Predictions from a year ago

From a post made about a year ago:

2003 was a slow year

2004 was the year of new launches

2005 was the year of resale purchase absorption

2006 was the year of price increases

2007 was the year of massive price escalation in resale

2008 was the year of crash

2009 was the year of slow sales

2010 was the year of runaway price increase

2011 was the year of new launches

2012 will be the year of price stagnation and fall (Did this year old prediction come true? Not quite, but close enough - Mumbai stagnant, Pune and GGN stagnant for last 4 months or so)

2013 will be the year of resale purchase absorption

2014 will be the next round of runaway price increase

2015 might be the next bull phase massive price increases, in new and resale, similar to 2006-7.

Assuming the 7-8 year RE cycle seen all over the world repeats itself here

Re: Compuwala,

Bears are like the boy who cry wolf - they keep on screaming crash crash. And like a broken clock, they will be right some time or other.

I wrote this in beginning of 2011 in this same thread (page 366)


If you look at RE market in last 3 years, it has been following the textbook pattern of a 7-8 year cycle.

2007 flat prices peaked (previous cycle). Assume imaginary index for RE(IMex)=100

2008 prices crashed IMex =80 (Bears scream crash crash)

2009 RE firms got into debt trouble and there were distress sale of plots (Vatika plots GGN) and flats (Unitech Uniworld gardens 2 GGN). Many affordable flats were released. Imex = 70. (Bears keep screaming crash crash although crash is already over)

2010 Prices stabilised and went back to peak 2008 levels. IMex=100
(Bears scream crash crash - since prices are rising, they say crash is imminent)

2011 Prices stabilised, fresh inventory being continuously sold. Imex = 130
(Bears scream crash crash - just more imminent)
If we have a normal cycle, then we can expect:

2011: stable prices for rest of the year, rates reach peak of BAse rate 10%. IMex=130 (Bears scream crash crash continuously, always around the corner) (Did this prediction come true, made a year ago? - we did have stagnant prices for most of 2011 except that prices jumped from Nov 2011 to Feb 2012 or so)

2012: Decline in sales, end of industrial cycle upmove, poor economic performance. Lowering of rates by end of 2012, Bank base rates 8%. IMex= 100(Bears scream crash crash and say - I told you so!!!!) (Did this prediction come true? - seems to be a mild correction in some local markets, others are seeing appreciation)

2013: Delivery of inventory initial pipeline coincides with lower rates, good resale with loan possibility, industrial cycle starts upmove. Base rate 7%, IMEX= 140. (Bears scream crash crash - prices are not sustainable)

2014: Good stock market performance, good economic performance and good RE price upmove coincides (for residential and commercial and real estate RE). Nifty 10,000, IMEx 250, Base Rate 6%. (Bears scream crash crash - more imminent)

2015: Massive performance by nifty and real estate. Nifty 14000, IMEx 400, Base Rate 6% (Bears scream crash crash - but many people start to doubt the bears - they have cried wolf for 7 long years. By end of 2015 everyone decides it is stupid to stay out of RE market, because it keeps rising - so they all go and buy. Bears scream crash crash but no-one listened because they have been screaming this always)

2016: Continued delivery of flats results in massive oversupply, Real estate crashes. Massive inflation causes Rates jacked up to Base rate 12%. Currency crashes. Nifty Crashes to 9000 levels from 15000. IMEX crashes to 250 levels from 500. (Bears scream crash crash - I told you so!!!!!! - but poor suckers lose all their money, having timed their entry all wrong - they swear off real estate and stocks for ever

2017: Indistrial and RE cycle starts all over again.


Thats how things happen over and over again. Always has and always will.

Guy buying Nifty 5000 and exiting at 15000 makes massive profits. Guy buying at Nifty 6000 and remaining invested makes 50% in 2016 when markets crash to 9000 levels.

Guy buying IMEX 70 and exiting IMEX 500 makes massive profits. Guy buying IMEX 100 and remaining invested, makes 150% when IMEX crashes to 250 levels.

That is the way of this world. Those who understand cycles time entry and exit properly.