Hereby I will prove how the realty boomers arguments are false.

What are the boomers arguments?

1.) Buy today, houses always increase in value in the long run.
WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.

2.) Renting is just wastage of money.
WRONG. As said before renting is now much cheaper per month than owning. If you don't rent, you either:

* Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance, costs that increase forever.
* Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income is sufficient for emergency expenses,retirement etc.

Either way, owners lose much more money every month than renters and that's assuming prices don't correct to very high level & everything is smooth in the economy.

3.) As a renter, you won't have any money left as you will spend them on vacations,cars & hence won't have equity/savings etc.
WRONG. Equity is just money. Renters are actually in a better position to build equity/savings through investing in anything but housing. Renters can get rich much faster than owners, just by investing in conservative stocks & bonds.

* Owners are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
* Owners must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity/savings. Only houses are such a guaranteed drain on cash.
* Owners must insure a house, but not most other investments.
* Owners must pay to repair a house, but not a stock or a bond.
* Owners lose their money as house prices reduce. The EMI's remain constant in spite of reduction in rates. At the end of loan tenure, they would have paid almost twice than that of current renters who will buy at logical rates. Keep interest rates in mind. Most of the EMI is not principal amount but interest.

4.) There are great tax advantages to owning a house.
WRONG. Many people believe you can just reduce your income tax by the amount you pay in interest, but they are wrong. Buyers may not deduct interest from income tax; they deduct interest from taxable income. And even then, the tax advantage is not significant compared to the large monthly loss from owning.

If you don't own a house but want to live in one, your choice is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc.

5.) RE is based on local factors, it's not a national phenomenon. RE of Delhi-NCR,Bangalore & rest of the cities has nothing to do with Pune RE.
WRONG. Lending rates remain the same throughout the country. ALL loans are harder to get. This will drive prices down everywhere.

6.) A rental house provides good income. So, you can rent if you have purchased as investment.
WRONG. Rental houses provide very poor income in hyped areas and certainly cannot cover mortgage payments. Remember there is almost 300% difference between EMIs & rent for the same house.

It's pointless to do the work of being a landlord if you can make more money with no risk, no work, and no state income tax by investing in assured good returns bond.

7.) If owning is a loss in monthly cash flow, but appreciation will make up for it.
WRONG. Appreciation is negative. Prices are going down. It only adds to the injury of already high EMI's.

8.) As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
WRONG. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many house owners are near bankrupt as they don't save anything at the end of the month due to high EMI's.
No one has to buy, but there will be more and more people who have no choice but to sell as their payments rise. That will keep driving prices downward for a long time.

9.) House prices never fall atleast in Pune.
WRONG. If you see the RE scenario of 1996, prices crashed by 50% & took a whole 7+ years to recover.
Exact 1996 scenario may not be there today but strong correction is inevitable across the city.

10.) House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
WRONG. House prices won't be zero, but the equity or the principal amount you paid can be zero or even negative. What you will pay as EMIs later in actual terms is not for the principal amount but only the interest as house prices dip. So, you will be only serving the bank.

11.) Prices will soften gradually, won't crash immediately.
WRONG. Prices are falling off a cliff. No one knows exactly what will happen, but it looks like prices will continue to fall for long time. These are just more manipulation of buyer emotions, to get them to buy even while prices are falling.

12.) The bubble prices were driven by supply and demand alone.
WRONG. Prices were driven by low interest rates and risky loans & good returns for investors in initial phases of boom in 2004-05.
Prices went up, interest rates went up & buyers savings went down. So prices are violating the most basic assumptions about supply and demand.

13.) There is lack of land.
WRONG. Ample of land is available & continue to be even in future in Pune. Sales volume are down. Even in Japan (small country with less land), prices went down. Current prices here are the same as that of 23 years ago. If we really had a housing shortage, there would not be so many vacant rentals.

