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Real Estate bubble in India

Last updated: June 30 2013
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  • #41

    #41

    Re : Real Estate bubble in India

    Originally posted by nabishek View Post
    The banks are trying to orchestrate another RE boom.

    This time at a different level.They are trying to cash in on the affordable=attractive sentiment of people and promoting the sub 30 lakhs loan segment.

    They still think and hope to repeat the same story of 2004-2006 and get another sweep of such people falling prey to them all over again.

    Will they be successful?thoughts please.
    Banks will be strong as long as they have liquidity = money flowing in. Once the liquidity tap stops Banks will shiver and get nervous. Then they will stop lending.

    Nobody is above market...market is god. If market is overvalued than it will correct itself by a big crash. No money printing by government and banks can prevent the crash.

    Just ask the Japanese..Real estate crashed in Japan in 1990....it has never recovered even now. In 2000, 10 years after real estate crash in Japan...tokyo and osaka were 70% below 1990 prices without inflation adjustment in nominal terms (Sorry...Japan never had inflation in that dead decade...Japan had deflation ......Deflation is the ultimate stealth weapon to kill bulls)

    Nobody can manipulate the market...if it has to crash it will.
    Last edited by contra; July 16 2009, 03:54 PM.

    Comment

    • #42

      #42

      Re : Real Estate bubble in India

      Originally posted by BigBear View Post
      I have seen prices going up 50-100% in 2004-05 in bangalore and Chennai actually laged Bangalore at that time.
      I am comparing bangalore prices in 2005 and 2009 and not chennai with bangalore price.So what is percentage of land to do with this.
      Whatever you say all commodities(including land) will go by supply and demand scenario.When demand was there prices shot up and when demand is falling prices
      are falling.You cannot change their theory which is in force for centuries.Better to miss the bus rather than get into a overspeeding bus and die.
      Well Bear, if you dont understand mathematics I cant help you. Land appreciates and building depreciates. In 2003-2007 to be precise land prices shot up in Bangalore almost 10 times in many a places of which 80% or more were done in 2003-2004. Flat prices went up just 2 times to max 3 times.
      In Chennai land prices shot up between 2004 and 2007 almost 6 to 8 times. Flat prices went up almost 5 to 6 times. Since the ratio of land in a flat in Chennai is higher the land price escalation took up the price of flat in Chennai.
      To be precise flat bought in 1998 has gone up atmost 3 times in Bangalore at its peak. No more!
      Anyway you seem to want to say that market is bearish and you wont listen to arguments. I wont push you further as you are also part of that funny cartel desperate to get prices down. Unfortunately you guys are a. Wrong and b. Causing chaos to folks who listen to you.
      Well only God can save those idiots who follow you!
      And look at your friend, an upmove he says is nothing and he expects downmove. Ask him to talk of DJI because that is where he is terribly bearish, World markets, American markets. Why the shit did it shoot up?
      Well Wiseman and you are having a view which I strongly believe is terribly against the truth. If you both can find anyone land in Chennai for 50L and below per ground another writer here is desperate to buy it. Please do that and then talk your bearish stories. Just that the two of you were sacked from your job may not mean bearishness. It might mean that you are not upto the trend in jobs and you should enhance your skills. So dont use your own personal lines to determine prices of the market!
      Have a great day Mr. Bear!

      Comment

      • #43

        #43

        Re : Real Estate bubble in India

        Originally posted by Natarajg007 View Post
        To be precise flat bought in 1998 has gone up atmost 3 times in Bangalore at its peak. No more!
        I don't agree that flat prices is bangalore have not appreciated much.

        A flat by nagarjuna constructions in J.P.nagar 1st phase (near R V dental college) went for Rs. 8 lacs in 1997, in the same complex flat was sold at Rs.25 lacs in 2005.

        A flat at Mantri paradise in Bannergetta road was bought at Rs.25 lacs in 2003 when it was just completed...in 2005 end the same flat was sold at Rs.42 lacs.

        Flats in premium locations and built with good quality have given good appreciation in bangalore.

        It is a myth that buying Chennai flats is better than buying in Bangalore flats. One more myth by Chennai real estate cartel to fool buyers.


