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Builders & Real Estate Bulls Theory Proved Wrong

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Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
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  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    suryawork,
    +
    1 to what you said. RE bulls should keep buying flats or rather they should even sell their kidneys & buy some more flats as they will double money in an year or two.

    Originally posted by Que Sera View Post
    @tangent

    Chill.

    If you are quoting the base price as per the builder, it is a indicator of the builder's holding capacity. My friendly neighbourhood broker is offering to sell almost RTM property at rupees one crore odd. The same property was available prelaunch 4 years ago at the same price.[emoji2]
    Que_Sera,
    +1. But note that RE bulls are frustrated lot. Hence, they will make these statements.
    The resale flat in my neighborhood is still up for sale, its almost an year now despite owner reducing price by 28%. RE bulls don't understand despite putting so many news & inputs about 2009 & cheap money which flowed in then which helped builders. Now neither Dhongress is in power, neither banks have money to lend to RE. Wonder why RE bulls ignore the yesterday's news as to how builders are literally begging for money & selling off their land & other non-core asset. My next post will show how banks are now chasing willful defaulters which includes builders.

    The projects like Mittal One Nation being quoted today is less than its launch price of over an year back, one member today also pointed out how even park street project is selling 700/sq ft below quoted price. Kumar Siddhashila at Marketyard is selling flat at lower price than its launch price 3 years back. Now add the interest & you get a D segment car free.
    Last edited by realacres; October 11 2014, 11:10 PM.
    If you are happy, you are successful.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by Que Sera View Post
      @tangent

      My friendly neighbourhood broker is offering to sell almost RTM property at rupees one crore odd. The same property was available prelaunch 4 years ago at the same price.[emoji2]
      Which property? Please share with the forum..

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Battle on bad loans intensifies

        Punjab National Bank has launched a major attack on wilful defaulters or companies, whose promoters have the money to pay back loans to lenders but won’t deliberately do so for reasons ranging from fund diversion and financial fraud.

        PNB has classified companies including Winsome Diamonds and Jewellery, Zoom Developers, Koutons Retail and Mumbai-based Tayal Group-promoted KSL & Industries.

        Zoom Developers, which owes about Rs 2,600 crore to banks, has an outstanding of Rs 410 crore to the Mumbai-branch of PNB, while Koutons has Rs 88 crore balance.

        Mumbai-based Tayal group, the former promoters of erstwhile Bank of Rajasthan, which has interests in textile to real estate, has about Rs 2,500 crore to pay back to banks.

        Indian banks have been intensifying their battle against wilful defaulters in the recent years after falling neck-deep into chronic bad debt.

        Banks, especially state-run lenders, are under immense pressure by the Reserve Bank of India (RBI) and the government to cut bad debt. Bad debts weakens the financial health of banking industry and multiplies the capital required by these banks.

        India’s banking system is dominated by state-run banks, which control 70 percent of the assets of the industry and has over 90 percent of the total bad loans of the banking system emerging from their balance sheets.

        Battle on bad loans intensifies: Winsome, Zoom, Koutons, KSL tagged wilful defaulters - Firstbiz


        Noose tightens: After Mallya, Mumbai’s Tayal Group slapped with wilful defaulter notice

        In September 2013, the Tayal group firms had come under the scanner of income tax department for alleged misappropriations by the group firms in handling bank funds.

        “Instead of utilising these loan amount in debt restructuring, Tayal diverted large percentage of loan amount in its real estate projects without informing banks and without paying service tax to the department," the report said quoting officials.

        Once a group company is tagged as a wilful defaulter, the loans will be taken out of the CDR facility. Not just that. A wilful defaulter firm and its promoters, group companies, will not even get finance from any other bank or financial institutions.

        Noose tightens: After Mallya, Mumbai's Tayal Group slapped with wilful defaulter notice - Firstbiz

        ^^ This news talks about Tayal & Zoom developers only but this is just tip of iceberg. Many builders will now face the heat when banks come knocking at their doors.
        If you are happy, you are successful.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by anirban8 View Post
          Which property? Please share with the forum..
          Till he informs, you can read my post above.
          If you are happy, you are successful.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Mumbai’s ‘recession-proof’ south real estate witnesses a downturn

            South Mumbai’s billing as the country’s costliest real estate hub seems to be under threat. While the overall real estate market in the city has been tepid over the past few years, marked by a high inventory pile-up due to increased supply and subdued demand, the inventory pile-up in south Mumbai appears to be the most worrying.

            “The inventory pile-up in south Mumbai is high not in terms of the quantum of inventory, but in terms of the quarters-to-sell ratio, which refers to the number of quarters it will take to clear the unsold stock. South Mumbai consumers are very informed. They are generally the first ones to pull out in times of a slowdown and also the first to be flamboyant when there is a recovery. The reason for the low velocity of sales is the overall sluggishness in the market,” said Samantak Das, chief economist and director of research at Knight Frank India.


