Builders & Real Estate Bulls Theory Proved Wrong
12k+ Replies1M ViewsLast Reply: 1 years ago
realacres
Veteran Member
Started 8 years ago
12597 Replies
Sort by :Filter by :
Oldest
All
- One may not agree with views of another poster,but civility in replies is essential.This forum is for learning and understanding RE.
Good economic sense is being talked about.If an average man looses a job and has a big loan o/s it is crisis time - EMIs to be paid,family to be looked after.
Loans are to be very thoughtfully taken and reserve of emergency fund built up.
Near the place where I stay there is large number of unsold flats,but prices are still higher than earlier.The builders seem to have deep pockets and are resisting price reductions.CommentQuote1Flag - Maharashtra lifts ban on sand mining - The Times of India
Construction pace will catch up.But strict control over illegal mining is necessary.
""Government officials said e-auctioning and thorough scrutiny of mines would control illegal mining.""
Let us hope that things improve.Illegal sand mining can create havoc.CommentQuote0Flag - Whatever theory we apply, it just seems incomplete.
Look at the real case from my experience quoted below.
One cousin had been scouting for a bungalow in western Banglore for the last two years.He found one two years ago and the price was 2.9 crore.He didn't buy as he felt prices would fall.Finally he bought it last week for 3.4 crore.Luckily I didn't advise him not to buy last year as he would have blamed me for wrong advice.
Another one came across a good flat in North Banglore last year but backed out as the price was 1.5 crore.That area is in good demand.But he got the same flat for 1.34 crore last month !!!!!
In my home town plots were quoted at 7 lakh last year.My nephew bought one this week for 14 lakhs !!! No reduction at all.
So much for all our theories and news reports.Originally Posted by vaibav123One may not agree with views of another poster,but civility in replies is essential.This forum is for learning and understanding RE.
Good economic sense is being talked about.If an average man looses a job and has a big loan o/s it is crisis time - EMIs to be paid,family to be looked after.
Loans are to be very thoughtfully taken and reserve of emergency fund built up.
Near the place where I stay there is large number of unsold flats,but prices are still higher than earlier.The builders seem to have deep pockets and are resisting price reductions.CommentQuote0Flag - rambler,
The pace of increase in rates is pretty low as compared to heydays when 5 lakh flat in Pune becomes 18 lakhs in three/four years.
This increase in rate may be due to normal inflationary price rise.
Plots are a different category.CommentQuote0Flag - Originally Posted by investwestso did builders and bulls put a theory that there'll be hiring in better pace than past or there'll be no layoffs?
Furthermore - a layoff is layoff but each employer has its different reasons behind any layoff.
Are we going off topic? All those who lose their current jobs will find something else otherwise govt will provide them yellow ration cards and will feed them. Don't worry about it - as some companies fire, some others hire and that's what we see in the news pasted and posted here time to time.
I want to know about the theory which is proved wrong.
1. Almost all working people in private sector will be laid off / underemployed at some or other time in their working lives . It's a fact and they'll find new work is also a fact .
It does not mean that they will not buy new houses in their lives or should stop living their lives . People should see the positives rather than negatives .
2. Prices in Pune are certainly not increasing at the rate they did during 2009-12 which many people seem to take as base percentage for future appreciation .CommentQuote0Flag - rambler
The micro markets pricing varies. It depends on the supply, holding capacity as well as the socio economic group occupying the area.
Today, there are areas in Bombay which are not only holding up but showing increase in prices due to low supply/holding capacity of sellers and high demand. When the tide goes out, areas like this are the ones "with clothes on". These do not necessarily have to be hni areas with ultra high budgets.
Incidentally your cousin in Bangalore has actually paid equivalent for the bungalow, if you account for the time value of money. 7% FD return on rs 2.9 crores is rs 42 lacs ..
Even a fd would be rs 3.32 cr vs 3.4 cr paid.. Other mode of tax efficient investments like a mutual fund and he has actually saved money.CommentQuote0Flag - Originally Posted by Que Serarambler
The micro markets pricing varies. It depends on the supply, holding capacity as well as the socio economic group occupying the area.
Today, there are areas in Bombay which are not only holding up but showing increase in prices due to low supply/holding capacity of sellers and high demand. When the tide goes out, areas like this are the ones "with clothes on". These do not necessarily have to be hni areas with ultra high budgets.
