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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

    Originally posted by asliarun View Post

    If Tata Nano gets overbooked by say 2 lakh advance bookings, why don't they raise prices from 1 lakh to 2 lakhs? After all, supply and demand dictates that they should increase prices, right? Why doesn't Walmart increase prices because it gets so many customers?
    Good points all. In reality Tata Nano's grey market price actually does rise. Those who want it, but don't want to wait do end up paying a premium in the secondary market. And very often, it's the showroom guy who ends up making more money because he knows he has a hot cake in his hand that he can really suck and milk. And who knows even the manufacturer gets a small premium kick-back from the showroom.

    The best way to regularize this is to actually have VIP bookings. So those who want the vehicle tomorrow, can choose to pay 2Lakhs, and they'll get it the next day. In this case, the manufacturer actually gets the benefit of producing a hot cake. But wouldn't some call this as "commercial exploitation".

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by razer View Post
      I agree with you. But all I'm saying is price discovery is the end-point, and you cannot peel back the layers and say that since you got it for 123, you can't sell for 456.
      Originally posted by razer View Post

      As compuwalah said, if you find an article wrongly priced in a mall, then just don't buy it. Sure, go ahead moan and groan about it, but don't go crying about how the material was procured in Rs 5, and it costs only Rs 100 to stitch. Then why sell for Rs 1500?

      To take this analogy further, I must say that builders are giving "torn" jeans, or half-size jeans saying it will grow as you become thinner, calling it fashionable.

      Pricing is not my biggest beef against builders. Non-performance certainly is. How can you take "mooh maangi rakkam", and still not deliver?

      • Justifying the high price doing Land hoarding is wrong.
      • Let me try and use your own analogy and try to explain in your mall all jeans are above 1200. The ones that are below that are quoted as life time opportunity and not jeans at all but are sold as jeans (torn short etc. that u mentioned). In your case we are assuming that only Jeans can be worn and nothing else.. so potentially u are going NUDE if you don’t buy the jeans (This is the point where I state that housing is a necessity so we have to assume that jeans is also a necessity).
      • You can hire the Jeans but at the same time the owner can ask you to give it back anytime.
      • On top of this, The stores create FEAR by constantly increasing the price of Jeans for apparently no reason. (“apparently no reason” is important point here).
      • What else they claim only 3 Jeans left and so now the Jeans are going to cost 2500. So remaining people pls go nude. Advance booking for next lot of Jeans will cost 2700. which subsequently will be increase to 3000 as soon as Jeans come in our godown. And as soon as they hit rack they will cost 3300. (Reason could be anything like cost of preparing Jeans has increased, Tremendous amount of loan taken so have to repay that etc.)

      What will you ay if ************** companies increase the prices of all life saving drugs to huge levels irrespective of cost of manufacturing. They too can Claim ohh I have taken huge loan for buying my 7 series BMW have to pay that off. Huge demand for my medicine.. if you don’t want it don’t take it simple. Government controls the prices of such essential drugs here. Cause it is important.
      Government also makes sure that hoarding food grains is not done by Baniyas.

      You might say the cases are different. But I would say one is immediate need and the other is maybe not so immediate need.

      I think I am blabbering a lot. Let me jut stop at let us the Major point is housing is a necessity.

      VK

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by veeemkay View Post
        Let me jut stop at let us the Major point is housing is a necessity.
        VK
        Dude, no one is asking anyone to go "nude". (hey it rhymes! )

        Housing is necessity to buy? I don't think so.

        In our country we have this "funda" that we must have our own home. To have a roof over your head is a necessity, but to have your own roof over your head is not a life-and-death situation.

        I live in a country where close to 70% (if not more) of the population rents. Everyone here is incessantly crying about rents, instead of home prices . I live in a rental apartment, too. It's not my home, but I treat it like my own. The rent is high, I know, but I simply cannot afford to buy in this country.

        So all those who are creating FUD is for those who want to buy. For those who feel that the prices are unjustified, they can continue to rent (for a lot less I might add in India), and keep a stable roof over their head.

