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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

    Property Price to fall

    Check the link below, as posted on Housing scam thread which shows how builders have no option but to clear inventory ASAP to survive leading to dip in property prices. This is from Zee Business:-

    http://www.youtube.com/watch?v=c_yWFd0r5EQ

    It shows how credit to builders is drying up & post home loan scam, the situation becomes even worse for builders.

    In other news, in Mumbai, 14,000 luxury flats are coming up in Lower Parel alone in next 1-2 yrs which is far more than the demand here is. This would lead to dip in property prices.

    Here are some more nos. which I have got:-

    Total flats in Delhi-NCR = 97,000
    Sold = 54,000
    Vacant = 43,000

    Total flats in Mumbai = 1.26 L,
    Sold = 46,000
    Vacant = 80,000


    Similar is the case even with cities like Pune, huge supply, but no demand. The home loan scam has dried up builders' financing options & the recent interest rate hikes by banks for home loans means EMIs becoming more costlier for borrowers as well.

    Infact, today itself, after HDFC, ICICI has hiked the home loan interest rates by 50 bps or 0.5% w.e.f. 06 Dec 2010. SBI has said that they too will be rising interest rates in coming weeks.

    Good part though :- The deposit rates on FD is going to go up by 25-50 bps as well, so good for depositors. Man, in current times, cash is the king.
    If you are happy, you are successful.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by realacres View Post
      Check the link below, as posted on Housing scam thread which shows how builders have no option but to clear inventory ASAP to survive leading to dip in property prices. This is from Zee Business:-

      http://www.youtube.com/watch?v=c_yWFd0r5EQ

      .

      Man this Zee news network is funny. Once on Zee news, they were telling news of how they exposed some fake currency notes racket somewhere in Nashik or some where...

      This is what he says...
      "Sab taraf sannta chaya hua hai, sadke khali hai, sab log Zee news dekh rahe hai" LOL I stopped watching Zee news from then.

      One more channel some NDTV/IBN I think, was telling how some one could hack in your bank account easily. They showed that dude, open the "view source" on the browser, once on the login page, and change something there. That was the biggest one..

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by Venkytalks View Post
        UNFORTUNATELY HINDU IS A COMMUNIST PAPER AND OTHER 2 ARE SOc-ial-st BENT OF MIND

        sorry caps lock by mistake
        I think Hindu is the best newspaper with no crap.
        They do not depend on Por.n to sell their paper and the content is pretty good too.

        But howcome is it Comminist ?? I didn't get that .

        TOI = TOIlet ha ha ha lolzzzzz
        good one...I agree completely

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by kingmanish View Post
          One more channel some NDTV/IBN I think, was telling how some one could hack in your bank account easily. They showed that dude, open the "view source" on the browser, once on the login page, and change something there. That was the biggest one..
          NDTV everyone watches for Fun. "Yamraj ka darwaza mil gya hai.Ji haan yahi hai Yamraj ka darwaza " and they showd some stone cave in a hill
          "Himesh reshamiya ko le jaayenge Alien " hahahah

          But It's sad that I can't name even a single channel with some serious news. CNN IBN , Headlines Today all have reverted to cheap means

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Half-a-dozen real estate IPOs face delay

            Raghavendra Kamath & Ashish Rukhaiyar / Mumbai November 27, 2010, 0:00 IST

            The mega real estate loan scam could delay the initial public offers (IPOs) of over half-a-dozen real estate developers because of poor investor sentiment, said bankers and analysts tracking the sector.

            “It will be very difficult for real estate entities to raise money through IPOs at this juncture,” said Gyan Mohan, executive vice-president and head, investment banking, IDBI Capital Markets.


            According to Prime Database, which tracks primary capital markets, eight real estate companies have got the final approval from the market regulator to launch IPOs. These include Raheja Universal, Lodha Developers, Lavasa Corporation and Kumar Urban Development. Together, they were looking to raise Rs 9,500 crore.


            “Though it has been said that this is not a systemic risk, investor sentiment has been impacted. The sector was anyway facing transparency issues,” said Mohan.

            The IPOs are crucial for these developers to repay debt. For instance, New Delhi-based BPTP was planning to use a fourth of the IPO proceeds of Rs 1,500 crore to lower debt.

            “I do not think any property developer will bring out a public issue in the current financial year. Those who try IPOs and QIPs (qualified institutional placements) will have to undergo a lot of scrutiny and due diligence in the coming days,” says Amit Goenka, national director, capital transactions, Knight Frank India.

            Developers like Lodha agree. “The markets are still volatile and previous issues have not done very well. We may take a view in the new year,” said Abhisheck Lodha, managing director of Lodha Developers.

            The benchmark BSE Sen has fallen 2.3 per cent, or 448 points, since November 19.

