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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  • Mango man celebrates small victories

    Originally Posted by monds
    Man...this is just perfect...can't agree any more...you just said it what I would have...keep it up...
    Sit on your hard earned hard cash and enjoy the show, it's live and free :D
    Now, I don't care if Indian RE corrects or don't correct, but for sure the Mango man has woke up...


    Mango man celebrates small victories for eg , in mumbai forums IB greens thread are so happy when they see that the price pr/sqft has gone up by 900 rs/sqft in just one month ,so they feel that they have made a good investment ,all this because IB published ad in newspaper about the rate being 4000/sqft
    CommentQuote
  • Realty gets battered

    Originally Posted by heretic
    I sense a lot of anger and resentment building up in the common man, as he acquires info and comes to realise what I realized couple of years ago. The back of this evil cartel is going to break and cause a massive price correction. DON'T BE THE GREATER FOOL. Don't be enticed by fraud propoganda. Have patience for a year or two & preserve your cash.The Indian RE market is primed for a major correction.Just wait & see what skeletons are going to tumble out of the present CBI investigation.
    Nice article man :). It is good to see new members here on the forum giving real thoughts unlike RE bulls who run away when faced with questions. To add to what you have said, here is the news published today:-

    TNN, Nov 27, 2010, 06.11am IST
    MUMBAI: Real estate stocks continue to fall like ninepins on Day 3, thanks to the housing loan scam. The CBI has claimed that several top officials in banks and financial institutions took bribe to sanction loans to a large number of realty companies . On Friday, in intra-day trading, the BSE's Realty Index fell nearly 15% to a 52-week low of 2,455 points but as a late rally helped realty stocks, it finally settled with a loss of 4.5% at 2,743.

    The day's session saw several real estate stocks fall over 20% in intra-day trade but recover part of those losses at close. For example, Orbit Corp fell 29% to its intraday low of Rs 57 but closed at Rs 70, Unitech saw a low of Rs 46 and closed at Rs 60, while Indiabulls Realestate's intraday low was at Rs 118 but the closing was at Rs 136.

    In some cases, the stock prices are nearing the levels that were when Lehman Brothers filed for bankruptcy protection in the US in September 2008. However, a dealer with a local company pointed out that the recent lows for the sector was in March 2009, when the sen had gone to the 8,100-level .

    Broking house analysts and market players said that real estate companies will find it very tough to get loans from banks and other financial institutions, and all loans to the sector will come under strict scrutiny. On the other hand, if they want to place their shares with private equity players or come to the market directly to raise funds, they will have to price their shares low enough to attract investors who are already scared to have a substantial exposure to the sector. Top officials at real estate firms also believe that because of paucity of funds these companies might go for price cuts on their properties and rates could go down as much as 20% from the current levels.


    * I consider this to be more than 20% especially in cities like Pune where nothing new development has come up & residential stocks soaring. Btw, now Sakal is going to have a PBAP exhibi at COEP grounds, Shivajinagar:D. Man, I never saw so many RE exhibis in such a short time!! Got some clue from here??:bab (34):

    * I consider this to be more than 20% especially in cities like Pune where nothing new development has come up & residential stocks soaring. Btw, now Sakal is going to have a PBAP exhibi at COEP grounds, Shivajinagar:D. Man, I never saw so many RE exhibis in such a short time!! Got some clue from here??:bab (34):

    * I consider this to be more than 20% especially in cities like Pune where nothing new development has come up & residential stocks soaring. Btw, now Sakal is going to have a PBAP exhibi at COEP grounds, Shivajinagar:D. Man, I never saw so many RE exhibis in such a short time!! Got some clue from here??:bab (34):

    * I consider this to be more than 20% especially in cities like Pune where nothing new development has come up & residential stocks soaring. Btw, now Sakal is going to have a PBAP exhibi at COEP grounds, Shivajinagar:D. Man, I never saw so many RE exhibis in such a short time!! Got some clue from here??:bab (34):
    CommentQuote
  • Hey realacres, thanx for ur encouragement.

    I was born & brought up in Pune; but I'm sick of this city now. Its expensive, crowded, polluted and diseased. Between Jan 2010 to May 2010 I was transferred to Uttaranchal -- Dehradun. Its a cantonment town, resembles Pune of the seventies. Very green & clean, with beautiful climate. People are cosmopolitan & helpful.

