Now most awaited nexus between builder, bankers are OUT to public.

now what should common man do, should they wait for similar fate of hosuing prices like shares prices down by 50% in a month.

I think this scam is going to un earth many more nexus in next 1-2 months which will really would give answer: How come flat work 1 cr sold out like HOT CAKE.

if this scam go beyoud 1000 CR then hosuig prices will crash everywhere becuase bullders need to save positions.

why you guys says???
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  • jha saab. ye kya. ek aur Diwali thread.
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  • One more thread speculating a crash/fall in prices :(:bab (24)::bab (41):
    Get real guys.

    It's just 4-5 builders whose link is exposed. And for the banks, the arrested people will be replaced by new ones.

    And the party will continue :D
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  • Fail to see the connection. Scams are digested in India, without any problem.

    I believe only some few % of scams are exposed, because opposition and media is not paid their portion of commission. Once this gets paid, everything cools off.
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  • Originally Posted by compuwalah
    jha saab. ye kya. ek aur Diwali thread.



    We all know that you got Diwali Phobia..:D:D:D
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  • I'm sorry to continue this thread further, but I do not think that people have understood this scam rightly.

    The scam is actually a case of bribery, where the building companies have paid kickbacks to high ranking bankers to pass their loans. These loans are in crores.

    These building companies under question are fairly large and are probably listed on stock markets as well. The likes of Unitech and DLF.

    The effect of this will only be more scrutiny when giving out leans. Which is great!
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  • Originally Posted by harshalx
    I'm sorry to continue this thread further, but I do not think that people have understood this scam rightly.

    The scam is actually a case of bribery, where the building companies have paid kickbacks to high ranking bankers to pass their loans. These loans are in crores.

    These building companies under question are fairly large and are probably listed on stock markets as well. The likes of Unitech and DLF.

    The effect of this will only be more scrutiny when giving out leans. Which is great!


    Let me tell you the actual reality in the market, and how those scamsters operate...

    A builder launch a scheme, he books flats on the names of his agents and those agents borrow money from the banks. Banks pay maximum amount of the total loan amount (nexus) and builder starts the construction.
    When the tower is up and visible, builder increases the PSQFT rate and lure the end user...Agent's flat is passed on to the real end user (bakara) :)

    The same trick is used for the second...third..fourth...xxx tower...
    Banks and Builders nexus works well as long as there are fools to buy it...This worked well so far as the end user thought he will afford it...

    Now onwards, all the small - big banks would be under scanner and there would be strict control over the housing loan disbursement. This will shrink the liquidity and thus lead to FALL in the high real estate prices. Also, the high income jobs in India are under pressure due to global economic crises...so there is no assurance that X person is earning 20L per annum will continue to earn that much for the next 5 years...

    Mango man now realised that there is a Bank-Builder nexus that will ruin his whole life under debt...so better stay away from the TRAP and enjoy whatever wealth in hand on something else...

    Any other views are welcome..!!
    Cheers,
    MONDS
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  • RE Or Ponzi

    Current RE scenario looks more like Ponzi scheme to me.

    * For those who don't know what Ponzi scheme is, please visit the following link:-

    http://en.wikipedia.org/wiki/Ponzi_scheme
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  • Lot is said about the nexus between the builder and bank, but i think its known.
    and where does the bankers dont take the percentage of loan allotment, try asking SME or even farmers . but they pay the commision to the bank manager.

    other point how big is the bribery case when compared to 2G scam, my feeling is its more to transfer the focus.

    but one thing is clear builders may be now in the pressure to clear the inventory as the liquidity might be choked to an certain extent.

    Banker who were preferring lending to high margin business (Realty) will now have to lend to the infra companies (low margin business)
    , which will be good as hopefully infra would see some improvement
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  • Originally Posted by monds
    Let me tell you the actual reality in the market, and how those scamsters operate...

    A builder launch a scheme, he books flats on the names of his agents and those agents borrow money from the banks. Banks pay maximum amount of the total loan amount (nexus) and builder starts the construction.
    When the tower is up and visible, builder increases the PSQFT rate and lure the end user...Agent's flat is passed on to the real end user (bakara) :)


    This is hardly true. It might be a very rare case. A typical bulding scheme contains more than a good 100/200 flats. The builder possibiliy cannot recruit 200 agents to have flats on their names.


    Mango man now realised that there is a Bank-Builder nexus that will ruin his whole life under debt...so better stay away from the TRAP and enjoy whatever wealth in hand on something else...


    Mango man, unfortunately doesn't want to get into details and make some analysis. He is more worried about his emotions and how all his relatives are investing into real estate.
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  • Originally Posted by amitjha
    Now most awaited nexus between builder, bankers are OUT to public.

    MoneyMatters itself facilitated 5000 Cr of loans to builders which could be more if more such facilitators found in market.

