It seems prices has started falling in Mumbai, many builders have started quoting less than what is being advertised, also many flats owners have reduced their prices to sell their flats as soon as possible before the price drops more, any first hand input welcome...:D
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  • Originally Posted by fundoo158
    When the ppl feel that "ALL will be well" and nothing can go wrong...thats the time "overconfidence" has set in...A clear sign of reaching peak...

    What r u talking abt...? 70 -110% increase for IT folks...Man u must be kidding...The ppl u know either r bluffing or have got exceptional raises...

    Folks - 2008 & 2009...On an average ...there was no hike & no promotions..(I am talking about SWITCH companies). Market picked up in Nov -09. From Nov 09 - till date....if any1 has switched ...he would have seen 40-50% increment..(even in extreme cases)...and those who haven't have got paltry hike of 10-20% ....

    So effectively..there r 2 sets ...those who switched have 13-14% hike p.a.

    those who have sticked with their company have -5-6% p.a

    Now coming to other industries...take banking, insurance,real estate etc etc....All these sectors are seeing growth because of IT...these folks have highest disposable income and most care free lot....

    IT has been bane in a sense as it provides 30K per month to freshers who don't even know how to use that amount with no maturity....

    I am running out of time...I will revert back on other points in some time...

    Too much of anything is bad...

    My prof(Chief Investment Strat of a major bank) says...High risk..high return statement used in incomplete....It should be high risk, high return, high losses...

    IF we r seeing high return...its quite easy that we r having high risk...as vice versa is true...

    Yours is all theory with news inputs. I am based in Pune and have seen 10s of my friends book over last 1 year. You seem to have an NRI view of doom and gloom. I cannot expect more as you saw 4% contraction last year. In India there was 6.5% growth last year and 9% yoy so far this year.
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  • Originally Posted by jadhav_ravi
    Yours is all theory with news inputs. I am based in Pune and have seen 10s of my friends book over last 1 year. You seem to have an NRI view of doom and gloom. I cannot expect more as you saw 4% contraction last year. In India there was 6.5% growth last year and 9% yoy so far this year.


    Sirji....

    FYI...Even i am based in pune...and have seen 100's of bookings....but that doesn't classify as view...becoz all those have booked as they were afraid that Pune RE will increase more....

    I am not saying growth is not good....I am against excesses getting built up....With US undergoing recession ...$ will get devalued...Just think what will happen to IT folks ( Btw ..I am one of them) ....and loans taken by them.....Once they start default....banks NPA will go haywire......

    U know what...when India was growing 6.5...but IT was in doldrums ...banks & RE players were literally scared...

    Expecting is good ...but tooo much is bad anywhere...
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  • I usually judge the market by the size of the property supplement in TOI.. actually when sales are high, i find the supplement pretty thin.. However these days.. I see the supplement almost for 20 pages with 12- 15 pages of ad...
    It does not mean that there is a fall in prices.. it only means probably there is a slowdown in sales and everyone is advertising.. and if the trend continues thro' Diwali.. who knows...

    But this is my inference of how things are..
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  • Originally Posted by jadhav_ravi
    In America they go down because people put 10% of their money and 90% is mortgage and then they see foreclosures and depressed sales.

    Indians are more prudent. They do not have a reckless lifestyle (although this is changing). India is a rich nation of poor people.


    Your observation about America and India are totally contradictory.
    I find Americans more prudent and hence ruling the world :D

    Pls read points:
    * High poverty and high RE price (comparable to USA) co-exist when avg urban middle-class earns #1/5 of his/her counter-part in USA.
    * American houses are of better quality & life-span. Indian throwing loads of cash on inferior-quality houses.
    * Indians buying houses at Home-loan rate of #9% (USA 4.3%) in-spite of double-digit inflation.
    * Indians putting 30%-50% down-payment, with the fact that NO social security if one looses job.
    * Indians buying RE on high EMI in city-outskirts when one can Rent at 1/3 cost in the city. Also poor in maths?
    * Paying high EMI and compromising on quality/necessities of life for e.g. rich/nutritional food (malnutrition is India is comparable to sub-saharan African countries), family-traveling on scooter (triple-seat) when can afford car.