14.) If you don't own, you'll live in a cheap neighborhood later.
WRONG. For the any given monthly payment, you can rent a much better house than you can buy. Renters live better, not worse. There are downsides to renting, such as being told to move at the end of your lease, or having your rent raised, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash. There are similar but worse problems for owners anyway, such as being fired and losing your house, or having your interest rate and property taxes adjust upward. Remember, property taxes are forever.

15.) There's always someone predicting a real estate crash.
TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

16.) Local incomes justify the high prices.
WRONG. The mortgage should be more than your 3 years earning. It is much higher today. Most are already in danger/red zone.

17.) You have to live somewhere.
CORRECT. But that doesn't mean you should waste your life savings on a bad investment. You can live in a better house for much less money by renting during the down slide in RE.

18.) It's not a house, it's a home.
WRONG. Wherever one lives in it is home, be it apartment, condo, bungalow , mansion or house. Calling a house a "home" is a manipulation of your emotions for profit.

19.) If you don't buy now, you'll never get another chance.
WRONG. History proves otherwise.
Here's a beautiful quote from a analyst:-
"The real issue isn't whether you will be stuck being a renter all your life, she says. Its whether you'll get so scared about being shut out that you'll buy at the market's peak and be stuck in a property you can't afford or sell."

20.) It would take major economic recession or a major earthquake that wipes out this area in order for the price to fall by over 50%.
WRONG. Even today, if the prices fall by 50%, there will still be very few people who can buy at this levels due to uncertainty in jobs & most importantly high EMIs. Also, look at the rental rates for equivalent houses. Which loss per month is larger? EMI or rent?

contd....
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  • This concept does not go well with the typical indian mentality ie.. a house made of bricks & mortar.



    Originally Posted by Venkytalks
    http://www.prlog.org/10604008-puravankara-plans-prefab-housing-plant.html

    Prefabricated housing ha the potential to reduce building costs by 30% and improve construction quality at the same time - also reduce labour costs which are rising with NREGA and inflation.

    If a cement biggie like Birla latches on to it, it can be a game changer in Indian construction. Unfortunately Tata has sold its cement business, otherwise they would have been perfect - Nano housing!

    Some of the prefab Singapore housing is amazing. Building goes up in weeks.
    CommentQuote
  • Originally Posted by mahesh pune
    What kind of technology is it ? Is it similar to aluform technology (Originaly from beigium) used by Naiknavare which uses RCC walls with loadbearing avoiding bricks. ?


    It just uses iron rods and cement - forms for making beams to standard sizes are used. There are joining iron spikes for bolting the beams together. The beams are made in the factory, rather than on site. Similarly, floor plates are manufactured in the factory. These are carried to the site on trucks, lifted by cranes and joined together to make the RC beam structure of the foundation and the framework. Joints are reinforced with on-site cement and voila - the RC frame is ready. Fill in the brick work, plaster it and finish the fitting - building takes just a few months to make.

    Delhi metro uses similar technique, except the design and size are gigantic and high tech.

    This kind of mass production are routine for building in the west and in south east Asia. The height of the crane determines what height you reach.

    Mass production will make sense in India if the labour cost keeps going higher and capital cost goes higher - this way you save on labour and quick finishing makes the capital costs some 30% lower.

    I have been waiting for this to come to India for over 10 years now. No signs of it - our builders dont want to build efficiently, they want to delay and hood wink and bilk their customers.

    Only someone like Tata will do it.
    CommentQuote
  • A closet bear?

    Originally Posted by realacres
    Here is a nice opinion-editorial page of IE. The extract has been taken from New York Times (NYT), written by Paul Krugman. It just shows how we have learnt nothing from our past mistakes & coming out of this mess is going to be a lot tougher than that of 1930s.

    * Please read this neutrally, without seeing a bull or bear here. My humble request.

    http://www.indianexpress.com/news/the-38-double-dip/678129/0

    Btw, HDFC has increased lending rates by 50 bps or 0.50%.




    Real,

    You don't have to be a closet bear. Cme up and join me in the open! :D

    Just kidding!

