Prices doubled from 2009...enough said....
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  • Originally Posted by punerebuyer
    yes.... and the lucky few ones are the ones who can bargain with the builders. I have personally experienced this. You can name it anything (correction or bargaining) but the end result is the buyer got RE cheaper than the builder advertised rates.

    Actually they are not lucky folks but clever and rational folks who tried to get most out of their money and were successful. They were prepared to walk out of a transaction if the product they were buying was not worth the money and finally they all (i have at least 5 friends who booked in 5 different areas in Pune) are/were end users.

    also many builders are giving freebees these days.. this is a direct reduction in price if one is going to spend money on it anyway (e.g. solar water, modular kitchen, sometimes even car, free parking, sometimes furniture etc).



    Actually this is where education comes in picture... once more and more people are aware that RE transactions are builder-political nexus, they will become more cautious. Earlier builder used to ask only some amt in black but recently that % is going higher. So when people see the risks, they are getting cautious and some are backing out. People advice each other not to pay money in cash and make builder accountable for the money paid. These are some steps which are resulting in reduction of RE sales.



    sigh... this is applicable when the inventory is full and demand is still there... currently demand is there but so is inventory. Numerous reports are available on builder inventories. You can even check big townships in the evening for number of flats having lights.

    Institutional investors literally jump on businesses where they have a high demand and less supply and when the product is popular among masses. RE is a basic need but still the financiers ((most leading banks) are backing out. This itself says something.

    just repeating what everyone has said 'Demand may not be there at atrocious prices' .. Many of the ultra luxurious apartments in Mumbai have no buyers and Mumbai definitely has limited land supply and better infrastructure (south Mumbai).



    Education comes here again... people do not have money... but they are brainwashed to think that they have money... by over-leveraging... families spend their lifetime investments and even ancestral properties / valuables just to make a downpayment and get prepared to pay at least twice the (already inflated) market cost due to interest payments.

    They need to be educated on financial discipline and made aware of what they can really afford going forward. How can they be prepared where the sudden need for cash may arise (accedents, illness, natural disasters, etc).

    this is more important for the folks who have started earning recently and entering in the market for the first time... as someone has said, they havent missed the boat but they were simply not earning at that time.

    +1
    very well explained
    stoxxx has posted this thread to laugh on those who are in need of home but can't afford.
    no need to give a explanation to his crap comments...

    He don't want his house value to do down which he has bought at cheaper price and now calculating its appreciation at every minute.

    May god give him all the problems in his house so that he becomes needy and let him come in the housing market...
    we all will poke a fun on him...
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  • Originally Posted by sunnyketkar
    +1
    very well explained
    stoxxx has posted this thread to laugh on those who are in need of home but can't afford.
    no need to give a explanation to his crap comments...

    He don't want his house value to do down which he has bought at cheaper price and now calculating its appreciation at every minute.

    May god give him all the problems in his house so that he becomes needy and let him come in the housing market...
    we all will poke a fun on him...


    what a sick mentality.....these are the people who wish there should be recession, people should lose their jobs , families should come on road just because these guys missed the bus.....absolute sick and pathetic....:bab (45):

    these guys have one common characteristic attack the posters...they dont want any contrary views to theirs....anyone dares to say that and they will be presumptuous and start poisonous attacks on them....full of venom....

    by the way I see a lot of new bears arriving here - 1 post, 5 posts and 7 posts etc...

    seems we have a multiple ID syndrome....

    I am sure if these people work hard than spending time on message board attacking other posters then they would do something productive in life....may god give them that sanity....

    Let sunnyketkar lose his job, living means then he will know how recession hurts....and then he will know who has last laugh...
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  • Originally Posted by punerebuyer
    yes.... and the lucky few ones are the ones who can bargain with the builders. I have personally experienced this. You can name it anything (correction or bargaining) but the end result is the buyer got RE cheaper than the builder advertised rates.

    Actually they are not lucky folks but clever and rational folks who tried to get most out of their money and were successful. They were prepared to walk out of a transaction if the product they were buying was not worth the money and finally they all (i have at least 5 friends who booked in 5 different areas in Pune) are/were end users.

    also many builders are giving freebees these days.. this is a direct reduction in price if one is going to spend money on it anyway (e.g. solar water, modular kitchen, sometimes even car, free parking, sometimes furniture etc).