    Are Indians prudent?
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  • Originally Posted by wiseman
    Jadhav,

    Apart from Govt statistics, where is the recovery?

    In the last 3 years (since April 2007) how much has your salary gone up? In the meantime, how much have prices gone up? Petrol, Vegetables, Rice, ...

    Also, as far as I know most Industries out there (lets forget Tata Motors, REliance, Infy, etc who are riding on their cash hoard and cornering the market) are seriously cash strapped and either going sick or closing in large numbers.

    What you say is recovery is mainly adriven by the following ...

    1. Banks (in collusion with builders and retailers) loosening their purse to go back to dangerous levels of lending (given the NPAs and drop in purchasing power of people over time)

    2. Builders jacking up prices in order to recover from their near-death experience back in 2008. Due to stimulus they have not got over their debt problem or inventory problem but merely postponed their crisis by a couple of years.

    3. The Govt desperately using every dangerous and short-term expedient mean to keep the "recovery" story going

    But, given the lack of volumes in RE we can safely assume that price increase is not based on real demand and only quotations used to scare some gullible people to buy in haste! Real growth happens when demand has healthy growth along with prices which is missing this time around.

    Here is my take (and its been the same since 2008) ...

    Back in 2008 I had posted my earliest post talking about home prices declining between 50% - 80% (in areas with the largest rise in prices) n the basis of my understanding that the coming depression was going to be the greatest in modern history. That fact is now commonly accepted (among the people who predicted the last recession) and they are now talking about this depression going on for quite a few years more.

    What nobody banked on was that the FED and other Central Bankers would make it much worse by creating insane stimulus programs and blowing the bubble bigger. Now, with the second leg of the depression threatening to open up, they are talking of yet more Quantitative Easing.

    Please note that this QE has not changed the original target but has merely postponed it because the global economic vehicle had got some more fuel to go a few more months (at a very heavy cost).

    While the rest of the world experiences depression (including China as we shall see), India cannot escape substantial pain, especially given our own precarious Fiscal situation. We do not seem to have the pain because a lot of money from all over the world is currently parked here to squeeze out little returns from one of the few places in the world which has some steam left. Given the lack of any upside in the markets in the last 10 months, the FIIs are getting edgy about the India growth story. And to make it worse, the Govt is squandering this money away in populist, feel-good schemes, and in corruption like the CWG, etc.

    The fact that major export segments like IT are facing serious hits to growth (except the top 10 companies which may have crossed the threshold and survive, most small/mid tier companies are facing significant difficulties which says a lot about where IT is going; apart from the fact that massive cuts in budget like BT - 50% - will inflict further hits on this sector). Shipping is a natural target as will be Textiles, Gems/Jewellery and Auto ancillaries. Much of the profit growth in the last 2 years could be credited to severe cost cutting and increased lending to stimulate demand, both of which do not last long (in fact most companies are done with cost cutting and this will show up in Sep Qtr results and more so on Dec results when the next leg of the depression takes hold.

    You will soon see FII money start to leave in serious numbers as money always seeks safety when things go wrong. And Industrial and Services sectors will take significant hits. What the Govt did not tel you is that the big IIP numbers in first half of this year was due to Low Base Effect as well as Stimulus Spending Peaking simultaneously!!! Now we will see the other side of the story ... High Base Effect and lack of Stimulus AS WELL AS second leg of the Depression!

    Once fear hits in big numbers we will see the same old stories about job loss and banks cutting down on lending and a natural contracting cycle.

    This scenario is unfolding quickly starting in US and EU and will not take long to hit our shores (1-2 quarters from the time it starts in the US). It is specifically when job losses threaten that you will see prices unravelling. If this decline takes longer to run (as there may not be another QE like before to stop it and blow another bubble) then you will also see distress sales by new entrants in RE (people who bought in 2007-10) with high leverage and poor job security which could compound the problem.

