As per the report published in front page today(15-JUNE-2011) ... economictimes.com ----- REAL ESTATE SLOWDOWN has begun, brokers are running here and there due to paltry sales.

http://economictimes.indiatimes.com/markets/real-estate/realty-trends/brokers-hunt-for-jobs-as-sales-slump-hits-realty/articleshow/8856588.cms

Updated: 18/Jun/2011.
India's Homebuyers Gaining Upper Hand

India's Homebuyers Gaining Upper Hand - WSJ.com



NEW DELHI | BANGALORE: Yusufbhai has just opened a stationery shop in a Bangalore bylane. He has christened it 'Smart Shop', borrowing the name from the realty brokerage firm, Smart Properties, he ran from the same premises until about two months ago. Yusufbhai switched to retail after his property business hit a rough patch following a slump in home sales. About three-quarters of his revenues came from sale of apartments, the remaining from renting.

"With home sales plummeting, it doesn't make business sense anymore," he explains. It's the same story in other big cities. In Mumbai, Pranay Shah, a mid-size broker has set up a small fast food joint to make ends meet. In Nagpur, Sashinath Chinchole has quit the real estate business and set up an ice-cream parlour. Their worries are not unfounded. While the large and established players in the property business have managed to stay put even during the slump, thousands of smaller players like brokers and agents are being forced to look for other jobs.

Also hit are lakhs of people employed with such small outfits - each of which hires 5-15 people.With many brokers shutting shop or downsizing, these people are out in the market, looking for jobs in sectors such as retail, banking, insurance and call centres. The real estate industry employs about 10 lakh people across the country, the majority in the unorganised sector.

In the first quarter of 2011, home sales dropped 17% in Mumbai, 14% in Bangalore and 15% in Hyderabad. According to consultant Jones Lang La-Salle, unsold residential units in projects that are complete or are nearing completion in 6-12 months in Mumbai and Delhi-NCR are as high as 25% and 16%, respectively. In other big cities, including Bangalore, Chennai and Kolkata, the numbers range between 12% and 19%. Sales in tier-II and tier-III cities are steady, though there is some panic due to the increase in interest rates, which have climbed to about 11% from 8.25% a year ago.


"For smaller brokers, the impact of the current market factors is a lot more compared to the larger brokers," says Abdur Ravoof, president of the National Association of Realtors India . Ravindra Bramhe, chairman of the Maharashtra Property Brokers' Association, says, "Even for our members - who are fairly well-off - business is down 40% compared to 2009-10. But the smaller guys are in trouble and are setting up businesses that move on a daily basis. Many I know have asked their employees to look out."

Mrinal Chaudhary, 24, chose to work in the real estate sector in the National Capital Region after his MBA last year because it was booming. He worked with a small real estate brokerage firm, which sold apartments in Greater Noida. He made an average Rs 45,000 a month, sometimes even Rs 80,000. Then came the farmers' agitation on the Yamuna Expressway, and business disappeared. Chaudhary moved to a bank. He has vowed never to return to the sector.

For whatever business is left in the market, there are hundreds of agents in queue. For instance, there are pockets on the Noida Expressway, near large projects, where real estate brokers can be seen sitting inside small tents, under the sweltering sun, waiting for business. Those who can't afford to set up these tents can be seen on the roadside, running after every car that passes by, with brochures and flyers of projects in hand. Industry refers to them as the broker mandi. "All my friends and colleagues are now looking outside real estate before things get worse," says Chaudhary. Many have returned to the insurance industry and others have found jobs with small call centres. A few have found employment with retail stores, says Chaudhary.

Many other young sales executives still working with brokerage firms are struggling, not knowing whether they will get a salary at the end of the month, as most of these firms have switched from a fixed salary model to a revenue-based fee model for their sales staff. "This was required," says Sumit Joshi, director of Noida-based Capitol Realtors, a mid-size real estate brokerage that has downsized as well as started working on a revenue-based fee model. To tide over the slowdown in sales, his firm has also recently diversified into loans, both for real estate and business, and loan against property by tying up with multiple banks.

