Welcome to 2010, to Chennai and see how the RE market revs up in a one way ticket to the moon. That is also true of Stock market in India though one sharp dip to wipe out scared folks will happen in the early part. So as Nifty creates a new high later the new year you will realise why if you missed buying in 2009 your favourite land or flat in Chennai you never are going to get it and certainly for nothing less than 50% upwards.
Welcome to the bull in RE in 2010. Happy new year.
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  • Never thought things will unravel so quickly ...

    Folks,

    For a while now I have been the LONE guy on this forum emphasizing that the world in 2010 was a much more dangerous place than in 2008. Simple reason:

    When we faced a near--global-financial-death situation the problem was kicked down the road with a huge dose of additional monetary pumping. All that did was keep the wolves at bay for another year, created a false sense of security and led a whole lot of people to think that the problem was over.

    In reality, today, people have even less savings than in 2008, their assets are much less in value and jobs are much greater at risk as deflation has created a permanent reduction in demand for real assets (not cars and TVs which are consumer items sold to distract us from the real problems).

    So, when 2010 was born, I was standing alone on this side of the fence (and was called all kinds of names for being a scare-mongerer).

    Well, as you saw last week (and things have just got started), just the single event of the Democrats being given a sound thrashing in Massachusetts and the threat of the Dems being kicked out of power got Obama going after the Banks. Now, Bernanke's job is at high risk, the Big Banks are looking at serious losses if their money-making racket is dismantled and the 1970s nemesis, Paul Volker is back at the helm (he is famous for having told the Banksters that the only real innovation by banks in the last 30 years was the ATM!:D).

    Coming to the point. Japan is bust, EU is being torn apart, US is on the ropes and now China is either going to reverse its boom or stay flat. Latin America is having engine troubles of its own. In a sea with most countries in distress or taking in water, do you really think our ship alone will be sailing well? Back to thinking De-coupled?

    All of last week we say the FIIs start pulling money out of the markets. Even with this small amounts withdrawn, Sensx is down around 1000 points. Many supports built up on the way up have been breached. Mood is definitely bearish (though early) and bulls are already talking of previous high of 17700 as nearly unreachable.

    Point is this. Much of this 2009 Boom (if not all of it) is very thin in terms of real fundamentals. When things start going the other way, there will be a rush to the exit by everyone at the same time! There will be little time to exit at that time.

    With fear back in the markets again, you will again see sharp fall in RE volumes with liquidity plunging Ready buyer yesterday will become wait-and-watch'er tomorrow. I suspect the Builders have lost their only opportunity (in 2009) to truly sell volumes and reduce inventory by their stupid ploy in raising prices as soon as some demand seemed to appear. They fell prey to their belief in own smartness and their arrogance that they were the center of the RE world. The recent years of boom seemed to make them think that customers existed for them rather than the other way around. A few more weeks of this and you will have them calling and begging to take RE off their hands are any price of your choice; especially in outlying areas!

    Little early to say. But, we may have ended (an elongated) Wave 2 and begun Wave 3, which is normally the most vicious, sharp and deep wave. Elongated wave 2 results in sudden very sharp falls when they end (so watch out for this in the near future).

    Next few weeks will see the bulls try very hard to take back the initiative. But for now the initiative is definitely with the bears.

    Very interesting 2010 ahead. Those thinking of taking on large amounts of debt be wary of income loss and interest rate increases, along with inflation rise in terms of essentials like food and fuel.

    Stay defensive. Buy only if you have to and your debt servicing ability is comfortable. Prices will either remain stable or actually decline due to builder distress. So, you have nothing to lose if you wait to see the depth of this fall and then decide accordingly.

    cheers
    CommentQuote
  • Originally Posted by wiseman
    Folks,

    With fear back in the markets again, you will again see sharp fall in RE volumes with liquidity plunging Ready buyer yesterday will become wait-and-watch'er tomorrow. I suspect the Builders have lost their only opportunity (in 2009) to truly sell volumes and reduce inventory by their stupid ploy in raising prices as soon as some demand seemed to appear. They fell prey to their belief in own smartness and their arrogance that they were the center of the RE world. The recent years of boom seemed to make them think that customers existed for them rather than the other way around. A few more weeks of this and you will have them calling and begging to take RE off their hands are any price of your choice; especially in outlying areas!

    cheers


    Appreciate your optimism, however, the Pune RE playes are nowadays boasting about their bookings.