    Btw, Krugman is losing a lot of credibility now-a-days!

    cheers
    CommentQuote
  • Originally Posted by wiseman
    Real,

    Btw, Krugman is losing a lot of credibility now-a-days!

    cheers

    I could not agree more on this. All his opinions expressed in NYT from last year are biased and pro-democratic thinking instead of economic rational.
    CommentQuote
  • Originally Posted by frugality
    well

    -US visa fee raise is specific to Indian IT companies.

    -UK super bug named on New Delhi..

    -China's IT Challenge

    In a move that could upset the Indian outsourcing industry's robust growth so far, China has announced operating tax exemption for its outsourcing businesses till 2013. The exemption, which will benefit Chinese companies in 21 cities, is in line with China's aggressive campaign to emerge as the top outsourcing destination in Asia.

    http://timesofindia.indiatimes.com/home/opinion/edit-page/Chinas-IT-Challenge/articleshow/6301403.cms

    This is when there is no recession in World ... what will happen later :bab (45):

    if 'IT outsourced jobs' are halved by US by some new law what will happen it Indian IT youths ?

    Or US jobless IT professionals are given option to work in India ?


    And EVM tampered ???
    http://timesofindia.indiatimes.com/city/hyderabad/Demo-on-EVM-tampering/articleshow/6284330.cms


    Another setback for IT

    http://timesofindia.indiatimes.com/business/india-business/Ohio-bans-outsourcing-of-IT-projects/articleshow/6521490.cms

    Ohio bans outsourcing of IT projects


    .................the development is expected to hurt Indian companies such as Infosys, Wipro, and Patni, which routinely win multi-million dollar state-level government contracts. Sharp reactions to Strickland's move from Infosys and India's IT lobbying group Nasscom suggested that Ohio had struck India Inc where it hurts, and there is concern in India about whether other states will follow suit.


    ------------------------------------------------------------

    Wall Street Firms to Cut 80,000 Jobs in 18 Months, Whitney Says


    http://www.bloomberg.com/news/2010-09-07/wall-street-firms-will-cut-up-to-80-000-jobs-over-18-months-whitney-says.html

    CommentQuote
  • Finally, out of the crib into real world ...

    Originally Posted by frugality
    Another setback for IT

    http://timesofindia.indiatimes.com/business/india-business/Ohio-bans-outsourcing-of-IT-projects/articleshow/6521490.cms

    Ohio bans outsourcing of IT projects


    .................the development is expected to hurt Indian companies such as Infosys, Wipro, and Patni, which routinely win multi-million dollar state-level government contracts. Sharp reactions to Strickland's move from Infosys and India's IT lobbying group Nasscom suggested that Ohio had struck India Inc where it hurts, and there is concern in India about whether other states will follow suit.


    ------------------------------------------------------------

    Wall Street Firms to Cut 80,000 Jobs in 18 Months, Whitney Says


    http://www.bloomberg.com/news/2010-09-07/wall-street-firms-will-cut-up-to-80-000-jobs-over-18-months-whitney-says.html





    The Indian IT baby (which was spoon-fed for far too long) is finally waking up to the real world.

    Others are out-arbitraging us and we have been bottle fed for so long (I can understand tax break when you are a 100 crores industry and the country needs $$$, but still when you are a 200,000 crores industry?!!) that it is unable to get up and walk.

    The timing is such that we are entering a global slowdown/contraction in the business cycle which will make it all the more painful. I expect some serious pay cuts and "productivity improvements" where our " engineers" finally learn what it is to make world-class products.

    I recently read a report (probably brought out for the first time) that in the last 1 year, over 140 product firms have shut shop, a significant part from the Telecom-focus area. We have a VERY LONG WAY TO GO to become world class in actual development (I mean not throwing large numbers of low-cost, low-quality bodies at producing seriously bug-ridden code).

    Everytime a report like this comes out, you get a standard response ... "it will not affect us much", which is the most asinine thing I have seen, like a Govt bereaucratic response to any crisis. One response to any and all issues whatever it may be!