With opportunities opening up in other sectors, the number of resumes received by hiring services firm TeamLease Services from the real estate sector has shot up. Says Rituparna Chakraborty, co-founder and senior vice-president, TeamLease, "Employment in organised real estate is at a nascent stage. And that is why employees seek opportunities in other sectors whenever business is down." Brokers, who ran successful businesses employing people on their rolls, are turning employees themselves. Take the example of Bangalore-based Mustafa Sharif, who has been leasing and renting commercial and residential establishments for a decade. He had to shut shop a few months ago, and chanced upon a job with a local builder. He now earns Rs 35,000 a month and has given his shop to his cousin to run some business.

Uncertainty in real estate was hard to bear for N Darshan, who downed the shutters on his five-year-old brokerage in Bangalore recently. "There was a time when there were no sellers and only buyers. But things have changed. Now I have turned my real estate shop into a cyber cafe," he says. Across town, another broker Shiva Kumar has put up a photocopy machine to balance his real estate broking business. "There is no assured income in real estate anymore. The commission on selling homes too has shrunk with buyers willing to pay only half the brokerage," says Kumar.
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  • I like your comment on law of averages hitting bulls eye sometimes if uttered every day of the year for too many years. The recession that came by in 2008, had minimal effect on Indian GDP unlike in leveraged western countries. I remember Gurgaon RE didn't buckle much during recession and after the event had gone much beyond 2007 peak. So I am fervently looking for another recession so that in 3 years time we go beyond peak reached in 2010.

    Originally Posted by alokgarg


    finally, if someone keeps predicting same thing for a long time, some time it will come true. that doesn't mean that he is a seer, its just that law of averages works, even for low probability events.
    CommentQuote
  • Do not be predisposed!

    Originally Posted by alokgarg
    first a correction. I am no investor. just an end user who has bought one flat after doing research for 1 year in noida market, and this one flat is appreciating handsomely. I don't write if I don't have anything worthwhile to say, it is as simple as that. IT is my day job and I don't pretend that I know everything about RE or world finance as some other people here do.

    that said, I can certainly follow logic in other people's argument. vkumar1 said, foreign reserves is only 10% of India's GDP. if doom comes to US worst case scenario we will loose that and we will not even complete loose that. in great depression US gdp decreased by 25%. there will be impact on India of a recession in US. but it will not be a apocalypse.

    regarding prediction of coming real estate meltdown, people are making them for last 2 years. there is one big thread on pune forum where people have been predicting coming meltdown in next 2 months for last 2 years. so forgive me, if I don't put much weight on these predictions.

    finally, if someone keeps predicting same thing for a long time, some time it will come true. that doesn't mean that he is a seer, its just that law of averages works, even for low probability events.



    Garg,

    I'm not arguing with you.

    But where exactly did I talk about Apocalypse in India (as you insinuate)? If you bothered to read my posts carefully I have only talked of the effects of over-leverage especially on RE purchases.

    Second, saying our FE is only 10% of GDP only means that whenever we say something, we should make sure we know what we are talkin about. FE reserves has very little to do with GDP. I dont know how old you were in 1990 when we had only 3 weeks of FE left in reserves (we need hard currency to buy essentials like Oil, etc). We had to part with our Gold (nothing else would do) inorder to buy some more FE & that was seen as nearly catastrophic. In fact MMS's entire reputation was built upon managing that crisis & getting this country on Reforms which is why you earn the high salaries that you do today!

    In any case a significant part of our FE is hot money inflow, which can (& will) flow out if the investor is in distress OR sees no reason to park it here. You might notice that in 2008 distress pullout was a major reason to crash our Stock Market which had a Domino effect on RE as well. Its the same even now.

    Please realise that a $10-20 billion pullout will result in stock indices going down 3000 to 6000 points or more - Sensx. This alone can create a big crisis in these tense times! So you can imagine what would happen if we "lose" "only 10% of our GDP" as you put it. You will see the Sensx at 3000 again & this country revert back to 1995 in economic terms.

