Esteem

The global economic recession has adversely affected the growth process of India’s economy and the worst being affected is the Real Estate segment.

In my last article, ‘owning a Home is becoming a distant Dream in Kolkata”, has been read my many and few of the reader disagree with me. Now everyone will agree that my prophecy has come true and that too so soon. Let me confess, that I am neither a disciple of Nosturdam, nor I even dreamt of such an economic tsunami , which will make company like Lehman Brothers, General Motors and other Multi national company begging to their government for helps to revive and survive.

The Crude oil which was hovering around $140 a barrel has come down to around $40 a barrel and the simple reason being that the demand has fallen down drastically. OPEC has to cut down its production.

Indian real estate giant like Unitech witness a devastating effect on its share price coming down to Rs 30 which was ten times lower than a month ago. The company has to sell its assets to mobilize funds for completion of their projects.
Similar shockwave didn’t spare DLF too, which made them to postponed their projects and change their strategy.

Today Developers are selling their stocks with heavy discounts and ironically the discount became their USP and a tool to fight competitors. Their latest advertisement’s trigger words being, ‘Fresh stock old rate; ‘You book a flat, we pay your pre-Emi’, Buy a home get a Car Parking for free”, and the most desperate one ‘25% flat discounts on flat’.

The RBI also cut Repo and Reverse Repo rate to pump around Rs. 60,000 crore to facilitate enough liquidity to the banks. Home loan became cheaper varying from 8% to 9.25% depending on the ticket size and the tenure.

The price of Cement and TMT bars also marginally came done, reducing the construction cost.

Inflation rate has come down to 0.24 % which means more buying or more savings.

But what puzzled me is that why aren’t happy? There have been no buyers in the market. Shopping malls are empty
inspite of display board showing ‘51% discounts’. Restaurants are under occupied, which once has to be booked. The fall in petrol and diesel’s price hardly boost the sale of four wheelers.
Why buyers has postponed their plan to buy home in spite of the fact that loan are cheaper, the income tax benefits on loan is still intact and the property price has come down to its lowest level.???

The Developers across the country especially Mumbai and Delhi have made an unprecedented rise in the property price because of the boom in the industry and therefore a correction was required and it happened. But those golden days seems to be a glorious past.

The common man including myself fails to understand the thesis of Economic tsunami, its effect and aftermath. What we understand the reality, is that the past economic euphoria has made us as an optimistic individual, going all out for better lifestyle , better housing, impulsive shopping using credit cards, buying ultra Modern Gadgets and white goods by taking personal loans, even not caring to pay a high interest rate. All this was possible because there was one HOPE. HIS JOB.

AND TODAY THEY HAVE A FEAR OF LOOSING IT ANY DAY.

This sole fear factor is responsible for the dormant market. People have realized that every day is not Fun day. Now they are more pragmatic and they have came out of the hangover. People are now catching Penny to save pounds.

The market will only revive if common people gain confidence about their income security from their job’s perspective. This phase will take at least a year to recover from this recession, but this event will definitely have a paradigm shift of the common man to go for saving and make a calculative expenditure even in terms of dwelling units.

nick_alan_76

I believe you. But how about IMF which thinks economy will further slowdown to 5.25% in 2009-2010?

Seriously, please provide some substance to your statement. Or else I will start making statements like

wiseman

Earth calling Shelley ... Earth calling Shelley .... come in please ...

<crackle> Shelley to Earth, I'm here ...

Shelley! Which Planet are you calling from?

just kidding. No offense!

But, Shelley, who is you advisors on how quickly this will end? Better ditch them fast or they wil take you to the cleaners.

Better still, point them to Nats. They will vibe well together!

cheers

ks2071746

Dear friends,

wise & nuts continue to pull each other's legs, at the slightest chance/opportunity.

ks2071746

Arry

It's said that history is a good teacher at times. If you look at the similar situtations in the past, it had taken many years for the economy to rebound.

Doller has ruled world for 78 years now. And since in this world it is said that "Anything that is constant is the change", the days of Doller dominance are commingn to end. Nothing lasts for ever. It started after world war-2 (when US used it's nuclear power). Not sure how this woudl end. It can become very messy if the world economies continue to look only at their own interests.

wiseman

ks,

Though he may be nuts, his name (as I call it) is Nats (short for Natraj).

Inadvertant mistake?

cheers