gufran ahmad
Post on 04-Apr-2018
230 Views
Preview:
TRANSCRIPT
-
7/30/2019 Gufran Ahmad
1/86
A SUMMER TRAINING PROJECT REPORT
ON
CUSTOMER BUYING BEHAVIOUR
For the partial fulfillment of Master of Business
Administration Program
UNDER THE GUIDANCE OF
Mrs. PRIYA SRIVASTAVA
(Faculty MBA)
SUBMITTED BY
IQBAL ZEESHAN
MBA III SEM
B.N.COLLEGE OF ENGINEERING & TECHNOLOGY,
LUCKNOW
(Affiliated to GBTU)
-
7/30/2019 Gufran Ahmad
2/86
ACKNOWLEDGEMENT
Like most effective endeavors, preparing this project was a collaborative effort. I owe a great debt to
many individuals who helped me in successful completion of this project.
I would like to express my sincere gratitude to HDFC REALTY. for giving me an
opportunity to complete my summer internship program in their esteemed organization.I would not have completed this journey without the help, guidance and constant support and co-
operation of certain people who acted as guides and friends along the way. I would like to express my
deepest and sincere thanks to Dr. UPAMA MISRA (Director, B.N. College of Engineering &
Technology), Dr. Vinitendra Pratap Singh {H.O.D, M.B.A Department} and Mrs. PRIYA
SRIVASTAVA for their invaluable guidance and help. The project could not have been completed
without their support and guidance.
In this connection I would like to express my gratitude to my parents and friends who were constant
source of inspiration during my summer training project report. At last I thank to Almighty for giving me
the power to complete this project successfully.
IQBAL ZEESHAN
MBA II YEAR
-
7/30/2019 Gufran Ahmad
3/86
PREFACE
As a part of MBA curriculum summer training was undertaken with HDFC
REALTY one of the biggest and fast emerging real estate company in Delhi (NCR)
region. It has set new trends and benchmarks of architectural excellence in the
contemporary global scenario.The summer training was for 8 weeks ( 2 months ) duration .The purpose of this
training was to have practical experience of working in an organization and to haveexposures to various management practices in the field of marketing. The blend of
learning and knowledge acquired during my practical studies at the company and
in the field is presented in this Project Report.
During the Training (Customers Survey) project was assigned for having practical
exposure.
This report is an attempt to identify the competitive strategies and methods used to
create value and awareness in the minds of target customers. And also to identify
competitive strength of HDFC REALTY projects with its major competitors like
Amrapali Group, Gaur sons India Ltd., Ajnara group etc.
The Project Report starts with the history and details of HDFC REALTYand also
covers the general information about the company and its functional department of
marketing.
-
7/30/2019 Gufran Ahmad
4/86
EXECUTIVE SUMMARY
This project report is prepared as the partial fulfillment of two year M.B.A of
BNCET Lucknow. This Research project is a compulsory part of the academics.
This research is done after the completion of 1st year of PGDM program.
In this research, I have attempted the research about consumer buying behaviour at
hdfc realty. Dealing with competition is one of the key elements of modern
marketing management (Kotler, 2000).The overall purpose of this research is to
identify the factors which influence consumer buying behaviour of HDFC
REALTYin Lucknow extension. The whole research is based on customers
survey. I have done research on impact and effectiveness of our values which we
are providing to our customers, which is one of the major tool used for analysing
competition in the market.
This report is an honest work towards the topic. There can be many short
comings in it because of the lack of the time, unavailability of data and other
constraints.
-
7/30/2019 Gufran Ahmad
5/86
INTRODUCTION
Real estate is a 12$ billion (revenue) industry in India. There has been a rapid
growth in the industry in the past few years. In the residential sector, a growing
middle class is enjoying rising income levels. Combined with smaller household
sizes, this demographic change has boosted demand for more modern housing and
home loans. Meanwhile, increasing consumer spending power has encouraged
growth in organized in organized retailing both feeding off and contributing to
the spear of mall culture and the popularity of other large-scale retail property
developments.
In the commercial property segment, strong growth in the services sector
particularly in the IT and ITES sectors and corporates growing scale of
operations have led to greater demand for commercial space, including modern
offices, warehouses and lodging space.
Many Developers have substantial plans to increase both their size and
geographical spread. They are also expanding into different kinds of properties,
which can boost the firms franchise values and reduce concentration risks.
However, managing and financing such activities can be a challenge, and puts a
premium on financial flexibility, capital access and operational infrastructure.
The project assigned to me has an objective to find and analyze the current
scenario of Real Estate, covering the preferences of current as well as prospective
customers. The major part of the project also analyses the size of investment in
various states and mind set of the customers regarding this as well as the
perceptions of customers towards major leading Real Estate players.
-
7/30/2019 Gufran Ahmad
6/86
The study was carried out with a methodology, in order to collect as much primary
data as possible. Data was collected by getting the questionnaires filled from Real
Estate Agents across Lucknow.
Once the data was collected, this data was analyzed using Microsoft Excel as a tool
and various conclusions were drawn. This analysis is depicted in the form of
various charts and graphs. Along with the questionnaires, Agents viewpoints on
various issues were also taken in order to get a more insight into the Real Estate.
-
7/30/2019 Gufran Ahmad
7/86
INTRODUCTION TO REAL ESTATE
Real estate is a 12$ billion (revenue) industry in India. There has been a rapid
growth in the industry in the past few years.100% FDI is allowed in real estate
development subject to minimum scale norms of either: 25 acres in case of
serviced plots or integrated townships; or 50,000 sq. mtrs. of built-up area for
construction development projects.
Commercial and office complexes mushrooming in major Indian metros present a
minefield of opportunities. Over 20 million new housing units required in the next5 years. The real estate market is projected to grow to $50 billion by 2010 CAGR
of over 30% p.a. is expected over the next five years. Increasing demand for
commercial and office space especially from the rapidly growing Retail, IT and
Hospitality sectors and the Urban Infrastructure Renewal mission is expected to
give a boost to the sector.
Other factors include:
$11.5 billion earmarked over the next five years for 60 cities. Investment opportunities exist in almost every segment business ; About 20
million new units expected to be built in five years in office space for IT andfive-fold increase in office space requirement over the next 3 years.
Commercial space for organized retailing: 200 million sq. ft. by 2010.Hotels and hospitality: Over 50,000 new rooms in the next 5 years;
Investment opportunity of over $50 billion in the next five years.
-
7/30/2019 Gufran Ahmad
8/86
Various Real Investment Options are:
AGRICULTURE LAND
Agriculture Land in India is the most protected area by the State and Central Govt.
Identification of Agricultural Land requires a bit of analysis about the rate and
assessment of future development in the nearby area. Due to fast growing
urbanization and development of infrastructure the price of agriculture land zooms
quickly. Agricultural land can be given on contract to cultivators with sharing of
crop model, to make small but regular tax-free earnings. Rural agriculture land is
completely free from capital gains tax and income from lease out or sale of crop is
also exempt as per the provision of IT Act, 1961.
Real Estate
Investment Options
Agriculture Land
Residential/Plotteddevelopment
Apartments/Villas
Commercial Spaces
Farm Houses
Real Estate Mutual
Funds
-
7/30/2019 Gufran Ahmad
9/86
RESIDENTIAL PLOTTED DEVELOPMENT
Most state governments have loosened their fists and have implemented land
reforms that make the conversion of agricultural land into residential land much
easier. The process of township development takes a period of about 5 to 10 years.
Initially, the prices of plotted development are quite low which rapidly increases
with the pace of development and with the rise in inflation factor.
APARTMENTS/VILLAS
As per the assessment made in the Indian Habitat Policy 1998, the demand for
houses in urban area is to the tune of 22 million houses. The gap in demand andsupply in housing stock has thrown big investment opportunities. Booking at the
launching stage and getting the exit at the completion stage ca offer shining returns
on investments. In this process the stamp duty and other taxes can be legally
avoided.
COMMERCIAL/RETAIL SPACES
The retail boom in India has fueled huge demand for commercial/shopping spaces.
Many MNCs and big corporate retailers prefer to take prime commercial
properties on long-term lease basis. The option offers regular returns besides
appreciation in capital value, taking both the returns together gives handsome
return and a wonderful combination of regular and a wonderful combination of
regular and long-term returns.
-
7/30/2019 Gufran Ahmad
10/86
FARM HOUSES/SECOND HOMES
Many developers are offering lifestyle with smart returns through farm
houses/second homes. The offer comprises of sale of farm houses at affordable
rates with professional property management giving lifestyle and capital
appreciation together.
