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10 Reasons Why Real Estate Price Will Not Fall

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10 Reasons Why Real Estate Price Will Not Fall

Last updated: January 8 2013
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  • #11

    #11

    Re : 10 Reasons Why Real Estate Price Will Not Fall

    Originally posted by wiseman View Post
    Nats,

    You were saying you are going away for ever and rolling out buckets of croc tears about how the bears are beating the hell out of bulls and getting all the sympathy from the general public?

    What happened? Back so soon? So was all that lamenting only fake like you?

    Anyway, till 2007 the brains seemed to be there when bulls made gains in a credit-fueled bull market. After all, as the old saying goes, any fool can make money in a rising market buying any asset. Its only the guys making money in a bear market who have the brains. And to make money in a bear market, you need to be a bear. So, the brains seem to be on the side of the bears around now!

    cheers
    Wiseman, I have to tell you something plain. The mod of this board, whoever he is, has actually used my suggestion and has made a lovebird of my id's impersonator. In other words the mod is willing to listen to sense and values my writing here.
    The value I have here is not from Chamchas as I know not anyone here in real life. Can you claim the same about yourself! I have a moral obligation to write here and I do when time permits.
    Just try to find out if you are worth anything here!

    Comment

    • #12

      #12

      Re : 10 Reasons Why Real Estate Price Will Not Fall

      Originally posted by contra View Post
      Though I don't agree with BigBear, I agree with the title.

      The crises in US has made me more bullish then ever before about India and China. What we are seeing is global readjustment and not global recession. The recession is only confined to western hemisphere and Japan. Domestic economy in India and China are still doing well. Both the countries has shattered records in respective domestic car sales since Jan 2009. Another contrarion indicator is that Stock Analysts and Media have become more bearish about India and Asia, which means the bull market which began in India And China realestate and stocks in 2003-04 is still on.

      Expect the US dollar to lose reserve currency status and become less valuable in next 5 years. There will sudden flight of capital to Asia, US dollar will collapse in hours like lehman brothers.

      Don't bother about exporters in India and China losing jobs like in IT. Domestic sector including REAL ESTATE will rock in Chindia even if exporters become weak.

      Expect Reliance Industries to become more valuable company then GE (already if combined Reliance is more valuable then GE). Bull market is on.
      China and India needs to do a lot to catch up with western world.They only account of 8% of world GDP whereas US and Japan only accounts for 34% of world GDP.China is heavily dependent on US exports and does not have a strong domestic consumption.

      Some 50% of China's GDP comes from investment, which has a huge multiplier effect on GDP. In the past, that kind of growth was sustained by high demand from the US and other developed countries.It is very unlikely demand will pick up from US in near future.Already there are talks of china growth slowing to 4-5% next year as compared to more than 12% few years back.In terms of household income and the small asset base, China is very poor - in some ways, poorer than India. China's consumption-to-GDP ratio is lower than India. Savings rate of households are also not high in China.

      As per India is concerned economy is in shambles as compared to China.We have fiscal deficit as close to 12%, Industrial growth is faltering,NPAs of banks rising,foreign exchange reserves are depleting and the rupee is depreciating.So dont think only exporters are affected domestic sectors like infrastructure,aviation,commercial vehicles,retail are affected drasticially.Even though car sales is increasing commercial vehicle sales is falling of the cliff and you know which is good pointer to economy out of these two.

      Comment

      • #13

        #13

        Re : 10 Reasons Why Real Estate Price Will Not Fall

        Originally posted by BigBear View Post
        China and India needs to do a lot to catch up with western world.They only account of 8% of world GDP whereas US and Japan only accounts for 34% of world GDP.China is heavily dependent on US exports and does not have a strong domestic consumption.

        Some 50% of China's GDP comes from investment, which has a huge multiplier effect on GDP. In the past, that kind of growth was sustained by high demand from the US and other developed countries.It is very unlikely demand will pick up from US in near future.Already there are talks of china growth slowing to 4-5% next year as compared to more than 12% few years back.In terms of household income and the small asset base, China is very poor - in some ways, poorer than India. China's consumption-to-GDP ratio is lower than India. Savings rate of households are also not high in China.

