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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

    Good indeed. But where is the perfect alternative ?
    Agreed currency is swapping of numbers. Money is real wealth.
    Money or wealth is based on perception, too.
    Wealth depends on perception of utility or shortage or need or acceptance widely.

    [1] Roman soldiers were paid salt !! They preferred it as salt was precious in those days.[ whence the phrase " salt money "]
    [2] Roman and middle east kings imported ice blocks at great cost [ a kind of fridge for them]
    [3] East India company officers imported ice blocks [ port was calcutta ]
    [4] African tribes revered sea shells and used them as ornaments.
    [5] Silk was highly priced in Europe in the past and " silk route" was born.
    [6] Spice made Europeans discover the route to India.
    [7] Tulip mania
    [8] Now bit coin.
    [9] Silver utensils were a symbol of status in Europe
    [10] For that matter stainless steel utensils were status symbol in India once--ask your grand parents.
    The video made me wonder about the intention of the makers.
    Such arguments are never-ending.
    As long as a system works it is better not to rack our brains.
    Watch the movie " Happy Feet " where the penguin augurer takes pebbles to provide solutions to the penguins---one pebble one answer is his slogan.
    Have you ever wondered the type of taxes we pay ?
    Tax for income, spend money and pay service tax, value added tax, cess,eat at a restaurant and pay tax,rent an expensive room and pay tax,buy home pay tax,vehicle tax,road toll and so many taxes.That is after paying income tax.Save money and pay tax for interest.
    We have become " taxiwallahs".
    Once England had window tax !!! Thank god PC has yet to get a whiff of it it seems.


    Originally posted by Sat234 View Post
    this is really good. but how much of it is real, and how much of it is conspiracy theory?? frankly, most of it went way over my head

    @rambler,
    @wiseman,

    you must watch this. we had a discussion about "why gold has value" earlier.
    the series seems to be sponsored by gold sellers though.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by herohiralal View Post
      This is another example of you taking one case and extrapolating it to suit ur bias. Which firm has defaulted and why? did it default cause it borrowed too much money to buy land and then was not able to launch schemes in time and hence was not able to generate cash to repay interest or did it launch schemes and was not able to generate enough bookings and still continued to construct the project?
      RE bulls always demand proof, but speak nothing on threads like 'Complaints Against Builders' where buyers suffer.
      How many proof have you given to support your theory. We atleast put so many links, articles, snaps etc. First, you RE bulls should show how picture of RE is good & how buying RE today makes sense. Please explain.


      Anyways, we are not bulls. agents or builders who make false claims & talk big lies.
      To see more about IL & FS story about builder bankruptcy, please read last fortnight Business India mag. Lot of details mentioned & if I remember it correctly, it is between page 12-15.

      For rising NPAs, please go back couple of pages, it is already mentioned.
      Yet, here is one more, latest one. Infact, it got posted by thodisizamin also on bubble burst thread :-

      How are Indian banks placed in their exposure to the real estate sector?

      India has seen a ten-year period of rising real estate prices and the sector seems to be cooling off. Commercial property vacancies are 20 percent while residential inventories are rising every day with transactions down 50-60 percent. RBI data on banks as of end March 2013 reveals that banks have an exposure of Rs 1.26 lakh crore to commercial real estate, Rs 4.6 lakh crore to personal mortgages and Rs 2.67 lakh crore to the housing sector. The NBFC sector, including the housing finance companies such as HDFC and LIC Housing Finance, would have an exposure of over Rs 3 lakh crore. Adding banks and NBFC exposure to real estate, the total exposure is around Rs 11.50 lakh crore. This works out to around 10 percent of GDP.

      Public sector banks gross NPAs (non-performing assets) as percentage of total advances is 4.75 percent as of March 2013 and has more that doubled over the last six years. A real estate price correction could lead to more NPAs and this could lead to a self fulfilling cycle of a deep rooted correction in the economy. It is best to prick the real estate bubble in India right now to avoid future calamity.


