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- Originally Posted by frugalityBusiness world report ..... see yourself and know the truth
Smothering The Green Shoots
Very good info man, thanks:). All is said well in the last paras:-
"People like Pankaj Kapoor of Liases Foras believe that we are moving towards another property bubble".
Frugal, fwd this link to PBAP.org:D.CommentQuote0FlagGood article.
Originally Posted by frugalityBusiness world report ..... see yourself and know the truth
Smothering The Green Shoots
http://www.businessworld.in/bw/2010_02_06_Smothering_The_Green_Shoots.htmlCommentQuote0FlagIf one try to correlate the no. of calls received from agents these days, I feel very excited and top of the world.
Quoted prices in Kharghar, Seawoods are back to April 2009 levels and I hope to get good deal for my 3BHK in next couple of months - I'm not a distress buyer. I believe in money saved is money earned.CommentQuote0FlagRead the following quote. I think builders are worried about the buyers who bought at the peak. And it is true that they will not like a reduction in price. I think it is hurting them too, but they don't have a choice.
In defence, Credai’s Gera says it is neither a consortium of builders nor greed that is pushing up prices. “With 10,000 builders in the fray, it is difficult to fix prices. On the other hand, builders find they cannot cut prices of existing stock when they have sold half the flats earlier at higher prices. The first lot of consumers may just stop paying their instalments.”CommentQuote0FlagOriginally Posted by ttt43Read the following quote. I think builders are worried about the buyers who bought at the peak. And it is true that they will not like a reduction in price. I think it is hurting them too, but they don't have a choice.
In defence, Credai’s Gera says it is neither a consortium of builders nor greed that is pushing up prices. “With 10,000 builders in the fray, it is difficult to fix prices. On the other hand, builders find they cannot cut prices of existing stock when they have sold half the flats earlier at higher prices. The first lot of consumers may just stop paying their instalments.”
Err.. one thing: The consumers are paying installments (EMI) to the bank, not to the builder. Why would the builders care if the consumers start defaulting on their home loans? They've already got their money. The banks should care, on the other hand.CommentQuote0FlagList of world cities - quality of living
Just went through the top 100 cities in the world.. rated on the basis of the quality of living. Not a single Indian city even figures in the top 100! This is so sad! Yet, we pay more money for houses than most of these cities.
The best part: The top 100 list has cities from countries like Tunisia, Slovakia, Slovenia, Lithuania, Poland, Chile, Uruguay etc.CommentQuote0FlagThere should be a list of world's most expensive yet "no quality" cities in :D:D..
Indian city will make a place for sure.Originally Posted by asliarunJust went through the top 100 cities in the world.. rated on the basis of the quality of living. Not a single Indian city even figures in the top 100! This is so sad! Yet, we pay more money for houses than most of these cities.
The best part: The top 100 list has cities from countries like Tunisia, Slovakia, Slovenia, Lithuania, Poland, Chile, Uruguay etc.CommentQuote0Flagwe did nelson on this thread 111!
Very good compilation of information from various perspective. I think these kinds of threads should be shared by all cities in this forum. As people from other forum might be missing info or they can add more.CommentQuote0FlagIf the project is not complete, the customer might want to cancel their booking and demand return of money.Originally Posted by asliarunErr.. one thing: The consumers are paying installments (EMI) to the bank, not to the builder. Why would the builders care if the consumers start defaulting on their home loans? They've already got their money. The banks should care, on the other hand.CommentQuote0FlagThis is a very sober, cautious analyst ...Originally Posted by VenkytalksHi Wisey, nice to see you gave up optimism quickly.
You should re-christen yourself to Pessiman.
No it is Greece (as you have said before). Check out
to see what Greece means to India. We are in the same boat - the one going over the waterfall (cool picture)
Been reading and saving up John Mauldin since 2005. He is a very cautious analyst who predicted the "muddle-through" economy for the next decade back then. Post 2008, he was the last one to become bearish and I was very surprised when he actually did so.
Check out his site http://www.2000wave.com/
cheersCommentQuote0FlagRBI rules out further restructuring of real estate loans
Another shocker for builders:-
http://www.realtyplusmag.com/rpnewsletter/fullstory.asp?news_id=7339&cat_id=8CommentQuote0FlagBanks get tough with commercial realtors
Banks have cut their exposure to real estate, as stressed assets mount in the sector. State Bank of India (SBI) and Punjab National Bank (PNB), among others, have begun cutting borrowing limits for the sector, coupled with aggressive recoveries.
SBI too has been reducing lending to real estate companies and aggressively targeting recoveries. "This is to stem the tide of bad loans, specially after projects, particularly low-cost housing, failed to take off," a senior SBI official was quoted as saying.