    But more to the point, RE is very reasonably priced there. No chawl-style apartments. Mostly bungalows & single-storey cottages. There one can get a 2-bedroom bungalow for INR 4000 to 4500 PM rental. Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs. Sometimes I wonder why we stick on to Pune where we have to wage war everyday for even the basic necessities of life.

    BTW, our great Sarkar has infused over INR 50,000/- crores in last few months in the PSU banks to 'recapitalise' them. In simple language, this means that thousands of crores of our money has been pissed away to cover bank NPAs and allow them to 'restructure' loans --- a large part of these loans being to RE companies. I read on this forum that INR 25000/- crore loans to builders are coming due in March. Banks dont like red ink on their balance sheets in March --- so what will the Government do ? Will MS again run to the bathroom & p*ss away more thousands of crores to again 'recapitalise' these banks? Excuse the language, but I'm really WHITE-HOT-ANGRY at the incompetent, corrupt, indifferent idiots who are running our govt & economy. has infused over INR 50,000/- crores in last few months in the PSU banks to 'recapitalise' them. In simple language, this means that thousands of crores of our money has been pissed away to cover bank NPAs and allow them to 'restructure' loans --- a large part of these loans being to RE companies. I read on this forum that INR 25000/- crore loans to builders are coming due in March. Banks dont like red ink on their balance sheets in March --- so what will the Government do ? Will MS again run to the bathroom & p*ss away more thousands of crores to again 'recapitalise' these banks? Excuse the language, but I'm really WHITE-HOT-ANGRY at the incompetent, corrupt, indifferent idiots who are running our govt & economy. has infused over INR 50,000/- crores in last few months in the PSU banks to 'recapitalise' them. In simple language, this means that thousands of crores of our money has been pissed away to cover bank NPAs and allow them to 'restructure' loans --- a large part of these loans being to RE companies. I read on this forum that INR 25000/- crore loans to builders are coming due in March. Banks dont like red ink on their balance sheets in March --- so what will the Government do ? Will MS again run to the bathroom & p*ss away more thousands of crores to again 'recapitalise' these banks? Excuse the language, but I'm really WHITE-HOT-ANGRY at the incompetent, corrupt, indifferent idiots who are running our govt & economy.
    CommentQuote
  • Bailout nations ...

    Originally Posted by heretic
    Hey realacres, thanx for ur encouragement.

    I was born & brought up in Pune; but I'm sick of this city now. Its expensive, crowded, polluted and diseased. Between Jan 2010 to May 2010 I was transferred to Uttaranchal -- Dehradun. Its a cantonment town, resembles Pune of the seventies. Very green & clean, with beautiful climate. People are cosmopolitan & helpful.

    But more to the point, RE is very reasonably priced there. No chawl-style apartments. Mostly bungalows & single-storey cottages. There one can get a 2-bedroom bungalow for INR 4000 to 4500 PM rental. Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs. Sometimes I wonder why we stick on to Pune where we have to wage war everyday for even the basic necessities of life.

    BTW, our great Sarkar has infused over INR 50,000/- crores in last few months in the PSU banks to 'recapitalise' them. In simple language, this means that thousands of crores of our money has been pissed away to cover bank NPAs and allow them to 'restructure' loans --- a large part of these loans being to RE companies. I read on this forum that INR 25000/- crore loans to builders are coming due in March. Banks dont like red ink on their balance sheets in March --- so what will the Government do ? Will MS again run to the bathroom & p*ss away more thousands of crores to again 'recapitalise' these banks? Excuse the language, but I'm really WHITE-HOT-ANGRY at the incompetent, corrupt, indifferent idiots who are running our govt & economy.


    Why do we get conned on a continuous basis?

    The 3G Spectrum sale was tomtom 'ed about by Pranabda about how we will now reduce our deficit this year and start doing double-digit growth from now on forever!!!

    Well lets see the Math.

    Spectrum sale got us Rs.110000 Crores instead of Rs.35000 Crores - an additional amount of 75000 Crores.

    This additonal "income" is nothing but raising a loan from the public via the Telecom Providers since they will now pass along the costs to you-n-me as higher charges OR 3G will fail due to high costs and these companies will go bust and get bailed out with taxpayers money!!!!:bab (45):

    A month before that the Govt asked Parliament for a hike in its spending budget by 70000 crores.

    On the day of announcing this additional amount in income, they went in for another raise of 54000 Crores in expenditure.

    Already the Govt has spent away the money "earned" and have gone deeper into the red for another 20000 Crores.