        In fact, by renting in India you can actually lead a lifestyle that you would've otherwise not been able to.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Builder theory proved wrong. RE bull theory proved wrong. Bear theory is right. Please stay on rent .

          Actually I also stay in country where house prices were beyond my reach. So I stayed on rent for 11 long years before I finally bought. All these years I have been staying on rent as some people had spare money to buy 3 or 4 properties which they rented out. So it was a win win situ for both landlord and me. Had there been no such people who were bullish, there would not have been apt to rent (though the market price of some of these apartment was much below the price at which the owner bought) and it would have been a headache to govt as how to house the people who come to work in country (yeah there are govt who are concerned about such issues as well. Not "fend for yourself" attitude :-) ).

          Similar situation exists now in India (as the equation of 200 times rent is worth of a property is out of window fot at least for past 3 years). People who think its worth buying properties and have sufficient money, buy at present rate (which seems to be happening) as they believe in the northbound travel of rates in long run. People for whom rental equation wins in the the EMI vs rent math , stay on rent (and lookout for a big slump which many oracles are predicting to buy). This way people who booked at higher rates can cover some of their EMI. So works win win for both parties.

          Like Good Bad Ugly dialogue (by Tucho)
          "If you want to buy... buy ... don't complain" (If you want to shoot ... shoot ... don't talk).
          Last edited by compuwalah; February 18 2010, 02:45 PM.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by razer View Post

            Housing is necessity to buy? I don't think so.

            In our country we have this "funda" that we must have our own home. To have a roof over your head is a necessity, but to have your own roof over your head is not a life-and-death situation.

            I live in a country where close to 70% (if not more) of the population rents. Everyone here is incessantly crying about rents, instead of home prices . I live in a rental apartment, too. It's not my home, but I treat it like my own. The rent is high, I know, but I simply cannot afford to buy in this country.

            So all those who are creating FUD is for those who want to buy. For those who feel that the prices are unjustified, they can continue to rent (for a lot less I might add in India), and keep a stable roof over their head.

            In fact, by renting in India you can actually lead a lifestyle that you would've otherwise not been able to.
            Rent jeans or buy Jeans. If one cannot buy then one has no option but to rent.

            I think you have mentioned the answer urself. 70% (if no more) of people in India have to rent. Then there is something very wrong in way RE is priced. Don’t you think so? Demand/ Supply????

            Is there any other alternative to housing? Apart from renting.
            Can we live on the road without a house (unfortunately a lot of Indians do)? Hence housing is a necessity. (Rental or Owned) And if it is a necessity then one has to think about the prices.

            BTW Are you renting by choice. I don’t think so.

            Originally posted by compuwalah View Post
            Builder theory proved wrong. RE bull theory proved wrong. Bear theory is right. Please stay on rent .
            He he he LOL.. Most of us dont have a choice.

            VK
            Last edited by veeemkay; February 18 2010, 02:40 PM. Reason: typo

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by veeemkay View Post
              Rent jeans or buy Jeans. If one cannot buy then one has no option but to rent.

              I think you have mentioned the answer urself. 70% (if no more) of people in India have to rent. Then there is something very wrong in way RE is priced. Don’t you think so? Demand/ Supply????

              Is there any other alternative to housing? Apart from renting.
              Can we live on the road without a house (unfortunately a lot of Indians do)? Hence housing is a necessity. (Rental or Owned) And if it is a necessity then one has to think about the prices.

              BTW Are you renting by choice. I don’t think so.

              VK
              I don't rent in India, I travel to another country for work, where I have a rented apartment. And yes in this foriegn country I'm renting by choice. Even if I could afford the apartment in this foreign country, I wouldn't buy.

              Am not sure about India's rent-buy ratio, I would assume most people in smaller cities live in their own homes? Only in the bigger cities, the stats would be slightly tilted toward tenants. Experts can chime in, I haven't a clue about this.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Originally posted by veeemkay View Post
                I think you have mentioned the answer urself. 70% (if no more) of people in India have to rent. Then there is something very wrong in way RE is priced. Don’t you think so? Demand/ Supply????
                VK
                If at all 70% rent then yes there is something very wrong. Why? They all will like to own a house as soon as they can. So they are in the buy market one time or other.
                30% who already own want a second or .... house

                So result --> High Demand, high prices.

