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Builders & Real Estate Bulls Theory Proved Wrong

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Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
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  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    Hi Wiseman, I agree with your China scenario.

    I felt it was so way back in 2005, but China has managed to juggle all its balls for full 5 years after people flagged the problem.

    Given the global weakness, they just might pull it off. My respect for China has increased a lot after seeing how they handle their economy and foreign policy.

    They may well be the best we have ever seen, even better than the British - who were really good.

    Re: India, all signs point to high (but not hyper) inflation rather than crash or deflation.

    USA and Europe will deflate like Japan.

    China will probably start a war.

    India has 14% plus consumer price inflation. I epect this to continue for the next 5 years.

    Obviously, if USA deflates and we inflate, our currency will see some ferocious depreciation. Expect 100 Rs to the dollar in 5 years.

    Everything will become more expensive by becoming double the cost.

    RE might just stand still at current prices for 5 years. Or it might also inflate further.

    Given current govt. borrowing, the interest rate differential between us and the rest of the world, depreciation and inflation are foregone conclusions.

    In such a situation, one should spend one's money quickly. Borrow on fixed interest rates and spend that also.

    As I have maintained through the last one year on this forum, we are going to see inflation of everything. Maybe least inflation will be in RE (it is already inflated), but even there we will see some inflation.

    My scenario is not new to you Wiseman, its just a repetition of what I always say.

    But my degree of conviction has increased rather than decreased. It has increased enough for me to start buying gol-d (which I had never liked because it is a pure speculation, it has no underlying yeild unlike bonds, stock and even RE).

    If USD becomes 100Rs, gol-d will become 40,000 !!!!!

    PCP, your stand still scenario seems likely to me. But please reflect on one thing:

    A flat needs 3 years plus to be built. So if you expect RE to move up in 2014, you need to book in 2011.

    Better still, buy a plot or a ready made flat in 2014. Still, market timing is never very accurate or easy especially in a opaque dealing like RE. Better to time it after whatever next shock shakes up our Indian system - stock crash, RE crash, recession, war, global crash , epidemic - whatever crashed the Indian economy should be bought into for stock and RE.

    I expected the crash of 2008 in Oct 2007 and cashed out totally in stocks. It feels like Oct 2007 today - imminent crash in economy is weeks to months away.
    Last edited by Venkytalks; September 10 2010, 05:27 PM.
    Venky (Please read watch a or before posting)

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    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by Venkytalks View Post
      Better still, buy a plot or a ready made flat in 2014. Still, market timing is never very accurate or easy especially in a opaque dealing like RE. Better to time it after whatever next shock shakes up our Indian system - stock crash, RE crash, recession, war, global crash , epidemic - whatever crashed the Indian economy should be bought into for stock and RE.

      I expected the crash of 2008 in Oct 2007 and cashed out totally in stocks. It feels like Oct 2007 today - imminent crash in economy is weeks to months away.
      Completely agree on this one, especially after interacting with people based abroad.
      If you are happy, you are successful.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Builders can't sell parking space

        Folks, check this out..!!!

        http://www.esakal.com/esakal/2010091...4175639013.htm

        For non-marathi readers -
        This is about supreme court decision on the madate that builder's can't sell parking space to flat buyers, the cost of parking would be equally distributed among all the apartments and all members to carry equal right to use the COMMON parking.

        This indeed a good move. Now, the builders have no other option to allow formation of a housing society and through the society, parking can be alloted to a member...I am not a law expert, this is one option I could instantly thought of

        Any other views guys..

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by frugality View Post
          More Bad news
          http://economictimes.indiatimes.com/...ow/6523137.cms
          Obama to check incentives to invest in overseas jobs






          The whole system needs revamp ... like research focused ...
          Have we written any language/Standards on Indian shores?
          Very few ... some maybe in Intel.

          He appears to be very certain about this......

          and the way the Visa hike was implemented seems this will be there in some time..

          http://www.ndtv.com/article/world/in...n-agenda-51232

          India's outsourcing concerns go unheeded as US President Obama doesn't seem to be in a mood to budge on his outsourcing stand. After widespread condemnation from different quarters in India, speaking at a White House press conference, Obama again took a jibe at companies that outsource jobs.



          time to sing ....

          All my bags are packed, I'm ready to go
          I'm standin' here outside your door
          I hate to wake you up to say goodbye

          isn't it ?

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by monds View Post
            This is about supreme court decision on the madate that builder's can't sell parking space to flat buyers, the cost of parking would be equally distributed among all the apartments and all members to carry equal right to use the COMMON parking.

            This indeed a good move. Now, the builders have no other option to allow formation of a housing society and through the society, parking can be alloted to a member...I am not a law expert, this is one option I could instantly thought of

            Any other views guys..
            Buit the thing is even today builders don't sell parking slots officially. Either it is in cash or it is included in other charges like infra development/miscellaneous etc. Don't know why the need to charge parking when 25%+ loading is already there?? It is better that RE regulator kicks in ASAP so that such things stop, till then, the builders will continue to find some loopholes & do their business as usual.
            If you are happy, you are successful.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Hunt still on for developer of the ill-fated Belapur bldg

              Man, remember the story put here by fellow member which showed how building crashed even before possession was given to the buyers?? Here is the update on the same:-

              Navi Mumbai: The Andheri-based builder of the ill-fated under-construction building that collapsed in Belapur last week, Raju Deshpande (40) has not been arrested so far.

              http://www.mumbaimirror.com/index.as...6362488807eab1
              If you are happy, you are successful.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Ganesh Chaturthi

                Wishing you all a very 'Shubh Ganesh Chaturthi'. May lord Ganesha bless you all.
                Attached Files
                If you are happy, you are successful.

