property rates at t.nagar- adyar - Indian Real Estate Forum

redonfire · 20-03-09

Dear Friends, This forum is source of lot of information. I am a new member and looking for a flat in Chennai in t.nagar - adyar . wat is the prevailing rates for a resale flat at these locality

ks2071746 · 21-03-09

Dear friend,

Welcome to this forum. You may get the details in property web sites. Of course the prices they indicate need to be adequately discounted even to the tune of 25 to 30%. The prices of such resale properties, depend on the exact place in the area/location, how old the flat is, how the flats and the building have been maintained, compliance to the original building approval, the layout, the builder etc. etc. I feel, normally, a 5 year old flat may be about 10-15% less than the prevailing market rate of a new construction, 10 year old may be less by 20% and over 10 years may even be lower by +25% . The price also depends on the area of UDS of the resale flat. Larger the UDS, higher will the the price it will fetch. This is the reason, for example, the TNHB flats may fetch good resale value due to large UDS they would come with, in spite of a not a good construction.

ks2071746

lovebird · 21-03-09

Quote:

Originally Posted by redonfire

Dear Friends, This forum is source of lot of information. I am a new member and looking for a flat in Chennai in t.nagar - adyar . wat is the prevailing rates for a resale flat at these locality

Start reducing the price from the year of your purchase with inflation adjusted.

10% per year for first 5 years and then 15% per year reductions + add inflation to the cost

kkkumar · 21-03-09

Dear Mr Natraj, my maths isnt all that good, could you kindly explain the workout with an example, perhaps you may consider a 15 year old flat in T nagar .
Thanks
Regards

ks2071746 · 21-03-09

Quote:

Originally Posted by Nataraajg007

Start reducing the price from the year of your purchase with inflation adjusted.

10% per year for first 5 years and then 15% per year reductions + add inflation to the cost

Dear friend,

I beg to differ. If I go by your calculaton, the flat will have to come to almost zero or negligible value in about 15 years time, considering an inflation of even 7 % average per annum. It can never be linked to the initial cost of purchase reduced every year thereafter, but to be adjusted downward with reference to the prevailing rate of a new flat of similar nature/in same area in the particular year. Can you please explain in detail with an example calculation for a 10 year old flat to enable me understand your views better?

ks2071746

nabishek · 21-03-09

Friends,

I am sharing here my understanding on depreciation of resale flats from the information i have gathered.

For a resale flat one has to consider value of land, estimated life of building, age of building and facilties available.

lets take for example a 20 years flat with 1500 sqft builtup 1000 sqft UDS.

If the flat was to be constructed today assuming the market price of land is 10,000/sqft

cost of land = (UDS * current market price) = 1,000 * 10,000 = 1,00,00,000

cost of construction = (built up area * construction cost) = (1500*1200) = 18,00,000

Total = 1,18,00,000 including all other charges.

The rate of depreciation is calculated as follows

The normal age of a building is considered to be 60 years.

Depreciation is calculated such that at the end of 60 years the value of the building becomes zero.

Out of the total asset value the residual or scrap or salvage value, is normally taken at 10% and can be ignored.The remaining 90% of the building cost is spread over the 60 years.

hence, rate of depreciation is 1.5% per year.

So if a building is 20 years old then rate of depreciation is 30%. i.e. the building is 70% of its initial value.

The cost of the resale flat would work out as follows if assuming the cost of construction 20 years back was 250/sqft.

cost of land = 1,00,00,000
cost of building = (1-(30/100)) * (1500*250) = 2,60,000
Total cost of resale flat = 1,02,60,000

Because the flat would have been puchased at lower input cost,at cheaper land rate and due to poor maintainence, the owner may also be willing to offer at 30-40% lesser than the calculation above.

If a person who holds a old flat (25-30 years+) wants to reap the benefits as per the true valuation above.The most profitable option is to go in for a joint venture along with all the residents of the building by hiring a builder or their own contractor.

With the relaxation of FSI,they can get substantial amount of money in hand and possibly also retain a flat in the complex by only sharing their space with few more additional neighbours.

Over the years land value appreciates and building value depreciates.

21-03-09

Quote:

Originally Posted by nabishek

Friends,

I am sharing here my understanding on depreciation of resale flats from the information i have gathered.

For a resale flat one has to consider value of land, estimated life of building, age of building and facilties available.

lets take for example a 20 years flat with 1500 sqft builtup 1000 sqft UDS.

