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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 chiragn View Post
    Guys,RE Industry is going to go through very interesting times in 2013.
    The following are some of the factors that i think are going to come in play along with my analysis of impact on buyer and seller-
    1.Expected Reduction in interest rates to the tune of 100-150 basis points in tranches-Positive for buyer and seller
    2.Finance Minister's ultimatum to financial institutions not to rollover existing loans to next financial year forcing some developers to cut rates-Positive for prospective buyer and negative for seller.Negative for existing investors.
    3. Increased consumer activism due to the recent CCI order against DLF- Positive for buyer and negative for seller
    4.Increase in FSI in most cities- Big positive for seller. Mixed for buyers as price might go down but existing projects might become more crowded.
    5.Hopeful passage of two important bills -Real Estate Regulation Bill and Land Acquisition Bill-Positive for buyer and possibly negative for seller?
    6.Major push by the government to remove roadblocks facing various infrastructure projects- Positive for both buyer and seller
    7. FDI in retail and insurance - Positive for seller and possibly neutral for buyer.Positive for existing investor.
    8. Improving sentiment in stock markets- Positive for both buyer and seller.
    9. Probable appreciation of the Indian rupee by year end as expected by various analysts-Positive for both Indian buyer and seller.Negative for overseas buyers.
    10. Increasing cost of living due to expected increase in taxation in some form or the other, increase in energy prices which will usher in higher inflation- Negative for both
    11.Increase in low cost/affordable hosing projects by medium/ big developers due to the revised ECB norms-Positive for both
    12.Government's plan to set up Land Authority of India to monetize unutilised land owned by various govt bodies-Positive for new buyer. Possibly negative for seller and existing investor.
    13. Build up to General elections in 2014- should be positive for both as govt will be keen to have a general feel good factor all around.


    Would appreciate everyone's point of view..
    Still psqf rates will rise and rupee value in hands of buyers will decrease due to inflation. The dream of home comes true generally at the age around 35. Younger generation is stretching their pockets and hence will lose other enjoyments of life for atleast for 10 years. By the time they will become 35 they will have large belly and will become lethargic and will be busy looking after their children and will feel sorry for the lost time

    Don't feel down, just kidding

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by realacres View Post
      Man, prices of Thane, Navi Mumbai are now getting cheaper than many areas of Pune. This proximity to Mumbai I never understood. I don't know why anyone working in Mumbai will buy at Pune rather than Navi Mumbai/Thane at lesser price ??
      what is total package cost in NM/Thane as compared to that of pune?

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Slums in Thane are cheaper than houses in Prabhat Road, Pune

        Not sure why do people insist on doing to comparison

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Some feelings

          Originally posted by chiragn View Post
          Guys,RE Industry is going to go through very interesting times in 2013.
          The following are some of the factors that i think are going to come in play along with my analysis of impact on buyer and seller-
          1.Expected Reduction in interest rates to the tune of 100-150 basis points in tranches-Positive for buyer and seller
          2.Finance Minister's ultimatum to financial institutions not to rollover existing loans to next financial year forcing some developers to cut rates-Positive for prospective buyer and negative for seller.Negative for existing investors.
          3. Increased consumer activism due to the recent CCI order against DLF- Positive for buyer and negative for seller
          4.Increase in FSI in most cities- Big positive for seller. Mixed for buyers as price might go down but existing projects might become more crowded.
          5.Hopeful passage of two important bills -Real Estate Regulation Bill and Land Acquisition Bill-Positive for buyer and possibly negative for seller?
          6.Major push by the government to remove roadblocks facing various infrastructure projects- Positive for both buyer and seller
          7. FDI in retail and insurance - Positive for seller and possibly neutral for buyer.Positive for existing investor.
          8. Improving sentiment in stock markets- Positive for both buyer and seller.
          9. Probable appreciation of the Indian rupee by year end as expected by various analysts-Positive for both Indian buyer and seller.Negative for overseas buyers.
          10. Increasing cost of living due to expected increase in taxation in some form or the other, increase in energy prices which will usher in higher inflation- Negative for both
          11.Increase in low cost/affordable hosing projects by medium/ big developers due to the revised ECB norms-Positive for both
          12.Government's plan to set up Land Authority of India to monetize unutilised land owned by various govt bodies-Positive for new buyer. Possibly negative for seller and existing investor.
          13. Build up to General elections in 2014- should be positive for both as govt will be keen to have a general feel good factor all around.


          Would appreciate everyone's point of view..
          If inflation is high, Rupee will not appreciate. It will depreciate.

          Land Regulation and other bills of that nature will be watered down to make them basically vague (enough loopholes) and toothless, so no big benefit there. Politicians will make sure of that as they stand to lose maximum and they have to pass the bill.

          Retail FDI not sure if it will help in any way. Foreign investors are not ready to throw money at anything that moves. They have seen Indian organised retail take a big hit and not do too well. Govt puts enough hurdles by way of no online sellling, etc. Also FMCG and Cons.Durables sales trends are weak (consumer is slowly getting tapped out as high inflation, low real income growth is putting pressure on spendable surpluses and people are not too keen on taking on more debt for conspicuous spending).
          Money will not readily come in and even if it does, its a moot point if it will wildly inflate RE.

          Next day, FM asked banks to further bailout builders. So a U-Turn there.

          With recent "good" performance among large corporates, Subbarao will ask, why do we need reduction in interest rates with inflation still high? Companies ar doing well again, just check Infy, TCS, HCL, Bajaj, Reliance etc, etc. So, until inflation comes down, no reduction in rates.

