I have got confirmed news from one of family friend who works with one of the reputed builders (from Pune), that property market in Pune is getting worse day by day. Many people who has signed but not made agreements are cancelling the deals (due to job conditions). Plenty of new projects are at High Risk. Many wise builders stopped the launch of new projects (including Paranjpe, DSK, Kumar).
People don't have money to pay EMI. Investors are not getting good rents. They want to sell off.
All in all, by Diwali rates will be down, if not the same.

You still can buy a flat if you have secured job and enough of money in hand. Those who want to take loan (more than 10L), please don't take risk.

Sansona
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  • Originally Posted by mahesh pune
    People who were waiting long to book (might not be investors but first time buyer) house may have booked at higher rates looking at government stability.

    C'mon man, was the Govt. unstable earlier? Infact, the boom period occurred when the left parties were part of Govt. (external support). Even the FM has said that he can only look after India's economy (that too is not in his control), not the global economy. India won't recover unless global economy improves & this is atleast 2-3 years away. We have just started to see the recession, more will follow. Note that we are behind US by atleast 1.5 years. Similarly, after US recovers, it will takes another 1.5 years to feel the good ripples here.

    If RE had been good, why the pathetic financial results?

    RE prices are falling:-

    Look at the following ad appeared in last couple of days.

    http://www.99acres.com/Independent-House/Villa-in-Wakad-Pune-4-Bedroom-bhk-for-Sale-spid-V2413629&pos=5
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  • Hotel Industry Witnesses a Slump of 30% in Business

    Not all's well for the economy:-

    http://www.loftyvistas.com/blog/?p=748
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  • Originally Posted by mahesh pune
    Are these deals were for the same project ? Flat value changes from project to project and also floor to floor. Even when i check ed in last sept with GK there was this much difference from project to project. he quote me suncrest for 3350 while rose rhythum at 2900 & ??? heritage which is inside at 2700 . People who were waiting long to book (might not be investors but first time buyer) house may have booked at higher rates looking at government stability.


    Its the same project, Rajaveer from GK.

    No changes from floor to floor, or from bldg to bldg for this project. Currently the builder is not selling any flats for less than 29xx for this project.

    More data for you as I have seen all the bookings and rates :

    In March, there were only 4 bookings that has taken place for this project, April was around 15 bookings, whereas in the month of May and June there were more than 25 bookings.

    The builders just take advantage of the sentiments and perceptions of people. The media folks like the TOI print media, and TV channels like CNBC have made the perception change a lot. And more folks are falling into the traps.
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  • ^^ very right.. people are getting into a mindset that current prices are least in a decade and hence giving their hard-earned money to these blood sucking builders...

    I say, WAIT guys... there is completely NO demand in the market.. I have met 3 people who have cancelled their bookings and loan from the bank... if we still hold and persevere.. just a matter of 2 months.. this diwali will be a big diwaala for these greed-stricken builders... :D
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  • Originally Posted by m_square
    ^^ very right.. people are getting into a mindset that current prices are least in a decade and hence giving their hard-earned money to these blood sucking builders...

    I say, WAIT guys... there is completely NO demand in the market.. I have met 3 people who have cancelled their bookings and loan from the bank... if we still hold and persevere.. just a matter of 2 months.. this diwali will be a big diwaala for these greed-stricken builders... :D


    Absolutely true about cancelling.
    I have too seen lots of cancelling to the tunes of 15 atleast. In office and in my circle. And there r many other cases were people have booked in hurry and now not able to cancel in the fear that they will lost their booking amount.
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  • Originally Posted by realacres
    Not all's well for the economy:-

    ]http://www.loftyvistas.com/blog/?p=748


    Change may hit FDI in real estate
    http://www.accommodationtimes.com/AT/News_Detail.asp?id=443

    Any Idea, how this can affect RE ?
    It looks like builders will benefit as they will get more time to repay the money to investors. But this can also mean very less FDI forthcoming as they will feel betrayed.
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  • Quiet a long thread i must say.... But here is the point...
    A. RE in Pune increased 2-3 folds from 05-08 for a reason.
    B. RE prices did not fall as much as in other parts of the country for a reason.
    C. All of us who write on this forum gets passed on to a little few..say maximun 5% puneities.
    D. Pune is a preffered investment destination for NRIs.
    E. Agreed that interest rates will rise in coming months. But there is nothing that warrants that builders resilience in Pune will be shaken.
    F. Pune Builder Association joints decided to increase the rates by 100/150 psf to given an impression that rates are increasing...And they are succeeding in it. No one wants to wait for another 6 months to book a flat... who knows what will happen in 6 months... a slew of good earnings and boom.... rates again touch 3000
    G. All this may sound unrealistic but this is what happened from 05-08.
    H. Call it panic buying or whatever... People have started booking flats again.
    I. I only heard of more bookings than cancellations in the past 3 months.
    J. I know of a couple of project who will be quoting 3000/4000 at the launch itself...!!