      Is India under threat of real estate bubble burst? | Firstpost

      Now, herohiralal, please give proof that all so called PROPOSED roads, metro, airport etc. based on which builders are selling projects will be completed in next 5 years. Proof please.
      If you are happy, you are successful.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Tough Times For Real Estate Cos

        A good video about growing debts, falling sales in RE. DLF sales are down by 70% QoQ.

        http://www.yourmoneysite.com/videos/...eal-estate-cos

        Vaibhav123,

        RE sector wants to be given industry status but they are not ready to have RE regulator. They say CREDAI will govern builders & that is sufficient. Hence, they are not getting industry status.
        If you are happy, you are successful.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Originally posted by realacres View Post
          [B]

          For rising NPAs, please go back couple of pages, it is already mentioned.
          Yet, here is one more, latest one. Infact, it got posted by thodisizamin also on bubble burst thread :-

          How are Indian banks placed in their exposure to the real estate sector?

          India has seen a ten-year period of rising real estate prices and the sector seems to be cooling off. Commercial property vacancies are 20 percent while residential inventories are rising every day with transactions down 50-60 percent. RBI data on banks as of end March 2013 reveals that banks have an exposure of Rs 1.26 lakh crore to commercial real estate, Rs 4.6 lakh crore to personal mortgages and Rs 2.67 lakh crore to the housing sector. The NBFC sector, including the housing finance companies such as HDFC and LIC Housing Finance, would have an exposure of over Rs 3 lakh crore. Adding banks and NBFC exposure to real estate, the total exposure is around Rs 11.50 lakh crore. This works out to around 10 percent of GDP.

          Public sector banks gross NPAs (non-performing assets) as percentage of total advances is 4.75 percent as of March 2013 and has more that doubled over the last six years. A real estate price correction could lead to more NPAs and this could lead to a self fulfilling cycle of a deep rooted correction in the economy. It is best to prick the real estate bubble in India right now to avoid future calamity.


          Is India under threat of real estate bubble burst? | Firstpost
          you said NPA were rising due to home loans. Where does it say so? All this says is that NPA could rise if home prices correct. That is totally different to saying that NPAs have already risen. Do you lesson in English now?

          Accept that you were wrong to put out that statement and move on to ur next incorrect post

          When RE prices crash NPA will be the last thing people will worry. There will be many more bigger problems to worry about


          Now, herohiralal, please give proof that all so called PROPOSED roads, metro, airport etc. based on which builders are selling projects will be completed in next 5 years. Proof please.
          The key is in the word 'proposed'. I dont think I have said that the new airport at navi-mumbai is complete and running or any other 'proposed' project is complete. On the contary I dont believe any of the big projects - pune metro, navi-mumbai, some crap corridor somewhere etc etc - will see the light of day in the next 5 yrs.

          Builders use such proposed projects to hike prices and cause the market is so rigged that +ve news drives up the prices but-ve news does not bring prices down.

          Your claim that the NPA are rising due to home loan default is incorrect. You have no data point to support that claim. All you have is a claim that once RE prices crash then NPA will rise.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by Venkytalks View Post
            Unfortunately both real estate and agricultural markets are under the state governments and are only used for corruption and rent seeking behaviour.

            There is no easy cure. State govts of India are TOTALLY corrupt - at least some 10% of central govt is still not corrupt.

            There is no saving grace. But people like Nitish Kumar, Raman SIngh, Modi etc can make a lot of difference - but even that is just a 10% reform.

            Rest 90% is just defunct with only corruption.

            Expecting agriculture reform is as useless as execting education to happen - the politician has a vested interest in creating conditions to keep poor people poor and illiterate so that he can keep looting them - looting them of money and looting them for votes on casteism
            Yup and thats the reason India will never see proper supply side reform in Agri and RE and prices will keep on rising or stay at high levels till everything falls apart. The control of politicians over Agri and RE is so tight that all efforts will be made to keep it that way.

            This is what I called a rigged market which realacres does not seem to be able to grasp and then keeps on using inaccurate or non-existent data to prove that the RE bubble has burst or is bursting.

            RBI talking about bringing down inflation using repo rate and CRR hikes is all nonsense. All the rates hike does it make it harder for infra like power, ports, telecom etc costly to build and deploy.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by herohiralal View Post
              Yup and thats the reason India will never see proper supply side reform in Agri and RE and prices will keep on rising or stay at high levels till everything falls apart. The control of politicians over Agri and RE is so tight that all efforts will be made to keep it that way.