                Do u know difference b/w a cost of building i & buying it. Guess is right - huge. The price of an entity is not derived from the manufacturing cost but from what people are willing to pay & how the entity holds in market(marketing).

                Prices are increasing last 6 months as people are willing to pay.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Good one compu, LOL

                  Originally posted by compuwalah View Post
                  Builder theory proved wrong. RE bull theory proved wrong. Bear theory is right. Please stay on rent .

                  Actually I also stay in country where house prices were beyond my reach. So I stayed on rent for 11 long years before I finally bought. All these years I have been staying on rent as some people had spare money to buy 3 or 4 properties which they rented out. So it was a win win situ for both landlord and me. Had there been no such people who were bullish, there would not have been apt to rent (though the market price of some of these apartment was much below the price at which the owner bought) and it would have been a headache to govt as how to house the people who come to work in country (yeah there are govt who are concerned about such issues as well. Not "fend for yourself" attitude :-) ).

                  Similar situation exists now in India (as the equation of 200 times rent is worth of a property is out of window fot at least for past 3 years). People who think its worth buying properties and have sufficient money, buy at present rate (which seems to be happening) as they believe in the northbound travel of rates in long run. People for whom rental equation wins in the the EMI vs rent math , stay on rent (and lookout for a big slump which many oracles are predicting to buy). This way people who booked at higher rates can cover some of their EMI. So works win win for both parties.

                  Like Good Bad Ugly dialogue (by Tucho)
                  "If you want to buy... buy ... don't complain" (If you want to shoot ... shoot ... don't talk).
                  Shoot karne ke bad talk karne ka man karta hai. Flat book karne ke bad bak bak shuru ho jata hai. You have to do something in that interminable loooooooooong wait while your builder goes to sleep - giving you sleepless nights.
                  Last edited by Venkytalks; February 18 2010, 06:20 PM.
                  Venky (Please read watch a or before posting)

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by puser View Post
                    Is land available anyway ? Why people are not buying LAND but buying flat in stalled projects of colorful brochures
                    Just 2 reasons:-
                    1. Sanctions are hard to get if you don't have right contacts at right place. Add to it that you should be aware of future prospects too &
                    2. Loads of B-money is involved which many mango man don't have.
                    Originally posted by razer View Post
                    I'm not a builder, nor am I a RE bull or a bear, but I fail to understand your logic.

                    I bought Larsen when it was Rs 500, market price now close to Rs 1500. What should I do? Sell it some needy fellow who wants it at Rs 600? And I have 300% profit in less than 6 months?!
                    Man, you are completely wrong in the interpretation. I never will say to you to sell below the current rates, but don't fake that you bought the share itself at 1500 & hence can't sell below it. As you accepted that you want 300% profit, let the builders say the same, why give lame excuses that profit margins are just 25% as land cost itself is 1500? Accept you want more profit & don't say that raw material cost gone up. Got the difference man?
                    If you are happy, you are successful.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by realacres View Post
                      Just 2 reasons:-
                      1. Sanctions are hard to get if you don't have right contacts at right place. Add to it that you should be aware of future prospects too &
                      2. Loads of B-money is involved which many mango man don't have.
                      Man, you are completely wrong in the interpretation. I never will say to you to sell below the current rates, but don't fake that you bought the share itself at 1500 & hence can't sell below it. As you accepted that you want 300% profit, let the builders say the same, why give lame excuses that profit margins are just 25% as land cost itself is 1500? Accept you want more profit & don't say that raw material cost gone up. Got the difference man?
                      Builder won't dare to say that he is earning 300 to 400 % profit.
                      They are sophisticated timids who suck the society!

                      Land is almost free to most of them yaar! What 1500?

                      Comment

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