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MARKET ANALYSIS - Make use of this dip in Real Estate Market

By djain128, Section Gurgaon Real Estate Property
Posted on Tue May 23, 2006 at 01:37:26 AM EST

Dear Friends,

There have been a lot of talk about crash in Real estate prices. Presently there seems to be some inactivity in the realty market in NCR. some of the reasons are:

No new projects in the offerring in NCR: Last week all news papers carried Advertisemwents on Jaipur projects there was no upcoming residential projects in NCR.
Restriction on prelaunches in Haryana: Haryana Govt has banned prelaunches prior to issueance of licence by the Govt this has pulled back investors
Advent of summers: Due to summers the buyers keep away and wait for more pleasent weather.
NRI effect; The NRI's will return to India in Winters Holiday i.e the time for the highest activity in realty market.
Increase in Home Loan Rates
The prices have stagnated for some projects and have not actually come down in Gurgaon

Well these are some of the factors (list not exhaustive.) But i see a opportunity in this dull market as property never goes below a certain point.

The reasons for booming Indian Economy are

India has a population of more than 55% people who are below the age of 25%. This is the working age of population and so the demand will grow and so will the economy.
All top companies of the world are lining up for India as there is demand exceeding supply in India, comparitively Cheap labour, Democracy, etc etc.
US & Europe is growing @ 1.5 - 2% p.a. where as as per data of Indian Govt Survey our economy is growing at 8-10% so investing in India, a business house gets 4 times better results.
The Investment inflow from GULF: Due to distrust on Bush administration post Iraq war & Now Iran, Oil money is coming to India for Investment earlier it was going to US. The better returns as well as growing economy is attracting investments.
The Sorbans Oxlay Act has made listing at NYSE a hard proposition. With Computerised Trading on Sock Exchanges now any share can be traded worldwide over internet. So MNC listed on NYSE are soon going to be listed on BSE/NSE.

Again List is not exhaustive

Here are comments by some unregistered user on Realty prices
It is not company which trades in stock market, it will never goes for bankcurrpcy. Appriciation will be less, I say if you get 8-10 percent avarage a year, that is very normal (conservative) in any where e.g. in delhi, gurgaon, noida, greater noida, faridabad, or any satellite township of any mega city etc. Then I still see it is the best investment option. Don't get loan and buy property for appriciation. If you have money, just invest, you will never regret.

People should make use of this panic selling. Stock market correction (20%) is good for stocks, good for investment, good for long run. It is the opprotunity for fund managers and stock investors to enter in the marker at right time, and intelligent managers have invested yesterday (monday) when it was down 10%. They will get benifit of this dip.

Regarding property who are posting message or selling at 20% low are making mistake, it will rebound around diwali and again big jump in next Feb March 2007, indian economy is doing good and well set to cross 9% or 10% (as China) in coming years. It will be doing good for next 2 to 4 year with out any break. Mark my word sensex will cross 12000 in next 60 days. This is called correction not crash. Government gave new opportunity to FIIs to enter in the market by throughing couple of bad news in the same week, mark my word on 25th May short term tax increment will not be 41% as statement given by officials. Wait for final news out on 25th, it will not be more than 20%.

Wait and watch. Wait for some time if you are not comfortable to invest now.

Comments are welcome.

< Police on Alert For Suicides After Bloodbath On Indian Stock Markets | Unitech pips DLF for mega Noida "Express City" project with Rs 1583 cr offer >

MARKET ANALYSIS - Make use of this dip in Real Estate Market | 23 comments (23 topical, 0 hidden) | Post A Comment

hi (none / 0) (#24)
by Unregistered Visitors on Tue May 30, 2006 at 04:26:35 AM EST

Test

[ Reply to This ]

Realty Risk (none / 0) (#23)
by Unregistered Visitors on Tue May 30, 2006 at 12:13:44 AM EST

Source: TIMES NEWS NETWORK[ SUNDAY, MAY 21, 2006 11:21:43 AM]

Rise in the interest rate of home loans may trigger correction in property prices.

