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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

    Originally posted by asdf2357 View Post
    Thanks Wiseman, for explaining it very very well!!
    I really feel, I'm on the same boat too.. As you see my earlier post, even I was feeling the prices are too high (and now may be because I bought, I'm thinking other way)..

    Just, the point that I want to make is, there are many guys who must be thinking of buying home since 2-3 years (or even more)... There was some hope due to consolidation in 2008 and drop in 2009.....

    But, due to some negativity in the blogs, (And I must say the confident predictions) by some of the members, few of those buyers may have further delayed their deals, and I don't know until some time they need to wait, considering prizes again fall..

    You can say, what is harm in renting, but everyone knows.. its not easy..
    E.g. you are searching for 2-3 years, then saw some dip, did not buy, and then convince your mind, "its ok! lets stay on rent and wait for next fall...."

    http://www.moneycontrol.com/news/bus...ng_487387.html

    According to a report by Jones Lang LaSalle Meghraj, the market value of under-construction projects in India has crossed over USD 100 billion from USD 9.4 billion at the end of 2006. While commercial market still remains flat, the residential property market has witnessed a sharp rebound.

    Keeping with the trend, Jones Lang LaSalle Meghraj recommends investing only in residential properties as they see revival in commercial property unlikely before next Diwali. In the commecial office space, Mumbai, NCR-Delhi and Bangalore contributes to about 70% of the market value.

    In an interview with CNBC-TV18’s Udayan Mukherjee, Anuj Puri, Chairman and Country Head at Jones Lang Lasalle India and Anand Narayan National Director-Residential at Knight Frank discuss the possibilities of a real estate bubble.

    Anuj Puri said that the greed for real estate had returned in Indian metros. Realty prices in Mumbai have crossed its 2007 peak but realty markets in the rest of India were still unheated and remain safe, he said adding, “There is strong resurgence of demand coming in metros but overall, other than some micro markets in major cities, I don’t think there is a bubble that is being formed.”

    On the sky rocketing price in Mumbai, he said, Navi Mumbai and the suburbs of Mumbai were doing really well, while prices in Central Mumbai too were up quite sharply. Puri expected a correction of price in the mill land area in Mumbai.

    Anand Narayan, meanwhile, sees huge demand in Lower Parel and Prabhadevi region in Mumbai. He feels that Sewri, in Mumbai, is the most undervalued pocket.




    So leave apart Mumbai
    Rest all metros this does apply....
    India didn't invent Stock market or Loans or Bonds or Business ......
    for that matter most countries follow same business rules ......


    here is the list of countries which you can just Google and derive info.
    I picked from Wiki.
    http://en.wikipedia.org/wiki/Real_estate_bubble

    For individual countries, see:

    * Australian property bubble
    * British property bubble
    * Bulgarian property bubble
    * Chinese property bubble
    * Danish property bubble
    * Indian property bubble
    * Irish property bubble
    * Japanese asset price bubble
    * Lebanese property bubble
    * Polish property bubble
    * Romanian property bubble
    * South Korean property bubble
    * Spanish property bubble
    * United States housing bubble


    This Image and there are couple of more images....
    and many of us are feeling exactly the same as in the Japan chart attached earlier.....
    Is that not the enough indicators ???
    and Biggest issue is Global Debt/Asset valuation issues......

    All these Bubbles above have no such factors when they burst .... it was their local issues....

    Doesn't that imply our bubble is building in most Dangerous times ??


    its your wish .... TV shows lots of Ads ... you don't bilendly believe them and buy everything....
    So whatever forum speaks apply your mind ....
    Attached Files

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by asdf2357 View Post
      Thanks Wiseman, for explaining it very very well!!
      I really feel, I'm on the same boat too.. As you see my earlier post, even I was feeling the prices are too high (and now may be because I bought, I'm thinking other way)..

      Just, the point that I want to make is, there are many guys who must be thinking of buying home since 2-3 years (or even more)... There was some hope due to consolidation in 2008 and drop in 2009.....

      But, due to some negativity in the blogs, (And I must say the confident predictions) by some of the members, few of those buyers may have further delayed their deals, and I don't know until some time they need to wait, considering prizes again fall..