    Actually this is where education comes in picture... once more and more people are aware that RE transactions are builder-political nexus, they will become more cautious. Earlier builder used to ask only some amt in black but recently that % is going higher. So when people see the risks, they are getting cautious and some are backing out. People advice each other not to pay money in cash and make builder accountable for the money paid. These are some steps which are resulting in reduction of RE sales.



    sigh... this is applicable when the inventory is full and demand is still there... currently demand is there but so is inventory. Numerous reports are available on builder inventories. You can even check big townships in the evening for number of flats having lights.

    Institutional investors literally jump on businesses where they have a high demand and less supply and when the product is popular among masses. RE is a basic need but still the financiers ((most leading banks) are backing out. This itself says something.

    just repeating what everyone has said 'Demand may not be there at atrocious prices' .. Many of the ultra luxurious apartments in Mumbai have no buyers and Mumbai definitely has limited land supply and better infrastructure (south Mumbai).



    Education comes here again... people do not have money... but they are brainwashed to think that they have money... by over-leveraging... families spend their lifetime investments and even ancestral properties / valuables just to make a downpayment and get prepared to pay at least twice the (already inflated) market cost due to interest payments.

    They need to be educated on financial discipline and made aware of what they can really afford going forward. How can they be prepared where the sudden need for cash may arise (accedents, illness, natural disasters, etc).

    this is more important for the folks who have started earning recently and entering in the market for the first time... as someone has said, they havent missed the boat but they were simply not earning at that time.


    well I understand the agony of people who want to buy but cannot....but that has been the case always....people could not afford property valued at Rs 3000 in 1980 and spent whole of their life in rented property despite both of the couples earning. So nothing new there.

    we are discussing here markets.....they may well crash....I dont know.....I dont have personal vested interest anyway.....but we are having objective discussion here....

    I would make one suggestion why dont some of the smart educated people start a service to get the flats for needy people at lower rates....they can happily take some reasonable % from that as their remuneration....

    it is a win-win situation....I am willing to be the first customer....
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  • Originally Posted by stoxxx

    I would make one suggestion why dont some of the smart educated people start a service to get the flats for needy people at lower rates....they can happily take some reasonable % from that as their remuneration....


    there is a separate thread where this idea was already discussed... including limitations as well..

    once again, there are many professional companies across the world which are in this business. Some smart indian investor can also must have thought about it but the entire logic fails because you cannot ask for more rent than what you are paying as EMI.

    E.g. as an individual, if you buy a 1 CR flat in kothrud with 50% down payment, the EMI still will be more than 50K and you can charge rent only up to 15 - 20K, so this is clearly not an investment opportunity. If you put 100% downpayment, the 1 CR amount can easily fetch nearly 1L in interest which is far more attractive than locking your capital for 20K return.

    as a company, if you want to build yourself, its practically impossible to buy large quantity of land without considerable black money. and when black money comes in picture, a professional management company cannot operate for win-win situation.
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  • Originally Posted by UncleScrooge
    When demand is there why is BMW not getting costlier?? why is price stagnant??



    BMW has a product for every price band.

    So does real estate developer. If you can spend more - somebody is waiting with a product to take away your money.

    That is market
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  • Originally Posted by stoxxx
    what a sick mentality.....these are the people who wish there should be recession, people should lose their jobs , families should come on road just because these guys missed the bus.....absolute sick and pathetic....:bab (45):

    stoxxx
    for your information I already own one nice home in kothrud. I DO NOT have cheap mentality like you who always poke fun at others. So please mind that.


    these guys have one common characteristic attack the posters...they dont want any contrary views to theirs....anyone dares to say that and they will be presumptuous and start poisonous attacks on them....full of venom....
    your "these guyes" are nothing but you who pokes fun at others point of view with your junk knowledge.
    I am NOT like you who watches fun of others after fulfilling own need.
    Thats why I am here with buyers interest.

    by the way I see a lot of new bears arriving here - 1 post, 5 posts and 7 posts etc...

    seems we have a multiple ID syndrome....

    I am sure if these people work hard than spending time on message board attacking other posters then they would do something productive in life....may god give them that sanity....
    same goes to you...you can also spend your valuable time on doing something constructive than crap.

    Let sunnyketkar lose his job, living means then he will know how recession hurts....and then he will know who has last laugh...
    you are a barking DxG. Keep barking...
    I very well know (infact better than you) about living. I have also affected by recession and have seen bad and good time.

    anyways stop barking now...stoxxx :bab (45):
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  • Originally Posted by stoxxx
    what a sick mentality.....these are the people who wish there should be recession, people should lose their jobs , families should come on road just because these guys missed the bus.....absolute sick and pathetic....:bab (45):

    these guys have one common characteristic attack the posters...they dont want any contrary views to theirs....anyone dares to say that and they will be presumptuous and start poisonous attacks on them....full of venom....

    by the way I see a lot of new bears arriving here - 1 post, 5 posts and 7 posts etc...

    seems we have a multiple ID syndrome....

