Will gurgaon follow Mumbai in time of downturn and it did in recovery? - Indian Real Estate Forum

gaurav_chugh · 11-08-10

Hello All,

Going by the latest statistics Mumbai is trading around 30% discount as it was doing a couple of moths back. It followed a sharp recovery in Mumbai after recession which made prices dearer by almost 60-80% within months.

Now Gurgaon is also trading about 70% dearer as compared to last year (when no other NCR location is up by more that 25-30%) and there is very few end user (consumer) into the market. The market is right now flooded with investors and brokers who wont shy to run away even if the prices become stable.

Wat are your views can we anticipate something like Mumbai in gurgaon. Is 40% premium in growth justified for Gurgaon on other NCR specially noida where infrastructure and roads are much better?

Please comment..

Cheers,
Gaurav

valuesearch · 11-08-10

Gaurav,
You have raised a pertinent point. Such high appreciation are difficult to sustain when the availability of new apartments will be ample in 2-3 years time frame. As rightly pointed out that bulk of the bookings are being done by investors, these units will be made available in the market just before registration of the flat to get the highest premium.
In Mumbai the prices have already come down as the flats are ready to move in, & sellers want to sell them before wasting money on the registry. Even the builders are offering ready to move in flats to end customer which is currently not the situation in Gurgaon.
Moreover, if the commonwealth games are not a hit (it currently looks to be a big let down) then image of India would also take a beating, & hence foreign investments which are currently huge in India...will also dry up.
In any investment returns do not exceed 20% in the long term, & such shall also be the fate of real estate.

Venkytalks · 11-08-10

I tend to agree with both gaurav and valuesearch.

Time to be cautious. The chance for quick money is already over.

Now there is only big risk, little chance for reward

Only thing is, there have been relatively few new launches in the past year in Gurgaon, so there is no real bubble in the making for new projects. New bookings with a long term horizon of over 3-4 years seem safe

The crash is likely for the already built Sohna Road apts which have appreciated to crazy levels recently, as they get delivered and nobody moves in - reality will strike. I expect 3000 - 3500 psf levels to be revisited soon in Sohna Road.

Short term investors will suffer. Long term hold people will escape unscathed.

AmitMM · 12-08-10

well said venky!!
real estate should be treated as any other investment and one should adhere to the investment principles which apply. unfortunately a lot of us get swayed and get into the speculave mode.
A 20% return which you pointed out is a very reasonable return.
In reference to gurgaon my view too is that anybody who has longterm 3-5 year time frame will definately make money( not abnormal returns!!!)
Just dont leverage yourself and stick to A grade builders!!!

11-08-10	#1
gaurav_chugh Member Join Date: Aug 2010 Posts: 425 My Mood: Thanks: 5 Thanked 23 Times in 13 Posts	Will gurgaon follow Mumbai in time of downturn that it did during recovery? Hello All, Going by the latest statistics Mumbai is trading around 30% discount as it was doing a couple of moths back. It followed a sharp recovery in Mumbai after recession which made prices dearer by almost 60-80% within months. Now Gurgaon is also trading about 70% dearer as compared to last year (when no other NCR location is up by more that 25-30%) and there is very few end user (consumer) into the market. The market is right now flooded with investors and brokers who wont shy to run away even if the prices become stable. Wat are your views can we anticipate something like Mumbai in gurgaon. Is 40% premium in growth justified for Gurgaon on other NCR specially noida where infrastructure and roads are much better? Please comment.. Cheers, Gaurav Last edited by gaurav_chugh; 11-08-10 at 10:00 AM.

11-08-10	#3
Venkytalks Veteran Member Join Date: Sep 2009 Posts: 2,655 Thanks: 26 Thanked 176 Times in 92 Posts	I tend to agree with both gaurav and valuesearch. Time to be cautious. The chance for quick money is already over. Now there is only big risk, little chance for reward Only thing is, there have been relatively few new launches in the past year in Gurgaon, so there is no real bubble in the making for new projects. New bookings with a long term horizon of over 3-4 years seem safe The crash is likely for the already built Sohna Road apts which have appreciated to crazy levels recently, as they get delivered and nobody moves in - reality will strike. I expect 3000 - 3500 psf levels to be revisited soon in Sohna Road. Short term investors will suffer. Long term hold people will escape unscathed. __________________ Venky Last edited by Venkytalks; 11-08-10 at 08:35 PM.

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11-08-10	#2
valuesearch New Member Join Date: Jul 2010 Posts: 30 My Mood: Thanks: 0 Thanked 0 Times in 0 Posts	Gaurav, You have raised a pertinent point. Such high appreciation are difficult to sustain when the availability of new apartments will be ample in 2-3 years time frame. As rightly pointed out that bulk of the bookings are being done by investors, these units will be made available in the market just before registration of the flat to get the highest premium. In Mumbai the prices have already come down as the flats are ready to move in, & sellers want to sell them before wasting money on the registry. Even the builders are offering ready to move in flats to end customer which is currently not the situation in Gurgaon. Moreover, if the commonwealth games are not a hit (it currently looks to be a big let down) then image of India would also take a beating, & hence foreign investments which are currently huge in India...will also dry up. In any investment returns do not exceed 20% in the long term, & such shall also be the fate of real estate.

12-08-10	#4
AmitMM Veteran Member Join Date: Jul 2010 Posts: 1,796 My Mood: Thanks: 12 Thanked 142 Times in 66 Posts	well said venky!! real estate should be treated as any other investment and one should adhere to the investment principles which apply. unfortunately a lot of us get swayed and get into the speculave mode. A 20% return which you pointed out is a very reasonable return. In reference to gurgaon my view too is that anybody who has longterm 3-5 year time frame will definately make money( not abnormal returns!!!) Just dont leverage yourself and stick to A grade builders!!!