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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

    RBI's credibility loss: It's wrong to blame Subbarao alone; UPA is equally responsible

    Originally posted by Que Sera View Post
    Gp ji...ra ji ko dil pe maat lena..woh dil se bahut ache hain.

    I quote from the first post on this thread by ra ji in 2009.

    7.) Several news posted earlier, clearly indicate that bankers, economic analysts as well as realty observers state that the RE prices will come down by 50-60% from their peak value, irrespective of place, location. These people are neither bears nor bulls, but analysts with neutral perspective.

    8.) Most importantly, the holding capacity of buyers is greater than builders. Builders have taken loans from various finance sources with interest rates as high as 20-35%. These are turning defaulters & if they want the finance institutions not to put an attachment to their properties, they will have no other option but to sell off current inventory a very low rates.
    .

    I missed the crash predicted by ra ji. For some properties i was tracking, the prices had already risen in 2010 by 50% from lehman lows and have doubled now from the 2010 base..

    Guess a 30% fall today would still put me in a better position if i had picked up the property in 2010 as a investor and rented it out.. 30% irr according to my calculations would be the return the current prices.. Net of all costs with 50% leverage.

    When the prices fall as predicted, i hope we will have the scrotal fortitude to buy the property, since that is likely due to a catastrophic economic event. How many of us mango people picked up properties/stocks post the lehman crash.. or for that matter stocks/equity mf last year ?

    If you need a place to stay.. This may be a good time to negotiate hard and pick up a house. Ensure not to overstretch the cash flows.

    Or you can have the always be a renter philosophy. To every one.. Their cup of tea..
    Even today I stand by what I said then. Nothing beats core fundamentals, not even money created out of thin air. And if are unaware, RE prices are actually already down by 20% in city & even more than that in real terms.

    See this latest news :-

    The mid-year economic review of the Narendra Modi government has made some strong-worded, direct observations against former RBI governor D Subbarao saying the monetary policy lost credibility in the economy during his stint at the central bank.

    "For nearly six years (2007 third quarter to 2013 third quarter), India lost monetary policy credibility...," the review said. "That has been reversed since the end of 2013, with real interest rates climbing back into positive territory".

    The reference to the specific time-frame given here unmistakably proves the men for whom the words of blame and praise are intended - the blame for Subbarao, who was in office since 2008 until September 2013, and the praise for Raghuram Rajan, who took charge thereafter.

    The ground for criticising Subbarao is this. Between 2007 and 2013, the RBI failed to contain inflation, letting price-levels soar to double digits, which in turn kept the real interest rates negative in the economy, while Rajan managed to kill inflation and turned real rates positive yet again.

    One cannot disregard the government's observations given that inflation has indeed consistently stayed at high levels during most past part of Subbarao's tenure, snatching away the fruits of economic growth from the common man.

    Shortly after Subbarao took over, the global financial crisis broke out, draining liquidity from the emerging markets, including India, forcing Subbarao to rapidly cut interest rates.

    Since 2010, the inflation was gradually transforming to widespread, generalised inflation and not something solely confined to demand side pressures, which was the case until then. When inflation is propelled by supply pressures, the monetary policy could do very little to check price levels and price expectations.

    Also, Subbarao, being Chidambaram's man in the RBI, undoubtedly faced immense pressure from the government to keep interest rates lower.

    In short, in the Subbarao era, if high inflation and resultant negative real interest rates for a long period meant loss of credibility for monetary policy, it is certainly unfair to blame the man alone.

    The responsibility should be equally attributed to the UPA government's policies that worsened the fiscal scene and adverse global economic conditions that would have made life difficult for any central banker in the aftermath of the 2008 global financial crisis.

    RBI's credibility loss: It's wrong to blame Subbarao alone; UPA is equally responsible - Firstpost

    ^^ In short, artificial lower rates with free for all cheap money led to infusion in market which was driven by this money created out of thin air & not from actual savings from consumers.

    Wonder why RE bulls run away when asked question about rising NPAs & builders going bankrupt now.
    If you are happy, you are successful.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Freebies, Inventories Weigh on Property Developers in 2014

      Buy a flat and get one free. Yes, that's what Noida-based realty firm Supertech is promising to buyers of apartments in one of its projects. Cars, LCD TVs and foreign trips have been the more common freebies doled out by developers to attract buyers in bad times.

      Developers have been forced to come out with such eye-popping offers because of the sharp slowdown in property sales.



      Freebies, Inventories Weigh on Property Developers in 2014 - NDTVProfit.com

      ^^ And still RE bulls will keep singing, RE prices always go up.
      If you are happy, you are successful.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by realacres View Post
        Wonder why RE bulls run away when asked question about rising NPAs & builders going bankrupt now.

