesn't take a PhD to calculate what will happen next.
@ 3:53 PM above,
That's some refreshing good judgement.
Anon at 1:03
And the thing that strikes me as bizarre is that once this beautiful productive land has been rendered dead with concrete, asbestos and god knows what other industrial toxins it's supposed value goes up. An acre of forest is cheap but that shitty piece of land in the middle of Mumbai is worth millions.
http://economictimes.indiatimes.com/news/international-business/flood-of-money-leaving-china-fueling-economic-and-political-risks/articleshow/16966163.cms
Looks like even the elites are taking money out.
@2:01AM
Shouldn't be surprising. Look at our education and culture. Everything is assigned monetary value.
That which is free: trees, rivers, rain are completely worthless and ready to be exploited or as the MBA types like to call it "value add"
A free flowing stream is priceless to every creature on this planet but it takes a truly fucked up creature to come along and say, hmmm, if only I can put this in a plastic bottle, then and only then will this have any value...
It's pathetic.
We are all frogs in the proverbial kettle of water that is on a low heat. Collectively we don't notice how the environment which supports and nourishes us is being slowly but surely decimated.
We shake our heads in dismay at instances like Rogda but then reassure ourselves that it's not happening to us (and cannot happen to us) since water is still coming out of our tap.
And moreover, the power plant that replaces the reservoir will probably ensure the air conditioners in the nearby city actually are put to use. So what if a few villagers are kicked around. "We" have to make some sacrifice if "we" are to "progress" right?
http://economictimes.indiatimes.com/news/international-business/flood-of-money-leaving-china-fueling-economic-and-political-risks/articleshow/16966163.cms
Looks like even the elites are taking money out.
Yet another area where Indian elites have the Chinese beat.
I don't get this parasitic mentality. Raped your own country and now thinking of moving to a Western country where all of a sudden you will be the ideal upright citizen?
Well, why don't you do that in your own country/state/town/village then? After all, the places you like to "escape" to didn't magically appear at the dawn of time.
The ironic thing is, people think they've escaped to a better place but they haven't been cured of their narrow mindedness.
Because if you swapped Indians with Scandinavins, within a generation, India would be a shining paradise while Denmark and Norway would be reduced to toxic dumps.
Bottomline, changing one's address is not going to solve something that is wrong with one's mind...
Peasants are being duped everywhere but more and more are wisening up to the game. Here's about as close to proof as we will get, the IG of TARP drops exposes the fraud:
http://www.amazon.com/Bailout-Account-Washington-Abandoned-Rescuing/dp/1451684932/
Must read for everyone who is eligible to vote in US elections which will leave no doubt that, bread and circus acts notwithstanding, there will be no difference regardless of who gets elected.
Both parties have been bought and paid for by the elites...
The Standard Chartered Bank has put its 1.5lakh square feet office block in Goregaon up for sale and is looking at realising Rs 300 crore against the purchase price of Rs 325 crore five years ago.
25 Cr depreciation in 5 years, although commercial properties has better potential to appreciate and have better rental yields.
http://timesofindia.indiatimes.com/business/india-business/StanC-puts-office-block-up-for-sale/articleshow/16975829.cms
>25 Cr depreciation in 5 years, although commercial properties has better potential to appreciate and have better rental yields.
Impossible, I say ! . How can it be. Prices falling? here in India ? In Bombay ? But RE is gold here. It never falls. We are rolling about in wealth.
// The Standard Chartered Bank has put its 1.5lakh square feet office block in Goregaon up for sale and is looking at realising Rs 300 crore against the purchase price of Rs 325 crore five years ago.
25 Cr depreciation in 5 years, although commercial properties has better potential to appreciate and have better rental yields.//
You need to understand how business works... many times it is better to show loss and take tax breaks, avoid compliance, gain mass confidence, etc and overall it turns out to be better for business. You need to be high level business man and/or accountant to understand this.