    For example, Megapolis has 450 bookings, Mittal's Sunshine Universe at Sinhgad Road was booked in few hours, Paranjape's Madhokosh at Dhayari has waiting list concept now, etc. (All this info. form Ravi's blog).

    Do you feel Builders are overdoing it (w.r.t. prices)? Or is it that buyers are made into believing about higher RE prices in coming years?

    Rate of 3000 psf to 4000 psf is again in vogue in Pune.
    CommentQuote
  • Real estate sector expects a good beginning Signs of rebound are beginning to show

    Ray of hope: The real estate sector looks forward to a good year Like the rest of the world, the real estate market in Chennai has been through one of the worst years in recent times. With the year 2009 behind, there is optimism amongst developers that 2010 would be better. Last year Chennai did not suffer too much in comparison to other major markets where there had been an extreme run up in prices. Today, although a few developers have started to raise capital and to look for investment opportunities, many others continue to lower debt and sell non-core assets. Due to the times, there is an unprecedented avoidance of risk among banks. Lenders will force distressed owners to become motivated sellers. Most banks want to do business only with proven developers with whom they already have a relationship. However, this year, property financing is expected to get more aggressive and more debt capital will flow. When the uncertainty fades, we are likely to see a significant upturn in apartment transactions. Very little sales will happen for office space in the next few quarters, as financing has been hard to secure for buyers. Recovery may be slower than expected with investments in business operations and new hiring getting delayed. New buildings coming on line over the next three to four quarters will face higher initial vacancy levels which will increase the pressure on owners of existing buildings to support current rent and occupancy levels. Despite seeing the first green shoots of recovery in select micro markets, in an uncertain environment, developers should intensely stay focused on maintaining stable cash flows, looking for every opportunity to cut costs and increasing efforts to maintain good relationships with investors and lenders. However, one thing is for sure that the size of the decline if any, moving forward is going to be smaller than what was seen in 2009. Developers should realize that although the worst may be over, every sale is tough and recovery could be slower than expected. In today’s market there are a large number of proposed affordable housing projects, however the demand for affordable housing is not unlimited. With many developers proposing affordable housing projects, developers need to realize that the demand for affordable housing is limited. More developers are expected to go green as cutting energy expenses is likely to be a priority from end users. In the land market, the coming year should be more active as the gap between buyers and sellers gradually narrows, with sellers making up most of that difference and more landlords being open to joint developments. In the retail real estate sector, the owners and tenants need to have a shared vision of success if retail real estate is to thrive in the years ahead. Some micro markets are bound to fare better than others. Market selection for potential apartment buyers is very important at this point in time because there are some markets that are very clearly going to slow down going forward over the next couple of years given the over supply. Signs of an economic rebound are beginning to show, although the question of whether it will be a strong, average, or weak recovery remains. The other big question is whether this is a temporary improvement, or whether the market is finally bottoming out and a revival is on the way. The author is a Managing Director with Jones Lang LaSalle Meghraj and can be reached at ramesh.nairjllm.co.in
    CommentQuote
  • Just 3 days old so too early, though promising start

    Originally Posted by enduser
    Appreciate your optimism, however, the Pune RE playes are nowadays boasting about their bookings.

    For example, Megapolis has 450 bookings, Mittal's Sunshine Universe at Sinhgad Road was booked in few hours, Paranjape's Madhokosh at Dhayari has waiting list concept now, etc. (All this info. form Ravi's blog).

    Do you feel Builders are overdoing it (w.r.t. prices)? Or is it that buyers are made into believing about higher RE prices in coming years?

    Rate of 3000 psf to 4000 psf is again in vogue in Pune.


    Enduser,

    Its only 3 days old.Next few weeks will be crucial. Once trend is set, you will see general public's mood swing. Then it will still take a while for builders to see reality.

