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Builders & RE Bulls Theory Proved Right !!!

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Builders & RE Bulls Theory Proved Right !!!

Last updated: June 15 2016
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  • Re : Builders & RE Bulls Theory Proved Right !!!

    now even real estate will have to start correcting. if the investors have lost confidence in equities, gold and silver, there is no reason why they would prefer RE as an investment option. i don't know how ganapati festival was for the real estate market (in pune in particular), but if dasara and diwali fails to sell any new flats, expect the prices to correct rapidly.

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    • Re : Builders & RE Bulls Theory Proved Right !!!

      From NDTV:

      If you're delaying your home buying decision because of rise in interest rates, then there's some good news for you. Realty experts are of the view that there could be 10-15 percent correction in property prices in residential segment in the coming six months.


      checkout this video.


      Video: Is now a good time to buy a home? Experts weigh in - NDTV Profit

      Comment


      • Re : Builders & RE Bulls Theory Proved Right !!!

        Originally posted by mymarji View Post
        From NDTV:

        If you're delaying your home buying decision because of rise in interest rates, then there's some good news for you. Realty experts are of the view that there could be 10-15 percent correction in property prices in residential segment in the coming six months.


        checkout this video.


        Video: Is now a good time to buy a home? Experts weigh in - NDTV Profit
        They have been saying this for 6 years....
        When the facts change, I change my mind. What do you do, sir? - John Maynard Keynes

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        • Re : Builders & RE Bulls Theory Proved Right !!!

          Originally posted by stoxxx View Post
          They have been saying this for 6 years....
          No, its less than 6 month since builder community started admitting prices are high and may correct.

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          • Re : Builders & RE Bulls Theory Proved Right !!!

            Originally posted by UncleScrooge View Post
            No, its less than 6 month since builder community started admitting prices are high and may correct.
            on the contrary builders are saying prices may go up further due to inflation which builder of pune has said prices may correct?

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            • Re : Builders & RE Bulls Theory Proved Right !!!

              Originally posted by puser View Post
              on the contrary builders are saying prices may go up further due to inflation which builder of pune has said prices may correct?
              Not single builder can say that prices will be going to decrease, insted he always keep saying that prices will go up and up as they have rights to increase or decrease (?) the rates.

              Buyers expecting decrease in prices and sellers expecting to increase the prices. (Time will do the exact role (umpire) to make situation clear)

              Comment


              • Re : Builders & RE Bulls Theory Proved Right !!!

                Originally posted by UncleScrooge View Post
                No, its less than 6 month since builder community started admitting prices are high and may correct.
                Chances are price of steel in commodity market drops. Then builders have no words.
                Already commodity market is seeing downfall.

                Comment


                • Re : Builders & RE Bulls Theory Proved Right !!!

                  Originally posted by ashutosh.n.k View Post
                  Chances are price of steel in commodity market drops. Then builders have no words.
                  Already commodity market is seeing downfall.
                  Till keep buying they will keep selling. The moment people stop buying they will come down at any rates.

                  a.k.a. demand v supply...very unpredictable in short term but one can make a good guess on long term.
                  When the facts change, I change my mind. What do you do, sir? - John Maynard Keynes

                  Comment


                  • Re : Builders & RE Bulls Theory Proved Right !!!

                    Observations on real estate price behaviour in India

                    I have thought about historical price behaviour and found some interesting trends:

                    Through life of property, longer you hold less the return.

                    1. Maximum returns are in first 5 years - about 30- 50% per annum returns in first 3-5 years after property is delivered. This is because, most property is delivered in bull phase and so one gets the advantage. Delivery is slow in bear years

                    2. In medium term of 5-15 years, the returns are about 15-20%

                    3. In long term of 15-30 years, returns are from 12-16%.

                    Cyclical behaviour:

                    1. From 1980 to 1987, flats gave a return of about 30-50% per annum based on location. These were high inflation and high growth and RE bull years

                    2. From 1987 to 1993, flats gave a return of about 16-20% per annum based on location. Inflation was high and there was currency depreciation and RE bull years

                    3. From 1993 to 2003, flats gave a return of about 4% per annum with many negative years. Inflation was 7-8%, RE was in a major bear phase for most of the period

                    4. From 2003 to 2011, flats gave a 16-18% return per annum with big bull phase and short bear phase (more like a bull market correction). Inflation was very low, economy was growing strong, RE was in bull phase.