    I am sure if these people work hard than spending time on message board attacking other posters then they would do something productive in life....may god give them that sanity....

    Let sunnyketkar lose his job, living means then he will know how recession hurts....and then he will know who has last laugh...



    I am again forced to comment here, "stoxxx" you say people are predicting recession for their sake of prfoit, but it is totally wrong. And what are you saying, let somebody lose job. Is it not sick mentally? Is it not pathetic? And now people will say, why "blotjab" fights with "stoxx".
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  • Originally Posted by BlotJab
    I am again forced to comment here, "stoxxx" you say people are predicting recession for their sake of prfoit, but it is totally wrong. And what are you saying, let somebody lose job. Is it not sick mentally? Is it not pathetic? And now people will say, why "blotjab" fights with "stoxx".


    "sunnyketkar=
    May god give him all the problems in his house so that he becomes needy and let him come in the housing market...
    we all will poke a fun on him..."

    BlotJab, you could as well have commented on above comment of sunnyketkar which was equally derogatory...I guess thats why stoxxx commented the way he did... :bab (59):
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  • Originally Posted by truptid
    in the long term which is more than 15-20 years...RE will hardly give 8 to 10 % return while equity will give more than that...

    there are lacs of proven articles and study...


    That is what I said, didn't I? that RE is not the best investment and returns are less. If it doesn't go well one is stuck with property that can't be liquidated easily.
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  • Anonymous post on India's housing bubble

    Not my own but a good articlulation of RE bulls theory I found on another site: Reproduced for readers benefit:

    "Here are a few random thoughts:

    1. Exactly when has the middle class Joe Blow been able to afford a house in India? Job descriptions may have changed over the years: professions such as teacher, office superintendent or bank teller may have been replaced by computer programmers, call centre attendant or system administrator but their relative status (lodged solidly in the middle-class hierarchy in a country renown for its wealth disparities) has not changed. So here’s my question again: When in the past 60 years has the average man on the street been easily able to afford a house in India?

    2. If housing has to correct, then INR has to dramatically increase. The reverse cannot be true (if INR falls AND housing corrects at the same time, then NRIs will rush in to buy RE, thus placing a solid floor on any correction). So under what circumstance do you think the RBI will let INR rise to meaningful levels? I note that all the interest rate increases in the recent past has not budged USD/INR which stubbornly bumps along around the 45 INR mark. India is doing exactly what China is doing: raising interest rates while printing tons of currency to keep the Yuan pegged to the collapsing USD. Asset price corrections are near impossible under such circumstances. Massive interest rate increases have done NOTHING to dent RE price levels in Delhi, Mumbai, Chennai, Shanghai, Beijing or Guanghou. Both China and India have housing bubbles because of their fiscal and monetary policies. Unless those policies change, people will flee to hard assets such as RE.

    3. One of the reasons for high RE in India is that the average Indian investor does not have a lot of alternative asset classes to chose from where he can invest money because of the non-convertibility of INR. Indians cannot easily invest in (say) Mongolian equities or London RE because of these restrictions. If Indians have to sell Indian RE en masse (and that creates a correction), where else do you think they will park their money? In the fast-wilting INR? Sorry but Indians are not that stupid. Where you have a failing currency, real assets will always be priced highly in such places. House prices never meaningfully correct when measured in local currency terms in places with exploding populations and weak currencies. Don’t take my word for it. Just ask the people of Zimbabwe, Nigeria, Bangladesh, China, Pakistan, Angola, Vietnam when their RE prices last corrected WHEN MEASURED IN THEIR LOCAL CURRENCIES. You will get blank stares in response.

    4. Gold prices reach a record high day after day after day. Indians have amassed massive reserves of Gold that they can rely on to fund any increase to EMI payments (even if interest rates reach stratospheric levels). There is zero chance of the levels of mass foreclosures and defaults seen in the US in India which triggered a housing collapse. Indians have substantial private savings in Gold unlike spendthrift Americans, British or Spaniards.

    The bottom line is that as long as the Rupee remains a structurally weak currency, RE will remain strong when measured in Rupees simply because there are no other reasonable inflation hedges for the average Indian. RE may correct, but only when measured in CHF or SGD, not when measured in INR."
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  • Venky, I agree with every word written here....Superb article

    BTW Prices in certain pockets of delhi has appreciated by 70% in the last 6 months...which correction are we talking about....