    Some patience needed here. But after last week my optimism has jumped!

    cheers
    CommentQuote
  • have to give it to you, your analysis seems spot on. btw are you in india or the us ? the message from president was the banking committe might have gone too far with the restrictions so hope to see some recovery this coming week. And is hosting an event to launch a new "exciting" product which should lift the markets up a little (well atleast the tech market).
    This week should be intresting. Coming back to the topic of RE I watch for ads on makaan and got this feeling that the builders and agents have started to jack up the prices again don't know how long that will last.
    Was talking to my wife at lunch about whether people realize that after taking on huge loans they have to crank out huge anounts of cash every month and for years and how many of 'em would be able to do that?
    well my rambling got too long :) would love to hear your thoughts.

    Originally Posted by wiseman
    Folks,

    For a while now I have been the LONE guy on this forum emphasizing that the world in 2010 was a much more dangerous place than in 2008. Simple reason:

    When we faced a near--global-financial-death situation the problem was kicked down the road with a huge dose of additional monetary pumping. All that did was keep the wolves at bay for another year, created a false sense of security and led a whole lot of people to think that the problem was over.

    In reality, today, people have even less savings than in 2008, their assets are much less in value and jobs are much greater at risk as deflation has created a permanent reduction in demand for real assets (not cars and TVs which are consumer items sold to distract us from the real problems).

    So, when 2010 was born, I was standing alone on this side of the fence (and was called all kinds of names for being a scare-mongerer).

    Well, as you saw last week (and things have just got started), just the single event of the Democrats being given a sound thrashing in Massachusetts and the threat of the Dems being kicked out of power got Obama going after the Banks. Now, Bernanke's job is at high risk, the Big Banks are looking at serious losses if their money-making racket is dismantled and the 1970s nemesis, Paul Volker is back at the helm (he is famous for having told the Banksters that the only real innovation by banks in the last 30 years was the ATM!:D).

    Coming to the point. Japan is bust, EU is being torn apart, US is on the ropes and now China is either going to reverse its boom or stay flat. Latin America is having engine troubles of its own. In a sea with most countries in distress or taking in water, do you really think our ship alone will be sailing well? Back to thinking De-coupled?

    All of last week we say the FIIs start pulling money out of the markets. Even with this small amounts withdrawn, Sensx is down around 1000 points. Many supports built up on the way up have been breached. Mood is definitely bearish (though early) and bulls are already talking of previous high of 17700 as nearly unreachable.

    Point is this. Much of this 2009 Boom (if not all of it) is very thin in terms of real fundamentals. When things start going the other way, there will be a rush to the exit by everyone at the same time! There will be little time to exit at that time.

    With fear back in the markets again, you will again see sharp fall in RE volumes with liquidity plunging Ready buyer yesterday will become wait-and-watch'er tomorrow. I suspect the Builders have lost their only opportunity (in 2009) to truly sell volumes and reduce inventory by their stupid ploy in raising prices as soon as some demand seemed to appear. They fell prey to their belief in own smartness and their arrogance that they were the center of the RE world. The recent years of boom seemed to make them think that customers existed for them rather than the other way around. A few more weeks of this and you will have them calling and begging to take RE off their hands are any price of your choice; especially in outlying areas!

    Little early to say. But, we may have ended (an elongated) Wave 2 and begun Wave 3, which is normally the most vicious, sharp and deep wave. Elongated wave 2 results in sudden very sharp falls when they end (so watch out for this in the near future).

    Next few weeks will see the bulls try very hard to take back the initiative. But for now the initiative is definitely with the bears.

    Very interesting 2010 ahead. Those thinking of taking on large amounts of debt be wary of income loss and interest rate increases, along with inflation rise in terms of essentials like food and fuel.

    Stay defensive. Buy only if you have to and your debt servicing ability is comfortable. Prices will either remain stable or actually decline due to builder distress. So, you have nothing to lose if you wait to see the depth of this fall and then decide accordingly.

    cheers
    CommentQuote
  • wiseman, i support you and i have also been waging the lone battle with my friends and family. If my understanding in macro AND Micro economics is correct, we should see a significant crash sometime soon.. i am not sure why there has not been a hullabulloo over the recent price hike of commodities. once the opposition steps up pressure next week regarding the price hike, the banks would be forced to initially hike up the CRR... driving liquidity out.. now lets see how the government plans to raise cash by diluting stake in navratnas turns out to be??? i am also hoping for a 50 % drop from current prices over the next 3 years..
    CommentQuote
  • Originally Posted by haripi2
    wiseman, i support you and i have also been waging the lone battle with my friends and family. If my understanding in macro AND Micro economics is correct, we should see a significant crash sometime soon.. i am not sure why there has not been a hullabulloo over the recent price hike of commodities. once the opposition steps up pressure next week regarding the price hike, the banks would be forced to initially hike up the CRR... driving liquidity out.. now lets see how the government plans to raise cash by diluting stake in navratnas turns out to be??? i am also hoping for a 50 % drop from current prices over the next 3 years..


