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- Originally Posted by aditi sharmaThe land pricing shows, builder are able to rip more profit from residential projects rather than commercial as Lunkad is planning a residential project on this land.
Humm...Even DSK has scrapped his SEZ project at Fursingi and now building 10000-15000 flats on that land...CommentQuote0Flag
- Originally Posted by home123Humm...Even DSK has scrapped his SEZ project at Fursingi and now building 10000-15000 flats on that land...
Who is going to stay there in FURSUNGI near Dumping Ground of Pune!!!CommentQuote0Flag
- Originally Posted by realacresHey, just got the update:-
RBI hikes repo rate by 25 bps (at 5.75%) and reverse repo rate by 50 bps (at 4.50%).:bab (6):
It seems controlling inflation is high-priority. Now RBI would be reviewing rate every-month (earlier it was every quarter).
More rate-hike are anticipated in Sept.
Good news for savings in FD :D
Bad news for loans with floatings-rate.CommentQuote0Flag
- More likely RBI will raise CRR and suck up liquidity next time - much more effective in drying up liquidity.
Indian rates are already optimal - raising rates will stifle growth badlyCommentQuote0Flag
- Majority see another RBI rate hike by SeptOriginally Posted by VenkytalksMore likely RBI will raise CRR and suck up liquidity next time - much more effective in drying up liquidity.
Indian rates are already optimal - raising rates will stifle growth badly
MUMBAI (Reuters) – The Reserve Bank of India (RBI) is likely to raise interest rates more aggressively in the rest of the fiscal year after tightening monetary policy more than was expected on Tuesday and sounding a hawkish tone, a new Reuters poll found.
Most economists polled expect interest rates in India to reach their peak by the second quarter of 2011, the poll found.
Read complete article here:-
- Hi real,
Yes the news channels were also full of analyst chatter along the same lines.
Analysts - They are like meteorology dept - when it rains, they predict more rain. Analysts did not anticipate 0.5% RRR raise. Now they are predicting lots of rate rise.
I believe RBI is more sensible than these analysts. They were prudent in 2006 when they predicted RE bubble. They were aggressive in raising rates, but lowered rates aggressively when the rest of the world followed suit.
If I was running the RBI, I would raise CRR and not the repo. It would be more effective in beating enflation. In fact I was expecting 0.25% RRR increase and a CRR increase this time around.
Maybe some specific things - some bond auctions etc - are anticipated by RBI and that is why they left CRR untouched.
RBI can also increase the risk in commercial RE - which is probably substantial, and ask for more provisioning by banks - which will cool RE prices and also bring down bank stocks.
I would lighten up on banks and RE stocks for now.CommentQuote0Flag
- Delays still ail realty sector, 25 projects to miss deadline
This is what is one of the most worrisome thing to happen:- highly delayed possession . We keep warning everyone about this. Check out the following article & the woes of the buyers here:-
- The project delays are actually result of extreme greed of developers. Iam wondering why there is no regulator for real estate industry.CommentQuote0Flag
- The bank deposit rates have been increased anywhere between 25-75 bps & this will make home & auto loan expensive from Sept-Oct.
In today's interview to DNA, the RBI Gov, Subbarao has said that liquidity will be pulled out from the system in next couple of months & lending for realty will be expensive from Nov 10. This includes home loan + loan to builders as well:bab (34):.CommentQuote0Flag
- 10 Ways Investors Sabotage Themselves
A good article from Forbes, nice tips to help you avoid from going bust.
- UK residential property prices start falling as lending remains restricted
To me it looks like India is trailing the path of UK in terms of credit offtake for realty. Come Nov will see interest rates go up as indicated by RBI this week. Lets see how this impacts RE sector, of now the sales have dipped QoQ in India as well.
Residential property price fell in July as buyer demand remained weak and there was a substantial drop in annual house price inflation, according to the latest index from the Nationwide.
