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Indian property bubble...........
Posted by :
pkk07Tracked by: 0 Boarder
Real estate developers are overestimating their power. The success and easy money and loot of middle class of the past five years has emboldened them and made them arrogant to the extent that they have started believing they can play God. They will construct at their own pace, delay possessions, sell at inflated prices, delivery crappy products and services and people will still fall at their feet to get a drop of the elixir of real estate. Well they are soon to discover (and if they were any smarter they would have learnt by now) that markets humble everyone. No one can play God here....
In reply to:
Indian property bubble...........
Posted by : chchch
pkk07, You have cited a nice example which I have not read so far. Yes, it is time rates fall down by 30 to 50% in all localities. If the real estate deelopers do not learn from the above exmple, market will mark them down. But, even Central Govt. institutions LIKE Delhi Development Authority are the culprits in marking up the prices of land/buildings/flats EVEN NOW, which is more a cause of hestitation to private builders/developers. 
Indian property bubble...........
Posted by : chchchTracked by: 0 Boarder
pkk07, You have cited a nice example which I have not read so far. Yes, it is time rates fall down by 30 to 50% in all localities. If the real estate deelopers do not learn from the above exmple, market will mark them down. But, even Central Govt. institutions LIKE Delhi Development Authority are the culprits in marking up the prices of land/buildings/flats EVEN NOW, which is more a cause of hestitation to private builders/developers. ...
In reply to:
Indian property bubble...........
Posted by : pkk07
I guess idiotic realty developers need to take a cue from Honda. Yes Honda. Honda cut the prices of its hybrid car model from 21 lacs to 13 lacs and sold more in a single day than they have sold in last three months. How would the response have been if Honda had cut the prices by 10%? I guess no body would bother to buy since the non-hybrid version would still be about 40-50% cheaper.
This proves that people are still willing to buy assets at reasonable prices. Just that nothing will sell at inflated prices now. If the real cost of a flat which is selling at 70 lacs today is 45-50 lacs then people will buy it happily at those prices. Its time rates should fall 30-50% in __all__ localities. Real estate developers should learn from Honda on how to sell during recession.
Indian property bubble...........
Posted by : pkk07Tracked by: 0 Boarder
I guess idiotic realty developers need to take a cue from Honda. Yes Honda. Honda cut the prices of its hybrid car model from 21 lacs to 13 lacs and sold more in a single day than they have sold in last three months. How would the response have been if Honda had cut the prices by 10%? I guess no body would bother to buy since the non-hybrid version would still be about 40-50% cheaper.
This proves that people are still willing to buy assets at reasonable prices. Just that nothing will sell at inflated prices now. If the real cost of a flat which is selling at 70 lacs today is 45-50 lacs then people will buy it happily at those prices. Its time rates should fall 30-50% in __all__ localities. Real estate developers should learn from Honda on how to sell during recession....
In reply to:
Indian property bubble...........
Posted by : Bhatt
[Expand] Support Wikipedia: a non-profit project Donate Now »
Indian property bubble
From Wikipedia, the free encyclopedia
Jump to: navigation, search
This article does not cite any references or sources.
Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed. (August 2007)
This article is written like a personal reflection or essay and may require cleanup.
Please help improve it by rewriting it in an encyclopedic style. (September 2008)
The origins of Indian Property Market Bubble can be traced to the interest rate reductions made by the NDA coalition government in the years following 2001. Home Loan Rates fell to a (then) historical lows of 7.5% in early 2004. This prepared the basis for the massive increase in real estate property prices across India. Low interest rates triggered huge interest in individuals to borrow to own their own homes and this triggered an increase in demand for real estate across India.
The Indian Property Market has been growing fast since March 2005, when the current UPA government decided to open FDI in Real Estate. The market has been growing at a dizzying rate of 100%+,and further[citation needed]
Real estate in Indian metropolises such as Mumbai, Delhi and Chennai has sky rocketed to levels comparable with international cities like London.
One remarkable point is the real-estate boom in Chennai and its suburbs, leading to high prices in decent housing and then finally prices dropped. For example, an apartment of 1500 square foot in a Chennai suburb will cost around USD 200,000, whereas in Europe similar size costs about USD 450,000. In a class A suburb of New York you can buy a large house for around same amount (450K). Per capita ratio is around 50:1 ($50,000 to $1100); this suggests the presence of a bubble.
However, speculations aside housing prices depend a lot on various factors such as the age of the property, facilities, surrounding area etc. Hence, the property bubble will burst for the places bought over priced with no stronghold value to it.