^^^ it's one thing for a bank which probably has a portfolio of 1000s of properties to take a paper loss on 1 of them, it's quite another for prices at the retail level to fall down.
Commercial RE has slowed down over the past few years however, residential RE is still going strong.
12500 rupees per sq ft. in Chennai
and this is just the cost of land!
Who thinks there will be value-for-money middle class housing coming up on this patch?
http://timesofindia.indiatimes.com/business/Mahindra-company-bids-260crore-for-Guindy-plot/articleshow/16986271.cms
@Anon - Commercial RE has slowed down over the past few years however, residential RE is still going strong.
Unlikely, at least in Delhi/Mumbai. In these two cities, sales are down between 30-50% compared to same quarter last year.
In Bangalore, I know of at least one apartment complex where the early investors are selling below the current market price quoted by the builder. Terribly small sample I know, and maybe a one off case.
In India, 80% of cars are bought through bank finance. For homes, that number will be much higher. No wonder builders complain so much about interest rates.
@polt: care to mention the complex in Bangalore ? As an aside, how does one research such info ?
"
In Bangalore, I know of at least one apartment complex where the early investors are selling below the current market price quoted by the builder. Terribly small sample I know, and maybe a one off case. "
This would be true everywhere not only in Banglore. And I would really doubt if it would be a significant amount. It might be just 100 to 200 rs psft below current rate offered by builder
@Anon - "care to mention the complex in Bangalore ? As an aside, how does one research such info ?"
This is ETA Gardens - Magadi road (Behind the railway station).
>As an aside, how does one research such info ?"
I met a friend who owns and stays there and he told us that early investors are selling about 15-20% below the builder quoted prices.
It could well turn out that if you negotiate hard the builder himself will match these prices.
Somehow the story seems similar across new apartments in Bangalore. Builder says 'almost sold out' which is probably true. But in the evenings very few lights are on, suggesting investors have bought many if not most of the flats.
I met a friend who owns and stays there and he told us that early investors are selling about 15-20% below the builder quoted prices.
It could well turn out that if you negotiate hard the builder himself will match these prices.
From what I know, since 8 months asking prices have atleast risen by 60% in Bangalore. Well even with 20% discount, they should still be able to make good money if they find someone to hold the bag. Tell me when they are selling 20% below their purchase price excluding interest costs, I would like to jump in then ;-)
By the way, visited a 4 storey apartment complex (mushrooming all over Bangalore in residential areas putting pressure on water, drainage etc and increasing land prices) curiously since I see "Contact" board from months somewhere in North Bangalore. Well, the asking price was 90L. With that kind of money, I sure can build a independent villa next door. Even with 20% discount it doesn't make sense to buy.
@GSM - From what I know, since 8 months asking prices have atleast risen by 60% in Bangalore.
Evidence?
In Malleswaram and RMV Layout, prices have been mostly flat for almost a year now.
Evidence?
This is what I do... look up some ads..call up/visit and get the asking price of similar properties in similar areas. After few months, you will bump in to a same sellers/ ads again...and then find out what they are offering i.e price increase.
I agree that I haven't tried the areas you mentioned... but hey I tried to find collect data on properties worth lakhs not crores;-)
@GSM - "After few months, you will bump in to a same sellers/ ads again...and then find out what they are offering i.e price increase. "
That is strange. So when the property does not sell for months, the price increases? Like that's going to work :)
// That is strange. So when the property does not sell for months, the price increases? Like that's going to work :) //
It does work brother! Why? because here is no other option for seller (they have extremely high holding power) and there is ofcourse no other option for buyer other than to buy.
Sellers are only impacted only and only if 80% of the buyers do not buy for a decade or so... until then music contunies...
That is strange. So when the property does not sell for months, the price increases? Like that's going to work :)
There are 2 things..firstly, people buy based on comparative value than absolute value. As you said previously, if there is a investor who is ready to sell at 20% compared to other sellers, it looks like a great bargain. But little do buyers evaluate on the absolute prices..