‘So far in 2010, demand from buyers has made little progress in building upon the recovery seen during much of 2009. Despite the introduction of a second stamp duty holiday for the vast majority of first time buyers and record low interest rates, the number of properties changing hands across the UK is still running at only half the levels seen prior to the financial crisis and recession,’ said Martin Gahbauer, Nationwide’s chief economist.
- What defines luxury homes? Is it only the price?
- Hi Real,
Reading your posts above, and yesterdays Property Times and HT Estates (Huge spreads on luxury flats), it feels like 2008 never happened.
Worst thing - even I felt like owning a piece of that luxury - and felt bad that my salary cannot support even 10% of the cost of those luxury apts. I mean 16 Crores is 4 million dollars !!!
Property is on a 100 meter dash now - everybody is busy buying buying buying. Vatika plots sold in Sept for 20,000 psy (in Gurgaon) are now worth 35000 psy - and they were bookings, so people made 500% profits on booking amount - in 9 months.
That could have been me - except I was busy wasting time in this forum !!! So that is 2 chances of a lifetime wasted in just one year - once in stocks and once in plots. Three if you include Yamuna Expressway plots.
Reading this forum is deleterious to your financial health!
(or is it capitulation phase - I dont know - thats the problem - one never knows!)
All one can do is be sensible and safe.
Anyway, there was an old internet forward which did th rounds in 2009 - perhaps on this very thread, I dont know - I found it on another blog and reproduce it here for those who came in late (cut and paste is in blue):
"An old gem on the internet but still relevant..
Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.
1. There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.
2. B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.
The net asset of the country now = 3 dollars.
3. Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.
* A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B sold his land and got 2 dollars, so his net asset is 2 dollars.
* C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
Thus, the net asset of the country = 4 dollars.
4. A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.
1. B loaned 2 dollars to A. So his net asset is 2 dollars.
2. C now has the 2 coins. His net asset is also 2 dollars.
The net asset of the country = 5 dollars. A bubble is building up.
5. B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.
1. As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
2. B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
3. C loaned 2 dollars to B, so his net asset is 2 dollars.
The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.
· Everybody has made money and everybody felt happy and prosperous.
6. One day an evil wind blew, and an evil thought came to C’s mind. “Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more.” A also thought the same way. Nobody wanted to buy land anymore.
1. So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
2. B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
3. C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.
4. The net asset of the country = 3 dollars again.
7. So, who has stolen the 3 dollars from the country ? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B’s net asset is still 2 dollars, his heart is palpitating.
1. B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.
2. A owns the 2 coins, his net asset is 2 dollars.
3. B is bankrupt, his net asset is 0 dollar. ( he lost everything )
4. C got no choice but end up with a land worth only 1 dollar
5. The net asset of the country = 3 dollars.
************ **End of the story; BUT ************ ********* ******
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
1. When a bubble is building up, the debt of individuals to one another in a country is also building up.
2. This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island’s own currency. Hence, there is no net loss.
3. An over-damped system is assumed when the bubble burst, meaning the land’s value did not go down to below 1 dollar.
4. When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.
5. If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.
6. When the bubble was in the growing phase, everybody made money.
7. If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.
8. As in the case of land, the above phenomenon applies to stocks as well.
9. The actual worth of land or stocks depend largely on psychology"
So went the internet forward.
Now my speculation is this - if this island had paper currency as well - they would have printed as many dollars as they wanted and the price of this 1 dollar piece of land could have been 1000 dollars also !!!
And if there were other nearby islands as well - we got a good description of world in 2008 onwards.
By the way, I am positive that I have read this on this forum also, possibly on this very thread!!! Only, who will flick through 200 pages to find it !!!CommentQuote0Flag
- Does this apply to paper currency? It would if paper currency is backed by equivalent "tangible" item of equal worth, normally .CommentQuote0Flag
- Originally Posted by VenkytalksThe actual worth of land or stocks depend largely on psychology
This may be true for land, but stock goes on fundamentals most of the times.CommentQuote0Flag