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Sri Lanka Equity Forum » Stock Market Talk » PENDING PROPERTY BUBBLE BURST!

PENDING PROPERTY BUBBLE BURST!

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1 PENDING PROPERTY BUBBLE BURST! on Wed Mar 08, 2017 10:33 am

samaritan


Vice President - Equity Analytics
Vice President - Equity Analytics
THE GOOD NEWS TO CSE:


THE PENDING PROPERTY BUBBLE BURST COULD BENEFIT THE STOCK MARKET AS POTENTIAL INVESTORS IN REAL ESTATE ARE LOOKING FOR ALTERNATIVES AND THE CSE LOOKS ATTRACTIVE BASED ON MARKET FUNDAMENTALS.

2 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 08, 2017 1:50 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Stupid to say property bubble burst is gud for CSE.

If our property bubble burst like usa, we'll see banks NPL level sky rocketing and impacting there pnl and balance sheet negatively. Companies like JKH, who has big amount of property in there portfolio will be adversely effected.

3 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 08, 2017 2:19 pm

samaritan


Vice President - Equity Analytics
Vice President - Equity Analytics
@jayathu wrote:Stupid to say property bubble burst is gud for CSE.

If our property bubble burst like usa, we'll see banks NPL level sky rocketing and impacting there pnl and balance sheet negatively. Companies like JKH, who has big amount of property in there portfolio will be adversely effected. 
Property bubble will burst very soon. There is an impending disaster on the cards. Can't help!

4 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 08, 2017 2:55 pm

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I believe it will happen. Many projects launched very recently use deceived propaganda stating majority of units are already sold out. This is a false statement to hing the customers.

5 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 09, 2017 8:20 am

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I don't think property bubble will burst anytime soon but rising interest rate is a worry for the CSE. Most of the market expert and economist says there'll be a rate hike next month. Which will dampen the equity market even more.


http://www.economynext.com/Sri_Lanka_03_month_Treasury_Bill_yield_reaches_9.47_pct-3-7518-3.html

6 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 09, 2017 8:55 am

samaritan


Vice President - Equity Analytics
Vice President - Equity Analytics
@jayathu wrote:I don't think property bubble will burst anytime soon but rising interest rate is a worry for the CSE. Most of the market expert and economist says there'll be a rate hike next month. Which will dampen the equity market even more.  


http://www.economynext.com/Sri_Lanka_03_month_Treasury_Bill_yield_reaches_9.47_pct-3-7518-3.html
In Sri Lanka a lot of stupid things take place contradictory to high profile theories.

Property prices reached dizzy heights over the past two years with a decline in economic growth. The Govt disposed the land opposite Galle Face to ITC at an exorbitant price. This triggered property prices to increase three fold driven by the demand created by property developers who are stuck now. Right now there aren't transactions taking place at the inflated price levels for freehold properties. The party is over!

http://www.dailymirror.lk/article/Mixed-sentiments-over-possible-property-bubble--125075.html

In the above press article CCI President who shares your view clearly states that "as long as the economy continues to grow like in the past there won't be a problem". Fair enough, but the economy had been on the decline in the past 2 years. Future growth???????????

CB Governor too stated that he is concerned about the Construction sector and are closely monitoring same for reasons which are obvious.

Analyse the pros & cons of the arguments in the press article, in my opinion a crash in the real estate market is imminent & inevitable. Wish to recall Mr.Murtaza Jafferjee (MD of JB Stock Brokers) who too predicted same long time ago.

7 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 09, 2017 3:35 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

8 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 09, 2017 7:24 pm

Chinwi

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
I also think there will be a 'lesson learned' related to property investment within next 1-2 years.

Despite the economic slowdown property prices were sent to sky by property sellers. Buyers acting crazy get bank loans and collect deeds. Sellers are doing offshore roadshows where our people are working.

Prime lands PAT last 2 years 4.4 billion. (as per their data sent to shareholders of Summit Finance )

Now we are at peak, definitely. That is all I can say at this moment.

9 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 09, 2017 9:22 pm

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
It is said there is a long delay in issuing the deeds by condominium management authority even buyers had paid in full after project completion.

Developers do not care how long authority takes to issue the deed even after final payment to the developer. Reason for the delay is figured out due to high number of units to be documented. 

Until the deed comes out the developer will allow the buyer to occupy or leased but with the assistance of developer. That is how developer earns extra bag of cash out of leasing services....
Borrowing funds for buying apartments would be very costly with possible rate hike. Buyers would be the ultimate losers if market value of property goes down as a result of bubble effect.

10 Re: PENDING PROPERTY BUBBLE BURST! on Fri Mar 10, 2017 9:26 am

samaritan


Vice President - Equity Analytics
Vice President - Equity Analytics
OUR ECONOMY IS LIKE SOMALIA BUT PROPERTY PRICES LIKE FLORIDA.

11 Re: PENDING PROPERTY BUBBLE BURST! on Fri Mar 10, 2017 12:34 pm

worthiness


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Can a middle class citizen afford buying 3 bed rooms unit ( about 1100 sq.ft.) just outside of Colombo for Rs.30m?