Incidentally your cousin in Bangalore has actually paid equivalent for the bungalow, if you account for the time value of money. 7% FD return on rs 2.9 crores is rs 42 lacs ..
Even a fd would be rs 3.32 cr vs 3.4 cr paid.. Other mode of tax efficient investments like a mutual fund and he has actually saved money.
With own money he gained.
With leverage he has lost a lot. Usually people leverage for 3.4 crore purchase.CommentQuote0Flag - venky
For investment.. Rent out purposes he may have just about be even. The appreciation has been in the range of 7% + odd.. Slightly below the tax adjusted cost of the home loan 10.4 odd.
For self occupancy , the tax benefits are limited and would have gained. Mind you the cost of the loan would be 10% + and tax savings limited to rs 50000 (30% of 1.5 lacs), now 60,000 (30% of 200,000) since a person in this tax bracket would have used up 80c anyways.
This ensures that the effective rate of the loan is nearer to 10%. This is the time correction folks are talking about, i guess.CommentQuote0Flag - Building homes for 1% population is bad business
Union minister for surface transport Nitin Gadkari on Friday asked Navi Mumbai developers that providing affordable homes to residents was a profitable option than paying high interest rate to banks on the unsold stock and that catering to 1% population was bad business.
"Everyone knows what is the true situation of the realty sector. You may be claiming that you have recorded good sales, but I know for the fact what the ground reality is. Their are several homes which are lying unsold and developers are footing bank interest," said Gadkari during his speech after inauguration of the 15th Builders Association of Navi Mumbai property exhibition at Cidco exhibition centre in Vashi.
The union minister said, "There is a need to incorporate new technologies in construction sector, which will bring down the costs, and as a result, will also prove to be beneficial for developers."
He added, "Even today the developers think that one project should be able to earn them lifetime earnings. Those days are gone and you have to concentrate on increasing the turnover and maintaining the profit. How many people in the country can afford to buy homes worth Rs50 lakh and Rs1 crore? The number is hardly 1% and if you are constructing homes for that 1%, it is not going to be a profitable venture."
Gadkari said, "Instead focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained," adding, "We are also in talks with the Reserve Bank to see how interest regime can be moderated and it will help the sector. But there is no point in sitting over unsold stock and paying interest to the banks."
Building homes for 1% population is bad business: Nitin Gadkari | Latest News & Updates at Daily News & Analysis
^^ What do RE bulls want to say on this ??CommentQuote0Flag - Originally Posted by realacresUnion minister for surface transport Nitin Gadkari on Friday asked Navi Mumbai developers that providing affordable homes to residents was a profitable option than paying high interest rate to banks on the unsold stock and that catering to 1% population was bad business.
"Everyone knows what is the true situation of the realty sector. You may be claiming that you have recorded good sales, but I know for the fact what the ground reality is. Their are several homes which are lying unsold and developers are footing bank interest," said Gadkari during his speech after inauguration of the 15th Builders Association of Navi Mumbai property exhibition at Cidco exhibition centre in Vashi.
The union minister said, "There is a need to incorporate new technologies in construction sector, which will bring down the costs, and as a result, will also prove to be beneficial for developers."
He added, "Even today the developers think that one project should be able to earn them lifetime earnings. Those days are gone and you have to concentrate on increasing the turnover and maintaining the profit. How many people in the country can afford to buy homes worth Rs50 lakh and Rs1 crore? The number is hardly 1% and if you are constructing homes for that 1%, it is not going to be a profitable venture."
Gadkari said, "Instead focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained," adding, "We are also in talks with the Reserve Bank to see how interest regime can be moderated and it will help the sector. But there is no point in sitting over unsold stock and paying interest to the banks."
Building homes for 1% population is bad business: Nitin Gadkari | Latest News & Updates at Daily News & Analysis
^^ What do RE bulls want to say on this ??
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
Forget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???CommentQuote0FlagOriginally Posted by realacresUnion minister for surface transport Nitin Gadkari on Friday asked Navi Mumbai developers that providing affordable homes to residents was a profitable option than paying high interest rate to banks on the unsold stock and that catering to 1% population was bad business.
"Everyone knows what is the true situation of the realty sector. You may be claiming that you have recorded good sales, but I know for the fact what the ground reality is. Their are several homes which are lying unsold and developers are footing bank interest," said Gadkari during his speech after inauguration of the 15th Builders Association of Navi Mumbai property exhibition at Cidco exhibition centre in Vashi.