        As per India is concerned economy is in shambles as compared to China.We have fiscal deficit as close to 12%, Industrial growth is faltering,NPAs of banks rising,foreign exchange reserves are depleting and the rupee is depreciating.So dont think only exporters are affected domestic sectors like infrastructure,aviation,commercial vehicles,retail are affected drasticially.Even though car sales is increasing commercial vehicle sales is falling of the cliff and you know which is good pointer to economy out of these two.
        Given below RBI governor's view regading why India got affected by the financial crisis

        The first point is about India's remarkably rapid trade integration with the world economy over the last decade. In terms of globalisation as measured by two-way trade, India's merchandise exports plus imports as a proportion of GDP increased from 21.2% in FY98 to 34.7% in FY08.

        Secondly, India's financial integration with the rest of the world has been equally deep. The ratio of total external transactions (gross current account flows plus gross capital flows) to GDP had more than doubled from 46.8% in FY98 to 117.4% in FY08.

        Further, Mr. Subbarao went on to expound on how the crisis has spread to India via three channels: the financial channel, the real channel and the confidence channel.


        The Financial Channel: This includes India’s equity market, money market, forex market and credit market all of whom came under pressure due to various factors. Corporates began turning to the domestic banking sector for their borrowing needs because external sources suddenly dried up due to the global liquidity squeeze. They also resorted to withdrawing their investments from local money market mutual funds, which caused abnormal redemption pressure over there. Thus were hit the credit and money markets. Further global deleveraging induced reversal of the capital flows, along with conversion of locally raised funds to meet overseas obligations by corporates caused the depreciation of the rupee. RBI’s intervention to buy rupees in the forex market to stem the depreciation of the rupee further caused an inadvertent tightening of liquidity.

        The Real Channel: The biggest factor here is the collapse of the exports due to a sudden slump in demand from places like the US, Europe and the Middle East (these together contribute towards 75% of India’s goods and services trade). Along with manufactured goods, exports of services like IT and ITES too have taken a hit due to its major user industries being in the doldrums. Thus, the damage to India’s export oriented industries has caused some disruption in the real economy.
        The Confidence Channel: The failure of Lehman Brothers around September 2008, followed by a string of other large banks threatening to go down under, caused a major crisis of confidence around the world, including India. The subsequent risk aversion intensified the effects of the already tight liquidity situation due to the cautious lending attitude it caused amongst Indian banks.

        Comment

        • #14

          #14

          Re : 10 Reasons Why Real Estate Price Will Not Fall

          As someone else said ...

          Originally posted by Natarajg007 View Post
          Wiseman, I have to tell you something plain. The mod of this board, whoever he is, has actually used my suggestion and has made a lovebird of my id's impersonator. In other words the mod is willing to listen to sense and values my writing here.
          The value I have here is not from Chamchas as I know not anyone here in real life. Can you claim the same about yourself! I have a moral obligation to write here and I do when time permits.
          Just try to find out if you are worth anything here!

          Nats,

          Someone said "trust, but verify". Before you shoot off your mouth about others based on silly assumptions, verify. How exactly do you say I know someone on this forum? Any evidence that will be news to me?

          You sound sillier by the day. Say something useful or just read what others say and keep fingers off keyboard.

          cheers

          Comment

          • #15

            #15

            Re : 10 Reasons Why Real Estate Price Will Not Fall

            Looks like you are disappearing day by day. Is it because as per your own logic if Nifty comes down RE has to fall, so on the converse as Nifty is shooting up RE should shoot up? So much for your crazy knowledge of markets and RE.
            Now it looks bears are disappearing from this board. Many seem to be expecting a shoot up. Siruseri flats for 4200 psft means I should sell land in Saligramam for 15k psft! If that sound ridiculous then if you sold your Mylapore slum land at 65L per ground how smart were you?
            WIseman I am counting your days on this board. Either you gonna convert into a bull or you going to slyly disappear as the RE market moves up. So you failed in your attempt to make weak hands sell out? What a shame!

            Comment

            • #16

              #16

              Re : 10 Reasons Why Real Estate Price Will Not Fall

              Originally posted by contra View Post
              Though I don't agree with BigBear, I agree with the title.

              The crises in US has made me more bullish then ever before about India and China. What we are seeing is global readjustment and not global recession. The recession is only confined to western hemisphere and Japan. Domestic economy in India and China are still doing well. Both the countries has shattered records in respective domestic car sales since Jan 2009. Another contrarion indicator is that Stock Analysts and Media have become more bearish about India and Asia, which means the bull market which began in India And China realestate and stocks in 2003-04 is still on.

              Expect the US dollar to lose reserve currency status and become less valuable in next 5 years. There will sudden flight of capital to Asia, US dollar will collapse in hours like lehman brothers.

              Don't bother about exporters in India and China losing jobs like in IT. Domestic sector including REAL ESTATE will rock in Chindia even if exporters become weak.

