Hereby I will prove how the realty boomers arguments are false.

What are the boomers arguments?

1.) Buy today, houses always increase in value in the long run.
WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.

2.) Renting is just wastage of money.
WRONG. As said before renting is now much cheaper per month than owning. If you don't rent, you either:

* Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance, costs that increase forever.
* Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income is sufficient for emergency expenses,retirement etc.

Either way, owners lose much more money every month than renters and that's assuming prices don't correct to very high level & everything is smooth in the economy.

3.) As a renter, you won't have any money left as you will spend them on vacations,cars & hence won't have equity/savings etc.
WRONG. Equity is just money. Renters are actually in a better position to build equity/savings through investing in anything but housing. Renters can get rich much faster than owners, just by investing in conservative stocks & bonds.

* Owners are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
* Owners must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity/savings. Only houses are such a guaranteed drain on cash.
* Owners must insure a house, but not most other investments.
* Owners must pay to repair a house, but not a stock or a bond.
* Owners lose their money as house prices reduce. The EMI's remain constant in spite of reduction in rates. At the end of loan tenure, they would have paid almost twice than that of current renters who will buy at logical rates. Keep interest rates in mind. Most of the EMI is not principal amount but interest.

4.) There are great tax advantages to owning a house.
WRONG. Many people believe you can just reduce your income tax by the amount you pay in interest, but they are wrong. Buyers may not deduct interest from income tax; they deduct interest from taxable income. And even then, the tax advantage is not significant compared to the large monthly loss from owning.

If you don't own a house but want to live in one, your choice is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc.

5.) RE is based on local factors, it's not a national phenomenon. RE of Delhi-NCR,Bangalore & rest of the cities has nothing to do with Pune RE.
WRONG. Lending rates remain the same throughout the country. ALL loans are harder to get. This will drive prices down everywhere.

6.) A rental house provides good income. So, you can rent if you have purchased as investment.
WRONG. Rental houses provide very poor income in hyped areas and certainly cannot cover mortgage payments. Remember there is almost 300% difference between EMIs & rent for the same house.

It's pointless to do the work of being a landlord if you can make more money with no risk, no work, and no state income tax by investing in assured good returns bond.

7.) If owning is a loss in monthly cash flow, but appreciation will make up for it.
WRONG. Appreciation is negative. Prices are going down. It only adds to the injury of already high EMI's.

8.) As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
WRONG. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many house owners are near bankrupt as they don't save anything at the end of the month due to high EMI's.
No one has to buy, but there will be more and more people who have no choice but to sell as their payments rise. That will keep driving prices downward for a long time.

9.) House prices never fall atleast in Pune.
WRONG. If you see the RE scenario of 1996, prices crashed by 50% & took a whole 7+ years to recover.
Exact 1996 scenario may not be there today but strong correction is inevitable across the city.

10.) House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
WRONG. House prices won't be zero, but the equity or the principal amount you paid can be zero or even negative. What you will pay as EMIs later in actual terms is not for the principal amount but only the interest as house prices dip. So, you will be only serving the bank.

11.) Prices will soften gradually, won't crash immediately.
WRONG. Prices are falling off a cliff. No one knows exactly what will happen, but it looks like prices will continue to fall for long time. These are just more manipulation of buyer emotions, to get them to buy even while prices are falling.

12.) The bubble prices were driven by supply and demand alone.
WRONG. Prices were driven by low interest rates and risky loans & good returns for investors in initial phases of boom in 2004-05.
Prices went up, interest rates went up & buyers savings went down. So prices are violating the most basic assumptions about supply and demand.

13.) There is lack of land.
WRONG. Ample of land is available & continue to be even in future in Pune. Sales volume are down. Even in Japan (small country with less land), prices went down. Current prices here are the same as that of 23 years ago. If we really had a housing shortage, there would not be so many vacant rentals.