REAL ESTATE MUTUAL FUNDS
Securities Exchange Board of India (SEBI) has recently allowed the launch of
mutual funds which can invest in physical property. Many corporates such as
HDFC and IDBI are in the process of launching real estate mutual funds.
-
7/30/2019 Gufran Ahmad
11/86
FACTS AND FIGURES
In India Construction is the second largest economic activity after Agriculture.
Investment in construction accounts for 11 percent of Indias Gross Domestic
Product (GDP) and nearly 50 percent of Gross Fixed Capital Formation (GFCF).
Construction accounts for nearly 65 percent of total investment in infrastructure
and is expected to be the biggest beneficiary of the surge in Infrastructure
Investment over the next five years. According to the Economic Survey, India hasthe potential to absorb US$ 150 Billion of Foreign Direct Investment in the next
five years in the Infrastructure sector. The sector is expected to grow at a CAGR of
15 percent over the next few years.
The sustained growth and positive outlook for the future has increased focus on
Infrastructure development. Opening of the Infrastructure development to private
players, FDI and increased investment commitments from the govt. has thrown a
host of opportunities for companies in the infrastructure development sector,
innovative projects like the metro Rail and Sky Bus, along with the proposed SEZ
projects have provided additional opportunities for the SMEs in the sector. While
majority of the infrastructure development projects are given out by the
government Agencies, the private sector is also actively participating through
development projects like SEZs and commercial construction.
-
7/30/2019 Gufran Ahmad
12/86
Along with the government bodies and funding agency, various infrastructure
development companies, machinery and materials suppliers, ancillary suppliers
and allied support industries would play an important role in meeting in demand
the for infrastructure development.
The Indian Infrastructure Sector is currently going through a vast transformation.
The Governments decision to throw open the construction of roads, Bridges
Airports and ports to the private sector and allowing 100 percent Foreign
Investment in real Estate Projects has provided a boost to the construction Industry
as well as generate demand for construction machinery. Housing and Infrastructure
Projects like Roads, Bridges and Ports are expected to grow about 20 percent per
annum for the next 15 years.
The new and expanding housing and infrastructure construction ventures have
generated substantial demand for construction machinery manufacturing and
servicing, including erection, commissioning and maintenance. Several multi
national firms are already present in the country.
-
7/30/2019 Gufran Ahmad
13/86
REAL ESTATE AS AN INVESTMENT OPTION
Is Real Estate A Good Investment Option?
Are you fatigued by the diminishing income and risk-factors associated with main-
stream investment avenuesfixed deposits, stocks, mutual funds, etc.? Think `real
estate': a lesser explored investment option.
Why real estate investment stands out?
Quantum of investment required is high
Investment horizon is long
Dual returns are available in form of rental income and capital
Appreciation
What are the promising avenues of real estate investment?
Offices
Shopping malls
Retail outlets
Industrial warehouses
What is the current Indian real estate scenario?
Periodic returns on commercial property ranges from 10 to 13 percent
Per year
-
7/30/2019 Gufran Ahmad
14/86
The Indian real estate industry has a growth rate of 35 to 40 percent
Annually
The demand for real estate is picking up as the IT industries set up their
Base in India or look for expansion in these cities.
Top financial companies have recognized the advantage of India as a
Business process outsourcing destination and had started expanding
their business.
Companies are increasingly switching over to renting office premises.
This offers flexibility in operations and avoids locking capital.
Companies operating in automobile design, auto components
Manufacturing, computer aided design and drawing are also entering
India in search of acquisition of space preferably as ready-to-occupy
premises.
Real estate developers are offering premises on long lease to the
companies.
Individual investors are benefiting from the developing commercial real
Estate market in India by investing in pre-leased properties.
Norris / Pies are investing in real estate as the rental income and capital
Used to purchase the property is easily reparable .
-
7/30/2019 Gufran Ahmad
15/86
What are funding sources supporting investment in real estate?
Banks
Financial institutions
High net worth individuals
Real Estate Mutual Funds
What are the procedures to be followed before investing in real estate?
Find out credibility of the developer.
Check out the attractiveness of property to tenants/ buyers
Weigh future value potential
Get to know the chances of project completion (in case its under
Construction)
Investigate the quality of project
Explore the availability of financing option
Take advice from a reputed and a credible real estate consultant.
Consult a reputed financial institution
Selecting a right option to invest hard earned-money is always a matter of big
confusion. The decision making process requires in depth analysis of available
options which suits the needs of a particular person or organization. A complete
-
7/30/2019 Gufran Ahmad
16/86
analysis and overview of investment decision making with innovative solutions
are given hereafter.
INVESTMENT NEEDS
The investment needs depend on the requirements of a particular person about
the liquidity of funds and his capacity and temperament bear risk. The tax
implication on return of investment to the investor is always a crucial matter for
choosing the right option.
FACTORS AFFECTING INVESTMENT DECISION MAKING
After TaxROI
Tax
Implication
Convenience
To Invest
Safety
Liquidity
-
7/30/2019 Gufran Ahmad
17/86
INVESTMENT OPTIONS:
The following are the major options available to the investors:
All the options have different features with respect to various factors having
implication on investment decision making. The following Chart depicts the
analysis of features of various options at a glance:
*based on prevailing market rates
**based on last 25 years track record
PO/Bank/Govt.Securities
Bonds/Debentures
Bullion (Gold/Silver)
Shares/Mutual Funds
Real Estate
-
7/30/2019 Gufran Ahmad
18/86
Comparative Features of
-
7/30/2019 Gufran Ahmad
19/86
Features
Options
Liquidity
Options
Safety Convenience
Tax
Benefits
Approx.
ROI
P.O/Bank/Got.
Securities
Reasonabl
e
Good Good Good 6-8%*
Bonds/Debentur
es
Reasonabl
e
Reasonabl
e
Reasonable NIL 8-10%*
Shares/Mutual
Funds
Good High Risk Reasonable Reasonabl
e
12-15*
{With high
level of
uncertainty
}
Bullion[Gold
and Silver]
Good Good Good Reasonabl
e
5-7%**
Real Estate Reasonabl
e
Reasonabl
e
Not so
Convenient
Good 14-24%
{High
Returns}
-
7/30/2019 Gufran Ahmad
20/86
GRAPH ON RETURN ON DIFFERENT INVESTMENT OPTIONS
REAL ESTATE AS AN INVESTMENT TOOL WITH SPECIFIC REFERENCE
TO RAJASTHAN
Population (2001 Census)
5,65,07,188
Urban population
23.38%
Literacy rate - 61.03%
Male - 75.7%
Female - 43.9%
0
5
10
15
20
25
30
PO/Bank/govt.se
c.
Bond/Deb.
Shares/Mutual
Fund
Bullion(Gold/
silver)
RealEstate
% from
% to
-
7/30/2019 Gufran Ahmad
21/86
Major industries
Mineral based Agro based Heritage based
Rajasthan at a glance
Abundant availability of minerals.Open & responsive GovernmentProximity to Gurgaon & Delhi, which are now getting saturated.
-
7/30/2019 Gufran Ahmad
22/86
Relatively better law & order scenario as compared to many other States inNorth India.
Very good living conditionsGood civic infrastructure
Residential, Educational and Medical facilities.
Road, Power and Water.
Avenues for re-creation and tourism.
Recent emphasis on technical manpower will yield results in near future.Easy access International Airport (Direct flights to Thailand,Singapore,
Dubai).
Continuously improving telecommunication infrastructure as a result of FreeRight of Way facility.
Strong focus now on Knowledge Sector at the highest level in StateGovernment.
Jaipur: A Magnificent Metropolis in Making
Salient Features of Jaipur Master Development Plan-2011:
Master Development Plan 2011 has been prepared not only to meet the future
requirement of the city and the region but also to tackle the day to day
problems of the city.
Jaipur is a fast developing city. By 2011 population of Jaipur is expected to
-
7/30/2019 Gufran Ahmad
23/86
reach about 42 Lacs. The plan has been prepared to accommodate about 35
Lacs in the city & the remaining seven lacs in the satellite towns of Chomu,
Bagru, Bassi, Achrol, Shivdaspura, Goner, Balawala, Jamwaramgarh, Kanota
and Kakus etc.
Jaipur is a tourist city. The plan provides for conservation and preservation of
its architectural heritage and to augment tourist facilities.
The land use plan along with the land use zoning code facilitates easy
implementation of the master plan proposals.