Some have suggested that given India`s population density is closer to that of Europe than that of America the real value of Indian Real Estate should be close to European levels rather than American levels. When looked at in that way Indian real estate is still cheap. This argument assumes the rapid economic growth in India will have brought per capita income in India to European levels within the next 5 years in urban areas.
Contra argument to this is US prices should ideally move with economy/inflation rate of 2-3% while Indian prices will gallop at the rate of 10% a year and probably more as the land distribution market is inefficient.
By its very definition a bubble is a short term phenomenon while Indian real estate market has continued on a secular upward trend, apart from periodic adjustments, in the last 10 years. Bear in mind that there are almost 400 million Indians waiting to hit the middle class group and they will exert additional pressure on the system. Affordability is the most important factor when it comes to housing prices and middle class housing is much levels of affordability in most of the major cities in India. People who compare India with developed European cities, forget the huge difference in affordability in both areas. Of course there is a huge demand for housing but they can only buy what they can afford.
One of the big problem of real-estate market is that supply lags behind demand by about 5 years (Plan-Approve-Finance-Construct time).
Lack of efficient signals to market participants means that there will be periods of mismatch between suppliers and buyers hence leading to cycles of booms and busts.
As of May 1st 2008, the Indian housing market has already started declining. Prices have started to drop drastically in some major cities.
The rents are all time low. A 60 Lakhs worth property gets a rent of 10 to 15 thousand ruppes per month.
India Buying Power some study by World Bank
Posted by : BhattTracked by: 0 Boarder
Jaab hamri itni kaam buying power hai tu itne costly makan kharidega kaun Maika lal?
MORE KEY FACTS & ANALYSIS
This is the first major effort to update poverty data based on 2005 measures of purchasing power parity. The new poverty estimates are also based on data from 675 household surveys across 116 developing countries. Over 1.2 million randomly sampled households were interviewed for the 2005 estimate, representing 96% of the developing world. But lags in survey data availability mean that the new estimates do not yet reflect the potentially large adverse effects on poor people of rising food and fuel prices since 2005.
Poverty has fallen by 500 million since 1981 (from 52 percent of the developing world`s population in 1981 to 26 percent in 2005) and the world is still on track to halve the 1990 poverty rate by 2015. But at this rate of progress, about a billion people will still live below $1.25 a day in 2015. Also, most people who escaped $1.25 a day poverty over 1981-2005 would still be poor by middle-income country standards.
East Asia`s progress has been dramatic since 1981, when it was the poorest region in the world. In China, the number of people living on less than $1.25 a day in 2005 prices has dropped from 835 million in 1981 to 207 million in 2005. The Bank`s earlier 2004 estimate had 130 million people living in China below a dollar a day based on 1993 PPP. Thus, the new calculations reveal more poor people than assumed earlier, but China`s remarkable success in reducing poverty still stands.
In the developing world outside China, the $1.25 poverty rate has fallen from 40 percent to 29 percent over 1981-2005. However, given population growth, this progress was not enough to bring down the total number of poor outside China, which has stayed at about 1.2 billion.
In South Asia, the $1.25 poverty rate has fallen from 60 percent to 40 percent over 1981-2005, but again, not enough to bring down the total number of poor people in the region, which stood at about 600 million in 2005. In India, poverty at $1.25 a day in 2005 prices increased from 420 million people in 1981 to 455 million in 2005, while the poverty rate as a share of the total population went from 60% in 1981 to 42% in 2005.
In Sub-Saharan Africa, the $1.25 a day rate was 50 percent in 2005-the same as it was in 1981, after rising, then falling during the period. The number of poor has almost doubled, from 200 million in 1981 to about 380 million in 2005. If the trend persists, a third of the world`s poor will live in Africa by 2015. Average consumption among poor people in Sub-Saharan Africa stood at a meager 70 cents a day in 2005. Poverty is less responsive to growth in Africa than other regions. Higher growth-without rising inequality-is needed to keep pace with other regions.
For middle income countries the median poverty line for all developing countries-$2 a day-is more suitable. 2.6 billion people lived on less than $2 a day in 2005-a number largely unchanged since 1981. This suggests less progress in crossing the $2 a day hurdle. By this measure, the poverty rate has fallen over 1981-2005 in Latin America and the Middle East and North Africa, but not enough to bring down the total number of poor. The poverty rate has risen in Eastern Europe and Central Asia, though with signs of progress since the late 1990s.
...
Indian property bubble...........