If the flat was to be constructed today assuming the market price of land is 10,000/sqft

cost of land = (UDS * (current market price/FSI allowed)) = 1000 * (10000/1.5) = ~ 67,00,000

cost of construction = (built up area * construction cost) = (1500*1200) = 18,00,000

Total = ~ 90 lakhs including all other charges.

The rate of depreciation is calculated as follows

The normal age of a building is considered to be 60 years.

Depreciation is calculated such that at the end of 60 years the value of the building becomes zero.

Out of the total asset value the residual or scrap or salvage value, is normally taken at 10% and can be ignored.The remaining 90% of the building cost is spread over the 60 years.

hence, rate of depreciation is 1.5% per year.

So if a building is 20 years old then rate of depreciation is 30%. i.e. the building is 70% of its initial value.

The cost of the resale flat would work out as follows if assuming the cost of construction 20 years back was 250/sqft.

cost of land = ~ 67,00,000
cost of building = (1-(30/100)) * (1500*250) = 2,60,000
Total cost of resale flat = ~ 70,00,000.

Because the flat would have been puchased at lower input cost,at cheaper land rate and due to poor maintainence, the owner may also be willing to offer at 30-40% lesser than the calculation above.

If a person who holds a old flat (25-30 years+) wants to reap the benefits as per the true valuation above.The most profitable option is to go in for a joint venture along with all the residents of the building by hiring a builder or their own contractor.

With the relaxation of FSI,they can get substantial amount of money in hand and possibly also retain a flat in the complex by only sharing their space with few more additional neighbours.

Over the years land value appreciates and building value depreciates.

Nabhishek you are right 90%. As I have explained before you have shown that price of flat = Land price + Building price. Perfect. However when calculating land price you are unnecessarily dividing by FSI.
Land price = Flat area/FSI* Market value of land
So in your case it is
cost of land = 1500/1.5 * 10000 = ~ 100,00,000
You have divided by FSI twice. Rememeber this
Market value of land is say M. Now you need to invest only M/FSI amount of land to construction 1 sqft of Flat. So if you buy land at 10K psft and you bought X sqft, you can construct X*FSI amount of flat. So each square feet of flat needs X/FSI amount of land.
In simple
if you have 1000sqft of land at 10K psft and FSI is 1.5 (normal cases) then you can build 1500 sqft of flat. If cost of construction is 1200 psft then cost of project is
1000sqftx10000+1500sqftx1200=1.8crores
Divide this by 1500sqft gives you 12000psft of flat
NOw if you use my original formula above to find
cost of land = 1500/1.5 * 10000 = ~ 100,00,000
That was just to back check for you incase the original formula did not sink in.

nabishek · 21-03-09

Quote:

Originally Posted by Natarajg007

Nabhishek you are right 90%. As I have explained before you have shown that price of flat = Land price + Building price. Perfect. However when calculating land price you are unnecessarily dividing by FSI.
Land price = Flat area/FSI* Market value of land
So in your case it is
cost of land = 1500/1.5 * 10000 = ~ 100,00,000
You have divided by FSI twice. Rememeber this
Market value of land is say M. Now you need to invest only M/FSI amount of land to construction 1 sqft of Flat. So if you buy land at 10K psft and you bought X sqft, you can construct X*FSI amount of flat. So each square feet of flat needs X/FSI amount of land.
In simple
if you have 1000sqft of land at 10K psft and FSI is 1.5 (normal cases) then you can build 1500 sqft of flat. If cost of construction is 1200 psft then cost of project is
1000sqftx10000+1500sqftx1200=1.8crores
Divide this by 1500sqft gives you 12000psft of flat
NOw if you use my original formula above to find
cost of land = 1500/1.5 * 10000 = ~ 100,00,000
That was just to back check for you incase the original formula did not sink in.

Thanks Nataraj, I see my mistake.I have corrected my calculation in the original message.

21-03-09

Quote:

Originally Posted by nabishek

Thanks Nataraj, I see my mistake.I have corrected my calculation in the original message.

Ooops so this forum lets one correct his original message! Interesting. I did not know it! Thanks.
(This is an attempt at testing correction!)

21-03-09

Quote:

Originally Posted by Natarajg007

Ooops so this forum lets one correct his original message! Interesting. I did not know it! Thanks.
(This is an attempt at testing correction!)

