First of all a very good article. Well researched and the author has put across his opinion logically supported with his research and knowledge. Yes definitly it looks any slump in US economy will Indian economy as well. In a globalised economy if any problems in small nations (like south east Asia crisis) can affect global economy, there is no question about whether a slump in world's biggest economy will affect other countries or not. So in my opinon, if you get a first hint of recession in US, be prepared to face its global affects. In case of a storm warning for a area, first thing a person does is either vacate the place or board up his place to protect against the storm. So in case of fisrt indication of US recession, safer thing will be either move out of risker assets like equities and move into safer assets like cash or Gold. Disclosure: This is my two Rs worth advice friends, and I am practising it myself.
Recently there was a lot of news on the RPLs price movements. Why nobody is enquiring about the movements of MMTC and STC. Why the news of a power plant project awarded to a company should immediately cause the market price of the perticular share to sky rocket. God only can save the poorest of the poor in this country. In class room where all students are brilliant it is good to encourage the students for achieving ultimate excellance by making everything based on performance and talent. If we do that in 100 crore population with varied capabilities it is disasterous. After all not even 5% of indians are participating in this stock market. Without their knowledge their hard earned money is making this 5 % richer and richer.
If communism failed due to its attitude towards better life for better performers, the capitalism will collapse due to the inflated greedy levels of life the performers are encouraged to look for.
A common man will never be able to have his own house the way things are moving in real estate. Take e.g If a flat cost is Rs. 60 Lacs & if a person has to shell out 85% he will end up taking almost 50 lacs as loan. Now let us findout out how many people will be able to shell out 50 thousand as interest every month from their income after meeting their requirements. Even after considering the benefits of income whether the real estate value will increase at the cost of interest. This is absolutely unreal estate business in India for a common man.
RE:UN-REAL ESTATE
by Chihahua on Nov 28, 2007 04:18 PM Permalink
Atually these are sharks. Peopl take home loans just bcos they have to pay high rent. Landlords ,construction companies ,mafias all fuel up the rates high. These rougues shud be hanged.
RE:UN-REAL ESTATE
by Pramod Ramachandran on Nov 28, 2007 04:03 PM Permalink
You said it Syed. I tried to own a house or flat in Bangalore since I am working here. The price is sky high - near 40 lakh for a flat and 60 for a decent house. Now I dropped the idea and plan to settle back in my home town in Kerala.
RE:What would be the future of Real Estate in India?
by faisal khan on Nov 28, 2007 03:30 PM Permalink
if you look at the trend of how countries have developed all over the world then its clear that real estate has a long way to go in India.I dont see any slowdown in the near term. A lot can be derived from what are the investment trends in this industry and global biggies are setting up huge funds for real estate in India and also many big groups are looking for a entry in this spce in India. So going by these trends i personally dont see any slowdown.There might be price corrections but my guess is that India is far away from a bust in this sector.
RE:What would be the future of Real Estate in India?
by tenzin thargay on Nov 28, 2007 03:44 PM Permalink
Hi Faisal, I do agree that on a long term basis what you are saying holds true that the economy will grow (all of us are banking on that) but the fact remains that a) the US market real-estate industry is facing a melt down b) most of the investment in real-estate companies and funds in India is by the FII's (as against FDI) and FIIs as you know are more fickle minded c) banks in India have over-lend to the real-estate sector in India (a fact noted by RBI also which means that many people have taken loan to buy houses as investment options which thus is not real growth d) many markets esp Mumbai has inherest instabilities which will have correction e.g. the repeal of ULCRA (urban land cieling repeal act)act which should release lot of area for development e) real-estate market is cyclic and it had a downslide for 7-8 years till 2001-2002 when it started picking up, so it may be time for such a correction again. Guess it cleared some issues :-))
RE:What would be the future of Real Estate in India?
by senthil narayanasamy on Nov 28, 2007 04:03 PM Permalink
tenzin can you explain the role of the FII's Vs FDI. If you don't mind?
