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Coming Property Crash

Last updated: May 5 2009
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  • #41

    #41

    Re : Coming Property Crash

    Originally posted by UscoKumar View Post
    I think I found following searching google.
    ......................................
    Economic times
    29 Nov, 2007

    According to figures available in the latest Reserve Bank of India’s (RBI) reports on Trends and Progress in Banking released, 32.3% of the total loans extended by new private banks were to the sensitive real estate market, up from 29.1% in the previous year.

    Exposure to real estate sector is inclusive of both direct and indirect lending, it said. Lending to real estate is a part of the exposure to the sensitive sector, including lending to real estate and commodities. These sectors are considered sensitive since loans can turn bad due to external circumstances that result in a fall in asset prices.
    When the RE prices see market corrections , the HFCs/banks will rederive the net asset value of the house-on-heavy-loan and when it falls below the lent amount(outstanding) , HFCs/banks will demand extra collateral from the borrowers . When the borrowers cant afford to pledge extra collateral , the banks will decide on the course of action which will even lead to fire-sale.

    No hasty decisions.

    Comment

    • #42

      #42

      Re : Coming Property Crash

      Originally posted by sethugm View Post
      When the RE prices see market corrections , the HFCs/banks will rederive the net asset value of the house-on-heavy-loan and when it falls below the lent amount(outstanding) , HFCs/banks will demand extra collateral from the borrowers . When the borrowers cant afford to pledge extra collateral , the banks will decide on the course of action which will even lead to fire-sale.

      No hasty decisions.
      Dear friend,

      So your advise is that one should wait and not hurry up to buy or sell at this point of time and better to wait and watch.
      Mine is also same.

      ks2071746

      ks2071746

      Comment

      • #43

        #43

        Re : Coming Property Crash

        Originally posted by newboy View Post
        you think banks have not taken adequate collateral security.
        dont just presume things banks not stupid.Indian banks dont do subprime loans,thats why they are still safe.and 2000 cr for 3 banks is small % of their lendings so they will not b in soup even if they write it off
        It's not a question if the 2000Cr is a small % of total loans lent by banks... its just that that amount need to be written off of their balance sheets. If you realize how the fractional reserve banking works, you would be surprised how it affect the banks. BTW, 2000Cr is almost 1/2 billion USD. It ain't small.

        What I would be interested in is ... did DLF get a loan or line of credit? (& what is DLF doing with the cash?)

        Comment

        • #44

          #44

          Re : Coming Property Crash

          Originally posted by prat12 View Post
          Sorry i dont agree with you as far as delhi is concerned.We are builders and the amount of knowledge we have i dont think rest of you could have.Till the common wealth games that are to be held in delhi in 201o..There is no chance of property rates even getting stable..it gonna increase and after 2010 property rates will get stable..no chance of getting down.
          People book our flats even before we start construction and we take 50-75% in advance as booking amount.

          As far we are concerned buy anything today..Tommorow you will feel it was cheap.Land has no depriciation...it only appreciate...
          Dear all,
          It is a pity that many builders in India still hold on to the prices when the whole world is seeing downtrend. Builders in different cities in the country are not realising the storm they are to face in the coming months by way of little or no sale and people not inclined to go in for the flats/houses. They still live in glass houses fully knowing/aware that, not a few stones but thousands of stones are going to hit their glass houses in the coming months to destroy them fully flat. Even GOD cannot save the RE/Builders/Promoter at this juncture if they still feel that they can continue to make hefty returns like the yester years.

          ks2071746

          Comment

          • #45

            #45

            Re : Coming Property Crash

            Originally posted by ks2071746 View Post
            Dear all,
            It is a pity that many builders in India still hold on to the prices when the whole world is seeing downtrend. Builders in different cities in the country are not realising the storm they are to face in the coming months by way of little or no sale and people not inclined to go in for the flats/houses. They still live in glass houses fully knowing/aware that, not a few stones but thousands of stones are going to hit their glass houses in the coming months to destroy them fully flat. Even GOD cannot save the RE/Builders/Promoter at this juncture if they still feel that they can continue to make hefty returns like the yester years.