    Conclusion: Unless there is any drastically bad news.. I do not foresee much correction in RE prices from here.

    PS: I am also looking to book a flat soon and wish if prices decline further.
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  • Originally Posted by m_square
    ^^ if we still hold and persevere.. just a matter of 2 months.. this diwali will be a big diwaala for these greed-stricken builders...


    Nothing big will change till or during Diwali. There will be buyers at all levels
    Different people think different, so buy at different levels. So the correction will
    take its time usually 2 yrs, min 1 yr. Patience is the key.
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  • Cancellation and delayed payments are at an all time high... a high profile residential project by DLF in Gurgaon has seen over 272 cancellations in the last 3 months.. and the smaller builders are in an even bigger mess!
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  • Lock in for FDI in RE.

    Originally Posted by aditi sharma
    Change may hit FDI in real estate
    ]http://www.accommodationtimes.com/AT/News_Detail.asp?id=443

    Any Idea, how this can affect RE ?
    It looks like builders will benefit as they will get more time to repay the money to investors. But this can also mean very less FDI forthcoming as they will feel betrayed.

    Aditi,

    The Govt. now has made a min. lock in period of 3 years for FDI in RE compulsory. This is a big turn off for FDI as this was not the case earlier during boom period where after getting handsome returns within 1-1.5 years, the FIIs used to pull out their money. Even the PE has now asserted that the money be used first for clearing the debts than starting new projects. The QIPs raised by builders are far less than what their current debt is.

    Be assured that FDI won't help RE as the amount in terms of %age is not even 18% with that compared to boom period. Lock in clause has further reduced the interest of FDI in RE. In current scenario, FDI is skeptical about coming in RE also due to worsening economic scenario & builders' inability to complete the project. Such (FDI) news are being floated by builders to give shining picture of RE which is no more than a gimmick.

    I reiterate, RE rates have only one way to go:- SOUTH.
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  • In less than seven months, 64 US banks bite the dust

    http://economictimes.indiatimes.com/articleshow/4821732.cms
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  • The estimate is over 500 will eventually!

    Originally Posted by realacres
    ]http://economictimes.indiatimes.com/articleshow/4821732.cms


    The current estimate is that over 500 banks will probably go under in the coming years.

    cheers


    The current estimate is that over 500 banks will probably go under in the coming years.

    cheers


    The current estimate is that over 500 banks will probably go under in the coming years.

    cheers


    The current estimate is that over 500 banks will probably go under in the coming years.

    cheers
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  • Real estate will weaken by end of next year

    Hi,

    Here is an interview by Nouriel Roubini, US economist. Indian RE mirrors the trends in the US RE. Here is the interview...

    NYU Professor Nouriel Roubini's Outlook on the Economy
    Wednesday, July 22, 2009
    SUZANNE PRATT: Joining me now with his thoughts on health care and the economy is Nouriel Roubini. He is the economics professor at NYU's Stern School of Business, who forecasted the housing bubble way before everyone else. Professor Roubini, welcome back to NIGHTLY BUSINESS REPORT.

    NOURIEL ROUBINI, ECONOMICS PROF., NYU STERN SCHOOL OF BUSINESS: Pleasure being with you tonight.

    PRATT: I want to start with health care. What do you think if there is health care reform and we see something in the near future, it's likely to do to economic recovery in this country?

    ROUBINI: We certainly need universal health care but we have to do it in a way that controls the fiscal costs. The new bill might cost $1.5 trillion over the next 10 years and I think it's critical to controlling costs. There are two ways of doing it. One is to make sure that the government negotiates with drug companies are reducing the cost of medicines and the second one is that the system currently gives an incentive to doctors who have too many test and procedures because they're paid based on that. Therefore we have also to control and change that system.

    PRATT: So what is your forecast for the recovery right now? I've been hearing sub par growth. What exactly does that mean?

    ROUBINI: First of all, in my view the recession is going to continue through the end of the year. It's not over yet, and while potential growth rate for the U.S. economy is 3 percent, I expect that the growth rate of the economy is going to be very anemic, below trend, then on 1 percent for the next two years. Why? You have U.S. consumers are shopped out, saving less debt burden. They're not going to consume very much. Your financial system is severely damaged, and credit growth is going to be limited, and now we have also this massive re-leveraging of the public sector with a large budget deficit and increases in public debt are going to eventually crowd out the economic recovery of the private sector. So I don't see a lot of economic growth ahead of us.

