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funny
10-06-2008, 08:08 PM
Guys,

I know this is immigration forum , so People who are not interested in this thread please ignore.

Considering the State of Markets and Global economy.

Do you guys think it make sense to buy a Flat/Single family house in India in this market?


Please throw some ideas..

sri1309
10-06-2008, 08:17 PM
pls post in property related forums..

amitjoey
10-06-2008, 08:29 PM
Guys,

I know this is immigration forum , so People who are not interested in this thread please ignore.

Considering the State of Markets and Global economy.

Do you guys think it make sense to buy a Flat/Single family house in India , I am going to india in Mid october. Should i take the lunge and buy some proerty there...This would be the first home..so no Home equity Loan..It will be on 12% interest Rae from some indian bank.


Please throw some ideas..


Yes! It is a good idea!. You would have some equity built over the years.

jayleno
10-06-2008, 08:36 PM
Dont you worry....as requested...you are ignored.
Guys,

I know this is immigration forum , so People who are not interested in this thread please ignore.

Considering the State of Markets and Global economy.

Do you guys think it make sense to buy a Flat/Single family house in India , I am going to india in Mid october. Should i take the lunge and buy some proerty there...This would be the first home..so no Home equity Loan..It will be on 12% interest Rae from some indian bank.


Please throw some ideas..

mirage
10-06-2008, 08:42 PM
What you are seeing right now in US, you'll see that in India begining next year. Indian Property market is ripe for a crash. I wouldn't invest a penny until the dust settles...

Bpositive
10-06-2008, 08:45 PM
i would wait a few months unless i had cash and could get substantial discounts...of course you may already have a great deal that you want to close...however, at a 12% rate, you have to be careful....lots of people will be looking to sell their flats soon...and there may be a temporary downturn in the market that you can take advantage of..get all your paperwork ready...but wait a bit to pull the trigger...

free advice...take it for what it is worth

kevinkris
10-06-2008, 09:00 PM
What i think is add this in your short term goal:

In case we need to go back we should have atleast a flat (completely owned) to live and work.

This is the minimum advantage of coming to different country to take all these struggles.


Guys,

I know this is immigration forum , so People who are not interested in this thread please ignore.

Considering the State of Markets and Global economy.

Do you guys think it make sense to buy a Flat/Single family house in India , I am going to india in Mid october. Should i take the lunge and buy some proerty there...This would be the first home..so no Home equity Loan..It will be on 12% interest Rae from some indian bank.


Please throw some ideas..

BECsufferer
10-06-2008, 10:05 PM
What you are seeing right now in US, you'll see that in India begining next year. Indian Property market is ripe for a crash. I wouldn't invest a penny until the dust settles...

You have to understand how the market in India operates versus how it is run in developed countries especially in USA. I don't know if you noticed, but all the property transactions are conducted on credit in USA with minimum persnal contribution ( i.e. down payement). And now in hindsight, we all can understand how this practise was reason for bubble-brust. As an interested home-owner looking for houses currently, I have first hand experience. I say that beacuse people out-bidding me, even in todays market conditions, are putting down zero amount in down payment and in-turn even financing closing costs. So when you have minimal of personal equity at stake, it bothers you least to take risks on other peoples ( say banks) money.

Now lets go to India, and I will stick to North-India, as that's where I have first hand expereience from. Go and talk to any property dealer and enquiry about properties. Wait for few weeks and return to find the rates have gone up. Well lets assume, you agreed upon the sale price and are now ready to conduct transaction. The property dealer is not going to ask you for SS number to check credit wortheness, but rather will ask for cash amount. You pay cash, you have the papers else don't waste time. So with business model, their is little risk involved and hence property business in North-India remains sizzling hot.

If you can afford you must buy piece of land in North India. ALthough maintaining it always remains challange as their are no laws protecting you from Rich-Police-Politician gangs.

alterego
10-06-2008, 11:01 PM
Property prices will soften worldwide. Though as someone pointed out many purchases in India are not credit based, so it may not be as bad there as there would be limited forced selling, though from what I have heard sales have and will slow markedly, another point to consider is that India has a population pressure like nowhere else in the world, as long as people can buy they will continue to do so.
It is also the case that the Indian economy is very much dependent on the US economy as much of the exports are to the USA, but the domestic economy is stronger than China. India can and perhaps will spend their 300 Billion dollar reserves in this down cycle for infrastructure development projects which should keep the domestic economy going.
An interesting thing is that the Indian Rupee is falling vis a vie the Dollar. I've heard it is because of hedge funds and other investors liquidating Indian assets to bring them back to the US where they have more pressing needs in a rapidly deleveraging system.
I would say that Property prices in India have adjusted downward by 15% or so already and will perhaps go another 10% but maybe not much more. I'm also hearing that the bigger hit is in the above 35 lakh properties, below that prices are holding up better.
Additionally if you are planning to buy from your savings/borrowings in the USA then you could benefit from the exchange rate, which is already nearly 25% better than a few months ago. Especially if you consider your situation shaky in the USA, it is an option worth considering. Given the US authorities can't seem to make up their minds whether they want us here, I can't see the sense in buying homes here, atleast buying there, you can ride out a market.

mxh72c
10-06-2008, 11:31 PM
We are really now in a global credit/liquidity crisis. Please see the link below to see the cash crunch the major real estate players like DLF are in. This article is from July so you can imagine what September would have been like for them. Prices have already come down in major centres. Currently there is a game of chicken being played between builders and end use buyers. Every indication is that very soon builders will have to cut their losses and sell their flats at deep discounted prices.



http://economictimes.indiatimes.com/Markets/Real_Estate/News_/DLF_to_spend_Rs_500_cr_on_share_buyback/rssarticleshow/3190535.cms

hindu_king
10-07-2008, 10:26 AM
Properties in India will start going down. They will reach bottom in the next 3 years. This is only the begining.

dallasdude
10-07-2008, 11:45 AM
It's not a wise decision to invest in India for another few years. If a controlled market like the US experiences such short comings, you cant even imagine how things will get in India. It's going to be extremely volatile and the armageddon is just about to begin. Stay away from there.

ssa
10-07-2008, 12:12 PM
Indian markets are in fact more controlled (by the government) than US ones. Last few years were like "wild wild west" on the Wall street under the cloak of "free markets" theory with practically no oversight or regulation of any kind which ultimately landed us all in this hole!!

It's not a wise decision to invest in India for another few years. If a controlled market like the US experiences such short comings, you cant even imagine how things will get in India. It's going to be extremely volatile and the armageddon is just about to begin. Stay away from there.

rupchikgulti
10-07-2008, 12:37 PM
Well, it doen't make sense to buy any kind of property any where in universe now as they are all coming down. Some already had and some are near to the situation.

sanjay
10-07-2008, 12:41 PM
Well, it doen't make sense to buy any kind of property any where in universe now as they are all coming down. Some already had and some are near to the situation.


