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ITS OFFICIAL - Slump in realty sales hits brokers really hard

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ITS OFFICIAL - Slump in realty sales hits brokers really hard

Last updated: June 22 2011
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  • #31

    #31

    Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

    Originally posted by vkumar1 View Post
    Except for the media rhetorics, where are the signs of Realty Sector Slump?
    In NCR, except for the NOIDA area, which is under distress because of the litigations and not because of so said slump, where are the prices going down?

    If the prices are not the criteria, then just what is the criteria?

    Please quote some distress sales by builders in Gurgaon to prove your point. Otherwise, there is no slump.
    thats true. visibily there is no slump. it will be a time-based slump. if price of a property in Noida stagnates for 6-12 months, its as good as a 8-10% slump due to cost-inflation index, expenditure and maintenance towards holding that flat. we are not going to see prices of new launch to reduce suddenly by 20-30%. Prices of over heated project in the upper and middle segment may come down by 15%. AFfordable and Ultra affordable segment will continue to see demand as usual as there is a shortage of 25 million units in that segment.
    MM

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    • #32

      #32

      Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

      US may face fresh recession in 2011-12 worse than before: Jim Rogers - Economic Times


      Friends, this is not related to the topic but has some indirect connect to the things that we are discussing here...

      Comment

      • #33

        #33

        Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

        Originally posted by chirag999 View Post
        US may face fresh recession in 2011-12 worse than before: Jim Rogers - Economic Times


        Friends, this is not related to the topic but has some indirect connect to the things that we are discussing here...
        Chirag,
        I have been hearing the issue of US for last 1 yr. Now i have started to beleive the fact-
        If US does well, India wont do well, If US doesn't do well, India will do well.
        MM

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        • #34

          #34

          Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

          Originally posted by Munish Malhautra View Post
          Candid comments
          I had asked a Q in 2010 that if price of RE crashes and comes down by 20-30% and if rental increase by 10-15% in 2011, what will u do, max responses said that they will still not buy and continue to rent. Hence the point is very clear. those who want to buy will buy any which way and those who dont want to buy will continue to comment and argue and keep waiting for the right opportunity.
          MM Bhai, you know all these as you have seen the RE market closely.... I remember in one of your post you talked about financing of RE projects... and that clearly shows depth of your knowledge in the business. ... there was another guy, Zohaib, who seen things so closely.
          (Kal (Friday) ke liye!!)

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          • #35

            #35

            Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

            Originally posted by chirag999 View Post
            US may face fresh recession in 2011-12 worse than before: Jim Rogers - Economic Times


            Friends, this is not related to the topic but has some indirect connect to the things that we are discussing here...
            ohh.. you forgot... the expert has a great name for it, called DOUBLE DIP Recession.... and we have been hearing this for many days.

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            • #36

              #36

              Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

              Originally posted by Munish Malhautra View Post
              if price of a property in Noida stagnates for 6-12 months, its as good as a 8-10% slump due to cost-inflation index, expenditure and maintenance towards holding that flat..
              You are very true with your statement about NOIDA, but this is largely because of the litigations. The "oversupply" factor was already offset by the introductory prices of 1750 - 2000 psf. (An 1800 psf price is a "loot" in NOIDA region - it is a once in a lifetime opportunity - compare prices in mid range society in Meerut: Rs. 1500 psf VS Noida Ex. Price Rs. 1800 - A ridiculous comparison, just an oversupply factor!)

              If I were a billionaire and there were no litigations in NOIDA, I would have bought the whole Noida Extension!

              About Gurgaon: There is no scope of price correction and slump. One year back, I was waiting for Today's canary greens to launch and book 2 units, and was hoping it to launch at 3200-3300 level. They came up with 3750! That means, they themselves ate the next 1.5 years appreciation in advance. Many people booked but I abstained. Today, resale prices are still same and will remain same for the next 6 months at least. This phenomenon also cannot be counted towards the sign of slump since the developer made fool of people.

              Others prices in Gurgaon are steadily rising and will continue to rise. (About Bangalore, Pune, Hyderabad etc., they are bound to see the downturn because of the MNCs moving to Gurgaon, Noida)

              No market corrections - no slump (in NCR) in sight right now. Prices are still very good.