            ks2071746
            Dear friend

            Well said... keep it up

            thanks

            chataara

            Comment

            • #46

              #46

              Re : Coming Property Crash

              Originally posted by ks2071746 View Post
              Dear friend,

              So your advise is that one should wait and not hurry up to buy or sell at this point of time and better to wait and watch.
              Mine is also same.

              ks2071746

              ks2071746
              When the RE prices see market corrections , the HFCs/banks will rederive the net asset value of the house-on-heavy-loan and when it falls below the lent amount(outstanding) , HFCs/banks will demand extra collateral from the borrowers . When the borrowers cant afford to pledge extra collateral , the banks will decide on the course of action which will even lead to fire-sale.

              No hasty decisions buyers .Get the best bargain.

              My suggestion is not to hurry up to buy.

              If sellers dont hurry up they tend to lose the bargain power.

              Other than few builders / promoters , everyone realised the sky-high RE prices need correction which is expected more in the coming days...

              No sales - More supply - More distress for sellers.

              Comment

              • #47

                #47

                Re : Coming Property Crash

                Originally posted by sethugm View Post
                When the RE prices see market corrections , the HFCs/banks will rederive the net asset value of the house-on-heavy-loan and when it falls below the lent amount(outstanding) , HFCs/banks will demand extra collateral from the borrowers . When the borrowers cant afford to pledge extra collateral , the banks will decide on the course of action which will even lead to fire-sale.

                No hasty decisions buyers .Get the best bargain.

                My suggestion is not to hurry up to buy.

                If sellers dont hurry up they tend to lose the bargain power.

                Other than few builders / promoters , everyone realised the sky-high RE prices need correction which is expected more in the coming days...

                No sales - More supply - More distress for sellers.
                Dear friend,

                But don't forget, Chennai RE bigwigs have the political power, will and strength to hold on to their guns giving peanut reductions for long. Do not underestimate them. There will be not a loss to them by holding on but it can be some loss of profit only for them.

                ks2071746

                Comment

                • #48

                  #48

                  Re : Coming Property Crash

                  Originally posted by ks2071746 View Post
                  Dear friend,

                  But don't forget, Chennai RE bigwigs have the political power, will and strength to hold on to their guns giving peanut reductions for long. Do not underestimate them. There will be not a loss to them by holding on but it can be some loss of profit only for them.

                  ks2071746
                  Dear Friend,

                  You seem to be more of a builders' friend than my friend.

                  Howlong they can survive ?

                  Do you think the Chennai politicians are powerful than Delhi Bombay & Bangalore politicians ? Why cant they holdup the prices ? Its purely supply & demand and affordability.

                  Given the huge availability in Chennai , the prices will nosedive .

                  Why did you leave the Block Money to further support your statement.

                  But don't forget, Chennai RE bigwigs cant force people to buy their properties.

                  And don't forget there are Chennai RE bigwigs who entered the market at the very peak time with highly leveraged funds and now in distress.

                  Cheers

                  Comment

                  • #49

                    #49

                    Re : Coming Property Crash

                    Originally posted by sethugm View Post
                    Dear Friend,

                    You seem to be more of a builders' friend than my friend.

                    Howlong they can survive ?

                    Do you think the Chennai politicians are powerful than Delhi Bombay & Bangalore politicians ? Why cant they holdup the prices ? Its purely supply & demand and affordability.

                    Given the huge availability in Chennai , the prices will nosedive .

                    Why did you leave the Block Money to further support your statement.

                    But don't forget, Chennai RE bigwigs cant force people to buy their properties.

                    And don't forget there are Chennai RE bigwigs who entered the market at the very peak time with highly leveraged funds and now in distress.

                    Cheers
                    anybody who differs is a friend of the builders,Ks why dont you toe the line,
                    your logical views seem to have placed you in the builder fraternity.
                    BTW Ks are you a builder?(pun intended)

                    Comment

                    • #50

                      #50

                      Re : Coming Property Crash

                      I dont know how many people know that. The HDFC is selling 2nd hand house. Does this mean that Bank is acquiring the property from Loan Defaulter too...

                      Bank also luring people to buy house by temp giving low int.
                      Either land or AIR and FOOD. Choice is yours.

                      Comment

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