I agree with your point. So, wait for some more time. Right now most important thing is to hold your money tight. When you have a job market highly volatile, most important thing is to have money in hand for bad time (I pray to GOD that no one get to see this time).

srikondoji
10-07-2008, 01:08 PM
I partially disagree with your analysis on markets in India. Icici and SBI are facing the problem of defaulters these days. Banks there have mimicked the model in United States and there are amny loans that had less than 10% downpayment.
I can tell you in Hyderabad that many flats in and around madhapur are upwards of 45 lakhs.
These prices will fall given the number of flats still unsold. There are amny unsold houses worth above 1 Cr and they are gonna come down.
--sri
You have to understand how the market in India operates versus how it is run in developed countries especially in USA. I don't know if you noticed, but all the property transactions are conducted on credit in USA with minimum persnal contribution ( i.e. down payement). And now in hindsight, we all can understand how this practise was reason for bubble-brust. As an interested home-owner looking for houses currently, I have first hand experience. I say that beacuse people out-bidding me, even in todays market conditions, are putting down zero amount in down payment and in-turn even financing closing costs. So when you have minimal of personal equity at stake, it bothers you least to take risks on other peoples ( say banks) money.

Now lets go to India, and I will stick to North-India, as that's where I have first hand expereience from. Go and talk to any property dealer and enquiry about properties. Wait for few weeks and return to find the rates have gone up. Well lets assume, you agreed upon the sale price and are now ready to conduct transaction. The property dealer is not going to ask you for SS number to check credit wortheness, but rather will ask for cash amount. You pay cash, you have the papers else don't waste time. So with business model, their is little risk involved and hence property business in North-India remains sizzling hot.

If you can afford you must buy piece of land in North India. ALthough maintaining it always remains challange as their are no laws protecting you from Rich-Police-Politician gangs.

BECsufferer
10-07-2008, 01:30 PM
I partially disagree with your analysis on markets in India. Icici and SBI are facing the problem of defaulters these days. Banks there have mimicked the model in United States and there are amny loans that had less than 10% downpayment.
I can tell you in Hyderabad that many flats in and around madhapur are upwards of 45 lakhs.
These prices will fall given the number of flats still unsold. There are amny unsold houses worth above 1 Cr and they are gonna come down.
--sri

Sri;

As i said in my note, my comments are strictly directed towards markets in North India such as Greater Mohali or Ludhiana. Their had been some instances of mega-builders pulling out of mega-commercial projects such as Mohali inter-State Bus Terminal. But on same note, recent auction of commercial land by GMADA saw prices not fore-seen by general public. As rarely does anyone in north India believes on financial or non-financial promisary notes, as we do here in USA. So for individual buyers, it all boils down to cash transaction.

My suggestion, as someone noted their is 25% appreciation of USD, is to invest in india preferbly in partnership with someone you know and can trust.

srikondoji
10-07-2008, 02:09 PM
Hi BECsufferer,
This time i completely disagree with you.
There has been asset bubble in Indian properties due to cheap money.

Read the following excerpt from March 2008.
"— The yen carry trade is a “cheap money” gambit that exploits the extraordinarily low borrowing rates available in Japan. It is notoriously hard to quantify but is understood to have supported a series of the asset bubbles around the world in the past few years, from Indian property to fine wine and art

— Japan's low interest rates, an anomaly in the financial world, result from Japanese central bank monetary policy, which has, Richard Jerram, the Macquarie economist, said, “defied orthodox economic thinking for more than 20 years”

Not just realtors, but banks, Tatats, birlas and to some extent Reliance will fall prey to the folly they made between 2005 and 2007.
They borrowed Billions of dollars for their oversees acquisitions which are yen denominated.
NO wonder why INdian markets are collapsing even though the Indian market is de-coupled.
Hope this explains why there won't be any property value appreciation for next few years in India as well as anywhere on this planet earth.

Sri;

As i said in my note, my comments are strictly directed towards markets in North India such as Greater Mohali or Ludhiana. Their had been some instances of mega-builders pulling out of mega-commercial projects such as Mohali inter-State Bus Terminal. But on same note, recent auction of commercial land by GMADA saw prices not fore-seen by general public. As rarely does anyone in north India believes on financial or non-financial promisary notes, as we do here in USA. So for individual buyers, it all boils down to cash transaction.

My suggestion, as someone noted their is 25% appreciation of USD, is to invest in india preferbly in partnership with someone you know and can trust.

cygent
10-07-2008, 02:51 PM
Guys, I know this is immigration forum , so People who are not interested in this thread please ignore.
Considering the State of Markets and Global economy.
Please throw some ideas..

At this point, I think it makes more sense to become a blood sucking goolti employer. :D

updated-------->
To the punk you gave me red with the comment "What the fu*K did you mean by goolty? Did some gulti screwed your wife or mother??"
No, actually I was fucked by a GOOLTI not a GULTI like you. And if I find you I will make sure to buttfu*k your Dad & make you Mom suck my di*k later MotherFu*ker. If you Mom is dead, then maybe your GrandMom or Wife or Daughter. Oh, and also learn some grammar, it is "screw" not "screwed", guess they don't teach that in goolti schools huh? Arsehole Fuc**ng lonely inbred loser.

Add to the other who gave me red with "I dont see much difference b/w gulty, Marathi, Tamil, Gujju, Desi, Gora, Iraqui, Irani." I was referring to GOOLTI not GULTI. Visit www.goolti.com know the difference. Gulti's are hardworking Telugu folk, I have no problem with them. GOOLTI's are the blood sucking Employers. Thanks for understanding.

Ramba
10-07-2008, 03:41 PM
There is vast difference between US and Indian housing market crash. India RE market will not collapse like here. There may be a melt down or small correction. The simple big reason is demand for housing in middle class due to economic growth. Based on population density, US is 9 times bigger than India. Lot of land in US. But housing land is so limited in India. So there is always demand. Second reason, there is no sub-prime lending in India. Third, in India, housing loan is based on cash worthiness rather than credit worthyness like in US. So we may not see such a massive foreclosure/bankrupcy in India to bring the price down considerably like in US.

However, now the prices or extremly high, such that it can not be affordabe to people other than NRI or IT folks. 1 crore houses are very common now. Based on US economy it will definitly come down. It will be depend on how hard IT/outsourcing bussiness gets affectd in future.

ArkBird
10-07-2008, 03:56 PM
There is vast difference between US and Indian housing market crash. India RE market will not collapse like here. There may be a melt down or small correction. The simple big reason is demand for housing in middle class due to economic growth. Based on population density, US is 9 times bigger than India. Lot of land in US. But housing land is so limited in India. So there is always demand. Second reason, there is no sub-prime lending in India. Third, in India, housing loan is based on cash worthiness rather than credit worthyness like in US. So we may not see such a massive foreclosure/bankrupcy in India to bring the price down considerably like in US.

However, now the prices or extremly high, such that it can not be affordabe to people other than NRI or IT folks. 1 crore houses are very common now. Based on US economy it will definitly come down. It will be depend on how hard IT/outsourcing bussiness gets affectd in future.


True, but you are forgetting the basic definition of demand. Demand is willingness to buy supported by ability to buy. If you are from any metros in India, think how many of your Non-IT, mainstream friends draw more than Rs. 50,000 per month? How can someone making even Rs. 50,000 a month afford 50 Lakh flat?