The union minister said, "There is a need to incorporate new technologies in construction sector, which will bring down the costs, and as a result, will also prove to be beneficial for developers."
He added, "Even today the developers think that one project should be able to earn them lifetime earnings. Those days are gone and you have to concentrate on increasing the turnover and maintaining the profit. How many people in the country can afford to buy homes worth Rs50 lakh and Rs1 crore? The number is hardly 1% and if you are constructing homes for that 1%, it is not going to be a profitable venture."
Gadkari said, "Instead focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained," adding, "We are also in talks with the Reserve Bank to see how interest regime can be moderated and it will help the sector. But there is no point in sitting over unsold stock and paying interest to the banks."
Building homes for 1% population is bad business: Nitin Gadkari | Latest News & Updates at Daily News & Analysis
^^ What do RE bulls want to say on this ??
Gadkari is advising to the builder to build houses which have demand. "focus should be on providing affordable homes to everyone so that sales increase and the profit is maintained". There is still a tremendous demand in affordable homes section. Obviously if all players try to gain market-share in one area and leave other area untapped then the inventory will be skewed.
Supply and demand: Supply is more in one area and less demand while demand is more in one area with less supply. That means, affordable housing section too sees price rise.
Gadkari may be true (I feel he his a very good administrator) but read an article posted a little earlier in this same threadOriginally Posted by herohiralalIn other unrelated news - unrelated cause it does not impact pune RE prices :)
Lodha Sells Rs 500 Crore Worth Flats in 9 Days at Mumbai High Rise - NDTVProfit.comCommentQuote0FlagLodha Sells Rs 500 Crore Worth Flats in 9 Days at Mumbai High Rise - NDTVProfit.com - I guess demand is going down and RE prices are falling ;-) duhCommentQuote0FlagOriginally Posted by herohiralalForget bears and bulls. Here is simple question. Why is it more profitable for the builder to build affordable housing than houses that cost 1 cr??? Does the minister want to show some calculations or should we just believe his word??
Take a small plot - half acre - and show me how building affordable housing project and selling it for 30-40 lakhs is more profitable than building a house that costs 1 cr. Wont the per sq ft flat of both the house be approximately the same???
Is there some special FSI for affordable housing that is going to increase the return for builder?? Or is the minister suggesting that people will buy a 300 sq ft carpet area house for 40 lakhs but not buy a 600 sqt carpet area house for 80 lakhs???
What is the definition of affordable housing?? Less area and so lower price or same area but different location hence lower price???
In haryana you get higher fsi for affordable scheme.
All schemes launchedvso far are sold out in multiples of supply.
And builders are making money in this schemeCommentQuote0FlagOriginally Posted by compuwalahLodha Sells Rs 500 Crore Worth Flats in 9 Days at Mumbai High Rise - NDTVProfit.com - I guess demand is going down and RE prices are falling ;-) duh
I say very shady report.
Absolutely no details more than this terse statement.
And how were they able to sell these very same flats that were not selling before all of a sudden. Simply by using the term "online"? :)
Online means what at this stage?
What was the booking amount for each flat? What are the details of the buyers - are they proxies for the builders/brokers themselves?
On the online platform this is done in various forms like click-fraud (for click-through revenue and click-based valuations), facebook type like-fraud (where sophisticated subject sites like Biochemistry got maximum likes from Egypt and Bangladesh - I'm sure there is lot of interest in advanced Biochemistry in rural Bangladesh! :D).
I believe this is one more ruse to use online platform to desperately claim abnormal sales of a normal asset out of the blue. Time will bear me out.
cheersCommentQuote0FlagRightly said wiseman. I called them up asking same. They said wiseman has not paid their salary for over six months and they will withhold the info for time being :-P
Not sure if you read the news (before posting the knee jerk reply) that they we not able to sell since the clearance from aviation dept was pending. After that last clearnce has been been obtained, it was open for booking.
Please find the relevant news and read it so that there can be some meaningful discussion.
Otherwise we only have misguded personal opinions that have filled up pages of several threads.
>> I believe this is one more ruse to use online platform to desperately claim abnormal sales of a normal asset out of the blue. Time will bear me out
Yes sir. Just like it has done for last 5 years :)CommentQuote1Flag