Announcement

Collapse
No announcement yet.

Builders & Real Estate Bulls Theory Proved Wrong

Collapse
X
Collapse

Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
12768 | Posts
  • Time
  • Show
Clear All
new posts

  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    South Mumbai bungalow sold for record Rs 350 crore


    When builders are themselves ready to pay such exorbitant prices then they will defintely make the buyers pay for this....

    looks like they have no intentions of reducing the prices.....

    plus they have plenty of cash to keep holding than negotiating.........

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by kingmanish View Post
      South Mumbai bungalow sold for record Rs 350 crore


      When builders are themselves ready to pay such exorbitant prices then they will defintely make the buyers pay for this....

      looks like they have no intentions of reducing the prices.....

      plus they have plenty of cash to keep holding than negotiating.........
      <hv put the same comment in a Mumbai trread where this article was posted>

      I dont know what this "record" means . The plot is 2092 sq meters ans there is a construction of 28000 sq feet on the plot. Also south mumbai FSI was recently increased. One should compare a persq feet cost of the plot taking into consideration the construction FSI available. If someone tomorrow buys a plot twice th size of this at 400 crores media will again report that as "record". But is it a record deal?

      One of a famous company in healthcare/diagnostics bought a plot from HDIL at 70% the rate HDIL had bought it in a full cash deal. That is the reality of today's market.

      Yesterday DNA carried an article on Runwal in trouble due to exit of Singapore fund. Today there is a completely different article with statement from Runwal that the exit of the fund was planned and as per strategy (though with much less returns). Same day Runwal gives a full page ad on front page of ET. Same day this "record" deal is published in Times of India. Isnt it too obvious that we are living in a world where paid news exist.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Yes, you are absolutely right.

        How long can they sustain on such false news. Sometime back some YES Bank head bought some property at a very high rate, same news had flashed. But remember that it is in the self interest of such people to show such exhorbitant prices. But after that, how many deals of that size took place ? Very few.

        Let us take such articles with appropriate perspective and not get carried away by such words as "Record", "Prices will only go North" etc.

        How long do these companies show "healthy-but-fake" balance sheets just so create a hype. After all now banks have started tightening on the banks loans and also economy is going to go down due to high inflation.
        TOI-let paper has started reporting that due to petrol/diesel hikes, people have cut down on shopping and visiting malls. Same with hike in prices of food products and LPG, people have reduced going to Hotel for eating. Some teenagers also said that they had to cut down on their parties due to petrol prices. So one can only imaging where our economy is headed. In such a scenario, where will RE be ? Will it not get affected ? If commercial space starts becoming vacant due to loses, residential RE will also suffer. Isn;t it ?


        Originally posted by rkv_hunter View Post
        <hv put the same comment in a Mumbai trread where this article was posted>

        I dont know what this "record" means . The plot is 2092 sq meters ans there is a construction of 28000 sq feet on the plot. Also south mumbai FSI was recently increased. One should compare a persq feet cost of the plot taking into consideration the construction FSI available. If someone tomorrow buys a plot twice th size of this at 400 crores media will again report that as "record". But is it a record deal?

        One of a famous company in healthcare/diagnostics bought a plot from HDIL at 70% the rate HDIL had bought it in a full cash deal. That is the reality of today's market.

        Yesterday DNA carried an article on Runwal in trouble due to exit of Singapore fund. Today there is a completely different article with statement from Runwal that the exit of the fund was planned and as per strategy (though with much less returns). Same day Runwal gives a full page ad on front page of ET. Same day this "record" deal is published in Times of India. Isnt it too obvious that we are living in a world where paid news exist.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by rkv_hunter View Post
          <hv put the same comment in a Mumbai trread where this article was posted>

          I dont know what this "record" means . The plot is 2092 sq meters ans there is a construction of 28000 sq feet on the plot. Also south mumbai FSI was recently increased. One should compare a persq feet cost of the plot taking into consideration the construction FSI available. If someone tomorrow buys a plot twice th size of this at 400 crores media will again report that as "record". But is it a record deal?

          One of a famous company in healthcare/diagnostics bought a plot from HDIL at 70% the rate HDIL had bought it in a full cash deal. That is the reality of today's market.

          Yesterday DNA carried an article on Runwal in trouble due to exit of Singapore fund. Today there is a completely different article with statement from Runwal that the exit of the fund was planned and as per strategy (though with much less returns). Same day Runwal gives a full page ad on front page of ET. Same day this "record" deal is published in Times of India. Isnt it too obvious that we are living in a world where paid news exist.