    Besides, this whole thng about "if you talk doomsday long enough, you will get lucky someday" is a whole lot of nonsense quite a few people use to put down some genuine arguments. They assume that if the train wreak does nt arrive as predicted, it does not exist. Sure. If the West did not do bailouts & create bubbles to relieve other bubbles exploding we all would have had this crisis back in 2003!

    First of all 2 years is very short in RE timescale. In addition it now becomes clear that the next recession / depression was merely a postponement of the 2008 one - which itself was a postponement of the 2000 one - simply by printing more money & pretending that all was well. Its called "extend & pretend".

    In a timespan of 20 years (time it takes to pay off a loan) there would be a couple of minor slumps (80s & 90s). But you can not have 3 major declines within 10 years & call it normal.

    I reiterate that the continuous call for caution over last 3 years was fully justified, had its sound basis & (as time will prove) have serious repercussions on many people who ventured into RE prematurely at excessive prices.

    Lets wait & watch.

    cheers
    CommentQuote
  • Originally Posted by wiseman
    Garg,

    I'm not arguing with you.

    But where exactly did I talk about Apocalypse in India (as you insinuate)? If you bothered to read my posts carefully I have only talked of the effects of over-leverage especially on RE purchases.

    Second, saying our FE is only 10% of GDP only means that whenever we say something, we should make sure we know what we are talkin about. FE reserves has very little to do with GDP. I dont know how old you were in 1990 when we had only 3 weeks of FE left in reserves (we need hard currency to buy essentials like Oil, etc). We had to part with our Gold (nothing else would do) inorder to buy some more FE & that was seen as nearly catastrophic. In fact MMS's entire reputation was built upon managing that crisis & getting this country on Reforms which is why you earn the high salaries that you do today!

    In any case a significant part of our FE is hot money inflow, which can (& will) flow out if the investor is in distress OR sees no reason to park it here. You might notice that in 2008 distress pullout was a major reason to crash our Stock Market which had a Domino effect on RE as well. Its the same even now.

    Please realise that a $10-20 billion pullout will result in stock indices going down 3000 to 6000 points or more - Sensx. This alone can create a big crisis in these tense times! So you can imagine what would happen if we "lose" "only 10% of our GDP" as you put it. You will see the Sensx at 3000 again & this country revert back to 1995 in economic terms.

    Besides, this whole thng about "if you talk doomsday long enough, you will get lucky someday" is a whole lot of nonsense quite a few people use to put down some genuine arguments. They assume that if the train wreak does nt arrive as predicted, it does not exist. Sure. If the West did not do bailouts & create bubbles to relieve other bubbles exploding we all would have had this crisis back in 2003!

    First of all 2 years is very short in RE timescale. In addition it now becomes clear that the next recession / depression was merely a postponement of the 2008 one - which itself was a postponement of the 2000 one - simply by printing more money & pretending that all was well. Its called "extend & pretend".

    In a timespan of 20 years (time it takes to pay off a loan) there would be a couple of minor slumps (80s & 90s). But you can not have 3 major declines within 10 years & call it normal.

    I reiterate that the continuous call for caution over last 3 years was fully justified, had its sound basis & (as time will prove) have serious repercussions on many people who ventured into RE prematurely at excessive prices.

    Lets wait & watch.

    cheers


    Wiseman, if I am not mistaken, you are the person who predicted real estate CRASH in way back in 2009 ... we are still waiting for it.

    And when you talk about CRASH, please do a simple thing, compare the price of 2009 and your crashed price now in 2011... or may be 2012 or no one knows.
    CommentQuote
  • Originally Posted by alokgarg
    first a correction. I am no investor. just an end user who has bought one flat after doing research for 1 year in noida market, and this one flat is appreciating handsomely. I don't write if I don't have anything worthwhile to say, it is as simple as that. IT is my day job and I don't pretend that I know everything about RE or world finance as some other people here do.

    that said, I can certainly follow logic in other people's argument. vkumar1 said, foreign reserves is only 10% of India's GDP. if doom comes to US worst case scenario we will loose that and we will not even complete loose that. in great depression US gdp decreased by 25%. there will be impact on India of a recession in US. but it will not be a apocalypse.

    regarding prediction of coming real estate meltdown, people are making them for last 2 years. there is one big thread on pune forum where people have been predicting coming meltdown in next 2 months for last 2 years. so forgive me, if I don't put much weight on these predictions.

    finally, if someone keeps predicting same thing for a long time, some time it will come true. that doesn't mean that he is a seer, its just that law of averages works, even for low probability events.