    But out industry leadership (same guys who went through the same bug-ridden path to leadership) seems to be wallowing in the model of the 1990s and seems to have no clue as to how to address the future challenges - barring a few exceptional companies that do.

    cheers
    CommentQuote
  • Originally Posted by frugality
    Another setback for IT

    http://timesofindia.indiatimes.com/business/india-business/Ohio-bans-outsourcing-of-IT-projects/articleshow/6521490.cms

    Ohio bans outsourcing of IT projects


    .................the development is expected to hurt Indian companies such as Infosys, Wipro, and Patni, which routinely win multi-million dollar state-level government contracts. Sharp reactions to Strickland's move from Infosys and India's IT lobbying group Nasscom suggested that Ohio had struck India Inc where it hurts, and there is concern in India about whether other states will follow suit.


    ------------------------------------------------------------

    Wall Street Firms to Cut 80,000 Jobs in 18 Months, Whitney Says


    http://www.bloomberg.com/news/2010-09-07/wall-street-firms-will-cut-up-to-80-000-jobs-over-18-months-whitney-says.html






    More Bad news
    http://economictimes.indiatimes.com/tech/ites/Obama-to-check-incentives-to-invest-in-overseas-jobs/articleshow/6523137.cms
    Obama to check incentives to invest in overseas jobs




    Originally Posted by wiseman
    The Indian IT baby (which was spoon-fed for far too long) is finally waking up to the real world.

    Others are out-arbitraging us and we have been bottle fed for so long (I can understand tax break when you are a 100 crores industry and the country needs $$$, but still when you are a 200,000 crores industry?!!) that it is unable to get up and walk.

    The timing is such that we are entering a global slowdown/contraction in the business cycle which will make it all the more painful. I expect some serious pay cuts and "productivity improvements" where our " engineers" finally learn what it is to make world-class products.

    I recently read a report (probably brought out for the first time) that in the last 1 year, over 140 product firms have shut shop, a significant part from the Telecom-focus area. We have a VERY LONG WAY TO GO to become world class in actual development (I mean not throwing large numbers of low-cost, low-quality bodies at producing seriously bug-ridden code).

    Everytime a report like this comes out, you get a standard response ... "it will not affect us much", which is the most asinine thing I have seen, like a Govt bereaucratic response to any crisis. One response to any and all issues whatever it may be!

    But out industry leadership (same guys who went through the same bug-ridden path to leadership) seems to be wallowing in the model of the 1990s and seems to have no clue as to how to address the future challenges - barring a few exceptional companies that do.

    cheers


    The whole system needs revamp ... like research focused ...
    Have we written any language/Standards on Indian shores?
    Very few ... some maybe in Intel.
    CommentQuote
  • Originally Posted by Venkytalks
    It just uses iron rods and cement - forms for making beams to standard sizes are used. There are joining iron spikes for bolting the beams together. The beams are made in the factory, rather than on site. Similarly, floor plates are manufactured in the factory. These are carried to the site on trucks, lifted by cranes and joined together to make the RC beam structure of the foundation and the framework. Joints are reinforced with on-site cement and voila - the RC frame is ready. Fill in the brick work, plaster it and finish the fitting - building takes just a few months to make.

    Delhi metro uses similar technique, except the design and size are gigantic and high tech.

    This kind of mass production are routine for building in the west and in south east Asia. The height of the crane determines what height you reach.

    There are probs in this methods:-
      As you said, height can be only till where the crane can reach,No mod can be done internally/externally like changes in window or doors as the walls bear the weight,If some chap messes with the walls while doing some interior work, all residents need to worry,Elevation from outside looks very pale as you can't finish & have design like in case of concrete. So, no fancy elevations.

