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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

    Israel, Belgium, Netherlands and Japan among large countries have same or higher density than India at 368 per sqKm.

    UK is around 250 and was denser than India until about 2001 census.

    There is no shortage of land.

    Bangladesh is 3 times denser than us.

    There is no shortage of farmland in India.

    We can use 20% of our fertile land for building without effect.

    Only our inability to administer is holding us back.
    Venky (Please read watch a or before posting)

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      right

      Rightly said Venkys

      Blame it on political propaganda. Its Netas, Babus more than enemies or geography or history that's holding country back. So Choose rightly and correctly your vote.
      You deserve what you choose.

      Welcome back !!!

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by vaibav123 View Post
        suryawork,
        Every year more than population of Australia gets added to our nation.
        Sir, your quote reminded me of a speech by Field Marshal Sam Manekshaw.

        He had said same line in one of his lectures about leadership.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Death rate is also high in India

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            More than population, main issue is about availability of develop-able land, which is deliberately kept low so that artificial scarcity can be created. This is done by politicians who in turn take a cut in builders profit.
            The builder earns, politicians earns but the city as whole losses.
            Current Pune DP is such that all open spaces will be gobbled by builders.
            Last edited by realacres; February 22 2015, 12:37 AM.
            If you are happy, you are successful.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Home buyers - From the late 50s to the early 20s

              A typical home buyer in the 1970s was someone in his late 50s, waiting for his provident fund money to buy a house. If lucky enough, he would have saved some to part-finance the property or arranged a nominal loan from a friend or relative.

              "Forty years back, property buying happened usually a couple of years before retirement. It was in many ways a final deed," says J S Augustine, a consultant with ACME Group.

              Fast-forward to now. People are buying properties even in their 20s. In fact, some start by buying small properties in remote areas, and move their way into the city over time.

              Today, people are happily raising 80-85 per cent through home loans, and if they still don't have enough, the rest is raised through a personal loan. No wonder, banks and housing finance companies are tapping youth aggressively.

              40 years ago...And now: Home buyers - From the late 50s to the early 20s | Business Standard News

              On other hand, look at its implications. A good article below :-

              Three out of four Indians would go bankrupt

              Mr. Horace Mann said ‘There is nothing as costly as ignorance’. We follow an age old habit of ignoring the consequences of an emergency in our life. The practice of maintaining emergency fund is not in the highest priority list amongst the most of the professionals. ArthaYantra conducted a research on 2000+ working professionals across various cities of India covering various age demographics, some alarming results came out which expose the preparedness of these professionals to meet an emergency in their life. An emergency is the risk caused due to death/disability, risk of health or loss of job.









              Conclusion:

              Before determining future financial aspirations, the savings for an emergency should be considered as the highest priority objective. Although there are other options that can be used in such contingencies like personal loans, hand loans, etc. but they would finally end up as a liability and hence will cause serious dents in surplus levels. Ignoring the savings for emergency can even cost future goals impacting the entire personal finance of the individual. It would be good to start saving with a disciplined approach to face any emergencies in life.

              Three out of four Indians would go bankrupt
              If you are happy, you are successful.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                PSBs generate R21,700 cr bad loans in three months

                Asset quality pressures continue to take a heavy toll of public sector banks’ performance with non-performing assets (NPAs) jumping Rs 44,500 crore to Rs 2,72,700 crore, or 5.1 per cent of the gross advances, as of December 2014 as against Rs 2,28,200 crore during December 2013.


                An analysis of bank results shows that PSU banks generated bad loans of Rs 21,700 crore during the October-December period alone. Further, 6.5 per cent of PSU banks loans were standard resturctured advances as on December 31, 2014.




                http://indianexpress.com/article/business/banking-and-finance/psbs-generate-r21700-cr-bad-loans-in-three-months/99/


                Also, the countries largest builder, DLF has been kicked out of NSE benchmark index & is replaced by Idea Cellular.

                But still RE bulls will say, al iz wel, al iz wel.
                If you are happy, you are successful.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Debt recast scheme failing, NPAs may cross R30K crore

                  After non-performing assets, it is now the turn of restructured debt packages that have got banks worried.

                  Debt restructuring packages of 121 companies with loans of over Rs 30,000 crore have failed during the last four years, and banks fear that number is set for a sharp rise in the coming months.

                  Figures available with the Corporate Debt Restructuring (CDR) cell of banks — considered as the “intensive care unit” for financially troubled corporates — show that CDR packages of 86 companies with loans of Rs 14,000 crore failed in 2013-14. In 2012-13, 12 CDR cases for Rs 4,300 crore and in 2011-12, 9 cases for Rs 3,000 crore failed.

                  These CDR packages failed — from virtually zero to Rs 30,000 crore in four years — even after banks doled out interest rate cuts, moratorium on repayment and in some cases even a haircut by the lenders. After taking into account the stressed loan cases withdrawn from the CDR mechanism, the total amount involved in unsuccessful restructuring comes to Rs 50,104 crore, says the CDR Cell of banks, created under the RBI’s regulatory framework.

                  RK Bansal, chairman of the Cell said, “One worry is that in cases which we have restructured failure rates might go up. We have noticed that failure rates had gone up during the last year. This is partly because these cases were restructured during 2011-12 and 2012-13.”