    Recently the Govt has further asked on 2 separate occassions for further spending hikes by (if I rremember correctly) another 45000 Crores and recently a 25000 Crore hike.

    Meanwhile the IIP is on a continuous downward spiral now that the Stimulus Program of Govt spending is winding down since they can't go on borrowing and spending forever - thankfully we still have independent bodies that question Govt on their profligate ways!

    A couple of weeks ago Pranabda on TV stated that Govt debt was 73% of GDP! That was an astounding revelation, since it makes India ALSO as dangerous as the other nations that are being bailed out!!! They too have Debt/GDP ratios between 90% and 130% of GDP which includes Govt as well as Private DEBT.

    The only thing that is saving us is the fig-leaf of cover we are getting because all the DANGEROUS HOT MONEY is being parked here (and in rest of Asia) because Western Banks believe that we are safe and will grow!!!

    Our safety is riding on such a thin belief! When we stop growing as fast as expected and our debts start to shop up as increased outflows, this HOT MONEY will rush out as STOP LOSS limits will get hit when markets start coming down.

    I dread to think of the carnage that will follow in out markets - Stock, RE especially where so many Indians have parked their essential savings thinking they are safe!

    Do you REALLY BELIEVE THE STORY OF THE GOVT THAT we will hit either the GDP growth targets or the Fiscal Deficit targets?

    Also believe in the Tooth Fairy?:D

    cheers!!!

    Our safety is riding on such a thin belief! When we stop growing as fast as expected and our debts start to shop up as increased outflows, this HOT MONEY will rush out as STOP LOSS limits will get hit when markets start coming down.

    I dread to think of the carnage that will follow in out markets - Stock, RE especially where so many Indians have parked their essential savings thinking they are safe!

    Do you REALLY BELIEVE THE STORY OF THE GOVT THAT we will hit either the GDP growth targets or the Fiscal Deficit targets?

    Also believe in the Tooth Fairy?:D

    cheers!!!

    Our safety is riding on such a thin belief! When we stop growing as fast as expected and our debts start to shop up as increased outflows, this HOT MONEY will rush out as STOP LOSS limits will get hit when markets start coming down.

    I dread to think of the carnage that will follow in out markets - Stock, RE especially where so many Indians have parked their essential savings thinking they are safe!

    Do you REALLY BELIEVE THE STORY OF THE GOVT THAT we will hit either the GDP growth targets or the Fiscal Deficit targets?

    Also believe in the Tooth Fairy?:D

    cheers!!!

    Our safety is riding on such a thin belief! When we stop growing as fast as expected and our debts start to shop up as increased outflows, this HOT MONEY will rush out as STOP LOSS limits will get hit when markets start coming down.

    I dread to think of the carnage that will follow in out markets - Stock, RE especially where so many Indians have parked their essential savings thinking they are safe!

    Do you REALLY BELIEVE THE STORY OF THE GOVT THAT we will hit either the GDP growth targets or the Fiscal Deficit targets?

    Also believe in the Tooth Fairy?:D

    cheers!!!

    Our safety is riding on such a thin belief! When we stop growing as fast as expected and our debts start to shop up as increased outflows, this HOT MONEY will rush out as STOP LOSS limits will get hit when markets start coming down.

    I dread to think of the carnage that will follow in out markets - Stock, RE especially where so many Indians have parked their essential savings thinking they are safe!

    Do you REALLY BELIEVE THE STORY OF THE GOVT THAT we will hit either the GDP growth targets or the Fiscal Deficit targets?

    Also believe in the Tooth Fairy?:D

    cheers
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  • Now, banks are increasing the despite rate. Is it showing the liquidity crunch ahead?
    CommentQuote
  • real/wise and other experts out here,
    i have a general query on RE price in india. everyone talks about things like builder politician nexus etc etc. all that holds for big/small cities and apartments. But i see the price for land ridiculously high even in remote villages. (these are not near cities either).. what do you have to say about this? don't say supply is limited. thers huge supply there. and moreover leverage is very less there as people usually don't take loans ( or the banks don't give). RE is also a hot topic of discussion here too. people say things like price was x a few years ago. now its y., there is a lot of demand, land will never lose value etc etc. i am not complaining as we too have a lot of land there. but i feel its highly overvalued and i always wonder why the price is so high. thers absolutely no connect between the income and the price. going by the price, almost everyone's worth is in crores which makes no sense
    i would appreciate if you can share your views.
    CommentQuote
  • Originally Posted by kaatesha
    real/wise and other experts out here,
    i have a general query on RE price in india. everyone talks about things like builder politician nexus etc etc. all that holds for big/small cities and apartments. But i see the price for land ridiculously high even in remote villages. (these are not near cities either).. what do you have to say about this? don't say supply is limited. thers huge supply there. and moreover leverage is very less there as people usually don't take loans ( or the banks don't give). RE is also a hot topic of discussion here too. people say things like price was x a few years ago. now its y., there is a lot of demand, land will never lose value etc etc. i am not complaining as we too have a lot of land there. but i feel its highly overvalued and i always wonder why the price is so high. thers absolutely no connect between the income and the price. going by the price, almost everyone's worth is in crores which makes no sense
    i would appreciate if you can share your views.