For more, please visit the following link:-
http://www.realtyplusmag.com/rpnewsletter/fullstory.asp?news_id=7200&cat_id=8CommentQuote0FlagReal estate bubble building up again in Mumbai
Though this is of Mumbai, it looks similar to Pune in some projects as well.
http://www.realtyplusmag.com/rpnewsletter/fullstory.asp?news_id=7172&cat_id=8CommentQuote0FlagOriginally Posted by realacrescontd....
21.) My wife will divorce me if I don't buy a house or shall I show her the savings by not buying the house.
WRONG. She will divorce you if you do buy a house and go bankrupt trying to pay the mortgage. She won't divorce you if you rent a much nicer place than you can buy, and then take her to Paris for a month in an year, which you can do just by avoiding that suicidal mortgage.
22.) Drop in interest rates would make people jump into market again which will increase the prices or atleast won't let RE prices crash.
WRONG. The RE prices reflect the median income of the area. RE market in Pune was largely driven by IT, NRIs & investors. IT industry is slashing jobs or cutting the pays & perks. Due to global economic crunch, NRIs lack funds today. Several investors have burnt their fingers in stock market & they see no appreciation but a RE correction today (some may call it as rates are ‘Softening’). Hence, all these elements that were the main drivers for RE boom are absent today. At the end of the day what matters is whether one can afford EMIs or not. To what extent is priciple amount & interest component is altogether diferent issue. Try to see to it that what is fixed (RE rates) are low so that interest rates fluctuation won't bother you much. The RBI figs. posted by fellow blogger clearly shows how loan dibersement has decrerased despite hike in RE prices. This only means that people aren't simply taking loans. Home loan NPAs are increasing every day passing by. Hence, banks are in no mood to lend further for a highly depreciating asset.
23.) Demand is there hence, drop won't take place.
WRONG. Demand is there but definately not at current levels. Current market is dictated by end users & end users alone. Hence, builders can't today enjoy on investors money & neglect the end users.
24.) No new projects are being announced. This will lead to low supply hence pushing up the rates.
WRONG. Even if 58% of the projects are abandoned, there simply aren't any buyers for the rest 42%. Add to it the investors 40% additional supply which will flood the market this year.
25.) Small correction here & there doesn't amount to crash.
WRONG. The correction of 20% & more, if is small, then another 'Small correction' is sufficient for crash. Consider this as a 'Whirlpool'. Once you are in, you are not out unless you sink to the bottom.
26.) I just want to own my own house.
CORRECT. Most people do and that's fine. Buyers will get their chance when housing costs half as much and they have saved a fortune by renting. House ownership is great - unless you ruin your life paying for it. If you can save even just 10% on the price of a house, you can retire several years earlier than you would otherwise. If you can save 50%, then you can easily take a ten year vacation and still come out ahead.
1.) People are simply not spending due to current RE & economic scenario.
2.) Investors aren't there, ending the speculation.
3.) Current market is end user dictated. End user doesn't find rates affordable/logical.
4.) Builder>> End User or
Builder>> Investor/speculator>> End user.
The chain ends with end user. End user is the king. Hence, expect distress sales from investors too.
5.) Result is visible on ground. Builders slashing prices, thus defying PBAP diktat. One builder reduces rates & now it is catching steam that will set off chain reaction for RE crash.
6.) Most importantly, the buyers are not homeless. They have a house even if it means rented one. Those who want to upgrade from 2BHK to 3/4BHK have put their plans on hold, as they too are not desperate. Due to several layoffs, people are going back to their native place, thus increasing the number of flats on rent.
7.) Several news posted earlier, clearly indicate that bankers, economic analysts as well as realty observers state that the RE prices will come down by 50-60% from their peak value, irrespective of place, location. These people are neither bears nor bulls, but analysts with neutral perspective.
8.) Most importantly, the holding capacity of buyers is greater than builders. Builders have taken loans from various finance sources with interest rates as high as 20-35%. These are turning defaulters & if they want the finance institutions not to put an attachment to their properties, they will have no other option but to sell off current inventory a very low rates.
Who blinks first was the question late last year. Today we have the answer:- Builders.
Like it or not, the current Pune RE scenario is similar to that of a ship heading inside the ‘Bermuda triangle’. What is visible today is just a deflection of ‘Compass’. Once it reaches the epicenter of the ‘Bermuda Triangle’, no one can help it from sinking.
To conclude, the builders require your money. So, whom should you believe? Facts or theories put forth by boomers? Think for yourself.
I would be very glad if you can share your thoughts on my article.
Comments most welcome & I would be happy to hear from you.
]http://prashvd.blogspot.com/CommentQuote0FlagChina sees fresh trouble in global market
World's biggest investor China sees fresh trouble in global markets.
Orders retreat from risky assets.