      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.
    CommentQuote
  • Originally Posted by realacres
    There are probs in this methods:-

      As you said, height can be only till where the crane can reach,
      No mod can be done internally/externally like changes in window or doors as the walls bear the weight,
      If some chap messes with the walls while doing some interior work, all residents need to worry,
      Elevation from outside looks very pale as you can't finish & have design like in case of concrete. So, no fancy elevations.
      I have seen cos like Saint Gobain have ventured into pre-fab gypsum walls. Here, plank like plywood is taken, covered with gypsum on both sides & then put under pressure & heated. This reduces cost by 30%, time reduces by 30-32% & load is decreased by whopping 7-8 times compared to regular brick walls. Now here is the trap:- If water is able to seep inside the gypsum, it damages the ply inside which leads to termite attack. So, the termites can eat up the entire wall:o. This though has been used in T3 terminal of Delhi Airport opened recently so as to speed up the work.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.

      Those methods you talk about are meant to reduce cost, weight and construction time further.

      You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

      Most concrete buildings made in China have off site beam casting nowadays.
    CommentQuote
  • Originally Posted by frugality
    Obama to check incentives to invest in overseas jobs

    A big factor here is that the cos which will outsource too will be hit with tax despite working on foreign shores & the cos which work locally will be given tax incentives. Now, if the cos need to pay tax in India + US + no further benefits + hike in VISA fee which will now be up by $ 450+ mn/annum + demand for wage increase in India, all are going to make outsourcing expensive in days to come. Seeing this, Indian cos like Infy & Wipro are hiring local americans rather than sending people from here for on-site.

    If we see this w.r.t. RE, currently Pune RE is directly proportional to IT. If IT is affected (it means no further further growth like Hinjewadi ph4,5,6...), all the projects taking into consideration ITGs like BR, Mpolis, schemes at Wakad & all will fall flat. I am damn sure that projects especially townships like BR, Mpolis, Amanora will be hit. Btw, I am fed up of reading Amanora's Aspire Towers 1-10 ads in newspaper every other day man:bab (22):.
    CommentQuote
  • Interesting

    Originally Posted by Venkytalks
    Those methods you talk about are meant to reduce cost, weight and construction time further.

    You can build the beams and brick in the spaces also - it is just that beams are made off-site rather than on-site. Finish will be same as current high rises - but construction is faster. But construction is highly mechanised and not dependent on manual labour - you can reduce labor to about 1/10th, but they need to be skilled and well trained - cost of labour is around 1/2

    Most concrete buildings made in China have off site beam casting nowadays.

    Interesting man:). Thanks for the info:).
    CommentQuote
  • This might be interesting ...

    Real and others,

    There was a post on the China bubble, but I'm too lazy to dig it up. An article on the Chinese RE bubble ...

    There Are Now Enough Vacant Properties In China To House Over Half Of Americahttp://www.businessinsider.com/there-are-now-enough-vacant-properties-in-china-to-house-over-half-of-america-2010-9?utm_source=Triggermail&utm_medium=email&utm_term=Money+Game+Select&utm_campaign=Moneygame_Select_090910#ixzz0z1oSezJW


    cheers
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  • Hi Wise, didnt you see the youtube video of a whole Chinese city which is just lying empty? An entire city with broad roads, high rise buildings, commercial buildings, apartments - all empty.

    In Delhi also, every family is occupying 2 or three flats - they live in 1 and leave 2 empty (renting out flats is dangerous in Delhi). Most of Dwarka and Gurgaon are full of empty flats.

    You see, the people who want to live in flats dont have money and live in slums

    The people who have the money have 3 flats each and are busy "investing" in their fourth flat.

    As for USA, it has 18 million dwelling units over and above their total number of households - The number of empty houses in USA is enough to house all of Delhi (or mumbai) - that too in luxury which currently only Ambani can afford.

    In fact, USA traditionally has about 5-10 million dwelling units above total number of households - that is how their economy operates, people have second homes, people move (a lot) by buying and selling a house which takes time and they tear down a lot of old houses all the time, youngsters move out of their homes into apartments, old people sell their house and go to retirement home etc etc. This has been the case for the last 30 years and more, the extra houses number has been inching higher all the time and has reached a gigantic number with the bubble.