    i think it is a greater fool theory... just like Mumbai, builders ask for a 2 CR for apartment X so the person staying in apartment Y in the next lane thinks that his house is worth 2 Cr as well. But the problem is, apartment X has no buyers and at this point apartment Y also will not get any buyer.

    the increased worth of apartment Y owner is not real worth... its only a speculation... or feel good factor.
    CommentQuote
  • Originally Posted by punerebuyer
    i think it is a greater fool theory... just like Mumbai, builders ask for a 2 CR for apartment X so the person staying in apartment Y in the next lane thinks that his house is worth 2 Cr as well. But the problem is, apartment X has no buyers and at this point apartment Y also will not get any buyer.

    the increased worth of apartment Y owner is not real worth... its only a speculation... or feel good factor.

    +1. Case here is a flat in Aundh. It was built in 2005 & has all obsolete specs like ceramic tiles in flat, no anti-skid tiles, brand-less CP fittings, manual lift etc. & just because builders here charge 5k, this fellow thought that the rate for his flat too is 5k. It has been over an year now & it is still not getting any buyers as people will anytime prefer brand new flats from builder with latest specs & amenities & this owner is saying, why the hell this flat isn't getting sold?:D

    Btw, did anyone read latest reports about land near Chakan?? Acres of land was bought by land sharks, politicos, etc. as they thought prices would go up after international airport comes up & they are now stuck as airport is in doldrums & no one is ready to buy their land even for the price they purchased!! Now, Ajit Pawar is trying hard if airport can be built here, not because he wants some development but don't want to loose money invested in land here.
    CommentQuote
  • Originally Posted by realacres
    +1. Case here is a flat in Aundh. It was built in 2005 & has all obsolete specs like ceramic tiles in flat, no anti-skid tiles, brand-less CP fittings, manual lift etc. & just because builders here charge 5k, this fellow thought that the rate for his flat too is 5k. It has been over an year now & it is still not getting any buyers as people will anytime prefer brand new flats from builder with latest specs & amenities & this owner is saying, why the hell this flat isn't getting sold?:D

    Btw, did anyone read latest reports about land near Chakan?? Acres of land was bought by land sharks, politicos, etc. as they thought prices would go up after international airport comes up & they are now stuck as airport is in doldrums & no one is ready to buy their land even for the price they purchased!! Now, Ajit Pawar is trying hard if airport can be built here, not because he wants some development but don't want to loose money invested in land here.

    punerebuyer and real
    thanks for your views. i was not talking about cities or apartments. but the scenario in villages or remote places.
    CommentQuote
  • Property prices may crash as loan scam hits funding

    MUMBAI/NEW DELHI: Finance minister Pranab Mukherjee’s direction to state-run lenders to prevent a recurrence of the loans-for-bribes scandal, and banks’ decision to go for a critical appraisal of all real estate loans above Rs 50 crore may stall projects and drive developers to private funds.

    Liquidity for the sector may dry up as bankers turn cautious in sanctioning fresh loans, forcing builders to cut prices to improve cash position, helping prospective buyers who have been holding on due to high prices:).

    DB Realty tumbled 10%, Indiabulls Real Estate lost 5.2%, DLF fell 3.8%, and Unitech declined 6% as a fund shortage threatens to derail their project execution, which had just started to show signs of recovery after the 2008 credit crisis.

    The arrest of eight finance executives by the Central Bureau of Investigation on Wednesday on charges of taking bribes to sanction loans does not lead to a systemic risk since the amount involved is tiny, bankers and bureaucrats said. It is getting more attention than it deserves, they said.

    “ banks and financial institutions should strengthen the NPA (non-performing assets) monitoring and management in their institutions to ensure that advance action is taken to identify incipient sickness and take appropriate action on it,” said Mukherjee.

