Dear friends
I used to see Free Ads paper to know the price quotings in RE section.
In june 2008 one person has quoted price for 2200 sq.ft land with 1800 sq.ft building with all amenities Rs.85 lacs. This house is not sold for the last 7 months.In january 2009 1st week he quoted Rs.82 lacs. This week he has quoted Rs.80 lacs.
Moreover, i can see many advertisement repeating for the last 7 months. From this we can know that property sales has come to standstill. And there is considerable price correction. Even though sellers are reducing the price slowly there are not any takers.
Thanks
chataara
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  • in mumbai the fall is 35 to 50%
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  • Go back to images of the 1930s!

    Originally Posted by chataara
    Dear wiseman and others

    Can you tell me what will happen if inflation turns into deflation.

    In what way it will impact RE sector?

    Thanks

    chataara



    Folks,

    All of you have Net connections. Just google "Great Depression" and check out all the personal accounts and pictures of what deflation brings.

    For a while people will enjoy what seems like lower prices. But gradually, production will decline sharply putting millions of people out of work. From fancy houses to cars to dining out and pubbing (and spending/wasting tons of hard-earned money on it), people will focus on daily necessities - cooking at home since eating out is too costly, stitching clothes as readymades are 3 times as expensive, taking the bus, and so on).

    So we will face stagflation. Real incomes will decline substantially. Production will fall steeply. There will be shortages of essential things - already some important medicines have disappeared because the few companies making them find them unviable in the small quantities demanded by the market - imagine losing your life only because the only company making this life-saving drug stopped or went out of business.

    While prices may fall, the income fall will make many of us feel very poor indeed. Added to this is the huge fall in real assets like RE. All of these will have a lasting impact on the psyche of the nation as a whole. Many of you guys have not been around in the 60s and 70s to know the real meaning of what "living on a tight budget" means.

    The 1930s had such a huge impact on American minds that it took 70 years for this memory to fade (most people eho saw that era has passed on) and as memory faded the same mistakes were made to bring the world back to the 1930s situation.

    Hope you question was answered.

    cheers
    CommentQuote
  • Originally Posted by chataara
    Dear wiseman and others

    Can you tell me what will happen if inflation turns into deflation.

    In what way it will impact RE sector?

    Thanks

    chataara


    On collapse of the Tokyo stock market during the early 90's - which also saw the pricking of their property bubble -
    Japan entered a 16 year period of deflation.Even during the world economic boom period of 2004-08 RE prices did not revert to early 90's level.

    I am not saying same will happen in India but downtrend is sure to continue for some more years.
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  • Dear friend,

    I don't think that we will enter into deflation. The inflation may be very low and may be a little above zero.

    ks2071746
    CommentQuote
  • the biggest change is 'speed'(information)

    Originally Posted by wiseman
    Folks,

    All of you have Net connections. Just google "Great Depression" and check out all the personal accounts and pictures of what deflation brings.

    For a while people will enjoy what seems like lower prices. But gradually, production will decline sharply putting millions of people out of work. From fancy houses to cars to dining out and pubbing (and spending/wasting tons of hard-earned money on it), people will focus on daily necessities - cooking at home since eating out is too costly, stitching clothes as readymades are 3 times as expensive, taking the bus, and so on).

    So we will face stagflation. Real incomes will decline substantially. Production will fall steeply. There will be shortages of essential things - already some important medicines have disappeared because the few companies making them find them unviable in the small quantities demanded by the market - imagine losing your life only because the only company making this life-saving drug stopped or went out of business.

    While prices may fall, the income fall will make many of us feel very poor indeed. Added to this is the huge fall in real assets like RE. All of these will have a lasting impact on the psyche of the nation as a whole. Many of you guys have not been around in the 60s and 70s to know the real meaning of what "living on a tight budget" means.

    The 1930s had such a huge impact on American minds that it took 70 years for this memory to fade (most people eho saw that era has passed on) and as memory faded the same mistakes were made to bring the world back to the 1930s situation.

    Hope you question was answered.

    cheers


    wiseman things have changed would be an understatement
    the world has grown smaller and the power of information is so fantastic that every company knows the offtake immediately and is so fast in cutting its costs to reduce inventories.this is the advantage of sub contracting or outsourcing.i know i dont have to go in detail.
    then a company would may be take a few months to even know that sales are falling to low levels.
    globalisation was not in the dictionary then.
    everything from the sanitary napkin to super computers have changed,the way we live has changed.
    i do not think we would go anywhere near the 'great depression"
    If we do God help us all
    CommentQuote
  • Dear friends,

    Let us not go to depressed mode personally while debating on the deflation or collapse or depression of economy etc.

    ks2071746
    CommentQuote
  • Originally Posted by abk
    wiseman things have changed would be an understatement
    the world has grown smaller and the power of information is so fantastic that every company knows the offtake immediately and is so fast in cutting its costs to reduce inventories.this is the advantage of sub contracting or outsourcing.i know i dont have to go in detail.
    then a company would may be take a few months to even know that sales are falling to low levels.
    globalisation was not in the dictionary then.
    everything from the sanitary napkin to super computers have changed,the way we live has changed.
    i do not think we would go anywhere near the 'great depression"
    If we do God help us all



    All things have changed but greediness of people had not changed a bit.Thats what causes great boom and bust.
    CommentQuote
  • Originally Posted by ks2071746
    Dear friend,

    I don't think that we will enter into deflation. The inflation may be very low and may be a little above zero.

    ks2071746

    The chances of a depression are, he says, “quite high” – even if that is averted, the recession will last a long time. “Look, we are not going back to where we came from. In that sense it’s going to last for ever.”