If there are 10 people drooling out side Ferrari showroom that does not mean there is demand for 10 Ferrari :)

Cheers

ArkBird

srikondoji
10-07-2008, 04:13 PM
Ramba,
Yes there is demand, but that demand initially came from NRI's. This is when properties were worth under 20 lakhs. But soon the prices jumped to levels even unaffordable to NRIs. Now these prices are unsustainable because even a person earning 1 lakh per month cannot afford a 50 Lakh worth propery. This is because of high interest rates on home loans.
I know few real estate houses where they are almost close to bankruptcy because they couldn't sell the houses or land. They borrowed huge amount of high interest short term loans and now can't sell the properties.
Sure, there is demand but economics will take the front seat at the time of materialization of this demand.

Your theory sounds exactly that of my father. When i challenged him in year 2005 that property values in Hyderabad will have to fall as the rise in prices is riduculous, he laughed at me. He said "I have not seen in my entire life a price drop in property prices". When i said, i will not invest in real estate until the prices fall, he just made fun of me.
I was at the receiving end for the past 2 years both in US and also in India for the decision not to invest in real estate here and also in India.
Luckily the piece of land i bought in India in the year 2004 still holds its value.

--sri


There is vast difference between US and Indian housing market crash. India RE market will not collapse like here. There may be a melt down or small correction. The simple big reason is demand for housing in middle class due to economic growth. Based on population density, US is 9 times bigger than India. Lot of land in US. But housing land is so limited in India. So there is always demand. Second reason, there is no sub-prime lending in India. Third, in India, housing loan is based on cash worthiness rather than credit worthyness like in US. So we may not see such a massive foreclosure/bankrupcy in India to bring the price down considerably like in US.

However, now the prices or extremly high, such that it can not be affordabe to people other than NRI or IT folks. 1 crore houses are very common now. Based on US economy it will definitly come down. It will be depend on how hard IT/outsourcing bussiness gets affectd in future.

Ramba
10-07-2008, 04:26 PM
True, but you are forgetting the basic definition of demand. Demand is willingness to buy supported by ability to buy. If you are from any metros in India, think how many of your Non-IT, mainstream friends draw more than Rs. 50,000 per month? How can someone making even Rs. 50,000 a month afford 50 Lakh flat?

If there are 10 people drooling out side Ferrari showroom that does not mean there is demand for 10 Ferrari :)

Cheers

ArkBird

I understand. Even for NRI it is difficut to afford now. The issue is the numbers. How many H1b and L1s come to US from 1990 t0 2008. Very very conservative estimation wil be atleast 2 million. This estimation ignores other NRIs in other country. Apart from this there are many resident IT folks makes 6 digit salary plays the role. If most of them tries to buy, we need to find another India. Indian real estates become a NRI colony,

21stIcon
10-07-2008, 06:34 PM
Almost all Hyderabad house hold has one or more members live in US, who save atleast 15l/year and invest a lot in homeloand which would translate into sustainable stability in AP,India.

Unless US govt. declares bankruptcy, AP real estate would not burst so it would be safe to invest in AP.....

nojoke
10-07-2008, 07:26 PM
Almost all Hyderabad house hold has one or more members live in US, who save atleast 15l/year and invest a lot in homeloand which would translate into sustainable stability in AP,India.

Unless US govt. declares bankruptcy, AP real estate would not burst so it would be safe to invest in AP.....

If an aparment costs 70 lakhs and that is renting for 15 thousand, how does it make sense to invest in it? The return on 70 lakhs at 12%(or 10%) is 7 lakhs/year. That is approx. 60 thousand per month. If you buy an apartment and rent it, it gives you 15 thousand. Don't you see the problem? The return on investment is low, very low. The fact that it is renting only for 15 thousand tells us that it is not affordable for most of the average guys in the city. The theory that there are more demand to snap up 70 lakh, 1 crore apartments is simply not true.

mirage
10-07-2008, 07:27 PM
The only housing market which doesn't show any sign of correction is Mumbai, as the builders have more Dubai, 'Bhai' kind of money. Everywhere else properties have already fallen 20-30%. In gurgaon & NOIDA they are down 40% from previous year...

ArkBird
10-07-2008, 08:12 PM
The only housing market which doesn't show any sign of correction is Mumbai, as the builders have more Dubai, 'Bhai' kind of money. Everywhere else properties have already fallen 20-30%. In gurgaon & NOIDA they are down 40% from previous year...

Even in Mumbai, prices are coming down (~10-20% from last year) however they are so high right now it has to crash more than 50% to come in "NRI" range. I feel sorry for the common middle class of Mumbai... They have no options but to go beyond Borivali and Thane even after crash :( ....

rkm
10-07-2008, 08:24 PM
Global economy downfall impact will be there in india also,Indian Stock market is also going down, Due to Inflation, High interest ,Election year (India). It is better to wait till next year.


Even in Mumbai, prices are coming down (~10-20% from last year) however they are so high right now it has to crash more than 50% to come in "NRI" range. I feel sorry for the common middle class of Mumbai... They have no options but to go beyond Borivali and Thane even after crash :( ....

mirage
10-07-2008, 08:43 PM
Did you guys paid attention to this, when Inflation rose to 13% Indian Finance Minister said it is because Oil is at $160 a barrel, but now as Oil has come down, Inflation has come down worldwide Inflation is still above 12% in India. also, when Stock markets were at 22K Indian FM minister used to give Interviews every day it is because of great policies of UPA govt. Now Sensex has slashed 40%, Finance Mn. has suddenly dissapeared. Did you guys also heard him saying 'Indian economy is insulated from ongoing US crisis'. I doubt if there is a bigger liar in Indian govt. than the finance minister he's beaten Laloo, amar singh types...

shree772000
10-07-2008, 09:43 PM
Almost all Hyderabad house hold has one or more members live in US, who save atleast 15l/year and invest a lot in homeloand which would translate into sustainable stability in AP,India.

Unless US govt. declares bankruptcy, AP real estate would not burst so it would be safe to invest in AP.....

I feel you guys are barking the wrong tree altogether. I agree that there will be a slow down in the real estate market. No question about it. But not the segment you guys are arguing abt. Only 10% of the NRIs can afford a house worth more than 50 Lakhs. I am being conservative here. So the upscale realestate market is not fueled by NRI money. Its the black money in india.

There is a lot of black money in India. Real estate bubble in india is definitely because of that money. It will not correct as much as US for sure!

immi_enthu
10-07-2008, 09:56 PM
If an aparment costs 70 lakhs and that is renting for 15 thousand, how does it make sense to invest in it? The return on 70 lakhs at 12%(or 10%) is 7 lakhs/year. That is approx. 60 thousand per month. If you buy an apartment and rent it, it gives you 15 thousand. Don't you see the problem? The return on investment is low, very low. The fact that it is renting only for 15 thousand tells us that it is not affordable for most of the average guys in the city. The theory that there are more demand to snap up 70 lakh, 1 crore apartments is simply not true.

I had the same question. Can anyone please explain inspite of the above problem, how are the prices for apartments in Hyderabad are so high ?

The only thing I can think of is that everybody is buying for themselves not as an investment.

shree772000
10-07-2008, 10:08 PM
I had the same question. Can anyone please explain inspite of the above problem, how are the prices for apartments in Hyderabad are so high ?