Mega Projects in Pipeline :
Mahendra City (S.E.Z) on Ajmer Road3000 Acres
World Trade Park
Film City
IT City
Knowledge Corridor
Ring Road
Gems and Jewelry Market
Rope-Way
Medi-Tech City
Proposed Projects:
-
7/30/2019 Gufran Ahmad
24/86
International Convention Centre
Sports City
Green field Airport
International Golf Course
DYNAMICS OF REAL ESTATE PRICING
The Interest rate factor has a direct relationship with the pricing of the immovable
property. Future properties are discounted by the market at a particular rate of
discounting factor to calculate the present market value, when the discountingfactor reduces by few points, the prices of immovable property increases many fold
as the present value of the future property gets increased.
The following chart shows the present value of Rs.1000 after 1 to 15 years. The
chart clearly shows that present value of Rs.1000 after 15 years discounted @ 20%
is Rs. 65, while if the same is discounted @ 10% the present value comes to Rs.
239, it is amazing to note that 50% (from 20% to 10%) curtailment in interest ratesincreases the present value from Rs. 65 to Rs. 239 reflecting a jump of 267%. This
dynamic works in future property pricing.
CASE STUDY TO UNDERSTAND THE DYNAMICS OF REAL ESTATE
PRICING
Year 2000
Belief: Agriculture Land in Shivdaspura is a future property of 2015 and at time
the price level shall be Rs. 50.00 lakh per bigha.
Discounting factor: 20%
-
7/30/2019 Gufran Ahmad
25/86
Present Value (PV) in the year 2000, of Rs. 50.00 lacs in years 2015 was 50.00
lacs0.065* = 3.25 lacs ** approx
*
*Discounting factor of Rs.1 after 15 years @20% p.a.
**The same was the approx. then prevailing price.
Belief: Agriculture Land in Shivdaspura is a future property of 2015 and at time
the price level shall be Rs. 50.00 lack per bigha.
Discounting factor: 10%
Present Value (PV) in the year 2006, of Rs. 50.00 laces in years 2015 was 50.00
lacs0.424* = 21.20 laces ** approx
*Discounting factor of Rs.1 after 9 years @ 10% p.a.
%/ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Nyrs.
10% 909 826 751 683 621 564 513 467 424 386 350 319 290 263 239
-
7/30/2019 Gufran Ahmad
26/86
REAL ESTATE IN WORLD
A real estate bubble or property bubble (or housing bubble for residential markets)
is a type ofeconomic bubblethat occurs periodically in local or globalreal
estatemarkets. It is characterized by rapid increases invaluationsofreal
propertysuch ashousinguntil they reach unsustainable levels and then decline.
The questions of whether real estate bubbles can be identified and prevented, and
whether they have broadermacroeconomicsignificance are answered differently
byschools of economic thought, as detailed below. Thefinancial crisis of 2007
2010was related to the bursting of real estate bubbles around the world, which had
begun during the 2000s
Identification and prevention
As with all types ofeconomic bubbles, whether real estate bubbles can be
identified or prevented is contentious. Bubbles are generally not contentious
inhindsight, after a peak and crash.
Withinmainstream economics, some argue that real estate bubbles cannot be
identified as they occur and cannot or should not be prevented, with government
and central bank policy rather cleaning up after the bubble bursts.
Others, such as American economistRobert Shillerof the Case-Shiller Home Price
Index of home prices in 20 metro cities across the United States, indicated in May
31, 2011 that a "Home Price Double Dip Confirmed" [3]and British magazineThe
Economist, argue that housing market indicators can be used to identify real estatebubbles. Some argue further that governments and central banks can and should
take action to prevent bubbles from forming, or to deflate existing bubbles
http://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estate_appraisalhttp://en.wikipedia.org/wiki/Real_estate_appraisalhttp://en.wikipedia.org/wiki/Real_estate_appraisalhttp://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Macroeconomichttp://en.wikipedia.org/wiki/Macroeconomichttp://en.wikipedia.org/wiki/Schools_of_economic_thoughthttp://en.wikipedia.org/wiki/Schools_of_economic_thoughthttp://en.wikipedia.org/wiki/Schools_of_economic_thoughthttp://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Hindsighthttp://en.wikipedia.org/wiki/Hindsighthttp://en.wikipedia.org/wiki/Hindsighthttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-2http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-2http://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-2http://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Hindsighthttp://en.wikipedia.org/wiki/Economic_bubblehttp://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010http://en.wikipedia.org/wiki/Schools_of_economic_thoughthttp://en.wikipedia.org/wiki/Macroeconomichttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Real_propertyhttp://en.wikipedia.org/wiki/Real_estate_appraisalhttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Economic_bubble -
7/30/2019 Gufran Ahmad
27/86
Macroeconomic significance
Withinmainstream economics, economic bubbles, and in particular real estate
bubbles, are not considered major concerns.[dubiousdiscuss] Within some schools
ofheterodox economics, by contrast, real estate bubbles are considered of critical
importance and a fundamental cause offinancial crisesand ensuingeconomic
crises.
The mainstream economic view is that economic bubbles bring about a temporary
boost in wealth and a redistribution of wealth. When prices increase, there is a
positivewealth effect(property owners feel richer and spend more), and when they
decline, there is a negative wealth effect (property owners feel poorer and spend
less). These effects, it is argued, can be smoothed bycounter-cyclicalmonetary and
fiscal policies. The ultimate effect on owners who bought before the bubble formed
and did not sell is zero. Those who bought when low and sold high profited, while
those who bought high and sold low (after the bubble has burst) or held until the
price fell lost money. This redistribution of wealth, it is also argued, is of little
macroeconomic significance.
In some schools of heterodox economics, notablyAustrian economicsandPost-
Keynesian economics, real estate bubbles are seen as an example ofcredit
bubbles(pejoratively,speculative bubbles), because property owners generally use
borrowed money to purchase property, in the form ofmortgages. These are then
argued to cause financial and hence economic crises. This is first argued
empirically numerous real estate bubbles have been followed by economic
slumps, and it is argued that there is a cause-effect relationship between these.
The Post-Keynesian theory ofdebt deflationtakes a demand-side view, arguing
that property owners not only feel richer but borrow to (i) consume against the
http://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Mainstream_economicshttp://en.wikipedia.org/wiki/Wikipedia:Disputed_statementhttp://en.wikipedia.org/wiki/Wikipedia:Disputed_statementhttp://en.wikipedia.org/wiki/Wikipedia:Disputed_statementhttp://en.wikipedia.org/wiki/Talk:Real_estate_bubble#Dubioushttp://en.wikipedia.org/wiki/Talk:Real_estate_bubble#Dubioushttp://en.wikipedia.org/wiki/Talk:Real_estate_bubble#Dubioushttp://en.wikipedia.org/wiki/Heterodox_economicshttp://en.wikipedia.org/wiki/Heterodox_economicshttp://en.wikipedia.org/wiki/Heterodox_economicshttp://en.wikipedia.org/wiki/Financial_criseshttp://en.wikipedia.org/wiki/Financial_criseshttp://en.wikipedia.org/wiki/Financial_criseshttp://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/Wealth_effecthttp://en.wikipedia.org/wiki/Wealth_effecthttp://en.wikipedia.org/wiki/Wealth_effecthttp://en.wikipedia.org/wiki/Counter-cyclicalhttp://en.wikipedia.org/wiki/Counter-cyclicalhttp://en.wikipedia.org/wiki/Austrian_economicshttp://en.wikipedia.org/wiki/Austrian_economicshttp://en.wikipedia.org/wiki/Austrian_economicshttp://en.wikipedia.org/wiki/Post-Keynesian_economicshttp://en.wikipedia.org/wiki/Post-Keynesian_economicshttp://en.wikipedia.org/wiki/Post-Keynesian_economicshttp://en.wikipedia.org/wiki/Post-Keynesian_economicshttp://en.wikipedia.org/wiki/Credit_bubblehttp://en.wikipedia.org/wiki/Credit_bubblehttp://en.wikipedia.org/wiki/Credit_bubblehttp://en.wikipedia.org/wiki/Credit_bubblehttp://en.wikipedia.org/wiki/Speculative_bubblehttp://en.wikipedia.org/wiki/Speculative_bubblehttp://en.wikipedia.org/wiki/Speculative_bubblehttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Debt_deflationhttp://en.wikipedia.org/wiki/Debt_deflationhttp://en.wikipedia.org/wiki/Debt_deflationhttp://en.wikipedia.org/wiki/Debt_deflationhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Speculative_bubblehttp://en.wikipedia.org/wiki/Credit_bubblehttp://en.wikipedia.org/wiki/Credit_bubblehttp://en.wikipedia.org/wiki/Post-Keynesian_economicshttp://en.wikipedia.org/wiki/Post-Keynesian_economicshttp://en.wikipedia.org/wiki/Austrian_economicshttp://en.wikipedia.org/wiki/Counter-cyclicalhttp://en.wikipedia.org/wiki/Wealth_effecthttp://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/Economic_criseshttp://en.wikipedia.org/wiki/Financial_criseshttp://en.wikipedia.org/wiki/Heterodox_economicshttp://en.wikipedia.org/wiki/Talk:Real_estate_bubble#Dubioushttp://en.wikipedia.org/wiki/Wikipedia:Disputed_statementhttp://en.wikipedia.org/wiki/Mainstream_economics -
7/30/2019 Gufran Ahmad
28/86
increased value of their property --- by taking out ahome equity line of credit), for
instance; or (ii) speculate by buying property with borrowed money in the
expectation that it will rise in value. When the bubble bursts, the value of the
property decreases but not the level of debt. The burden of repaying or defaulting
on the loan depressesaggregate demand, it is argued, and constitutes the proximate
cause of the subsequent economic slump.