                    Some has been commented in link below.

                    The Real Estate Cash Flow Calculator by Deepak Shenoy

                    My take:

                    Bull phase in property in India lasts for many years and is much longer than the usual 7-8 year RE cycle in West.

                    If lucky enough to buy in bull phase, serial investing with profit booking within 5 years is best option.

                    Bear phase in India also lasts very long, much more than West.

                    Holding property through prolonged bear phase can be deleterious to financial health. Bear can last as long as 10 years. So your returns are totally destroyed if you are forced to hold through this phase.

                    I think RE cycle in India lasts 15 to 20 years.

                    Having up decade in 1980s, down decade in 1990s, up decade in 2000s, chances are higher for 2010s decade to be a down decade than up decade.

                    All property investors should ponder on the implications - holding expensive property for 10 years can be a tough thing.

                    However, I still believe that India is in a RE bull supercycle and the next 50 years will give amazing returns in property.

                    There is a good chance that in future, we might switch to shorter RE cycle more in tune with 7-8 year developed market cycle. In which case, this being RE super cycle (massive urbanisation half century) - every bear phase might last 2-3 years only while every bull phase lasts 4-5 years.

                    We need to observe the market more to see if we are changing our trajectory - but every bear phase is a buying opportunity.

                    I anticipate 15-20% returns on a 50 year hold.
                    Venky (Please read watch a or before posting)

                    Comment


                    • Re : Builders & RE Bulls Theory Proved Right !!!

                      Originally posted by Venkytalks View Post
                      I have thought about historical price behaviour and found some interesting trends:

                      Through life of property, longer you hold less the return.

                      1. Maximum returns are in first 5 years - about 30- 50% per annum returns in first 3-5 years after property is delivered. This is because, most property is delivered in bull phase and so one gets the advantage. Delivery is slow in bear years

                      2. In medium term of 5-15 years, the returns are about 15-20%

                      3. In long term of 15-30 years, returns are from 12-16%.

                      Cyclical behaviour:

                      1. From 1980 to 1987, flats gave a return of about 30-50% per annum based on location. These were high inflation and high growth and RE bull years

                      2. From 1987 to 1993, flats gave a return of about 16-20% per annum based on location. Inflation was high and there was currency depreciation and RE bull years

                      3. From 1993 to 2003, flats gave a return of about 4% per annum with many negative years. Inflation was 7-8%, RE was in a major bear phase for most of the period

                      4. From 2003 to 2011, flats gave a 16-18% return per annum with big bull phase and short bear phase (more like a bull market correction). Inflation was very low, economy was growing strong, RE was in bull phase.

                      Some has been commented in link below.

                      The Real Estate Cash Flow Calculator by Deepak Shenoy

                      My take:

                      Bull phase in property in India lasts for many years and is much longer than the usual 7-8 year RE cycle in West.

                      If lucky enough to buy in bull phase, serial investing with profit booking within 5 years is best option.

                      Bear phase in India also lasts very long, much more than West.

                      Holding property through prolonged bear phase can be deleterious to financial health. Bear can last as long as 10 years. So your returns are totally destroyed if you are forced to hold through this phase.

                      I think RE cycle in India lasts 15 to 20 years.

                      Having up decade in 1980s, down decade in 1990s, up decade in 2000s, chances are higher for 2010s decade to be a down decade than up decade.

                      All property investors should ponder on the implications - holding expensive property for 10 years can be a tough thing.

                      However, I still believe that India is in a RE bull supercycle and the next 50 years will give amazing returns in property.

                      There is a good chance that in future, we might switch to shorter RE cycle more in tune with 7-8 year developed market cycle. In which case, this being RE super cycle (massive urbanisation half century) - every bear phase might last 2-3 years only while every bull phase lasts 4-5 years.

                      We need to observe the market more to see if we are changing our trajectory - but every bear phase is a buying opportunity.

                      I anticipate 15-20% returns on a 50 year hold.

                      But Robert schiller says that RE in the long term gives only inflation adjusted returns.

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