    PRATT: Are you worried at all about a double-dip recession?

    ROUBINI: Yeah, the risk is that by the end of the next year, if budget deficit remains very large, around $1.5 trillion, and if the Fed keep on monetizing them, essentially printing money to try to prevent increases in interest rates, expect that the inflation is going to go up, and if expecting inflation were to go up, long-term government bond yields would go up, and mortgage rates will go up. Borrowing costs for consumers (INAUDIBLE) will go up, and that's going to crowd out the recovery, so there's even a risk of a double-dip recession.

    PRATT: How great a risk would you expect? I mean is there a percentage that you'd be willing to put it at?

    ROUBINI: Well, that's going to depend on the decisions that are going to be made about exit strategies from these massive monetary easing and massive fiscal easing. It's going to be difficult because if you reduce the fiscal stimulus too much too soon, raising taxes, cut spending, the economy is weak, is going to tip into recession. If you wait too long and the deficit remains too large, then eventually the market's going to worry about rising inflation, rising deficits (INAUDIBLE) rates are going to go up, and you'll have recession again. So the timing and the sequencing and when to do it is going to be a very difficult policy proposition.

    PRATT: If your economic projections are correct and I have to point out that they are below consensus, it would seem that the stock market may have gotten way ahead of itself here at the current levels. Do you agree with that?

    ROUBINI: Yes. Some increase in stock prices are justified because we avoided the risk of a near depression. That was the risk we were facing in the first quarter. But markets have gone up too much, too soon based on economic fundamentals. If the recovery is going to be weaker, therefore profits are not going to recover as fast. If you are going to have still weaknesses in the rest of the world, Europe, Japan I think there will be downside risk for the stock market from this point on.

    PRATT: So what are you looking with your money? Are you looking overseas or are you still looking for U.S. equities to do the best?

    ROUBINI: Well, for the time being, I keep my money still in cash, because I think there are downside risk on equities, on credit, on foreign equities, on commodities. I think that there are downside risks, too many risky assets. It's better to wait until there are stronger signs of a more robust and resilient recovery before jumping into risky assets.

    PRATT: What would you expect those stronger signs to be? What do you look for?

    ROUBINI: Well, we have to look whether there's going to be any stabilization of the job market, but unfortunately I see unemployment rate well above 10 percent this year and close to 11 percent at the peak next year. We have to see a recovery of the U.S. consumer, but there's a massive weakness because of consumers being hit by default (ph) in the equity wealth, in this housing wealth, falling labor income, rising debt and debt servicing ratio (ph). That's why I'm somehow bearish about the recovery and I expect the recovery to occur anytime soon and that's going to be a negative for the markets.

    PRATT: OK, some very interesting thoughts from you. Thank you very much for joining us.

    ROUBINI: Pleasure being with you.

    PRATT: My guest this evening Professor Nouriel Roubini.



    http://www.pbs.org/nbr/site/onair/transcripts/nouriel_roubini_of_nyu_090722/?ref=patrick.net
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  • World Trade down by 32%

    WORLD trade has been one of the worst casualties of the global economic slowdown and the source of some particularly startling figures. Towards the end of last year trade all but collapsed. According to the World Bank, the value of exports from a sample of 65 countries accounting for 97% of world trade rose by 20.2% in September, compared with a year earlier. But by November exports were worth 17.3% less than a year earlier, before slumping by a whopping 32.6% in the year to January. In March the managers of South Korea’s Busan port, long one of the world’s busiest, said that it had run out of space to store nearly 32,000 empty containers. The Baltic Dry Index, which measures demand for the ships that transport bulk goods such as iron ore or coal, fell from 11,793 at the end of May last year to a pitiful 663 in early December.

    Article on The Economist.
    http://www.economist.com/businessfinance/displaystory.cfm?story_id=14115878&fsrc=rss
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  • RBI Eco Date update.

    Home loans have fallen from 31,735 Cr to 13,028 Cr YoY (Page 50). This means that people are not buying as they did earlier. Most of these loans are below INR 10L based on distribution figs. which means that the RE buying activity has fallen especially in metros & Tier-1 cities like Pune.
    Download the data sheet in pdf here. Size is about 5MB.

    http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/FQUMMDJ0709_F.pdf

    The 1% subsidy given by Govt. is for loans upto INR 10L. This is highly insufficient at current rates prevailing in cities like Pune. Just waiting for Sept 09 results of banks like ICICI. I have news that the NPAs in home loan segment has risen drastically in banks & trend is getting worse every day passing by.
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