Melbourne House Prices and Wages 1965 to 2010
Recent real estate bubbles
1990: Japan
The crash of theJapanese asset price bubblefrom 1990 on has been very damaging
to theJapanese economy,[4]
. The crash in 2005 affectedShanghai,China's largest
city.[5]In comparison to thestock market bubbles, real estate bubbles take longer to
deflate: prices decline slower because the real estate market is less liquid.
Commercial real estate generally moves in tandem with the residential properties,
since both are affected by many of same factors (e.g., interest rates) and share the
"wealth effect" of booms. Therefore this article focuses on housing bubbles and
mentions other sectors only when their situation differs.
2007: many countries
As of 2007, real estate bubbles had existed in the recent past or were widely
believed to still exist in many parts of the world,[6]especially in theUnited
States,Argentina,[7]Britain,Netherlands,Italy,Australia,Canada,New
http://en.wikipedia.org/wiki/Home_equity_line_of_credithttp://en.wikipedia.org/wiki/Home_equity_line_of_credithttp://en.wikipedia.org/wiki/Aggregate_demandhttp://en.wikipedia.org/wiki/Aggregate_demandhttp://en.wikipedia.org/wiki/Aggregate_demandhttp://en.wikipedia.org/wiki/Japanese_asset_price_bubblehttp://en.wikipedia.org/wiki/Japanese_asset_price_bubblehttp://en.wikipedia.org/wiki/Japanese_asset_price_bubblehttp://en.wikipedia.org/wiki/Japanese_economyhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-3http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-3http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-3http://en.wikipedia.org/wiki/Shanghaihttp://en.wikipedia.org/wiki/Shanghaihttp://en.wikipedia.org/wiki/Shanghaihttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-4http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-4http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-4http://en.wikipedia.org/wiki/Stock_market_bubblehttp://en.wikipedia.org/wiki/Stock_market_bubblehttp://en.wikipedia.org/wiki/Stock_market_bubblehttp://en.wikipedia.org/w/index.php?title=E.g.,_interest_rates&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=E.g.,_interest_rates&action=edit&redlink=1http://en.wikipedia.org/wiki/Wealth_effecthttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-LVRG-5http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-LVRG-5http://en.wikipedia.org/wiki/United_States_housing_bubblehttp://en.wikipedia.org/wiki/United_States_housing_bubblehttp://en.wikipedia.org/wiki/United_States_housing_bubblehttp://en.wikipedia.org/wiki/United_States_housing_bubblehttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-6http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-6http://en.wikipedia.org/wiki/British_property_bubblehttp://en.wikipedia.org/wiki/British_property_bubblehttp://en.wikipedia.org/wiki/British_property_bubblehttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/New_Zealand_property_bubblehttp://en.wikipedia.org/wiki/New_Zealand_property_bubblehttp://en.wikipedia.org/wiki/File:Real_Melbourne_House_Prices_1965_-_2010b.JPGhttp://en.wikipedia.org/wiki/New_Zealand_property_bubblehttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Italyhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/British_property_bubblehttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-6http://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/United_States_housing_bubblehttp://en.wikipedia.org/wiki/United_States_housing_bubblehttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-LVRG-5http://en.wikipedia.org/wiki/Wealth_effecthttp://en.wikipedia.org/w/index.php?title=E.g.,_interest_rates&action=edit&redlink=1http://en.wikipedia.org/wiki/Stock_market_bubblehttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-4http://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Shanghaihttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-3http://en.wikipedia.org/wiki/Japanese_economyhttp://en.wikipedia.org/wiki/Japanese_asset_price_bubblehttp://en.wikipedia.org/wiki/Aggregate_demandhttp://en.wikipedia.org/wiki/Home_equity_line_of_credithttp://en.wikipedia.org/wiki/File:Real_Melbourne_House_Prices_1965_-_2010b.JPG -
7/30/2019 Gufran Ahmad
29/86
Zealand,Ireland,Spain,Lebanon,France,Poland,[8]South
Africa,Israel,Greece,Bulgaria,Croatia,[9]Norway,Singapore,South
Korea,Sweden,Baltic states,India,Romania,Russia,UkraineandChina.[10]Then
U.S. Federal Reserve ChairmanAlan Greenspansaid in mid-2005 that "at a
minimum, there's a little 'froth' (in the U.S. housing market) it's hard not to see
that there are a lot of local bubbles."[11]TheEconomistmagazine, writing at the
same time, went further, saying "the worldwide rise in house prices is the biggest
bubble in history".[12]Real estate bubbles are invariably followed by severe price
decreases (also known as a house price crash) that can result in many owners
holding mortgages that exceed the value of their homes. As of the end of 2010,
11.1 million residential properties, or 23.1% of all U.S. homes, were innegative
equityat Dec. 31, 2010.[13]Commercial property values remain around 35% below
their mid-2007 peak in the United Kingdom.[14]As a result, banks have become
less willing to hold large amounts of property backed debt, a likely key issue in
affecting a recovery worldwide in the near term.
Housing market indicators
UK house prices between 1975 and 2006 adjusted for inflation.
http://en.wikipedia.org/wiki/New_Zealand_property_bubblehttp://en.wikipedia.org/wiki/New_Zealand_property_bubblehttp://en.wikipedia.org/wiki/Irish_property_bubblehttp://en.wikipedia.org/wiki/Irish_property_bubblehttp://en.wikipedia.org/wiki/Irish_property_bubblehttp://en.wikipedia.org/wiki/Spanish_property_bubblehttp://en.wikipedia.org/wiki/Spanish_property_bubblehttp://en.wikipedia.org/wiki/Spanish_property_bubblehttp://en.wikipedia.org/wiki/Lebanese_housing_bubblehttp://en.wikipedia.org/wiki/Lebanese_housing_bubblehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Polish_property_bubblehttp://en.wikipedia.org/wiki/Polish_property_bubblehttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-7http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-7http://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/Israelhttp://en.wikipedia.org/wiki/Israelhttp://en.wikipedia.org/wiki/Israelhttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Bulgariahttp://en.wikipedia.org/wiki/Bulgariahttp://en.wikipedia.org/wiki/Bulgariahttp://en.wikipedia.org/wiki/Croatiahttp://en.wikipedia.org/wiki/Croatiahttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-8http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-8http://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Baltic_stateshttp://en.wikipedia.org/wiki/Baltic_stateshttp://en.wikipedia.org/wiki/Baltic_stateshttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-9http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-9http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-9http://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-10http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-10http://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-11http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-11http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-11http://en.wikipedia.org/wiki/Negative_equityhttp://en.wikipedia.org/wiki/Negative_equityhttp://en.wikipedia.org/wiki/Negative_equityhttp://en.wikipedia.org/wiki/Negative_equityhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-12http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-12http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-12http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-13http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-13http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-13http://en.wikipedia.org/wiki/File:Graph-house-prices-1975-2006.gifhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-13http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-12http://en.wikipedia.org/wiki/Negative_equityhttp://en.wikipedia.org/wiki/Negative_equityhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-11http://en.wikipedia.org/wiki/The_Economisthttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-10http://en.wikipedia.org/wiki/Alan_Greenspanhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-9http://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Ukrainehttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Romaniahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Baltic_stateshttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-8http://en.wikipedia.org/wiki/Croatiahttp://en.wikipedia.org/wiki/Bulgariahttp://en.wikipedia.org/wiki/Greecehttp://en.wikipedia.org/wiki/Israelhttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-7http://en.wikipedia.org/wiki/Polish_property_bubblehttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Lebanese_housing_bubblehttp://en.wikipedia.org/wiki/Spanish_property_bubblehttp://en.wikipedia.org/wiki/Irish_property_bubblehttp://en.wikipedia.org/wiki/New_Zealand_property_bubblehttp://en.wikipedia.org/wiki/File:Graph-house-prices-1975-2006.gif -
7/30/2019 Gufran Ahmad
30/86
Robert Shiller's plot of U.S. home prices, population, building costs, and bond
yields, fromIrrational Exuberance, 2d ed. Shiller shows that inflation adjusted U.S.
home prices increased 0.4% per year from 18902004, and 0.7% per year from
19402004, whereas U.S. census data from 19402004 shows that the self-
assessed value increased 2% per year.
