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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 abeerbagul View Post
    Wow, now people are using US housing price rises to justify prices in India. This is hilarious. If US and Indian housing prices were so deeply correlated, where was India during the US housing crash in 2008?
    And when we say that all reasons of bubble are same in India today as they were in US 4 years ago, or in Canada today, then people dismiss this as theory.
    we started with 2009 like "If price can fall in Boston why not in Pune man" ... "or US housing shows exacly the path Indian housing market gonna take" .., there were not much objections to the same at that time (mean man the post used to come from biGGies) . People use to take name like Washington, San Francisco, Baner, Fursoongi all in same breath.

    Scenario remains same. People tryingto connect US housing conditions to Indian conditions.

    This can be argued two ways. When US houses were falling and even then India housing frew by 15-20% per year. Now if US itself going up how much big rise Indian prop will have.

    Other way is that some people may say "I think both market are inveresely correlated (throw in some chart from dust some US dolalr vs ... err .. anythign would do ... it just make thing look authentic ) and now we will see drop in Indian market".

    One more interesting group can say that now peopel will sell of prop in India and buy in say Houston (ust say 5 of my NRI friends are doing that ... who gonna verify man ... you can be bold enough to say you are yourself settling in Nevada and plan to sell paav and vada there to desi and red inidians as they are bored of burger king anyway) as its has more up potential than India. Now then say surely this is tell tale sign of fall as NRI money moved abroad and cooling of local prices.

    Let the imaginations flow in.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      If the US market is picking up, don't US investors invest in their own backyard instead of coming saat-samundar paar to invest in an economy with returns of -2% Y-o-Y with a 6% CAD. Doesn't make sense to me. (The -2% data is got from some US investor on some Indian Business Channel. Don't blame me!!! )

      So if US investors don't come to India, then who will get the FIIs and FDIs and F-(PUT-ANY-ALPHABET-FROM-A-Z)-Is ? Aren;t we too dependent on the US/Worlds FIIs Inflows....strange, once we prided to be independent, even the Y2K bug didn't affect our Banking system, as we didn't use computers then . Today we are so dependent on FII that they are dictating the DTAA or GAAR etc.

      I wish the US investors invest in US market and get more returns...so that our poor techies get a chance to buy their dream house. Looks like we have taken the American Dream (of always being in debt) very seriously....

      Originally posted by compuwalah View Post
      we started with 2009 like "If price can fall in Boston why not in Pune man" ... "or US housing shows exacly the path Indian housing market gonna take" .., there were not much objections to the same at that time (mean man the post used to come from biGGies) . People use to take name like Washington, San Francisco, Baner, Fursoongi all in same breath.

      Scenario remains same. People tryingto connect US housing conditions to Indian conditions.

      This can be argued two ways. When US houses were falling and even then India housing frew by 15-20% per year. Now if US itself going up how much big rise Indian prop will have.

      Other way is that some people may say "I think both market are inveresely correlated (throw in some chart from dust some US dolalr vs ... err .. anythign would do ... it just make thing look authentic ) and now we will see drop in Indian market".

      One more interesting group can say that now peopel will sell of prop in India and buy in say Houston (ust say 5 of my NRI friends are doing that ... who gonna verify man ... you can be bold enough to say you are yourself settling in Nevada and plan to sell paav and vada there to desi and red inidians as they are bored of burger king anyway) as its has more up potential than India. Now then say surely this is tell tale sign of fall as NRI money moved abroad and cooling of local prices.

      Let the imaginations flow in.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by abeerbagul View Post
        Wow, now people are using US housing price rises to justify prices in India. This is hilarious. If US and Indian housing prices were so deeply correlated, where was India during the US housing crash in 2008?
        And when we say that all reasons of bubble are same in India today as they were in US 4 years ago, or in Canada today, then people dismiss this as theory.
        There is a weak correlation between Indian and US RE. And the prices will have to rise a lot more before they can be back to pre-crisis levels.

        Indian RE prices dont need to be justified using US prices. Just and understanding of the way the country works - banks - builder - policitians nexus - should be enough

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          When US prices fell, Canada prices did not fall. US and Canada are deeply correlated economies.

