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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 wiseman View Post
    Finally I understand the word "broker" as used by you.

    Hirco put in 350 mil pounds but does not have the common sense to hire an independent consultant to do a covert study to check the "facts" put out by Hiranandani (I have heard many stories about the Hiranandanis). Little work, lots of tall talk and unmitigated greed!

    Then Hiranandani projects that he is going to deliver the township, takes his cut (from all directions) and farms project to contractors who may not have the same commitment to deliver. Besides, maybe they have not been paid properly as well, who knows!?

    As Vaibhav said, broker a deal, throw a broad presentation, get the money, pass it to someone else to deliver (after taking the all-important cut) and then on to the next deal! Small issues like delivering on the promise are forgotten.

    I used to call India a nation of traders. Brokers sounds good too!

    cheers

    Wisey,

    Exactly...this is what happening the country in the name of business...but the local brokers start a business knowing fully well they are going to make losses..their only aim is to sell that to a foreign company when that sector opens up by the impotent government who does not have a teeth to regulate...finally it is a loot for all...

    That is why I dont have any respect on Indian corporates. They all are brokers but shamelessly call themselves as business man. TATA somewhat stands out in my opinion. But he is also forced to do brokering business sometimes


    Housing broking business reached its pinnacle in 2009 and 2010 and still brokers are expecting that euphoria. BUT THE TRAIN HAS LEFT THE STATION ALREADY.

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by mangoman2012 View Post
      Wisey,

      Exactly...this is what happening the country in the name of business...but the local brokers start a business knowing fully well they are going to make losses..their only aim is to sell that to a foreign company when that sector opens up by the impotent government who does not have a teeth to regulate...finally it is a loot for all...

      That is why I dont have any respect on Indian corporates. They all are brokers but shamelessly call themselves as business man. TATA somewhat stands out in my opinion. But he is also forced to do brokering business sometimes


      Housing broking business reached its pinnacle in 2009 and 2010 and still brokers are expecting that euphoria. BUT THE TRAIN HAS LEFT THE STATION ALREADY.
      Another one is the online E-Comm (fancy name for retail online) business. Most retail operations you will find happening in dingy offices in remote locations. But the new ones like flipkart, etc work off offices that even IBM/Oracle/Apple will be envious off as though they are already hugely profitable. They provide interesting tales like ... "we are building the internet highways for the future" little understanding that, unlike real highways which have high entry barriers due to land/license/etc, every new generation of Net highway is necessarily much better than the previous one and literally billions of highways can be built on the Net at marginal cost! The value of a brand is as low as a click away!!! And apart from an Amazon/Ebay/Alibaba most brands will not survive the next 5 years (at least not at the burn rate of today).

      Then that pay themselves and over-fancy coders inflated salaries in the name of retaining "talent"!

      All this while making huge losses that have run through billions of dollars in "investment" within few years and in the hope that they could sell off their white elephants at astronomical prices to incoming E-Comm companies.

      This is the handiwork of VCs who are now fully controlling these companies and after Amazon has publically proclaimed that they are now on a mission to eliminate competition and rule the Indian space, all the dreams of most of these "brokers" will evaporate (along with the billions) like the early morning mist on a hot summer day!

      cheers

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Builders & Real Estate Bulls Theory Proved Wrong

        http://toi.in/KZ0SzZ
        Car sales down 11%

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Hi realacres et al,
          I read your article that started this thread on
          june 2009. I am very interested to know what points still holds from that article if you introspect from today's perspective (almost 5 yrs when you wrote that article!).

          Keenly waiting for your response.

          Best Regards,

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by sactel View Post
            Hi realacres et al,
            I read your article that started this thread on
            june 2009. I am very interested to know what points still holds from that article if you introspect from today's perspective (almost 5 yrs when you wrote that article!).

            Keenly waiting for your response.

            Best Regards,
            Everything holds true today & shall be there tomorrow.
            What only artificially changes some course in between in stimulus from Govt, but this too is not long lasting. Man, for how long a person can survive on steroids ?
            If you are happy, you are successful.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Soft target: Grinding halt in construction, realty as parties ring companies for funds

              Reuters
              New Delhi

              As India's mammoth general election approaches, jackhammer drills are quietening down at construction sites and earthmovers and cranes remain parked.

              Many of the country's real estate and construction companies - their finances already squeezed by a sharp economic slowdown - are diverting funds from housing and other projects to election campaign contributions. Many projects are stalled, at least temporarily.

              More than other businesses, Indian developers and contractors are particularly reliant on ties with the government to acquire land or win contracts. If they fund a winner's campaign, the payoffs can be huge.

              Based on past elections, such companies could end up funding a disproportionate amount of the $5 billion that political parties are likely to spend this time to woo the country's 815 million voters.

              "A lot of money will flow from real estate into the elections, much of it unaccounted for," said Santhosh Kumar, Chief Executive Officer of operations at Jones Lang LaSalle India, which advises real estate clients, including developers.

              While the campaign spend for this year's national election will likely prove a boon for many businesses, they are mainly in the consumer and small retail sector.

              Real estate and construction are not likely to benefit and it's being reflected in the stock market.