14.) If you don't own, you'll live in a cheap neighborhood later.
WRONG. For the any given monthly payment, you can rent a much better house than you can buy. Renters live better, not worse. There are downsides to renting, such as being told to move at the end of your lease, or having your rent raised, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash. There are similar but worse problems for owners anyway, such as being fired and losing your house, or having your interest rate and property taxes adjust upward. Remember, property taxes are forever.

15.) There's always someone predicting a real estate crash.
TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

16.) Local incomes justify the high prices.
WRONG. The mortgage should be more than your 3 years earning. It is much higher today. Most are already in danger/red zone.

17.) You have to live somewhere.
CORRECT. But that doesn't mean you should waste your life savings on a bad investment. You can live in a better house for much less money by renting during the down slide in RE.

18.) It's not a house, it's a home.
WRONG. Wherever one lives in it is home, be it apartment, condo, bungalow , mansion or house. Calling a house a "home" is a manipulation of your emotions for profit.

19.) If you don't buy now, you'll never get another chance.
WRONG. History proves otherwise.
Here's a beautiful quote from a analyst:-
"The real issue isn't whether you will be stuck being a renter all your life, she says. Its whether you'll get so scared about being shut out that you'll buy at the market's peak and be stuck in a property you can't afford or sell."

20.) It would take major economic recession or a major earthquake that wipes out this area in order for the price to fall by over 50%.
WRONG. Even today, if the prices fall by 50%, there will still be very few people who can buy at this levels due to uncertainty in jobs & most importantly high EMIs. Also, look at the rental rates for equivalent houses. Which loss per month is larger? EMI or rent?

contd....
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  • US Mortgage Rates Head North

    Man, this is what all expected, hike in ROIs in US as well. Here are some details about the graph for the same.

      A downward zigzag pattern began in 1981 when rates were at 18.63%.
      Five waves down completed wave (A) in 1993.
      Five waves down completed wave (C) at 4.71% in December.
      Within wave 5 of (C), five waves down are now visible.
      Now that the zigzag correction is complete, a rally up to the 8.64-65 area is expected.
      Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.Rising mortgage rates, falling home prices, defaults and, ultimately, the depression will squelch the U.S. government’s attempts to solve the real estate crisis. In fact, there are so many government hands in the real estate cookie jar that this industry may be stuck in a downtrend for years after the overall economy bottoms.
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    CommentQuote
  • Sir,

    I like to agree with you on majority of points however overall I disagree with you completely. Property prices are more of bubble, it's up-to to that individual investor's to decide whether he want to chew that bubble or not. There is no real estate regulator or for that matter bench mark (both for price discovery and for transparency (documentation, ownership, building plans etc) in India. So on a same street, you can have an property worth thrice the amount of property bag opposite the street.

    Now your theory of investing in equity market, tell me one company you can trust with your money. I think while comparing it with property market, you forgot to mention the names of like Harshad Mehta,Ketan Parekh and many more.

    There is no general comparison between renting and owning, which is completely subjective and should be according to ones perspective on factors such as

      Do he/ she wants to settle down in that particular area/ location/ state (specifically important for people who migrate from one place/ state to another for job/ better perspective)?
      If yes, than what are the options available to him/ her in term of both ren
      ting or owning, considering one financial obligations both current and future?

      I think, I haven't come across any investment platform, which is immune from both from wrong doings by its participants or have given positive returns only.

      If you have, please enlighten everyone by sharing some thoughts on that.

      I hope you will consider above moderately.ting or owning, considering one financial obligations both current and future?

      I think, I haven't come across any investment platform, which is immune from both from wrong doings by its participants or have given positive returns only.

      If you have, please enlighten everyone by sharing some thoughts on that.

      I hope you will consider above moderately.ting or owning, considering one financial obligations both current and future?

      I think, I haven't come across any investment platform, which is immune from both from wrong doings by its participants or have given positive returns only.

      If you have, please enlighten everyone by sharing some thoughts on that.

      I hope you will consider above moderately.ting or owning, considering one financial obligations both current and future?

      I think, I haven't come across any investment platform, which is immune from both from wrong doings by its participants or have given positive returns only.