Secondly, if the investors are leveraged, they need to cover for their 12% interest costs + 3% rent costs...after all they are trying to keep the home new by not renting it out :-). And add the 10% interest if the same money was in FD. So the price has to go up 25% min per year..Doesn't other industries pass raise in prices of raw materials....the same applies to speculators...just the business model :-)
pls shut this blog down. RE will increase indefinitely. Comman pls move -> to shanties/slums.
// Comman pls move -> to shanties/slums. //
what is shanties / slums rates? Are they not in bubble... sob sob.. no where to go... where do I sleep, pee and poo ?
^^^ I have heard prices for 10X10 rooms in Dharavi are upwards of 50Lakhs.
So shanties are out for the common man as well.
On the other hand any guy who owns any kind of RE in the cities of Delhi and Mumbai is at least a millionaire several times over.
So you cant say that the wealth has remained in the hands of a few only.
I think the distribution of wealth via RE appreciation has been fantastic, to say the least.
Bangalore price rise is not uniform, it's gone up a lot near Yeshwantpur, Jalahalli because of the Airport and the new Metro line (under construction !!) but has stagnated in the old localities of Bangalore such as Malleshwaram, Jayanagar etc. Commercial properties OTOH are down everywhere, I know this from my office sources.
And yes a lot of flats are indeed vacant, most likely bought up by investors.
On an unrelated note there's a cyclone warning for TN coast, everyone in that area be prepared.
Dharavi land is prime RE and is mostly cornered by politicians and their henchmen.
There is tons of money to be made by rehabilitating these slums.
The only thing holding them back is the minority community are no pushovers and will extract their pound of flesh.
If it was some villagers they would've been long kicked out.
There is a lesson for all of us, in a democracy those who stand up, shout out and are willing to fight for their rights are the only ones that matter.
// There is a lesson for all of us, in a democracy those who stand up, shout out and are willing to fight for their rights are the only ones that matter.//
You got this one right. Majority Indians are known to work around the issue rather than the issue itself.
Today people are flush with money anticipating huge returns in future... but for this future generation needs to be earning 3 times (atleast) compared to today's generation.... will this happen? My guess is as good as yours!!
clearly not going to happen. this boom was artificially generated.
moreover, we have not solved any consequential problem. environment, poverty, corruption.
at some point the price will have to be paid. the longer these problems linger, the greater cost and more catastrophic the final result.
there were kings and their descendants became kings. once in a while someone would oppose and dethrone the king (and destroy his entire lineage) and from that point on that persons descendants became king.
how is it different with these gandis. are indians so dumb that they need rahul to parade before them wearing a gold crown?
>they need to cover for their 12% interest costs + 3% rent costs
Sorry it does not work that way. By the same measure you could keep a car brand new and expect to increase its prices as well.
What you have put in is a sunk cost. The market does not care about it. What it cares about is supply/demand. Buyers will simply check what a comparable house/car is going for and buy accordingly. If comparative prices have gone up, they will consider paying more. If they have fallen ...
The argument about holding power does not 'hold' either. By the same metric very few assets (stocks/gold) should fall in price. But there will always be a few who do not have holding power or simply expect prices to fall. And when they sell at a lower price, everything around gets repriced.
What it cares about is supply/demand
You have not considered speculative demand fulled by credit. No one buys a car on speculation even though financed by credit. When the demand is speculative the price increase or decrease would be exponential.
So to simply put, prices cannot be flat for a long period of time. If not this year, they will increase exponentially next year. People will simply calculate the differential between old established areas not seen price increase and new upcoming areas seeing exponential price increase and the cycle continues. When/ how the cycle breaks is debate for another day :-)
>You have not considered speculative demand fulled by credit. No one buys a car on speculation even though financed by credit. When the demand is speculative the price increase or decrease would be exponential.
When I say "supply/demand" it covers everything. Credit driven demand is not a special kind of demand where laws of economics do not apply.