The only thing I can think of is that everybody is buying for themselves not as an investment.

Look at the previous post. Its a myth that NRIs are buying up all these high end properties.

Indian real estate market is fueled by the black money india. They are using NRIs as a facade. Investing in realestate legitimizes that money. Now they don't care how much rent they are getting. It makes no business sense at all. You and me cannot comepete with them.

nojoke
10-08-2008, 12:49 AM
Look at the previous post. Its a myth that NRIs are buying up all these high end properties.

Indian real estate market is fueled by the black money india. They are using NRIs as a facade. Investing in realestate legitimizes that money. Now they don't care how much rent they are getting. It makes no business sense at all. You and me cannot comepete with them.

Assuming you are correct. The black money needs to be converted to white money. So they need to sell the apartment at some point in future. There is no point in letting it sit there with low returns. If all these properties come to market the effect is the same. It drives down the price.
Otherwise I have to conclude that these guys want to repent their mistakes and doing community a service by buying properties at sky high prices so that ordinary folks can rent it and is made affordable. :)

drirshad
10-08-2008, 03:33 AM
It may not look as bad but this is a time to step back and take a better look on every step moving forward. This is a very testing time for the economic outcome in the next few months. A very sad episode to have come upon an Indian family my heartfelt condolence to them.

http://timesofindia.indiatimes.com/Death_of_American_Dream_Indian_kills_family_self_i n_LA/rssarticleshow/3568703.cms

WASHINGTON: Multiple gunshots echoed in the upscale home of an Indian family in a quiet, gated, suburban Los Angeles community last weekend, echoing the troubled times in America.

When police turned up on Monday morning after calls from a concerned neighbor waiting for a carpool ride, they found the body of 45-year old Karthik Rajaram, an unemployed financial adviser, lying in one room with a handgun he had used to shoot himself dead.

With him lay his two youngest sons Arjuna (7) and Ganesha (12), both shot dead. In different rooms across the house they found the bodies of Karthik’s wife Subasri (39), his mother-in-law Indra Ramasesham (69), and his eldest son Krishna (19). They all appeared to have been shot to death by Karthik Rajaram.

Police also found two suicide notes – one for the cops and one for extended family and friends -- and a will. In them, Rajaram he spoke of his financial difficulties and took responsibility for killing his family members, police said.

indian111
10-08-2008, 11:46 AM
You are right in the sense of returns but I am also looking at investing ,not 50 lakhs but small amts. The rturns may not be good but the main reason I think people invest is because of the surity that the land price appreciates more than 50% and be sure your principal is safe compared to stocks or other.

Just my 2 cents .Let me know if somene think otherwise




If an aparment costs 70 lakhs and that is renting for 15 thousand, how does it make sense to invest in it? The return on 70 lakhs at 12%(or 10%) is 7 lakhs/year. That is approx. 60 thousand per month. If you buy an apartment and rent it, it gives you 15 thousand. Don't you see the problem? The return on investment is low, very low. The fact that it is renting only for 15 thousand tells us that it is not affordable for most of the average guys in the city. The theory that there are more demand to snap up 70 lakh, 1 crore apartments is simply not true.

nojoke
10-08-2008, 12:17 PM
You are right in the sense of returns but I am also looking at investing ,not 50 lakhs but small amts. The rturns may not be good but the main reason I think people invest is because of the surity that the land price appreciates more than 50% and be sure your principal is safe compared to stocks or other.

Just my 2 cents .Let me know if somene think otherwise

That is speculation. Speculation is what is causing all these problems. When the game stops all the speculators dump the property and the values spiral down.

bailoor
10-08-2008, 12:17 PM
Older generation men always put their savings in LAND and the women in GOLD. Both are ASSETS.

The new generation thought stock market is for educated people where you understand the company principles/profits/analysis etc... But it is turning out more like GAMBLING.

Friend,
I am from Bangalore. Most of the major cosmopolitan cities prices will remain stable(10-15% changes) . If you are looking at long term investment, go ahead and buy LAND.
After 5-10 years, you can sell and use it for your kid's education or you can construct
rental houses.

Make sure the LAND documents are correct and there is proper security for it.

Good Luck.

NolaIndian32
10-08-2008, 01:30 PM
Guys, on a side note, please be aware that while you are residing/employed in the US and you pay and file tax returns for your employment in the US, per US laws/regs you have to pay taxes on your "worldwide income". Now there is a dollor for rupee tax credit, but assets taxed in the two countries differ and their rates differ too. So if you buy property in the India while in the US you may need to declare it or any rental income you may receive from it on your US Tax Returns while you continue to reside/work in the US.

It is pretty complicated and you will need the services of an International Tax Accountant.

Disclaimer: I am not an accountant, please do your own research based on the generlaized information in this post.

funny
10-08-2008, 01:51 PM
http://www.bestsyndication.com/?q=tough-days-ahead-indian-real-estate-market

Green_Always
10-08-2008, 02:48 PM
Looks like things are going down there now.. due to Current American economy status.




India facing ripple effect of global crisis, will act fast: FM

http://economictimes.indiatimes.com/India_facing_ripple_effect_of_global_crisis_FM/articleshow/3575032.cms

dallasdude
10-08-2008, 04:31 PM
Looks like things are going down there now.. due to Current American economy status.




India facing ripple effect of global crisis, will act fast: FM

http://economictimes.indiatimes.com/India_facing_ripple_effect_of_global_crisis_FM/articleshow/3575032.cms

I agree. it makes no sense to invest in India now.

nk2006
10-08-2008, 05:10 PM
Look at the previous post. Its a myth that NRIs are buying up all these high end properties.

Indian real estate market is fueled by the black money india. They are using NRIs as a facade. Investing in realestate legitimizes that money. Now they don't care how much rent they are getting. It makes no business sense at all. You and me cannot comepete with them.

You are right on - most of conversations/analysis on RE market in India (especially Hyderabad which I am familiar with) center around how NRI/IT employee money has spurred the prices. its a big urban legend. Majority of these "investments" were with black money - corrupt govt employees, local businessmen, and politicians of all parties, and ultra rich actors. They saw a chance in converting their black money into white and pumped up into RE projects as "investments". I saw a report somewhere which said that these black-money transactions can account for atleast 33% of RE transactions in hyderabad (with another 1/3 coming from companies/FII's and only the other 1/3 from NRI's + local rich professionals like IT employees/doctors/lawyers etc). In the apartment and SF homes market most of the projects are in the mid-way thru completion -with majority of apartment projects scheduled to complete in 2009-11. During that time there will be abundant apartments with not many people living in them - expect to see rental prices go down even more.

Of course these investors would eventually try to cash their assets - and deman vs supply equations change dramatically to drag down prices. In addition to this - the current global economic conditions are bad (to put it very mildly) - the argument that it will not touch India may not be correct. Our economy is a lot smaller than other economies like US/europe and depend a lot on those economies - more financial companies bankruptsies would affect IT companies revenues. Also there were direct investments from some of the failed companies in India - for example Lehman Bros had a investment in one of apartment project in Hyderabad. Morgan Stanley, Merrill Lynch, etc. all have tie ups with RE companies with huge "promised" investments. Now that they themselves are in trouble - dont think that they would venture into indian RE market anymore - this can also potentially drag down prices.

