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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  • Originally Posted by Venkytalks
    Your reason is right for US to some extent - real reason is that US has some 18 MILLION more homes than the 150 million odd households.

    These remain empty always - US has MORE SUPPLY THAN DEMAND. What happened in USA was that every body decided to play a game of musical chairs, moving to one step bigger house than where they were before.


    Quote:
    Originally Posted by Venkytalks
    (Reproducing my post from Delhi forum - it has bearing on the RE bull theory)
    Anyone talking supply and demand is being foolish. The more the supply, the more prices rise - we have seen it in GGN, NOIDA and now in Delhi (Mumbai is of course the ultimate in this perversity).

    KHaribal, I stand by both statements in their contexts.

    In normal countries, supply and demand have a balance.

    In India, supply is a miniscule percentage of demand. There is RE hoarding by the rich.

    Increasing the supply by govt (DDA flats in Delhi) does not solve the demand problem - instead it caused a resetting of the basal price - "now if govt is selling 3BHK for 1.1 Crore, I will push up the price to 2.25 crore" has been the game plan of the RE hoarders.

    So prices rose despite supply being increased - because for that 16000 DDA flats released, there were 7.5 Lakh applicants - so supply was some 2% of the demand. Learning about this masive demand even at the high quoted prices exposed the weakness of the buyer and the excess demand existing, to the RE hoarders. Their immediate response was to jack up the prices.

    I had refused to apply for the DDA lottery saying price was too high. But the 7.5 Lakh applications revealed the demand - massive!!!! And I was wrong to have not applied - there was a 40-50% immediate resale return available, because while people were waiting for the results to be released, the flat prices were quietly raised by 30-40% using the DDA prices as a benchmark!

    India will have demand exeeding supply by 10000% for the next 100 years (if things crawl like they are now).

    Expecting prices to fall is just wishful thinking. The thousands of empty flats in Mumbai or Dwarka or Gurgaon are not excess supply - they are hoarded flats for which the owners are waiting for someone to save up/ take loan on massive scale to buy. They are not supply, they are the tantalising glimpse for which some poor sucker will have to slave for a few decades to own. The RE hoarders have the upper hand and probably will have the upper hand for the forseeable future.

    There is now evidence for firming up of rents also. I have been saying first that rents WILL increase (in discussions with Wiseman over a year ago), then said I have anecdotal evidence from friends and neighbors in Delhi that rents are rising, and now studies are showing some firming up of rents.

    Wiseman, with whom I had a lot of discussion on effect of inflation on rentals - you might find this following extract interesting.

    "
    DNA India reports.


    Rising realty rates may have resulted in a sharp decline in property sales, but it has led to a growth in rental value in Mumbai and other metropolitan cities in the country. Mumbai and the outskirts of the city has seen an 11% growth in rental value in the past year, according to a study conducted by private real estate portal, 99acres.com.


    The figure for Bangalore, Pune and Delhi has shot up by 13%, 11% and 9% respectively.


    Surprisingly, rental value in South Mumbai, one of the most preferred locations to stay in the city, has seen a dip. The Worli residential market saw a 21.31% dip last year, while the figure for Prabhadevi, Parel and Bandra (West) fell by 18%, 12% and 11.57%.


    “The rent in South Mumbai had gone through the roof. It is still unaffordable. So, people are shifting towards the suburbs and outskirt of the city,” a real estate expert told DNA.


    However, the rental value in the suburbs too has shot up drastically. Borivli (West) witnessed a record 42.25% growth, while the rates have shot up by 35.04% in Powai, 28.32% in Malad and 20.40% in Kandivli (East). The Mumbai metropolitan region too has seen a ruse in rental value.


    The figure for Mira Road and Seawoods shot up by 39.28% and 36.36% respectively in the past year.


    A real estate expert attributed the rise in rental value to exorbitant property rates in Mumbai.


    “People prefer to stay in rented homes instead of buying a house. Also, there is a huge influx of people in the city. As a result, there is a huge demand for rented homes,” he said. Government data compiled by the stamp duty department also shows that there is a 35% rise in the number of lease agreements being signed in the city.