Posted by : BhattTracked by: 0 Boarder
[Expand] Support Wikipedia: a non-profit project Donate Now »
Indian property bubble
From Wikipedia, the free encyclopedia
Jump to: navigation, search
This article does not cite any references or sources.
Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed. (August 2007)
This article is written like a personal reflection or essay and may require cleanup.
Please help improve it by rewriting it in an encyclopedic style. (September 2008)
The origins of Indian Property Market Bubble can be traced to the interest rate reductions made by the NDA coalition government in the years following 2001. Home Loan Rates fell to a (then) historical lows of 7.5% in early 2004. This prepared the basis for the massive increase in real estate property prices across India. Low interest rates triggered huge interest in individuals to borrow to own their own homes and this triggered an increase in demand for real estate across India.
The Indian Property Market has been growing fast since March 2005, when the current UPA government decided to open FDI in Real Estate. The market has been growing at a dizzying rate of 100%+,and further[citation needed]
Real estate in Indian metropolises such as Mumbai, Delhi and Chennai has sky rocketed to levels comparable with international cities like London.
One remarkable point is the real-estate boom in Chennai and its suburbs, leading to high prices in decent housing and then finally prices dropped. For example, an apartment of 1500 square foot in a Chennai suburb will cost around USD 200,000, whereas in Europe similar size costs about USD 450,000. In a class A suburb of New York you can buy a large house for around same amount (450K). Per capita ratio is around 50:1 ($50,000 to $1100); this suggests the presence of a bubble.
However, speculations aside housing prices depend a lot on various factors such as the age of the property, facilities, surrounding area etc. Hence, the property bubble will burst for the places bought over priced with no stronghold value to it.
Some have suggested that given India`s population density is closer to that of Europe than that of America the real value of Indian Real Estate should be close to European levels rather than American levels. When looked at in that way Indian real estate is still cheap. This argument assumes the rapid economic growth in India will have brought per capita income in India to European levels within the next 5 years in urban areas.
Contra argument to this is US prices should ideally move with economy/inflation rate of 2-3% while Indian prices will gallop at the rate of 10% a year and probably more as the land distribution market is inefficient.
By its very definition a bubble is a short term phenomenon while Indian real estate market has continued on a secular upward trend, apart from periodic adjustments, in the last 10 years. Bear in mind that there are almost 400 million Indians waiting to hit the middle class group and they will exert additional pressure on the system. Affordability is the most important factor when it comes to housing prices and middle class housing is much levels of affordability in most of the major cities in India. People who compare India with developed European cities, forget the huge difference in affordability in both areas. Of course there is a huge demand for housing but they can only buy what they can afford.
One of the big problem of real-estate market is that supply lags behind demand by about 5 years (Plan-Approve-Finance-Construct time).
Lack of efficient signals to market participants means that there will be periods of mismatch between suppliers and buyers hence leading to cycles of booms and busts.
As of May 1st 2008, the Indian housing market has already started declining. Prices have started to drop drastically in some major cities.
The rents are all time low. A 60 Lakhs worth property gets a rent of 10 to 15 thousand ruppes per month.
...
Dubai Bubble Bust
Posted by : BhattTracked by: 0 Boarder
Print | Close this window
Dubai property boom halts as prices fall, jobs go
Thu Nov 13, 2008 8:17am EST
(repeats to additional subscribers)
By Jason Benham
DUBAI, Nov 13 (Reuters) - Dubai property shares plunged and its biggest private developer slashed jobs this week as the global financial crisis tightened its grip on the tiny emirate, until now synonymous with the Gulf Arab real estate boom.
Dubai`s glittering skyline and luxury tourism sector have lured investors in droves over the past five years. But property prices have begun to fall, according to brokers and banks, in one of the clearest signs to date that the bubble has burst.
A real estate crash in Dubai would call into question the futures of millions of immigrant workers, many from India and Pakistan, and whether energy exporter Abu Dhabi would run to the rescue of its high-flying but poorer neighbour. "Villas that were very hot before the crisis have fallen. The buyers were chasing the sellers but now it`s the other way round," said Quaid Abbas, property consultant at Engel & Volkers. "Small real estate companies are going to close down."
Secondary prices in Dubai and Abu Dhabi fell 4 to 5 percent, with Dubai`s advertised villa prices falling by 19 percent month-on-month in October after several banks tightened lending conditions in August and September, HSBC said.
Apartments in the Dubai International Financial Centre, the nexus of the banking and investment sector, fell as much as 30 percent, it said.