The real estate market in the could be a risky proposition for investors not intending to hold the property for long.

Many consultants and builders feel that the real estate prices have almost peaked and it would be difficult for investors to make money in a short span of time. However, investors can shift their attention to smaller towns, where the property prices have not spurted.

A senior consultant with a global consultancy firm India Property Research, Tanaji Chakraborty, said that property prices have gone into the hot zone and it would be advisable to the short and medium term investors to desist from entering the market. Even long investors, he added, should not expect the same return in major metros, which they earned in the last two years.

The property prices have gone up by more than 100% in the last two years. Investors hold the property , with rising prices, in the expectation of better returns.

Now, the prices are not going to witness the similar rise in the short to medium term. This might disturb the balance as many investors may decide to sell to book profit. Many consultants and builders feel that this would lead to increase in the supply .This, he felt, could lead to a kind of correction in the prices.

Getamber Anand, one of the promoter directors of ATS Infrastructure , a medium sized developer , also accepted that the prices in NCR have risen substantially and there could be some correction.

The general perception among the consultants and builders is that if the prices do not go for a correction it would remain stagnant around the present level for some time.

Global consultancy firm, Cushman and Wakefield, in its outlook for 2006 said that the speculative short term activity would see a significant decline, with investors increasingly taking more informed decisions rather than following the herd mentality.

But, similar gain is not possible in the short to medium term.In fact, consultants feel that another hike in the interest rate on home loan could be a trigger point.

The steep rise in the property prices in the last two years was also because of the fall in the home loan rates to 7-7 .5% per annum from over 10% per annum in 2002.The fall in the interest rate triggered the demand for the real estate in the country.

Similarly, Tanaji Chankraborty said, that rise in the interest rate to around 10% will affect the demand drastically. The interest rate on the floating home loan rate has already gone up to 8.5% to 8.75%.if the rate is increased by another half a percentage point, it would cross the 9% level.

Till now, the increase in the rate has not affected the monthly installments.Instead,banks have increased the repayment period, keeping the monthly installment the same. But, the two percentage point rise in the interest rate from 7 to 9%, the 20 years loan repayment period has to increase to 39 years if the monthly installment has to be kept at the old level. If the interest rate rises by another one percentage point to 10%, the monthly installment has to be increased.

In this situation, consultant and the banker said that many investors would be forced to sell their holdings .

This, a senior consultant argued will increase the supply which would trigger a price correction. Therefore, consultants feel small investors should desist from entering the property market at the present level.

[ Reply to This ]

Need to buy 250 Plot in Hi Tech City Uppal (none / 0) (#22)
by Unregistered Visitors on Mon May 29, 2006 at 12:19:53 PM EST

I am intrested in buying 250 Sq Yrd plot in Hi Tech City Ghaziabad with Uppal Chadda gruop. Intrested sellers please send me email with booking rate and asking premium at below written email address. I will prefer first booking (means booking slip should be in my name) but transfer also ok with resanable rate. I can give all money in white. Write your phone no also.
indian_investment@yahoo.com

[ Reply to This ]

golden rule (none / 0) (#18)
by Unregistered Visitors on Sat May 27, 2006 at 10:26:22 AM EST

MY GRANDFATHER HAD AN EXPERIENCE OF OVER 50 YEARS OF WORKING IN REAL ESTATE INDUSTRY AND HE TAUGHT ME A GOLDEN RULE.IT GOES LIKE THIS-
jo insaan mandi ke baad aney wali tezi aur tezi ke baad aney wali mandi dekh leta hai wahi zameen se kamata hai.
its simple. at this time evrything is down(kundli,faridabad,indrapuram,gurgaon),and yes it could slipp LITTLE MORE but it wont be same if you have the VISION.
2-3 months on market will improve as it always happens in july-aug and diwali would spark it up.
for those who are already invested hang on to it ,for those who dont have anything get something good cos it will pay you guys.
belive me it will happen.
regards

[ Reply to This ]

: Grandfather Vision (none / 0) (#20)
by Unregistered Visitors on Sun May 28, 2006 at 09:28:32 PM EST

We appreciate your Grandpa's 50 years exper. in real estate but if you check with him the prices are set to nosedive as there are no investors at this high level, even there are a few investors if prices fall by 20-25%.