          Improved stock market sentiment - more money will flow into stocks. When market crashes in the near future, money will be lost and not return to RE (taking a wild view).

          Just some thoughts ...

          cheers
          Last edited by wiseman; January 20 2013, 05:10 PM.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Some feelings

            Originally posted by chiragn View Post
            Guys,RE Industry is going to go through very interesting times in 2013.
            The following are some of the factors that i think are going to come in play along with my analysis of impact on buyer and seller-
            1.Expected Reduction in interest rates to the tune of 100-150 basis points in tranches-Positive for buyer and seller
            2.Finance Minister's ultimatum to financial institutions not to rollover existing loans to next financial year forcing some developers to cut rates-Positive for prospective buyer and negative for seller.Negative for existing investors.
            3. Increased consumer activism due to the recent CCI order against DLF- Positive for buyer and negative for seller
            4.Increase in FSI in most cities- Big positive for seller. Mixed for buyers as price might go down but existing projects might become more crowded.
            5.Hopeful passage of two important bills -Real Estate Regulation Bill and Land Acquisition Bill-Positive for buyer and possibly negative for seller?
            6.Major push by the government to remove roadblocks facing various infrastructure projects- Positive for both buyer and seller
            7. FDI in retail and insurance - Positive for seller and possibly neutral for buyer.Positive for existing investor.
            8. Improving sentiment in stock markets- Positive for both buyer and seller.
            9. Probable appreciation of the Indian rupee by year end as expected by various analysts-Positive for both Indian buyer and seller.Negative for overseas buyers.
            10. Increasing cost of living due to expected increase in taxation in some form or the other, increase in energy prices which will usher in higher inflation- Negative for both
            11.Increase in low cost/affordable hosing projects by medium/ big developers due to the revised ECB norms-Positive for both
            12.Government's plan to set up Land Authority of India to monetize unutilised land owned by various govt bodies-Positive for new buyer. Possibly negative for seller and existing investor.
            13. Build up to General elections in 2014- should be positive for both as govt will be keen to have a general feel good factor all around.


            Would appreciate everyone's point of view..
            An Important Point is missed...Next year is general election in 2014 which will release 50,000 crores of black money in market to win votes/election as typically general election these days in India releases black money worth of 10 Billion USD in in market...So, will some of this money will find its route in Real Estate(Through sale of RE to generate the black money which was put into it in last 4-5 years so that cash can be used to the election ....Also will this black money release into market from politicians find its route again in RE??)...In nutshell impact of general election on Real Estate...Shayad main isi topic pe PhD karr loon kya ??

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              During elections; Black money locked in RE is taken out and gets distributed in a lot of people.

              Only Elections ensure Distributive Justice in India!!

              That's why Politicians hate elections where as Common People Just Love it.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Frugal had posted front pic of Mumbai mirror about dip in prices in Mumbai by several big builders.

                What I noted was last line of the news, which reads;

                Lalit Kumar Jain, president of Confederation of Real Estate Developers Association of India, said the liquidity crunch is forcing builders to reduce prices and clear inventory. He expects more builders to follow Naman, RNA and Lodha’s example.

                His own construction company, Kumar Builders, is also dropping prices wherever possible, he said.


                The link for it is here :-

                Builders blink, first price cuts are here, News - Cover Story - Mumbai Mirror

                Apart from it, Mahindra Lifespaces has reported fall in profits by 66%.
                If you are happy, you are successful.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  This is taking a lot of people by surprise

                  Originally posted by realacres View Post
                  Frugal had posted front pic of Mumbai mirror about dip in prices in Mumbai by several big builders.

                  What I noted was last line of the news, which reads;

                  Lalit Kumar Jain, president of Confederation of Real Estate Developers Association of India, said the liquidity crunch is forcing builders to reduce prices and clear inventory. He expects more builders to follow Naman, RNA and Lodha’s example.

                  His own construction company, Kumar Builders, is also dropping prices wherever possible, he said.


                  The link for it is here :-

                  Builders blink, first price cuts are here, News - Cover Story - Mumbai Mirror

                  Apart from it, Mahindra Lifespaces has reported fall in profits by 66%.

                  I'm so surprised that a majority of people are surprised that RE prices can actually come down. Just today a friend was telling me that in Bangalore a quotation of 5k per sft an year ago is being quoted at 4k today. He was looking very surprised by that news, since most people have been brought up on the theory that RE prices will not only never come down, it will always rise!

                  If anyone wants the details I will get it and post.

                  As more people recognise the falling knife for what it is, more will prefer to wait resulting in even more desperation among the builders and greater "reduction" via various means.

                  The other surprising thing people will find out is that cost of building is also no barrier to price declines. Sometimes price can fall well below cost of building, especially in the luxury space with lots of useless, unwanted embelishments which get pared down by bargain hunters.

                  If the slide has really started, its going to get very interesting soon. Let us see.

                  cheers
                  Last edited by wiseman; January 21 2013, 01:44 AM.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Does this affect the prices in Pune ?

                    One thing is for sure if prices are reduced they'll go down pretty faster .

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by Baruch View Post
                      Slums in Thane are cheaper than houses in Prabhat Road, Pune

                      Not sure why do people insist on doing to comparison


                      Baruch sir. You said a lot in that one sentence.

                      Wish I had same skills of putting less words and conveying tonnes with it.

                      Comment

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