    Business head at 99acres.com Vineet Singh said: “People are relocating or moving in better homes, which in turn, will affect the rental values of properties. Also, the state of real estate is not in trend with the moving economy because availability of fresh inventory is less in the Mumbai region. Therefore, rental values escalate on an annual basis.”


    arshal Shelkar, who has been staying at Seawoods for the past three years, is finding it difficult to cope up with the rising rentals. He used to pay Rs7,000 as rent for a 3BHK house. The owner demanded Rs12,000 last year. “Now he is asking for Rs20,000. I am staying in Navi Mumbai, not South Mumbai. Each day, I have spend one hour on travel. If I continue to stay in houses with such high rents, my monthly budget will go haywire. I have other liabilities like EMIs and daily expenses. There should be control over the rise in rent rates,” he said"
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  • More Prop Exhibis

    After Times Expo, now 'Sakal' is organizing property expo. And the same builders who say SOLD OUT will be displaying their projects :D. If everything is indeed sold out, why the need to showcase the projects again & again??:bab (65):
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  • Realty heads for crisis as banks refuse more loans

    Anuradha Shukla New Delhi April 22, 2011

    India's realty sector , which is yet to completely recover from the effects of the global economic slowdown, seems to be heading towards another financial crisis. Banks and other financial institutions are refusing to lend to the sector leading to increase in pressure on loan repayments by the sector.

    According to global property consultancy firm Knight Frank, the realty sector has to repay an overall Rs 1.8 lakh crore of debt to various banks and other financial institutions.

    "Their cash flow may also be under pressure as creditors seek early repayments," Amit Goenka, national director of capital transactions at the Indian unit of Knight Frank said.

    The situation is just getting worse, as all major banks and other financial institutions have stopped financing the sector over uncertainties looming over the sector, bad debt repayment history and poor stock valuations have added to their woes.

    A leading official at the State Bank of India (SBI) said that the realty sector is one of the major defaulters, so banks are very reluctant to lend to the sector.

    "This year the realty sector is among the top defaulters. And we are not talking of the small developers. The list includes all the top players who have defaulted on repaying loans. This year they will add to the list of NPAs (non-performing assets) of many public sector as well as private sector banks," the official told Mail Today. Besides banks, private equity (PE) firms are also shying away from investing in realty projects, thanks to the involvement of the sector in the recent scams.

    "No one wants to put money By Anuradha Shukla in New Delhi Realty heads for crisis as banks refuse more loans into realty projects. The sector is involved in every other scam and no one wants to be involved in any controversy," a senior official at PE firm Red Fort Capital, said.

    "Also, developers have failed to learn from the past slowdown. There are just a few projects that are on schedule, even when money started flowing in. This current crisis is self created by the developers. There will be fresh project delays," he added. According to experts, developers will find it difficult to complete their projects on time.

    Already more than half a dozen projects in Noida and Noida Extension have been delayed due to lack of cash flows. And as the big players are struggling to get fresh loans, the small one are trying to sell their projects by offering assured returns of 10 to 15 per cent on both residential as well as the commercial projects.

    "They are already on the verge of stress sale. The cost of finance has gone up to as high as 25 to 30 per cent, almost as high as during the period of slowdown," Sanjay Dutt of Jones Lang LaSalle Meghraj (JLLM) had said last month. Sam Chopra, India head of Remax, a global property consultancy, said the sector will witness a steep correction and distress sales before prices stabilise.

    "There is certainly a price bubble in the market. Home prices have gone up exceptionally high and have touched unrealistic levels," Chopra said.

    "A flat selling in Mumbai at Rs 1.07 lakh per square feet is by no means realistic. The price needs a severe correction and I expect this bubble to burst in another six to eight months," Chopra had said a few months back.

    Courtesy: Headlines Today

    Realty heads for crisis as banks refuse more loans - Business Today
    CommentQuote
  • All these news articles are fine. But if you ignore the tyranny of shoulds then where are the real price impact on the ground.

