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RE business in Chennai collapsing

Last updated: August 17 2009
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  • Re : RE business in Chennai collapsing

    Originally posted by Nataraajg007 View Post
    Source: Economic Times

    Satyam defers joining date of freshers
    23 Mar 2009, 2037 hrs IST, PTI

    NEW DELHI: Satyam Computer has deferred the joining dates of freshers, citing the global economic slowdown and the turn of events in the once

    iconic firm, while stopping short of asking them to look for jobs elsewhere.

    "Accordingly, it has been decided to defer the joining dates for the campus hires, until further intimation. We expect and recognise that this will cause a disruption in your plans and do sincerely regret the inconvenience caused.

    "We would like you to know that this decision was made after careful deliberations and only after all other practical options were exhausted. While unfortunate, it has also been unavoidable. Added to this, was an unprecedented set of events in the organisation, over the past few weeks, which has been most unfortunate", said company HR head of S V Krishnan in an email to all the freshers.

    The company is in the process of restating its accounts, which is crucial to determining the future of its over 50,000 employees.

    "This scenario combined with the continuing volatility in the business environment, necessitates that we optimise... and critically re-examine additional requirements (for new-hires) on an ongoing, quarterly basis", he said.

    "The IT services industry in India and around the world has been observing the impact of the unfolding global economic crisis. The rate of growth, is half of what it used to be at around 40 per cent Y-o-Y," he sai

    =======================================

    Two years ago such freshers used to take shared rental flats in IT areas which lead to increase in demand of flats. Now this market is gone

    No wonder RE is falling

    when satyam fiasco came you were shouting 55000 jobs lost and the consequential job losses and RE will fall .
    against that this is a huge relief and growth that 55000 people did not lose jobs can be thougth as 55000 jobs created if satyam had failed.
    and now you are jumping on 'no new recruitment'.
    This has proved you absolutely wrong where are the 55000 jobs lost in satyam.many here were doing the same.
    ATLEAST ONE THING YOU AND CO. PREDICTED HAS NOT HAPPENED YET
    SATYAM HAS NOT FIRED 55000 PEOPLE AND THE 3 DEPENDENT JOBS I.E 150000 JOBS ARE STILL NOT LOST.

    I AM NOT SAYING RE WILL GROW OR THERE WILL BE NO CORRECTION BUT CRASH IN CHENNAI WILL NOT HAPPEN(CLEVER YOU GUYS HAVE TAKEN A 15 MONTHS (LAG) BUFFER) SORRY CAPS KEY LOCKED

    Comment


    • Re : RE business in Chennai collapsing

      Sorry abk, its not us who are clever

      Originally posted by abk View Post
      when satyam fiasco came you were shouting 55000 jobs lost and the consequential job losses and RE will fall .

      I AM NOT SAYING RE WILL GROW OR THERE WILL BE NO CORRECTION BUT CRASH IN CHENNAI WILL NOT HAPPEN(CLEVER YOU GUYS HAVE TAKEN A 15 MONTHS (LAG) BUFFER) SORRY CAPS KEY LOCKED

      Even Nats and I are in agreement about the lag! So, it is just an empirical observation (with sound logic) that RE lags between Stocks. Its not that we are extra-clever (thanks for the compliment ).

      This 55000 jobs is not very relevant. The real losses will be in the millions. And the IT sector will see from 300000 to 500000 jobs before this is finished - calculations were provided for this.

      It is this and a prolonged recovery which will beat down prices. You must have patience as this will take a few years!

      cheers

      Comment


      • Re : RE business in Chennai collapsing

        Originally posted by abk View Post
        when satyam fiasco came you were shouting 55000 jobs lost and the consequential job losses and RE will fall .
        against that this is a huge relief and growth that 55000 people did not lose jobs can be thougth as 55000 jobs created if satyam had failed.
        and now you are jumping on 'no new recruitment'.
        This has proved you absolutely wrong where are the 55000 jobs lost in satyam.many here were doing the same.
        ATLEAST ONE THING YOU AND CO. PREDICTED HAS NOT HAPPENED YET
        SATYAM HAS NOT FIRED 55000 PEOPLE AND THE 3 DEPENDENT JOBS I.E 150000 JOBS ARE STILL NOT LOST.

        I AM NOT SAYING RE WILL GROW OR THERE WILL BE NO CORRECTION BUT CRASH IN CHENNAI WILL NOT HAPPEN(CLEVER YOU GUYS HAVE TAKEN A 15 MONTHS (LAG) BUFFER) SORRY CAPS KEY LOCKED
        Abk,
        Can you tell me few reasons why chennai RE will not fall.When entire world enjoyed easy credit flow till 2008 Chennai RE went up more than 300% and now when massive credit deleveraging is happening across the world with assets collapsing across world and India Chennai will escape?.Is chennai located in Mars!