      If you have, please enlighten everyone by sharing some thoughts on that.

      I hope you will consider above moderately.ting or owning, considering one financial obligations both current and future?

      I think, I haven't come across any investment platform, which is immune from both from wrong doings by its participants or have given positive returns only.

      If you have, please enlighten everyone by sharing some thoughts on that.

      I hope you will consider above moderately.
    CommentQuote
  • Originally Posted by cayogeshgupta
    Sir,

    :o No sirs here man, we all are friends:).

    I like to agree with you on majority of points however overall I disagree with you completely. Property prices are more of bubble, it's up-to to that individual investor's to decide whether he want to chew that bubble or not. There is no real estate regulator or for that matter bench mark (both for price discovery and for transparency (documentation, ownership, building plans etc) in India. So on a same street, you can have an property worth thrice the amount of property bag opposite the street.

    Now your theory of investing in equity market, tell me one company you can trust with your money. I think while comparing it with property market, you forgot to mention the names of like Harshad Mehta,Ketan Parekh and many more.




    There is no general comparison between renting and owning, which is completely subjective and should be according to ones perspective on factors such as

      Do he/ she wants to settle down in that particular area/ location/ state (specifically important for people who migrate from one place/ state to another for job/ better perspective)?
      If yes, than what are the options available to him/ her in term of both ren
      ting or owning, considering one financial obligations both current and future?

      I think, I haven't come across any investment platform, which is immune from both from wrong doings by its participants or have given positive returns only.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
      YOgesh, I agree with whatever you have said above. However, there is a big difference to whom this forum generally speaks to:- End users rather than investors. What you said is correct from point of investment i.e. when you have surplus cash & your livelihood is secured. What we members here is say is more for first time end users of RE, where the purchase will be done on EMIs/savings. Hence, even if there is a difference of 10%, the difference is huge for end users, but may not be necessarily be for investors.

      Coming to investment options:-

      Yes, there is not a single co. on which you can bet & say that it will give returns of +x%. Had this been the case, everyone would have been in stock markets, including builders:D.

      In case of stock markets, MFs, FDs, bonds, go_ld atleast you have the option of direct access to liquidity. What's more, you can also have stop loss or average out the pricing in markets. What will you do with RE? Buy another 4-5 flats to compensate for the loss in value in 1st flat? Not to forget that RE has it's own complications like to being illiquid.

      The mentioned instruments of investments can be done on SIPs as well, can be hiked or decreased as & when required, in RE it is one shot:- Either you pass or you fail, no ATKT (hey, I too had ATKTsp).

      So, what is said on investment front is very fine for INVESTORS & not END USERs. Please let me know your comments.
    CommentQuote
  • I am first time buyer...not so great in economics...but don't find house which is really worth of amount it asks :)
    CommentQuote
  • RealAcres, we have people in this forum who take pride in calling themselves Sir...good that you gave your honest opinion...but just be little extra careful, otherwise you endup making friendship with agents or builders in this forum :D:D:D and then you will have to buy a scorpio :D:D:D
    CommentQuote
  • Originally Posted by monds
    but just be little extra careful, otherwise you endup making friendship with agents or builders in this forum :D:D:D and then you will have to buy a scorpio :D:D:D


    LOL.... Wonder what Mahindra people must be feeling, happy or sorry for their target customer for "Scorpio"
    CommentQuote
  • NITIE grad bags Rs 67.5-lakh offer in final placement

    http://www.business-standard.com/india/news/nitie-grad-bags-rs-675-lakh-offer-in-final-placement/390722/

    A news for price hike in Pune :-D
    CommentQuote
  • Originally Posted by monds
    and then you will have to buy a scorpio

    LoL:D. That's funny.
    Originally Posted by puser
    NITIE grad bags Rs 67.5-lakh offer in final placement

    http://www.business-standard.com/india/news/nitie-grad-bags-rs-675-lakh-offer-in-final-placement/390722/

    A news for price hike in Pune :-D

    Man, it is not domestic but international placement.