    -from George Soros,Legendery Investor.
    CommentQuote
  • The more things seem to change the more they revert to being the same!

    Originally Posted by abk
    wiseman things have changed would be an understatement
    the world has grown smaller and the power of information is so fantastic that every company knows the offtake immediately and is so fast in cutting its costs to reduce inventories.this is the advantage of sub contracting or outsourcing.i know i dont have to go in detail.
    then a company would may be take a few months to even know that sales are falling to low levels.
    globalisation was not in the dictionary then.
    everything from the sanitary napkin to super computers have changed,the way we live has changed.
    i do not think we would go anywhere near the 'great depression"
    If we do God help us all


    Dear abk,

    If what you say is true, then we should never have had the blow-off boom, the Global slump and so on.

    Things in the US are following exactly the pattern set by Japan from 1990 onwards. So, the US - which adviced Japan what not to do then, seems to be ignoring its own advice and doing exactly the same.

    Somehow, the world - while it appears to have changed, speeded up and is more informed - does not seem to have learnt lessons from the past and is repeating mistakes/blunders from the past. At least in this regard, nothing seems to have changed.

    There is still an increasing possibility that we may see the first Global Depression in modern times!

    cheers
    CommentQuote
  • Depression

    Hi Guy's
    A question what will happen if the US dollor tanks due to over printing of the currency and the rest of the world holding (especially China) US T bills/ currency and the effect this will have on the Indian currency and trade and RE ?
    Will there be a depression due to this effect?

    Can
    CommentQuote
  • Dear friend,

    I do not think so.

    ks2071746
    CommentQuote
  • Interesting situation in the US ...

    Originally Posted by can
    Hi Guy's
    A question what will happen if the US dollor tanks due to over printing of the currency and the rest of the world holding (especially China) US T bills/ currency and the effect this will have on the Indian currency and trade and RE ?
    Will there be a depression due to this effect?

    Can



    Hi Can,

    Remember the Obama election slogan? "Yes, we can!"

    Well, an increasing number of analysts are now starting to say, "Yes, We Can't!!!" :D

    In other words, all this printing of money will do is one of the 2 below:

    1. If this money gets stuck in Banks to re-capitalise them (as its happening now), severe deflation will set in followed by depression (in fact the imminent emergency in the US is the possible failure of Agricultural crops coming season since Banks are not lending and the whole cycle is jeopardised!).

    2. If it gets out into the economy, severe inflation will set in literally sending the $$$ to the bottom.

    Already, global apetite for Treasury Bonds is showing alarming weakness as seen last week when sales nearly failed.

    Finally it might become a circular event with one arm of the Govt buying Treasury from another arm which issues them. This is called "Circular Jerking"! :D

    The prognosis is that in all probability the US is toast. And since it used to consume 25% of the World's output, the Asian Export growth model is also toast. Get used to a longish period of fairly depressed period in former Asian Tigers, Lions and other predatory countries! ;)

    The other informed people may correct this argument with improved logic! I would much appreciate it.

    cheers
    CommentQuote
  • US Dollar not even worth Re1

    US the biggest debtor of the world is going to print dollars in trillions to cover deficit. The actual value of dollar will not be even re1
    CommentQuote
  • Originally Posted by can
    Hi Guy's
    A question what will happen if the US dollor tanks due to over printing of the currency and the rest of the world holding (especially China) US T bills/ currency and the effect this will have on the Indian currency and trade and RE ?
    Will there be a depression due to this effect?

    Can

    Already China does not want to hold US treasuries and started purchasing commodities like oil,copper etc.It has also started canvasing for alternate currency to replace US dollar.

    Coming to effect of weak dollar on Indian RE,once dollar becomes weak FDI and FII inflows will be much higher which will lead to hyper inflation(Remember 12% inflation few months back) which in turn will lead to hardening of interest rate.
    So even if RE price holds good due to weak dollar buyers will be killed by the high interest rate.
    CommentQuote
  • Originally Posted by wiseman
    Hi Can,

    Remember the Obama election slogan? "Yes, we can!"

    Well, an increasing number of analysts are now starting to say, "Yes, We Can't!!!" :D

    In other words, all this printing of money will do is one of the 2 below:

    1. If this money gets stuck in Banks to re-capitalise them (as its happening now), severe deflation will set in followed by depression (in fact the imminent emergency in the US is the possible failure of Agricultural crops coming season since Banks are not lending and the whole cycle is jeopardised!).

    2. If it gets out into the economy, severe inflation will set in literally sending the $$$ to the bottom.

    Already, global apetite for Treasury Bonds is showing alarming weakness as seen last week when sales nearly failed.

    Finally it might become a circular event with one arm of the Govt buying Treasury from another arm which issues them. This is called "Circular Jerking"! :D

    The prognosis is that in all probability the US is toast. And since it used to consume 25% of the World's output, the Asian Export growth model is also toast. Get used to a longish period of fairly depressed period in former Asian Tigers, Lions and other predatory countries! ;)

    The other informed people may correct this argument with improved logic! I would much appreciate it.

    cheers



    I agree to what you say, but I feel as long as U.S. dollar is the reserve currency, this may not happen. Would appreciate your comments.
    CommentQuote