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

    Originally posted by abc111 View Post
    Compuwlah
    And then check the choice of words that you use.
    Request you to walk the talk yourself before advising others. What you have to say the words you have used in the quoted posts.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Posts which r intended to Flame, insult, r rude or meant to harass other members r not allowed .


      If you have nothing nice to say, then say nothing at all & move on . If things don't work out as per the rules here, expect infractions, suspensions & bans .


      If anybody has any issues with what a member is writing, please report the same, instead of slugging it out here & making off topic & personal comments .


      If somebody has an different POV, convey the same within the gambit of IREF rules .


      Thanks .


      *****************


      Insults/Flaming
      IREF was put together for people to come together and help each other, collaborate and discuss in a positive way – not bash on someone because you don't like their idea, or because they don't share the same views as you. We are big into the free speech idea here. So you're free to say what you think – but do it in a constructive and positive way. We encourage mature debates – discourage childish arguments. Personal attacks, insults, rudeness, racism, threats, name calling or unnecessarily inflammatory posts will NOT be tolerated. Common courtesy, politeness and respect for fellow members, along with constructive posting of opinions are essential in preventing posts from being edited and/or deleted, or having threads locked. Whilst we encourage healthy disagreement/debate, please maintain respect towards fellow members at all times.


      Off Topic
      Please make every effort to keep your posts relevant to the active thread topic. Detours usually take a thread wildly off topic, and invite others to do the same. Off topic posts (and any responses to such posts) may be deleted without notice.
      Download our Android App! | Please Read IREF Rules | FAQ's

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Why you should buy property in US rather than in India

        http://www.firstpost.com/investing/w...ia-751447.html

        The other attractive feature is that realty gets decent rates of return in the US. Properties bought with no debt yield a net rate of return of 4-5 percent on rentals. This return is net of taxes, insurance, other fees and expenses. If there is leverage involved, the rate of return increases dramatically.

        A 5 percent return in the US is much better that what banks give on fixed deposits. This is considered good when compared to India where returns on fixed deposits are higher than returns earned on rentals.
        Rental yields in India are typically 1-2 percent, due to inflated property prices. People invest in properties more for capital appreciation and less for regular income. But given the run up in homes prices in India, there is risk of a strong correction.

        Some may argue, why go through the hassle of buying property in the US, when fixed deposits in India earn about 9 percent. The answer is simple. In India, high inflation gives a negative rate of return on fixed deposits. In the US, on the other hand, inflation is low, giving a positive rate of return. This actually translates to the dollar getting stronger against the rupee, which increases rupees earned when converted from the greenback.
        Finally, while most asset classes have run up in price, real estate is relatively cheap. This gives investors a chance to get in on the ground floor in the US.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Discounting inflation, long-term return from realty is zero

          Discounting inflation, long-term return from realty is zero - Firstpost

          Poke Me: Why real estate is a bad long term investment - Economic Times

          Most people in India are convinced that real estate is a great asset. More caution is in order. Real estate investment is not a guarantee of profit. It is hard to be diversified, and illiquidity hampers portfolio structuring. Most important, the outlook for supply over the medium term implies that there is no great upside.
          Too many intelligent people in India believe that one can never do wrong by investing in real estate. Some facts will help bring more sense. Consider investing in the best commercial real estate of Bombay -- Nariman Point -- in 1994. The price was Rs.35,000 per square foot. Today, almost 20 years later, the price is Rs.25,000 a square foot.

          Over this period, Nifty produced returns of 362%. Inflation ate away 272%. Net of inflation, Nifty delivered an average annual return of 1% while Nariman Point commercial real estate delivered -9%.

          This is, of course, just an anecdote. Many individual real estate investments have done very well and have occasionally outperformed equities. My point is a limited one. We should not mindlessly assume that real estate is always a good investment. We should not assume that real estate will always outperform equities -- as the above example shows things can be as bad as underperformance (compared with the Nifty index fund) of 10 percentage points per year over a 19 year period.
          Why did Nariman Point underperform over this period? Because of new supply. That is the heart of the problem of real estate as an asset class. There is no long term returns in owning steel or bricks. Every time there is a real estate boom, it triggers off fresh construction. This supply quenches the boom.

          Bombay is a pretty bad place in terms of availability of space, because of both geography and governance. Elsewhere in India, the case against real estate is even stronger. The government in India is slow to build roads and water supply and police stations in outlying areas. But with a lag, these facilities do come about. Ultimately, when the price of structures exceeds the price of bricks and steel, new supply emerges, which is bad for real estate prices. The rise of a professional real estate industry, coupled with access to formal finance including foreign capital, has increased the scale of supply and given bigger and faster corrections.