          Great information!!! Thanks.

          We need to be aware of everything around us and not get carried away by media.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by mymarji View Post
            Yes, you are absolutely right.

            How long can they sustain on such false news. Sometime back some YES Bank head bought some property at a very high rate, same news had flashed. But remember that it is in the self interest of such people to show such exhorbitant prices. But after that, how many deals of that size took place ? Very few.

            Let us take such articles with appropriate perspective and not get carried away by such words as "Record", "Prices will only go North" etc.

            How long do these companies show "healthy-but-fake" balance sheets just so create a hype. After all now banks have started tightening on the banks loans and also economy is going to go down due to high inflation.
            TOI-let paper has started reporting that due to petrol/diesel hikes, people have cut down on shopping and visiting malls. Same with hike in prices of food products and LPG, people have reduced going to Hotel for eating. Some teenagers also said that they had to cut down on their parties due to petrol prices. So one can only imaging where our economy is headed. In such a scenario, where will RE be ? Will it not get affected ? If commercial space starts becoming vacant due to loses, residential RE will also suffer. Isn;t it ?
            If people have to spend entire salary on expenses, where will be the margin for EMI?

            RE crash is here and will stay for as long as the repo rates are over 6% - probably for 1.5 years is my guess.

            This is the real recession, 2008 was only a market crash due to liquidity crunch.

            You should buy into both the RE and Stock corrections it will be LEGEN - wait for it - DARY.
            Venky (Please read watch a or before posting)

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by Venkytalks View Post
              You should buy into both the RE and Stock corrections it will be LEGEN - wait for it - DARY.
              Would be interested in both if they fall 50 % from these unrealistic, unsustainable levels.

              Simple logic : if RE prices can zoom 150 % to 300 % between 2002 - 2008, with hardly any supporting fundamentals, why will they not correct 40 % - 50 % ?

              Concentrate on the deteriorating macroeconomic parameters. The rest is just noise.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                So venky - you also a Barny Stinson fan


                Originally posted by Venkytalks View Post
                If people have to spend entire salary on expenses, where will be the margin for EMI?

                RE crash is here and will stay for as long as the repo rates are over 6% - probably for 1.5 years is my guess.

                This is the real recession, 2008 was only a market crash due to liquidity crunch.

                You should buy into both the RE and Stock corrections it will be LEGEN - wait for it - DARY.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  The banks are now giving preference to only ready possession flats than under-constro. Reason :-

                  Banks fear that their money will go down the drain as builders are unable to complete projects due to liquidity crunch & negligible sales with high debts.
                  This has been confirmed by the SBI Chairman Pratip Chaudhuri.
                  When I spoke with my bankers, they informed that now the banks are looking at the builders' strength & stage of completion & not just eligibility of loan seeker.

                  Hence, one may get a loan of say INR 50L for ready poss flat but not for under-constro flats.
                  Banks have also reduced lending amount to 75% of agreement value, which also means they want a safety buffer for price drops & default of borrower.
                  If you are happy, you are successful.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Some more RE updates

                    Here are some more updates to show current scenario of RE:-

                    In India, there are 9L flats being up for sale & of this, over 5L flats are unsold.
                    In Pune, Mumbai the inventory is more than 54%, in NCR it is even more.

                    In Mumbai, there have been just 3 land deals in past 6 months!! All these were distress sales.

                    The builders who bought land in 2010 are yet to make even a single paisa profit from it.

                    Builders are not getting loans from banks as before. The non-paper investors too are pulling out. Hence, the builders are ready to offer discounts of even 20+% today if about 35% amount can be paid in cash.

                    FDs are being provided by builders for interest rates of 15-18% p.a ....though all are not officially announcing it.

                    The recent hike in diesel is going to make matters worse for builders (& banks) as RBI has said that the interest rates may go up by 100 bps or 1% by the end of this year. This will take floating home loan interest rates over 12% & fixed close to 15% .

                    And many builders are not buying land as they too expect strong correction in coming months. This is is the case even in Pune.
                    If you are happy, you are successful.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Staring at slump, realtors line up freebies

                      Another eg. which show RE prices & builders are cracking:-

                      Staring at slump, realtors line up freebies - Indian Express

                      Note that such freebies & offers like free stamp duty, free car, holidays etc. are reduction in prices though rate/sq ft is the same. Once these freebies fail, builders are forced to decrease rates.
                      If you are happy, you are successful.

                      Comment

                      Tags: None
                      Have any questions or thoughts about this?
                      Working...
                      X