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Real Estate Predictions for 2009/2010

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Real Estate Predictions for 2009/2010

Last updated: February 14 2009
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  • #31

    #31

    Re : Real Estate Predictions for 2009/2010

    [quote=wiseman;12749]
    Originally posted by abk View Post
    CHECK THIS OUT.NOT VERY BAD IS IT @http://www.msnbc.msn.com/id/29117073/

    Abk,

    Do you have any idea what 20% fall in median prices across top 10 or 20 cities in US means? It means Trillions of $$$. Which is many times the entire output of India in a whole year today.

    20% of a person's salary might look small. And maybe you are comprehending this US-wide drop in a similar way. But every 20% is not the same as every other 20%.

    This is VERY, VERY BAD!!! It is so bad that it has never been badder in the history of the modern world. Please note that the last time around it took the US 25 years to recover back to where they were in 1929.




    Try and understand. Statistically it may look "not so bad". In reality it is shaping up to be a disaster which will be very very painful to all of us in the longer term going forward.

    Don't think I'm simply exagerating.

    cheers
    Wiseman my point here is simple if with the US financial institutions in a mess and other crisis the RE has not crashed as you predict by 80% even in US the centre of the crisis.
    then India should have a relatively lesser correction than US in RE and chennai where housing buyers are actual users and less speculators and 'soft launches' like in b'lore and mumbai are not done in chennai,the RE mkt in chennai would not crash to the levels you predict.

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    • #32

      #32

      Re : Real Estate Predictions for 2009/2010

      [quote=abk;12764]
      Originally posted by wiseman View Post

      Wiseman my point here is simple if with the US financial institutions in a mess and other crisis the RE has not crashed as you predict by 80% even in US the centre of the crisis.
      then India should have a relatively lesser correction than US in RE and chennai where housing buyers are actual users and less speculators and 'soft launches' like in b'lore and mumbai are not done in chennai,the RE mkt in chennai would not crash to the levels you predict.
      Dear friend,

      I agree. The rate of interest going down, likely to be around 7.5% by April 09, the Govt. likely to give further sops for RE, may induce stability in the RE prices and may not allow the prices to fall to further lower levels fast.
      One should not forget, the RE is driven by black money, the politicians hold so much of them and they will make the Govt. give sops so that those in the RE arena do not lose heavily in the RE investments they have made/holding.

      ks2071746

      ks2071746

      Comment

      • #33

        #33

        Re : Real Estate Predictions for 2009/2010

        http://www.news.yahoo.com/s/politico...politico/18692

        http://news.yahoo.com/s/afp/20090210...ankinggeithner

        Geithner rescue plan fails to ease jitters

        The new effort also commits 50 billion dollars to prevent "avoidable foreclosures" of owner-occupied homes by helping to reduce monthly payments for middle-class families.

        I’m concerned that $50 billion to reduce foreclosures understates the amount that we will need, and we need some assurance that, assuming this works as we hope it will, there will be more money available,” House Financial Services Chairman Barney Frank (D-Mass.) said in a statement after Geithner’s speech.

        He also called the administration’s plans to release a “comprehensive” housing plan in the next few weeks “too much time,” urging financial institutions to hold off on foreclosures until Obama announces his housing plan.

        “Until housing is addressed in my state of Arizona, housing prices will continue to decline, and that creates a downward spiral which exasperates the recession,” said Sen. Jon Kyl (R-Ariz.). “You’ve got to stop that downward spiral.”

        ---------

        None will be knowing the extent of "unavoidable foreclosures" .

        Need to check where our members get the data on US RE and give a wrong signal to our guests .

        No wonder if our Indian RE promoters/brokers get into US RE & predict appreciation of 200-400 % ?

        Cheers
        Last edited February 13 2009, 04:49 PM.

        Comment

        • #34

          #34

          Re : Real Estate Predictions for 2009/2010

          Originally posted by sethugm View Post
          http://www.news.yahoo.com/s/politico...politico/18692

          http://news.yahoo.com/s/afp/20090210...ankinggeithner

          Geithner rescue plan fails to ease jitters


          Need to check where our members get the data on US RE and give a wrong signal to our guests .

          No wonder if our Indian RE promoters/brokers get into US RE & predict appreciation of 200-400 % ?

          Cheers
          sethugm check the thread the data is not by a broker
          the source is given and it is not by a nobody.
          @http://www.msnbc.msn.com/id/29117073/

          i am pasting it for your information.
          if this is unreliable then so is yours a qoute by a senator
          a politician of all the people to take one's word.
          sethugm dont belittle anybody here.

          Comment

          • #35

            #35

            Re : Real Estate Predictions for 2009/2010

            Once again. The Politician & Black Money bogey ...