[ Parent | Reply to This ]

Shame on Author (none / 0) (#17)
by Unregistered Visitors on Sat May 27, 2006 at 06:00:15 AM EST

How can you write saying that here is some details from aninymus

[ Reply to This ]

Looking for a plot in Jaipur (none / 0) (#14)
by Unregistered Visitors on Fri May 26, 2006 at 12:09:08 AM EST

Great Chance to get a plot in a township at a low rate in Jaipur. Invest your money in the developing City, Jaipur. Platinum Green is the latest project by Ace India Abodes Ltd. Don't miss this chance. Because opportunities are rare.

A very good investment in real estate business. Unbelievable township coming in Jaipur at unbelievable rate. The township name is Platinum Green, building it in 400 acres. The project is developed by Ace India Abodes Limited, a reputed company in India. Booking rate is very too affordable that normal people can invest money in it. We also provide the buy back option with a return of 80 Thousand Rupees in three months.

Location : On the main Jaipur-Ajmer NH-8 Expressway
Plots size : 266, 355, 400 and 500 Sq. yards.
Rate : Rs.2500/-
Booking amount : 25% (i.e. Rs.1,66,250/- for 266 Sq. yds)

If you invest Rs.166250/- We can assure you Rs.80,000/- more in three months with buy back option. If you not interested in buy back option then you can get 5% of discount on price or as commission (i.e. Rs33550/-). This is an excellent investment in your life.

35 minutes drive from M. I. Road
Railway Station and Bus Station within 30 min. reach
Airport within 30 min. reach.
Schools and Engineering / Medical Colleges in close proximity
10 min. from upcoming Omaxe & Vatika townships
Township in the vicinity of Mahindra's Sez, the only one in Rajasthan

Cont. for booking

R. Malhotra (Chief Consultant)
Mob : 9810825422, 9212132620

Hareesh Kumar (Asst. Manager)
Mob : 9811873414

The Real Estate Professional Group
245, Jagriti Enclave, 2nd Floor
Vikas Marg Extension
Delhi - 110092

email : rrcon@sify.com, info@ncrdelhiproperties.com

For more details of Platinum Green...
Visit us at www.ncrdelhiproperties.com

[ Reply to This ]

INACTIVITY because NO BUYERS at THESE PRICES (none / 0) (#11)
by Unregistered Visitors on Tue May 23, 2006 at 11:15:32 PM EST

You started the article right - there has been very little activity in teh Gurgaon real estate.

Then you gave a long list of possible reasons - sound nice.

For example, get real when you talk about NRIs coming in the winter to buy real estate in India etc. I know many NRIs (am one myself). The High Gurgaon prices are not affordable for a second home for average NRIs.

The main factor for inactivity is that the prices in Gurgaon are unrealistically high and most Indians (they are the real buyers and not teh NRIs) can not afford such silly high prices.

No Buyers means no activity.

[ Reply to This ]

Thanks for the good laugh (none / 0) (#5)
by PS on Tue May 23, 2006 at 02:03:50 PM EST

"The Sorbans Oxlay Act has made listing at NYSE a hard proposition. With Computerised Trading on Sock Exchanges now any share can be traded worldwide over internet. So MNC listed on NYSE are soon going to be listed on BSE/NSE." Yes, I can see all companies listed on NYSE rushing to BSE/NSE for listings. You must be joking.