          Some claim that India has a large population and there is a shortage of land. A little arithmetic shows this is not the case. If you place 1.2 billion people in four-person homes of 1000 square feet each, and two workers of the family into office/factory space of 400 square feet, this requires roughly 1% of India's land area assuming an FSI of 1. There is absolutely no shortage of land to house the great Indian population.

          The biggest story about the future of real estate prices in India is the FSI. In most of India, the FSI is below 2. This is an abysmally small number by global standards. All over Asia, FSIs are above 5, going up to 20 or to no limit. In the long run, politicians in India will see the light and FSI will rise. A higher FSI results in lower rental rates for households and firms, as was seen in Hyderabad which was a pioneer in FSI reform. When FSI goes up, this will unleash supply on a big scale. As an example, if Bombay moves from an FSI of 1 to 2 -- which would still make it worse than the FSI seen anywhere else in Asia -- this would trigger off a doubling of supply.

          These arguments are not specific to India. While datasets about real estate investments over long time periods are not easy to come by, academic evidence is slowly building up of fairly poor returns to real estate. Net of inflation, real estate tends to produce roughly 0 over long periods, while equity indexes produce significant and positive returns after inflation.
          Finally there are the practical difficulties of diversification and liquidity. Most people are not rich enough to buy 50 properties spread across India. Buying and selling involves very large transactions costs and delays, and generally involves black money.

          Skepticism is in order. If less than 1% of the land area of India is built out, this is enough for the entire population. There is no long-run return in hoarding bricks and steel. Real estate booms the world over are quenched by supply. The prospect of holding real esate in India is worse because FSIs are tiny. In the future, FSIs will go up, which will further fuel supply. Households investing in real estate are also hurting on account of inadequate diversification, illiquidity and the use of cash.
          Last edited by CAPT RAJESH; May 12 2013, 06:57 AM.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Real Estate safe for now but not always safe

            The concept of RE being safe was true in my father's times when price rise was steady and just beating inflation, where debt levels for buying was very low and therefore people could hold on to their investments.

            Now, while the RE industry has entered bubbly territory, people have stuck to the old belief that RE is still safe.

            This creates a gap which will show up when the SHTF. Incomes will stagnate, inflation will rise and prices will decline in real terms. The bubble will unwind and when prices reach the levels of long term growth averages (and the effects of excess debt is washed away along with many investors), then it will become a safe investment.

            Till then, if you are aware of the risks and have an exit plan, you are okay. Not otherwise.

            cheers

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by Baruch View Post
              Can you show us this statment where RBI governor is talking of high chances of rates going up ?

              Hope we understand the difference between "rates not going down" & "rates going up"
              When we ask RE bulls to give proof for what you claim, you disappear, & when we say something, you all jump in demand proof. Why double standards man ?

              Unlike sugar coating, we like to present facts (unlike bulls & builder around here).
              See this article :-

              Rate cut, yes, but cheaper loans not yet

              “Monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. Monetary policy will also have to remain alert to the risks on account of the current account deficit (CAD) and its financing, which could warrant a swift reversal of the policy stance,” RBI warned.

              Rate cut, yes, but cheaper loans not yet - The Hindu

              Now hope you understand what means "Swift Reversal".

              Compu,

              Seems you turn blind eye to the rate drop egs. being given here. Some are just few posts above. Why divert attention by making dialogs of gabbar & all ? Better if we discuss or debate the real scenario than have filmy debates having no foundation.
              If you are happy, you are successful.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Over 1 lakh e-auctions for NPA properties expected in 2013-14

                This is one of the most valid claims that RE bubble is already started to burst on account of high NPAs. RE bulls, your thought on this news please.

                Indian banks are expected to conduct over one lakh e-auction transactions during financial year 2013-14 to sell properties of Non-performing Assets (NPAs), according to NPAsource.com, a portal that focuses on resolution of stressed assets.

                Residential, agricultural, commercial and industrial properties are likely to be sold through the e-auction route, with the first two accounting for the largest number in terms of transactions, said a press release issued by NPAsource.com.

                With the Ministry of Finance making it mandatory for all commercial banks to move from physical auctions to e-auction mode for all NPA cases under the Debt Recovery Tribunal (DRT), there will be a spurt in e-auctions in 2013-14. Also, the Ministry of Finance wants that NPAs under SARFAESI Act (The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002) should gradually move to the e-auction mode, but has not made it mandatory.

                The focus of most banks now is on recovering dues from NPAs, as they have started impacting their profitability and margins.

                As on March 31, 2012, net NPAs of 40 listed banks were Rs 61,558 crore, which rose to Rs 92,398 crore as on December 31, 2012, the release said.