        Comment


        • Re : RE business in Chennai collapsing

          Further beating to RE by Infosys

          Source: Economic Times

          Infy defers hiring plans for engg grads by 6 mths
          25 Mar 2009, 0430 hrs IST, Chiranjoy Sen, ET Bureau

          BANGALORE: India’s second-biggest exporter, Infosys Technologies, has postponed its hiring plans for engineering graduates this year by

          almost six months, as the company seeks to cope with a lower demand for services in its top markets of US and Europe.

          Next fiscal, Infosys will be interviewing potential employees by visiting top engineering colleges during eighth semester, and not sixth semester as before.

          “Earlier, we used to give offers an year in advance, even one-and-half years in advance. We have changed that,” says Infosys board member and director, HR, TV Mohandas Pai, told ET .

          Infosys have a target of hiring 25,000 employees this fiscal and based on this; it will be hiring another 9,000 employees till March, 2009. For the December quarter, Infosys and its subsidiaries added 5,597 employees on a gross basis, much lower than the previous quarter’s 10,117. Net employee addition stood at 2,772 for the quarter.

          One of the reasons for scrapping advance hiring is that the company is moving towards a leaner bench. According to Mr Pai, Infosys’ current bench strength is at 20% of total employees, which is likely to come down to 10% and eventually stabilise between 10 and 15% in the coming fiscal. “Attrition is down because growth has come down and hence the need for bench is less. We are in the middle of an adjustment towards a leaner bench,” he pointed out.

          The IT major has also tightened performance management norms and has placed around 5% of its global workforce (roughly 5,000 out of a total staff strength of 100,000-plus ) under the scanner. Senior managers have been asked to give the lowest performance rating to the ‘underperforming’ 5% as a part of the company’s consolidated relative ranking. Though rock-bottom rankings have been handed out earlier, this is the first time that Infosys has made it mandatory.

          Pai said Infosys has been trying to make the organisational structure leaner and efficient resulting in some 100 positions being knocked off. “They are not being redeployed because these positions do not exist any longer. But it is a modest figure when compared to the overall numbers,” he said.

          Meanwhile, the company has reduced the variable part of the board members’ compensation by 30% in the second quarter of the current fiscal and by an additional 20% in the third quarter.

          Comment


          • Re : RE business in Chennai collapsing

            From Economic times:
            With investors shying away from real estate sector, Property Investment Advisors ASK expects there could be an up to 30 per cent price
            correction across most realty markets in the country.
            We believe that there is scope for another 25-30 per cent correction in prices in most (property) markets of the country," ASK Property Investment Advisors said in a report based on a review of the sector.
            Stating that demand was overwhelmingly gravitating towards "affordable housing", ASK said that end-users and investors were shying away from real estate resulting in a demand-supply mismatch with the creation of substantial inventory of premium/affordable properties.

            Demand would be increasingly price and product sensitive with completed properties commanding a 15-30 per cent premium over under construction properties due to a perceived increase in project execution task, it said.
            "The top seven cities continue to have considerable latent demand for housing and at the right price, buyers are rushing to the market," it said, adding demand in the seven top cities had been impacted more than tier-III and emerging cities.

            Comment


            • Re : RE business in Chennai collapsing

              I had also suggested this (i will retrieve the post it was against comparing japan with india)

              This last Tuesday the Wall Street Journal published an op-ed by my friend Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: give foreigners who will come to the US and buy a home resident status (green cards). This is a very important proposal and one that deserves national attention and action.

              Comment


              • Re : RE business in Chennai collapsing

                Originally posted by abk View Post
                I had also suggested this (i will retrieve the post it was against comparing japan with india)

                This last Tuesday the Wall Street Journal published an op-ed by my friend Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: give foreigners who will come to the US and buy a home resident status (green cards). This is a very important proposal and one that deserves national attention and action.
                check this out.
                if the epicentre of the crisis,the US the peak to trough is estimated <37 &#37; then my prediction of chennai proper to correct by 20 % (max) is not overtly optimistic or 'denial mode'. and this prediction is if nothing is done---no stimulus.

