Rising Land price Vs Depreciating resale value

scorpio_007 · 05-19-2008

Hi

I am looking for a place in and around south chennai. I am not looking at new flats but spacious 3BHK resale flats.

Inorder to expedite my house hunting process I have no choice but to contact the local agents. In the last 2 weeks I believe I have done enough to gauge the real estate market and hence thought of posting this for further review and suggestions..

For 2 BHK apartments the market is still going strong. In this range prices for resale flats are up, for anything around 13XX sqft it is even upto 95 lakhs. Thus this is seller's market.
Price/sqft for new flats is between 8 to 11K whereas for resale it is from 5 to 8K
For 3BHK resale flats with list price beyond 1C: the flats are not that many and if there are, they are kept vacant even for 6 to 8 months awaiting a good deal. Thus this is buyer's market.
Also the rental market has a similar behaviour. Flats beyond 50K per month are plenty but not taken up for a long time.

My million $$ question is...

Assuming the fact that flats depreciate in the long run, is it advisable to buy flats beyond 5 or 10 years old??.
My worry is if these old flats depreciate much faster than the corressponding appreciation in their land costs, we might end up loosing a lot.

Please share your opinions, and thoughts on the above..

I saw a flat for 1.2C, which is kept vacant for a very long time. Looks like they might come down to 1C but I feel it should be around 90Lakhs or even less than that. The agents have advised not to go for that price as there are other 2BHK units (lesser by 250 - 300 sqft than 3Bhk) going for the same price..

Thank you

realtyrider · 06-03-2008

Many expect a further correction in home prices in India. Since the volumes of property transactions are going down, hence the asking price for property will also go down. Additionally, over-supply of property is posing as a major reason for the slow down in Real Estate prices.Recent media reports have also suggested the same trend. Reports suggest that Real Estate Prices in Mumbai, Bangalore, Pune, and National Capital Region have corrected 15-20% in the first quarter of this year. Market-watchers say that this trend will be repeated across the Tier II cities and suburbs too. No wonder property developers are wooing prospective users with all sorts of offers. Some are even offering lower EMIs for flats while some are offering goodies like cars along with property. Still others are wavering off the stamp duty prices.Are the property prices coming down in your area? Is the property slow down really impacting the end user in a major way? Should the home seekers cheer for some reasons? Is there a possibility of a market dive? Or is this a temporary phase in the housing segment?

sriram · 06-14-2008

Hi

1) Most of the resale flats may be through brokers, who just like that inflate the rates. Say if the expectation is 80 Lacs , they say 115 lacs and will judge yr preparedness.

2) If you show withdrawal, they will try to keep you in hold and this negotiation will go till a comfort level is reached.

3) Unless it is for self occupation (urgently needed), suggest to wait for corrections in pricing .

05-19-2008	#1
scorpio_007 Junior Member Join Date: Apr 2008 Posts: 1	Rising Land price Vs Depreciating resale value Hi I am looking for a place in and around south chennai. I am not looking at new flats but spacious 3BHK resale flats. Inorder to expedite my house hunting process I have no choice but to contact the local agents. In the last 2 weeks I believe I have done enough to gauge the real estate market and hence thought of posting this for further review and suggestions.. For 2 BHK apartments the market is still going strong. In this range prices for resale flats are up, for anything around 13XX sqft it is even upto 95 lakhs. Thus this is seller's market. Price/sqft for new flats is between 8 to 11K whereas for resale it is from 5 to 8K For 3BHK resale flats with list price beyond 1C: the flats are not that many and if there are, they are kept vacant even for 6 to 8 months awaiting a good deal. Thus this is buyer's market. Also the rental market has a similar behaviour. Flats beyond 50K per month are plenty but not taken up for a long time. My million $$ question is... Assuming the fact that flats depreciate in the long run, is it advisable to buy flats beyond 5 or 10 years old??. My worry is if these old flats depreciate much faster than the corressponding appreciation in their land costs, we might end up loosing a lot. Please share your opinions, and thoughts on the above.. I saw a flat for 1.2C, which is kept vacant for a very long time. Looks like they might come down to 1C but I feel it should be around 90Lakhs or even less than that. The agents have advised not to go for that price as there are other 2BHK units (lesser by 250 - 300 sqft than 3Bhk) going for the same price.. Thank you Last edited by scorpio_007 : 05-19-2008 at 07:37 PM.

06-14-2008	#3
sriram Junior Member Join Date: Jun 2008 Posts: 1	Rising Land price Vs Depreciating resale valu Hi 1) Most of the resale flats may be through brokers, who just like that inflate the rates. Say if the expectation is 80 Lacs , they say 115 lacs and will judge yr preparedness. 2) If you show withdrawal, they will try to keep you in hold and this negotiation will go till a comfort level is reached. 3) Unless it is for self occupation (urgently needed), suggest to wait for corrections in pricing .

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
Land price in Sholinganallur and pallikaranai	sachin26	Chennai	2	05-28-2008 05:55 PM
Resale transaction stamp duty and other costs	nathan	Real Estate Discussions	0	04-10-2008 03:27 AM
Resale flats-- Chennai	alagu_2kin	Chennai	0	01-23-2008 05:03 PM
Without More Housing, Prices Will Keep Rising	Pinnacle	Real Estate Updates	0	03-09-2007 02:28 PM

06-03-2008	#2
realtyrider Senior Member Join Date: Apr 2008 Posts: 101	Many expect a further correction in home prices in India. Since the volumes of property transactions are going down, hence the asking price for property will also go down. Additionally, over-supply of property is posing as a major reason for the slow down in Real Estate prices.Recent media reports have also suggested the same trend. Reports suggest that Real Estate Prices in Mumbai, Bangalore, Pune, and National Capital Region have corrected 15-20% in the first quarter of this year. Market-watchers say that this trend will be repeated across the Tier II cities and suburbs too. No wonder property developers are wooing prospective users with all sorts of offers. Some are even offering lower EMIs for flats while some are offering goodies like cars along with property. Still others are wavering off the stamp duty prices.Are the property prices coming down in your area? Is the property slow down really impacting the end user in a major way? Should the home seekers cheer for some reasons? Is there a possibility of a market dive? Or is this a temporary phase in the housing segment?