    Alokbhai, cool down :bab (48):

    Seasonal birds comes, create noises and then disappears. We have seen many such people coming for few posts, venting their frustration and then disappear.

    It is better to ignore them and they will disappear on their own. If the discussion is not fruitful, meaningful and practical.... discussion just for academic purpose on some hypothesis... no one will be interested in reading those craps for days and you know the outcome.

    Anyone thinking my above post as crap can do the same thing on me too... just ignore.

    So Alokbhai, cool down and eek eek ho jaye aapke liye aur mere liye :bab (48):
    CommentQuote
  • sirjji itni jalddi cheerrrss mat karo, feeling jaag jaati hai...abhi ek din aur kaam karna hai n den friday party. Bass thoda intezaar :0

    Originally Posted by ondabhai
    Alokbhai, cool down :bab (48):

    So Alokbhai, cool down and eek eek ho jaye aapke liye aur mere liye :bab (48):
    CommentQuote
  • Originally Posted by chirag999
    sirjji itni jalddi cheerrrss mat karo, feeling jaag jaati hai...abhi ek din aur kaam karna hai n den friday party. Bass thoda intezaar :0


    Koi baat nehin.. abhi se planning chaloo kar do to mehfil zaroor zamegi!!
    CommentQuote
  • hey guys,

    looks like it we entered into some really hot discussion. :bab (22):
    ok, i agree with you all. Frankly, who wants a boom burst in our Pyara Bharat

    Bhagwaan kare apna desh din duna raat chauguna tarakki kare...

    its only a matter of belief - being optimistic or pessimistic - two sides of the same coin.

    But yes, one think i do believe in, US and EU (since its also in as doldrums as US) contribute approx 40% - 45% of world GDP. And if they burst, everything in the world will shake. In India, industries catering to US/EU like IT, BPO, Manufacturing, Exports etc. will feel the pinch,

    But yes, on the positive side, it also means reduction or atleast stagnation in commodity (esp. oil, coal, iron) prices due to reduced western demand. GOOD FOR APNA BHARAT.

    As per www.worldwatch.org, The United States, with less than 5 % of the global population, uses about a quarter of the world’s fossil fuel resources—burning up nearly 25 % of the coal, 26 % of the oil, and 27 % of the world’s natural gas. The 12 % of world’s population that lives in North America and Western Europe accounts for 60 percent of private consumption spending, while the one-third living in South Asia and sub-Saharan Africa accounts for only 3.2 percent.

    Hence, if US and EU falls, world is not going to come to end. But there would be transition from West to East, and it'll be painful. More for them, less for us.

    Baki agar kuch galat bol diya to sorry hai bhai log...:bab (39):


    Benjamin Graham once said: “The fact that other people agree or disagree with you makes you neither right nor wrong. You will be right if your facts and your reasoning are correct.”
    CommentQuote
  • don't worry I am not going anywhere and I will always remain cool :D. but sometimes you have to respond when people just resort to posting rants in response of someone's well thought out argument. but in the end, you are right, there is no point in stretching an academic discussion. that's why I stopped responding to Nahar-par guy and will soon stop responding to world economy people.

    cheers.
    Originally Posted by ondabhai
    Alokbhai, cool down :bab (48):

    Seasonal birds comes, create noises and then disappears. We have seen many such people coming for few posts, venting their frustration and then disappear.

    It is better to ignore them and they will disappear on their own. If the discussion is not fruitful, meaningful and practical.... discussion just for academic purpose on some hypothesis... no one will be interested in reading those craps for days and you know the outcome.

    Anyone thinking my above post as crap can do the same thing on me too... just ignore.