    The common man is not a fool. This is why, despite the MF industry trying to talk up the markets (unsuccessfully), MF NET flows are NEGATIVE and all the talk about midcaps and smallcaps and very long term investing is not holding any water with small investors. The stupidest thing to do is to put your money in smallcaps (highest risk of failure) and midcaps (decent risk of failure) especially when markets are in such a precarious state and this is what our geniuses in the investment business are recommending. Sure, in the next 25 years everything will go up. But will I be alive then? :)

    I will go out on a limb to state that I believe that this will happen starting this Sep and probably hit peak in 2H 2011 - 1H 2012 coinciding with the peak in US RE declines. Probably the best thing to do today is to shun RE and stocks (even sell them) and get into Gol.d, silver and short term fixed income securities.

    After a significant fall in prices, it would be best time to get into stocks and RE (especially agricultural land).

    This is not a period to be overconfident. Its a period to be circumspect and very cautious.

    Let us see.

    cheers


    The overall situation is presented in its right praspective by Wiseman. I highly appricate the effort put by wiseman in this post.
    It is rightly pointed out that the RE price in India particularly in Mumbai is going to crush in very near future. So investor be careful. At present there is no one other than investor in the mumbai RE domain.
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  • Originally Posted by tubaibabu
    The overall situation is presented in its right praspective by Wiseman. I highly appricate the effort put by wiseman in this post.
    It is rightly pointed out that the RE price in India particularly in Mumbai is going to crush in very near future. So investor be careful. At present there is no one other than investor in the mumbai RE domain.


    End users need to realise that it is the so called "investors" who have enabled builders to get into this position. We need to collectively choke them for air by not making real estate transactions for the next six months .. and if, for some unforeseen reason, you do need to make a buy ... do it directly with the builder .. shun investor flats that come up for resale .. only then with the investors vanish from the market place and the prices will come down to a realistic level.
    BTw .. most of these "investor" types are being funded by the kick backs and corruption activities like CWG farce etc so basically its your own money that is being used to screw you over.
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  • these investor people are just like Narada (Msgnger). I mean when things ar ebad these ppl move out reducing prices in sec sales...If it was only builder based primary market..prices would never go down ..they would go only up because builder is stronger..politically than the homebuyer..So they perform a very important function...If you only have actual users..prices would never go down..you can see this with rentals which hardly go down..
    so investors are necessary evil..

    Key problem is till this percetion is there among ppl / government that prices are going to rise.. This is the real problem..
    Govt benefits since
    It helps increase govt funding by land sale.. / feeling of prosperity even among ppl with poor cash flow living in posh areas../needless waste of resources in redevelopment..The Maha govt is playing a dangerous game..as dependence on property tax and land costs to finance its costs is going to lead to trouble later on.
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  • Originally Posted by hitmady
    Your observation about America and India are totally contradictory.
    I find Americans more prudent and hence ruling the world :D

    Pls read points:
    * High poverty and high RE price (comparable to USA) co-exist when avg urban middle-class earns #1/5 of his/her counter-part in USA.

    Actually indian ppl hardly spent on anything else..In US good education , edical costs a lot..but in india ppl r accustomed to cheap education..(which is changing now)

    * American houses are of better quality & life-span. Indian throwing loads of cash on inferior-quality houses.

    Lots of flats in Mumbai have snake like plaster cracks but this is because Govt is not doing its job in ensuring good quality housing via the permits

    * Indians buying houses at Home-loan rate of #9% (USA 4.3%) in-spite of double-digit inflation.
    In India practically Inflation is closer to 20% and rentals are also rising up..
    ppl r worried that since house prices are continuously going up, if they cannot buy now..it will be more expensive later..