              Expect Reliance Industries to become more valuable company then GE (already if combined Reliance is more valuable then GE). Bull market is on.

              I am sorry to disappoint you but if dollar goes down, the first country to feel the pinch will be China...no more cheap exports and all their 1+ trillion $ bonds vanish. Hope you know what you are talking about

              Comment

              • #17

                #17

                Re : 10 Reasons Why Real Estate Price Will Not Fall

                Dear friends,

                Coming back to the original subject of this post, there are prices falls, in some areas to the tune of 30% or so in outskirts mostly dominated so far by IT chaps, in some very high cost areas like Mylapore, Adyar, T.Nagar etc. to the exent of even 20 %, there are areas in city like Saidapet KK Nagar, Ashok Nagar etc. where there are some reductions or even stagnant but not any appreciable reductions. Still the flats are booked at the high rates of around Rs. 4500 range especially in Saidapet area for new projects and mostly the builders now offer 2 bed flats rather than 3 bed flats.

                ks2071746

                Comment

                • #18

                  #18

                  Re : 10 Reasons Why Real Estate Price Will Not Fall

                  Originally posted by ks2071746 View Post
                  Dear friends,

                  Coming back to the original subject of this post, there are prices falls, in some areas to the tune of 30% or so in outskirts mostly dominated so far by IT chaps, in some very high cost areas like Mylapore, Adyar, T.Nagar etc. to the exent of even 20 %, there are areas in city like Saidapet KK Nagar, Ashok Nagar etc. where there are some reductions or even stagnant but not any appreciable reductions. Still the flats are booked at the high rates of around Rs. 4500 range especially in Saidapet area for new projects and mostly the builders now offer 2 bed flats rather than 3 bed flats.

                  ks2071746
                  If it is 4200 in Siruseri; 4500 in Saidapet is a STEAL. I would believe 16000 is the apt price.

                  Comment

                  • #19

                    #19

                    Re : 10 Reasons Why Real Estate Price Will Not Fall

                    And in Saligramam?

                    Originally posted by Natarajg007 View Post
                    If it is 4200 in Siruseri; 4500 in Saidapet is a STEAL. I would believe 16000 is the apt price.

                    I'm sure you will get a steal at Rs.100000 in Saligramam? It must be a steal for Nats when you buy it from him, I'm sure!

                    cheers

                    Comment

                    • #20

                      #20

                      Re : 10 Reasons Why Real Estate Price Will Not Fall

                      Thanks, you are the one to get disappointed

                      Originally posted by surla View Post
                      I am sorry to disappoint you but if dollar goes down, the first country to feel the pinch will be China...no more cheap exports and all their 1+ trillion $ bonds vanish. Hope you know what you are talking about
                      Zhou Xiaochuan, Governor of the People's Bank of China recently commented in a essay he wrote that having US dollar as the world's reserve currency is a pain and he wanted IMF's special drawing rights (SDRs) to be used as world's reserve currency. If you read The Hindu this week, China's ambassador to India who had visited Chennai also commented that having a single reserve currency is a pain (indirectly he meant having the US dollar as reserve currency of the world was big pain in the b utt).

                      If you have a habit of reading financial newspapers, China has announced 100 billion dollars of Currency swaps with 5 -6 countries like Korea, Argentina, Venezuala, Singapore, Belarus. Henceforth these countries can directly buy or sell to China in Yuan eliminating the need to have dollars.

                      Hugo Chavez, who heads world's second largest oil exporter Venezuala on a visit to Beijing this week said China is a great power and declared a large currency swap with China, henceforth most trade between China and Venezuala will happen in Yuan.

                      During the recent G20 summit in London, IMF which is has large amounts of Gold, declared that they will sell all of their Gold off market to raise cash to provide stimulus to effected countries during this downturn. Chinese had a huge relief, Why? China is the first buyer who is buying most of this IMF gold that too off market, which means there will be no sudden impact in Gold prices. China is spending its dollar reserves in purchasing most of the Gold from IMF off market and in stimulating its own domestic consumption as they know they can't depend on US consumer anymore. In next few years after China has steadily shifted all its dollar reserves into Gold off market and into its own economy by lending to its people, the US Dollar will depreciate like melting ice cream when exposed to sudden heat.

                      Russia is another buyer of IMF's gold.

                      I still believe betting against the US dollar is the trade of this century and am buying gold, gold is real currency. I also love India's real estate especially Chennai, as Chennai is closer to Asian centers like Singapore, China.

                      Comment

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