        In bangalore land prices skyrocketed 8-10 times in 2004 & 2005 those 2 years. Since early 2006 land prices have stagnated in Bangalore...i am really surprised at the consistency of this stagnation in last 3.5 years....no rise and slight fall.

        Whereas in Chennai in 2004, 2005 land was dirt cheaper than Bangalore. ( In 2005 when bangalore was rising like fully charged rocket a plot in upcoming arekare mico layout in Bannergetta road outskirts was worth more than a plot in vadapalani central chennai). In fact I purchased a plot in velachery in 2005 for the same reason as in that year 2005 chennai was very cheap compared to bangalore which was a blazing rocket that year.

        Since early 2006 however, Chennai land prices has risen like 8-10 times.

        Comment

        • #44

          #44

          Re : Real Estate bubble in India

          Infra

          Agree with point regarding Flat/land appreciation by Nats.

          Would look to point out Ahmedabad RE scenario.

          Now Ahmedabad is a typical Indian town with hardly any IT push. Inspite being a state capital, within 6 hrs of Mumbai, with huge Gujju NRI population has hardly seen much bubble RE prices. So the prices r continuing to rise even in present Recession period due to low base effect. This fact is being exploited by Bulls in TV channels / news paper
          Tom tomimg Bull theory of recovery.

          Another important aspect is the good infra provided by Govt in form of ring roads with water and light connections. Thus u can get bunglows in Amdavad in prices which u get box houses in out skirts of Pune.

          As per Nats, stabilisation period is there like Stock markets in RE. So earn't we in a stab period after tremendous run in these last three years.

          Comment

          • #45

            #45

            Re : Real Estate bubble in India

            Originally posted by Sansei View Post
            Agree with point regarding Flat/land appreciation by Nats.

            Would look to point out Ahmedabad RE scenario.

            Now Ahmedabad is a typical Indian town with hardly any IT push. Inspite being a state capital, within 6 hrs of Mumbai, with huge Gujju NRI population has hardly seen much bubble RE prices. So the prices r continuing to rise even in present Recession period due to low base effect. This fact is being exploited by Bulls in TV channels / news paper
            Tom tomimg Bull theory of recovery.

            Another important aspect is the good infra provided by Govt in form of ring roads with water and light connections. Thus u can get bunglows in Amdavad in prices which u get box houses in out skirts of Pune.

            As per Nats, stabilisation period is there like Stock markets in RE. So earn't we in a stab period after tremendous run in these last three years.
            Sansei,

            you are a pune guy and a very irregular visitor to chennai forum, so don't get carried away by what nats or anyone says.

            nats is a person who is telling people to buy now and get 300% appreciation next 3-4 years...he is talking of the boom time continuing at the same pace for next 10-20 years like it happened in period since 2006.

            nats is not the one to talk about stabilizing...he only talks about super bull run for another 10-20 years.

            if someone is misleading public....you also don't unknowingly mislead people by validating such people.
            Last edited by contra; July 17 2009, 10:06 AM.

            Comment

            • #46

              #46

              Re : Real Estate bubble in India

              Originally posted by Natarajg007 View Post
              Well Bear, if you dont understand mathematics I cant help you. Land appreciates and building depreciates. In 2003-2007 to be precise land prices shot up in Bangalore almost 10 times in many a places of which 80% or more were done in 2003-2004. Flat prices went up just 2 times to max 3 times.
              In Chennai land prices shot up between 2004 and 2007 almost 6 to 8 times. Flat prices went up almost 5 to 6 times. Since the ratio of land in a flat in Chennai is higher the land price escalation took up the price of flat in Chennai.
              To be precise flat bought in 1998 has gone up atmost 3 times in Bangalore at its peak. No more!
              Anyway you seem to want to say that market is bearish and you wont listen to arguments. I wont push you further as you are also part of that funny cartel desperate to get prices down. Unfortunately you guys are a. Wrong and b. Causing chaos to folks who listen to you.
              Well only God can save those idiots who follow you!
              And look at your friend, an upmove he says is nothing and he expects downmove. Ask him to talk of DJI because that is where he is terribly bearish, World markets, American markets. Why the shit did it shoot up?
              Well Wiseman and you are having a view which I strongly believe is terribly against the truth. If you both can find anyone land in Chennai for 50L and below per ground another writer here is desperate to buy it. Please do that and then talk your bearish stories. Just that the two of you were sacked from your job may not mean bearishness. It might mean that you are not upto the trend in jobs and you should enhance your skills. So dont use your own personal lines to determine prices of the market!
              Have a great day Mr. Bear!
              Exactly thats what we are saying.For 50 lakhs we cannot find decent place in chennai!!Real estate has become reel estate and time to come back to realty.