[ Reply to This ]

Hard to believe (none / 0) (#15)
by Unregistered Visitors on Sat May 27, 2006 at 12:49:43 AM EST

Agree with you it only deserves a good laugh.

However even in the fantastic case of this companies listing on BSE than it only means that Indiin investors may have another class of assets to invests which can only reduce the allocation to existing class of assets including real estate.

So it deserves only a GOOD LAUGH. Nice try to sell properties when there is no BUYER. I suggest Keep holding to your property if you own one in anticipation.

[ Parent | Reply to This ]

What is Sorbans Oxlay Act (none / 0) (#6)
by Unregistered Visitors on Tue May 23, 2006 at 08:19:03 PM EST

Do you know what are the provisions of sorbans Oxlay Act, How many companies got delisted from NYSE since introduction of act.

[ Parent | Reply to This ]

: SARBANES OXLEY (none / 0) (#9)
by Unregistered Visitors on Tue May 23, 2006 at 10:57:49 PM EST

Sarbanes Oxley Act makes it necessary for companies listed in the USA (NYSE and Nasdaq) to follow certain processes and procedures and to certify that the companies' financial reports are factually correct.
It was introduced after problems like Worldcom and Enron. It is a costly process, but even Indian companies like INFOSYS are already following it.
No company has been delisted because of this.
And it is 'dreaming in technicolour' when somebody suggests that the companies will start running away from NYSE and list on BSE because of Sarbanes Oxley Act (or SOX, as it is commonly known).

[ Parent | Reply to This ]

Downside (none / 0) (#3)
by Unregistered Visitors on Tue May 23, 2006 at 12:25:28 PM EST

Property market seems to go downwards. With ever upward looking sensex shotdown, investors will be more and more conscious about investments. Other factors (interest rates, overheated market, loads of flats available, mostly owned by investors etc etc) also are not favourable for property rates going up. Property prices have crashed in US and UK. People would have read on this website about this. US interest rates have gone up, NRIs can get good return there-n-there itself. Prices abroad going down, many would think buying their home in those country itself as not all NRIs buy here because they want to return to India. I dont think property prices will rise any further in next 6-8 months unless some mircale happens. Guys 'wait more' is best advice. If you rush now, rates will shoot up again as builders, all kind of property agents(dalle, website dalle etc),investors want us to rush, thats why these kind of articles. Thanks Anuj.

[ Reply to This ]

: Bargain Hard if you want now. (none / 0) (#4)
by Unregistered Visitors on Tue May 23, 2006 at 12:36:59 PM EST

there are loads of new apartments are ready (check in Indirapuram, Sector 93 Noida, G Noida, same would be true abt gurgaon)..investors dont want to spend money in registry and other expense one used to incur while taking possession. This is to maximize their profits, so guess many of these will be coming in market for resale. If you want to buy now, bargain very hard, dont show too much interest or any hurry. If you dont get the price you wish, dont run after it. It will run after you. Brokers will spending lots of money on phone calls to call you. Do not forget to leave you number with them. Let us all try hard to bring it down as much as we can. It is our turn now. Thanks again. Anuj

[ Parent | Reply to This ]

what (none / 0) (#1)
by Unregistered Visitors on Tue May 23, 2006 at 11:19:31 AM EST

The author of this article is a nut case. Don't pay attention to what he says. Be careful before you buy any property for next 8 months. The market is going to crash big time bringing property prices down 50 to 60 percent. Don't get fooled by these builders and their pimps.

[ Reply to This ]

decline (none / 0) (#2)
by Unregistered Visitors on Tue May 23, 2006 at 12:18:17 PM EST

i agree with it,,,don't buy for 6-8 months,,,massive decline on the way...