      You can say, what is harm in renting, but everyone knows.. its not easy..
      E.g. you are searching for 2-3 years, then saw some dip, did not buy, and then convince your mind, "its ok! lets stay on rent and wait for next fall...."
      asdf,

      I agree with your view that there was some chance for prospective buyers in 2009. But do not understand your stand of not disclosing any details about your purchase apart from the rate & appreciation in that. Agreed that one can not share much details on public forums but still sharing approx location etc is required so that people reading the post would get benifitted. other wise purchase at 3200 & now it is selling at 4300 etc etc this kind of information is of no use to readers. Just see kind of incormation shared by one member on another thread. Not that much but definitely some more details from you would have been appreciated.

      http://www.indianrealestateforum.com...lat-13793.html

      PS: Also do not be under impression that neighbouring builder or your own builder is now quoting 4300 so rates have rosen upto that level. If you try to get a deal builders are even today negotiating rates by fe hundreds & I have experienced this. So 4300 is not definitely 4300 in reality. Also this is rate at which builder sells his units, if you try & look in resale market you will find lower rates for propertied not old than 2 yrs.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Finally, this is it !

        asdf and others who are itching to buy,

        Let me try to keep it very simple (difficult for a guy who goes on and on! )

        Everyday in the stock market, I watch for setup (opportunities where the probable upside is 4-5 times downside). And when this "new low" price comes up, get into the market confidentally.

        But surprise! Very often the price goes up around 15-20% and suddenly turns around and creates yet another "new low"!!! Makes one look very foolish!

        So, over time I have learnt to trade according the the severity of the drop. If there is a small drop, I do a small trade and pull profits/losses quickly. If there is a humongous fall (and all else seems to be okay), then I get in with more and wait for longer.

        Whats the point of all this?

        Its all about the timeframe. Many youngsters are in such a hurry to buy a home because to them a 2-3 year wait is too much for their patience.

        For the seniors, 2-3 years may even be too little so long as they do not get the humongous falls. I have learnt in the stock market that it takes 5-8 years to get one of those humongous falls. And these buying opportunities give you 5 and 10 baggers easily (sometimes even 20 and 50 baggers).

        Similarly, if some of the youngsters learn to wait for the trmendous falls (and opportunity) they will benefit vastly. Remember, there may never be a fall for another 15 years! That too is part of the game.

        Finally, if you are too impatient and think a decent fall is good to buy, simply go in an buy but being sure that you can take care of the EMI under any circumstance!

        I spent a long time renting and I have no hangups at all since the pockets are bulging with cash and life becomes easy! I will wait for any amount of time for the bargain I'm looking for (like my friend says, if you have cash in pocket, you can even get 2 for 1 of original quoted price these days from builders).

        Just do things so that they FEEL RIGHT for you!

        Was that short?

        cheers
        Last edited by wiseman; October 4 2010, 06:38 PM.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by wiseman View Post

          I spent a long time renting and I have no hangups at all since the pockets are bulging with cash and life becomes easy! I will wait for any amount of time for the bargain I'm looking for (like my friend says, if you have cash in pocket, you can even get 2 for 1 of original quoted price these days from builders).

          Just do things so that they FEEL RIGHT for you!

          Was that short?

          cheers
          Though I am not an RE bull nor I am not at all itching to buy. Still i think this is extreme thinking. Specifically words highlighted.

          God know when senior members from this forum will stop comparing RE with stocks. Everyone knows that stock always outperform RE, but what is point discussing same thing over & over when people are thinking / asking / talking about buying a home for self-use?

          It would be better now if we call this forum as Indian Real Estate 'Investment' forum

          as majority of senior members with lots of cash always see towards this as investment, nothing else.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            How many do NOT think of a home as an asset?

            Originally posted by rsatitkar View Post
            Though I am not an RE bull nor I am not at all itching to buy. Still i think this is extreme thinking. Specifically words highlighted.

            God know when senior members from this forum will stop comparing RE with stocks. Everyone knows that stock always outperform RE, but what is point discussing same thing over & over when people are thinking / asking / talking about buying a home for self-use?