    Do you mean 50% price drop even in RE?
    That is Pune RE...
    CommentQuote
  • Originally Posted by enduser
    Do you mean 50% price drop even in RE?
    That is Pune RE...


    With Pune Metero coming up, I fear rise in RE prices on PROPOSED metro line passing by your new PROPOSED township/apartment. I hope to see RE crash because anyway prices are unrealistic (50 lac 2 BHK of 1000-1200 sqft is crazy)...
    CommentQuote
  • Originally Posted by enduser
    Do you mean 50% price drop even in RE?
    That is Pune RE...


    oops sorry i was referring to price of RE across markets or to be specific in chennai.. Pune i have no idea..but guess sould be no different..
    CommentQuote
  • Originally Posted by wiseman
    Folks,

    For a while now I have been the LONE guy on this forum emphasizing that the world in 2010 was a much more dangerous place than in 2008. Simple reason:

    When we faced a near--global-financial-death situation the problem was kicked down the road with a huge dose of additional monetary pumping. All that did was keep the wolves at bay for another year, created a false sense of security and led a whole lot of people to think that the problem was over.

    In reality, today, people have even less savings than in 2008, their assets are much less in value and jobs are much greater at risk as deflation has created a permanent reduction in demand for real assets (not cars and TVs which are consumer items sold to distract us from the real problems).

    So, when 2010 was born, I was standing alone on this side of the fence (and was called all kinds of names for being a scare-mongerer).

    Well, as you saw last week (and things have just got started), just the single event of the Democrats being given a sound thrashing in Massachusetts and the threat of the Dems being kicked out of power got Obama going after the Banks. Now, Bernanke's job is at high risk, the Big Banks are looking at serious losses if their money-making racket is dismantled and the 1970s nemesis, Paul Volker is back at the helm (he is famous for having told the Banksters that the only real innovation by banks in the last 30 years was the ATM!:D).

    Coming to the point. Japan is bust, EU is being torn apart, US is on the ropes and now China is either going to reverse its boom or stay flat. Latin America is having engine troubles of its own. In a sea with most countries in distress or taking in water, do you really think our ship alone will be sailing well? Back to thinking De-coupled?

    All of last week we say the FIIs start pulling money out of the markets. Even with this small amounts withdrawn, Sensx is down around 1000 points. Many supports built up on the way up have been breached. Mood is definitely bearish (though early) and bulls are already talking of previous high of 17700 as nearly unreachable.

    Point is this. Much of this 2009 Boom (if not all of it) is very thin in terms of real fundamentals. When things start going the other way, there will be a rush to the exit by everyone at the same time! There will be little time to exit at that time.

    With fear back in the markets again, you will again see sharp fall in RE volumes with liquidity plunging Ready buyer yesterday will become wait-and-watch'er tomorrow. I suspect the Builders have lost their only opportunity (in 2009) to truly sell volumes and reduce inventory by their stupid ploy in raising prices as soon as some demand seemed to appear. They fell prey to their belief in own smartness and their arrogance that they were the center of the RE world. The recent years of boom seemed to make them think that customers existed for them rather than the other way around. A few more weeks of this and you will have them calling and begging to take RE off their hands are any price of your choice; especially in outlying areas!

    Little early to say. But, we may have ended (an elongated) Wave 2 and begun Wave 3, which is normally the most vicious, sharp and deep wave. Elongated wave 2 results in sudden very sharp falls when they end (so watch out for this in the near future).

    Next few weeks will see the bulls try very hard to take back the initiative. But for now the initiative is definitely with the bears.

    Very interesting 2010 ahead. Those thinking of taking on large amounts of debt be wary of income loss and interest rate increases, along with inflation rise in terms of essentials like food and fuel.