I could be wrong (was saying that this would happen for last one year - it didnt happen so far ;)) - but I think buying an apartment/house in Hyderabad/Bangalore/Chennai now in 2008 as an "investment" is not a great idea. If the buy is to live there - then its another matter (I never look at my home as an investment - its more of a life style choice whether in India or in US).

sundeep14
10-08-2008, 05:54 PM
best time to send money to india and keep it in bank there for sometime..u will best conversion rate right now....Rs.46-Rs. 47 for a dollar...also u get atleast 9-10% interest on ur money there...after 8-10 months when the picture about real estate gets clear..we should invest in property in india..

saveimmigration
10-09-2008, 02:00 PM
Older generation men always put their savings in LAND and the women in GOLD. Both are ASSETS.

The new generation thought stock market is for educated people where you understand the company principles/profits/analysis etc... But it is turning out more like GAMBLING.

Friend,
I am from Bangalore. Most of the major cosmopolitan cities prices will remain stable(10-15% changes) . If you are looking at long term investment, go ahead and buy LAND.
After 5-10 years, you can sell and use it for your kid's education or you can construct
rental houses.

Make sure the LAND documents are correct and there is proper security for it.

Good Luck.


I totally agree,

It all depends on the type of property you want to invest,

Land/Bunglows not more than 10% correction [Different class of buyers mostly cash-NOT middle class]

Flats-definite correction atleast 30%[mostly middle class]

Stock market money will trickle in real estate-as someone said gold prices and land prices will sustain

Location important

BECsufferer
10-09-2008, 05:03 PM
Before I go any further, please read my disclaimer. The views are soley directed towards local market I am aware of and interests in i.e. GMADA ( Punjab/ Chandigarh area) and in no-way should my views/ opionion be applied to flats in Bombay/ Banglore or Hyd etc. With that said, hear me out.

Their is and last year I first hand expereienced massive infrastrucutral development going on in Delhi as well as in Chandigarh/ Punjab area. Their are supposed to be some Asian or Commonwealth games to happen in 2010. In addition to that, for some great reasons it appears the states closer to national capital had been lacking in basic infrastructural development. Can you believe Bombay-Pune highway is in better conditions than Ludhiana- Delhi, National Highway #1!. FYI: NH-1, is India's historically first highway criss-corssing the country from West to East. So they are playing the catchup game.

With improved basic infrastructure, living and commuting from satillite cities has become much easier than it was 10 yrs ago. Just like sub-urbs here, people want to enjoy life-style that is un-affordable in city centers. The NRI spending clout has wanned in recent years due to rapid development and growth in India. So the babus, politcians, industrialists, cops, Rich middle-class etc are coming in and taking away most of the RE. In addition to that, the basic infrastrucutral development funded by Government is giving a lot of monies to people whose farming land is being acquired to setup airport or industrial/ residentail sectors. These recently cash-rich farmers are not investing back in buying adjoining farm land but also investing in urban properties. You won't believe, but people were compensated quarter million per acre for recent Mohali/ Chd airport expansion. On top of all this, they ever growing population and shrinking available land is organically raising the prices.

With all that going, why would you think RE investment would fail? Plus remember the age-old adage "... Land never fails you." Jats do it!

shree772000
10-09-2008, 05:46 PM
You are right on - most of conversations/analysis on RE market in India (especially Hyderabad which I am familiar with) center around how NRI/IT employee money has spurred the prices. its a big urban legend. Majority of these "investments" were with black money - corrupt govt employees, local businessmen, and politicians of all parties, and ultra rich actors. They saw a chance in converting their black money into white and pumped up into RE projects as "investments". I saw a report somewhere which said that these black-money transactions can account for atleast 33% of RE transactions in hyderabad (with another 1/3 coming from companies/FII's and only the other 1/3 from NRI's + local rich professionals like IT employees/doctors/lawyers etc). In the apartment and SF homes market most of the projects are in the mid-way thru completion -with majority of apartment projects scheduled to complete in 2009-11. During that time there will be abundant apartments with not many people living in them - expect to see rental prices go down even more.

Of course these investors would eventually try to cash their assets - and deman vs supply equations change dramatically to drag down prices. In addition to this - the current global economic conditions are bad (to put it very mildly) - the argument that it will not touch India may not be correct. Our economy is a lot smaller than other economies like US/europe and depend a lot on those economies - more financial companies bankruptsies would affect IT companies revenues. Also there were direct investments from some of the failed companies in India - for example Lehman Bros had a investment in one of apartment project in Hyderabad. Morgan Stanley, Merrill Lynch, etc. all have tie ups with RE companies with huge "promised" investments. Now that they themselves are in trouble - dont think that they would venture into indian RE market anymore - this can also potentially drag down prices.

I could be wrong (was saying that this would happen for last one year - it didnt happen so far ;)) - but I think buying an apartment/house in Hyderabad/Bangalore/Chennai now in 2008 as an "investment" is not a great idea. If the buy is to live there - then its another matter (I never look at my home as an investment - its more of a life style choice whether in India or in US).

On the same note.... On my last trip to India, Hyd specifically...I went around and asked some people I knew for an estimate on a property...I saw people just pulled the numbers out of thin air. I donno how they came to the number, there was nothing to track the real value, like revenue records etc.

I think this also causes the bubble we are seeing, as some people who have cash and are willing to pay may buy it at that price and that will cause people to think that its actually worth that much.

nojoke
10-09-2008, 05:54 PM
Before I go any further, please read my disclaimer. The views are soley directed towards local market I am aware of and interests in i.e. GMADA ( Punjab/ Chandigarh area) and in no-way should my views/ opionion be applied to flats in Bombay/ Banglore or Hyd etc. With that said, hear me out.

Their is and last year I first hand expereienced massive infrastrucutral development going on in Delhi as well as in Chandigarh/ Punjab area. Their are supposed to be some Asian or Commonwealth games to happen in 2010. In addition to that, for some great reasons it appears the states closer to national capital had been lacking in basic infrastructural development. Can you believe Bombay-Pune highway is in better conditions than Ludhiana- Delhi, National Highway #1!. FYI: NH-1, is India's historically first highway criss-corssing the country from West to East. So they are playing the catchup game.

With improved basic infrastructure, living and commuting from satillite cities has become much easier than it was 10 yrs ago. Just like sub-urbs here, people want to enjoy life-style that is un-affordable in city centers. The NRI spending clout has wanned in recent years due to rapid development and growth in India. So the babus, politcians, industrialists, cops, Rich middle-class etc are coming in and taking away most of the RE. In addition to that, the basic infrastrucutral development funded by Government is giving a lot of monies to people whose farming land is being acquired to setup airport or industrial/ residentail sectors. These recently cash-rich farmers are not investing back in buying adjoining farm land but also investing in urban properties. You won't believe, but people were compensated quarter million per acre for recent Mohali/ Chd airport expansion. On top of all this, they ever growing population and shrinking available land is organically raising the prices.