    So Alokbhai, cool down and eek eek ho jaye aapke liye aur mere liye :bab (48):
    CommentQuote
  • Originally Posted by alokgarg
    don't worry I am not going anywhere and I will always remain cool :D. but sometimes you have to respond when people just resort to posting rants in response of someone's well thought out argument. but in the end, you are right, there is no point in stretching an academic discussion. that's why I stopped responding to Nahar-par guy and will soon stop responding to world economy people.

    cheers.


    Alok sir, ondabhai sir, right say by you

    Bye Wisemen sir

    Please discuss in Indian English not in IMPORT english

    bye:bab (59):
    CommentQuote
  • Post maybe off-topic but still relevant to the thread.

    Dont take it otherwise or personally ss this is not directed to any single person, but please read the content of Wiseman's posts in Pune forum.
    I know for a fact that discussions on Pune forum are far more logical than NCR forum where people often get into emotional tiffs and only bothered about prices and discounts going up or down.
    You will realise when u see how many people got banned from Pune forum and how many from NCR.

    I understand that he gets into longish dooms-day discussions again and again but what he tells is definitely based on some facts and his deep knowledge of financials and economics must have been helpful to many people and definitely it includes me.

    I consider his posts as "heads-up" but not necessarily the deciding factor.

    Hence before discounting someone please see his contribution. :)
    CommentQuote
  • Originally Posted by wiseman
    Garg,

    I'm not arguing with you.

    But where exactly did I talk about Apocalypse in India (as you insinuate)? If you bothered to read my posts carefully I have only talked of the effects of over-leverage especially on RE purchases.

    Second, saying our FE is only 10% of GDP only means that whenever we say something, we should make sure we know what we are talkin about. FE reserves has very little to do with GDP. I dont know how old you were in 1990 when we had only 3 weeks of FE left in reserves (we need hard currency to buy essentials like Oil, etc). We had to part with our Gold (nothing else would do) inorder to buy some more FE & that was seen as nearly catastrophic. In fact MMS's entire reputation was built upon managing that crisis & getting this country on Reforms which is why you earn the high salaries that you do today!

    In any case a significant part of our FE is hot money inflow, which can (& will) flow out if the investor is in distress OR sees no reason to park it here. You might notice that in 2008 distress pullout was a major reason to crash our Stock Market which had a Domino effect on RE as well. Its the same even now.

    Please realise that a $10-20 billion pullout will result in stock indices going down 3000 to 6000 points or more - Sensx. This alone can create a big crisis in these tense times! So you can imagine what would happen if we "lose" "only 10% of our GDP" as you put it. You will see the Sensx at 3000 again & this country revert back to 1995 in economic terms.

    Besides, this whole thng about "if you talk doomsday long enough, you will get lucky someday" is a whole lot of nonsense quite a few people use to put down some genuine arguments. They assume that if the train wreak does nt arrive as predicted, it does not exist. Sure. If the West did not do bailouts & create bubbles to relieve other bubbles exploding we all would have had this crisis back in 2003!

    First of all 2 years is very short in RE timescale. In addition it now becomes clear that the next recession / depression was merely a postponement of the 2008 one - which itself was a postponement of the 2000 one - simply by printing more money & pretending that all was well. Its called "extend & pretend".

    In a timespan of 20 years (time it takes to pay off a loan) there would be a couple of minor slumps (80s & 90s). But you can not have 3 major declines within 10 years & call it normal.

    I reiterate that the continuous call for caution over last 3 years was fully justified, had its sound basis & (as time will prove) have serious repercussions on many people who ventured into RE prematurely at excessive prices.

    Lets wait & watch.

    cheers



    So, wiseman dada - do u agree with what i said in my initial post ?
    CommentQuote
  • Originally Posted by Munish Malhautra
    Dont take it otherwise or personally ss this is not directed to any single person, but please read the content of Wiseman's posts in Pune forum.
    I know for a fact that discussions on Pune forum are far more logical than NCR forum where people often get into emotional tiffs and only bothered about prices and discounts going up or down.
    You will realise when u see how many people got banned from Pune forum and how many from NCR.

