digital thoughts

When a notice is served from court, some loan defaulters hide in some places and don’t accept the notice. In the Facebook era, that doesn’t work anymore.

A lending institution in Australia loaned the couple in Canberra more than A$100,000 ($122,000). The couple defaulted on the loan, bank couldn’t locate them in the last known residence. Bank’s lawyer obtained a default judgment in the couple’s absence and was able to convince the court to serve it via Facebook.

More on this story is here.

Global economy crisis takes another toll. Eyespot Corporation closed its doors. They provide video uploading facility for Digital Bhoomi users. Now, we have to look for another video hosting company that can host our users’ videos of their real estate properties.

You can still continue to upload your videos to YouTube and provide the link when you list your real estate property. If you want to post your real estate listings, please click here and select the city and post your ad. It’s simple, fast and very effective.

Indian real estate boom is getting busted. India is not detached from global economy. Global economic slowdown is now causing loosing demand for office space in Bangalore. The major portion of the office space in Bangalore is occupied by the IT companies. With the companies have been forcing to review their plans to beat the slowdown, the land absorption by the companies is also coming down. This affects the real estate market of Bangalore and many other cities in India.

According to a report by Cushman & Wakefield, a property management consultant firm, the demand for office space in Bangalore witnessed 61 percent drop on a quarter-on-quarter. During the April-June period of 2008, the supply of office space was 3.11 million sq ft while the total absorption was 1.97 million sq ft.

Even with the all the slow downs many speculators still believe that Indian real market will never go down. Oh, well…

It looks like housing prices finally start to come down drastically in U.S. For past two years, U.S. was facing housing and sub-prime crisis. Many house owners were reluctant to reduce the home price thinking that some kind of reversal would come up. Many sellers finally realize the extent of the damage done by sub-prime crisis and started to reduce the price. It may be too late, because everyone has the same idea now.

Mark and Elaine Hendricks recently offered their 2000 Mustang convertible as a freebie to anyone who would buy their Woodbridge house, but even that failed to distinguish it from the roughly 700 other homes for sale in their Zip code (pincode). You can read more about this here.

As I wrote many times, I am sure that the same kind of situation will happen in India. Sooner or later.

The number of unoccupied apartments in and around the city is expected to touch nearly one lakh by April, reports The Hindu. Citing the outcome of an “informal survey,” Inspector-General of Registration and Commissioner of Stamps H. Shashidhar said that these indeed were the current market trends.

He also said that the figure included both old and new apartments – those that had not been sold, those that had not been rented out and those now under construction. Shashidhar said that registrations of property in the State had reduced by 45 to 50 percent, partially due to the ban on registration of revenue sites.

It seems that speculative investors keep away from buying the apartment and that only genuine users were buying the properties now, Shashidhar said.

Confirming the slump in the market, Feroze Abdullah, realtor and proprietor of Feroze Estates said his own business had seen a 50 percent drop during this period. “There is more supply than demand. Prices in the last three years have risen unnaturally and the market is now seeing a leveling. But in the central districts, the prices are still high.”

Related Link: Bangalore Real Estate

It looks like foreigners won’t leave the Indian real estate market alone, until it also collapses. Global real estate fund Millennium Spire said it would invest $1 billion across the country. The fund plans to invest in South India with Coimbatore as the key focus. The fund has a target ROI of 25%+ per year. This magic number pulls in lot of crowd to India, time will tell how long the party would last.

Source: VC Circle

U.S. economy is shaken by greedy banks that gambled on housing loans to credit-risk customers. Just as expected, government is launching efforts to punish the people that caused huge damage to the economy.

FBI officially launched the probe to investigate the fraud in connection with subprime loans. It is investigating 14 companies for possible accounting fraud, insider trading, etc., When all these end, we can see few more court dramas just like what we have seen in Enron and $6000 curtain cases.

Related Link: FBI probes 14 companies

In a wise move, RBI has decided to put on hold approvals for about 30 foreign venture capital funds that want to invest in the real estate sector.

Indian real estate is a bubble. We wrote about that many times. However, it doesn’t look like this bubble will end anytime soon, unless Indian stock market collapses because of recession in U.S. By looking at the measures taken by U.S. Fed, it appears that U.S. recession will be mild and short-lived.

Indian government is trying to slow down the capital inflow to the red-hot Indian real estate market. Although it’s too late, India is trying to do something.. finally. Many foreign funds have no place to park their money, most of them think that they would get 30%+ returns only in Indian real estate sector. Well, they may get 30% return, but who is going to suffer at the end? Indian middle class citizens, of course.

As of now, Indian middle class group can’t find an affordable housing in any Indian city. I doubt that would change anytime soon, as long as some crooks keep the real estate prices high to park their black money.

Related Links: Business Standard | Americans pay for housing boom’s excess

If Indian government ignores the real estate bubble and doesn’t do anything to fix it, we may soon see the headline “Indians Pay for Housing Boom’s Excess”. In America, banks fueled the speculation and borrowing by offering loans to everyone. In India, speculators are everywhere. Many Indians think that local real estate boom will go forever. Indian banks are also added fuel to the speculation fire. When all these end, it is going to look very ugly.

If you want to foresee what will happen when Indian real estate bubble ends, take a look at the article in Yahoo. Let me quote Chris Johnson, Johnson Research Group. “Along with the joy of a market that goes as high as ours is the agony of when it starts to correct itself.”

India’s realty industry will grow at a fast clip of 30 percent over the next 10 years, offer 20-25 percent returns and secure foreign investment worth $30 billion, says a study by a leading industry lobby.

“The total size of investments in the domestic real estate sector is likely to be $102 billion,” says the study released Sunday by the Associated Chambers of Commerce and Industry of India. “India is the only country that offers return on commercial and residential properties ranging between 20-25 percent, against 15-18 percent in rest of Asia.”

This is not good news for a common man. How does the real estate industry get 20-25% return? By pricing all the residential/commercial units to obscene levels.

Foreign investors will be happy because they get 25% return compared to 5% in their home country. Indian real estate companies will be very happy because they earn crores of rupees by selling the properties at 75% margin. Indian real estate brokers are also pleased at their newfound fortune, they mint money by doing minimal work.

How about middle class families? They just need to tolerate all the obscene rental levels in many cities. They just need to sit and watch this euphoria. They will also get to watch dramatic end of real estate bubble in India.

Related Link: India’s realty sector to get $30 billion