In attempting to identify bubbles before they burst, economists have developed a
number offinancial ratiosandeconomic indicatorsthat can be used to evaluate
whether homes in a given area are fairly valued. By comparing current levels to
previous levels that have proven unsustainable in the past (i.e. led to or at least
accompanied crashes), one can make an educated guess as to whether a given real
estate market is experiencing a bubble. Indicators describe two interwoven aspects
of housing bubble: a valuation component and a debt (or leverage) component. The
valuation component measures how expensive houses are relative to what most
people can afford, and the debt component measures how indebted households
become in buying them for home or profit (and also how much exposure the banks
accumulate by lending for them). A basic summary of the progress of housing
http://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/Irrational_Exuberance_(book)http://en.wikipedia.org/wiki/Irrational_Exuberance_(book)http://en.wikipedia.org/wiki/Irrational_Exuberance_(book)http://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Economic_indicatorhttp://en.wikipedia.org/wiki/Economic_indicatorhttp://en.wikipedia.org/wiki/Economic_indicatorhttp://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.pnghttp://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.pnghttp://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.pnghttp://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.pnghttp://en.wikipedia.org/wiki/Economic_indicatorhttp://en.wikipedia.org/wiki/Financial_ratiohttp://en.wikipedia.org/wiki/Irrational_Exuberance_(book)http://en.wikipedia.org/wiki/Robert_Shillerhttp://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.pnghttp://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.png -
7/30/2019 Gufran Ahmad
31/86
indicators for U.S. cities is provided byBusiness Week.[15]See also:real estate
economicsandreal estate trends.
Housing affordability measures
The price to income ratio is the basic affordability measure for housing in agiven area. It is generally the ratio ofmedianhouse prices to median
familialdisposable incomes, expressed as a percentage or as years of income. It
is sometimes compiled separately forfirst time buyersand
termed attainability.[citation needed] This ratio, applied to individuals, is a basic
component of mortgage lending decisions.[citation needed] According to a back-of-
the-envelope calculation byGoldman Sachs, a comparison of median home
prices to median household income suggests that U.S. housing in 2005 is
overvalued by 10%. "However, this estimate is based on an average mortgage
rate of about 6%, and we expect rates to rise," the firm's economics team wrote
in a recent report.[16]According to Goldman's figures, a one-percentage-point
rise in mortgage rates would reduce the fair value of home prices by 8%. [citation
needed]
The deposit to income ratio is the minimum requireddownpaymentfor atypical mortgage[specify], expressed in months or years of income. It is especially
important for first-time buyers without existinghome equity; if the
downpayment becomes too high then those buyers may find themselves "priced
out" of the market. For example, as of 2004 this ratio was equal to one year of
income in the UK.[17]
Another variant is what the United States'sNational Association of
Realtorscalls the "housing affordability index" in its publications.[18](The
NAR's methodology was criticized by some analysts as it does not account for
http://en.wikipedia.org/wiki/Business_Weekhttp://en.wikipedia.org/wiki/Business_Weekhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-14http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-14http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-14http://en.wikipedia.org/wiki/Real_estate_economicshttp://en.wikipedia.org/wiki/Real_estate_economicshttp://en.wikipedia.org/wiki/Real_estate_economicshttp://en.wikipedia.org/wiki/Real_estate_trendshttp://en.wikipedia.org/wiki/Real_estate_trendshttp://en.wikipedia.org/wiki/Real_estate_trendshttp://en.wikipedia.org/wiki/Medianhttp://en.wikipedia.org/wiki/Medianhttp://en.wikipedia.org/wiki/Medianhttp://en.wikipedia.org/wiki/Disposable_incomehttp://en.wikipedia.org/wiki/Disposable_incomehttp://en.wikipedia.org/wiki/Disposable_incomehttp://en.wikipedia.org/wiki/First_time_buyerhttp://en.wikipedia.org/wiki/First_time_buyerhttp://en.wikipedia.org/wiki/First_time_buyerhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Goldman_Sachshttp://en.wikipedia.org/wiki/Goldman_Sachshttp://en.wikipedia.org/wiki/Goldman_Sachshttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-15http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-15http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-15http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Downpaymenthttp://en.wikipedia.org/wiki/Downpaymenthttp://en.wikipedia.org/wiki/Downpaymenthttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/wiki/Home_equityhttp://en.wikipedia.org/wiki/Home_equityhttp://en.wikipedia.org/wiki/Home_equityhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-16http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-16http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-16http://en.wikipedia.org/wiki/National_Association_of_Realtorshttp://en.wikipedia.org/wiki/National_Association_of_Realtorshttp://en.wikipedia.org/wiki/National_Association_of_Realtorshttp://en.wikipedia.org/wiki/National_Association_of_Realtorshttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-17http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-17http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-17http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-17http://en.wikipedia.org/wiki/National_Association_of_Realtorshttp://en.wikipedia.org/wiki/National_Association_of_Realtorshttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-16http://en.wikipedia.org/wiki/Home_equityhttp://en.wikipedia.org/wiki/Wikipedia:Citing_sourceshttp://en.wikipedia.org/wiki/Downpaymenthttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-15http://en.wikipedia.org/wiki/Goldman_Sachshttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/First_time_buyerhttp://en.wikipedia.org/wiki/Disposable_incomehttp://en.wikipedia.org/wiki/Medianhttp://en.wikipedia.org/wiki/Real_estate_trendshttp://en.wikipedia.org/wiki/Real_estate_economicshttp://en.wikipedia.org/wiki/Real_estate_economicshttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-14http://en.wikipedia.org/wiki/Business_Week -
7/30/2019 Gufran Ahmad
32/86
inflation.[19]Other analysts, however, consider the measure appropriate,
because both the income and housing cost data is expressed in terms that
include inflation and, all things being equal, the index implicitly includes
inflation). In either case, the usefulness of this ratio in identifying a bubble is
debatable; while downpayments normally increase with house valuations, bank
lending becomes increasingly lax during a bubble and mortgages are offered to
borrowers who would not normally qualify for them (see Housing debt
measures, below).
The Affordability Index measures the ratio of the actual monthly cost of themortgage to take-home income. It is used more in the United Kingdom where
nearly all mortgages are variable and pegged to bank lending rates. It offers a
much more realistic measure of the ability of households to afford housing than
the crude price to income ratio. However it is more difficult to calculate, and
hence the price to income ratio is still more commonly used by pundits. In
recent years, lending practices have relaxed, allowing greater multiples of
income to be borrowed. Some speculate that this practice in the longtermcannot be sustained and may ultimately lead to unaffordable mortgage
payments, and repossession for many.[citation needed]
The Median Multiple measures the ratio of the median house price to themedian annual household income. This measure has historically hovered
around a value of 3.0 or less, but in recent years has risen dramatically,
especially in markets with severe public policy constraints on land and
development.[citation needed]
http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-18http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-18http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-18http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-18 -
7/30/2019 Gufran Ahmad
33/86
Inflation-adjusted home prices inJapan(19802005) compared to home priceappreciation in theUnited States,Britain, andAustralia(19952005).
[edit]Housing debt measures
The housing debt to income ratio or debt-service ratio is the ratio of mortgagepayments to disposable income. When the ratio gets too high, households
become increasingly dependent on rising property values to service their debt.
