sachin26

Hi all
I have not been in chennai for the last 2 years.What is happening to chennai real estate with the rising inflation?Is this a good time to invest? Any inputs will be much appreciated.
Thanks

strongsville

No. Its not a good time to invest anywhere in Chennai. Prices are falling slowly. It is expected to fall atleast another 30% by the end of this year. So just wait.

sridharbabu111

hey there(strongsville),
you havent got much ideas about real estate right?
you expect prices to fall 30%. how long have you known anything about real estate in india?

strongsville

hey there, Do you think you have a Phd. in RE business? What the hell you know about RE boom and bust, inflation, recession and other things related to economy?

What do you expect man? RE to go up another 500% in one month?

antonyprakash

sridharbabu should have invested too much in chennai or he might be a promoter. I can see that from his frustration

rickyofsnow

The real estate is part of larger economic cycle.

Inflation will lead the RBI to Mop up liquidity and increase the price of money (Interest rate).
This process will & Must slowdown the general economy and create demand for cash.

This is like taking bitter medicine when you are sick (Inflation) and take rest from active work,while your body (Economy) gets better.

If you dont take medication and work hard as before you risk death (Economic meltdown)

Remember Argenitina in early 2000's Thailand,Malysia,Indonesia took 10 years to recover from the 1997 Asian economic criss.

NOTHING CAN KEEP GOING UP WITHOUT A PERIOD OF CORRECTION AND RECESSION.

Expect a 3-4 of property down turn in India.

wiseman

Dear Sridharbabu,

You should have started this post with "hey there (sridharbabu)".

Since everything else you wrote seems to show your knowledge (or lack of it) about Real Estate.

Lets cut to the chase. Lets take a bet. I will sell you Rs.1 crore worth of property notionally today at current prices. You sell it back to me exactly 2 years later at whatever price it is on that day. The difference shall be paid for in cash! This is called Futures. Ever tried it?

I really want to get rich in 2 years time and you are offering me a great opportunity. I believe I will make at least 50 lakhs profit on this deal.

I'm betting property will go down AT LEAST 50% in most areas it has gone up 3-4 times in last 5 years. In 1995-98 crash RE came down 75%. And there was not even a hint of any crisis in the world. In fact US was booming in those days.

I'm very careful when I open my mouth to say something, lest my foot not find its way into it!

No offense.

cheers

venkit

How the coming inflation( or rupee devaluation) is going to affect RE?

Is it possible for our government/politicians to keep the RE prices high by devaluating indian rupee?


Thanks
Venkit

Economist

When Inflation is high, as you know asset price and wages goes up.
Goverment has some blunt tools to try and reduce inflation that is RBI repo rate and Bank cash reserve holding (To mop up some liquidity)

The risk of using the above tools over a certain limit will affect the growth,economic health of the country and hurt the common man.

But if asset prices and wages are high (Due to uncontrollable inflationary pressures) overseas investment,exports, tourism will be hurt.

That is if the wages or high or equal to other countries then there is no cost savings for them to make those goods/service in India.

The easiest thing to in such situation is phased/structural devaluation of currency. The price of the asset or wages will not reduce but due to currency devaluation it will still remain cheap for overseas market.

India did that in 1990/91

Economist

Strongville said this in July 2008, That is 1.5 years ago.
Where was the minimum 30% fall that he was saying.
I haven't seen that did you guys?

He said at least 30% I wonder how much was the maximum he had in mind.