    If anything prices have gone and are going up even today. So as I said the title of this thread should be that builders and RE bulls theory proved correct.
    CommentQuote
  • Originally Posted by realacres
    Anuradha Shukla New Delhi April 22, 2011

    India's realty sector , which is yet to completely recover from the effects of the global economic slowdown, seems to be heading towards another financial crisis. Banks and other financial institutions are refusing to lend to the sector leading to increase in pressure on loan repayments by the sector.

    According to global property consultancy firm Knight Frank, the realty sector has to repay an overall Rs 1.8 lakh crore of debt to various banks and other financial institutions.

    "Their cash flow may also be under pressure as creditors seek early repayments," Amit Goenka, national director of capital transactions at the Indian unit of Knight Frank said.

    The situation is just getting worse, as all major banks and other financial institutions have stopped financing the sector over uncertainties looming over the sector, bad debt repayment history and poor stock valuations have added to their woes.

    A leading official at the State Bank of India (SBI) said that the realty sector is one of the major defaulters, so banks are very reluctant to lend to the sector.

    "This year the realty sector is among the top defaulters. And we are not talking of the small developers. The list includes all the top players who have defaulted on repaying loans. This year they will add to the list of NPAs (non-performing assets) of many public sector as well as private sector banks," the official told Mail Today. Besides banks, private equity (PE) firms are also shying away from investing in realty projects, thanks to the involvement of the sector in the recent scams.

    "No one wants to put money By Anuradha Shukla in New Delhi Realty heads for crisis as banks refuse more loans into realty projects. The sector is involved in every other scam and no one wants to be involved in any controversy," a senior official at PE firm Red Fort Capital, said.

    "Also, developers have failed to learn from the past slowdown. There are just a few projects that are on schedule, even when money started flowing in. This current crisis is self created by the developers. There will be fresh project delays," he added. According to experts, developers will find it difficult to complete their projects on time.

    Already more than half a dozen projects in Noida and Noida Extension have been delayed due to lack of cash flows. And as the big players are struggling to get fresh loans, the small one are trying to sell their projects by offering assured returns of 10 to 15 per cent on both residential as well as the commercial projects.

    "They are already on the verge of stress sale. The cost of finance has gone up to as high as 25 to 30 per cent, almost as high as during the period of slowdown," Sanjay Dutt of Jones Lang LaSalle Meghraj (JLLM) had said last month. Sam Chopra, India head of Remax, a global property consultancy, said the sector will witness a steep correction and distress sales before prices stabilise.

    "There is certainly a price bubble in the market. Home prices have gone up exceptionally high and have touched unrealistic levels," Chopra said.

    "A flat selling in Mumbai at Rs 1.07 lakh per square feet is by no means realistic. The price needs a severe correction and I expect this bubble to burst in another six to eight months," Chopra had said a few months back.

    Courtesy: Headlines Today

    Realty heads for crisis as banks refuse more loans - Business Today



    This all is Paid News .....:bab (35):

    All the buyers are combining and bribing the news channel to publish this news ....

    Now builder lobby is thinking to open a new news channel which will blow up this Cartel of Buyers bribing News, Banks to get the price reduction .......

    Some PBAP members want CBI inquiry in this matter ..

    Already the matter is take up to CM. :D
    CommentQuote
  • hahaha

    Originally Posted by frugality
    This all is Paid News .....:bab (35):

    All the buyers are combining and bribing the news channel to publish this news ....

    Now builder lobby is thinking to open a new news channel which will blow up this Cartel of Buyers bribing News, Banks to get the price reduction .......

    Some PBAP members want CBI inquiry in this matter ..

    Already the matter is take up to CM. :D



    Very funny.. :)

    The buyers are really wicked these days...trying all wicked techniques to fool the innocent builders of Pune... :bab (35): :D
    CommentQuote
  • Originally Posted by stoxxx
    All these news articles are fine. But if you ignore the tyranny of shoulds then where are the real price impact on the ground.

    If anything prices have gone and are going up even today. So as I said the title of this thread should be that builders and RE bulls theory proved correct.



    May be after election, next political party will change the name.:D
    CommentQuote
  • DDA Scheme .........