Rehab Gouda, senior sales agent at Al Jabal Real Estate, said that property prices had fallen 30-35 percent in Dubai since September.
A three-bedroom villa in the unbuilt Jumeirah Park project, a sought-after area of the seaside emirate, which was worth around 4.8 million dirhams ($1.3 million) in August, is now valued at roughly 3.8 million dirhams, she said.
"The market is going through a tough time," said Sana Kapadia, associate equity research at EFG-Hermes in Dubai.
"Whether or not it is the end of the market, remains to be seen."
ARRESTED DEVELOPMENT
Times are certainly tough for the real estate sector with shares tumbling this year due to the crisis and a number of highly publicised investigations into alleged corruption.
Emaar Properties EMAR.DU, the region`s largest property developer by market value, fell 5.6 percent on Thursday to mark a drop of over 80 percent this year. Union Properties UPRO.DU, which has dropped around 78 percent during 2008, fell 6.7 percent.
Scaled-back projects and job cuts among developers provide more evidence that the financial crisis has hit Dubai, which boasts man-made palm islands, an indoor ski resort and the world`s tallest building.
Emaar said on Thursday it was reviewing its jobs policy after Damac Holding, Dubai`s largest private property developer, said earlier this week it was cutting 200 jobs, or 2.5 percent of its workforce.
The cuts follow news that developers are scaling back projects as funding becomes harder to secure.
State-owned Nakheel said recently it was slowing down on dredging work on its massive Palm Deira project, the largest of three palm archipelagos that, when completed, is planned to house more than 1 million people.
While soaring inflation has triggered civil disturbances in Dubai in recent months, a property collapse could trigger the same if the government decides to ship home thousands of labourers who climb scaffolding and pour concrete every day.
Dubai`s ambition to be a regional economic hub would also be dented by a property crash, though some are optimistic that Abu Dhabi would intervene and that long-term growth prospects for the region would support the financial sector.
"Dubai appears to be able to continue to attract people and talent and this looks poised to maintain its standing as a regional power house," Kapadia said.
(Reporting by Jason Benham; editing by Thomas Atkins, John Stonestreet)
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Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests....
NSE Announcements on DLF
Posted by : MMB MessengerTracked by: 0 Boarder
Dlf Limited, JM Financial Consultants Pvt. Ltd. and DSP Merrill Lynch Limited has informed the Exchange that Dlf Limited (the "Company") is buying back its own fully paid up equity shares of face value Rs.2/- each ("Shares") from the open market through the electronic trading facilities of the Bombay Stock Exchange Limited ("BSE") and The National Stock Exchange of India Ltd. ("NSE") (together the "Stock Exchanges"). The Company has appointed JM Financial Services Pvt Ltd. and DSP Merrill Lynch Ltd. as its brokers ("Brokers") for placing orders on the Stock Exchanges. The details of the purchase orders that were executed on the Stock Exchanges on November 14, 2008, in connection to the above buyback are: 1) Date of Buyback: November 14, 2008; 2) Name of the Broker: JM Financial Services Pvt. Ltd.; a) No. of equity shares bought back on BSE: Nil; b) No. of equity shares bought back on NSE: 8000; c) Total no. of equity shares bought back: 8000; d) Average Price of Acquisition (Rs.): 238.98; 3) Name of the Broker: DSP Merrill Lynch Ltd.; a) No. of equity shares bought back on BSE: Nil; b) No. of equity shares bought back on NSE: Nil; c) Total no. of equity shares bought back: Nil; d) Average Price of Acquisition (Rs.): NA; 4) Cumulative Equity Shares bought as on November 12, 2008: 16,13,847; 5) Quantity Closed Out on November 14, 2008 - Nil; 6) Quantity Closed out as on November 12, 2008 - 80; 7) Total Quantity Closed Out - 80; 8) Total Equity Shares bought back as on November 14, 2008: 16,21,767....
BSE Announcements on DLF
Posted by : MMB MessengerTracked by: 0 Boarder
DLF Ltd has informed BSE that Mr. Pua Seck Guan has joined DLF Group as CEO, DLF International in Singapore. He will be leading the DLF Trust Management Pte. Ltd. which is in the process of building up office space assets of significant magnitude....
NSE Announcements on DLF
Posted by : MMB MessengerTracked by: 0 Boarder
Dlf Limited has informed the Exchange that "Mr Pua seck Guan has joined DLF Group as CEO, DLF International in Singapore. He will be leading the DLF Trust Management Pte. Ltd, which is in the process of building up office space assets of significant magnitude". The details of the media release shall be available on the NSE website (http://www.nseindia.com) under: Corporates > Latest Announcements and on the Extranet Server (/Common/Corporate Announcements). ...