              Comment

              • #47

                #47

                Re : Real Estate bubble in India

                Originally posted by contra View Post

                nats is a person who is telling people to buy now and get 300% appreciation next 3-4 years...he is talking of the boom time continuing at the same pace for next 10-20 years like it happened in period since 2006.

                nats is not the one to talk about stabilizing...he only talks about super bull run for another 10-20 years.

                if someone is misleading public....you also don't unknowingly mislead people by validating such people.
                No Contra, I dont think thats what nats has been saying.I have been reading his posts ever since he started to contribute in this forum and following is what I gather.

                1.RE investment means only buying Land.
                2.Flat should be bought only for living and doesnt make any investment sense.
                3.Chennai RE has been giving good 15-30% CAGR depending on the location in the past.
                4.Dont sell your land unless you face a crisis and need cash.Entry and exit in RE is not childs play.
                5.The correction phase that we are witnessing is only a consolidation phase and is temporary, nats is urging people to make use of this opportunity to strike a good deal and make an entry as he believes there will be yet another surge in prices taking the prices to a new high level hitting your current affordability.(The timing of this is what is being debated, personally I feel and believe upmove is not possible before another wave of correction thats imminent, the current prices are unreal and inflated)

                Nats is clear on his fundamentals,Its confusing to others because most people who are looking to buy property are through taking loans, and by reading his posts they may interpret that nats is asking people to take huge loans to buy property hoping huge returns at current price in short term.

                I dont remember reading nats say that till now.He only has to explain his postition regarding it.

                Anyways, If you interpret as follows I find his arguments very valid.

                Following is my own interpretation

                Instead of making 15% downpayment and taking 85% loan and buying a flat to save rents and keep paying EMI's throughout your life for 20 years.

                Invest your 15% savings and other surpluses if any, in a land with good livable location and basic infrastructure cash down, you have possibility to see better returns at the end of 20 years than any other investment instrument with medium risk.All this without the hassles of debt, paying income tax, showing loss from property for interest outgoing etc.

                20 years is a long term, There is surely a possibility of atleast one RE boom again, if not more.

                If someone buys a flat and expects 300% returns in 3 to 4 years in todays scenario, that person is going to bite dust.Any appreciation of flat is only because of appreciation of land.Land appreciation happens in sustainable manner only in long term.

                If people can hope to leverage and gain profits by buying a flat and can expect 15-20% CAGR returns at the end of 20 years, as told by banks.Imagine the returns had they invested(not speculated) in land alone and that too without loan?

                Its important everyone understands all the implications,set correct expectations,understand risks involved and make an informed decision while buying property.

                Comment

                • #48

                  #48

                  Re : Real Estate bubble in India

                  Very good points and a balanced view!

                  Originally posted by nabishek View Post
                  No Contra, I dont think thats what nats has been saying.I have been reading his posts ever since he started to contribute in this forum and following is what I gather.

                  1.RE investment means only buying Land.
                  2.Flat should be bought only for living and doesnt make any investment sense.
                  3.Chennai RE has been giving good 15-30% CAGR depending on the location in the past.
                  4.Dont sell your land unless you face a crisis and need cash.Entry and exit in RE is not childs play.
                  5.The correction phase that we are witnessing is only a consolidation phase and is temporary, nats is urging people to make use of this opportunity to strike a good deal and make an entry as he believes there will be yet another surge in prices taking the prices to a new high level hitting your current affordability.(The timing of this is what is being debated, personally I feel and believe upmove is not possible before another wave of correction thats imminent, the current prices are unreal and inflated)

                  Nats is clear on his fundamentals,Its confusing to others because most people who are looking to buy property are through taking loans, and by reading his posts they may interpret that nats is asking people to take huge loans to buy property hoping huge returns at current price in short term.