    The DDA scheme has proved that India needs affordable housing & only correct valuation can attract the buyers. DDA got the huge response due to its pricing & affordable offering. 67.8% properties offered under DDA falls under less than 19Lakh bracket & just a minuscule 5.4% fall under more than 1Cr.

    But as usual, some people started spreading false news, because they just believe in something.:bab (51):

    Type- units- Amount in Lakhs
    1BHK(Furnished) - 1,285 34-37
    2BHK(Furnished)- 548 51-96
    3BHK(Furnished)- 876 110-112
    3BHK - 2,311 54-85
    2BHK - 51 21-49
    1BHK - 10,125 9-18
    Expandable 1Room+Kitchen- 224 6-19
    Expandable 1Room+Kitchen- 154 18-48
    1Room- 663 3-6
    Total = 16,237





    http://www.thejakartapost.com/news/2011/04/24/it-illegal-believe-ridiculous.html

    CommentQuote
  • Banks wary of realty loans...

    he already cash-starved real estate majors have now got more to worry about. Banks have quietly decided to choke credit to the sector, in view of the alleged involvement of realty majors Unitech and DB Realty in the 2G spectrum scam.

    The Reserve Bank of India has also shown discomfort with banks opening their purses to real estate majors. The central bank had also increased the risk weight for residential housing loans of R75 lakh and above to 125% to rein in rising real estate prices.

    Banks wary of realty loans as 2G scam sours lending mood - Hindustan Times
    CommentQuote
  • Originally Posted by khbarilal


    The DDA scheme has proved that India needs affordable housing & only correct valuation can attract the buyers. DDA got the huge response due to its pricing & affordable offering. 67.8% properties offered under DDA falls under less than 19Lakh bracket & just a minuscule 5.4% fall under more than 1Cr.

    But as usual, some people started spreading false news, because they just believe in something.:bab (51):

    Type- units- Amount in Lakhs
    1BHK(Furnished) - 34-37
    1BHK - 9-18
    Total = 16,237



    The Janata (1 BHK)flats which were selling for 20 Lakhs in market were offerred at 14-15 Lakhs by DDA in current round (previously they were offerred for 8-9 Lakhs). Immediate response is that the same Janata flat price in market has now gone up to 30 Lakhs = 33% price appreciation within 6 months.

    Rent for these flats has gone up from 8000 per month to 11000 per month.

    If DDA had offerred the same flats for 9-10 Lakhs, prices would have probably not increased.

    Please understand that I am only trying to understand the market dynamics here. Cause and effect as someone else said, are very difficult to proove here, but the most obvious correlation id probably the right one.

    NOIDA has seen massive launch of huge number of affordable flats (1.5 Lakh affordable flats) in the last 2 years. What effects this will have remains to be seen. I believe there wil be a blood bath type crash in NOIDA within next 2 years - since here supply is probably in the same order of magnitude as demand.

    What actually happens, we have to see. You can see more of that discussion here:

    https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/noida-real-estate/15263-food-for-thought/page2?t=17482&page=2
    CommentQuote
  • 2008 DDA Speculation Results........

    Posh Vasant Kunj in the heart of south Delhi - but take a stroll into Sector E and you get a chill down your spine. Rows and rows of vacant flats stare at you. It's eerie, haunting and unsettling. But this ghost township is part of the envied DDA's prestigious 2008 housing scheme , for which millions of Delhiites had put their luck and money at stake.

    One of the residents, Harish Chand, is still battling it out in his decrepit flat at Pocket 2 in Sector E. He has nobody next door, because most allottees have never turned up to live there. But most of these flats have been burgled, electric wires hang dangerously and meters have all been stolen. Thieves have a field day in this area. And muck s over from open sewers.


    2008 DDA scheme flats: Hundreds lie vacant at Vasant Kunj without water, power supply - The Economic Times
    CommentQuote
  • Home Truths.....

    Rising home loan rates (by 2-2.5%) in the last six months, clubbed with 20-30% appreciation in capital value in 2010, and inflationary concerns have led to a drop in residential sales. There has been a 90% jump in the number of new residential units that hit the market in 2010 over the previous year. Another 60,000 new units are estimated to have entered the market in the first quarter of 2011.

