Menu

Home › Forums › Housing › Effect of credit crunch/subprime mortgage on Indian Real Estate and worldwide real estates

Viewing 15 posts - 1 through 15 (of 33 total)
1 2 3
  • Author
    Posts
  • November 4, 2007 at 10:53 AM #10808
    fun4vnay2
    Participant

    Guys,

    For the last 4/5 years, Indian real-estate is on fire and property prices have gone up 3/4 times in the last 4/5 years.
    Now this credit crunch happening ( worldwide?) what kind of effect you anticipate on Indian Real Estate ?

    Thanks a lot in advance

    Deepak

    November 4, 2007 at 11:18 AM #95377
    bsrsharma
    Participant

    I think a lot of the upsurge in Emerging market prices is due to Globalization. All those exported goods & services are generating cash flows and increasing wages & purchasing power. That may get slightly negatively impacted by US recession, but not much. After the last recession, US businesses increased outsourcing and I expect same thing this time. In fact, if there is a severe recession, I think the Big three Autos may entirely move the production offshore (like consumer electronics or textiles). That has to increase valuations of emerging market assets.

    November 4, 2007 at 11:18 AM #95449
    bsrsharma
    Participant

    I think a lot of the upsurge in Emerging market prices is due to Globalization. All those exported goods & services are generating cash flows and increasing wages & purchasing power. That may get slightly negatively impacted by US recession, but not much. After the last recession, US businesses increased outsourcing and I expect same thing this time. In fact, if there is a severe recession, I think the Big three Autos may entirely move the production offshore (like consumer electronics or textiles). That has to increase valuations of emerging market assets.

    November 4, 2007 at 11:18 AM #95442
    bsrsharma
    Participant

    I think a lot of the upsurge in Emerging market prices is due to Globalization. All those exported goods & services are generating cash flows and increasing wages & purchasing power. That may get slightly negatively impacted by US recession, but not much. After the last recession, US businesses increased outsourcing and I expect same thing this time. In fact, if there is a severe recession, I think the Big three Autos may entirely move the production offshore (like consumer electronics or textiles). That has to increase valuations of emerging market assets.

    November 4, 2007 at 11:18 AM #95433
    bsrsharma
    Participant

    I think a lot of the upsurge in Emerging market prices is due to Globalization. All those exported goods & services are generating cash flows and increasing wages & purchasing power. That may get slightly negatively impacted by US recession, but not much. After the last recession, US businesses increased outsourcing and I expect same thing this time. In fact, if there is a severe recession, I think the Big three Autos may entirely move the production offshore (like consumer electronics or textiles). That has to increase valuations of emerging market assets.

    November 4, 2007 at 2:57 PM #95474
    Eugene
    Participant

    i think there’s more going on than just globalization. Russian real estate grew just as quickly last 5 years. Even in places that don’t export anything (80% of the country :))

    to give you an idea – apartments in most major Russian cities cost on the order of $100 per square foot. Median annual wages are $3000-4000.

    November 4, 2007 at 2:57 PM #95467
    Eugene
    Participant

    i think there’s more going on than just globalization. Russian real estate grew just as quickly last 5 years. Even in places that don’t export anything (80% of the country :))

    to give you an idea – apartments in most major Russian cities cost on the order of $100 per square foot. Median annual wages are $3000-4000.

    November 4, 2007 at 2:57 PM #95460
    Eugene
    Participant

    i think there’s more going on than just globalization. Russian real estate grew just as quickly last 5 years. Even in places that don’t export anything (80% of the country :))

    to give you an idea – apartments in most major Russian cities cost on the order of $100 per square foot. Median annual wages are $3000-4000.

    November 4, 2007 at 2:57 PM #95402
    Eugene
    Participant

    i think there’s more going on than just globalization. Russian real estate grew just as quickly last 5 years. Even in places that don’t export anything (80% of the country :))

    to give you an idea – apartments in most major Russian cities cost on the order of $100 per square foot. Median annual wages are $3000-4000.

    November 4, 2007 at 3:44 PM #95464
    fun4vnay2
    Participant

    Let me tell you real first hand example of my own small city in Northern India.

    The real estate has doubled in last 3/4 years but the income of people living there has not increased much at all

    This is a classic example of easy financing by Banks there.
    10 years back, it was rare to see indians taking loans to buy house because of two reasons:

    1) Difficult to get loans from Banks
    2)Cultural reasons

    But now, both the above factord have changed, one fueling the other. Now it is very easy to get bank loans to buy houses and thus bringing up the prices. In my own small city, in the last 4/5 years, nothing has changed substantially w.r.t. jos creation, salary increase but still the boom is there.