[ Parent | Reply to This ]

buy now ! (none / 0) (#8)
by Unregistered Visitors on Tue May 23, 2006 at 10:16:44 PM EST

People who say prices will crash are the ones who missed the bus earlier and are now hoping and praying for market to crash, "if wishes were horses beggars would ride". These people missed the bus earlier and would again lose the opportunity of a good entry point- which is now! Want some proof ? just scrool down to posts 1 year back from these prophets of doom and compare what actually happended ! this is seasonality not crash. Good investors go against herd mentality and buy when others are selling,that's common sense, which unfortunately is not so common.

[ Parent | Reply to This ]

very common (none / 0) (#25)
by Unregistered Visitors on Wed Jun 14, 2006 at 11:15:52 PM EST

what is very common though are you property dealers trying to talk up the market. but i must say i am impressed with you. you seem to be an educated one! thats uncommon!

[ Parent | Reply to This ]

Agree with You ???? (none / 0) (#16)
by Unregistered Visitors on Sat May 27, 2006 at 12:54:22 AM EST

I agree with you that Good investors go against the herd mentaliliy. However right now Herd is telling me that the real estate market will kep going up (as you can see in all posts for lat 6 months) and I am going against that HERD.

The same thing saved me on the Stock Market Crash as every one (yes every one ) for last 3 months atrted talking about investments in stock markets with mutual funds getting enormous funds in last 3-6 months.

But i did buy at 10000 when the market fell. SO YES GOOD INVESTORS GO AGAINST TH EHERD MENTALITY.

[ Parent | Reply to This ]

Sell what you have to... (none / 0) (#12)
by Unregistered Visitors on Wed May 24, 2006 at 02:33:22 AM EST

Since you are advicing people to buy very strongly, I guess that you have something to sell...:-)

Why dont you directly quote what price you are expecting along with other details, and let the people out here see if its even worth 60% of your asking price...

[ Parent | Reply to This ]

Missing the bus????? - read history my friend (none / 0) (#10)
by Unregistered Visitors on Tue May 23, 2006 at 11:06:31 PM EST

In Mumbai Nariman point, which is a yardstick to measure Mumbai real estate prices, flat prices were on a high in 1995/1996. Then they started declining, went down by about 50-60% by about 2001. It is only now that they are getting back close to the 1995 prices.

Will it happen in Gurgaon, I do not know. I do not claim to be an expert or a Jyotishi like a lot of other people or the writer of the above article.

But, can the real estate prices go down in India - YES, as seen from the Mumbai example.

Prices today are UNAFFORDABLE and lot more new properties are being completed.

Stock market moves in last two weeks are once again proving, "PRICES CAN NOT KEEP ON GOING UP".

My Guess: there will not have a phenomenal increase in real estate prices the next 6-8 months. They are more likely to drop than increase.

It is worthwhile waiting.

[ Parent | Reply to This ]

: real estate price (none / 0) (#19)
by Unregistered Visitors on Sun May 28, 2006 at 03:04:02 PM EST

We all have some opinion and possibly some of us made a lot of money during the course of last 3 years.The big property developers in conjuction with the investors are fuelling the price escalation.Government is also unwittingly helping the situation in favour of the builders as it is also able to auction land in record prices.
If only the bank inerest rate picks up dramatically (which is quite unlikely to happen)the property prices will crash.
My suggestion to all end users(I am one myself)is first do your home work i.e.selection of right builder, development,location,affordibility,planning permission,authenticity and then only try getting involved in the real estate.Please remember we need to have a long term perspective for our home.Eventually, we all know a good property will always appreciate in the long term.

[ Parent | Reply to This ]
: law of economics (none / 0) (#13)
by Unregistered Visitors on Thu May 25, 2006 at 03:33:48 AM EST

In order to make money we should buy cheap and sell at a higher price, the difference between buying and selling price = profit.
this would imply that we should buy when market is down and sell when market is up?

[ Parent | Reply to This ]

MARKET ANALYSIS - Make use of this dip in Real Estate Market | 23 comments (23 topical, 0 hidden) | Post A Comment

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