Okey I see it is possible to correct a message thanks to Nabhishek. If I had known it before I would have fixed many typos some of which I used to fill with new statements! What a pity?
BTW how does one edit the message header when replying? Your help is appreciated!

20-03-09	#1
redonfire New Member Join Date: Feb 2009 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts	property rates at t.nagar- adyar Dear Friends, This forum is source of lot of information. I am a new member and looking for a flat in Chennai in t.nagar - adyar . wat is the prevailing rates for a resale flat at these locality

21-03-09	#4
kkkumar Member Join Date: Sep 2008 Posts: 87 Thanks: 0 Thanked 0 Times in 0 Posts	could you pl explain with an example Dear Mr Natraj, my maths isnt all that good, could you kindly explain the workout with an example, perhaps you may consider a 15 year old flat in T nagar . Thanks Regards

21-03-09	#6
nabishek Member Join Date: Mar 2008 Posts: 336 Thanks: 0 Thanked 4 Times in 2 Posts	Resale flats Friends, I am sharing here my understanding on depreciation of resale flats from the information i have gathered. For a resale flat one has to consider value of land, estimated life of building, age of building and facilties available. lets take for example a 20 years flat with 1500 sqft builtup 1000 sqft UDS. If the flat was to be constructed today assuming the market price of land is 10,000/sqft cost of land = (UDS * current market price) = 1,000 * 10,000 = 1,00,00,000 cost of construction = (built up area * construction cost) = (15001200) = 18,00,000 Total = 1,18,00,000 including all other charges. The rate of depreciation is calculated as follows The normal age of a building is considered to be 60 years. Depreciation is calculated such that at the end of 60 years the value of the building becomes zero. Out of the total asset value the residual or scrap or salvage value, is normally taken at 10% and can be ignored.The remaining 90% of the building cost is spread over the 60 years. hence, rate of depreciation is 1.5% per year. So if a building is 20 years old then rate of depreciation is 30%. i.e. the building is 70% of its initial value. The cost of the resale flat would work out as follows if assuming the cost of construction 20 years back was 250/sqft. cost of land = 1,00,00,000 cost of building = (1-(30/100)) (1500250) = 2,60,000 Total cost of resale flat = 1,02,60,000 Because the flat would have been puchased at lower input cost,at cheaper land rate and due to poor maintainence, the owner may also be willing to offer at 30-40% lesser than the calculation above. If a person who holds a old flat (25-30 years+) wants to reap the benefits as per the true valuation above.The most profitable option is to go in for a joint venture along with all the residents of the building by hiring a builder or their own contractor. With the relaxation of FSI,they can get substantial amount of money in hand and possibly also retain a flat in the complex by only sharing their space with few more additional neighbours. Over the years land value appreciates and building value depreciates. Last edited by nabishek; 21-03-09 at 11:06 PM.*

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Search

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
House in Akshaya Nagar (Near Ramamurthy Nagar)	Shashi_kb	Bangalore	1	09-09-09 11:39 AM
Property price in Ramamurthy nagar	vinpree	Bangalore	0	13-02-09 02:05 PM
flat rates per/sq. ft , in banaswadi ( kalyan nagar)	solaipalaniappan	Bangalore	1	23-01-09 09:50 PM
Yamuna Nagar, Opp. Milat Nagar, Osiwara, Off Lokhandwala, Andheri (W), Mumbai	akazi	Mumbai	0	20-08-08 02:17 PM
resale flat prices in shenoy nagar,arumbakam,Gill Nagar	rajbandla	Chennai	0	09-06-08 10:59 PM

21-03-09	#2
ks2071746 Senior Member Join Date: Nov 2008 Location: Tamilnadu Posts: 855 My Mood: Thanks: 1 Thanked 0 Times in 0 Posts	Dear friend, Welcome to this forum. You may get the details in property web sites. Of course the prices they indicate need to be adequately discounted even to the tune of 25 to 30%. The prices of such resale properties, depend on the exact place in the area/location, how old the flat is, how the flats and the building have been maintained, compliance to the original building approval, the layout, the builder etc. etc. I feel, normally, a 5 year old flat may be about 10-15% less than the prevailing market rate of a new construction, 10 year old may be less by 20% and over 10 years may even be lower by +25% . The price also depends on the area of UDS of the resale flat. Larger the UDS, higher will the the price it will fetch. This is the reason, for example, the TNHB flats may fetch good resale value due to large UDS they would come with, in spite of a not a good construction. ks2071746