Cash is king in recession - Page 3 - Indian Real Estate Forum

vibes28 · 03-06-12

Guys. Great bit. My 2 cents to it.

As things stand rite now, all the pointers are towards a slow down...not sure if it would be a full blown recession. It would be difficult to predict by anyone.. so we should take it with a pinch of salt.

On real estate front, i think the key driver on prices are two factors:
a. Illiquidity of the asset class: When you want to buy it, there are no sellers and vice versa..........when you want to sell there are no buyers. And typically this mismatch is what always creates a scenario of one paying over or under value.

b. Holding capacity of the builders/ investors: So while we all know that prices are completely unrealistic but the ability of builders to hold on that price level ensures that there is no correction.

In my opinion, even with a recession.......the prices will not go down significantly.....purely because of the high holding capacity... I live in Mumbai....prices here are unbeleivable.........people talk of buying a 1 cr house as if they are just going to go and eat "paan"... but its the sheer holding power which doesnt reduce the prices.

But , the fact that prices are unrealistic is reflected in transactions dwindling down..........because at the end of the day the paying capacity has to match. So a classical case of unrealistic prices but high holding power.

Now with recession, the paying capacity will not go up as expected and transactions will go down further but the prices will depend on holding power which atleast Mumbai Builders have enough.

My advise would be, if you need to buy for yourself and can afford... buy. dont count much on recession. However, if you are investor, you need to assess your horizon and the exit plan. Surely you would find it difficult to sell if the recession is serious.. At these prices , most of us can only think of one investment in life time... so be thought ful..

good luck

man4ish · 06-06-12

Soon there will be good time to buy in resale. Save your money for premium.

RamanT · 06-06-12

but the risk is if recession doesn't come...then you could be loosing 10% premium in next 6months... with RBI planning to cut rates, one can't be so sure... and even if a soft recession comes prices won't fall more than 10%... so the question is does it really make sense to hold your money and sit on the sidelines

man4ish · 06-06-12

RBI will cut rate 1% (max) on loan which will not affect market much. A person who invest 50 lakh on loan for him paying extra EMI of 2000 Rs per month is nothing. If he want he can buy now also. I think this is just ................

Quote:

Originally Posted by RamanT

but the risk is if recession doesn't come...then you could be loosing 10% premium in next 6months... with RBI planning to cut rates, one can't be so sure... and even if a soft recession comes prices won't fall more than 10%... so the question is does it really make sense to hold your money and sit on the sidelines

bjstfriend · 06-06-12

Hi Friends,

well i am a nw member, but found this thread practical on the grounds of present situations.
Presently all the exixting projects as well as upcoming ones, they are on the peak, compare it with last two years pricing........its no where related to reality.
There is a need of correction and we buyers and investers can do so.
Please please hold your monies as this is not the right time to jump in a tide.......... rest assured there are good buy's awaiting in coming 6 months time.

All the best and you all are welcome to share your inputs as well as counter my views

naganyal · 06-06-12

http://www.tradingeconomics.com/india/gdp-growth

An Economy is considered in recession means if it is slowing down for two consecutive quarters.
Here in India's case we are contracting since start of 2010 from GDP Growth rate of 9.4% to 5.3% which is 9 quarters of consecutive down trend , and in this period we poor people were falsely made to believe that we are in Growth phase. Actually we did not feel that much pinch as we were still having the Positive growth rate and we were not going negative and we fools with whole country with the help of paid media and politicians propeganda who are heavily invested in RE ,beleived that we are out of recession .... But now overseas investors have realized that the growth story of india is a false hope , the have down graded india and india is on the verge of default, now these greedy industralists and overseas investors are crying the same rona about policy Grid lock, Lack of commitments by Govt etc. who were praising Govt. when govt was softening rates.

So Guys we are already in recession since last 9 quarters and now going to the depression. So you all be prepared for it, preserve your capital(cash) , Liquidify your Property investments (they will become scrap when our priorities will change to accumulate food for our family ) , Invest in physical Gold which will come in use for buying essentials....

man4ish · 06-06-12

Go for FD which is safe with min 9% return and liquidify any time.

Quote:

Originally Posted by naganyal

http://www.tradingeconomics.com/india/gdp-growth

An Economy is considered in recession means if it is slowing down for two consecutive quarters.
Here in India's case we are contracting since start of 2010 from GDP Growth rate of 9.4% to 5.3% which is 9 quarters of consecutive down trend , and in this period we poor people were falsely made to believe that we are in Growth phase. Actually we did not feel that much pinch as we were still having the Positive growth rate and we were not going negative and we fools with whole country with the help of paid media and politicians propeganda who are heavily invested in RE ,beleived that we are out of recession .... But now overseas investors have realized that the growth story of india is a false hope , the have down graded india and india is on the verge of default, now these greedy industralists and overseas investors are crying the same rona about policy Grid lock, Lack of commitments by Govt etc. who were praising Govt. when govt was softening rates.

So Guys we are already in recession since last 9 quarters and now going to the depression. So you all be prepared for it, preserve your capital(cash) , Liquidify your Property investments (they will become scrap when our priorities will change to accumulate food for our family ) , Invest in physical Gold which will come in use for buying essentials....

Mr bullish · 06-06-12

Exactly, when U find more investors than end-users in most Reality forums, on ground, one can see the Occupancy levels which too look absysmal im most farway projects, one can sense the doom which is fast approaching but is acted in angry denial at least by those already invested.
If property prices can crash in US in 2008 and are yet to reach 50% of peak prices 4 years thence, if Chinese are grappling with falling property prices for last 2 years ever since govt. imposed regulations there, there is no reason to believe India won't suffer.
With prices sky-high in prime areas and vast supply in far-away areas and an economy going downhill by the day, one wonders does it make any sense at all to dabble in this ...........