          What we bears are pointing out is that ratios indicating a bubble remain the same everywhere.
          If today a 2 BHK costs 60L and has a rent of 12k per month in Wakad, this is a price:rent ratio of 1:600 indicating high bubble territory.
          In Kothrud, a 3 BHK in Samrajya at 1.50L will have rent of 20k per month, indicating a rent:price ratio of 1:750.

          These same ratios were around 1:300 is US at the time of housing bubble. Now they are more like 1:150, even if prices are rising.
          In US today prices are more in sync with rents, so prices are rising because the economy has improved. Dow Jones Index has gone up phenomenally in past 2 years.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            I don't think he was correlating the two

            Originally posted by abeerbagul View Post
            Wow, now people are using US housing price rises to justify prices in India. This is hilarious. If US and Indian housing prices were so deeply correlated, where was India during the US housing crash in 2008?
            And when we say that all reasons of bubble are same in India today as they were in US 4 years ago, or in Canada today, then people dismiss this as theory.

            I think it was just posting a news item about rising US RE prices, not correlating it with Indian RE.

            But there are many issues with the US RE. First of all banks who hold millions of homes in foreclosure are not disclosing a big chunk of them, thereby creating an image of much less distress in the RE market. This also creates a false sense of shortage which leads many people to start chasing RE all over again (this time with much less financial strength).

            Many commentators are saying that the FED and USG are forcing the blowing of another (micro) bubble in RE to further fend off the inevitable!

            In any case prices today are still far below the 2005 peak in most cases and the RE sector is far from coming out of the woods. This rise can be compared to the "green shoots" statements of 2011 and the "recovery" statements of 2012.

            Till jobs rise (not part-time, minimum-wages-no-benefits kind of jobs but high paying ones) and more people get off welfare, consumer spending will not return to the old levels (some say that may never come back to the US till their basic issues with debt is resolved one way or another), which is the minimum requirement for RE to take off again.

            cheers

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              RE collapse within US itself wasnt very uniform. I myself own a home in US , there was NO decline in my home value between 2006-2010, there was modest 2-3% per year increase before that and there has been in atleast 5% INCREASE in the last two years.

              Only big eye catching news such as political gridlock in washington get all the media attention while small incremental turnarounds at state and local level go largely unnoticed, these include infrastructure improvement at city/state level , low gas prices making energy intensive manufacturing more competitive, technological innovation unlocking energy reserves so much so that IEA predicts US to be ahead of Saudi Arabia in petroleum production by 2020.
              Last edited by sheeshu; March 28 2013, 05:17 AM.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                sheeshu,

                no decline between 06-10? which part of the US is this?

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Not part of US, but part of his imaginary mind. Houses in dreams never decline...

                  Even though there were some parts in US where the prices never appreciated to decline much, such as the Mohave Desert or Death Valley or Nevada.

                  Originally posted by footy1 View Post
                  sheeshu,

                  no decline between 06-10? which part of the US is this?

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    As per S&P data, Dallas had a fall of only -7% in 2006-11 period...its pretty much possible that certain properties rose in value...

                    Property Prices in United States | American Real Estate Prices

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Imaginary mind produces what can be easily proved as BS based on information available in public domain

                      "Between the second quarter of 2007 and the second quarter of 2012, the Houston area’s house price index increased 5.82 percent, according to a Business Journals’ On Numbers analysis of data from the Federal Housing Finance Agency. "


                      "Las Vegas experienced the worst decline, a drop of 59.2 percent. Fourteen other metros — all in Nevada, interior California, Arizona or Florida — have experienced declines of more than 40 percent. "


                      Houston No. 1 for home value growth - Houston Business Journal


                      Originally posted by mymarji View Post
                      Not part of US, but part of his imaginary mind. Houses in dreams never decline...

                      Even though there were some parts in US where the prices never appreciated to decline much, such as the Mohave Desert or Death Valley or Nevada.
                      Last edited by sheeshu; March 29 2013, 04:03 AM.

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