Economic times writes here on Robert Vadra's role in inflating India's housing bubble. Looking at the data we can safely conclude that India's housing bubble is been inflated beyond limits by politicians and their black money dealings with builders with tacit support of public sector banks. The property flippers and NRI's are just pawns in this real game where the biggest transfer of wealth and land to politicians has been done in broad daylight with everyone from the law enforcement and the fourth estate turning a blind eye to this mega scam of massive proportions. NREGA and all schemes for the poor of the country are just eyewash to win votes so these greedy politicians can accumulate wealth which can be measured in astronomical units.
During 2009 and 2010, Vadra bought 25 apartments in DLF Capital Greens, a premium project constructed on a 38-acre land that DLF acquired from DCM Shriram and the Lohia Group in 2007 for Rs 1,675 crore. While the builder launched the first phase of the project at around Rs 4,500-5,500 per sq ft, the prices subsequently increased to Rs 10,000 per sq ft. Vadra brought these apartments in the first phase and sold them in 2010-11.
He also booked 15 apartments in DLF Magnolias, a premium project next to a company-owned golf course on the Gurgaon Golf Course road that is nearing completion. Of these, he has already sold 13 apartments and still retains two units.
Here is the summary of Shriram Subramanium on investing in real estate stocks. Full article here.
During 2009 and 2010, Vadra bought 25 apartments in DLF Capital Greens, a premium project constructed on a 38-acre land that DLF acquired from DCM Shriram and the Lohia Group in 2007 for Rs 1,675 crore. While the builder launched the first phase of the project at around Rs 4,500-5,500 per sq ft, the prices subsequently increased to Rs 10,000 per sq ft. Vadra brought these apartments in the first phase and sold them in 2010-11.
He also booked 15 apartments in DLF Magnolias, a premium project next to a company-owned golf course on the Gurgaon Golf Course road that is nearing completion. Of these, he has already sold 13 apartments and still retains two units.
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Here is the summary of Shriram Subramanium on investing in real estate stocks. Full article here.
The ongoing DLF - Vadra controversy has brought to light the blatant transgressions that real estate companies - listed and un-listed - adopt in India. Real estate companies have never been known to be high on transparency and corporate governance. This is just a reflection of the deeper morass in the real estate sector, which is by far the largest and most valuable asset class in India. It is not the marketplace that decides the fortunes of real estate companies, but the builder-politician nexus that picks out the winners in this sector.
Realty sector shouldn’t be listed as the companies don’t need shareholder funds, nor will they ever make any money for investors.
This is because:
(a) The sector depends a lot on black money.
(b) There is little transparency in land values or construction costs.
(c) Politicians and bureaucrats have lot of discretionary power in deciding winners and losers.
(d) Companies need to pay speed money to get all approvals for all stages of project development.
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