    To give an idea fo the prices:
    A two bedroom apartment/flat ( not SFR ) would cost Rs 2 millions where the average salary would be hardly 300K/year with an interest rate of ~11% there for housing loans.

    Lets see if this would unrival itself and when ?

    November 4, 2007 at 3:44 PM #95406
    fun4vnay2
    Participant

    Let me tell you real first hand example of my own small city in Northern India.

    The real estate has doubled in last 3/4 years but the income of people living there has not increased much at all

    This is a classic example of easy financing by Banks there.
    10 years back, it was rare to see indians taking loans to buy house because of two reasons:

    1) Difficult to get loans from Banks
    2)Cultural reasons

    But now, both the above factord have changed, one fueling the other. Now it is very easy to get bank loans to buy houses and thus bringing up the prices. In my own small city, in the last 4/5 years, nothing has changed substantially w.r.t. jos creation, salary increase but still the boom is there.

    To give an idea fo the prices:
    A two bedroom apartment/flat ( not SFR ) would cost Rs 2 millions where the average salary would be hardly 300K/year with an interest rate of ~11% there for housing loans.

    Lets see if this would unrival itself and when ?

    November 4, 2007 at 3:44 PM #95471
    fun4vnay2
    Participant

    Let me tell you real first hand example of my own small city in Northern India.

    The real estate has doubled in last 3/4 years but the income of people living there has not increased much at all

    This is a classic example of easy financing by Banks there.
    10 years back, it was rare to see indians taking loans to buy house because of two reasons:

    1) Difficult to get loans from Banks
    2)Cultural reasons

    But now, both the above factord have changed, one fueling the other. Now it is very easy to get bank loans to buy houses and thus bringing up the prices. In my own small city, in the last 4/5 years, nothing has changed substantially w.r.t. jos creation, salary increase but still the boom is there.

    To give an idea fo the prices:
    A two bedroom apartment/flat ( not SFR ) would cost Rs 2 millions where the average salary would be hardly 300K/year with an interest rate of ~11% there for housing loans.

    Lets see if this would unrival itself and when ?

    November 4, 2007 at 3:44 PM #95479
    fun4vnay2
    Participant

    Let me tell you real first hand example of my own small city in Northern India.

    The real estate has doubled in last 3/4 years but the income of people living there has not increased much at all

    This is a classic example of easy financing by Banks there.
    10 years back, it was rare to see indians taking loans to buy house because of two reasons:

    1) Difficult to get loans from Banks
    2)Cultural reasons

    But now, both the above factord have changed, one fueling the other. Now it is very easy to get bank loans to buy houses and thus bringing up the prices. In my own small city, in the last 4/5 years, nothing has changed substantially w.r.t. jos creation, salary increase but still the boom is there.

    To give an idea fo the prices:
    A two bedroom apartment/flat ( not SFR ) would cost Rs 2 millions where the average salary would be hardly 300K/year with an interest rate of ~11% there for housing loans.

    Lets see if this would unrival itself and when ?

    November 4, 2007 at 3:54 PM #95411
    bsrsharma
    Participant

    In case of Russia, the reason is plain to see – in 5 years, oil has gone from about $30 to $96 per bbl. If receipts go up by more than 3 times, asset prices are bound to inflate to absorb all that flood of petrodollars. Every time we fill our SUVs, we inflate the Russian bubble some more; our hardship translates immediately into their prosperity. Another commodity is Gold – has gone up from under $300 to over $800 per Oz. Russia produces large amount of gold.

    November 4, 2007 at 3:54 PM #95468
    bsrsharma
    Participant

    In case of Russia, the reason is plain to see – in 5 years, oil has gone from about $30 to $96 per bbl. If receipts go up by more than 3 times, asset prices are bound to inflate to absorb all that flood of petrodollars. Every time we fill our SUVs, we inflate the Russian bubble some more; our hardship translates immediately into their prosperity. Another commodity is Gold – has gone up from under $300 to over $800 per Oz. Russia produces large amount of gold.

  • Author
    Posts
Viewing 15 posts - 1 through 15 (of 33 total)
1 2 3
  • You must be logged in to reply to this topic.