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Builders & Real Estate Bulls Theory Proved Wrong


Builders & Real Estate Bulls Theory Proved Wrong

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

    Originally posted by Sharpj View Post
    Real any idea why this Boboda Pawar guy took the short cut..
    Heavily messed up. Strange that even bobada couldn't rescue him.
    Btw, for his last rites almost all heavy weight clock chaps had turn up.

    Originally posted by herohiralal View Post
    Since when did ICICI become the gold standard? Even Warren Buffet lost $ 1 billion on consecutive days after IBM and Coke announced their quarterly results.

    Here is an link about the different players in the indian commercial RE sector.

    Dont follow some bank or some oracle blindly.
    There is huge difference between the 2 :-

    ICICI ventured into under-constro projects of various types using investors' money but builders couldn't complete the project & money got stuck & now investors are crying (no sympathy for them, they should be ready to face consequences for taking risks coz if they made profit, no one would have cried).

    On the other hand, Blackstone goes for buying ready commercial spaces, most of which are rent yielding projects. Add to it that it goes to buy in bulk, they get heavy discount.

    These are the guys which believe in Chinese manufacturing logic :- Low profit per unit but high volumes, so total revenues & topline is good.

    Last but not the least, ICICI was a mere investor, Blackstone is a buyer itself, note the difference.
    If you are happy, you are successful.


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Stress on banks’ balance sheets a serious threat to Modi’s economic revival agenda

      The amount of restructured loans on the book of Indian banks continued to rise in the three months ended 30 September as more number of companies became stressed units and failed to honour their repayment obligations to lenders.

      In the September quarter, banks approved Rs 19,105 crore of fresh loans for restructuring from 19 companies under the corporate debt restructuring mechanism (CDR), a forum of lenders, which offer relaxed loan repayment terms to troubled companies by slashing lending rates, offering a moratorium and extending the loan repayment period, according to official data.

      Total stressed assets in the banking system (bad loans combined with restructured loans) amounts to 14 percent of the total loans given by the banking system at end-June.

      What is more important and disturbing is that the credit flow to industries, especially medium-sized companies, which are the backbone of an emerging economy, has remained stagnant so far this fiscal year, which indicates prolonged slowdown in the economy.

      The optimism in the economy post the arrival of a stable government at the Centre still doesn’t seem to have much influence on changing the fortunes of industries and banking sector so far. On the other hand, increase in the bad and restructured loan levels of banks necessitates more capital in these banks, adding to the burden of the government fighting a large deficit.

      On Wednesday, international rating agency Moody's retained its negative outlook on the domestic banking system, citing high leverage in the corporate sector that may prevent any meaningful recovery in asset quality.

      "Our outlook for the country's banking system remains negative, as it has been since November 2011.

      The message: It is highly critical for the Modi-government to address the deterioration in the financial health of companies and, in turn, that of banks, if it is serious about what it preaches i.e. breathing life back into a weak economy that has grown at sub-5 percent levels in recent years.

      If not, the damage can be more than what it possibly anticipates now.

      Stress on banks


      You spoke about just SBI home loan, check out what is happening in entire banking system now, thanks to giving cheap money earlier.
      If you are happy, you are successful.


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        No takers for ‘easy’ schemes by desperate developers

        In a bid to beat their blues in the slackened realty market, developers in Mumbai are trying to make the most of the festive season by dangling lucrative easy payment schemes. While owing an apartment in Mumbai with a ticket price of anywhere over Rs 1 crore by paying nothing more than 10 per cent of the price until possession may seem like an irresistible deal, analysts caution buyers against signing on the dotted lines before reading the fine print.

        “The scheme benefits developers as instead of paying the high interest rate that is levied on construction financing from banks, projects are financed through homes loans that are available at a lower interest rate of 10 per cent to individual homes buyers,” said Abhishek Ranganathan from the financial services company Phillip Capital India.

        The sudden dependence of builders on end-user’s money is also owing to the fact that investors who used to fund projects by booking a specific number of apartments even before a project was officially launched are now refraining from putting their money on real estate.

        Moreover, buyers are not convinced about investing in projects that have not taken off the ground as even in case of the easy payment schemes, if the developer defaults on interest payment or delays the project, the onus will fall on the buyer,” he said.

        Mumbai realty market | The Indian Express
        If you are happy, you are successful.


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Caveat investor: DLF and listed realtors have destroyed Rs 3,30,000 cr wealth

          It is common wisdom that you can’t lose money in real estate, given that land is always in short supply. But then, how does one explain the humongous wealth destruction by real estate companies that are listed on the stock markets? If real estate can only go up, how come real estate shares only go down?

          Take the case of DLF, the biggest daddy of them all. According to Firstbiz calculations, from its all-time high price of Rs 1,205 a share in January 2008, DLF has plunged more than 90 percent to Rs 109 today (27 October). This means in six years, just one real estate company has destroyed shareholder wealth to the tune of Rs 1,86,000 crore, falling from a high of Rs 2.06 lakh crore to just Rs 19,502 crore now.

