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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

    Loan Rescheduled....

    It’s a bit of a window dressing going on in the real-estate sector. Banks and financial institutional, on one hand, do not want mounting non-performing assets (NPAs) in their books. On the flip side, real-estate companies don’t have enough cash flows at this point in time to really keep up with their repayment schedules. So, companies have lapped up a new term loans to really repay their old loans.

    Realty loan relief: Sources say Rs 6000cr rescheduled - CNBC-TV18 -

    The loan re-schedules proves that RE is an illiquid asset class & prices are exorbitant.
    Even banks do not want the exposure to NPA but in order to avoid bankruptcies they are extending the loans. Instead of addressing the crisis now, they are pushing forward the issue. Now, RE became much more risky than past because the unaddressed pricing issue will only worsened.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Problem With Megacities

      Ashok R. Datar, chairman of the Mumbai Environmental Social Network and a long-time advisor to the Ambani corporate group, suggests that Asian megacities should stop emulating the early 20th Century Western model of rapid, dense urbanization. “We are copying the Western experience in our own stupid and silly way,” Datar says. “The poor gain on the rich. For every tech geek, we have two to three servants.

      Datar suggest that developing countries need to better promote the growth of more manageable smaller cities and try bringing more economic opportunity to the villages.

      The Problem With Megacities - Megacities - Opportunities at Urban Edges - Forbes

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by compuwalah View Post
        That was the new Diwali kinda bear deteline set a month back. Or should we wait for few months to see the deadline to take effect (as usual) .
        Well, this is not a Diwali Kinda bear but it’s a real bear. The loan rescheduled has not resolved the problem. It has just postponed the problem. Previously there was a hope that if prices correct meaningfully, again market will revive but it’s now confirmed that long term slump ahead.

        The correction can happen in 2 ways.

        1. Immediate price reduction

        2. Time base.


        When time base correction happen it grind slowly but very finely.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          There is a full page ad in today's TOI by Marvel Realtors who would be charging for Carpet Area only. This is a good initiative, but need to check for any hidden conditions/costs. Any idea, for which project of Marvel is this applicable?

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          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by khbarilal View Post
            Well, this is not a Diwali Kinda bear but it’s a real bear.
            LOL . Till now all were diwali bhalus par ees baar sacchhi mucchhi ka bhalu hai . Lets watch and see.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by realacres View Post
              Gurgaon is satellite city of Delhi, so it became instant hit with those who wanted to be close to Delhi but either the prices were high or infra wasn't planned properly.

              In case of Pune, it is not satellite city of Mumbai even though some builders try to show Pune as Mumbai annexe. Also, there are professional builders in NCR, while in Pune, currently most of RE market is dominated by NCP & its scorpio chaps.

              Pune is no doubt more safer & has closer to home atmosphere than NCR but the prices are too high vis a vis it's infra.

              * PS:- Gurgaon went up due to its proximity to Delhi & buyers are from all fields, while in case of Pune, prices went up mainly due to IT. So, all the RE hype was created around IT rather than infra & quality of life.
              Thats not correct real.I doubt you have ever been to gurgaon.

              Proximity to Delhi is just one reason.
              Gurgaon did not become the millenium city just out of nowhere.

              Just look at the NH8 .....there is no match in India to that.
              The sprawling malls ....all the mals of Pune combined will be equivalent o ambience.

              Then the IT sector.......

              The airport ...And the ill gotten money of Delhi politicians businessen etc which they want to invest.

              all these and much more contribute to Gurgaon growth.

              They are so many new manufacturing plants coming up...

              Metro....and the egde of Gurgaon being in Haryana rather than Noida which is in UP

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                I have stayed in both the places and I still beleive Noida is much better than Gurgaon in terms of convenience and cost

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by compuwalah View Post
                  So what happened to the 31-Mar-2011 deadline stuff ? Prices reduced by 20-30% in Pune ? That was the new Diwali kinda bear deteline set a month back. Or should we wait for few months to see the deadline to take effect (as usual) .
                  It seems that 4 days are like 4 yrs for you post 31st Mar!! Man, it seems you believe in the logic that 9 women can deliver a child in 1 month...expect over-night results.
                  If you are happy, you are successful.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by khbarilal View Post
                    It’s a bit of a window dressing going on in the real-estate sector. Banks and financial institutional, on one hand, do not want mounting non-performing assets (NPAs) in their books. On the flip side, real-estate companies don’t have enough cash flows at this point in time to really keep up with their repayment schedules. So, companies have lapped up a new term loans to really repay their old loans.

                    Realty loan relief: Sources say Rs 6000cr rescheduled - CNBC-TV18 -

                    The loan re-schedules proves that RE is an illiquid asset class & prices are exorbitant.
                    Even banks do not want the exposure to NPA but in order to avoid bankruptcies they are extending the loans. Instead of addressing the crisis now, they are pushing forward the issue. Now, RE became much more risky than past because the unaddressed pricing issue will only worsened.
                    Realty firms seek funds from PE to tide over debt - The Economic Times

                    Builders will arrange funds by paying higher interest rates from NBFCs. Anyway their profit margins are high so can sustain slighly lower margin for some duration.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by compuwalah View Post
                      Realty firms seek funds from PE to tide over debt - The Economic Times

                      Builders will arrange funds by paying higher interest rates from NBFCs. Anyway their profit margins are high so can sustain slighly lower margin for some duration.
                      In all this, the key aspect which you ignore is slump in sales which are happening not due to interest rates alone but lack of buyers.
                      If you are happy, you are successful.

                      Comment

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