    Analysts expect developers to cut fresh supply in the coming months to be able to hold on to their price lines. While avoiding cash discounts, realtors have started offering discounts and freebies such as free car parking, modular kitchens and air conditioners. As they struggle to hold on to their price lines, analysts expect gradual correction in rates in spurts of 5-10% in each quarter. Looks like pressure from a bulging inventory of unsold stocks, and a high interest rate regime could make your dream home cheaper.:bab (59):

    business.outlookindia.com | Home Truths
    CommentQuote
  • Will home rates reduce significantly ??

    Even though boarders are doing there bits to keep posting various newspaper
    clippings about reduction in property prices ,but i am afraid that in the current economic scenario in india ,max there will be stagnation in property prices with lower sales...........for property prices to correct meaningfully overall indian economic scenario has to deteriorate significantly.
    for example:

    1) sen coming in range of 11000-13000.
    2)job losses in indian economy
    3)political instability
    4)spiking up of govt bond yields.

    unless things like those given above start to happen and continue for some time to install fear in mind of indian people rather than hope of economic recovery which is currently in the minds of indian people, you will not see a significant reduction of property prices.

    :bab (6):
    CommentQuote
  • If you look at RE market in last 3 years, it has been following the textbook pattern of a 7-8 year cycle.

    2007 flat prices peaked (previous cycle). Assume imaginary index for RE(IMex)=100

    2008 prices crashed IMex =80 (Bears scream crash crash)

    2009 RE firms got into debt trouble and there were distress sale of plots (Vatika plots GGN) and flats (Unitech Uniworld gardens 2 GGN). Many affordable flats were released. Imex = 70. (Bears keep screaming crash crash although crash is already over)

    2010 Prices stabilised and went back to peak 2008 levels. IMex=100
    (Bears scream crash crash - since prices are rising, they say crash is imminent)

    2011 Prices stabilised, fresh inventory being continuously sold. Imex = 130
    (Bears scream crash crash - just more imminent)
    If we have a normal cycle, then we can expect:

    2011: stable prices for rest of the year, rates reach peak of BAse rate 10%. IMex=130 (Bears scream crash crash continuously, always around the corner)

    2012: Decline in sales, end of industrial cycle upmove, poor economic performance. Lowering of rates by end of 2012, Bank base rates 8%. IMex= 100(Bears scream crash crash and say - I told you so!!!!)

    2013: Delivery of inventory initial pipeline coincides with lower rates, good resale with loan possibility, industrial cycle starts upmove. Base rate 7%, IMEX= 140. (Bears scream crash crash - prices are not sustainable)

    2014: Good stock market performance, good economic performance and good RE price upmove coincides (for residential and commercial and real estate RE). Nifty 10,000, IMEx 250, Base Rate 6%. (Bears scream crash crash - more imminent)

    2015: Massive performance by nifty and real estate. Nifty 14000, IMEx 400, Base Rate 6% (Bears scream crash crash - but many people start to doubt the bears - they have cried wolf for 7 long years. By end of 2015 everyone decides it is stupid to stay out of RE market, because it keeps rising - so they all go and buy. Bears scream crash crash but no-one listened because they have been screaming this always)

    2016: Continued delivery of flats results in massive oversupply, Real estate crashes. Massive inflation causes Rates jacked up to Base rate 12%. Currency crashes. Nifty Crashes to 9000 levels from 15000. IMEX crashes to 250 levels from 500. (Bears scream crash crash - I told you so!!!!!! - but poor suckers lose all their money, having timed their entry all wrong - they swear off real estate and stocks for ever

    2017: Indistrial and RE cycle starts all over again.

    Thats how things happen over and over again. Always has and always will.

    Guy buying Nifty 5000 and exiting at 15000 makes massive profits. Guy buying at Nifty 6000 and remaining invested makes 50% in 2016 when markets crash to 9000 levels.

    Guy buying IMEX 70 and exiting IMEX 500 makes massive profits. Guy buying IMEX 100 and remaining invested, makes 150% when IMEX crashes to 250 levels.

