Will Drought Hit The RE Sector ? - Indian Real Estate Forum

arin_12 · 24-08-09

As you know that 250+ district in India had been hit by the drought. How many of this forum think that this will change the current RE market.

arin_12 · 26-08-09

Surprise to see that no one has any view on this. May be positive or a negative view. Or people are not able to digest the bitter truth.

mani_vaidya · 26-08-09

It will surely have a impact. Drought leads to scarcity of food materials, which leads speculation, which leads to inflation, which leads to increase in cost of living. The household budget calculation will go wrong down the line in the next 3-4 months. Already good quality rice costs Rs 40 per Kg in Chennai. Savings will be reduced. As you know, it is all a chain reaction. I expect the interest rates to be hiked by 50 basis points in Oct RBI review due to inflanationary pressure, which is already hinted in the last review by the RBI.

Drought will play spoilsport in RE.

Cheers
Vaidy

panther · 26-08-09

Theoretically it should (as Vaidy just explained). In reality though, it will not. The broker-builder nexus managed to hold the prices (I really don't buy the 10-30% drop BS) even through one of the most publicized and deepest global recession. I really don't see how they would let a puny drought hit the RE market.

Plus, the end consumers are mostly the people who are not directly connected to the agricultural industry. For them drought might mean higher prices on food for a while, but doesn't directly translate to a drop in income. Hence, I don't think drought will have any noticeable impact.

24-08-09	#1
arin_12 Member Join Date: Dec 2007 Posts: 225 Thanks: 0 Thanked 0 Times in 0 Posts	Will Drought Hit The RE Sector ? As you know that 250+ district in India had been hit by the drought. How many of this forum think that this will change the current RE market. __________________ Either land or AIR and FOOD. Choice is yours.

26-08-09	#3
mani_vaidya New Member Join Date: Jul 2009 Posts: 13 Thanks: 0 Thanked 0 Times in 0 Posts	Impact will be seen in 3 - 4 months time.. It will surely have a impact. Drought leads to scarcity of food materials, which leads speculation, which leads to inflation, which leads to increase in cost of living. The household budget calculation will go wrong down the line in the next 3-4 months. Already good quality rice costs Rs 40 per Kg in Chennai. Savings will be reduced. As you know, it is all a chain reaction. I expect the interest rates to be hiked by 50 basis points in Oct RBI review due to inflanationary pressure, which is already hinted in the last review by the RBI. Drought will play spoilsport in RE. Cheers Vaidy

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26-08-09	#4
panther New Member Join Date: Dec 2008 Posts: 36 Thanks: 0 Thanked 0 Times in 0 Posts	Theoretically it should (as Vaidy just explained). In reality though, it will not. The broker-builder nexus managed to hold the prices (I really don't buy the 10-30% drop BS) even through one of the most publicized and deepest global recession. I really don't see how they would let a puny drought hit the RE market. Plus, the end consumers are mostly the people who are not directly connected to the agricultural industry. For them drought might mean higher prices on food for a while, but doesn't directly translate to a drop in income. Hence, I don't think drought will have any noticeable impact.