vivekvan

I do not think that the prices will fall that much, as roti, kapda, makan is one of the basic needs of people. Look at the luxary items, are the prices of cars, plasmas etc down by 50%?? If there are no buyers then the builders will not start any new projects, then the supply will dry up and prices stablize. Also keep in mind the RBI help for flats below 20 lacs. Max prices will fall by another 10% in the next six months.

dineshp

So the correction was/is delayed but not denied to common man. Just like everything else, the cascading effect of any changes in US can be felt world over after a brief (make that long pause) period of time, the real estate correction too has found it's much needed home coming to India.

Check out Deccan Herald Front page bottom half dated 12/12/2008 for the news update.

Thanks
Dinesh

wiseman

Vivekvan,

Be realistic. When prices have taken 5 years to rise, do you expect them to fall in one day? Or even in one year?

Cars and Plasma TVs will fall by 50% - oe even more. But not when you have money in your pocket to buy them. They will fall when a majority of people run out of money (in the form of ability to raise loans, mainly, since majority of people buy these things with debt rather than cash) to buy these things. Don't be under the belief that this is going to be fun and games.

And people will run out of ability to get loans when they are no longer loan-worthy - this means out of job! Just try to go on your own for a while and see if Banks (which rolled out red carpet just a month ago) even entertain you if you tell them you are on your own !

But IIP numbers are "shocking" according to the news today, but not to some people who get news regularly from the Industrial and Services marketplace. Officially IIP for Oct is -0.4% and we have entered recession too.

This bear market will not be the 12-18 month variety. Yes, the market may seem to bottom out and even rise a good amount in 2009-2010. But a double-dip in 2011-12 will see it go down even lower than the 2009 lows.

Estimates based on long-term P/E and what is called the Q ratio sees the DOW going down as low as 4500 (50% down from here). We might even see our Sensex go down that much and more importantly see it hang around below the 10000-12000 levels for quite some time to come.

It is not the fall period that will affect us badly. It is the stagnation after that which will wear us down and seriously affect us! As you can see, during this fall last few months, most people seem to be partying as if nothing happened. This is the time when the Titanic hits the iceberg and is slowly settling down. People still are not aware of the real dangers. And even if some people have lost jobs, everyone is thinking, "this is for another 3 months. Then jobs will come back and then party time again." Also, they are dipping into savings to tide things over and so all seems hunky dory. Wait till a good number start running out of savings and still jobs do not seem to be coming back ... Then you will see the serious volume and price drops.

dblacksmith: Can you find a single "I" in this?

cheers

vkpraba

This is a recent article published in 'Indianrealestatenews.com' :

