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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Pune > Builders & Real Estate Bulls Theory Proved Wrong
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Old June 30 2009, 02:45 PM   #21
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Originally Posted by amit_arya View Post
I agree to you fully with that but i would like to add

" dont try to time the market"

e.g. 20 years down the line properties in NCR were available at a price of 10-20L are currently at 2-3Crs. so if you are looking for a home for self or for long term perspective a home bought today at 3K or 3.5K per sq ft will not matter 20years down the line when it would be probably 40K 45K per sq ft. ... well this will hold true for every big city in india atleast for next 30-40years
Dear Amit,
Thank you for describing the mother of all assumptions that caused the subprime crisis.

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Old June 30 2009, 02:55 PM   #22
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Dear Amit,
Thank you for describing the mother of all assumptions that caused the subprime crisis.
Yeah thats so true.. the assumption that real estate is a pot of gold in which your investment doubles every five years leads to tremendous greed.

If you have bought a flat for consumption then its increased sale value to you is notional.

If you buy a 3BHK today for 40 L and sell it 20 years later for 2 crores where will you live anyway?

The 1 BHK you want to buy will cost you 1 crore plus stamp duty, registration, and parking.. so where is the profit..

Many better places to invest your money than real estate if its only for investment purposes.
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Old June 30 2009, 03:01 PM   #23
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Also, the great indian growth story is going to slow down a little now.. recession has shown everyone their true value.. 3 years ago you would kill to be an investment banker.. now you will kill yourself if you are an investment banker.. i have friends from many big MBA collages waiting for huge salary packages from morgan stanley and Bank of america.. most of them now work at the current market salary in good Indian companies ...

Real estate cannot escape this trend.. i dont think we will see a 30% correction again coz its happened in many places.. but I dont expect to see Kharadi or PS selling at inflated sqft prices in the next five years at least..
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Old June 30 2009, 03:23 PM   #24
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Also, the great indian growth story is going to slow down a little now.. recession has shown everyone their true value.. 3 years ago you would kill to be an investment banker.. now you will kill yourself if you are an investment banker.. i have friends from many big MBA collages waiting for huge salary packages from morgan stanley and Bank of america.. most of them now work at the current market salary in good Indian companies ...
Akssenti,

Making millions out of operating a pocket calculator (okay, scientific calculator in some extremely rare cases) is a temptation that few sheeple (sheep + people i.e. Indian middle class) can ignore.

Quote:
Real estate cannot escape this trend.. i don't think we will see a 30% correction again coz its happened in many places.. but I don't expect to see Kharadi or PS selling at inflated sqft prices in the next five years at least..
The whole Indian middle class trend is about profiting from artificial scarcity and snobbery as opposed to actually creating something of value. I don't see any decline in that trend. The builders know this. That's why they are pressurizing lending institutions.
Luckily for us, subprime crisis occurred in the US first, so our banks are not willing to continue with the same reckless lending practices.
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Old June 30 2009, 03:27 PM   #25
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Question Is RE Bear Theory correct now ??

Premium RE stocks like
DLF, Unitech, Omaxe, HDIL
& Infra Stocks like IVRCL, GMR, GVK
are under tremendous pressure from last few days...
Today, it all came down...
Is it realistic to equate this fall to RE prices ?
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Old June 30 2009, 06:08 PM   #26
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[/QUOTE]Luckily for us, subprime crisis occurred in the US first, so our banks are not willing to continue with the same reckless lending practices.[/QUOTE]

It was hardly lucky for us that the sub prime crisis occurred there. We blindly copy the west anyway in most cases. Be it credit cards, fashion or whatever.

They were sitting on the sub prime time bomb for ever now. It just happened to explode in 2009. Was convenient that when the 10 years of foolish bush administration was ending he ended it with a bang of recession. His policies now haunt his successor and the rest of the world.
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Old June 30 2009, 07:45 PM   #27
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Quote:
Originally Posted by shekhar7 View Post
Premium RE stocks like
DLF, Unitech, Omaxe, HDIL
& Infra Stocks like IVRCL, GMR, GVK
are under tremendous pressure from last few days...
Today, it all came down...
Is it realistic to equate this fall to RE prices ?
Saw an interview of Rakesh Jhunjhunwala, a biggie on BSE on CNBC TV-18 show:- Bull or Bear.

He said the following about RE.

1.) Fundamental are weak.
2.) No positive outlook seen in medium term.
3.) Balance sheets don't tell exact picture. (Which means they are manipulated).
4.) Need to clear inventory (flats) at lower rates which the market demands. Simply selling land at reduced rates (down by 60%) won't help.
5.) People don't spend in such economic scenario taking into consideration that loans are for 15-20 years for many.
6.) He himself (Rakesh J) doesn't have a single share of RE company!!
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Old June 30 2009, 07:50 PM   #28
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you guys must visit Chennai forum. We have already discussed these topics for more than a year now......

Just a food for thought: RE is not just about some fraud developers who earn high profit margins and fool customers by promising hawa mahals.

Even if DLFs, Unitechs, Jaypees and many more become bankrupt and disappear.....India real estate story would still be intact, as land in Pune (due to nearness to Mumbai & job creation potential) is still a good investment if not sub standard flats.
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Old June 30 2009, 08:56 PM   #29
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Quote:
Originally Posted by contra View Post
you guys must visit Chennai forum. We have already discussed these topics for more than a year now......

Just a food for thought: RE is not just about some fraud developers who earn high profit margins and fool customers by promising hawa mahals.

Even if DLFs, Unitechs, Jaypees and many more become bankrupt and disappear.....India real estate story would still be intact, as land in Pune (due to nearness to Mumbai & job creation potential) is still a good investment if not sub standard flats.
Are you purchasing here? Let us know.

By your own logic, the prices should be atleast INR 2000/sq ft at Karunkuzhipallam village in Kanchipuram district due to its proximity to Chennai.
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Old June 30 2009, 09:51 PM   #30
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Contra - proximity to Mumbai is another hype. While Mumbai itself got corrected in RE prices by 30-40%, Pune builders still hold tight to their mahals.

How do you think job opportunities are increasing in Pune? Do you think the IT industry is going to hire like it happend a few years back? And for other people around who are in service, affording a home with current rates is far away from their dreams.
Pune is the worst city for a average earner. I am still able to find a decent meal for Rs25 in Bangalore or Mumbai. You show me such a place in Pune. This is just an example, there are hundred things like this.

wait for one more month, Pune builders will raise the rates saying water has become costly and not available for construction.
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