With all that going, why would you think RE investment would fail? Plus remember the age-old adage "... Land never fails you." Jats do it!

Your theory that land values never fall in india is not true. Here is the proof. It is a question of affordability. Even if the population explodes and since most of them are poor, there is no justification for such high price appreciation we had in the last 5 years.
http://www.ciol.com/content/news/2006/106042710.asp
-------------------------------------------------------------
“From the peak level, prices started plummeting in 1995. Between 1995 and 2000, the property bubble built on speculations burst and prices declined by almost 30–40 per cent all across India, including Bangalore. There was a slight recovery in 1999-2000 period, riding on the dotcom boom.”

cygent
10-09-2008, 05:55 PM
Some people gave me red for joking about "blood sucking employers". You have no clue how badly they have screwed me but not my "wife" or "mother" like you have suggested. That comment was totally uncalled for. If you have any guts atleast reveal your userID. I have updated my original post to answer your questions and pacify the 1st commenter.

kshitijnt
10-09-2008, 08:28 PM
Only thing that makes sense right now is gold.

hebbar77
10-10-2008, 12:01 AM
If you are not in india, then you are somewhere to earn more than you do than in india. So investment is safe if you can afford to invest in that property without a loan. If you are taking a loan you are getting ripped off. STOP there.

to me agricultural land is next to investment in gold. agri land always holds value(sale value) or appreciates over time. Always you can get decent return by farming something there. So my belief is you always get 6%+ return on investment over short/long period of time.

city properties are just a ripp off. So get only one property if you want to live for yourself.. Investment of say 50 lacs on a flat(condo), may give you a good rent. But for how long? and what % of interest you pay on that loan? And what will the aging affect be on that flat!!...
that way land | house is better choice!


To me below are investment items first the highest safety + return(decreasing order or preference)
1. gold(other precious metals)
2. treasary bonds../govt assured accounts
2. agri land(either in india or US, in is labor is higher)
3. city independent houses
4. select mutual funds
5. stock market
6. Condos

shree772000
10-10-2008, 01:14 PM
Hi,
Which bank offers best interest rate for fixed deposit in india.?
What is treasury bond?? How could we invest in it?

ICICI has some very good interest rates. I like them because they have online access to your account which most of the indian banks don't.

shree772000
10-10-2008, 01:15 PM
If you are not in india, then you are somewhere to earn more than you do than in india. So investment is safe if you can afford to invest in that property without a loan. If you are taking a loan you are getting ripped off. STOP there.

to me agricultural land is next to investment in gold. agri land always holds value(sale value) or appreciates over time. Always you can get decent return by farming something there. So my belief is you always get 6%+ return on investment over short/long period of time.

city properties are just a ripp off. So get only one property if you want to live for yourself.. Investment of say 50 lacs on a flat(condo), may give you a good rent. But for how long? and what % of interest you pay on that loan? And what will the aging affect be on that flat!!...
that way land | house is better choice!


To me below are investment items first the highest safety + return(decreasing order or preference)
1. gold(other precious metals)
2. treasary bonds../govt assured accounts
2. agri land(either in india or US, in is labor is higher)
3. city independent houses
4. select mutual funds
5. stock market
6. Condos

I concur. The order will vary a little bit depending on market for shhort term gains. But for current market I think this order makes sense and also for building a long term low risk portfolio.

Refugee_New
10-10-2008, 01:28 PM
ICICI has some very good interest rates. I like them because they have online access to your account which most of the indian banks don't.

ICICI bank will cheat and steal your money. Beware. Also they are exposed to this financial crisis and the news is not coming out. I heard that so many people withdrawing money from this bank.

Check with others.

funny
10-10-2008, 01:36 PM
ICICI bank will cheat and steal your money. Beware. Also they are exposed to this financial crisis and the news is not coming out. I heard that so many people withdrawing money from this bank.

Check with others.


State Bank of India offers smae interest rates and may be a better conversion rate

cal_dood
10-10-2008, 02:35 PM
In the end it comes downs to your risk profile and expected rate of return. For example Gold is supposedly safe, but is this a good time to buy ? It is at an all time high (Around $850-900 an ounce. It was around $250 an ounce in 2000). Will it go further up, most probably, but nobody can say how much. Will it come down - you bet.

My take is - all the things in the list are vehicles of diversification. In a portfolio you should have some gold, real estate, stocks, bonds etc. and you need to constantly re-balance your portfolio as per your situation.

Also, if like most people, you don't know how to time the market, dollar-cost averaging is a good option. If you want to add gold to your portfolio, don't buy all of it today. Buy it at intervals - a friend of mine had a very good way to do it. He bought a gold coin at every family occasion - Birthday, Anniversary etc.

If you are not in india, then you are somewhere to earn more than you do than in india. So investment is safe if you can afford to invest in that property without a loan. If you are taking a loan you are getting ripped off. STOP there.

to me agricultural land is next to investment in gold. agri land always holds value(sale value) or appreciates over time. Always you can get decent return by farming something there. So my belief is you always get 6%+ return on investment over short/long period of time.

city properties are just a ripp off. So get only one property if you want to live for yourself.. Investment of say 50 lacs on a flat(condo), may give you a good rent. But for how long? and what % of interest you pay on that loan? And what will the aging affect be on that flat!!...
that way land | house is better choice!


To me below are investment items first the highest safety + return(decreasing order or preference)
1. gold(other precious metals)
2. treasary bonds../govt assured accounts
2. agri land(either in india or US, in is labor is higher)
3. city independent houses
4. select mutual funds
5. stock market
6. Condos

hebbar77
10-10-2008, 02:43 PM
People who want to put FD(fixed deposit), try FDs related to NRE accounts. It gives higher return+ you can get the money back to $$.

Always good to stick to nationalised banks! Private banks offer better interest rate, but one fine day you might end up searching for a branch to get your money back.

srikondoji
10-10-2008, 02:53 PM
staying debt free, buying physical gold, convert half of your dollars to rupees, owning physical silver etc are the best options for now.

Real estate property prices will crash in Hyderbad. There is no shortage of land in and around Hyderabad. Already talk of giving away Hyderabad to Telangana is hotting up.

The cheap money from Japan is gone and will never come again. Call rates for banks have risen to 20% (bank to bank lending).
Already there are fissures in European Union in handling the crisis.
The situation is out of reach for USA and Dollar value may crash. The recent runup in dollar is due to Euro crashing. It is a temporary phenomenon.

Keep an eye on all the economic indicators and you will do good for yourself and your family.
I already got plenty of red reps for this sage advise in the past 8 months.
Thanks
sri

Ramba
10-10-2008, 04:17 PM
Hi,
Which bank offers best interest rate for fixed deposit in india.?
What is treasury bond?? How could we invest in it?