India’s realty industry is facing its worst crisis in recent years with profits of most listed companies taking a hit after riding on the boom of the last few years, a boom fired by an appetite for new investment avenues for the rich and middle classes alike.Such has been the impact of the downturn that the realty index of the Bombay Stock Exchange (BSE), an indicator of investor mood for the industry, has fallen more than 25 percent in the past month and over 75 percent in the past year.
“It’s just an initial indicator of a long-term crisis,” said Santosh Kumar, the chief operating officer and director of noted global realty consultants, Jones Lang Lasalle Meghraj. “Developers went overboard on land acquisition without paying attention to the delivery of projects. Now their money is blocked in lands,” Kumar told IANS. The trouble faced by the realty developers was also reflected in their second-quarter results reported last week, where company after company had to contend with a drop in profits.
Realty major DLF, which had long ago raised Rs.100 billion over ($2 billion) in what was then the largest-ever initial public offering in India, logged a four percent drop in consolidated net profits for the July-September quarter. So was the case with Unitech, which logged a 12 percent decline in net profit, while for Parsvnath Developers, it was the second straight quarter of decline, with a dip of 78.6 percent in the July-September period.
Another Delhi-based realty firm, Omaxe, which is also facing turbulent times for the second straight quarter, reported an 87.3-percent decline. “Real estate continues to face tight monetary conditions that has had an impact on the sector. If restrictive conditions continue, we expect the industry outlook to weaken further,” DLF said in a statement.
“Reduction in construction costs with softening of raw material prices will help us maintain our product margins in challenging times,” said Rajiv Singh, vice chairman of the company. “Earlier, these companies were in the denial mode. Now, they have started to acknowledge it,” said Anil Chawla of D.E. Shaw and Co, leading private equity investors in the real estate sector.
“I feel the real loss figures will come up in the next quarters.” According to Sanjay Chandra, managing director of Unitech, the company had been “slightly affected” by high interest rates. “Borrowing costs are currently about 15.5 to 16.5 percent, compared with 12.1 percent for the year ended March 31, 2008.” Agreeing with his assessment, Kumar said: “With tight liquidity, poor stock market sentiments and drying private equity, they are finding it difficult to cope up. Projects are also getting delayed because of funds.” Experts did not foresee any upturn in the immediate future, though the government and the central bank have been taking steps to infuse additional liquidity into the system, especially for sectors like housing. “The realty sector needs a reality check for itself. I feel that the realty sector will go for price cut up to 30-40 percent. Prices must match market demand and developers cannot just blindly quote prices,” said Chawla.
“This situation seems likely to persist for another 8-10 months at least. Most of the projects are getting delayed and buyers are not showing interest,” said Sanjay Verma of Cushman and Wakefield. “Even in peak season like Diwali, the response was very lukewarm,” said Verma, who is managing director for South Asia with the international real estate solutions firm

punitkumar

Hi


need help of some one since I don’t know much about property.

I am from Punjab and looking for investment in property. I know that I will not be staying here for next 20 year due to the nature of my job. It’s purely for investment purpose.

1. I want to go for a plot instead of flat for the reasons, the entire land is of mine and second since I will not be staying here so it’s better to have a plot and build a house whenever I feel that I shall stay in it.

Is it right approach

2. I can invest 20 - 40 lacs and I am looking for 250 - 300 sq yard plot minimum and I am more interested in places like Ludhiana , Chandigarh , Mohali , ....these are the paces where I can stay whenever I want being from this part of country plus I can visit the residential area once a while ( which is not possible if I take it in bag lore or delhi..)

Which is the best place in Punjab

3. Can someone help me some good residential project in Punjab / Chandigarh with a good builder where I can invest in plots considering my above budget and requirement of 250 - 300 sq yard

4. I have heard about two residential projects ( plots ) in Punjab , one is by parsavnath in rajpura ( around 5500 / sq yard) and second by Pearls in Mohali ( around 14000 / sq yard).

Which one is better considering from long term investment angle.

Thanks for your help

Best regards

nick_alan_76

Better investment is to go gamble at a . You will still loose but you will atleast enjoy in the process.

If you haven't gone and invested yet, I also have a plot on moon to sell you... right next to where Chandrayaan MIP landed.

lovebird

Now cash is the king. Do noy buy any real estate for another 6 months atleast.

Prices are falling every month

vens

True. Gold prices flared up in international market in dollar terms and Indian Rupee is depreciating after budget leading to further jump in prices in rupee terms. In the past one week gold price has increased by more than 10%

On the otherhand, to see the evidence of first steep fall in real estate price DLF one of the top builders has reduced their Bangalore- New Town project price launched recently at Rs.2775/sft to Rs.1850/sft just now!! 30% reduction in one go.

Chennai real estate is defying gravity. Let us see how long.

ks2071746

Dear friend,

Chennai RE guys are very strong people, politically and financially with a lot of will. They would hold on for a some more months. But a time will come for them also for some distress selling. They will not go for new projects as the return will be marginal/reasonable and nominal and not like the ones which they have enjoyed /so long in the last few years. On going projects, they will delay and go in on some compromise on the materials/quality of contruction etc. Their political influence/funding ( mostly black money ) will enable them to hold on further. Ultimately the customer will be the sufferer.

ks2071746

Indianil

One can expect a correction up to 25% in end user market and up to 40% correction in investor driven market from the peak level.

Regards