            It would be better now if we call this forum as Indian Real Estate 'Investment' forum

            as majority of senior members with lots of cash always see towards this as investment, nothing else.

            Friend,

            Let me do a poll. How many people are there on this forum who have NEVER even once thought about their home in terms of its value and how much they have "made" from their purchase? EVER?

            If there is anyone who has NEVER ONCE thought of hiss/her home as something that made money (on paper at least) for them which could be of use just in case, please respond to this ...

            If you even once (in passing), thought of your home in terms of it being an asset in times of extreme distress, then, in the back of your mind, you do view it as an investment; heart of hearts!

            I think, honestly, even if you are living in your home, if you bought at 30 lakhs and its now 90 lakhs, deep down you would be patting yourself (now-and-then) about what a good "investment" choice you made. Would you not?

            So, where is the argument of RE NOT ALSO being viewed as an investment (besides being viewed as a home)? Only difference is, some do it openly, some think they do not do it!

            Thats all the difference between you and me (differernt parts of the same boat actually).

            cheers

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Nice graph frugal & this time I completely agree with wiseman about the dip.
              asdf, you thought that 2009 prices are good. But good when compared to what? 2007-08? Anything less than 2007-08 will look good, but in reality, even 2007 prices were high. Like in case of auto, if M800 is priced at 15L & then it is available for 12L, it will look good....but see the real value, & even 6L will be high!! As said by rsatitkar, I too fail to understand why you are not ready to even give the location....if location can't be given...how can we trust what you are saying?? Look at Harish, manu, m^2, hitmady etc. who give details. Now we are not even asking you project name, nor the builder. And man, asking such questions don't mean pointing gun at you!
              If you are happy, you are successful.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Banks hike base rate, loans likely to become expensive

                This is what we were expecting, hike in base rates. Hiking of base rates clearly indicates how expensive credit has become & inflation becoming a big demon eating into savings of most. Banks will hike interest rates further very soon. The good news though, the FD interest rates will be hiked as well. So, good for depositors.

                http://in.biz.yahoo.com/100930/50/bawbnm.html

                This one from FE:-

                Mumbai: LIC Housing Finance and Magma Fincorp have raised lending rates by 50 bps as money turns more expensive.

                Close to ten banks hiked their base rates last week by 25-50 bps as deposits became costlier and other non-banking finance companies (NBFC) and housing finance companies (HFC) may follow suit. LIC Housing Finance hiked prime lending rate(PLR) by 50 bps to 13% during its quarterly meeting held late last week.


                http://www.financialexpress.com/news...w-suit/692485/
                If you are happy, you are successful.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Good in theory, not practical

                  Originally posted by rsatitkar View Post
                  God know when senior members from this forum will stop comparing RE with stocks. Everyone knows that stock always outperform RE, but what is point discussing same thing over & over when people are thinking / asking / talking about buying a home for self-use?
                  I am still to meet a single person who buys home(for self use), when he firmly believes prices are going to fall tomorrow. Did you? Then I can agree with you.

                  Every single buyer, believes prices will not fall (if not appreciate) and even if they fall they will rise back in 6-12 months.

                  While I too believe some where in my heart that, for self use, it does not matter if price falls, but if you have any friends in USA who bought home at peak prices in 2006, ask them how they feel today!

                  When home buying is one of the biggest purchase, why not make it the best bargain and best purchase?

                  What is the urgency? are we on footpaths without shelter or living in tents and camps? On the contrary, we have the luxury of very cheap rentals from our smart investors, so fail to understand the urgency in buying a "Home sweet home"

                  So I have been maintaining even for self use, make sure you pay the right price, calculated according to your own calculations, not by what EMI you afford and what builder quotes.
                  Last edited by RAJESHP; October 5 2010, 06:27 AM.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Another point of view ...

                    For centuries in the past, Indians have been brought up thinking there is something wrong with them if ...