A variant of this indicator measures total home ownership costs, including
mortgage payments, utilities and property taxes, as a percentage of a typical
household's monthly pre-tax income; for example seeRBCEconomics' reports
for the Canadian markets.[20]
The housing debt to equity ratio (not to be confused with the corporatedebt to
equity ratio), also calledloan to value, is the ratio of the mortgage debt to thevalue of the underlying property; it measuresfinancial leverage. This ratio
increases when the homeowner takes asecond mortgageorhome equity
loanusing the accumulated equity as collateral. A ratio greater higher than 1
implies that owner'sequityis negative.
http://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Great_Britainhttp://en.wikipedia.org/wiki/Great_Britainhttp://en.wikipedia.org/wiki/Great_Britainhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=8http://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=8http://en.wikipedia.org/wiki/RBChttp://en.wikipedia.org/wiki/RBChttp://en.wikipedia.org/wiki/RBChttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-19http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-19http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-19http://en.wikipedia.org/wiki/Debt_to_equity_ratiohttp://en.wikipedia.org/wiki/Debt_to_equity_ratiohttp://en.wikipedia.org/wiki/Debt_to_equity_ratiohttp://en.wikipedia.org/wiki/Loan_to_valuehttp://en.wikipedia.org/wiki/Loan_to_valuehttp://en.wikipedia.org/wiki/Loan_to_valuehttp://en.wikipedia.org/wiki/Financial_leveragehttp://en.wikipedia.org/wiki/Financial_leveragehttp://en.wikipedia.org/wiki/Financial_leveragehttp://en.wikipedia.org/wiki/Second_mortgagehttp://en.wikipedia.org/wiki/Second_mortgagehttp://en.wikipedia.org/wiki/Second_mortgagehttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/File:EconomistHomePrices20050615.jpghttp://en.wikipedia.org/wiki/File:EconomistHomePrices20050615.jpghttp://en.wikipedia.org/wiki/File:EconomistHomePrices20050615.jpghttp://en.wikipedia.org/wiki/File:EconomistHomePrices20050615.jpghttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Second_mortgagehttp://en.wikipedia.org/wiki/Financial_leveragehttp://en.wikipedia.org/wiki/Loan_to_valuehttp://en.wikipedia.org/wiki/Debt_to_equity_ratiohttp://en.wikipedia.org/wiki/Debt_to_equity_ratiohttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-19http://en.wikipedia.org/wiki/RBChttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=8http://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Great_Britainhttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/File:EconomistHomePrices20050615.jpghttp://en.wikipedia.org/wiki/File:EconomistHomePrices20050615.jpg -
7/30/2019 Gufran Ahmad
34/86
[edit]Housing ownership and rent measures
The ownership ratio is the proportion of households who own their homes asopposed torenting. It tends to rise steadily with incomes. Also, governments
often enact measures such astax cutsor subsidized financing to encourage and
facilitatehome ownership. If a rise in ownership is not supported by a rise in
incomes, it can mean either that buyers are taking advantage of lowinterest
rates(which must eventually rise again as the economy heats up) or that home
loans are awarded more liberally, to borrowers with poor credit. Therefore a
high ownership ratio combined with an increased rate ofsubprime lendingmay
signal higher debt levels associated with bubbles.
Theprice-to-earnings ratioorP/E ratiois the common metric used to assess therelative valuation ofequities. To compute the P/E ratio for the case of a rented
house, divide thepriceof the house by its potentialearningsornet income,
which is the market annualrentof the house minus expenses, which include
maintenance and property taxes. This formula is:
The houseprice-to-earnings ratioprovides a direct comparison to P/E ratios
used to analyze other uses of the money tied up in a home. Compare this
ratio to the simpler but less accurate price-rent ratio below.
The price-rent ratio is the average cost of ownership divided by thereceived rent income (if buying to let) or the estimated rent that would
be paid if renting (if buying to reside):
http://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=9http://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=9http://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Tax_cuthttp://en.wikipedia.org/wiki/Tax_cuthttp://en.wikipedia.org/wiki/Tax_cuthttp://en.wikipedia.org/wiki/Home_ownershiphttp://en.wikipedia.org/wiki/Home_ownershiphttp://en.wikipedia.org/wiki/Home_ownershiphttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Subprime_lendinghttp://en.wikipedia.org/wiki/Subprime_lendinghttp://en.wikipedia.org/wiki/Subprime_lendinghttp://en.wikipedia.org/wiki/Price-to-earnings_ratiohttp://en.wikipedia.org/wiki/Price-to-earnings_ratiohttp://en.wikipedia.org/wiki/Price-to-earnings_ratiohttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Earnings_per_sharehttp://en.wikipedia.org/wiki/Earnings_per_sharehttp://en.wikipedia.org/wiki/Earnings_per_sharehttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/wiki/Net_incomehttp://en.wikipedia.org/wiki/Earnings_per_sharehttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Equitieshttp://en.wikipedia.org/wiki/P/E_ratiohttp://en.wikipedia.org/wiki/Price-to-earnings_ratiohttp://en.wikipedia.org/wiki/Subprime_lendinghttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Home_ownershiphttp://en.wikipedia.org/wiki/Tax_cuthttp://en.wikipedia.org/wiki/Rentinghttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=9 -
7/30/2019 Gufran Ahmad
35/86
The latter is often measured using the "owner's equivalent rent" numbers
published by theBureau of Labor Statistics. It can be viewed as the real
estate equivalent of stocks'price-earnings ratio; in other terms it measures
how much the buyer is paying for each dollar of received rent income (or
dollar saved from rent spending). Rents, just like corporate and personal
incomes, are generally tied very closely tosupply and demandfundamentals;
one rarely sees an unsustainable "rent bubble" (or "income bubble" for that
matter). Therefore a rapid increase of home prices combined with a flat
renting market can signal the onset of a bubble. The U.S. price-rent ratio was
18% higher than its long-run average as of October 2004.[21]
The gross rental yield, a measure used in the United Kingdom, isthe total yearly gross rent divided by the house price and
expressed as a percentage:
This is the reciprocal of the house price-rent ratio. The net rental
yield deducts the landlord's expenses (and sometimes estimated rental voids)
from the gross rent before doing the above calculation; this is the reciprocal
of the house P/E ratio.
Because rents are received throughout the year rather than at its end, both
the gross and net rental yields calculated by the above are somewhat less
than the true rental yields obtained when taking into account the monthly
nature of rental payments.
The occupancy rate (opposite: vacancy rate) is essentially the number of occupiedunits divided by the total number of units in a given region (in commercial real
estate, it is usually expressed in terms of area such as square meters for different
http://en.wikipedia.org/wiki/Bureau_of_Labor_Statisticshttp://en.wikipedia.org/wiki/Bureau_of_Labor_Statisticshttp://en.wikipedia.org/wiki/Bureau_of_Labor_Statisticshttp://en.wikipedia.org/wiki/PE_ratiohttp://en.wikipedia.org/wiki/PE_ratiohttp://en.wikipedia.org/wiki/PE_ratiohttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-20http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-20http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-20http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-20http://en.wikipedia.org/wiki/Supply_and_demandhttp://en.wikipedia.org/wiki/PE_ratiohttp://en.wikipedia.org/wiki/Bureau_of_Labor_Statistics -
7/30/2019 Gufran Ahmad
36/86
grades of buildings). A low occupancy rate means that the market is in a state
ofoversupplybrought about by speculative construction and purchase. In this
context, supply-and-demand numbers can be misleading: sales demand exceeds
supply, but rent demand does not.
[edit]Housing price indices
Main article:House price index
The CaseShiller index (national, quarterly) 19872008, showing a housing bubble
peaking in 2006.
Measures of house price are also used in identifying housing bubbles; these are
known ashouse price indices(HPIs).
A noted series of HPIs for the United States are theCaseShiller indices, devised
by American economistsKarl Case,Robert J. Shiller, andAllan Weiss. As
measured by the CaseShiller index, the US experienced a housing bubble peaking
in the second quarter of 2006 (2006 Q2).