              This is what I called a rigged market which realacres does not seem to be able to grasp and then keeps on using inaccurate or non-existent data to prove that the RE bubble has burst or is bursting.

              RBI talking about bringing down inflation using repo rate and CRR hikes is all nonsense. All the rates hike does it make it harder for infra like power, ports, telecom etc costly to build and deploy.
              Hero bhai, the truth as usual lies somewhere in between. You are also right and Real acres is also right.

              A lot of bank NPAs are for commercial real estate and project (not home) loans. They might be getting evergreened, but that will only magnify the ultimate problem. They are dead loans. Commercial realty at such asronomical prices is simply not viable - no business or retail can pay such high overheads.

              Real estate does stagnate in India for prolonged periods. I watched the 1996 to 2003 period quite closely and a repeat is now very much on the cards. On the other hand, when it comes out of it, real estate will bounce a lot as it did in 2004-2008 - so in the long term, you can expect a 10% return from capital appreciation alone after holding cost - and another 2% from rent = total 12% return long term.

              Political corruption does keep real estate a black market, and so prices only stagnate and dont fall - but conversely, the bubble bursts by bursting the currency.

              Recent currency burst was nothing but the real estate bubble bursting - it went largely unnoticed, since real estate markets show only stagnation and not a fall - mor nacha but kisi ne na dekha.

              Right now and next one year is actually buying time - wait for Rupee to finish appreciating and then buy real estate.
              Venky (Please read watch a or before posting)

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Originally posted by Venkytalks View Post
                Recent currency burst was nothing but the real estate bubble bursting - it went largely unnoticed, since real estate markets show only stagnation and not a fall - mor nacha but kisi ne na dekha.

                Right now and next one year is actually buying time - wait for Rupee to finish appreciating and then buy real estate.
                Currency burst happened across most of the developing world. The govt and RBI has been able to gain what something like 25 billion $ in FCRN deposits by offering them an awesome deal.

                The currency burst didnt affect SBI or ICICI or HDFC. A RE burst is going to take them down hard.

                As per my analysis the currency burst was a result of bad RBI and govt policy to bring down CAD. Have tried to map the events here - I couldn't possibly comment: When the Indian rupee fell like a stone

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by herohiralal View Post
                  Currency burst happened across most of the developing world. The govt and RBI has been able to gain what something like 25 billion $ in FCRN deposits by offering them an awesome deal.

                  The currency burst didnt affect SBI or ICICI or HDFC. A RE burst is going to take them down hard.

                  As per my analysis the currency burst was a result of bad RBI and govt policy to bring down CAD. Have tried to map the events here - I couldn't possibly comment: When the Indian rupee fell like a stone
                  I had seen the same post somewhere in IREF.

                  You are not giving enough importance to the great THREAT of Fed taper. It did not materialise and yet US long term bond rates went from 1.6 to 2.6%. That is a massive movement of interest rates.

                  Everything fell, including Rupee. Effectively, the Rupee depreciated from 56 to 62 = 10%.

                  US rates are still ruling at 2.8%. That is pretty high and within short distance of the equilibrium state of about 4% long term rates in US.

                  You are right that pain is yet to hit Indian banks - but the pain has started. Orbit default and many other stressed real estate loans are already putting our banks in trouble.

                  But India will inflate its way out of this trouble - low growth and high inflation with Rupee depreciation has been the usual model of Indian economy for decades.

                  A long stagnation for real estate is very much on the cards. Many builders will go out of business. Many commercial realty projects will be abandoned. Residentials also will se slow delivery and delinquency.

                  Under construction property will fall in value. But ready to move property will show a paradoxical rise because of inflation, currency depreciation and scarcity value (because very few will actually complete each year, causing undersupply).

                  All in all, a bear market in realty for a year or two.

                  Good time to buy.
                  Venky (Please read watch a or before posting)

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Venky bhai whats ur take of AAP win on NCR RE

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      """Good time to buy."
                      When many people see this good time and start buying the graph will start looking up.
                      Cycle will continue.

                      Comment

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