    But even if you put together all the excess homes in USA and China, and even in Gurgaon and Dwarka, you still cant give a house each to India's homeless.

    Thats the tragedy
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  • Invest in a state that has an apartment Act

    Nice article, but I am sure that until & unless a national RE regulator similar to TRAI for telecom is put in place, builders will continue to find some loopholes to avoid the penalties/punishments:bab (45):.

    http://epaper.livemint.com/ArticleText.aspx?article=06_09_2010_014_003&kword=&mode=1
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  • Yes. Seen all of those... My point ...

    Originally Posted by Venkytalks
    Hi Wise, didnt you see the youtube video of a whole Chinese city which is just lying empty? An entire city with broad roads, high rise buildings, commercial buildings, apartments - all empty.

    In Delhi also, every family is occupying 2 or three flats - they live in 1 and leave 2 empty (renting out flats is dangerous in Delhi). Most of Dwarka and Gurgaon are full of empty flats.

    You see, the people who want to live in flats dont have money and live in slums

    The people who have the money have 3 flats each and are busy "investing" in their fourth flat.

    As for USA, it has 18 million dwelling units over and above their total number of households - The number of empty houses in USA is enough to house all of Delhi (or mumbai) - that too in luxury which currently only Ambani can afford.

    In fact, USA traditionally has about 5-10 million dwelling units above total number of households - that is how their economy operates, people have second homes, people move (a lot) by buying and selling a house which takes time and they tear down a lot of old houses all the time, youngsters move out of their homes into apartments, old people sell their house and go to retirement home etc etc. This has been the case for the last 30 years and more, the extra houses number has been inching higher all the time and has reached a gigantic number with the bubble.

    But even if you put together all the excess homes in USA and China, and even in Gurgaon and Dwarka, you still cant give a house each to India's homeless.

    Thats the tragedy


    Fully agree with you and this inequity will continue for all time to come. There is specific logic of why he rich will become richer and the poor, poorer.

    The China story was coming out in dribs and drabs and we saw the video on the Billion $$$ building which was completely empty, the Mall of China, largest in the world which was almost completely empty, the China Electricity Authority claiming that 64.5 million meters showed zero readings and the Sina.com survey of 100 top cities which showed that places like Tianjin had 66% vacant homes. I had also independently done a back of envelope calculation of these homes housing nearly 20% of China's population if hey could.

    The point I was trying to make is that the housing bubble is so huge in China that its only a matter of time when the Govt's efforts to keep the economy out of trouble will work. Soon, like the US, stimulus efforts will stop working and then it will be free fall as the heavily debt-laden buyers of homes come to market desperately trying to sell before the other guy crashes the price. A rush for the exit when its too late. And this rush for exits only needs a small trigger to set it off.

    Remember late 2005? I was telling people who had bought homes in the US to sell urgently and get out when they could. In hindsight we know that August was the peak. But at that time most guys (including my brother who bought around that time) thought, "whats wrong with this guy? Can't he see the phenomenal boom going on?". The rest is history ...

    The Chinese Central Bank has asked Bank Stress Tests to be done given a 60% price crash scenario and NOT the ridiculous scenarios of the US and EU banks. Yu know what that means!!!

    About the Indian RE market, we are still in no-man's land and we need to see if builders can continue this low-volume, high-price, high inventory scenarios for lonf enough to get out of their crushing debts.

    Given the constant unwinding of global debt at phenomenal rates and the expected high-unemployment, low-business-volume scenario in much of the world for YEARS to come, I somehow think that, soon, even Indian companies will start feeling the heat (like IT companies now and soon other exporters) and there will be a steady loss of jobs and pay cuts. Nothing drastic like a crash, but slow bleed whose impact will be just as bad. This situation will keep the builder's situation just the same - hgh-inventory and low-volumes and continue to keep a ceiling on price rise.

    Any sudden, sustained rise in interest OR crash in other markets which has a side effect in our markets will tilt the balance against builders.

    Lets wait and watch.

    cheers
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