        The builder who have defaulted were due to internal problems with running the company - Hiranandani. Apart from that there have been no major default by builders. Power companies, infra companies and other core industry companies have all defaulted or resturctuted.

        The facts are clear - home loans have the lowest NPA across all sectors the economy.

        I would take u seriously if u had replied to the post with - Yes I was wrong. The facts on the ground are different to what I had predicted.

        But you insist on saying you stand by wrong predictions?? Then you will post crap logic to keep ur sanity. Best of luck.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by realacres View Post
          Even today I stand by what I said then. Nothing beats core fundamentals, not even money created out of thin air.

          Are sir even Kejri accepted his mistake in resigning after 49 days - Quitting as Delhi CM was a 'mistake', admits Kejriwal - Hindustan Times


          Humility is a quality not everyone has but still everyone should try to develop it Say it. People will take ur posts a little more seriously and the importance of this thread will improve.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by realacres View Post
            Seems you missed the news posted just above your post.
            Strange no bulls is commenting on either of them.

            And pandeji,

            Even Kishor biyani couldn't survive the slaughter of ecommerce & finally ended up tying up with amazon India.
            This is what happens when a person doesn't listen to market demands.
            Sir you dont listen to facts but go on lecturing people?? Twist every fact to suit ur bias and then blame others. I think my new year resolution is going to be to ignore people like u. 6 more days and I will off ur case. Dont have time to waste after people who dont learn even after being wrong for 5 yrs.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by realacres View Post
              Buy a flat and get one free. Yes, that's what Noida-based realty firm Supertech is promising to buyers of apartments in one of its projects. Cars, LCD TVs and foreign trips have been the more common freebies doled out by developers to attract buyers in bad times.

              Developers have been forced to come out with such eye-popping offers because of the sharp slowdown in property sales.



              Freebies, Inventories Weigh on Property Developers in 2014 - NDTVProfit.com

              ^^ And still RE bulls will keep singing, RE prices always go up.
              Read the offer man!!!

              "Buyers can get a studio apartment free if they buy a top-floor flat in Supertech's Cape Crown project in Noida. The company is also offering flipkart vouchers worth Rs 1 lakh."

              So its not one for one. Its like 1/10 for 1.top floor flat in Noida. What a joke

              Again twisting data to suit bias. Atleast when copying from other sources post the relevant parts man...

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                herohiralal

                The man multiple posts the same negativity across multiple forums. It becomes difficult to read thru them. Clear violation of forum rules.. By a moderator no less.. Ex though.

                After five years, prices are falling in a overheated area and people crow (pun intended) about it. This reminds me of the old probability story my statistics prof used to tell me.

                if you get enough monkeys banging randomly on typewriters, given enough time.. A readable tome can be produced.

                And then pull out cases of over leveraged disasters to prove a point.

                Prices will go up and down... In eqty/MF..Everywhere.
                Last edited by Que Sera; December 25 2014, 11:11 PM.
                Life is what happens when you are making other plans. Enjoy it

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  "In Gurgaon's Phase 1 area, a second floor apartment has been sold for Rs 1.72 crore to an end user, down from Rs 2.25 crore "

                  NCR property prices corrects. Seems another paid shill article by builders. Assuming this 30% correction is accurate, prices are still way too high. Potential further downside in over next few months ?

                  Best time to buy a house in Delhi as property prices see 30 per cent fall - The Economic Times

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    @gmumbai = "NCR property prices corrects. Seems another paid shill article by builders"
                    When prices rise, the media reports of it is termed as paid news. Now prices are falling and this too is paid news Are our journalists really that venal or are we seeing conspiracy where there is none. Just mean reversion playing out in Indian RE.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by herohiralal View Post
                      Are sir even Kejri accepted his mistake in resigning after 49 days - Quitting as Delhi CM was a 'mistake', admits Kejriwal - Hindustan Times


                      Humility is a quality not everyone has but still everyone should try to develop it Say it. People will take ur posts a little more seriously and the importance of this thread will improve.
                      There are many people who come to this forum and stalwarts like RA and wiseman alone would have demoralised if not convinced so many people over the years against buying property at the rates that were much more affordable to the public at the time. Who will take the blame?

                      The whole forum Pune especially has lost value due to the volume of his posts and selective negative picking from various sources, statements without being backed up by data and general scare mongering.

                      We need more people to share their views based on practical and genuine experience of buying, selling, renting and building real estate. The whole discussions have limited to financial performance and macroeconomic activity.
                      Last edited by RP Pune; December 26 2014, 07:42 AM.

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