            According to data from real estate consultancy firm Knight Frank, the inventory level in the south Mumbai market as of June 2014 will take about 18 quarters, equivalent to 4.5 years, to sell, compared with an average period of three years for the unsold inventory for the entire Mumbai Metropolitan Region to clear.

            The high stock of unsold houses is despite the fact that new launches in south Mumbai areas have been very limited due to scarcity of land. Of all the new projects launched in Mumbai over the past two years, less than one per cent of them have been in south Mumbai.

            Pankaj Kapoor, managing director at Liases Foras, a Mumbai-based real estate research firm, said, “Affordability is a factor that is denting sales across Mumbai."

            A study by Liases Foras had found that almost half of these premium residences remain unsold.

            For instance, a project involving grandiose 15,000-square-feet duplexes in a 55-storey under-construction scraper on the chic Napean Sea Road has not sold a single unit in six years.

            Similarly, sales have also been languid in projects in south Mumbai by major real estate firms such as Indiabulls Bleu in Worli, DB Realty’s Orchid Heights and Orchid Turf view in Mahalaxmi and Razzak Heavens by Orbit group on Napean Sea Road.

            Clipping of Pune

            ^^ The sentences highlighted above clearly shows that RE prices can fall even in prime locations where there is scarcity of land. Now similarly, as per builders' logic, the prices at suburbs should also fall as RE prices in prime locations are falling.
            If you are happy, you are successful.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by realacres View Post
              suryawork,
              +1 to what you said. RE bulls should keep buying flats or rather they should even sell their kidneys & buy some more flats as they will double money in an year or two.


              Que_Sera,
              +1. But note that RE bulls are frustrated lot. Hence, they will make these statements.
              The resale flat in my neighborhood is still up for sale, its almost an year now despite owner reducing price by 28%. RE bulls don't understand despite putting so many news & inputs about 2009 & cheap money which flowed in then which helped builders. Now neither Dhongress is in power, neither banks have money to lend to RE. Wonder why RE bulls ignore the yesterday's news as to how builders are literally begging for money & selling off their land & other non-core asset. My next post will show how banks are now chasing willful defaulters which includes builders.

              The projects like Mittal One Nation being quoted today is less than its launch price of over an year back, one member today also pointed out how even park street project is selling 700/sq ft below quoted price. Kumar Siddhashila at Marketyard is selling flat at lower price than its launch price 3 years back. Now add the interest & you get a D segment car free.
              you look more frustrated man .. my investments have gave me 20% + return .. either agree or disagreee but dont to call ppl names
              Last edited by Tangent; October 11 2014, 11:38 PM.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Originally posted by anirban8 View Post
                Which property? Please share with the forum..
                Property is in new Bombay. If you are interested, will pm the details to you.

                However there was a reason i did not pick it up then.. I just did not like it.

                And the other property where the builder has jacked up the rates (again bombay "side").. he is still managing to trickle sell the premium property [emoji33] .

                The point i was making is about micro markets and holding capacity. Like mid caps, some property prices may drop like falling stones, others may hold on or even increase ,akin to the defensives in a bear market. Generalizations are very inaccurate.
                Life is what happens when you are making other plans. Enjoy it

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by Que Sera View Post
                  Property is in new Bombay. If you are interested, will pm the details to you.
                  Don't have much idea or interest in New Bombay RE market. As it was used as an example in Pune RE thread, I did assume that it is in Pune. Never mind.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by Que Sera View Post
                    Property is in new Bombay. If you are interested, will pm the details to you.

                    However there was a reason i did not pick it up then.. I just did not like it.

                    And the other property where the builder has jacked up the rates (again bombay "side").. he is still managing to trickle sell the premium property [emoji33] .

                    The point i was making is about micro markets and holding capacity. Like mid caps, some property prices may drop like falling stones, others may hold on or even increase ,akin to the defensives in a bear market. Generalizations are very inaccurate.

                    you need to mention the location city ...else the argument does nt make sense .... since this is pune thread it makes more sense to give examples from pune ... .. like wise there are many who give examples from NCR/delhi region again completely irrelevant to pune market ...prices in south mombay have decreased that doesnt mean prperty in pune have reduced .... bears here are getting excited over examples which are not remotely connected to pune RE .......

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      My bad.

                      The point i was trying to make was about holding capacity/location/mispricing at launch and micro markets which would apply across cities and countries. Mind you, i have example of increase from jan 14 prices in my post to drive the point

                      May be, if we look at it in the broader perspective, we will be able to understand it better. Even in UK, London is the best performing market raising the same fears we have about a asset bubble. But there are areas outside London which have not even recovered from the post Lehman crash. Apparently for a advertised resale in London, 30-40 people were turning up !

                      All asset classes go thru periods of out performance/under performance or stagnation. RE is no different.

                      The higher capital outlay makes it attractive (due to leverage, returns are amplified) as well as risky (leverage works both ways).
                      Life is what happens when you are making other plans. Enjoy it

                      Comment

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