    I got suspicious hearing MD of HDFC Bank, Mr. Aditya Puri, publicly claiming that RE price won't fall. Its strange that a banker is interested in RE going up (when already in bubble-territory) like an investor

    Current RE business is Ponzi scheme as pointed by Realacres.
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  • Originally Posted by hitmady
    MoneyMatters itself facilitated 5000 Cr of loans to builders which could be more if more such facilitators found in market.

    I got suspicious hearing MD of HDFC Bank, Mr. Aditya Puri, publicly claiming that RE price won't fall. Its strange that a banker is interested in RE going up (when already in bubble-category) like an investor :D

    Current RE business is Ponzi scheme as pointed by Realacres.found


    Well, I have said earlier, its best to wait until 2013-2014 for any purchase in Real Estate. The situation then would be much different than it is now.I feel the Real Estate will become more transparent in years to come.
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  • Originally Posted by pcpune
    Well, I have said earlier, its best to wait until 2013-2014 for any purchase in Real Estate. The situation then would be much different than it is now.I feel the Real Estate will become more transparent in years to come.

    Are you referring to the day by day reduced thinkness of the common walls :D used by builders
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  • nothing is going to change because of this scam. most buyers of these flats are end users (and a few investors) so it is not as if these prices are jacked up artificially. the only thing that will bring down RE prices is another recession, depression or something unthinkable. of course, prices won't rise much either.
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  • Realty may see 15% correction in 2011: Analysts

    AHMEDABAD: Though tales of record deals and mega investments continue to flood the real-estate sector, a nervous chatter about property markets cooling off has already begun.

    Experts dealing in the real-estate sector predict that prices could taper off in peripheral areas of cities like Mumbai, Delhi, Kolkata , Hyderabad , Pune and Ahmedabad by as much as 10-15%.

    This process of correction, however, will not be as intense as the one witnessed in 2008-09. Prices are expected to dip gradually in the initial months of 2011 and last for several months. The impact is already evident in some of the smaller realty markets in Tier-II cities like Ahmedabad, where a couple of builders have reduced the prices of luxury homes.

    “Given that there will be an abundance of supply coming to the markets in 2011-2012, there could be a decrease in prices due to over-supply. Burgeoning areas (of cities) will see minor corrections as more and more supplies roll in,” says Ash Sharma, senior vice-president-markets, Jones Lang LaSalle, India (JLL), a global real estate consultant.

    Mr Sharma feels that the correction will not happen immediately and will not touch matured locations. A recent pan-India research done by a Gujarat-based marketing strategy and consulting firm points out that the Indian real estate industry is in for some correction in 2011.

    “It (the correction) may start from the first quarter of 2011 and last up to the third quarter of 2012. However, it will not be too intense as it was during recession period. It is expected that the prices may come down by 10-15% during this phase,” says a research by Ikon Marketing Consultants.

    According to it, a majority of real estate investors from Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Gurgoan, Chandigarh and Pune are now not willing to invest at the existing price points. “Majority of these investors are keen to exit and book profits on their earlier investment,” says Azaz Motiwala, head of the firm.

    As ET reported earlier, the percentage of investors in real estate projects in cities like Ahmedabad, Kolkata, Pune and Mumbai had already reached over an unhealthy 50-60% from an ideal 30% (with the rest 70% being actual end-users).

    Secondly, the rise of residential prices which shot up by 30-40% within the last one year has also given rise to fears of formation of a bubble in the market. Pranab Datta, VC & MD, Knight Frank India (a global real-estate consultant), says that a boom in the residential markets which is driving majority of the realty market will continue “till the point the stretch in affordability, on account of rising prices, is bearable.”

    In some residential micro-markets of Mumbai, prices have surpassed the 2008 peak levels and this coincide with a large quantum of supply. Particularly in the luxury segment, if the speed of sales reduces, then we cannot rule out a price correction going forward, said Mr Datta.

    Even the realtors themselves, foresee a correction. “There has been an oversupply in the luxury segment in Ahmedabad. While sales in this residential segment have already dipped by 10% in the last three months, some of the developers have also been forced to cut down their prices. As per the current trends, the markets are in for a correction, sooner or later,” says NK Patel, an Ahmedabad-based developer.

    Similar are the views of Ms Snehal Mantri, director marketing, Mantri Developers. “In markets such as Mumbai and Delhi, where there is a high level of speculative buying, prices have risen sharply and these markets may witness a correction prices in property prices. South India, specially Bangalore, is a different scenario as the hike in property prices was marginal and just a correction on a much lower base. Hence we do not anticipate any correction in the Bangalore property market”, says Ms Mantri.
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  • Originally Posted by compuwalah
    Are you referring to the day by day reduced thinkness of the common walls :D used by builders


    :D I heard some builder in wakad already started in that direction by giving glass as a wall.....
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