Check here

http://www.ratekhoj.com/fixed-deposits/nri-fixed-deposits/fdresults.php?post=Submit+your+choices&duration=all+periods&inst%5B%5D=Public+Sector+Banks&amt=deposit+amounts+less+than+Rs.+15+lakhs&citizentype=non-senior&sorttype=rate&sortorder=DESC&filewrite=0

21stIcon
10-10-2008, 04:48 PM
staying debt free, buying physical gold,

The cheap money from Japan is gone and will never come again. Call rates for banks have risen to 20% (bank to bank lending).
Already there are fissures in European Union in handling the crisis.
The situation is out of reach for USA and Dollar value may crash. The recent runup in dollar is due to Euro crashing. It is a temporary phenomenon.
sri

Equity is down 20% to 30% in developing world and 50 to 70% down in emerging world over 7 trading days, but gold/silver/platinum is just hanging on there, so get out of commodities which would not help you at all, best option is stay in long term USA bonds for security or buy south east Asia bonds which would be right choice for long term

70% of precious metals are owned by banks and government which do not have liquidity to buy, even current price supportd is provided by China/Taiwan/Arab sovereign funds. those govts might get out of gold any time then price will drop to 2005 range.

Do not under estimate USA which is global economic engine,It will recover and this is not new to this country, they have done it and they may do it again at some point in future

Take it easy by diversifying your portfolio....

Best option stay in cash until 2010 with FDIC security....

srikondoji
10-10-2008, 08:30 PM
Long term USA bonds are toast. You can short them instead of buying.

Why should China/Taiwan/Arab get out of Gold? There are no strong indicators for doing that for now.

I cannot stop but laugh at your insistence that USA is global economic engine. More than half of the population is in deep debt and their population is ageing fast. Students can't borrow money now on easy terms to dund their education. THere is virtually no appetite for more debt to fire the economic engine at all.

Physical gold and silver is best to possess.
Equity is down 20% to 30% in developing world and 50 to 70% down in emerging world over 7 trading days, but gold/silver/platinum is just hanging on there, so get out of commodities which would not help you at all, best option is stay in long term USA bonds for security or buy south east Asia bonds which would be right choice for long term

70% of precious metals are owned by banks and government which do not have liquidity to buy, even current price supportd is provided by China/Taiwan/Arab sovereign funds. those govts might get out of gold any time then price will drop to 2005 range.

Do not under estimate USA which is global economic engine,It will recover and this is not new to this country, they have done it and they may do it again at some point in future

Take it easy by diversifying your portfolio....

Best option stay in cash until 2010 with FDIC security....

21stIcon
10-10-2008, 09:38 PM
Long term USA bonds are toast --->


Look at 1930/1960/1990 history you would understand why it make sense buy US bonds during stressed time because yield will go down and price will shoot up


Why should China/Taiwan/Arab get out of Gold? There are no strong indicators for doing that for now.


Eventually they will get out when they find there is no purchasing power on other side of globe. learn How gold crashed from $840 -$170 between 1981- 1990 and why gold price was stable between 1991-2001.

Gold price would not shoot up when most of the developed countries banks are in trouble like 1989-1992

I would not suggest more than 5% of your net worth in gold, but you should know your appetite

China has to lend more of its reserve to western economies otherwise its own export will be in peril, so they would not invest in gold...

Learn relationship between crude and gold, crude would go back to$50/barrel , so Arab govts would have not money to buy gold...



I cannot stop but laugh at your insistence that USA is global economic engine. More than half of the population is in deep debt and their population is ageing fast. Students can't borrow money now on easy terms to dund their education. THere is virtually no appetite for more debt to fire the economic engine at all.

Physical gold and silver is best to possess.

Russians were stronger in 1970's and US crushed them to no where ,800 banks failed in 1990 and Japanese were stronger than today's Chinese economy but US smashed in 5 years


If you understand how US crushed you would not laugh you would be happy that you are in best part of earth

Moreover I am not saying I am right on everything , I am just writing what I feel , time has to judge our predictions.

Do you know why economists are not best paid executives than scientist?

You would understand laughing and bet would not make sense on capital markets.

srikondoji
10-10-2008, 11:48 PM
The only difference between the historic data (1930/1960/1990) and 2008 is that, we are in globalized economy now. The crash you are seeing now is much much different than what anybody has seen before.

Crude prices are crashing because the demand growth projections Goldman sachs had was based on availability of which is not the case now. So, demand for crude is lower and hence oil prices are crashing. Look at GM and ford. They are going down too, because auto sales are doomed for next 2 years.

The problem why Gold will go up is multifold.
China, OPEC countries have huge dollar reserves and hence would like to diversify their dollars. The run up in Gold is just because China and few Oil exporting countries were buying Gold. Gold still has more room to rise. I am talking about physical gold and not the paper gold (GLD ticker symbol).

United States has to print dollars to meet the present crisis. At the same time, it has support those currency papers with Gold. Without Gold backing, dollar value will be crushed.
I am goldsmith and i do know the history of Gold going back to decades. I also read several books to top it all.
See the value of Gold after making inflation adjustments. Don't just look at the per ounce value in dollar terms.

Unless you look at money supply (m3), you will not be able to get a grip on Gold value.
Google on term 'brenton woods' and do some reading.

The only way Gold can be crushed is if
a) United States sells all its Gold holdings.
b) If some gold miner miraculously says that they found a mine with billions of ounces of gold and which can profitably extracted.

There is one theory floating around. United States may sell some of its gold reserves to make up for $700 Billions. However, there are buyers out there who would love to take that Gold. China's biggest headache right now is, what to do with their Dollars.

United States long term bonds are going to yield nothing and will be worthless.

We can go on this forever and fill these pages.

Look at 1930/1960/1990 history you would understand why it make sense buy US bonds during stressed time because yield will go down and price will shoot up



Eventually they will get out when they find there is no purchasing power on other side of globe. learn How gold crashed from $840 -$170 between 1981- 1990 and why gold price was stable between 1991-2001.

Gold price would not shoot up when most of the developed countries banks are in trouble like 1989-1992

I would not suggest more than 5% of your net worth in gold, but you should know your appetite

China has to lend more of its reserve to western economies otherwise its own export will be in peril, so they would not invest in gold...

Learn relationship between crude and gold, crude would go back to$50/barrel , so Arab govts would have not money to buy gold...




Russians were stronger in 1970's and US crushed them to no where ,800 banks failed in 1990 and Japanese were stronger than today's Chinese economy but US smashed in 5 years


If you understand how US crushed you would not laugh you would be happy that you are in best part of earth

Moreover I am not saying I am right on everything , I am just writing what I feel , time has to judge our predictions.

Do you know why economists are not best paid executives than scientist?

You would understand laughing and bet would not make sense on capital markets.

21stIcon
10-11-2008, 12:38 AM
As I said I am not economy guru, we can read history after 5 years. My point is gold was not inflation proof , last 50 years return was less than other investment types and high volatile.

If you are considering gold for investment how would physical gold differ from ETF?


For me it is easy to sell ETF from my desk since I would get same value as physical gold.

akred
10-12-2008, 12:03 AM
Nice link. When I looked at list of banks I realised that the 10% is about domestic deposits. How am I eligible for this? How can deposit and get the money back over time?

You open a resident account in a bank and file an Indian tax return for the earnings. If you need money outside India, you can remit $200,000 per person every year (i.e. $400,000 for a couple), which is a large enough limit for most circumstances.

http://www.rbi.org.in/SCRIPTs/BS_PressReleaseDisplay.aspx?prid=17068

sanju
10-12-2008, 01:40 AM
I don't know much about buying house/property in India. Maybe you want to have a close family member keep an eye on your property otherwise a land graber/local gunda in the area may take possession of your property while you are here/away.