[edit]Real estate bubbles in the 2000s
By 2006, several areas of the world were thought to be in a bubble state, although
this contention was not without controversy. This hypothesis was based on
observation of similar patterns in real estate markets of a wide variety of
http://en.wikipedia.org/wiki/Oversupplyhttp://en.wikipedia.org/wiki/Oversupplyhttp://en.wikipedia.org/wiki/Oversupplyhttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=10http://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=10http://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/wiki/Case%E2%80%93Shiller_indexhttp://en.wikipedia.org/wiki/Case%E2%80%93Shiller_indexhttp://en.wikipedia.org/wiki/Case%E2%80%93Shiller_indexhttp://en.wikipedia.org/wiki/Case%E2%80%93Shiller_indexhttp://en.wikipedia.org/wiki/Case%E2%80%93Shiller_indexhttp://en.wikipedia.org/wiki/Karl_Casehttp://en.wikipedia.org/wiki/Karl_Casehttp://en.wikipedia.org/wiki/Karl_Casehttp://en.wikipedia.org/wiki/Robert_J._Shillerhttp://en.wikipedia.org/wiki/Robert_J._Shillerhttp://en.wikipedia.org/wiki/Robert_J._Shillerhttp://en.wikipedia.org/wiki/Allan_Weisshttp://en.wikipedia.org/wiki/Allan_Weisshttp://en.wikipedia.org/wiki/Allan_Weisshttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=11http://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=11http://en.wikipedia.org/wiki/File:Case-shiller-index-values.jpghttp://en.wikipedia.org/wiki/File:Case-shiller-index-values.jpghttp://en.wikipedia.org/wiki/File:Case-shiller-index-values.jpghttp://en.wikipedia.org/wiki/File:Case-shiller-index-values.jpghttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=11http://en.wikipedia.org/wiki/Allan_Weisshttp://en.wikipedia.org/wiki/Robert_J._Shillerhttp://en.wikipedia.org/wiki/Karl_Casehttp://en.wikipedia.org/wiki/Case%E2%80%93Shiller_indexhttp://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/wiki/House_price_indexhttp://en.wikipedia.org/w/index.php?title=Real_estate_bubble&action=edit§ion=10http://en.wikipedia.org/wiki/Oversupplyhttp://en.wikipedia.org/wiki/File:Case-shiller-index-values.jpghttp://en.wikipedia.org/wiki/File:Case-shiller-index-values.jpg -
7/30/2019 Gufran Ahmad
37/86
countries.[22]This includes similar patterns of overvaluation and excessive
borrowing based on those overvaluations.
Thesubprime mortgage crisis, with its accompanying impacts and effects on
economies in various nations, has given some credence to the idea that these trends
might have some common characteristics.
http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-21http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-21http://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-21http://en.wikipedia.org/wiki/Subprime_mortgage_crisishttp://en.wikipedia.org/wiki/Subprime_mortgage_crisishttp://en.wikipedia.org/wiki/Subprime_mortgage_crisishttp://en.wikipedia.org/wiki/Subprime_mortgage_crisishttp://en.wikipedia.org/wiki/Real_estate_bubble#cite_note-21 -
7/30/2019 Gufran Ahmad
38/86
INDIA: REAL ESTATE SCENARIO
-
7/30/2019 Gufran Ahmad
39/86
GROWTH ACROSS GEOGRAPHIES
-
7/30/2019 Gufran Ahmad
40/86
Indias Property Sector: Credit Strengths
In the residential sector, a growing middle class is enjoying rising income levels.
Combined with smaller household sizes, this demographic change has boosted
demand for more modern housing and home loans. Meanwhile, increasingconsumer spending power has encouraged growth in organized in organized
retailingboth feeding off and contributing to the spear of mall culture and the
popularity of other large-scale retail property developments.
In the commercial property segment, strong growth in the services sector
particularly in the IT and ITES sectors and corporates growing scale of
operations have led to greater demand for commercial space, including modernoffices, warehouses and lodging space.
Many Developers have substantial plans to increase both their size and
geographical spread. They are also expanding into different kinds of properties,
-
7/30/2019 Gufran Ahmad
41/86
which can boost the firms franchise values and reduce concentration risks.
However, managing and financing such activities can be a challenge, and puts a
premium on financial flexibility, capital access and operational infrastructure.
The property industry is also wrestling with oversupply in certain areas, such as in
Indias commercial property sector, which may lead to rent reductions and value
drops. Meanwhile, property firms must also cope with a reduction in customer
advances on new construction, increasing land values (making acquisition and
development deals tougher), rising interest rates since 2005, and increased
difficulty in arranging capital. The latter is exacerbated by rising interest rates and
property prices, which have encouraged banks to become more selective in
granting loans as they try to preserve asset quality.
Moreover, the Reserve Bank of India (RBI) has increased risk weighting for real
estate exposure, which has served to curtail direct lending to this sector.
The property business in India also faces political risks. These risks may come in
various forms, but include the stalling of decisions over acquisitions or planning
permission during elections, while some approvals have even been rescinded
following elections and changes to state governments.
Property financing remains largely conducted through conventional mortgages,
with the volume of more modern, transparent and liquid products-such as shares in
public property firms and CMBS-still negligible. This is partly due to high
registration charges and transaction costs and structural impediments in the
securitization legal framework.
Furthermore, mutual funds lack the appetite of long-tenure deals, and mostly invest
in high quality debt, while pension funds and insurance companies have yet to
invest in structured paper either.
-
7/30/2019 Gufran Ahmad
42/86
COMPANY PROFILE
HDFC Realty is a wholly owned subsidiary of HDFC. We have assisted individuals in acquiring
homes valued at 5000 million rupees.
HDFC is a pioneer housing finance institution in India and with over 30 years in operations hasprovided finance to over a million families in India.
We are a team of real estate professionals facilitating Buying, Selling or Leasing of Residential /Commercial property.
At HDFC Realty, we provide personalised attention to the individuals and corporates in theirprocess of identifying properties. From understanding the requirement to organizing the sitevisits to completion of transaction, we make every effort to make the process of acquiring a
property, hassle free and convenient.
Presently our services are available in Mumbai, Navi Mumbai, Pune, Bangalore, Delhi / NCR,Kolkata, Kochi & Hyderabad.
For a property in India, you can depend on HDFC Realty, a subsidiary of HDFC, the pioneer
housing finance major in India, which has assisted over 2 million homebuyers in the last 30
years.
HDFC Realty helps to search properties in all major cities in India and has transacted in
properties worth over Rs.500 crores. Our objective is to provide the buyer all the services under
one roof, from property search to visits at the property site, and also help with the legal
documentation.
http://hdfcrealty.com/information.asphttp://hdfcrealty.com/information.asp -
7/30/2019 Gufran Ahmad
43/86
COMPANY PRODUCTS
Hdfc realty Projects in Lucknow
CAPE TOWN
Overview Redefining wonderful living with a 4-sided open campus. Spread out over approx 50 sprawling acres. Well appointed apartments with modern conveniences.
A world-class leisure and residential community spread out over approx 50 sprawling acres, CapeTown has been
envisioned as a complete, self-contained campus area built around the best of the facilities where every home is
designed to the most demanding standards.
8 Variants of well planned (2,3,4 bedroom) apartments and penthouse towers, Luxury Villas spread over a greenarea, CapeTown from Hdfc realty is one of the best housing developments in the city.'
CapeTown will comprise of upscale, well appointed apartments with modern conveniences such as a clubhouse,
jogging track, swimming pool and more.
-
7/30/2019 Gufran Ahmad
44/86
Features
What's Special- 82% open landscaped area- 4 sided open vastu friendly Plot
- 100 Acre adjoining city greens
- In-house clubs with exclusive facilities
- 24 hour water & power supply
- Metro Connectivity
- Jogging track
- Extensive sports facilities (swimming, basketball, volleyball, badminton, tennis etc.
- Gymnasium
- Herbal and Medicine Plantation
- Massage therapy
Extensive sports facilities(including basketball, volleyball, badminton, tennis etc.)Swimming pool, Health Club, Medical Centre, Ayurvedic Massage Centre
Round the clock customer care Reticulated gas supply to every kitchen Shopping complex with in the complex Ample parking space Well-designed complex with beautiful landscape Jogging Track, Gymnasium, Harbal and Medicine Plantation, Massage therapy within the
campus.
A well equipped beauty salon run by professionals to give you the very best. A club house with luxury elements that will help you be you when you need the break
-
7/30/2019 Gufran Ahmad
45/86
ECOCITY
Overview
The roofs and walls, pergolas and water features, vegetation and choices of materials are allintended to create a micro-climate of a moderated, comfortable environment.
Ecociti incorporates ecologically responsive urbanism at work in which the environments behind
and between buildings are as important as the buildings themselves, and in which energy, water
and resources are conserved whilst maintaining human comfort and nurturing the spirit.
The roofs and walls, pergolas and water features, vegetation and choices of materials are all
intended to create a micro-climate of a moderated, comfortable environment. The architecture of
the complex is incorporates features of a high level of environmentally responsible design. The
buildings in Ecociti shall have natural ventilation system, use of renewable energy through solar
panels and utilization of other recycled material.
Also we have studio apartments - EcoSuites in the complex.
Features
-
7/30/2019 Gufran Ahmad
46/86
What's Special
- Committed to eco-centrism, Ecociti is about living the way nature wants you to.
- Creation of a micro-climate of a moderated environment.
- Use of anaerobic digestor for reduction of methane gas.