    I feel that the correction talk is done only by people who have seen RE prices zoom over the past 5 years and have left the bus...

    I was one of them before i invested in the last one year....People dont say that correction will come, they are praying that correction should come...:bab (59):

    Originally Posted by Venkytalks
    Not my own but a good articlulation of RE bulls theory I found on another site: Reproduced for readers benefit:

    "Here are a few random thoughts:

    1. Exactly when has the middle class Joe Blow been able to afford a house in India? Job descriptions may have changed over the years: professions such as teacher, office superintendent or bank teller may have been replaced by computer programmers, call centre attendant or system administrator but their relative status (lodged solidly in the middle-class hierarchy in a country renown for its wealth disparities) has not changed. So here’s my question again: When in the past 60 years has the average man on the street been easily able to afford a house in India?

    2. If housing has to correct, then INR has to dramatically increase. The reverse cannot be true (if INR falls AND housing corrects at the same time, then NRIs will rush in to buy RE, thus placing a solid floor on any correction). So under what circumstance do you think the RBI will let INR rise to meaningful levels? I note that all the interest rate increases in the recent past has not budged USD/INR which stubbornly bumps along around the 45 INR mark. India is doing exactly what China is doing: raising interest rates while printing tons of currency to keep the Yuan pegged to the collapsing USD. Asset price corrections are near impossible under such circumstances. Massive interest rate increases have done NOTHING to dent RE price levels in Delhi, Mumbai, Chennai, Shanghai, Beijing or Guanghou. Both China and India have housing bubbles because of their fiscal and monetary policies. Unless those policies change, people will flee to hard assets such as RE.

    3. One of the reasons for high RE in India is that the average Indian investor does not have a lot of alternative asset classes to chose from where he can invest money because of the non-convertibility of INR. Indians cannot easily invest in (say) Mongolian equities or London RE because of these restrictions. If Indians have to sell Indian RE en masse (and that creates a correction), where else do you think they will park their money? In the fast-wilting INR? Sorry but Indians are not that stupid. Where you have a failing currency, real assets will always be priced highly in such places. House prices never meaningfully correct when measured in local currency terms in places with exploding populations and weak currencies. Don’t take my word for it. Just ask the people of Zimbabwe, Nigeria, Bangladesh, China, Pakistan, Angola, Vietnam when their RE prices last corrected WHEN MEASURED IN THEIR LOCAL CURRENCIES. You will get blank stares in response.

    4. Gold prices reach a record high day after day after day. Indians have amassed massive reserves of Gold that they can rely on to fund any increase to EMI payments (even if interest rates reach stratospheric levels). There is zero chance of the levels of mass foreclosures and defaults seen in the US in India which triggered a housing collapse. Indians have substantial private savings in Gold unlike spendthrift Americans, British or Spaniards.

    The bottom line is that as long as the Rupee remains a structurally weak currency, RE will remain strong when measured in Rupees simply because there are no other reasonable inflation hedges for the average Indian. RE may correct, but only when measured in CHF or SGD, not when measured in INR."
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  • Originally Posted by Venkytalks
    Not my own but a good articlulation of RE bulls theory I found on another site: Reproduced for readers benefit:

    "Here are a few random thoughts:

    1. Exactly when has the middle class Joe Blow been able to afford a house in India? Job descriptions may have changed over the years: professions such as teacher, office superintendent or bank teller may have been replaced by computer programmers, call centre attendant or system administrator but their relative status (lodged solidly in the middle-class hierarchy in a country renown for its wealth disparities) has not changed. So here’s my question again: When in the past 60 years has the average man on the street been easily able to afford a house in India?

    2. If housing has to correct, then INR has to dramatically increase. The reverse cannot be true (if INR falls AND housing corrects at the same time, then NRIs will rush in to buy RE, thus placing a solid floor on any correction). So under what circumstance do you think the RBI will let INR rise to meaningful levels? I note that all the interest rate increases in the recent past has not budged USD/INR which stubbornly bumps along around the 45 INR mark. India is doing exactly what China is doing: raising interest rates while printing tons of currency to keep the Yuan pegged to the collapsing USD. Asset price corrections are near impossible under such circumstances. Massive interest rate increases have done NOTHING to dent RE price levels in Delhi, Mumbai, Chennai, Shanghai, Beijing or Guanghou. Both China and India have housing bubbles because of their fiscal and monetary policies. Unless those policies change, people will flee to hard assets such as RE.

