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Commentary

Switch off your TV, Stop Buying Papers, Say Real Estate Developers

Talk about ostriches with their heads in the sand. From DNA:

“Journalists are blowing up the issue (of real estate slowdown) to
become hot journalists and step into the limelight,” said Mufatraj
Munot, chairman, Kalpataru Properties.
He said negative publicity in the media was one of the reasons why
properties were not
being sold.

An exasperated Ramni Shastri, managing director of Sterling
Developers, had a suggestion for those wanting to buy property: “The
media is hyping the decline, so when you see stories of a slowdown in
news channels, just switch off your TV set. When you read the same
thing in newspapers, stop buying the papers.”

Oh really. So prices should only go up, no? This is a stupid market, that keeps prices down! Stupid media. Only report the bad stuff.

Where were these guys when the media was interviewing their suited, booted CEOs and hailing the great property mela India had become. Did they stop and say, uh, prices are too high, please shut off your TV? If anything they would cut out a news clipping and hang it on their walls.

They want us to be ostriches and hide our heads in the sand. They sound to me like a monkey holding his hand to his ear, saying ‘nanananaa-i-can’t-hear-you’, with a subtle difference: I might actually trust the monkey.

I wish there was a way to short property. There is a LONG LONG LONG way to go before prices go back upwards. If you’re looking to buy, don’t.

  • Siddharth says:

    >Deepak,

    Its very funny to read though. Thanks for highlighting it here.

    Seems like the real estate cartel is i rough ride finally. With interest rates rising, expensive to borrow capital, demand on decline, whatever big fish you are , how long individual can hold? As the article goes on saying small developers are already jumping to sell off at lower proces with almost 25% lower!

    recall the story of monkey and is baby i water tank as the water goes up above her nose she puts htebaby underneath her feet to survive. Cartel should work till the time everone can see some profit out of it, but the moment cartel becomes Titanic then it will be fun watching them for people like sitting on fence.

    But in other sense it will be unpleasant to see friends, relatives also going thru the real estate crisis.

    If you noticed, in USA, UK and India these glomy problems are at the door when the terms of existing govt’s are coming to an end with new elections. So in that political sense I dont believe powers today will do anything that would hurt in short term but HEAL in long term. Isnt it common sense, if they see by the short term unsetting they cant be power tobe in next term, then god help me.

    my 2cents.

  • px says:

    >well is it that they have ran out of money to advertise in the media ?

    good post

  • Anonymous says:

    >Lehman was the last of the geniuses ..pumped 750 crore a month back into Unitech!!

    Another view-

    http://indiaplay.blogspot.com/2008/04/indian-real-estate-is-realty-challenged.html

    🙂

  • Anonymous says:

    >Hi Deepak,
    Arpan here. Several questions:
    1) How about shorting all realty plays? Makes sense? I looked into financials of some and trailing PE is <10. So I can't short confidently either.
    2) You add NIFTY short at 4238. Assuming you are serious, the minimum return I'd assume @10% which pegs NIFTY close to 3700. Are you really one of the believers of the NIFTY 3k camp?
    3) Time to sell anything and everything Lehmann owns — whatever's in publicly known that is?

    Regards

  • Siddharth says:

    >Satyam to axe 4500 employees

    http://timesofindia.indiatimes.com/Business/Satyam_to_axe_4500_employees/articleshow/3483165.cms
    This news cant be authenticated though.

    So pink slips have already started in mass in IT. Not good for real estate. Last week I has word with an Techi in London, he was also saying they sector is feeling the pinch.

    Surely I am scared like hell to even think of home loan for near future. I would be happy renting for few more years.

    This is not good, Deepak. Makes me feel sad about future in these times.

    Hope the rot will dry out and fresh sustainable start nears soon.

  • Siddharth says:

    >http://timesofindia.indiatimes.com/Cities/DDA_flats_Last_day_to_submit_forms/articleshow/3487296.cms

    Rs5000 to submit form. 7.5 lakhs forms sold. Say at least 1 lakhs forms have been submitted then cash raised=50 crores.
    And this is just to accept application for the lucky draw of housing flats. Plus the applicants have to pre deposit 1.5 lakhs when submittign the form.
    whew am off calculating!! Its very brilliant brains behind this.This SCHEME must be hughly profitable even after saying 40% less from current prices….
    But hold If you want to sell those 5010 flats at current prices, are there any buyers??
    click click. Its amazingly brilliant idea to milk profits.
    Just my observation.
    Deepak whats your take on this?

    cheers