Correction or Collapse?

There is an interesting article at LiveMint on Indian Real Estate Correction/Collapse. Hines Interests, a real estate firm is expecting a 50% drop in prices.

"With a tripling of prices in some cities, Hines expects a 50% drop in prices".

One statement in the article sounded weird

“The real estate bubble will not burst in the sense that prices will collapse,” he said. But he expects there will likely be a correction in prices up to 50% noting that, “even that is not a huge reduction considering the fact that prices have doubled and tripled in the last couple of years.”

If 50% correction is not a price collapse what is?? 50% price collapse from 300% is 150%. The last statement in the above quote almost tells that Hines would like a bigger collapse!

Collapse or a correction, whatever you call it I'll take a 50% cut, we will be almost near reality.

2007!

Its been almost a year since I last posted and its almost a year since I started posting!

Was it ennui or was I just tired of being one of the very few 'Indian real estate bears'? I'm not sure whether it was one or both, but am back with a new energy and more conviction of the impending fall of real estate in India.

2007 was a very interesting year for me. I learnt quite a bit about real estate, economy, LBOs, CDOs, M1, M2 .... It was a 'Alice in Wonderland' experience for me. For a person more accustomed to the certainty of Newtonian physics and field of computer software which follows clear and succinct logic it was a step into unchartered territory.

The world of economics is not a WYSIWYG world. Two economists see the same data and come up with two completely opposing views. It is beautiful in a sense, but it is quite scary that there is no absolute picture which everyone sees and agrees upon.

Now moving away from the metaphysical ramblings, I'll bid adieu with a note that I'll start posting more on 'Indian Real Estate'.

Annam