          Firstbiz added up the wealth destroyed by six listed realty companies from their peak prices and today’s values, and the total loss to investors adds up to Rs 3,30,792 crore. Clearly, realty companies are not worth investing in at all.

          So it is caveat investor: it is simply too risky to invest in listed realty companies. Stay away.

          Caveat investor: DLF and listed realtors have destroyed Rs 3,30,000 cr wealth - Firstbiz
          If you are happy, you are successful.


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by realacres View Post
            This is another classic case of manipulation by Compu.

            Man, where has SBI said what you have mentioned above ??
            Nowhere is Pune specifically mentioned, nor the price per flat has been given.
            Again, the loan which SBI has said it gives or for that matter even other banks, it is not necessary that it will be for flats only from builders.

            Also, there is nothing mentioned that the home loans disbersed by SBI is for new flat, it can be merely a refinancing option as well.

            Compu, see what SBI guy mentions :-

            On the average ticket size, Sriram said it is Rs 30-32 lakh now.

            All what you mentioned in RED above is nothing but story cooked up by your imagination.

            So, when entire news is in front of readers, don't try to fool them man.


            Can you let us know how many people buy house with 100% downpayment ??
            classic case of manipulation by Compu ... wo wo wo .... man I fell off from my chair .

            I could be replying to this post in very fitting manner but would refrain from doing so. Reason. If someone wants to get misguided by non stop negetive statement of each and every RE project or related builder , in face of prices going up'n'up for last 5 years right in middle of all negetive stats posted, its his/her fate. Bulls have in time and again tried to warn against these statement by providing with various evidences , so there is nothing much to post further. I bear any criticism with apt gandhigiri.

            btw I was unnaware of possesion of skill to manipulate people blush


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Construction FDI: Realtors and benami speculators will gain more than home buyers - Firstbiz
              In fact, the first beneficiaries of this easing will be crooked builders – now struggling to sell property in major cities – and their benami investors, mostly even more crooked politicians. By helping them access more and easier finance, the government is essentially delaying a correction in property prices – and making housing more unaffordable to everybody.
              Consider what is being proposed by the liberalisation. Among other things, the minimum built-up area for projects in which foreign investment will be allowed has been reduced to 20,000 sq metres from the earlier 50,000; the minimum size of investment has been reduced to $5 million from $10 million; and the lock-in period of investment will end the minute a project is completed. The old three-year lock-in applies only to incomplete projects.

              What this liberalisation has done is to make speculative investments easier for foreign investors, especially non-residents. So instead of allowing only domestic speculators to make money through benami holdings, now even NRIs from the Gulf and small-ticket foreign investors can join the party – all at the expense of the genuine home buyer whose prices will stay elevated and unaffordable. It will encourage more speculation as the minimum investment norms are lower, the early exit barriers are gone, and the pool of available speculators is larger.

              This easing will help builders and real estate owners more than home buyers as they can now access cheaper and more finance. The only home buyers who will benefit are those who have already put their money in projects, but builders are delaying completion due to the lack of funding.

              Not surprisingly, the most ecstatic responses have come from builders.

              The Economic Times quotes Rajeev Talwar, Executive Director of DLF, one of India’s biggest value destroyers on the stock exchange, as saying: “The government is bang on (target). We are very glad about the trunk infrastructure completion part as it will bring in asset-based FDI. This will ensure that project developers who have taken FDI are not left with more debt.”

              DLF will certainly benefit by being able to reduce its debt load, but how will home buyers benefit if easy money makes builders more reluctant to lower prices and hang on longer to built property? The only way home buyers will gain if the huge debt load and slow sales forces builders to bring down prices to push sales and improve liquidity. But this is exactly what won’t happen is cheap money flows in torrents as a result of the FDI change. The FDI easing will make builders ability to hoard property stronger.

              My view:
              Political control from behind scenes will ensure that buyer remains disadvantaged in the process of home buying.


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                I think such decision are envitable as builders will push the government to come with policies that help them. If anybody thought modi will help to bring down prices then we r living in a fools paradise. At the end he is a baniya and he knows best what is good for doing business. Only way prices will come down if banks go down like in US but it will mean common man is also affected.


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by vaibav123 View Post
                  My view:
                  Political control from behind scenes will ensure that buyer remains disadvantaged in the process of home buying.
                  Yes Vaibav. Now, we will be able to say that renting is better that buying probably. But fence sitters will still predict (rather pray) for a RE crash.

                  My View:
                  One more boom period in RE is expected in coming 4-5 years. however next 8-10 months RE prices should remain subdued.


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong


                    As i read here it is clear that real estate is not the best mode of investment / multiplying your money. But come to think of it GOLD has also lost its attraction as an investment option, the NIFTY being at all time high we cant even start an investment in equity.

                    In this situation what avenues would you suggest where an average investor like me should invest / park the surplus funds?


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Go in for PPF,Post Office MIS linked with RD a/c.
                      Open SIPs in 5 star rated MFs.


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