How to find Warning sign in realesate market
Posted by : pkk07Tracked by: 0 Boarder
Hi Bhatt,
Thankfully, buyers need not form a cartel because common people follow herd behavior. If you tell them prices are going up, they will chase the asset and drive prices further up. If you tell them prices are going down, they will stay away even after prices have gone below the fundamental value. The buyer sentiment has turned negative and it can not be revived by any thing or anyone. Let Govt, banks, builders and media test all their might, they are bound to fail.
For a proof, look at US and Europe where stunning rate cuts delivered in quick succession have failed to create any enthusiasm at all among buyers. Things will not be any different in India. Realty is dead for good and for a long long time to come....
In reply to:
How to find Warning sign in realesate market
Posted by : Bhatt
Like sellers (Builders) form their cartel we buyer also form cartel and slogan DONT BUY NOW should spred like fir in all over India and best part in India is you r getting 1Carore costing flat on rental like live & licence at Rs.18,000/= per month like all leading area in all metro city of India so atleast for 2 to 3 years minimum all should stop purchase any new flats then this cartel will break
How to find Warning sign in realesate market
Posted by : BhattTracked by: 0 Boarder
Like sellers (Builders) form their cartel we buyer also form cartel and slogan DONT BUY NOW should spred like fir in all over India and best part in India is you r getting 1Carore costing flat on rental like live & licence at Rs.18,000/= per month like all leading area in all metro city of India so atleast for 2 to 3 years minimum all should stop purchase any new flats then this cartel will break...
In reply to:
How to find Warning sign in realesate market
Posted by : pkk07
It is just a game now of who blinks first. Real estate developers are bluffing and everyone knows they are dying to sell. Till now the cartel has somehow kept their flock together but sooner or later one of them will give up and then we will see a tsunami of houses in the market selling for their worth or may be even less than their true worth. The days of houses selling at inflated prices are gone and are not coming back for a decade now. Yes a decade. Last cycle was 12 years long. And property cycles are longer than stock market cycles which themselves are about 8 years. 2007 prices will be seen again only in 2017. If DLF and its other cartel members want to wait till then, best of luck to them.
DLF Q2 cons net profit down 4.12% at Rs 1935.35 cr
Posted by :
m60Tracked by: 0 Boarder
what happend to their dankuni project...
In reply to:
DLF Q2 cons net profit down 4.12% at Rs 1935.35 cr
Posted by : MMB Messenger
DLF has announced its second quarter numbers. The company`s consolidated net sales were up 15.21% at Rs 3,744.39 crore versus Rs 3,249.91 crore on YoY.
DLF Q2 cons net profit down 4.12% at Rs 1935.35 cr
Posted by : MMB MessengerTracked by: 0 Boarder
DLF has announced its second quarter numbers. The company`s consolidated net sales were up 15.21% at Rs 3,744.39 crore versus Rs 3,249.91 crore on YoY....
How to find Warning sign in realesate market
Posted by : pkk07Tracked by: 0 Boarder
It is just a game now of who blinks first. Real estate developers are bluffing and everyone knows they are dying to sell. Till now the cartel has somehow kept their flock together but sooner or later one of them will give up and then we will see a tsunami of houses in the market selling for their worth or may be even less than their true worth. The days of houses selling at inflated prices are gone and are not coming back for a decade now. Yes a decade. Last cycle was 12 years long. And property cycles are longer than stock market cycles which themselves are about 8 years. 2007 prices will be seen again only in 2017. If DLF and its other cartel members want to wait till then, best of luck to them....
In reply to:
How to find Warning sign in realesate market
Posted by : chchch
Bhatt, very recently I got information from Chennai that many in Housing Loans instalments default has arisen and the banks/institutions are selling the flats/houses at discount to the prevailing prices. Even flats constructed just one or two years back have been put on bloc. Suppose the going rate in a particular locality is Rs.5000/- per sq.ft., the same is being quoted at Rs.4,000/- per sq.ft. by the institutions which financed the property. It has just started.
How to find Warning sign in realesate market
Posted by : mukutTracked by: 0 Boarder
This stock is extremely risky for short term and long term.
Inflation is down. It may run up little bit tommorrow but it will come down in long term. ...
In reply to:
How to find Warning sign in realesate market
Posted by : KARUNAS
Two digit is not far away for dlf in the current situation and is nearing it very fast/
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