Indian real estate to witness 15-20% price correction - Indian Real Estate Forum

arun · 13-10-06

Indian real estate to witness 15-20% price correction

Industry experts have forecasted that the Indian real estate market is likely to witness a price correction of 15-20 per cent in the residential segments in over-heated markets like Tier I cities where the prices have gone up disproportionately during last 12 months.

“Price correction is also expected in the land prices in the major markets (Tier I) over the next 12-18 months, which would lead to fall in the real estate prices in the housing sector.Because, after a certain price level, it will be a buyers market and developers will have to cut their prices.The rising home loan rates would also lead to correction in the prices in residential segment.

rajiv · 16-10-06

I was just discussing this with one of my real estate broker friend over this issue... we were concerned about the realtors rule the roost attitude...

The poperty pricing were placed in such a hotch potch manner... cashing the realty boom the agents use to price high the property and killing the market for amid investors...

but the question is ... is it a paper agenda or its going to be implemented ....?????

16-10-06

these corrections hardly matters because ultimately its the agents and the sellars voice that finalises the deal..i m not sure whether it is going to have any effect because property transactions are not transparent

dev · 16-10-06

I think this is the place where real estate ethics role becomes prominent to maintain the transparency between the investor and the realtor...

mohan · 16-10-06

But what is this.....?

Quote:

New Delhi: While real estate is booming in the Capital, prices of bungalows in Lutyens’ Delhi are literally going through the roof. In the last four years, prices here have gone up over three times — a whopping figure considering that the zone is seen as a ‘mature’ market.
The super-boom was in evidence again in a recently-concluded deal, when Essar’s Ruias bought a bungalow, 4 Tees January Marg, on 2.26 acres of land at Rs 91.7 crore. Seen in the context of the very low constructed area permitted within the Lutyens’ zone, it was a huge amount.
According to a real estate consultant who studied 4 Tees January Marg, only around 6,000 square feet can be constructed on the plot. This translates to a staggering price of Rs 1.52 lakh per square foot, an unprecedented value for real estate anywhere in the country.
The one-acre property on Amrita Shergil Marg which Sanjay Singal bought for Rs 137 crore a couple of months ago worked out to Rs 1.14 lakh per sq ft as the permitted built-up area on the plot is just 12,000 sq ft.
The Singal deal shows how much the prices have escalated. In 2002, Sunil Mittal had bought the 19, Amrita Shergil Marg bungalow for Rs 38 crore, which is less than one-third the price Singal paid for a similar property on the same road.

Source: TOI, 05/10/06

Does this news report depict the price correction theory?

rakesh · 16-10-06

there is hardly any property to buy in lutyens' Delhi and the plots and Bungalows left are only within the reach of influential people whether they are politicians or businessman. Prices are shooting up in small localities in Delhi and NCR; the price hike in Lutyen's Delhi is no surprise to me.

rajbeer · 16-10-06

I too heard about it while coming to office in my cab... there need to be a proper evaluation and cost estimation system to monitor such events... its really ridiculous ...

Rashmi · 08-12-06

Industry experts expect mild price corrections in certain pockets in the country's mature real estate hubs.

A survey conducted by prominent international investors, private equity players, property developers and investment bankers - noted that the Indian real estate market is evolving fast and growing at an exceptional pace. However, it is plagued with information asymmetry as information dissemination is constrained and not regulatory mandated, unlike in capital markets.

The survey says return expectations also vary across sectors giving an indication about the perceived risk-return profile in various market segments. IT/ITeS is perceived to have lower risks compared to retail and hospitality. The lack of adequate infrastructure is the biggest challenge facing the real estate sector followed by regulatory ambiguities, rather issues like taxation structure and availability of funds.

What can be better news than this? Hope the industry takes note of the survey and implement measures to actually initiate price corrections.

13-10-06	#1
arun New Member Join Date: Oct 2006 Posts: 43 Thanks: 0 Thanked 0 Times in 0 Posts	Indian real estate to witness 15-20% price correction Indian real estate to witness 15-20% price correction Industry experts have forecasted that the Indian real estate market is likely to witness a price correction of 15-20 per cent in the residential segments in over-heated markets like Tier I cities where the prices have gone up disproportionately during last 12 months. “Price correction is also expected in the land prices in the major markets (Tier I) over the next 12-18 months, which would lead to fall in the real estate prices in the housing sector.Because, after a certain price level, it will be a buyers market and developers will have to cut their prices.The rising home loan rates would also lead to correction in the prices in residential segment.

16-10-06	#2
rajiv New Member Join Date: Oct 2006 Posts: 10 Thanks: 0 Thanked 0 Times in 0 Posts	Good to hear that... I was just discussing this with one of my real estate broker friend over this issue... we were concerned about the realtors rule the roost attitude... The poperty pricing were placed in such a hotch potch manner... cashing the realty boom the agents use to price high the property and killing the market for amid investors... but the question is ... is it a paper agenda or its going to be implemented ....?????

16-10-06	#4
dev New Member Join Date: Oct 2006 Posts: 13 Thanks: 0 Thanked 0 Times in 0 Posts	real estate ethics role I think this is the place where real estate ethics role becomes prominent to maintain the transparency between the investor and the realtor...

16-10-06	#7
rajbeer New Member Join Date: Oct 2006 Posts: 8 Thanks: 0 Thanked 0 Times in 0 Posts	Lutyens’ Delhi ... I too heard about it while coming to office in my cab... there need to be a proper evaluation and cost estimation system to monitor such events... its really ridiculous ...

08-12-06	#8
Rashmi Member Join Date: Nov 2006 Posts: 90 Thanks: 0 Thanked 0 Times in 0 Posts	Mild price corrections expected Industry experts expect mild price corrections in certain pockets in the country's mature real estate hubs. A survey conducted by prominent international investors, private equity players, property developers and investment bankers - noted that the Indian real estate market is evolving fast and growing at an exceptional pace. However, it is plagued with information asymmetry as information dissemination is constrained and not regulatory mandated, unlike in capital markets. The survey says return expectations also vary across sectors giving an indication about the perceived risk-return profile in various market segments. IT/ITeS is perceived to have lower risks compared to retail and hospitality. The lack of adequate infrastructure is the biggest challenge facing the real estate sector followed by regulatory ambiguities, rather issues like taxation structure and availability of funds. What can be better news than this? Hope the industry takes note of the survey and implement measures to actually initiate price corrections.

16-10-06	#3
amit Unregistered User Posts: n/a	these corrections hardly matters because ultimately its the agents and the sellars voice that finalises the deal..i m not sure whether it is going to have any effect because property transactions are not transparent

16-10-06	#6
rakesh New Member Join Date: Oct 2006 Posts: 30 Thanks: 0 Thanked 0 Times in 0 Posts	there is hardly any property to buy in lutyens' Delhi and the plots and Bungalows left are only within the reach of influential people whether they are politicians or businessman. Prices are shooting up in small localities in Delhi and NCR; the price hike in Lutyen's Delhi is no surprise to me.

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