    I understand that he gets into longish dooms-day discussions again and again but what he tells is definitely based on some facts and his deep knowledge of financials and economics must have been helpful to many people and definitely it includes me.

    I consider his posts as "heads-up" but not necessarily the deciding factor.

    Hence before discounting someone please see his contribution. :)


    No offense to anyone .. Nimbu jyada nichod ne se kadwa ho jaata hain.

    Aaab yeh nehin paata ke kadwa nimbu juice karele ke juice jaisa faidamand hota hain ki nehin. .....Ya faide ke liye nimbu nichod nichod ke kadwa karke peena theek rahega ya direct karele ka juice peena..

    Mere liye to aaj Friday hain.... nehin peena mujhe kadwa nimbu ... :bab (48):
    CommentQuote
  • Originally Posted by Munish Malhautra
    Dont take it otherwise or personally ss this is not directed to any single person, but please read the content of Wiseman's posts in Pune forum.
    I know for a fact that discussions on Pune forum are far more logical than NCR forum where people often get into emotional tiffs and only bothered about prices and discounts going up or down.
    You will realise when u see how many people got banned from Pune forum and how many from NCR.

    I understand that he gets into longish dooms-day discussions again and again but what he tells is definitely based on some facts and his deep knowledge of financials and economics must have been helpful to many people and definitely it includes me.

    I consider his posts as "heads-up" but not necessarily the deciding factor.

    Hence before discounting someone please see his contribution. :)

    Are you saying agree with arguments but not with inference. What is this knowledge that draws wrong inferences. Have not read any post on Pune forum, but definitely wd like to now. offhand I can say that it is very easy to put some financial jargon from here and there and say that everything will fall down. No experts required there. Expertise is required in identifying individual short and long opportunities in any business. If you are reading some bearish macro analyst who has been proved wrong again and again by increasing property prices in the last two years, my advise is save your time.
    CommentQuote
  • mt, I have been reading wisemans posts for long. His analysis is always skewed to the extreme scenario, when everything crashes. However he analyses very well and has sound knowledge. YOu would do well not to ignore his views.

    Best way to use his post is to consider his predictions as the worst case scenario and give probablity of occurrence at only 5%.

    That way, you will wonder just a little bit about "what if Wiseman's predictions come true?"

    That should create enough fear, so that you chose safe options and dont over-leverage yourself or make other mistakes.

    Assuming best case scenario is the usual way we approach RE investment. Most newspapers will give you this input - the "all is well" opinion.

    A thought towards worst case scenario makes us cautious and prevents over enthusiastic investment - like making 2 bookings assuming to sell one to pay for the other - a common trick used by many. No newspaper is going to give you Wiseman's scenario - so where will you get that input from? Wiseman writes as well as any newspaper writer too - a big plus, his writing is a delight to read.

    I would not recommend you to time your investments using Wiseman's predictions, because he is always bearish at all times.

    The reality is always in between - neither the broker's rosy scenario, nor Wiseman's crash and burn scenario - but something more reasonable.

    Anyway, he is right about one thing - our "FE reserve" is entirely hot money and can flow out at any time. If FII pull out, our FE reserves will fall by a few tens of billions. Our currency is a semi float and will fall like crazy and we will be forced to raise interest rates and also increase allocation of FII monet to debt - this will arrest flight of capital at the cost of pushing us into a more extreme recession.

    But our RBI is good at their job - they have already started increasing debt allocations to FII money to prevent all these extreme events from happening. So pull out from equity will be balanced by debt allocation to dollar.

    Wiseman is also right about MMS and his actions in 1992. Madhu Dandavate was a great example of an incompetent finance minister who did not know his job. He managed to create a flight of capital which almost caused a default. MMS corrected his stupid mistakes and changed India for ever using that crisis as an excuse.

    Pranab is a much more accomplished finance minister and I am sure he wil lmanage this present problems without hassles.

    And life will go on as usual
    CommentQuote
  • Venky - Wiseman has great knowledge of finance and economics. But he is too bearish on almost everything.

    Also sometimes using financial and economic jargon to prove the point is not always healthy.
    CommentQuote