Is Real Estate on the way to recovery - Indian Real Estate Forum

gaurav1979gupta · 23-08-09

Hi All
Here is the summary of the Research I have done over last 3-4 months In the Property market of NCR and fundamental question whether the recovery for Real Estate is some where near in Sight ?? .
1 /W.r.t to HUDA and Noida Authority Sectors in gurgon
The prices are only esclated by Property dealers .If some one chooose to take down the Date of Listing of Property and Property Dealer one can very well see a pattern. The prices have been more or less same in last 3-4 month .Only when Stock markets goes up , Property dealers have been trying to increase the offer prices in listing every 10-15 days .Trust me there has not been even a single transcation .
Whether the Developers are out of woods and ahead to recovery .
My answer is No .
1. Since Unitech have started selling their land in Greater Noida starting 2nd Week of August at a price 15700/- Square Yard for a ( Park Facing+Corner facing ) all inclusive (EDC+IDC) where in the Authority Prices are 11800/- per square meter .
2. Vatika India Next are selling their plot on NH-8 Sector 82 in Gurgaon at new booking Rate is 20000/- Square yard .the plot sizes are 240/300 square yard . Same plots are available in Resale market at 15-17000/- per Square yard .
These two example very clearly shows that Liquidity crunch is still causing trbulance to Developers causing Developers to sell the land .
Flats in NCR
All due to affrodable hosing Buzz Builders are coming out with low Per Sqare Feet Rates in upcoming project that will get completed by 2012 .
q1. whether the prices have been really reduced - the answer is No
q2. Whether the size of the Apartment have been reduced - Yes
q3. Whether the profit margins have been reduced by Builders - No
q4. Whether the builder will try to keep up their promises - May be No ,
Because there is no State regulation on what should be done .Only Legal action taken can be <misrepresentation of the fact > that can lead to no more than 3 years Jail or compensation to be paid to Customer .
Right valuation of a flat = ( Actual Carpet Area of Flat *800/- per Square Feet ) + Total Land value for comman area / Total Number of flats in Society.
Land values are 10-12000/- per sqaure meter including interst based appreciate for the plot acquired by big builder
Plots in NCR
What should be the right value for a Plot --- Is Circle Rate is a good benchMark .
During the Real Estate boom time all the Development Agency ( HUDA , DDA, NOIDA) have increased their circle rate many folds .During 2003-2004 the circle rates used to be 5-8000/- in Gurgaon , 8-10000/- in Noida and 20-40000/- in DDA
in 2009-2010 , these rates are - 16-26000/- per sqare yard in Gurgaon , 20 -30000/- per square meter in Noida and close to 100000/- per sqare yardin DDA
Prices for Plot in resale market

This are gernally 25 - 40 % higher than the Circle Rate in areas which are having only 5-10% occupancy nearly 60-70% higher in areas having higher occupany
How does the circle rates gets determined and what cause changes in Circle Rate for land .
For all public transport projects such as Metro or BRTS within differnt cities of India , the Govement of India funds 20-25 % project , 15-20 % by owner state of the city and rest 50-60 % has to be generated by the Development agency of the city .Like HUDA in case of Gurgaon , JDA in Jaipur and DDA in Delhi .'
There are two ways of generating the Income by Development agencies
(1) increase the stamp duty on property transcation this causes only a limited amont to be collected for the revenue
(2) increase the circle rate , this leads to a qantam jump in the revenue .Please note that is exactly done by DDA to raise the money for Delhi Metro Project cost .

23-08-09	#1
gaurav1979gupta New Member Join Date: Aug 2009 Posts: 19 Thanks: 0 Thanked 1 Time in 1 Post	Is Real Estate on the way to recovery Hi All Here is the summary of the Research I have done over last 3-4 months In the Property market of NCR and fundamental question whether the recovery for Real Estate is some where near in Sight ?? . 1 /W.r.t to HUDA and Noida Authority Sectors in gurgon The prices are only esclated by Property dealers .If some one chooose to take down the Date of Listing of Property and Property Dealer one can very well see a pattern. The prices have been more or less same in last 3-4 month .Only when Stock markets goes up , Property dealers have been trying to increase the offer prices in listing every 10-15 days .Trust me there has not been even a single transcation . Whether the Developers are out of woods and ahead to recovery . My answer is No . 1. Since Unitech have started selling their land in Greater Noida starting 2nd Week of August at a price 15700/- Square Yard for a ( Park Facing+Corner facing ) all inclusive (EDC+IDC) where in the Authority Prices are 11800/- per square meter . 2. Vatika India Next are selling their plot on NH-8 Sector 82 in Gurgaon at new booking Rate is 20000/- Square yard .the plot sizes are 240/300 square yard . Same plots are available in Resale market at 15-17000/- per Square yard . These two example very clearly shows that Liquidity crunch is still causing trbulance to Developers causing Developers to sell the land . Flats in NCR All due to affrodable hosing Buzz Builders are coming out with low Per Sqare Feet Rates in upcoming project that will get completed by 2012 . q1. whether the prices have been really reduced - the answer is No q2. Whether the size of the Apartment have been reduced - Yes q3. Whether the profit margins have been reduced by Builders - No q4. Whether the builder will try to keep up their promises - May be No , Because there is no State regulation on what should be done .Only Legal action taken can be <misrepresentation of the fact > that can lead to no more than 3 years Jail or compensation to be paid to Customer . *Right valuation of a flat = ( Actual Carpet Area of Flat 800/- per Square Feet ) + Total Land value for comman area / Total Number of flats in Society. Land values are 10-12000/- per sqaure meter including interst based appreciate for the plot acquired by big builder Plots in NCR What should be the right value for a Plot --- Is Circle Rate is a good benchMark . During the Real Estate boom time all the Development Agency ( HUDA , DDA, NOIDA) have increased their circle rate many folds .During 2003-2004 the circle rates used to be 5-8000/- in Gurgaon , 8-10000/- in Noida and 20-40000/- in DDA in 2009-2010 , these rates are - 16-26000/- per sqare yard in Gurgaon , 20 -30000/- per square meter in Noida and close to 100000/- per sqare yardin DDA Prices for Plot in resale market This are gernally 25 - 40 % higher than the Circle Rate in areas which are having only 5-10% occupancy nearly 60-70% higher in areas having higher occupany How does the circle rates gets determined and what cause changes in Circle Rate for land .** For all public transport projects such as Metro or BRTS within differnt cities of India , the Govement of India funds 20-25 % project , 15-20 % by owner state of the city and rest 50-60 % has to be generated by the Development agency of the city .Like HUDA in case of Gurgaon , JDA in Jaipur and DDA in Delhi .' There are two ways of generating the Income by Development agencies (1) increase the stamp duty on property transcation this causes only a limited amont to be collected for the revenue (2) increase the circle rate , this leads to a qantam jump in the revenue .Please note that is exactly done by DDA to raise the money for Delhi Metro Project cost . Last edited by gaurav1979gupta; 23-09-09 at 11:09 AM. Reason: Circle Rate calculation added

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