    A Bank of India official said, “All big-tickets loans, particularly to builders, will come under the scanner now. Recall of loans can happen if there is a fear that the quality of loans may suffer. But as of now, there is no such worry and hence it would not prompt us to recall loans.”

    The arrest of finance sector executives for alleged corruption and passing on information regarding these transactions has shaken the banking sector. Bank of India, Central Bank of India and LIC Housing Finance , whose executives were arrested, have said they followed set norms and any violation may relate to individual cases involving specific executives.

    “There is no chance of anything becoming NPA as a result of what has happened,” said TS Vijayan, Chairman of LIC, the parent company of LIC Housing Finance. CBI has said, in-custody LIC Housing CEO Ramachandran Nair, has confessed to the involvement of other board members, according to Times NOW news channel.

    Some of the tele conversations of these arrested executives have also been tapped, it said. “There will be repercussions in terms of increased caution by banks while lending to developers,” said Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India.

    Borrowing will become more expensive and the process involved in getting it will get lengthier as banks increase their vigilance levels.” While the panicky bankers would stay from decision-making for a while, there is unlikely to be any recall of sanctioned loans that would be disruptive.

    “There is no question of recalling loans since all the procedures of giving loans are followed,” said KR Kamath, CMD of Punjab National Bank , one of the banks named by CBI. ``There is no need for any knee-jerk reaction. However, the loans that are sanctioned will be reviewed.”

    An unintended consequence of the scandal could be lower prices for home buyers as developers look to sell at a faster rate to improve cash flows. “If one looks at the last three quarters, sales have been dropping and most developers have built lot of debt pressure on their books,” said Pankaj Kapoor, Managing Director of property consultant firm Liases Foras.

    "This issue, along with tighter measures already announced by RBI in its policy review, may expedite the process of correction,” he said, estimating the correction to be at least 25%. This scandal need not necessarily be as bad as the ones in 1992 and 2001, when investors lost thousands of crores of paper wealth.


    http://economictimes.indiatimes.com/markets/real-estate/news-/Property-prices-may-crash-as-loan-scam-hits-funding/articleshow/6991512.cms
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  • Originally Posted by wiseman
    Do you REALLY BELIEVE THE STORY OF THE GOVT THAT we will hit either the GDP growth targets or the Fiscal Deficit targets?

    Also believe in the Tooth Fairy?:D

    cheers



    LOL:D:D:D That was good one. I must say people who believe in our govt. GDP growth targets must be believing in Tooth Fairy and Santa Claus, since they are RE bulls and feel their pockets would be filled by money by some magic, even without saying "abra ka dabra"
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  • Originally Posted by RAJESHP
    LOL:D:D:D That was good one. I must say people who believe in our govt. GDP growth targets must be believing in Tooth Fairy and Santa Claus, since they are RE bulls and feel their pockets would be filled by money by some magic, even without saying "abra ka dabra"


    Congress party's slogan had been "Garibi Hatao". Due to rampant inflation, I'm feeling poor day by day. Congress should change it to "Garib Banavo".
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  • Originally Posted by heretic
    Hey realacres, thanx for ur encouragement.

    I was born & brought up in Pune; but I'm sick of this city now. Its expensive, crowded, polluted and diseased. Between Jan 2010 to May 2010 I was transferred to Uttaranchal -- Dehradun. Its a cantonment town, resembles Pune of the seventies. Very green & clean, with beautiful climate. People are cosmopolitan & helpful.

    But more to the point, RE is very reasonably priced there. No chawl-style apartments. Mostly bungalows & single-storey cottages. There one can get a 2-bedroom bungalow for INR 4000 to 4500 PM rental. Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs. Sometimes I wonder why we stick on to Pune where we have to wage war everyday for even the basic necessities of life.

    BTW, our great Sarkar has infused over INR 50,000/- crores in last few months in the PSU banks to 'recapitalise' them. In simple language, this means that thousands of crores of our money has been pissed away to cover bank NPAs and allow them to 'restructure' loans --- a large part of these loans being to RE companies. I read on this forum that INR 25000/- crore loans to builders are coming due in March. Banks dont like red ink on their balance sheets in March --- so what will the Government do ? Will MS again run to the bathroom & p*ss away more thousands of crores to again 'recapitalise' these banks? Excuse the language, but I'm really WHITE-HOT-ANGRY at the incompetent, corrupt, indifferent idiots who are running our govt & economy.

    "Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs."

