India's growth was fueled by the abundant global cash liquidity.

A corporate bank could borrow for 2% in Japan and invest in India's Debt market for 7% - 8%.Profit for nothing - Untill recently.

Any Indian PE firm,Venture capitalist or large builder could walk in to global market with a project and money was thrown at them.

Now the global cash flow has come to a grinding halt.

Banks are not lending (Short term reserve) to another bank fearing the Bank would collapse.

25 global banks have collapsed in 10 days (US,Europe and Asia).

1 European country is Bankarupt (Iceland)

18 major countries have entered recession (Includeing US,UK,Australia,Germany,Japan,NZ,South Korea etc)

Leaman Brothers was 168 years old,It had survived the great Depression in 1930's but dead now.

India Real estate will starve for cash.
Builders will not buy new lands for future projects.
Builders will sell most of their land bank for liquid cash.

I am an Economist - I havent seen (Or heard) of fall currency and Index this fast.

This is worst than 1930's Great depression.

The fuel (Liquidity and cash flow) for the Real estate fire is over.

Bank will not lend without large security to small and medium builders.

No cheap money and easy finance - Lot of projects (all kind of industries) will come to a halt or will not eventuate.

Please Turn on real TV,Surf the real media world wide or talk your friends Overseas.

It is all interconnected - FII are not risking there money in Indian Money Market (Look at the fall in INR)

The Real estate boom Is well and truly dead.

Need to wait for another 8-10 years for the next up cycle.
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  • regret or wishlist??

    Originally Posted by expat101
    Guys,

    It's useless to fight the Indian Perma Real Estate bull mentality.
    I wish every one holding Real Estate on loans in India the very best and to the traders who are trading on margin buying call options using 10-20% down on building stock which will be delivered over the next 3-4 years - You must have a lot of guts to do what you are doing!

    I hope the Realtors stay afloat and the stock gets delivered, the Balance of payments becomes a dream, the dollar does not slide to 65 -75 (If balance of payments hits us a 30-40% slide will have to happen:)). The NRI's who invested at Rs 54 will be invested at Rs 65. I hope rentals yields don't come back to their average of 4-6% (They were averaging over 4% for the past 45 years). If they do come back, our options will expire out of money big time.


    Is it your wishlist or regret?? Currency conversion is understandable but supply vs demand is driving the market for few years to come. There is not enough housing available and the potential buyer with money are increasing every hour and more so in coming time. Many of the NRI (not just USA... may be the least of them) who went away 20-30 years back are pouring in money to secure a space for them. Add to that the coming FDI and resulting boom. My friend, take a deep breath, forget the regret and figure out ways to secure a space for you and your family in the promising economy. Don't indulge in political circus that goes on in this country, you would be mistaken to draw conclusion about Indian economy based on that.
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  • Originally Posted by PappuPilot

    but supply vs demand is driving the market for few years to come. There is not enough housing available and the potential buyer with money are increasing every hour and more so in coming time.


    It is opposite.
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  • It will be very interesting to learn what those experts, who were dreaming of a "Bubble Burst" (atleast) from 2008 thinks NOW.

    Aise, some experts still hope the same .. good part is, they are still expecting 20-30% discount where the RE price has increased by more than 100% in many areas in last 4-5 years.
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  • Be a bull. But hedge with put options!

    Originally Posted by gharondabhai
    It will be very interesting to learn what those experts, who were dreaming of a "Bubble Burst" (atleast) from 2008 thinks NOW.

    Aise, some experts still hope the same .. good part is, they are still expecting 20-30% discount where the RE price has increased by more than 100% in many areas in last 4-5 years.



    Gharondabhai,

    This is how to invest in the long time in such turbulent times.

    Buy stocks at reasonable rates. Keep riding the bull as long as price rides above Moving Averages. When MAs are under threat, buy put options to protect against downside risk. Expire puts when uptrend re-commences. Sell when 100% are buyers at any price and get into FDs.