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                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by frugality View Post

                  time to sing ....

                  All my bags are packed, I'm ready to go
                  I'm standin' here outside your door
                  I hate to wake you up to say goodbye

                  isn't it ?
                  Good one.

                  BTW, how to reconcile this with new hiring by IT, maintained profit margins and share prices rising every day?

                  Somehow, I think there is misrepresentation of India's growth numbers. Our inflation deflators are all wrong. Our growth is supposed to be 8.5% or so.

                  But if our true inflation is off by 50% i.e. 15% rather than 10% WPI, then almost 50% of our growth might be just wrong capturing of inflation related price increases as true rise of GDP.

                  i.e. If you sold a soap for 10 Rs last year and sold a smaller sized soap for 11Rs this year - and our GDP was just soap - we would have grown 10% in GDP, whereas actually our soap gor smaller.

                  Again, if you made a road for 100Rs last year, it got washed away in the rain, you again made the same road for 110Rs, our GDP would calculate it as a 10% growth. Whereas actually we had 100Rs capital destruction.

                  Again, RE is not part of our inflation measures and growth deflator. But it is a part of our growth figures. So if you sold a flat for 30L last year and sold a similar flat for 45 L this year, our GDP would grow 50%!!!!!

                  I dont know what to believe. All around me I see uncompetitive people and inefficiency. I see enormous capital destruction. I see terrible mismanagement .

                  And still India is shining??? How ????
                  Venky (Please read watch a or before posting)

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Venky, Can you explain why would the indian currency get weaker if there is inflation in India while US deflates.

                    I would expect it to grow stronger, with higher foreign inflows in Indian markets. It weakened from 38-51 when the FII's pulled out money from the stock market.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      And the Govt continues to cook figures ...

                      Originally posted by Venkytalks View Post
                      Good one.

                      BTW, how to reconcile this with new hiring by IT, maintained profit margins and share prices rising every day?

                      Somehow, I think there is misrepresentation of India's growth numbers. Our inflation deflators are all wrong. Our growth is supposed to be 8.5% or so.

                      But if our true inflation is off by 50% i.e. 15% rather than 10% WPI, then almost 50% of our growth might be just wrong capturing of inflation related price increases as true rise of GDP.

                      i.e. If you sold a soap for 10 Rs last year and sold a smaller sized soap for 11Rs this year - and our GDP was just soap - we would have grown 10% in GDP, whereas actually our soap gor smaller.

                      Again, if you made a road for 100Rs last year, it got washed away in the rain, you again made the same road for 110Rs, our GDP would calculate it as a 10% growth. Whereas actually we had 100Rs capital destruction.

                      Again, RE is not part of our inflation measures and growth deflator. But it is a part of our growth figures. So if you sold a flat for 30L last year and sold a similar flat for 45 L this year, our GDP would grow 50%!!!!!

                      I dont know what to believe. All around me I see uncompetitive people and inefficiency. I see enormous capital destruction. I see terrible mismanagement .

                      And still India is shining??? How ????

                      Did you see the head of the CSO actually come on TV and tell us how the GDP figure was wildly wrong because someone typed in the wrong CONSTANT PARAMETER?!

                      So, GDP for a country as large as India is computed by bureaucrats somewhere on spreadsheets by inserting constants to provide them with whatever number their political masters need at that moment.

                      And then this guys goes on to ASSURE us that he is confident such an error will not happen again. Note that, if such a massive difference did not come up, no one would have noticed the tinkering that is part of the process now-a-days.

                      And we are complaining of China cooking up their numbers!!!

                      Its all smoke and mirrors and the entire system of rules is setup for the rich and crooked (can these 2 words be taken together? ) for the rich and crooked ... The story goes on ... Till it suddenly, inexplicably and "surprisingly" breaks down and takes everyone to the cleaners.

                      And you still think the BIG one is not coming down the pike somewhere down the line? Well, here's a chart on the Z$ Vs. US$. Do you think the US$ will not replace the Z$ sometime in the future?!

                      As regards the question by Vicky, its a very interesting question that is not necessarily easy to answer (at least for me ). I'm still pondering and searching for clues. And I bet its keeping all exporters and IT sector awake at night!

                      cheers

                      PS - its is not the loss of value in the currency that signals hyperinflation. It is the hyperinflation that forces govt to print currency in increasing numbers to try to keep people's confidence in it. As the value is constant, more the currency printed, less the value ... until, at the end, value tends to ZERO as the number of zeros in the note tends to an absurdly high number!!! Like in early-2008 in the case of the Z-Govt, it finally gave up!
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                      Last edited by wiseman; September 12 2010, 07:31 PM.

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