    Indians putting 30%-50% down-payment, with the fact that NO social security if one looses job.
    Till now..Since India is developing there is hardly any story of a large numbe r of ppl losing jobs and going back to village so Indian ppl have never expereienced crisis


    * Indians buying RE on high EMI in city-outskirts when one can Rent at 1/3 cost in the city. Also poor in maths?
    Indians are smart that wys..key driver of purchase decisions is expecation of rising prices..Once that goes..see b'lore / hyderabad.. You dont get that much difference..This rtaio is worse in Mumbai though

    Andheri(W) 1 bhk costing 80L..i.e 80k emi but 20k rent i.e 400$
    But what is 80L now was 20L in 2002..so ppl are worried about price reaching 3 crores in 2015 or so..

    * Paying high EMI and compromising on quality/necessities of life for e.g. rich/nutritional food (malnutrition is India is comparable to sub-saharan African countries), family-traveling on scooter (triple-seat) when can afford car.

    I can assure you that no Indian give bad food to his child compared to anything else .. In fact if you not getting good food in Amrika , please come
    near Siddhivinyak and get good food when you sit in line with beggars..
    Also no scooters are sold nowadays..Its mainly bike and that too good one like pulsar..
    India ppl make cheap car like nano which also provided warmth to poor ppl by burning up.. and now many families travel in nano../cheap maruti

    Are Indians prudent?Your observation about America and India are totally contradictory.
    I find Americans more prudent and hence ruling the world :D

    Pls read points:
    * High poverty and high RE price (comparable to USA) co-exist when avg urban middle-class earns #1/5 of his/her counter-part in USA.

    Actually indian ppl hardly spent on anything else..In US good education , edical costs a lot..but in india ppl r accustomed to cheap education..(which is changing now)

    * American houses are of better quality & life-span. Indian throwing loads of cash on inferior-quality houses.

    Lots of flats in Mumbai have snake like plaster cracks but this is because Govt is not doing its job in ensuring good quality housing via the permits

    * Indians buying houses at Home-loan rate of #9% (USA 4.3%) in-spite of double-digit inflation.
    In India practically Inflation is closer to 20% and rentals are also rising up..
    ppl r worried that since house prices are continuously going up, if they cannot buy now..it will be more expensive later..


    Indians putting 30%-50% down-payment, with the fact that NO social security if one looses job.
    Till now..Since India is developing there is hardly any story of a large numbe r of ppl losing jobs and going back to village so Indian ppl have never expereienced crisis


    * Indians buying RE on high EMI in city-outskirts when one can Rent at 1/3 cost in the city. Also poor in maths?
    Indians are smart that wys..key driver of purchase decisions is expecation of rising prices..Once that goes..see b'lore / hyderabad.. You dont get that much difference..This rtaio is worse in Mumbai though

    Andheri(W) 1 bhk costing 80L..i.e 80k emi but 20k rent i.e 400$
    But what is 80L now was 20L in 2002..so ppl are worried about price reaching 3 crores in 2015 or so..

    * Paying high EMI and compromising on quality/necessities of life for e.g. rich/nutritional food (malnutrition is India is comparable to sub-saharan African countries), family-traveling on scooter (triple-seat) when can afford car.

    I can assure you that no Indian give bad food to his child compared to anything else .. In fact if you not getting good food in Amrika , please come
    near Siddhivinyak and get good food when you sit in line with beggars..
    Also no scooters are sold nowadays..Its mainly bike and that too good one like pulsar..
    India ppl make cheap car like nano which also provided warmth to poor ppl by burning up.. and now many families travel in nano../cheap maruti

    Are Indians prudent?
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  • Originally Posted by mamba
    Originally Posted by hitmady
    India ppl make cheap car like nano which also provided warmth to poor ppl by burning up.. and now many families travel in nano../cheap maruti

    Are Indians prudent?


    :D:D:D :bab (4):

    I had to read your post thrice man, but I just couldn't get your sarcasm everywhere else. But this bit? Absolutely priceless. :bab (6):

    :D:D:D :bab (4):

    I had to read your post thrice man, but I just couldn't get your sarcasm everywhere else. But this bit? Absolutely priceless. :bab (6):
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  • Good post wiseman. Though I do not agree completely to all the negative direction, I applaud your efforts and passion towards the topic. Thanks for the contribution, it was a good read :)

    A wise man (not wiseman the user!) once told me how to identify a bubble. The peak is near when people start to justify the already sky rocketed prices.