              Indian stocks have hit record highs this month on the perception that Modi will win and bring in a more business-friendly administration. Real estate companies have tracked some of those gains, but in a 12-month period, they have slumped about 20 percent, according to the CNX Realty index, which includes developers like DLF Ltd and Oberoi Realty.

              In the same period, the broader Indian market is up about 17 percent.


              Annual profit at India's top developer, DLF, has fallen for five consecutive years and earnings for the first nine months of the current April-March fiscal year are 40 percent lower from a year ago.

              India's economic growth slowed to the lowest in a decade last fiscal year, while a drop in home sales has squeezed the liquidity that developers can use to fund political parties.

              "What some soft target developers are telling politicians today is that they are not in a position to fund anything,"
              said Lalit Kumar Jain, chairman of the Confederation of Real Estate Developers Association of India.

              Meanwhile, potential homeowners are seething at the delays in getting possession of properties they have already largely paid for as developers are running out of funds, either because of the slowdown or the election.

              "When we went to the site, it was dead. We could count the labourers sitting and relaxing. There was no machinery working and we saw no raw materials that would be used," said Ashima, a single mother of two who was expecting to move into her new home in Noida earlier this year but has now been told it will take another two and half years.

              "They are giving all sorts of reasons for the delay -- inflation, government issues and other things beyond their control," she said. "It is a very big setback. People say India is booming. Where is it booming?"
              If you are happy, you are successful.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Our politicians cutting across political lines are involved in business.
                How they can make laws and run the country in an unbiased manner is indeed a matter of concern?
                Involvement in the crucial industry of RE by political entities is deep rooted.
                Every election brings about problems in the industry.
                No wonder the industry remains unregulated law of the jungle.
                If you take legal action against any builder,be ready to face delays in proceedings and delayed justice at any rate.
                The point of justice becomes only ego satisfaction but effect on ground may be next to nothing.
                for e.g delayed possession may get you some compensation,but will it counteract the amount of rent you may have paid,interest on loans etc.
                Nation cannot progress,unless we bring in committed MPs working for good of the nation in neutral and unbiased manner.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by RP Pune View Post
                  Infact it's the opposite imo : many NRIs can afford to buy outright without loans.

                  NRIs are having a great time at the moment....rupee gaining 15% would actually be 'back to normalcy'. Most resident indians prepay their loans. NRIs don't get it with tenure more than 15 years...for some banks 10 years. Even those small % of NRIs that needed loans must be prepaying as well.

                  The link you posted is from 2013 when there was crazy volatility. It has actually been quite stable for many months now.
                  No NRI who has 1 crore of cash lying will be stupid enough to invest it in a flat in Pune. secondly i do not know how an NRI will earn 1 crore of cash. A person will have to save more than 3500$ per month, every month for 5 years to hit the 1 crore mark. This is a highly optimistic number as most of the guys in IT earn between 65 to 100K depending on experience and location. after taxes, insurance, rents, car payments, shopping, india trips, the number can nowhere be near 3500. People who think NRIs are literally minting money do not take the Purchasing Power Parity into consideration or the high cost of living in developed countries. At 65K infact, post taxes i doubt if the take home salary is even 3500.

                  Also, just because the currency is stable for now does not mean it will be 2 months down the line. My point is that even when pros have problems in figuring out which direction the currency is going to go, a layman like you and me will definitely never figure that out.
                  ...Thoda Aasman

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by ThodiSiZamin View Post
                    No NRI who has 1 crore of cash lying will be stupid enough to invest it in a flat in Pune. secondly i do not know how an NRI will earn 1 crore of cash. A person will have to save more than 3500$ per month, every month for 5 years to hit the 1 crore mark. This is a highly optimistic number as most of the guys in IT earn between 65 to 100K depending on experience and location. after taxes, insurance, rents, car payments, shopping, india trips, the number can nowhere be near 3500. People who think NRIs are literally minting money do not take the Purchasing Power Parity into consideration or the high cost of living in developed countries. At 65K infact, post taxes i doubt if the take home salary is even 3500.

                    Also, just because the currency is stable for now does not mean it will be 2 months down the line. My point is that even when pros have problems in figuring out which direction the currency is going to go, a layman like you and me will definitely never figure that out.
                    ThodiSiZamin,

                    I have seen numerous times that you take a sample, extrapolate and then generalize. Not saying you do it deliberately.

                    There are many cases where NRIs invest early in the projects and then take advantage of the staggerred payment schedule. People also sell other assets to buy new ones. They don't need whole lot of idle cash to invest.

                    Not everybody is in IT or other similar jobs.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Actual evidence : sales have been lower in last year and remittance have been higher

                      What we don't have evidence of is if NRI % in the actual sales went up, stayed same or became lower. My hunch is NRI contribution have increased, and that is why more focus on NRIs - more ads on TVs, emails and home fares etc.

                      In terms of investments out of remittances, Anecdotal evidence suggests FDs are the preferred choice in NRIs at the moment. Repatriation during this poor period for rupee is out of the picture, so it would be interesting to see where this money will move.

                      Comment

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