                Explaining the advantages of e-auction over the physical process, D K Jain of NPAsource.com said, “E-auctions offer multiple advantages like lower cost, greater participation, it saves time and allows better price realization for banks. Any interested party from India or even abroad can register themselves under the Reserve Bank of India regulations and participate in an e-auction of NPAs unlike the physical auction system where the interested parties have to travel to the venue where it is going to take place. This automatically leads to a significant increase in the number of participants, reduces costs and eliminates or curtails manipulation by a small cartelised group.”

                Until now, most banks were not participating in e-auction due to the lack of technological know-how and competence. But now various online portals are offering these services, Jain added.

                As on March 31, 2013, NPAsource.com had over 23,000 registered properties worth over Rs 210 billion, the release added.

                Over 1 lakh e-auctions for NPA properties expected in 2013-14: NPAsource.com | Business Standard
                If you are happy, you are successful.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by realacres View Post
                  When we ask RE bulls to give proof for what you claim, you disappear, & when we say something, you all jump in demand proof. Why double standards man ?

                  Unlike sugar coating, we like to present facts (unlike bulls & builder around here).
                  See this article :-

                  Rate cut, yes, but cheaper loans not yet

                  “Monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. Monetary policy will also have to remain alert to the risks on account of the current account deficit (CAD) and its financing, which could warrant a swift reversal of the policy stance,” RBI warned.

                  Rate cut, yes, but cheaper loans not yet - The Hindu

                  Now hope you understand what means "Swift Reversal".

                  Compu,

                  Seems you turn blind eye to the rate drop egs. being given here. Some are just few posts above. Why divert attention by making dialogs of gabbar & all ? Better if we discuss or debate the real scenario than have filmy debates having no foundation.
                  Yes I do understand the meaning of "Swift Reversal in policy stance" and I understand that its different from "Swift reversal in trend of rates going down"

                  Net net...you must be the only person on the planet to have read RBI's statement as "high chances of rates going up"

                  In between your two posts 10 year bond yileds have come down from 7.78 to 7.55...seems all those economists and traders are not able to read statements the way you read and like morons putting billions of dollars where their mouth is (again they dont have luxury of not following what they praech...a luxury many have here on IREF)

                  Keep on praying that rates will go up and get one more shock in June

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    E-auction of properties

                    Originally posted by realacres View Post
                    This is one of the most valid claims that RE bubble is already started to burst on account of high NPAs. RE bulls, your thought on this news please.

                    Indian banks are expected to conduct over one lakh e-auction transactions during financial year 2013-14 to sell properties of Non-performing Assets (NPAs), according to NPAsource.com, a portal that focuses on resolution of stressed assets.

                    Residential, agricultural, commercial and industrial properties are likely to be sold through the e-auction route, with the first two accounting for the largest number in terms of transactions, said a press release issued by NPAsource.com.

                    With the Ministry of Finance making it mandatory for all commercial banks to move from physical auctions to e-auction mode for all NPA cases under the Debt Recovery Tribunal (DRT), there will be a spurt in e-auctions in 2013-14. Also, the Ministry of Finance wants that NPAs under SARFAESI Act (The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Act, 2002) should gradually move to the e-auction mode, but has not made it mandatory.

                    The focus of most banks now is on recovering dues from NPAs, as they have started impacting their profitability and margins.

                    As on March 31, 2012, net NPAs of 40 listed banks were Rs 61,558 crore, which rose to Rs 92,398 crore as on December 31, 2012, the release said.

                    Explaining the advantages of e-auction over the physical process, D K Jain of NPAsource.com said, “E-auctions offer multiple advantages like lower cost, greater participation, it saves time and allows better price realization for banks. Any interested party from India or even abroad can register themselves under the Reserve Bank of India regulations and participate in an e-auction of NPAs unlike the physical auction system where the interested parties have to travel to the venue where it is going to take place. This automatically leads to a significant increase in the number of participants, reduces costs and eliminates or curtails manipulation by a small cartelised group.”

                    Until now, most banks were not participating in e-auction due to the lack of technological know-how and competence. But now various online portals are offering these services, Jain added.

                    As on March 31, 2013, NPAsource.com had over 23,000 registered properties worth over Rs 210 billion, the release added.

                    Over 1 lakh e-auctions for NPA properties expected in 2013-14: NPAsource.com | Business Standard
                    The chance to buy properties at cheaper rates may arise in case of e-auction of NPAs.
                    However those who are strict believers in Vaastu may not buy such property of defaulters.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by vaibav123 View Post
                      The chance to buy properties at cheaper rates may arise in case of e-auction of NPAs.
                      However those who are strict believers in Vaastu may not buy such property of defaulters.
                      on which site we will be able to see these auctions....

                      Comment

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