82% open landscaped area 2 Central Park of 3 acres & 2 Acres each within the complex Surrounded by 2 lush green sector parks In-house club with exclusive facilities Swimming pool, Health Club Badminton Court, Tennis Court & Amphitheatre 24 hour water & power supply Reticulated gas supply to every kitchen Shopping complex next to the complex Close to Sector-18, the entertainment hub of Lucknow Minutes away from reputed educational institutions like Amity, APJ, DPS etc. Vaastu friendly fengshui layout & design
Ample parking space Well-designed complex with beautiful landscape Located at Lucknow-Greater Lucknow Expressway Structure: Earthquake Resistance R.C.C. frame structure & non-load bearing brick walls
Communication & Security System
Intercom: Intercom facility in all flats connected with security Security: Guard room at main Entrance for Efficient manual
Garbage shoot
FFS: Each & Every tower will be well equipped with Fire Suppression System(a) Dry: The Fire extinguishers will be available at each floor.
(b) Sound: The Fire Alarm System will be available at each Floor
(c) Wet: The provision of Wet Pipe line at each floor.
-
7/30/2019 Gufran Ahmad
47/86
34 PAVALLION
Overview
Adjoining Lucknow City Center Metro Station International PGA standard 18 hole golf course nearby. Minutes away from reputed Educational Institutions like Amity, API, DPS, etc.
Hdfc realty presents AMBER HEIGHTS, ARISTO HEIGHTS and AZURE HEIGHTS at 34
Pavilion, Lucknow where you will find fully loaded 2 and 3 bedroom apartments well connected
with Delhi Metro.
It is situated in the heart of Lucknow and just 2 kms. from Lucknow Golf Course. It is minutes
drive from entertainment hub of Sector 18, Educational Institutes like AMITY, APEEJAY and
DPS are within the reach.
For recreation, you can join your friends at charmwood Club or Cappuccino Hut, especially
designed to suit your life style.
So now you can't miss a single fine moment of life.
-
7/30/2019 Gufran Ahmad
48/86
Features
What's Special
- Four side open Condominiums- Adjoining Lucknow City Center Metro Station
- Huge open landscaped area
- Eco friendly environment
- 100% power back-up
- Vaastu friendly fengshui layout & design
Centrally located at sector-34 in the heart of Lucknow Charm wood club with gymnasium, spa and other facilities Cappuccino hut - a place to connect Ample parking space Acres of green within the complex Artificial water bodies with landscaped gardens International PGA standard 18 hole golf course near by Close to sec-18-the entertainment hub of LUCKNOW Minutes away from reputed Educational Institutions like Amity, API, DPS, etc. Gated community lifestyle High speed elevators in all towers CCTV Surveillance Boom barrier for seprate entry & Exit In-house maintainance agency for up keeping of the compound
-
7/30/2019 Gufran Ahmad
49/86
APEX TOWERS
Overview
Located at the main Lucknow Expressway. Part of the fully developed Emerald Court campus with numerous families already residing. Exclusive swimming pool and club house.
Apex Towers situated in Emerald Court on the Greater LUCKNOW Expressway, combines both
sense and sensibility to give you your money's worth and more. Just 5 minutes away from Delhi
this apartment block is the tallest in the vicinity. Facing a 40 acre City Park the homes in this
project boast of a beautiful view along with the proximity of serene surrounding to stretch or
have fun with friends and family. The location boasts of several other advantages like the
proximity to various leading schools like Step-By-Step, Mayoor, Lotus Valley, AMITY
University and an upcoming multi-specialty hospital right across the road.
A home at Apex Tower comes with the added benefit of a swimming pool with in the compound.
The residents are also provided with a club house that offers the very best in class and service.
Here, living is all about adding style to your life!
And the best news is that the price for this high rise is not steep. Extremely affordable, these
luxuriously designed and perfectly built apartments are available at very attractive prices!
-
7/30/2019 Gufran Ahmad
50/86
Features
What's Special
- On the main LUCKNOW Expressway
- Just 5 Minute Drive from Delhi
- 24 hour water & power supply
- Facing 40 acre city park
- Vaastu friendly fengshui layout & design
On the main LUCKNOW Expressway Well-designed complex with beautiful landscape Just 5 Minute Drive from Delhi Part of the fully developed EMERALD COURT campus with numeral families
already residing
Facing 40 acre city park Vaastu friendly layout & design Close to Sector-18, the entertainment hub of Lucknow Exclusive swimming pool & club house Leading schools like Step-By-Step, Mayoor, Lotus Valley, AMITY University
in close proximity
Next to the upcoming multi-specialty hospital State-of-art shopping area within the complex 24 hour water & power supply Security System with intercom, CCTV system
-
7/30/2019 Gufran Ahmad
51/86
PROJECTS IN LUCKNOW EXTENSION AND GREATER LUCKNOW
CZAR
Overview
Modern day opulence prevails here Czar Suites are being uniquely developed as two side open plots on Faridabad Lucknow
Gurgaon (F-N-G Corridor), which has 130 metres wide road.
Beyond adjectives. Beyond hyperbole. This is the real thing.
Admittedly not for everyone, Czar Villas are the ultimate limited edition living experience. Each
villa is unique and captures the spirit of independent living spaces with a blend of community
living. With meticulously designed aesthetic interiors, they are the spaces so vibrant that while
you enjoy the best living style, you and your family will create the best moments. Moments that
you will wish like framing to adorn your wall for all times to come. And you can have all this
without having to pay through your nose.
GreaterLucknow
One of the largest industrial townships of Asia, is a young, planned, integrated vibrant city where
world class infrastructure provides numerous matchless facilities. Given its advantages, Greater
Lucknow has always been a preferred choice of Hdfc realty to offer various ultra-modern
projects to its customers.
-
7/30/2019 Gufran Ahmad
52/86
Adjacent to the project site, there is upcoming Night Safari, Formula1 Race Trace, Metro
Corridor and proposed International Airport at Greater Lucknow. Truly, its a perfect location for
the perfect moments.
Features
What's Special
- 85% open landscaped area
- Reticulated gas supply to every kitchen
- Ample parking space
- In-house clubs with exclusive facilities
- 24 hour water & power supply
- Next to Film city
- NRI city Biotech City
- IT City
- Medical City etc.
Central Park of 6 acres within the complex
60 units of super luxuary centrally air-conditioned apartments and penthouses
Four side open apartments and Penthouses with an individual identity 24 hour water & power supply International PGA standard 18 hole golf course near by Swimming pool, Health Club, Badminton Court Tennis Court & Amphitheatre State-of-art shopping mall within the complex & across the road Close to Sector-18, the entertainment hub of Lucknow Minutes away from reputed engineering and management intitutions Vaastu friendly layout & design
-
7/30/2019 Gufran Ahmad
53/86
Upcoming Night Safari, Formula1 Race Track, Metro Corridor and International Airport adjacent to site Security System with intercom, CCTV and separate electronic security lock with camera and access control Well-designed complex with beautiful landscape.
OXFORD SQUARE
Overview
Independent Floors A perfect blend of open spaces, community living and conveniences
Welcome to the world class, independent living spaces at Oxford Square, Greater Lucknow.
These Independent Floors provide a freedom of living where you are not forced to live in
claustrophobic environment. Each of the independent floors is designed to give you a feel of life
in a villa and a great sense of space. Independent Floors at Oxford Square is truly an address you
have always aspired for.
-
7/30/2019 Gufran Ahmad
54/86
With exclusive features like a terrace garden, a splash pool and a lot more, life at Oxford Square
is a perfect blend of open spaces, community living and conveniences. You will not be forced to
share your world with anyone else. With state-of-the-art security, gated complex, wide internal
roads, shopping complex, modern club, gym etc., you can now enjoy independent living on your
very own floor
Features
What's Special
- Possession in 18 months
- Duplex with personal splash pool & terrace garden
- Recreation centers
- Choice of 2, 3 & 4 BHK, G + 2 floors
- Vaastu friendly fengshui layout & design
- Duplex apartments on 2nd floor
- Primary creche School in the complex
Fully air conditioned independent floors with complete wood work. Possession in 18 months Duplex with personal splash pool & terrace garden Never before, Villas type independent floors on 22 acres of prime land at Gr. Lucknow Choice of 2, 3 & 4 BR, G + 2 floors Exclusive lawn for ground floor Exclusive terrace garden and splash pool for 2nd floor duplex#
-
7/30/2019 Gufran Ahmad
55/86
Independent parking for all floors Lush green environs In house club with all modern facilities
UPCOUNTRY
Overview
Now Experience Beachside Living without Leaving NCR. Choose between expandable Villas and High rise apartments.
Imagine stepping out of your home and stepping o
top related