12 Re: PENDING PROPERTY BUBBLE BURST! on Fri Mar 10, 2017 2:52 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

13 Re: PENDING PROPERTY BUBBLE BURST! on Fri Mar 10, 2017 3:19 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

14 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 15, 2017 2:30 pm

econ

avatar
Global Moderator
Of course there should be burst of property bubble soon. Prices are artificially inflated saying economic growth and bla bla. Most affected will be the luxury apartment in the mid colombo which are sold almost similar price as in developed countries.


_________________

--------------------
This is not buying\selling recommendation. Do your own analysis before take any decision

15 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 15, 2017 2:32 pm

econ

avatar
Global Moderator
@worthiness wrote:Can a middle class citizen afford buying 3 bed rooms unit ( about 1100 sq.ft.) just outside of Colombo for Rs.30m?

Absolutely no. There should be correction near soon.


_________________

--------------------
This is not buying\selling recommendation. Do your own analysis before take any decision

16 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 15, 2017 2:33 pm

econ

avatar
Global Moderator
@samaritan wrote:OUR ECONOMY IS LIKE SOMALIA BUT PROPERTY PRICES LIKE FLORIDA.
Yes that is absolutely correct. I can not figure out who will buy such a small apartments in Colombo at such high price levels.


_________________

--------------------
This is not buying\selling recommendation. Do your own analysis before take any decision

17 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 15, 2017 2:36 pm

econ

avatar
Global Moderator
@samaritan wrote:
@jayathu wrote:I don't think property bubble will burst anytime soon but rising interest rate is a worry for the CSE. Most of the market expert and economist says there'll be a rate hike next month. Which will dampen the equity market even more.  


http://www.economynext.com/Sri_Lanka_03_month_Treasury_Bill_yield_reaches_9.47_pct-3-7518-3.html
In Sri Lanka a lot of stupid things take place contradictory to high profile theories.

Property prices reached dizzy heights over the past two years with a decline in economic growth. The Govt disposed the land opposite Galle Face to ITC at an exorbitant price. This triggered property prices to increase three fold driven by the demand created by property developers who are stuck now. Right now there aren't transactions taking place at the inflated price levels for freehold properties. The party is over!

http://www.dailymirror.lk/article/Mixed-sentiments-over-possible-property-bubble--125075.html

In the above press article CCI President who shares your view clearly states that "as long as the economy continues to grow like in the past there won't be a problem". Fair enough, but the economy had been on the decline in the past 2 years. Future growth???????????

CB Governor too stated that he is concerned about the Construction sector and are closely monitoring same for reasons which are obvious.

Analyse the pros & cons of the arguments in the press article, in my opinion a crash in the real estate market is imminent & inevitable. Wish to recall Mr.Murtaza Jafferjee (MD of JB Stock Brokers) who too predicted same long time ago.
I think current and past government both responsible for this inflated prices for colombo properties. Government hold the bulk of lands and only limited disposed to connected parties at an exorbitant price levels which are not matched with economy of the country.


_________________

--------------------
This is not buying\selling recommendation. Do your own analysis before take any decision

18 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 15, 2017 2:58 pm

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

19 Re: PENDING PROPERTY BUBBLE BURST! on Wed Mar 15, 2017 6:55 pm

samaritan


Vice President - Equity Analytics
Vice President - Equity Analytics
A very defensive shape talk far from the truth. Property transactions in Colombo have drastically dropped over the past seven months or so. 

"Meka horage ammagen pena ahanawa wage wadak". Banks may have to hold onto possession of properties which will be less than half its value. Hope the banks have lent only one third the value. An imminent disaster in waiting and its already reflecting in the moves made by OSEA trimming their original project plans.

20 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 16, 2017 8:00 am

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I agree with somewhat what they say abt luxury apartments and mid range apartment demand. Currently Mid range apartments are selling well. If you check projects like waterfront, Havelock Town new phase, four four seven and other high end ones demand has come down. Mid range apartments which are coming up in rajagiriya bambalapitiya dematagoda kirulupona and nugegoda range arounds 20Mn-30Mn. For anyone to buy a land over there and build a house withing that price is difficult.

21 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 16, 2017 10:55 am

ice4083


Senior Equity Analytic
Senior Equity Analytic
My friend in Aussie tells me that apartment prices here are even more expensive than best places in Melbourne. He also told me that gambling Chinese people move into developing countries like ours when they see property development and do a pump & dump with the apartments too. They get out at the right time and we will find our usual fools holding on to properties twice their value soon.

22 Re: PENDING PROPERTY BUBBLE BURST! on Thu Mar 16, 2017 11:02 am

jayathu


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@ice4083 this happens at luxury apartment category, like what happened at Sydney. Chinese investors bought heavily into sydney high end apartments and started selling off after some time. Now prices of those has come down. Again beginning of this yr in Aussie Sydney high end market experiencing inflow of money Chinese investors due to lower prices which is prevailing.

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