            [quote=ks2071746;12790]
            Originally posted by abk View Post

            Dear friend,

            I agree. The rate of interest going down, likely to be around 7.5% by April 09, the Govt. likely to give further sops for RE, may induce stability in the RE prices and may not allow the prices to fall to further lower levels fast.
            One should not forget, the RE is driven by black money, the politicians hold so much of them and they will make the Govt. give sops so that those in the RE arena do not lose heavily in the RE investments they have made/holding.

            ks2071746

            In which case ks, where is the statistic on exactly how many of these flats in OMR, Velachery and other places in Bangalore, NCR and so on are bought and held by Politicians and those with black money. And what proportion is bought and held by the IT and other crowds.

            I find it funny that, when it comes to arguing about why prices will decline or what is the major factor on prices, I see everyone talking about the "newly rich" crowd of IT and others.

            On the other hand, when discussing about why prices will not decline on the same bunch of property, there is talk about politicians and black money.

            We need to settle this once and for all so that arguments do no flip and flop according to our convenience. So, are we all talking with any kind of data about these? Or is it just based on our past prejudices?

            I believe that, before the land is developed and sold off, it is cornered by the politicians and black money rich (largely with insider info and politican clout). They then develop and sell it off at ridiculous prices to the IT crowd.

            It is clear that the real demand in aggregate is by the IT and other crowd. The crowd that buys the original property and develops and sells it is basically the go-between and does not see it as long-term investment. It is basically an inventory to be disposed off at the best price as quickly as possible (even if the holding period is 1 - 2 years). So, when the end-user or end-buyer is fast reducing in numbers and capability to buy, I don't see how the go-between crowd is going to continue to buy at these prices and hold them for an unknown period of time to make an uncertain amount of profit.

            So, I don't see how all this stimulus is going to push prices and volumes up when the end-consumer is scared to death about the coming confusion and his/her job/salary in the near future.

            My pov.

            cheers

            Comment

            • #36

              #36

              Re : Real Estate Predictions for 2009/2010

              The Chennai market vs Banalore market vs Mumbai market doesn't make a difference. Everywhere it is the question of who is the buyer. The buyers in this case are of 2 types, 1. Speculative investors and 2. Well off professionals such as IT crowd (Actual residents). The buying power of the IT crowd is certainly going to be constrained a lot if you are keeping your eyes on the news and economic indicators. That takes care of the resident segment of the market.

              Now let's look at the speculative investors. These guys are again of 2 types, 1. Black Money hoarders & 2. Actual white money. Let's just say, black money hoarders have many better places to put their money if the returns on investments in RE don't pay off. RE is also more difficult to hide than these other means of parking their money and certainly less safe. These guys are not here for the long term. They want to keep rotating their money so that they do not get caught. Look for their quick exit. Now the other speculative investors who have put their white money in the RE. Their goal was to also make a quick buck in the RE. If the RE prices fall, they have to move out quickly. Some of these investors (specifically NRIs) are already suffering because of 20% rupee appreciation viz-a-viz other currencies in the past 1 year. They would need to cash out because of the tough market conditions (loss of job, revenue etc). Even if they move today, they lost 20%. Do you think they will wait much longer to move out and chance loosing more money.

              Now coming back to the issue of government injecting more cash in the market. Do you know there are 2 ways of raising capital as far as government is concerned, 1. Taxes & 2. Print more money. Raising taxes would reduce the spendable capital for the people... bad for the RE. Printing more money has inflationary effect. So cost of living goes up and your savings become less valuable (again reducing the spendable capital for the people). Oh btw, if you want to find out what happens if government just keep printing money, look up pre-WW2 Germany or Zimbabwe. Government is caught between rock and a hard place. Spending money you don't have didn't work in USA, Europe, Japan or China. Why would it work in India?

              Now coming back to other issue of Interest rates. Reduction of interest rates has a negative effect on the foreign direct investments and has inflationary effect on the economy. Government is trying to make access to money cheaper by reducing the interest rates.
              It is like giving the alcohol to a recovering alcoholic.
              It doesn't work. Government can't keep the interest rates low much longer. We still need all the FDI we can get.

              There is not much politicians with lot of black money to hide or save their RE exposure can do about this. This mess is bigger than them.

              Comment

              • #37

                #37

                Re : Real Estate Predictions for 2009/2010

                Originally posted by UscoKumar View Post
                Indian economy is better, when compared to China, in the sense it is less export focused. However, it will see the biggest bust ever due to Real Estate Industry. Prices of same real estate asset has crossed many times affordability limit. Some Banks will go down with it.

                Satyam situation is politically controlled. Govt., is trying its best not to break the bad news. We will not see its real affect soon as Govt., will try its best to delay the bad news as far as it can due to election year.
                Dear friend,

                I agree.

                ks2071746

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