    Is this available inside town or on outskirts??? Basically in small Towns nobody like to buy on outskirts of small cities due to lack of infra & market etc, so rate difference in such cases are more than 2-3 times, but same is not true in cities like Pune or bangalore..so we should compare A-pple with A-pple nor Oranges...

    "Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs."

    Is this available inside town or on outskirts??? Basically in small Towns nobody like to buy on outskirts of small cities due to lack of infra & market etc, so rate difference in such cases are more than 2-3 times, but same is not true in cities like Pune or bangalore..so we should compare A-pple with A-pple nor Oranges...

    "Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs."

    Is this available inside town or on outskirts??? Basically in small Towns nobody like to buy on outskirts of small cities due to lack of infra & market etc, so rate difference in such cases are more than 2-3 times, but same is not true in cities like Pune or bangalore..so we should compare A-pple with A-pple nor Oranges...

    "Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs."

    Is this available inside town or on outskirts??? Basically in small Towns nobody like to buy on outskirts of small cities due to lack of infra & market etc, so rate difference in such cases are more than 2-3 times, but same is not true in cities like Pune or bangalore..so we should compare A-pple with A-pple nor Oranges...

    "Beautifully designed, fully marbled cottages with modular kitchen and built-in wardrobes etc are available for 15 to 20 lacs."

    Is this available inside town or on outskirts??? Basically in small Towns nobody like to buy on outskirts of small cities due to lack of infra & market etc, so rate difference in such cases are more than 2-3 times, but same is not true in cities like Pune or bangalore..so we should compare A-pple with A-pple nor Oranges...
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  • Originally Posted by hitmady
    Congress party's slogan had been "Garibi Hatao". Due to rampant inflation, I'm feeling poor day by day. Congress should change it to "Garib Banavo".

    In 80s we use to mock the congress slogan as "garibon ko hatao".
    Think we need to change it to "pehele garib banao , phir hatao" :D he he
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  • ^^^Is this available inside town or on outskirts??? Basically in small Towns nobody like to buy on outskirts of small cities due to lack of infra & market etc, so rate difference in such cases are more than 2-3 times, but same is not true in cities like Pune or bangalore..so we should compare A-pple with A-pple nor Oranges...

    You're absolutely right, my friend, I'm comparing oranges with -- not a*pples -- but lemons -- WHERE PUNE IS THE LEMON:D

    Staying in Pune we are so conditioned to think that every thing HAS to be expensive, especially property. This misconception has overwhelmed us, so that we are blinded to other realities.

    My friend, Uttaranchal has 1/10th the population of Maharashtra; it follows that there is much less pollution, crowd & dirt. There are NO slums. Even state highways and internal roads in towns are FAR BETTER than Maharashtra. Dehradun is a well-planned, cosmopolitan town with NO water or electricity problems Everything is available here, and that too 10 / 15% cheaper than Pune.

    The town itself is only about 5kms in diameter. And yes, I reiterate, quaint bungalows are available bet 12 to 20 lacs hardly 3 / 4 kms from the town center

    When I was transferred to Uttaranchal, I was apprehensive. But I found out that its a better world here.

    Think, my friend, if I -- a thoroughbred maharashtrian, born & brought up in Pune -- have developed such a rabid contempt for Maharashtra-- just think to what level Maharashtra has sunk because of its dirty politics.

    When I was transferred to Uttaranchal, I was apprehensive. But I found out that its a better world here.

    Think, my friend, if I -- a thoroughbred maharashtrian, born & brought up in Pune -- have developed such a rabid contempt for Maharashtra-- just think to what level Maharashtra has sunk because of its dirty politics.

    When I was transferred to Uttaranchal, I was apprehensive. But I found out that its a better world here.

    Think, my friend, if I -- a thoroughbred maharashtrian, born & brought up in Pune -- have developed such a rabid contempt for Maharashtra-- just think to what level Maharashtra has sunk because of its dirty politics.

    When I was transferred to Uttaranchal, I was apprehensive. But I found out that its a better world here.

    Think, my friend, if I -- a thoroughbred maharashtrian, born & brought up in Pune -- have developed such a rabid contempt for Maharashtra-- just think to what level Maharashtra has sunk because of its dirty politics.

    When I was transferred to Uttaranchal, I was apprehensive. But I found out that its a better world here.

    Think, my friend, if I -- a thoroughbred maharashtrian, born & brought up in Pune -- have developed such a rabid contempt for Maharashtra-- just think to what level Maharashtra has sunk because of its dirty politics.
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