But I find some of the discussion in this thread extremely intriguing. There were specific conditions in 1930s, 1960s, 1990s that caused recovery in those times. Leadership & American generation were ready to sacrifice and do hard work. Contrary to the hard work done during those times, large percentage of the current population is indifferent and does not care to know about the current crisis, not knowing the gravity of the situation. Majority of the population was, still is, opposed to $700 billion bailout/rescue not knowing what is going on. The ups and downs in the stock market is just the beginning. Coming year is going to be very tough, specially on folks are in the situation that require them to visit this forum every now and then.

Every great and prosperous nation is just one generation away from losing its greatness. History teaches us that Great nations lost their greatness/cease to exist because the larger populations ignored the times of crisis. Most people say that America has always come out of crisis in the past and just like those times, America will again come out of the current crisis. That's what everybody expect and wants to see happen, as if there will be a miracle and everything will get fixed. Everybody including media/leadership are taking things for granted, as if things will turn around by itself just because things have turned around in the past. But this apathy is very dangerous. Here is why - we can say with fair bit of certainty that Romans must have also said during their time of crisis that things will be fine, they have always gotten fine because we are the Romans, the empire of Gods, or whatever. Likewise, this time around, media/leaders are guided by similar rhetoric. I find this behavior very dangerous. In 1930s/60s/90s there was able leadership and American generations during those times were ready to do their share. It doesn't appear such this time, atleast not right now. Maybe we have sometime to come out of the crisis and things will change in the near future. But without change in the direction, things don't look very good right now.

Rome was not built in one day and it did not perish in one day. If leadership and population continue to ignore the gravity of the crisis, there is only one possible outcome.

The positive aspect this time around is, due to globalization, other nations have stake in American economy and are willing to come to the rescue. Even nations like China and Russia are willing to step-up. This would have been unthinkable in an un-globalized world. But other nations can only do so much. Ultimately, the larger population in America will have to step up, and that includes us, there is no other way. Now G-7 is working together to come up with a comprehensive plan. A lot of people beat down on globalization, but till now it is working as was designed, which is good, and other friendlier/unfriendlier nations are willing to step-up.

Another foreseeable opportunity to fight the current situation is, world energy crisis. America can use the world energy crisis to turn things around, not necessarily subscribing to ideas from businessmen like T Bone Pickens/natural gas to promote their business and blah bhah blah, but something else, which makes America - a leader to solve the energy requirements of over 6 billion people, when estimated 20% of the world population consumes 95% of the world energy.

I don't know if you should buy property in India or if you should buy gold. But in the grand scheme of things, if I were you, I would hang on to the "cash" very close to my chest. Things are really bad, a lot more than what meets the eye or what is apparent.




.

srikondoji
10-13-2008, 03:41 PM
Nicely said.
Don't know if it was Roman or greek, but they kept on diluting their currency (gold coins) with copper to support their spending and populist schemes. They kept on diluting to the extent that even India stopped exporting spices becuase their coins were not worth as much as they use to once upon a time.
This is what is happening to dollar.

America is loosing their grips pn global financial system. Even though it will be remembered as the founder of free maket, it has rushed too fast and forced other countries to open up their financial system. HOwever, three essential ingedients of free market theory have not been handled well.
Price discovey, Capital allocation and Flow of liquidity.

We are at a point, where all countries can reject free market as a failed attempt or pick it up from here and strengthen it going foward. Regulation is a must or else we will hit the bump again in future.

Without a proper trading system and regulator price discovey is vey hard and bubbles keep occuring.
This is vey true in case of real estate poperties. There are many localities in Hyderabad where propeties have not been priced appropriately.
In a matter of 1 year, property prices in some localities have gone up multi fold just because of 1 or 2 transactions by desparate buyers.

There is no price differential between 100 sq yards propety or 1000 sq yards property on a per sq yard price basis.
ROE is far greater on investments made on proportionate basis on 1000 sq yard plot compared to 100 sq yard plot. Without regards fo town planning, return on investments every piece of land was priced with the same yard stick.

I think it is best to follow the quotes below
"When eveybody is buying, something is definitely wrong."
"When everybody is selling, again something is wrong".

I don't know much about buying house/property in India. Maybe you want to have a close family member keep an eye on your property otherwise a land graber/local gunda in the area may take possession of your property while you are here/away.

But I find some of the discussion in this thread extremely intriguing. There were specific conditions in 1930s, 1960s, 1990s that caused recovery in those times. Leadership & American generation were ready to sacrifice and do hard work. Contrary to the hard work done during those times, large percentage of the current population is indifferent and does not care to know about the current crisis, not knowing the gravity of the situation. Majority of the population was, still is, opposed to $700 billion bailout/rescue not knowing what is going on. The ups and downs in the stock market is just the beginning. Coming year is going to be very tough, specially on folks are in the situation that require them to visit this forum every now and then.

Every great and prosperous nation is just one generation away from losing its greatness. History teaches us that Great nations lost their greatness/cease to exist because the larger populations ignored the times of crisis. Most people say that America has always come out of crisis in the past and just like those times, America will again come out of the current crisis. That's what everybody expect and wants to see happen, as if there will be a miracle and everything will get fixed. Everybody including media/leadership are taking things for granted, as if things will turn around by itself just because things have turned around in the past. But this apathy is very dangerous. Here is why - we can say with fair bit of certainty that Romans must have also said during their time of crisis that things will be fine, they have always gotten fine because we are the Romans, the empire of Gods, or whatever. Likewise, this time around, media/leaders are guided by similar rhetoric. I find this behavior very dangerous. In 1930s/60s/90s there was able leadership and American generations during those times were ready to do their share. It doesn't appear such this time, atleast not right now. Maybe we have sometime to come out of the crisis and things will change in the near future. But without change in the direction, things don't look very good right now.

Rome was not built in one day and it did not perish in one day. If leadership and population continue to ignore the gravity of the crisis, there is only one possible outcome.

The positive aspect this time around is, due to globalization, other nations have stake in American economy and are willing to come to the rescue. Even nations like China and Russia are willing to step-up. This would have been unthinkable in an un-globalized world. But other nations can only do so much. Ultimately, the larger population in America will have to step up, and that includes us, there is no other way. Now G-7 is working together to come up with a comprehensive plan. A lot of people beat down on globalization, but till now it is working as was designed, which is good, and other friendlier/unfriendlier nations are willing to step-up.

Another foreseeable opportunity to fight the current situation is, world energy crisis. America can use the world energy crisis to turn things around, not necessarily subscribing to ideas from businessmen like T Bone Pickens/natural gas to promote their business and blah bhah blah, but something else, which makes America - a leader to solve the energy requirements of over 6 billion people, when estimated 20% of the world population consumes 95% of the world energy.

I don't know if you should buy property in India or if you should buy gold. But in the grand scheme of things, if I were you, I would hang on to the "cash" very close to my chest. Things are really bad, a lot more than what meets the eye or what is apparent.




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