            To tap elsewhere

            Due to delay in raising funds through selling equity and from public sector banks, the cost of borrowing for real estate companies will rise and developers may have to borrow more from private banks, non-banking finance companies and private equity (PE) firms, bankers say.

            At present, property developers borrow at between 10.5 per cent and 14 per cent, depending on their credit profile. This may rise by 50-100 basis points.

            “Conditions are quite adverse for the real estate sector. In debt, the cost of funds is based on the perceived risk. The riskier the assets, the higher is the price. Even RBI has increased the risk weight for real estate loans,” said a head of fixed-income capital markets at a foreign investment bank.

            RBI increased the standard asset provisioning by commercial banks for teaser home loans from 0.4 per cent to two per cent, capped the loan-to-value ratio at 80 per cent and increased the risk weight on loans of more than Rs 75 lakh to above 125 per cent in the November 2 monetary policy.

            Goenka says though private lenders will increase rates, private equity firms cannot increase their return expectations from developers, as they’ve already been asking for 25 per cent returns.
            If you are happy, you are successful.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Check out...

              http://www.mydigitalfc.com/companies...lty-prices-378
              Repayment blues to hit realty prices



              Article Link

              Real estate companies, which are already under severe financial strain, have to make a bullet repayment of over Rs 14,000 crore in the next two months to banks. This will force builders to cut prices of real estate stock, especially residential units, to boost cash flows to help them repay dues.

              The huge repayment burden in December and January was created when many banks restructured real estate loans for one and a half years in June 2009 under the Reserve Bank of India’s (RBI) special dispensation. “This is falling due in the next two months,” said a senior executive of a bank, who did not want to be named.

              But a senior banker from a public sector bank said, “Real estate companies will have to drop prices and sell properties so that there is a regular cash flow into their books.”

              The problem started when developers began to jack up prices, stifling sales at lower rates. This hit cash flows of developers. Banks aggravated the situation by helping developers to roll over debt by recording repayment on the due date and granting a fresh loan to the same company the next day.

              This helped the bank to continue the account as a standard asset while the developer got funds with no pressure to lower property rates and generate cash flows. Now, banks are watching their real estate exposure and implementing strong checks.

              http://indiahousingbubble.blogspot.com/

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Scam Fallout: Developers Postpone R13,000-cr IPOs Till Next Year

                Six real estate companies, all set to raise over $2.9 billion or R13,000 crore through the capital market, have postponed their plans till the middle of next year.

                Industry experts have blamed the LIC scam for bringing down the interests of foreign and domestic institutional investors in public offers. For some, the government and market regulator the Securities and Exchange Board of India (SEBI) played spoilsport.................

                For many developers liquidity is going to be a problem. After the LIC scam, banks have tightened the loan outflows.

                And as capital market too is not a favorable place for some time, developers may opt to reduce prices of their properties to improve cash flows. "Its' not just about FIIs and DIIs, even the retail investor will stay away from realty IPOs," said the banker


                Read complete story here:-

                http://epaper.hindustantimes.com/PUB...4.shtml?Mode=1
                If you are happy, you are successful.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by realacres View Post
                  Six real estate companies, all set to raise over $2.9 billion or R13,000 crore through the capital market, have postponed their plans till the middle of next year.

                  Industry experts have blamed the LIC scam for bringing down the interests of foreign and domestic institutional investors in public offers. For some, the government and market regulator the Securities and Exchange Board of India (SEBI) played spoilsport.................

                  For many developers liquidity is going to be a problem. After the LIC scam, banks have tightened the loan outflows.

                  And as capital market too is not a favorable place for some time, developers may opt to reduce prices of their properties to improve cash flows. "Its' not just about FIIs and DIIs, even the retail investor will stay away from realty IPOs," said the banker


                  Read complete story here:-

                  http://epaper.hindustantimes.com/PUB...4.shtml?Mode=1
                  It got reflected in RPP Infra proj IPO. The stock is available now at 13% below its issue price.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Read PMC Norms, Avoid Builders' Traps

                    Check out some norms* laid down by PMC. Reading this, it will help you on verifying whether the builder is saying right or wrong & avoiding builders' traps.

                    Please save the file which is here in .pdf & go though it. Will be useful. Hope this helps.

                    * Subject to change without prior notice.
                    Attached Files
                    Last edited by realacres; December 8 2010, 01:35 PM.
                    If you are happy, you are successful.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      UPA leaders will not allow any dip in real estate

                      Guys

                      Please do not do wishful thinking. The builders have nothing to worry about. Property prices will not go down. Banks will be forced (incentivised) to restructure loans. If required law will be changed, if required economic policy will be changed, FDI norms will be changed ..anything and everything will be allowed. Top UPA leaders have too much invested in real estate. They will not allow any dip. Mark my words (and continue voting for UPA)

                      AJ

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