sooth_sayer

India's Strong Growth Should Continue

So there are 2 Vikrams...go figure!! All the arguments you both supply as justification were all given to Japan during the 70s and 80s. Tokyo has a very dense population too, and its land availability is less than in India, so why is the market there yet to recover in the past 20 years? The rupee has depreciated only 50% against the dollar in the past 20 years, and so is not the justification you are looking for. Also, I was only pointing out how inappropriate it is to call the US home appreciation a bubble. Most homes in the US have hardly gone anywhere in the past 20 years and yet the whole world is being told that there was this big bubble in the USA. And yet there are bigger bubbles in both percentage and dollar terms in the rest of the world that nobody wants to scrutinize. How ironic?

India's Strong Growth Should Continue

Vikram, It is interesting that you can make a broad statement like "real estate will never go down in India", but when I point out that real estate went down in India in the 90s, you term it "generic". Real estate prices in India have gone up absurdly based on a ponzi scheme. It is completely leveraged, where speculators put down 5-10% down and then flip it over to the next speculator within weeks, if not days. Since money is not borrowed from banks to play this speculative game, perhaps banks are not in that much trouble, but that does not mean that the valuations are not absurd. It also means that very little equity is in these homes, as most people have been just speculating with their down payments.
Let me clarify that there was NEVER a bubble in the USA, and what the media in the USA terms a bubble is basically just a tripling of home prices in TWENTY years in coastal areas. In the rest of the USA, home prices have only DOUBLED in the last TWENTY years. And this very meager appreciation is what they call a bubble, which is utterly ridiculous. The leftist media in the USA wants home prices to stagnate forever. Media in India, on the other hand, is a non-stop hype machine, getting more investors into the ponzi game. Land prices have gone up anywhere from 100 times to a 1000 times in the past 20 years in India, and compare that to 2-3 times in the USA. Even low quality apartments in most Indian towns cost more than even a decent single family home in a corresponding place in the USA. Nothing could be said to justify that, when you compare incomes, infrastructure and quality.

India's Strong Growth Should Continue

Hey Vikram12, You are probably one of those that knows little about the past and is just rejoicing the present. Real estate prices in the 90s went down in India, so never say never. Also, what has happened in India in the stock market and in real estate in the current decade is a lot bigger of a bubble than what happened in Japan between 1970 and 1990. Japan also boasted an 8% annual economic growth during that period and land prices went up 500% (5 times) in those 20 years. Of course, that is nothing compared to the Indian bubble. All the bubbles burst in Japan in 1990 and since then, Japan has faced one of the most severe depression/deflations in the past 15+ years. India's turn is coming very soon. Those who ignore common sense and history and believe in never ending absurdity will wake up to reality pretty soon.

India's Strong Growth Should Continue

soothsayer
Jul 21 06:59 PMClearly, the author has lost a lot of money in the crash from the absurd valuations of Indian (and Chinese) markets. He is trying to pump it up as much as he can in a desperate attempt. Percentages are very misleading, and it is easy for a 1 trillion dollar economy (which is what India's GDP is currently) to show a 8-10% return, especially when it is coming almost completely from foreign sources. The US economy is $15 trillion, and even if it grows just 1%, its GDP growth is more than that of India in dollar terms. The law of numbers makes it harder for bigger numbers to grow by bigger percentages. So beware all scamsters who rely on percentages alone. Also, just because FIIs invested so much recently into India does not mean they are right in their investment strategy. Many established institutions do things wrong. US banks were lending easy money to home buyers for the past 5+ years, and by the author's argument, they should have done that because they expected a strong housing market. That's not what happened in the US, and the banks are now in trouble. India is right behind, when the greatest real estate bubble in the Universe pops in its metros. Mark my words, the next decade is going to be very dark for India, when all the hype is removed, India will be exposed for it truely is, a corrupt, cheating nation.