    While I have called for crash since 2008, I sold RE only in Mar-Apr 2012 (and that too only in part!)

    I'm still waiting for the inevitable decline in prices to reasonable valuations.

    cheers
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  • The time is bad and getting worse with frustration brewing in all the builders for very-very poor sale. The underwriters are now demanding their pound of flesh before buying from builders.

    An underwriter whom I met recently and became friendly told me that he (with his group) bought 260 units of a project launched 1.5 years back at a rate of 2400 psf. This was 20% cheaper than the pre-launch price of 3000 psf. The chief condition is that the builder cannot sell for less than 3000 psf in ANY CASE.

    Now the underwriters are demanding 30% discount on pre-launch price for buying 25% of the project size because they (underwriters) are sensing deep erosion in prices in near future.

    The problem, in all likelihood will aggravate because builders sitting on land parcels are eager to launch new projects or sell plots
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  • Might be a good idea to compute input-cost based price

    Originally Posted by Mulmule
    The time is bad and getting worse with frustration brewing in all the builders for very-very poor sale. The underwriters are now demanding their pound of flesh before buying from builders.

    An underwriter whom I met recently and became friendly told me that he (with his group) bought 260 units of a project launched 1.5 years back at a rate of 2400 psf. This was 20% cheaper than the pre-launch price of 3000 psf. The chief condition is that the builder cannot sell for less than 3000 psf in ANY CASE.

    Now the underwriters are demanding 30% discount on pre-launch price for buying 25% of the project size because they (underwriters) are sensing deep erosion in prices in near future.

    The problem, in all likelihood will aggravate because builders sitting on land parcels are eager to launch new projects or sell plots



    This is warning to the many people who could not understand how builders can sell below cost to them. I've said a long time ago. If it comes to between remaining in business with some loss Vs closing business, builders will sell at ANY price (including below cost if necessary to move inventory at distress). They had their chance in 2009/2010 and blew it due to greed and over-confidence of Indian Economy recovering and doing great! Reality is coming home to roost now and its now proven that all that was due to the Gov stimulus programs (as I said then).

    Rs 2400 must be pretty close to their cost of construction + interest for 1.5 years. Lets assume land cost them Rs 500 per SFt and building, including all amenities another Rs 1500. This implies Rs 2000 cost of property. For 1.5 years add interest (at 15% pa) of Rs 450 (22.5%).

    Just thinking loud. Wouldn't it be better for buyers to knowwhat might be the approx cost of construction of the flat they are buying so they know they are not paying thru their nose?!

    Maybe on-ground people like Real may be able to come up with likely cost of construction (purely own opinion). This will let people decide better if they want to pay the high premiums demanded of them today!

    cheers
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  • :( HELP!!!!!!! I sold an investor's flat last month in Pune, now deal has finished then also he is not willing to pay my brokerage. When deal was started he committed through mail that he has to pay me 1% commission, as he was out of India at that time we didn't made M.O.U. for commission that's why I confirmed through mail several times for brokerage and he also agreed, now he is saying "do what you want to do,I am not going to give your brokerage". Kindly help me out, I am in need of money..........................REPLY!
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  • Originally Posted by A232kapoor
    :( HELP!!!!!!! I sold an investor's flat last month in Pune, now deal has finished then also he is not willing to pay my brokerage. When deal was started he committed through mail that he has to pay me 1% commission, as he was out of India at that time we didn't made M.O.U. for commission that's why I confirmed through mail several times for brokerage and he also agreed, now he is saying "do what you want to do,I am not going to give your brokerage". Kindly help me out, I am in need of money..........................REPLY!


    Although most of us would have very little sympathy with any broker, no one should be cheated of his rightful hard work and effort. you have 2 options.
    1. File a complaint in police for cheating
    2. Inform It dept. and IRS (Internal Revenue Service) of this transaction. chances are that guy who cheated you of your rightful money must be cheating the govts. too. If you can make the effort of filling in the IRS form, you have punished him of the consequences unimaginable to you even.
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