    Stay defensive. Buy only if you have to and your debt servicing ability is comfortable. Prices will either remain stable or actually decline due to builder distress. So, you have nothing to lose if you wait to see the depth of this fall and then decide accordingly.

    cheers

    So Wisey are you saying DJI is going below 10K say to 7K again. Wanna take the risk and answer with your bear manners. If you know something this fall had to happen for another rise to take out 10700. You seem to be sad that you WERE WRONG. I am not sure if you ever KNEW whatever you claim to know!
    CommentQuote
  • 2010

    my take is that 2010 will be a dull year for RE mean no increase or no decrease.

    The bottom is out, now markets have to setle at the new equilibrium level, which may be 16- 17 K for sen and 10 to 10.5 K for DJI for next 3 - 6 months.

    In ref to indian companies, the sen values are inline with earnings except L&T result. the negative surprises are over.

    why should the bankers go gor rate hike?

    - Your economy has used the lower rate of interest well and overheating
    - Very high inflation
    - interst rate is low, so not attractive for the FIIs in bonds and FIIs initiate redemption in bonds

    at this point except inflation other things are unrealistic. For a country like us growth is more important than inflation.

    Inflation is definitly a indicator of good economy, but i dont think our industry has come out of the recession completely.

    so the inflation is related with only Food items in which prices can controlled by better supply management. (this guys are not doing that which is different story)
    CommentQuote
  • Guys, Just wait for a couple more months until the IT Cos announce the long-pending and long-awaited hike numbers. The OMR demand will again see spikes, if the hike amount is substantial. :D

    Heard the Cognizants and Tatas are already planning for a range of 10%. Also the promotions will add more taste to the flavor. Infy should be on the same lines as well, HCL may be off the list looking at its downward trend this Qtr. My take is that June should see the comeback in the RE demand, provided there are no surprises in the global markets.
    CommentQuote
  • This guy is secretly using my posts!

    Originally Posted by Almighty
    So Wisey are you saying DJI is going below 10K say to 7K again. Wanna take the risk and answer with your bear manners. If you know something this fall had to happen for another rise to take out 10700. You seem to be sad that you WERE WRONG. I am not sure if you ever KNEW whatever you claim to know!



    You are a sneaky one Almighty.

    You seem to be using my posts regarding where the markets are headed and making profits while deriding what I say publicly. Must stop giving you free tips which you use without even a "thank you" to me! :D

    While posting about Bull and 50% rise, etc, etc, I see that you are starting to short the market (from your posts).

    cheers
    CommentQuote
  • A 10% hike is reason for buying RE at high rates?

    Originally Posted by dollarsai
    Guys, Just wait for a couple more months until the IT Cos announce the long-pending and long-awaited hike numbers. The OMR demand will again see spikes, if the hike amount is substantial. :D

    Heard the Cognizants and Tatas are already planning for a range of 10%. Also the promotions will add more taste to the flavor. Infy should be on the same lines as well, HCL may be off the list looking at its downward trend this Qtr. My take is that June should see the comeback in the RE demand, provided there are no surprises in the global markets.



    Dollarsai,

    This 10% hike is probably not even going to compensate for the inflation in the last 2 years (assuming there were no hikes in general last year). Folks will still see real salary (2007-08 levels) being higher in purchasing power compared to even the hiked salaries, even if what you say is happens.

    My own contacts in the Industry (at senior levels) do not confirm that hikes will be general. They will be specific and performance based.

    So, do you really think the average guy (and others who seem to be hoping for hikes) will have the courage to go out and buy as soon as he sees a 10% hike, without any guarantees of job and hikes in the next few years?

    I expect that, given the high probability that the world will be in a much more precarious position - including the fact that exporters will be much more shaky when they realise that the "recovery" has just turned to the "double dip" and wondering how to back out of the vaguely promised hike.

    There may be other reasons for people to venture into buying RE in these trying times, but hike, IMO will probably not be one (without good visibility and guarantee about it in the future).

    cheers
    CommentQuote
  • People who fear about their job in India (especially in IT industry) MUST have some problems with their skills or performance. Pl. note that % of such people is not more than 5-7%. People who are slightly above this range are given time an oppty to step up (although this was not the case during recession).

    The pay revision in the industry is real. At least in IT industry, hike amount is more than inflation impact so people do upgrade their life with hikes, not just cover the inflation shortfall like most govt employees do. Needless to say govt employees are not driving the RE market in India.
    CommentQuote