    3. One of the reasons for high RE in India is that the average Indian investor does not have a lot of alternative asset classes to chose from where he can invest money because of the non-convertibility of INR. Indians cannot easily invest in (say) Mongolian equities or London RE because of these restrictions. If Indians have to sell Indian RE en masse (and that creates a correction), where else do you think they will park their money? In the fast-wilting INR? Sorry but Indians are not that stupid. Where you have a failing currency, real assets will always be priced highly in such places. House prices never meaningfully correct when measured in local currency terms in places with exploding populations and weak currencies. Don’t take my word for it. Just ask the people of Zimbabwe, Nigeria, Bangladesh, China, Pakistan, Angola, Vietnam when their RE prices last corrected WHEN MEASURED IN THEIR LOCAL CURRENCIES. You will get blank stares in response.

    4. Gold prices reach a record high day after day after day. Indians have amassed massive reserves of Gold that they can rely on to fund any increase to EMI payments (even if interest rates reach stratospheric levels). There is zero chance of the levels of mass foreclosures and defaults seen in the US in India which triggered a housing collapse. Indians have substantial private savings in Gold unlike spendthrift Americans, British or Spaniards.

    The bottom line is that as long as the Rupee remains a structurally weak currency, RE will remain strong when measured in Rupees simply because there are no other reasonable inflation hedges for the average Indian. RE may correct, but only when measured in CHF or SGD, not when measured in INR."


    Great post....you must have patience of a saint to continue making reasoned and logical posts amidst a mostly melodramatic, rhetorical and irrational melee....

    by the way can I ask any of the long term members if there is a 'ignore' feature available to put any of the members on ignore so one does not get entangled with them even inadvertently.
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  • Originally Posted by Venkytalks
    Not my own but a good articlulation of RE bulls theory I found on another site: Reproduced for readers benefit:

    "Here are a few random thoughts:

    1. Exactly when has the middle class Joe Blow been able to afford a house in India? Job descriptions may have changed over the years: professions such as teacher, office superintendent or bank teller may have been replaced by computer programmers, call centre attendant or system administrator but their relative status (lodged solidly in the middle-class hierarchy in a country renown for its wealth disparities) has not changed. So here’s my question again: When in the past 60 years has the average man on the street been easily able to afford a house in India?


    Venky,
    The article you posted underetimates the Indian middle class. I want to throw some light regarding same here:

    1. Its this very Indian middle class which makes India a Biggest consumer market in the world.

    2. Although middle class cannot afford any thing highly priced, the bulk of consumers/buyers in this category makes this class tempting for sellers.

    3. On Macro level, this class can be considered as group of buyers and this fact is true for every sector (including real estate).

    4. Very good example which shows the importance of Indian middle class is Auto sector. Why do you think all the makers of luxury cars are now compelled to make low price cars in India??? Skoda, Volkswagen, Nissan all are busy in attracting this very Indian middle class which they had never did in any other country. Why??? And lastly, why an auto company like Nissan which makes only high end cars making affordable segment car like Micra??? what do you think, are all these companies going through bad days??? No ... The answer is that they understand the strength of this consumer group known as Indian middle class which greedy Indian businessman/builders do not understand.

    5. Same is the case with all the big internation players in retail market (walmart) and they are trying too hard to enter indian market and woo Indian middle class.

    6. Hope one day FDI will be allowed in Indian real estate also (which is quite difficult due to builer - politicians nexus). But when this will happen these greedy builders will be running after the middle class consumers like beggers:bab (34):. Waiting for that day eagerly when international RE players enter Indian market. In current scenario, real estate players are not understanding that they are trying to kill a Hen which lays golden eggs. And BTW, how can they understand these things. They may have lots of money to run RE business but they do not have brains to understand Macro and Micro economics LOL.

    Arpit
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  • One of the reasons for high RE in India is that the average Indian investor does not have a lot of alternative asset classes to chose from where he can invest money because of the non-convertibility of INR.

    I do not believe that non convertibility of rupee is any longer an important issue. It was certainly in the past but over the years there has been a substantial liberalisation as far as availability foreign currency and convertibility of rupee is concerned . Indians are allowed to invest liberally outside, the yearly investment limit is USD 100000 per person ( family member ) per year is reasonably high. Your Indian credit card works abroad the foreign currency availablity for tourists is more that what they need. The biggest real estate investors in Dubai are Indians and these people are the same who have lost substantial value of their holding . The issue is not non convertibility it is not finding the needed assets this is due to shakiyness in world economy and the bad expeeriences of investing abroad. Investors prefer India which offers more safety and potential for return.
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