    That is the way of this world. Those who understand cycles time entry and exit properly.

    Kharibal, as I said before, Delhi has massive vacant flats of ` 20,000 flats in Dwarka and Sohna Road Gurgaon. These are hoarded flats. VAsant Kunj is vacant because there is no water - not by choice.
    CommentQuote
  • Originally Posted by Venkytalks
    If you look at RE market in last 3 years, it has been following the textbook pattern of a 7-8 year cycle.

    2007 flat prices peaked (previous cycle). Assume imaginary index for RE(IMex)=100

    2008 prices crashed IMex =80 (Bears scream crash crash)

    2009 RE firms got into debt trouble and there were distress sale of plots (Vatika plots GGN) and flats (Unitech Uniworld gardens 2 GGN). Many affordable flats were released. Imex = 70. (Bears keep screaming crash crash although crash is already over)

    2010 Prices stabilised and went back to peak 2008 levels. IMex=100
    (Bears scream crash crash - since prices are rising, they say crash is imminent)

    2011 Prices stabilised, fresh inventory being continuously sold. Imex = 130
    (Bears scream crash crash - just more imminent)
    If we have a normal cycle, then we can expect:

    2011: stable prices for rest of the year, rates reach peak of BAse rate 10%. IMex=130 (Bears scream crash crash continuously, always around the corner)

    2012: Decline in sales, end of industrial cycle upmove, poor economic performance. Lowering of rates by end of 2012, Bank base rates 8%. IMex= 100(Bears scream crash crash and say - I told you so!!!!)

    2013: Delivery of inventory initial pipeline coincides with lower rates, good resale with loan possibility, industrial cycle starts upmove. Base rate 7%, IMEX= 140. (Bears scream crash crash - prices are not sustainable)

    2014: Good stock market performance, good economic performance and good RE price upmove coincides (for residential and commercial and real estate RE). Nifty 10,000, IMEx 250, Base Rate 6%. (Bears scream crash crash - more imminent)

    2015: Massive performance by nifty and real estate. Nifty 14000, IMEx 400, Base Rate 6% (Bears scream crash crash - but many people start to doubt the bears - they have cried wolf for 7 long years. By end of 2015 everyone decides it is stupid to stay out of RE market, because it keeps rising - so they all go and buy. Bears scream crash crash but no-one listened because they have been screaming this always)

    2016: Continued delivery of flats results in massive oversupply, Real estate crashes. Massive inflation causes Rates jacked up to Base rate 12%. Currency crashes. Nifty Crashes to 9000 levels from 15000. IMEX crashes to 250 levels from 500. (Bears scream crash crash - I told you so!!!!!! - but poor suckers lose all their money, having timed their entry all wrong - they swear off real estate and stocks for ever

    2017: Indistrial and RE cycle starts all over again.

    Thats how things happen over and over again. Always has and always will.

    Guy buying Nifty 5000 and exiting at 15000 makes massive profits. Guy buying at Nifty 6000 and remaining invested makes 50% in 2016 when markets crash to 9000 levels.

    Guy buying IMEX 70 and exiting IMEX 500 makes massive profits. Guy buying IMEX 100 and remaining invested, makes 150% when IMEX crashes to 250 levels.

    That is the way of this world. Those who understand cycles time entry and exit properly.

    Kharibal, as I said before, Delhi has massive vacant flats of ` 20,000 flats in Dwarka and Sohna Road Gurgaon. These are hoarded flats. VAsant Kunj is vacant because there is no water - not by choice.



    whatever you said holds good in a normal economic cycle.......

    Whatever name you call it



      Super Cycle
      Peak oil production behind
      Debt cycle of Developed countries
      Nature at tipping point
      New world order

      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
      Some call it rubbish ... some add this in their possibilities....
      These all aspects are never before in our living history.

      Things ARE/going to be different this time .......
      So usual charts, stats will not hold good ......

      And you know who is walking on the Plastic(debt) money Minefield?
      the path earlier taken by US ?


      There are too many variables now......:o
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