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If Bubble Burst What's Your Plan B

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If Bubble Burst What's Your Plan B

Last updated: June 23 2013
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  • If Bubble Burst What's Your Plan B

    See all of us wish that the prices should keep going up But some Guys like Blog Below Keep warning about it. I happen to know the Author of this very famous Blog and he mentioned that scenario will be like this.

    Common Man Economics

    Say You have bought RE with 70 Lakhs

    Today's Rate 1 Carore so u r Jumping ...

    Tomorrow it may happen that Interest Rate spike to 20+

    At same time within months Rate If bought by Cash goes down to 30 Lakhs !! (Yes that's what he said)

    You have paid 20 Lakhs of Principal already but ~ 50 Lakhs of principal to be paid and Premium is soo high that you can pay But very uncomfortably and then If you sale u won't get more than 30 - 40 Lakhs ??

    AB KYA HOGA KALIYA ??
  • #2

    #2

    Re : If Bubble Burst What's Your Plan B

    And By the way That's exactly what happened in US .. and US is still not out of it !!

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    • #3

      #3

      Re : If Bubble Burst What's Your Plan B

      India is not USA

      Originally posted by mumbaiguy007 View Post
      And By the way That's exactly what happened in US .. and US is still not out of it !!
      KALIYA,
      India is not USA.( is this a blessing or curse)
      Neither is our RE that regulated nor is it comparable to USA.
      Prices may be disproportionately high,documentation improper and imperfect,but that is how India has functioned for centuries and a collapse is not an immediate danger.Ups and downs are part of the game,but neither is a permanent down nor permanent high in the immediate forthcoming period.
      Caution is in order but nothing beyond that.

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      • #4

        #4

        Re : If Bubble Burst What's Your Plan B

        Question is What's your Plan if this happen .. extreme high interest rate is inevitable weather 1991 type currency crisis trigger that or weather global inflation wave cause it does not matter is What Mr. Doom told me what say ??

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        • #5

          #5

          Re : If Bubble Burst What's Your Plan B

          Hai kisi mai ke laal ke paas jawab ???
          Last edited May 26 2013, 10:57 AM.

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          • #6

            #6

            Re : If Bubble Burst What's Your Plan B

            Why only Plan "B"?

            English has another 24 alphabets besides A and B. Once English finishes, try Hindi, French ...

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            • #7

              #7

              Re : If Bubble Burst What's Your Plan B

              Friends "We never dear to read / listen to things we don't want to listen...However history of investing says that when everyone is on one side of Boat you should be on other" to add Never Never before in history of world, some asset class has gone up up up for 15 straight years.. So we should know these things before jumping on it ...

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              • #8

                #8

                Re : If Bubble Burst What's Your Plan B

                Its unfair to compare our housing industry to that of US. Reasons:
                1) Firstly if you compare housing loan industry, % of houses under mortgage is much much higher in US as compared to India. Hence, volatility in interest rates will have much higher impact in USA. Due to this, holding capacity in India is better in uncertain times.
                2) In the US economic crisis, the underlying asset was the real estate. But the main reason for the huge effect the crisis had on the economy was the highly leveraged financial instruments including CDOs, Credit Default Swaps, etc etc. Once, the housing loan default started happening it had multiplying effect on the whole economy.
                3) Sadly, the land records in India are very poor and land under litigation is very high. Hence, the land available for housing is certainly limited. Even the procedure which involves conversion of agricultural land to non-agricultural land is highly complex and takes a long time.

                I am not saying that housing prices will continue to rise forever. But, what I am saying is the USA crisis can't/shouldn't be compared with India's scenario. We must keep in our mind that the real estate in India had a very good run in the past years but that sort of run can't continue forever.

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                • #9

                  #9

                  Re : If Bubble Burst What's Your Plan B

                  Originally posted by mumbaiguy007 View Post
                  Question is What's your Plan if this happen .. extreme high interest rate is inevitable weather 1991 type currency crisis trigger that or weather global inflation wave cause it does not matter is What Mr. Doom told me what say ??
                  If a 1991 style currency crisis were to occur again, I bet you would have more impeding concerns than the price of the house you bought.

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                  • #10

                    #10

                    Re : If Bubble Burst What's Your Plan B

                    lets see every one has there plans .more imp. if it works like we have planned..

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