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Topic: Investing in property & landbank plays?

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kulman Senior Member Joined: 02/Sep/2006 Location: India Online Status: Offline Posts: 9319	Posted: 11/Nov/2006 at 12:08pm
	There is a fear factor in real estate market not because of doubt whether the demand is genuine or speculative. The biggest fear is due to the fact that guys of 21-24 years age appear on channels to advise 'expert' opinion about real estate investments. These guys are recruited by 'specialists' like "Cushman Weikfield", "Knight Frank", "Trammel Crow Meghraj" etc. Inside information is that these 'specialist' agencies are equivalents of MS, ML, CLSA etc..
	Life can only be understood backwards—but it must be lived forwards
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Ajith Senior Member Joined: 06/Aug/2006 Location: India Online Status: Offline Posts: 1284	Posted: 11/Nov/2006 at 9:12am
	There is a lot of money(lots of enquiries to brokers for 40-50 crore deals here unlike a year back) chasing good locations and the real estate boom is for real because HNIs are more comfortable with real estate than shares which is natural because the latter is trickier and volatile and not so so easy to understand even though I have noticed that many well off acquaintances(one maha crorepathi also) are enquiring about/investing in stocks on expectations ....RJ and RD made this point about relative underemphasis on stocks on the Diwali show. Edited by Ajith - 11/Nov/2006 at 9:13am
	Ajith
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xbox Senior Member Joined: 10/Sep/2006 Online Status: Offline Posts: 2001	Posted: 15/Nov/2006 at 8:46am
	Caution Real estate buffs : Bubble is around the corner. I advise all ppl to take caution on real estate stocks. In case you in profits, book profit now (atleat 50%). I don't see anybody in loss as this sector is making 52 days highs day by day. RE stock prices are higly leveraged. Whereas most of the high profile projects are in forms of SPVs. I don't think this is best way to leverage such business model beyond a point. As of now most of such players are qouting PE of triple digits, which is unlikely to sustain. One can corelate this phenomina to internet boom/doom not far ago. Too much of leveraging inevitably invite to crisis. Big ppl will have strong heart to stomach notional losses but retail investor will be killed without warning. It is time to be little cautious. In Udyan's word ' It does not harm anybody to book profit away 100-200 point from peak. Nobody can time a buble burst but it is surely coming unless we pause a little bit. Edited by vipul - 15/Nov/2006 at 9:00am
	Don't bet on pig after all bull & bear in circle.
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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 15/Nov/2006 at 9:25am
	The interesting part of a real estate company is they have little fixed assets and they keep selling their assets (land) which they had acquired when those asset (land) prices was low. Now assuming that the current price or maybe 25% plus discounts all that cheap asset (land) they had acquired earlier the question is what would these companies need to do to maintain their mommentum. The answer is buy such assets (land) that become cheap after 2-3 years. That in other words means that a person is leveraging on real estate prices going up in future also.Now all of us know that prices can rise only upto a point and then they would taper off. None of the gurus in business have made money in land bank stocks maybe these companies are cyclical and do not favour a long term hold. A person needs to get in and then exit just as he sees land prices correcting - that is very difficult to do.
	'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Ajith Senior Member Joined: 06/Aug/2006 Location: India Online Status: Offline Posts: 1284	Posted: 16/Nov/2006 at 2:19pm
	The 1995 property crash (I know only about the South-Bangalore,Chennai and Kerala)was swift and took even the best minds in the business by surprise.But they say this time its different.But its never differrent.. In a property crash , there will very little value left in some property stocks. But even the bigtime property expert I know who got it wrong last time says its different this time because of GDP growth,foreign money.. Mumbai has fewer than a thousand skyscrapers,Shanghai more than 25 times that figure.Such data may lead to overenthusiasm and oversupply. Edited by Ajith - 16/Nov/2006 at 5:18pm
	Ajith
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BubbleVision Senior Member Joined: 05/Aug/2006 Location: India Online Status: Offline Posts: 3142	Posted: 16/Nov/2006 at 2:41pm
	Historically, as i have researched... and read.... Property (and art) always tops out AFTER the stock market....This is mainly due to lack of liqudity in property and art. Property stocks though are a different kettle of fish...
	You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 16/Nov/2006 at 3:51pm
	Property price will have a very very high correlation with property stocks.
	'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Ajith Senior Member Joined: 06/Aug/2006 Location: India Online Status: Offline Posts: 1284	Posted: 16/Nov/2006 at 5:30pm
	The way ,I am told ,the property guys know is when the same number of enquiries come in but fewer deals are clinched. But the property crash may not be around the corner because deep structural shifts are taking place in the economy-like, by the end of the decade 44% of our population is expected to be urban.And ,it may depend on the economy and the amount of money coming into real estate development which if it is excessive would really create a bubble.Here ,in Kerala real estate is being talked about in hushed tones and commercial areas are being mopped up for Reliance...all pointing to a bubble in future because prices have not soared as yet.
	Ajith
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