                  I dont remember reading nats say that till now.He only has to explain his postition regarding it.

                  Anyways, If you interpret as follows I find his arguments very valid.

                  Following is my own interpretation

                  Instead of making 15% downpayment and taking 85% loan and buying a flat to save rents and keep paying EMI's throughout your life for 20 years.

                  Invest your 15% savings and other surpluses if any, in a land with good livable location and basic infrastructure cash down, you have possibility to see better returns at the end of 20 years than any other investment instrument with medium risk.All this without the hassles of debt, paying income tax, showing loss from property for interest outgoing etc.

                  20 years is a long term, There is surely a possibility of atleast one RE boom again, if not more.

                  If someone buys a flat and expects 300% returns in 3 to 4 years in todays scenario, that person is going to bite dust.Any appreciation of flat is only because of appreciation of land.Land appreciation happens in sustainable manner only in long term.

                  If people can hope to leverage and gain profits by buying a flat and can expect 15-20% CAGR returns at the end of 20 years, as told by banks.Imagine the returns had they invested(not speculated) in land alone and that too without loan?

                  Its important everyone understands all the implications,set correct expectations,understand risks involved and make an informed decision while buying property.

                  Abishek,

                  Very well done!

                  cheers

                  Comment

                  • #49

                    #49

                    Re : Real Estate bubble in India

                    Originally posted by nabishek View Post
                    No Contra, I dont think thats what nats has been saying.I have been reading his posts ever since he started to contribute in this forum and following is what I gather.

                    1.RE investment means only buying Land.
                    2.Flat should be bought only for living and doesnt make any investment sense.
                    3.Chennai RE has been giving good 15-30% CAGR depending on the location in the past.
                    4.Dont sell your land unless you face a crisis and need cash.Entry and exit in RE is not childs play.
                    5.The correction phase that we are witnessing is only a consolidation phase and is temporary, nats is urging people to make use of this opportunity to strike a good deal and make an entry as he believes there will be yet another surge in prices taking the prices to a new high level hitting your current affordability.(The timing of this is what is being debated, personally I feel and believe upmove is not possible before another wave of correction thats imminent, the current prices are unreal and inflated)

                    Nats is clear on his fundamentals,Its confusing to others because most people who are looking to buy property are through taking loans, and by reading his posts they may interpret that nats is asking people to take huge loans to buy property hoping huge returns at current price in short term.

                    I dont remember reading nats say that till now.He only has to explain his postition regarding it.

                    Anyways, If you interpret as follows I find his arguments very valid.

                    Following is my own interpretation

                    Instead of making 15% downpayment and taking 85% loan and buying a flat to save rents and keep paying EMI's throughout your life for 20 years.

                    Invest your 15% savings and other surpluses if any, in a land with good livable location and basic infrastructure cash down, you have possibility to see better returns at the end of 20 years than any other investment instrument with medium risk.All this without the hassles of debt, paying income tax, showing loss from property for interest outgoing etc.

                    Ok like you said if people listen to Nats and decide to buy land in chennai.

                    How many people can buy land in annanagar, adyar, mylapore...forget these....how many people can buy land in tambaram, ambattur without taking loans.

                    If everybody is rich and can buy land with 100% cash of thier own ...i will be the first person to agree with nats ( by the way on some other issues like stock trading i have agreed with him in the past).

                    I didn't expect this illogical explanations from you of all the people nabhishek.

                    Comment

                    • #50

                      #50

                      Re : Real Estate bubble in India

                      Besides, in the final analysis, even if this analysis turns out wrong as many time it does,

                      -- covering your bases, eh? based on pure technicals, you think that the markets will tank by aug 5th because of the head and shoulders patten created on the charts. well, i don't argue now, but we will wait till aug 5th. i do not have any opinion on this, really, but am curious to see how accurate technical analyses are.
                      Last edited by Vinod Gupte; July 17 2009, 12:52 PM.

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