If supply is larger than demand, prices will fall or stay stagnant till demand catches up. If people have bought the homes outright, they will hold on. If they have bought it on credit, they will sell or rent it out in the hope that prices will rise fast later.
Besides asset prices increases are always technically exponential (i.e. compounded). Even a 1% increase is exponential.
blah blah blah..
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SBI Chief had said yesterday that CRR is a waste of economy.
I am wondering what about the 1500 crore he gifted to Mallya? Is that not waste?. Dear Sir, CRR will be used to compensate the unsuspecting savers of the country when you makes loss by dancing to Mallya's tunes.
He also said something like 'even after 10 rate hikes inflation is not controlled' . I am amused at this idiotic statement. Had Subbarao raised 1 or 2 percentage more a year ago, today inflation would have been under control. Subbarao also knew that mistake and he is trying to control the damage by holding on the rates. He also knew these blood sucking corporate vultures may even get rid of him if he raises rate.
People like SBI chief are responsible for Real estate bubble and forgetting that he is working for a state run bank he competes with corporate vultures for people's blood. What a irony? Dear sir, I am worrying what you will be telling next year, when due to real estate crash, your bank's assets quality takes a hit?
One remembers that after taking over he provisioned bad loans he acquired from his predessor and he would have thought the economy will continue to boom so that he can show huge profits quarter on quarter. But he forgot basic economics that the economy works in cyclical fashion. He is seeing the fall the SBI shares now under his regime. The best thing he can do is to prevent the asset quality from slipping instead of nudging/harassing RBI to cut rates.
Please remember. You work for the country.
www.ksmfinanceindia.blogspot.in
Chidambaram has a dubious distinction of 'share market saviour'. Whenever he comes to power, he tries to help the markets. He is always bullish. He uses all the tricks in the book to take the markets up.
Now he openly started challenging RBI. It looks like threatening now. he seems to be losing the common wisdom that is expected from a economist. What a pity?
When inflation is at double digits would you believe that a finance minister of the country openly threatening/forcing his country's central bank to cut rates only to save the blood sucking Real Esate Mafia? Unimaginable. This can happen only in India. Still people are mum. People simply donot care if their day to day expenses raises at a alarming pace, but they are only worried that their real estate investments should not go bad.
The comedy is by allowing FDI in aviation ( there is a hidden selfishness about saving state run banks here} and by allowing FDI in retail ( thousands of small traders life in limbo}, we think that we have done a great reform and expect economy to improve. Everybody with little bit of commonsense would know that by doing this government is trying to boost share market sentiment and by luring FII money they think they can bridge their CAD. The irony is the hot money can go at the same pace.
I believe Chidambaram is trying to boost sentiment at the cost of long term economic benefits for the country oonly to postpone the inevitable until 2014 elections. Unfortunately nature has a terrible way of paying back and I am quite sure now, the inevitable crash will happen before elections and Congress is going to pay dearly for this.
No one can deny our dear leaders one last opportunity to loot the country before the shit hits the fan...
One sentence
Subbarao -- A central banker I can respect.
When Bankers everywhere have sold their shirts to the corporates.
Subbarao -- A central banker I can respect.
He is getting retired next year. For sure Govt will not extend his term like they did in Aug 2011. Chidu will have the last laugh after all..
Indians are selfish and have short memory. All hype will be forgotten and people will adapt to what they have and what they are offered.
RE is not coming down. Period. Inflation has began and will prevail... and people will survive... may be with poor quality of life. Sad part is that they will not realize that they are living in hell... for them hell is heaven.
A minister talks about a bubble -
http://economictimes.indiatimes.com/markets/real-estate/news/housing-bubble-can-burst-in-absence-of-proper-planning-ajay-maken/articleshow/17035171.cms
I hope the govt is careful about lending to the poor. The US had similar good intentions about lending to the poor, but the policies were hijacked by human greed and led to sub prime lending.
I think it's a good idea to hedge both ways, through cash as well as gold, preparing for both inflation and deflation. It also means that your wealth won't grow but hey isn't it a better idea to just preserve your wealth.