                    - They do not follow their father's footsteps into career
                    - They do not get married by age XX (24 for men and 18 for women?)
                    - They do not buy their own self-stay home by so-n-so age

                    and so on. These may have been good advice for times when life different. In the old days, most people were born and lived till they died in the same locality/region. And money was hard to come by. Then it made sense to do buy what was the only asset which would guarantee gradual increase in value. Then, there was also social prestige associated with owning a home. You only need to attend a Gruhapravash to see the preening and display of pride (on borrowed money!) to understand this.

                    But times change. And changing with the times is always a sign of forward thinking (so long as change is positive for you).

                    Being in a rented home, for me, has no shame or deficiency in my self-esteem. I have enjoyed some really beautiful homes on rent which I would have otherwise not lived in because of being forced to live in my own self-use home.

                    We need to change some of our thinking and get rid of this false sense of increased self-esteem in owning our own home when, actually, to start with, 80% of the home is actually owned by the bank!!!. And till you pay the last EMI, you can be harassed by the bank if you default even when you have paid 90% of the loan. Therefore, as many so-called "seniors" have been saying, buying a home should be first of all a practical financial decision unencumbered by emotional reactions. If you really want a peaceful and profitable ownership of your own home, first get the calculations right. Then (mostly) things should be okay.

                    Sometimes we misunderstand the meaning of the word OWN, thinking that, just because we have to pay the maintenance and repairs of the house, we own it, despite the papers being locked up in the bank!

                    cheers
                    Last edited by wiseman; October 5 2010, 09:33 AM.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by wiseman View Post
                      For centuries in the past, Indians have been brought up thinking there is something wrong with them if ...

                      - They do not follow their father's footsteps into career
                      - They do not get married by age XX (24 for men and 18 for women?)
                      - They do not buy their own self-stay home by so-n-so age

                      and so on. These may have been good advice for times when life different. In the old days, most people were born and lived till they died in the same locality/region. And money was hard to come by. Then it made sense to do buy what was the only asset which would guarantee gradual increase in value. Then, there was also social prestige associated with owning a home. You only need to attend a Gruhapravash to see the preening and display of pride (on borrowed money!) to understand this.

                      But times change. And changing with the times is always a sign of forward thinking (so long as change is positive for you).

                      Being in a rented home, for me, has no shame or deficiency in my self-esteem. I have enjoyed some really beautiful homes on rent which I would have otherwise not lived in because of being forced to live in my own self-use home.

                      We need to change some of our thinking and get rid of this false sense of increased self-esteem in owning our own home when, actually, to start with, 80% of the home is actually owned by the bank!!!. And till you pay the last EMI, you can be harassed by the bank if you default even when you have paid 90% of the loan. Therefore, as many so-called "seniors" have been saying, buying a home should be first of all a practical financial decision unencumbered by emotional reactions. If you really want a peaceful and profitable ownership of your own home, first get the calculations right. Then (mostly) things should be okay.

                      Sometimes we misunderstand the meaning of the word OWN, thinking that, just because we have to pay the maintenance and repairs of the house, we own it, despite the papers being locked up in the bank!

                      cheers
                      Well I will write in precise points:

                      1. I agree that in today's date buying property in Pune is not advisable as prices are bloated. Here I concur with senior members
                      2. At the same time I belive there was an opportunity in 2009 where prices came down by 15-20%, here I differ with most of the senior members. Agreed that may not be the only opportunity but, yes it was an opportunity.
                      3. Renting forever (or even 5+ year ) is not an option. You may call my thinking poor, old fashioned or whatever you wish. But this what I think. I differ a lot with senior members on this point.
                      4. Now comes buying at logical & affordable price. Yes we are advising people to buy at a price which is both logical & affordable. Affordable is still a quantifiable term which can be directly linked to buyer's income / savings. But how about logical price? When to call that price is at logical level, unfortunately it's very difficult to determine this & hence so far no one has given a quantified answer for a what a logical price would be?

                      Let us take an example 'Samrajya' Jit_Sir's project is the one most discussed on this forum & most of the senior members haveopinion that project is good but price is not logical. Can any one state what will be a logical psf price for this project in today's date? This will indeed help prospective buyers, than just mentioning that today's price is not logical, most of the people know that.

                      Remember affordable price can vary as per the person but logical price has to be same irrespective of the person.

                      Comment

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