Ooops, dont curse me for appearing too fast. Just had a thought and so decided to share it, just the weekend free time banter. No more. I am not going to argue about it.

I have been noticing folks continue to beseige Indian RE using Global euphemisms, talking about Deflation when they themselves dont understand what it is and then Wise talking about return to 60s and 70s. Frankly to me my childhood days were wonderful. I wont mind the 70s. I dont need a cell. I need LIFE to LIVE. So if that is depression or deflation, I hope we go there!

Anyway forget about my reactive banter. Let me come to the original chatter. During 2003 to 2009 salaries have gone up so much. Now what happened to this money. Let me not bother about those 25 somethings of 2003 who saw 20K suddenly and decided to booze it to death. Some of these bought luxury homes thinking they have become rich (not realising what is real worth of their money and surprising Wise is talking about real worth suddenly, something he did not know for all these months I was on this board; maybe he is taking EC101 course somewhere...good for him!).

I want to talk about the host of folks who were aged around 35 to 40 in 2003.

Now most of the better ones among this age group were picking up around 5L to 10L in 2003. I am talking about SW managers and not the TOP ones like me (I was picking a multiple of this in 2003!) nor the government folks. I was picking a multiple of this in 2003! Now these guys have moved from that 7.5L (average of 5 and 10) to a value of about 20 to 25L (average 22.5L).
Now in 6 years let us assume they had a linear growth for simplicity. So their average salary was (22.5+7.5)/2=15L. With 15L, suppose they paid 4L tax, 1L other paycuts, 3L to live, they would have save 7L. Even the violent spenders among them would have saved 5L. Over 6 years they must have save about 5x6 to 7x6 i.e., 30L to 42L. Top it with interests which will make it about 35L to 50L.
Let us assume 2 sets of these folks. Ones that took a loan and bought a property say in the middle year, i.e. 2005-6. They would not have saved this amount but must have spent all this money paying EMIs foolishly to some god damn banker. They have a home which they claim is theirs, but actually belongs to the lending bank!

Take the second type who literally saved this money. They have 35L to 50L in hand. Now if property prices do fall wont these folks come in and buy at the fall? So there is a lot of money swishing in the system, just that greed made prices shoot up too fast and fear is making Wisemen and his bear cartel write here negatively. Both are part of human MISBEHAVIOUR!

So how much can anything fall. The minute the property in 2005-6 let us say bought by one such 40 year old went from say the 30L level then to 80L level in 2008, the one who onl saved cash was sobbing. Now if it falls to even 70L that guy with his 35 to 50L in hand will come cashing in on it! Wont he? Just needs to take a bit more as loan and now this loan will look small given his higher salary!

In other words lots of REAL MONEY has come into the Indian system unlike US where salaries did not go up the way it did in India. While Indian salaries went up almost 5 times in US salaries moved up their normal 5 to 10% CAGR. Now this fact is promptly missed by Wiseman and many of those US RE writers on this forum. They just dont have enough brains to understand it, I suspect!?

Another point that I noticed today was that someone mentioning that Bangalore flats have fallen in prices and that Bangaloreans learn fast.(The frog example shows the brains of the writer mimics the ambhibian!) That is a joke. I have said this a million times before but with deaf years and idiotic brains around I am having to repeat it. The FSI used in BLR is about 3 to 4. So flats in Bangalore in similar areas were relatively 2 to 3 times cheaper than in Chennai almost always. So in Malleswaram even at the peak Flats cost 7K psft. In Mylapore or TNagar they were at 15 to 20Kpsft. The Mantri tower in the heart of Bangalore cost 6crores for 6000sqft but an year + ago in Nungambakkam (I forget the name ... it was Life or something abstract like that!) was costing 5Cr for 2500sqft.

In other words in Chennai the only way to reduce FLAT PRICES is by increasing FSI or turning a blind eye to violators like in BLR. Also the number of floors has to be increased. In Bangalore any silly area with any road size will have 3 floors to 4 floors with Stilt, not 2 floors like in Chennai. So the person telling me that I talk about Land and others about Flats and hence there is a "fight" is incorrect. Land determines the price of a flat. Land is the Least Common Multiple. (Please refer to ABK writing about cost of building materials not falling!) So land price in Mylapore and Malleswaram has to be similar, in Boat Club and Sadashivanagar has to be similar and lo and behold they are very identical. However flat prices are not; in these same area pairs.

Let me just sign off by stating that one should realise that with lots of money waiting on the wings the RE fall is just a correction as far as India is concerned. Now if Indian economy sinks and we have recession and we have 60s and 70s coming and so on...all the gloomy stories are sold then if you buy those stories, then you should not buy a property, just stay in a rented place.

Let me tell you. Whether it is Growth phase or Recession phase, whether it was 70s, 80s, 90s or 2000s. It is ALWAYS CHEAPER TO LIVE IN A RENTED FLAT, however people want to OWN, not live as a slave in someone else's house from where you can be thrown out! Also inflation causes rents to go up and if you have your own home u dont have to pay for the inflation. (BTW I had a relative who continued to live in Malleswaram in a rented flat for years after retirement but then he was lucky to have a son in law who got him a flat to live...or he would be in deep trouble thanks to inflation!...this is in 80s to now!)

Finally a piece of advice to the KIDDOS in their 20s! You havent become any better than the kiddos of 70s and 80s. Honestly your REAL WORTH or REAL INCOME (Ask Wisey to define it for you!) is actually lower. So your dads kiddos; were much better off than you are with same brain levels! Explains why I always show a condescending look at the lakh and oneth Engineer from TN. He is always behind 1lakh guys just in TN and so maybe 30lakhs from India. So he is just an ALSO RAN, not the winner and he does not deserve more than the ALSO RANs of 70s, 80s and 90s.
Remember the Winner takes it all in Soc ialism or in Capitalism, just that who is the Winner is redefined in various situations differently.

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