    Originally Posted by RAJESHP
    LOL.... Wonder what Mahindra people must be feeling, happy or sorry for their target customer for "Scorpio"

    Mostly sorry. Look at the ad of Scorpio & the models in it:p,...however, the real owners are the exact opposite to what is shown in the ads:D.
    CommentQuote
  • Who is jacking up property prices

    Good info about manipulation in RE prices. Btw, some builders in Mumbai are charging 80% as loading factor.

    http://moneylife.in/article/8/4564.html
    CommentQuote
  • Originally Posted by realacres
    Good info about manipulation in RE prices. Btw, some builders in Mumbai are charging 80% as loading factor.

    http://moneylife.in/article/8/4564.html



    ICICI is a real culprit. All banks want property prices to go up .... Opposition is pretty strong for Mango Man ... so he has to become slave ... :)
    CommentQuote
  • Debt shadow on real estate recovery story

    Real estate firms have a total debt of up to Rs 75,000 cr and must pay at least Rs 25,000 cr in 2010-11 on the principal and interest accrued once the grace period on repayment ends in June:D


    http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD%2F2010%2F04%2F03&ViewMode=HTML&GZ=T&PageLabel=1&EntityId=Ar00101&AppName=1
    CommentQuote
  • Originally Posted by realacres
    Real estate firms have a total debt of up to Rs 75,000 cr and must pay at least Rs 25,000 cr in 2010-11 on the principal and interest accrued once the grace period on repayment ends in June:D


    http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD%2F2010%2F04%2F03&ViewMode=HTML&GZ=T&PageLabel=1&EntityId=Ar00101&AppName=1


    Good News. But would it impact Pune RE players?
    CommentQuote
  • Originally Posted by frugality
    ICICI is a real culprit. All banks want property prices to go up .... Opposition is pretty strong for Mango Man ... so he has to become slave ... :)


    If Mango Man stop buying; developers/banks etc all will go begger/bankrupt

    Wise developer will reduce rates; and pay off the rising debts with reasonable profit margin instead of 200-400%
    CommentQuote
  • Originally Posted by Space
    Good News. But would it impact Pune RE players?

    Though this may not have direct impact on Pune RE, the resemblance is striking! Eg. Look what happened to Kumar builder, Phinix Multicon, not to forget many small builders who were left lurking in the dark.
    The listed cos some aspect comes to light, as Pune builders are not listed on stock markets except for Kolte Patil & Vascon, getting details about the financial health of other builders is a bit tedious process. However, you can well see how hammered the stocks of these 2 builders are. Infact, Vascon didn't got fully subscribed in retail sector at all:D!! See the performance of these scrips. Even builders like DSK & Paranjape have FD schemes, reason:- no money to fund their existing project completely, nor are financial institutions willing to lend to them. Add to it that many foreign investors who entered RE through REITS have already exited & the value of REITS is 80% down.

    So, cash crunch is there in most cases, the only thing is that it is not easily visible as builders are trying to put up brave face;).
    CommentQuote
  • Originally Posted by realacres
    Though this may not have direct impact on Pune RE, the resemblance is striking! Eg. Look what happened to Kumar builder, Phinix Multicon, not to forget many small builders who were left lurking in the dark.
    The listed cos some aspect comes to light, as Pune builders are not listed on stock markets except for Kolte Patil & Vascon, getting details about the financial health of other builders is a bit tedious process. However, you can well see how hammered the stocks of these 2 builders are. Infact, Vascon didn't got fully subscribed in retail sector at all:D!! See the performance of these scrips. Even builders like DSK & Paranjape have FD schemes, reason:- no money to fund their existing project completely, nor are financial institutions willing to lend to them. Add to it that many foreign investors who entered RE through REITS have already exited & the value of REITS is 80% down.

    So, cash crunch is there in most cases, the only thing is that it is not easily visible as builders are trying to put up brave face;).


    Question is why are they not reducing rate and why are we seeing new launches like Aloma
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