                ]http://www.marketoracle.co.uk/Article9582.html[/url]
                U.S. House Prices Could Drop Another 20%, Housing Market Crisis Solutions
                Housing-Market / US Housing
                Mar 22, 2009 - 06:58 AM

                By: John_Mauldin
                Housing Could Drop Another 20% in Pricing

                Let's review the situation as it will be if we do nothing. Shilling shows that we built 6.7 million more homes in this country between 1996-2005 than the normal trend would have projected, partially because we underbuilt the decade before that. New housing starts average about 1.5 million in normal times but have fallen to 500,000 recently, and could fall further as unemployment rises and demand declines. Even so, Shilling estimates that we still have about 2.4 million excess homes.

                Excess supply of anything means lower and continuously falling prices, and that has certainly been the case in housing. Here is what Shilling writes:

                "We believe that if nothing is done to eliminate surplus housing, prices will fall another 20% between now and the end of 2010 for a total peak-to-trough decline of 37% (Chart 1 below). The resulting further negative effects on the economy will be devastating. At that point, almost 25 million homeowners, or almost half the 51 million total with mortgages, will be underwater... That's also a third of the 75 million total homeowners, with the remaining 24 million owning their houses free and clear. It would take a little over $1 trillion to reduce their mortgages to the value of their houses, compared to $449 billion for the almost 14 million currently underwater."

                This is not inconsistent with similar projections by other acknowledged experts and independent analysts like John Burns and Professor Robert Shiller of Yale. If
                Last edited March 25 2009, 04:56 PM.

                Comment


                • Re : RE business in Chennai collapsing

                  Originally posted by abk View Post
                  check this out.
                  if the epicentre of the crisis,the US the peak to trough is estimated <37 % then my prediction of chennai proper to correct by 20 % (max) is not overtly optimistic or 'denial mode'. and this prediction is if nothing is done---no stimulus.

                  ]http://www.marketoracle.co.uk/Article9582.html[/url]
                  U.S. House Prices Could Drop Another 20%, Housing Market Crisis Solutions
                  Housing-Market / US Housing
                  Mar 22, 2009 - 06:58 AM

                  By: John_Mauldin
                  Housing Could Drop Another 20% in Pricing

                  Let's review the situation as it will be if we do nothing. Shilling shows that we built 6.7 million more homes in this country between 1996-2005 than the normal trend would have projected, partially because we underbuilt the decade before that. New housing starts average about 1.5 million in normal times but have fallen to 500,000 recently, and could fall further as unemployment rises and demand declines. Even so, Shilling estimates that we still have about 2.4 million excess homes.

                  Excess supply of anything means lower and continuously falling prices, and that has certainly been the case in housing. Here is what Shilling writes:

                  "We believe that if nothing is done to eliminate surplus housing, prices will fall another 20% between now and the end of 2010 for a total peak-to-trough decline of 37% (Chart 1 below). The resulting further negative effects on the economy will be devastating. At that point, almost 25 million homeowners, or almost half the 51 million total with mortgages, will be underwater... That's also a third of the 75 million total homeowners, with the remaining 24 million owning their houses free and clear. It would take a little over $1 trillion to reduce their mortgages to the value of their houses, compared to $449 billion for the almost 14 million currently underwater."

                  This is not inconsistent with similar projections by other acknowledged experts and independent analysts like John Burns and Professor Robert Shiller of Yale. If
                  Abk,
                  In US RE Price increased only by around 60% between 2002 and 2007 and the fall expected as per you is 37%.But in India RE price increased between 300% and 400% between 2002 and 2007.So the fall will also be much steeper may be around 70-80% from peak of 2007/2008.

                  Comment


                  • Re : RE business in Chennai collapsing

                    Not necessarily the reason why!

                    Originally posted by BigBear View Post
                    Abk,
                    In US RE Price increased only by around 60% between 2002 and 2007 and the fall expected as per you is 37%.But in India RE price increased between 300% and 400% between 2002 and 2007.So the fall will also be much steeper may be around 70-80% from peak of 2007/2008.

                    Correlation must not be confused with causation!

                    In simple terms it means that, "because US rose 60% and is now falling 37%, therefore, India which went up 300% MUST fall 70%.

                    The US market has a long-term annual increase in home prices of 1% (yes, 1%) over the last 100 years. The Indian market has one of around 12% to 15%. Therefore the dynamics (including other factors like stable population in US implying lower demand, etc, etc) means that the reasons and extent of rise as well as fall may be quite different.

                    But I agree with you that the 70% fall is coming in many areas of this country. Reasons may be different from the US.

                    cheers

                    Comment


                    • Re : RE business in Chennai collapsing

                      Dear friend,

                      Though I do not believe that the RE in India will have anything like 70% fall, it will really be good it it happens, to those who are not owning any house/flat and also those wanting to go for their second or third investments in RE to reap rich benefits in the coming years.

                      ks2071746

                      Comment

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