              Comment

              • #37

                #37

                Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

                Originally posted by Munish Malhautra View Post
                thats true. visibily there is no slump. it will be a time-based slump. if price of a property in Noida stagnates for 6-12 months, its as good as a 8-10% slump due to cost-inflation index, expenditure and maintenance towards holding that flat. we are not going to see prices of new launch to reduce suddenly by 20-30%. Prices of over heated project in the upper and middle segment may come down by 15%. AFfordable and Ultra affordable segment will continue to see demand as usual as there is a shortage of 25 million units in that segment.
                While I agree with your views and I personally believe there is not much room for builder to cut cost further and go for a 20-30% discount.

                However, it happened in Noida just couple of years back.... and the reason? Oh no, not recession or such...... in management term it is called "Game Changer" ... we had NE and the price of Noida dropped to some sane level.

                There can be some game changer once again.... but probability of that is quite low in near future.

                Comment

                • #38

                  #38

                  Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

                  Hello Munish Sir,

                  Even i am not that influenced by this article but yes a few of the things that have been pointed are 100% correct.

                  My believe is when US market falls then 50% ppl in india make profit and other 50% suffer.




                  Originally posted by Munish Malhautra View Post
                  Chirag,
                  I have been hearing the issue of US for last 1 yr. Now i have started to beleive the fact-
                  If US does well, India wont do well, If US doesn't do well, India will do well.

                  Comment

                  • #39

                    #39

                    Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

                    I had to choose 1 year 20% because this was closest to my opinion.

                    What I really beleive is 10% correction lasting 1 year.

                    Comment

                    • #40

                      #40

                      Re : ITS OFFICIAL - Slump in realty sales hits brokers really hard

                      Originally posted by Munish Malhautra View Post
                      Chirag,
                      I have been hearing the issue of US for last 1 yr. Now i have started to beleive the fact-
                      If US does well, India wont do well, If US doesn't do well, India will do well.
                      Hi guys,

                      I'm a novice in RE. However, does know a bit about finance. I do believe if another recession (predicted to be deeper) hits US, it could prove catastrophic for the entire world economy. India may have a bit lesser impact, but it'll be there.

                      Reasons (bit longer, but still brief) -

                      1. 2008 crash/recession was primarily caused by RE burst. That's why it was called "Sub-Prime Crisis". Though other reasons like reducing exports, jobs in manufacturing and services were also another reason.

                      2. US had the bullets to fight the recession, later called "Quantitative Easing (QE-I and QE-II)". Basically, this was flushing the economy with cheap money by reducing real rates to almost zero, buying bad debts from financial system to govt. books, and re-rating already worsened debt situation. Ultimate objective was to prevent a complete crash in stock markets and re-create confidence in already shaken investors.

                      3. Huge chunk of this QE money flew out to Emerging Markets like India, China, Brazil, Russia etc. That's why during 2009-10 period, when all world markets swung into +ve, Emerging markets were best performers.

                      4. However, along with world markets, metals like gold, silver, platinum that are considered heaven during crisis also continued to rise to new peaks. This spike was caused not by QE, but by actual investors (retail and HNI) who had lost confidence in world financial system.

                      Now, everything was going smooth and everyone believed that recovery has already started happening or its round the corner. But few basic fundamentals that were overlooked by US Fed (and which were actually warned by leading economists) -

                      1. Stashing easy money in the economy is easy, u just need to print paper currency. However, once things stablize, how would this money be brought back from the system to the Central Bank. Fed thought that once confidence would return, they would start raising interest rates and things would be back to normal. AND BINGO, THAT NEVER HAPPENED.

                      2. Huge amount of investments in BRICS nations led to terrific commodity demand, that couldn't be matched by constrained supply. Result - inflation and current account deficits. We all know what's happening in India.

                      3. Due to QE-I, QE-II, burgeoning fisal deficit, and, trade imbalance, US has already exhausted its debt ceiling of around 14 trillion USD. So, if another market crash hits, US probably has not bullets to fire.

                      4. Besides, if US govt. revenue doesn't raise (which look virtually impossible), it may default on its debt payments that would lead to re-rating (downgrading) of US govt., or, better say entire US economy.

                      5. Don't forget who are biggest creditors of US Fed - they are emerging nations like China, India, Brazil, EU, besides fund houses and banks etc. Hence, if US fails on its debt obligations, it would prove catatrophic for these nations. Its simply like i give u huge loan and u don't pay me back, i'll be doomed.

                      That's why, this time world and especially China - India are correlated to US like never before. Pray that US shall never ever enter into recession again.
                      The knowledge of what to do in a Recession or Boom is more important than predicting a Recession or Boom.

                      Comment

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