    Originally Posted by wiseman
    Jadhav,

    Apart from Govt statistics, where is the recovery?
    .....

    Let us see.

    cheers
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  • While all NRIs are so sure of bubble and waiting in sidelines, the RE market in India just chugs ahead.

    Keep talking of NPAs, corruption, infrastructure, bubble, FDI, FII, bad debt, restructuring, double triple quadruple dips, FED, Bernanke, Buffet, Recession, Depression, QE, Dow, ... while the odd new graduate who came from village gets his job, buys a new flat in Mumbai and moves on. He can afford 30L so they price it at 30L in remote suburbs. The 5000-10000 flats worth 1C+ have enough takers in Mumbai. So life just goes on.
    :bab (35):

    There is no replacement for experience. Keeping aside all text-book economists, ask any Mumbaikar and they will tell you what will happen if you keep thinking of bubble and wait on the sidelines: the price will just go up!
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  • Very well woven together. Great piece of writing.

    Originally Posted by jadhav_ravi
    While all NRIs are so sure of bubble and waiting in sidelines, the RE market in India just chugs ahead.
    Keep talking of NPAs, corruption, infrastructure, bubble, FDI, FII, bad debt, restructuring, double triple quadruple dips, FED, Bernanke, Buffet, Recession, Depression, QE, Dow, ... while the odd new graduate who came from village gets his job, buys a new flat in Mumbai and moves on.
    :bab (35):

    There is no replacement for experience. Apart from the economists, ask any Mumbaikar and they will tell you what will happen if you keep thinking of bubble and wait on the sidelines: the prices will just go up!
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  • Originally Posted by MANOJa
    Very well woven together. Great piece of writing.



    What a piece of writing ???
    The present day economic crisis all about this misplaced belief that price increases all the time even it has no rational reason behind. The whole world has learn that every bubbles bust one day but unfortunately nither you nor Mr. Jadhav ravi has learnt a lesson.
    But the days are not far, the RE bubble is going to bust very soon. Hope nither you nor Mr. Jadhav ravi have invested havily in Mumbai RE.
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  • Originally Posted by tubaibabu
    What a piece of writing ???
    The present day economic crisis all about this misplaced belief that price increases all the time even it has no rational reason behind. The whole world has learn that every bubbles bust one day but unfortunately nither you nor Mr. Jadhav ravi has learnt a lesson.
    But the days are not far, the RE bubble is going to bust very soon. Hope nither you nor Mr. Jadhav ravi have invested havily in Mumbai RE.


    Wishful thinking!
    When everything tanks, Mumbai RE will tank.
    Till then just keep wishing.

    "The present day economic crisis" Which crisis are you talking of??
    "The whole world has learn that every bubbles bust one day" Justify that it is a bubble first. That way : Is Stock market at 18K also a bubble?? Are salaries of 15-20L per annum for middle-level manager also a bubble? Are all onsite/NRI guys earning US salaries a bubble? Is 100% growth in Tata Motors profit a bubble?
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  • I think u r one of the guys who had a misadventure in the last bubble burst.

    This is a forum, where everybody is free to give an opinion, as long as it is not biased or influenced by some external forces.

    Two people can always have different views , but there r better ways to express disagreements.

    Thanks


    Originally Posted by tubaibabu
    What a piece of writing ???
    The present day economic crisis all about this misplaced belief that price increases all the time even it has no rational reason behind. The whole world has learn that every bubbles bust one day but unfortunately nither you nor Mr. Jadhav ravi has learnt a lesson.
    But the days are not far, the RE bubble is going to bust very soon. Hope nither you nor Mr. Jadhav ravi have invested havily in Mumbai RE.
    CommentQuote