Ultimate · 06-06-12

I agree, this forum is mostly full of investors and not that many end users. No wonder so many people are bullish on this forum.

Venkytalks · 06-06-12

Bullish? I thought everyone was bearish. Even the thread says cash is king!

03-06-12	#21
vibes28 Member Join Date: Jun 2012 Posts: 79 Likes Received: 72 Likes Given: 0	Guys. Great bit. My 2 cents to it. As things stand rite now, all the pointers are towards a slow down...not sure if it would be a full blown recession. It would be difficult to predict by anyone.. so we should take it with a pinch of salt. On real estate front, i think the key driver on prices are two factors: a. Illiquidity of the asset class: When you want to buy it, there are no sellers and vice versa..........when you want to sell there are no buyers. And typically this mismatch is what always creates a scenario of one paying over or under value. b. Holding capacity of the builders/ investors: So while we all know that prices are completely unrealistic but the ability of builders to hold on that price level ensures that there is no correction. In my opinion, even with a recession.......the prices will not go down significantly.....purely because of the high holding capacity... I live in Mumbai....prices here are unbeleivable.........people talk of buying a 1 cr house as if they are just going to go and eat "paan"... but its the sheer holding power which doesnt reduce the prices. But , the fact that prices are unrealistic is reflected in transactions dwindling down..........because at the end of the day the paying capacity has to match. So a classical case of unrealistic prices but high holding power. Now with recession, the paying capacity will not go up as expected and transactions will go down further but the prices will depend on holding power which atleast Mumbai Builders have enough. My advise would be, if you need to buy for yourself and can afford... buy. dont count much on recession. However, if you are investor, you need to assess your horizon and the exit plan. Surely you would find it difficult to sell if the recession is serious.. At these prices , most of us can only think of one investment in life time... so be thought ful.. good luck VedKapoor likes this.

06-06-12	#23
RamanT Senior Member Join Date: May 2012 Posts: 795 Likes Received: 113 Likes Given: 59 My Mood:	but the risk is if recession doesn't come...then you could be loosing 10% premium in next 6months... with RBI planning to cut rates, one can't be so sure... and even if a soft recession comes prices won't fall more than 10%... so the question is does it really make sense to hold your money and sit on the sidelines VedKapoor and ROMILBAR like this.

06-06-12	#30
Venkytalks Veteran Member Join Date: Sep 2009 Location: New Delhi Posts: 3,859 Likes Received: 877 Likes Given: 178	Bullish? I thought everyone was bearish. Even the thread says cash is king! __________________ Venky (Please read FORUM RULES watch a VIDEO or SEARCH FAQs before posting)

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06-06-12	#22
man4ish Member Join Date: Apr 2011 Posts: 252 Likes Received: 5 Likes Given: 24 My Mood:	Soon there will be good time to buy in resale. Save your money for premium.

06-06-12	#25
bjstfriend New Member Join Date: Jun 2012 Posts: 33 Likes Received: 3 Likes Given: 5	Hi Friends, well i am a nw member, but found this thread practical on the grounds of present situations. Presently all the exixting projects as well as upcoming ones, they are on the peak, compare it with last two years pricing........its no where related to reality. There is a need of correction and we buyers and investers can do so. Please please hold your monies as this is not the right time to jump in a tide.......... rest assured there are good buy's awaiting in coming 6 months time. All the best and you all are welcome to share your inputs as well as counter my views

06-06-12	#26
naganyal Member Join Date: Mar 2010 Posts: 90 Likes Received: 22 Likes Given: 42	http://www.tradingeconomics.com/india/gdp-growth An Economy is considered in recession means if it is slowing down for two consecutive quarters. Here in India's case we are contracting since start of 2010 from GDP Growth rate of 9.4% to 5.3% which is 9 quarters of consecutive down trend , and in this period we poor people were falsely made to believe that we are in Growth phase. Actually we did not feel that much pinch as we were still having the Positive growth rate and we were not going negative and we fools with whole country with the help of paid media and politicians propeganda who are heavily invested in RE ,beleived that we are out of recession .... But now overseas investors have realized that the growth story of india is a false hope , the have down graded india and india is on the verge of default, now these greedy industralists and overseas investors are crying the same rona about policy Grid lock, Lack of commitments by Govt etc. who were praising Govt. when govt was softening rates. So Guys we are already in recession since last 9 quarters and now going to the depression. So you all be prepared for it, preserve your capital(cash) , Liquidify your Property investments (they will become scrap when our priorities will change to accumulate food for our family ) , Invest in physical Gold which will come in use for buying essentials....

06-06-12	#28
Mr bullish Member Join Date: May 2012 Location: Delhi Posts: 360 Likes Received: 245 Likes Given: 59	Exactly, when U find more investors than end-users in most Reality forums, on ground, one can see the Occupancy levels which too look absysmal im most farway projects, one can sense the doom which is fast approaching but is acted in angry denial at least by those already invested. If property prices can crash in US in 2008 and are yet to reach 50% of peak prices 4 years thence, if Chinese are grappling with falling property prices for last 2 years ever since govt. imposed regulations there, there is no reason to believe India won't suffer. With prices sky-high in prime areas and vast supply in far-away areas and an economy going downhill by the day, one wonders does it make any sense at all to dabble in this ...........

06-06-12	#29
Ultimate Member Join Date: Jul 2011 Posts: 99 Likes Received: 21 Likes Given: 1	I agree, this forum is mostly full of investors and not that many end users. No wonder so many people are bullish on this forum.