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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 heretic View Post
    Unrealistically high RE prices in India are due to the nexus between builders, bankers, politicians and media. All these four factors are as thick as the thieves they are. Do we common people realise the extent to which we are being exploited? Check this out:
    1] In the past decade, politicians have poured their illicit wealth, lakhs of crores extracted from bribes & scams, into land and construction. Politicians have become builders and builders have become politicians.
    2] With such huge vested interests, they frame economic policies aimed at ever-increasing property prices. Since last year, inflation is in double digits, and yet interest rates on FDs in banks are between 8% to 8.5%. While our savings are actually eroding in value, this cheap credit is being chanelised to RE companies [and easy home loans to entice buyers at high prices and thus benefit the builders] When these loans to RE companies are not repaid, they are 'restuctured' because banks don't want to show NPAs.
    3] The Government rakes in thousands of crores in high stamp duties & registration charges --- another reason for keeping RE prices artificially high.
    4] These politicians -cum- builders [who have acquired land in prime areas or outskirts of almost every major city & town in India] develop the land with cheap bank credit + booking money. Then they load on all sorts of hidden costs and sell constructed units at huge profits.
    5] In the past we had 'sahukars' who lent money & kept poor people under debt for generations. Now we have housing finance aimed at enticing suckers to buy property at exaggerated prices and making them pay interest lifelong. One home loan customer = hefty interest assured for next 15 to 25 years.
    Friends, please note how the common people are exploited at every stage mentioned above. They are using OUR money at every stage TO EXPLOIT US.
    Real estate has become a flipping game in India. A sureshot way to earn anywhere between 100% to 300% returns. But as the US, UK, Spain, Ireland, Canada, Dubai have found out in the past 2 years [and Thailand, HongKong, Singapore found out in the 90s] this ponzi scheme cannot go on forever. Contrast this with Germany, a nation that concentrates on producing real goods and services, where property prices have remained stable since the 1990s. They were not affected by the crisis, their standard of living has not gone into a tailspin, and the German Mark is steady as a rock.
    Actually the RE prices should have collapsed in India, as they did all over the world after 2008.
    The factors that led to the world-wide property market crash were present in India in 2007 itself. And yet RE prices hardly corrected. Why? Because it is not in the interest of these thieves to allow RE prices to collapse. Everyday, I see pages upon pages of 'property for sale' ads in newspapers and columns by bogus 'experts' and 'market analysts' --- telling us that this is the best time to buy apartments & rowhouses. Its a huge conspiracy.

    I sense a lot of anger and resentment building up in the common man, as he acquires info and comes to realise what I [as a retail investor] 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.
    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
    Now, I don't care if Indian RE corrects or don't correct, but for sure the Mango man has woke up...

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    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Mango man celebrates small victories

      Originally posted by monds View Post
      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
      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

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Realty gets battered

        Originally posted by heretic View Post
        I sense a lot of anger and resentment building up in the common man, as he acquires info and comes to realise what I [as a retail investor] 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. Man, I never saw so many RE exhibis in such a short time!! Got some clue from here??
        If you are happy, you are successful.

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        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          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 [they call them kothies] & 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 [ of SG, RG & MS] 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.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Bailout nations ...

            Originally posted by heretic View Post
            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 [they call them kothies] & 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 [ of SG, RG & MS] 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!!!!

            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?

            cheers
            Last edited by wiseman; November 28 2010, 05:12 PM.

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            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Now, banks are increasing the despite rate. Is it showing the liquidity crunch ahead?

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                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.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by kaatesha View Post
                  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.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by punerebuyer View Post
                    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?

                    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.
                    Last edited by realacres; November 28 2010, 10:21 PM.
                    If you are happy, you are successful.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by realacres View Post
                      +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?

                      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.

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