I think it's a good idea to hedge both ways, through cash as well as gold, preparing for both inflation and deflation
To me the best hedge against inflation is Debt as long as you can survive a deflation for 18 months.
^^^ That's a play for the 1%, which is why the rich have never had it any better. A low tax, high inflation climate suits them just fine...
For the rest of us, debt is slavery.
The newly elevated Minister said providing loans to the economic weaker section (EWS) or the low income groups (LIG) could prevent from such a bubble burst to happen.
Debt is slavery.
The real solution is for the bubble to burst. It is certainly not to saddle the low income groups with bubble level debts which will make them lifelong slaves of the elite.
Bubble will burst once the criminal investigations and prosecutions begin into the fraud being committed in RE and land transactions.
Otherwise, the longer this continues, more and more unwitting people are pledging their hard earned incomes into this fraud.
@GSM
I agree that debt is the way to go but not if you have to cut a portion of your body to get into it, as I see it now, to get any loan one has to pony up 20-30% down payment and if deflation strikes you will be left naked. For the rich it hardly matters as they get into debt with hardly any money on them.
I am curious..is your 18 month time frame based on the assumption that govt will jump in and stabilize things within that time frame ?
to get any loan one has to pony up 20-30% down payment
I mean survive 18 months after all that. Even otherwise, your assumption is deflation exactly strikes the moment you go into debt. What if the deflation comes after 2 years. Are you in a better position to surive?
18 month time frame based on the assumption that govt will jump in
My assumption you need to survive the panic phase. 18 months is sufficient for you to plan for future without getting wiped out. If in a depression things are still bad, rest assured 90% of your neighbours would be worse than you. And for the others who didn't take a risk, they would probably be panicking about their jobs and not take a riks then too.
The bottom line is success doesnot come with out risk attached.
The bottom line is success doesnot come with out risk attached.
This is the hogwash that is being fed to the masses. Builder and RE agents peddle the same to get unsuspecting buyers to pledge their lifes savings (and future earnings) to their fraud filled projects.
Pray tell us what risk did Robert Vadra take to deserve the success of 50 crores payback in a few months?
The real risk will be borne by the chumps who will "invest" in the DLF property that comes up which has the "cost" of this and other kickbacks factored in.
There was a time when being rich was associated with hard work, perseverance and intelligence.
Now it's simply associated with fraud and the ability to game the system.
Icons are being shattered everywhere and being exposed for the fraudsters they are. Be it in religion, sports, education, entertainment or business.
@GSM
The bottom line is success doesnot come with out risk attached.
I thought the bottom line was to hedge against the risk, and you are advocating taking on risk.
There was a time when being rich was associated with hard work, perseverance and intelligence.
Now it's simply associated with fraud and the ability to game the system.
If I just remove the word "Fraud" above, can we say it is called "Smart Work" which is the buzz word nowdays :-)
I thought the bottom line was to hedge against the risk, and you are advocating taking on risk.
Well risk is everywhere, everyday when you travel on overcrowded roads. Do you hedge it with insurance? Doesn't mean that it will cover for our precious lives. But does that stop anyone of us from travelling to work everyday?
^^^ "Smart work" too was eclipsed by the Goldman CEO who put it best "God's Work"
Hard to argue with anyone who claims to be doing that. In fact, I've adopted that phrase to answer when anyone asks "What do you do?" :-D
Back home, we have our fair share who'll claim they're doing the same.
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"Subbarao -- A central banker I can respect."
Exactly why is Subbarao getting high praise on this board? Subbarao (i) did absolutely nothing to curb intolerable levels of inflation, (ii) did nothing while the INR nose-dived to embarassing levels further exacerbating inflationary pressures and (iii) presided over the biggest housing bubble the world has ever seen (save for perhaps Japan in the early 90's).
So why on Earth is this epic failure of a Central Banker deserving of such praise and respect on this board?
Can anyone please enlighten me?
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