                  They were based on some projections that the economy will do well and demand will rise etc. In some cases it was not possible to comply with or achieve that,” Bansal said.

                  Banks had gone overboard in estimating demand and the promoters’ capability in bringing money.

                  Debt recast scheme failing, NPAs may cross R30K crore | The Indian Express | Page 99

                  ^^ And still RE bulls keep asking same old question :- Why didn't price fall earlier ?? Seems they over-look the cheap money which was given to builders which helped builders then & now no wonder that many banks & builders are looking towards bankruptcy.
                  If you are happy, you are successful.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Bad loans in PSU banks up 3-fold to Rs 2.17 lakh crore in 3 years

                    Bad loans in public sector banks more than tripled to about Rs 2.17 lakh crore in three years to March 2014, government said in Parliament today.

                    "NPAs (non-performing assets) of the banks have gone up during the last few years. Gross NPAs of the public sector banks increased from Rs 71,080 crore in 2011 to Rs 2,16,739 crore as on March 31, 2014," Minister of State for Finance Jayant Sinha said in a written reply in Rajya Sabha.

                    Earlier this year, government had organised a confluence of PSU banks in Pune to discuss about on banks' differential strategic funds, capacity building, technology enabled transformation and strengthening risk management among others.

                    The Minister said government and Reserve Bank have taken a number of steps to address the issue of NPAs in public sector banks.

                    "Government has already decided to establish six new Debt Recovery Tribunals to speed up the recovery of bad loans of the banking sector," he said.

                    Also, as per earlier directive, banks need to start acting as soon as a sign of stress is noticed in a borrower's account and not to let it become an NPA.

                    Bad loans in PSU banks up 3-fold to Rs 2.17 lakh crore in 3 years - The Economic Times

                    ^^ Expect in coming time builders' assets being taken over by banks. Infact, it has already now started with banks taking over Kingfisher house in Mumbai. See news below :-

                    Loan recovery: SBI consortium takes over Kingfisher House

                    Clamping down on Vijay Mallya-led UB Group to recover loans, a 17-bank consortium led by state-run SBI today took over possession of the prized Kingfisher House, estimated to be worth Rs 100 crore.

                    The banks have taken possession of the over 17,000-sq ft property at Vile Parle, near the domestic airport here, as part of their efforts to recover the Rs 6,800 crore loan they had granted to the long-grounded Kingfisher Airlines.

                    Loan recovery: SBI consortium takes over Kingfisher House - The Economic Times
                    If you are happy, you are successful.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Budget 2015: Jaitley should dissuade second homes buys to deflate property bubble

                      India, an emerging market, needs to build infrastructure that is critical for long-term progress. Such initiatives are financed by long-term financial savings.However, government policies have encouraged households to direct large chunk of their savings into real estate and gold.

                      Dissuade investment into second homes

                      Current income tax provisions promote hoarding of property by investors (not end-users), who now account for more than 50% of property purchases in metropolitan regions. While it may seem foolish that investors borrow at 10% p.a while only getting rental yields of 3-4% p.a, the apparent gap is made up by tax incentives for purchase of real estate and classifying it as investment rather than end-use. Section 24 of the Income Tax Act caps the offset from interest paid on mortgage loans on properties bought for the self-use to Rs 2 Lacs. However, for investment properties, the entire interest differential between the interest paid and rental yield and an additional 30% standard maintenance deduction can be claimed as loss from the income. Further, due to low rental yields, real estate investment is currently being used as a tax saving instrument.

                      Second homes should attract differential rate of tax

                      This in effect is a subsidy for the rich at the expense of the poor. It is also substantial loss of tax revenues to the government. Persistent high-inflation and lack of reforms in the opaque real estate sector have contributed to the asset price bubble and attracted more investors. Second homes should attract differential rate of tax. This will cool down the house prices in an orderly manner, channelize saving into financial assets, deflate the property price bubble, contain long term inflationary expectation and strengthen the “Housing for All” policy of the current government.

                      Improve land productivity and Tax unutilised land / buildings

                      Currently the government agencies responsible for urban planning and development get revenues from “land monetisation” not land productivity. They derive revenues from new construction and sales, not end-use, via land and stamp duty that now account for 7-8% of state government revenues.As per last census of 2011, vacant houses in the urban areas have increased by 73% to 11 million in a decade. This has also resulted in prices rising beyond the affordable limits of an actual end-user. Moreover, the developers have started a new trend of affordable housing to stay afloat and attract buyers. These affordable houses are located far away from places of work and the end-users are not inclined to move. Most of such locations at 50 Km from city centres are undeveloped and not liveable.

                      It is imperative to release, develop and utilise land close to urbanising areas.This can be done by imposing vacant land tax, a practice prevalent in developed countries.This will discourage speculative land hoardings and encourage land-owners to develop vacant or under-utilised land parcels or make way for others who can do it. As a result, inner city land would turn productive thus reducing the pressure to build undeveloped sites. This is also similar to progressive tax - paid by wealthy and somewhat reduces economic inequalities.

                      Budget 2015: Jaitley should dissuade second homes buys to deflate property bubble - Firstpost
                      If you are happy, you are successful.

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