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Are Real Estate Prices Going To Fall 40% by Mid 2007?

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Are Real Estate Prices Going To Fall 40% by Mid 2007?

Last updated: February 21 2009
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  • #61

    #61

    Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

    Real Esate prices in Chennai are not apparently heading a serious downtrun yet although we hear singular cases of price fall that too from ************, on which we cannot judge that prices are falling. In fact the prices should come down at least to 50% of today's prices in Chennai which may be a good price. Even at that level I do consider prices on the higer side.

    Money supply from foreign RE funds helped developers to maintain artificially high prices even if they do not sell. They tried to manipulate the government to substitute Foreign RE funds job but that has worked partially only. Let us see what happens.

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    • #62

      #62

      Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

      Fancy Pricing?

      I had a look at the advt.The property is on resale and is a house built 7 years ago with 880 sqft land and 1500 sqft builtup.I am not sure if both the advt, the one quoting 95L and the other quoting 58L only for the land is for the same property.

      Nevertheless, I am sure the property which was quoted 95L was built for less than 58 Lakhs.My estimate is that it would have been built and sold at the cost of around 35-40Lakhs only; seven years back.

      The seller is surely making a distress sale and trying to book as much profit as possible by quoting less than the market price and pull out before the crash happens and erodes the asset of its original value.

      We can find lots of such instances for resale property.

      We can conclude the price crash has started only if new property are sold below the cost price.Until then the discounts, special offers etc will remain confined only to the negotiation table and nothings official.

      Builders are desperate to avoid doing so openly and are trying everything they can to keep the price fall under their wraps.

      There is a new property from a reputed builder in thoraipakkam which initially had a plan of one apartment per floor with 2000 sqft.They quoted 5500 Rs/sqft.Due to poor response, they redrew the plan and split it into 2 apartments per floor of 1000 sqft each and are now quoting 3900 Rs/sqft for the same.Also, the luxury furnishing and amneties have been replaced with basic ones in the specification.

      Assuming the total area is 6000 sqft, the net value is now 2 Crores 34 Lakhs as against the earlier price of 3 Crores 30 Lakhs.The builder surely seems to be targeting the Below 50L segment.

      Is this a price correction of 30%? or just a consquence of fancy pricing?

      Forum members, your valuable comments please.
      Last edited December 10 2008, 12:13 PM.

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      • #63

        #63

        Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

        All the realestate bears thinking they are WISE!! US treasury bills have fallen to 0% interest and even traded at -ve interest. In such a situation where does one invest his money. Realestate and Stocks. In other words the bottom is clear. So fools who want to sell out their hard earned property (read land and building...not some silly new flats!) can only play into Wiseman's cartel's hands. That guy is really fooling around.
        Beware, if you sold land today in Chennai for 50L, I bet you wont get it back for 1C next year same time. Best of luck.

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        • #64

          #64

          Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

          Hey Natrajg007, you came again with your fancy theories.

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          • #65

            #65

            Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

            Nice to have you back, Natraj!

            Nabishek, You are probably right.

            Look at it this way. If thishouse was built for Rs 35 lakhs 7 years ago, add up the interest on sunk cost and the inflation-adjusted cost of the house would still be in the range of the price that is being quoted.

            Your comment:
            Is this a price correction of 30%? or just a consquence of fancy pricing?

            It is both. First came the fancy pricing. Then, when reality is beginning to strike, comes the price correction

            Natraj, happy to have you back. For every bear like me looking to beat down the price to "realistic" levels, there needs to be a bull like you looking for unrealistic prices .

            Time will tell us who is right. Actually I too am a long-term bull. But the only difference between our respective outlook is, first I'm looking for a significant fall to affordable levels. Then I expect human greed (like yours) to take up the price again to unrealistic levels where I will exit into cash and hold on till realistic prices are back again - this happens every 7 years or so.

            And I don't need a cartel to make this happen. Just leave it to hyper-greedy guys who are always looking for mega profits and they will do it all by themselves .

            In your case, you keep looking for prices to go up, up and away forever.

            Time will tell. Keep posting.

            Everybody: ILO just came on the news and is talking about India facing a significant downturn. Their worry is that the Fiscal Stimulus is only helping the producers. Where is the stimulus / protection for the unorganised sector? Since this is the weakest sector and the one most likely to be hurt.

            cheers
            Last edited December 10 2008, 12:56 PM. Reason: Info

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            • #66

              #66

              Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

              In THE HINDU, this saturday, one builder has given big ad.

              Single bed flat Rs 12.5 lakhs and 3 bed Rs 20 Lakhs on OMR near SSN college.

              Though location is far, areas nearby were quoted much higher earlier.

              This shows another down fall of prices

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              • #67

                #67

                Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

                Has anybody checked 99acres for the ad ?

                Originally posted by kar27us
                a month ago an independent house in annanagar with 880 sqft land and building wa quoted by a broker for 90 lacs and the same broker now quoting a price for 58 lacs.you can see the drop.the name of the broker is sk estates and the ad is in 99acres.
                I am unable to locate the ad in 99 acres,i dont think it is there, can you pls give me the property ID.and have you called the brokers sk agents to acertain the facts? (there might be an error in posting or the property migth be litigated)i dont think so,this seems like the sms asking for blood donors, to be forwarded. till date i have not been able to reach the number given(i am a part of a blood donors group).
                PEOPLE check the facts and comment, v want facts not hearsay.

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                • #68

                  #68

                  Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

                  you must visit the site

                  Originally posted by maeswaran View Post
                  In THE HINDU, this saturday, one builder has given big ad.

                  Single bed flat Rs 12.5 lakhs and 3 bed Rs 20 Lakhs on OMR near SSN college.

                  Though location is far, areas nearby were quoted much higher earlier.

                  This shows another down fall of prices
                  I had a look at the location a friend dropped me and had to run an errand.
                  I paid rs 300 for an auto to drop me at adyar. yes good for a one day picnic.

                  Comment

                  • #69

                    #69

                    Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

                    Originally posted by Natarajg007 View Post
                    All the realestate bears thinking they are WISE!! US treasury bills have fallen to 0% interest and even traded at -ve interest. In such a situation where does one invest his money. Realestate and Stocks. In other words the bottom is clear. So fools who want to sell out their hard earned property (read land and building...not some silly new flats!) can only play into Wiseman's cartel's hands. That guy is really fooling around.
                    Beware, if you sold land today in Chennai for 50L, I bet you wont get it back for 1C next year same time. Best of luck.
                    Hey Nataraj,
                    When did you come out of hospital? Is your treatment already over?

                    Comment

                    • #70

                      #70

                      Re : Are Real Estate Prices Going To Fall 40% by Mid 2007?

                      Lets not get personal again, friends

                      Originally posted by strongsville View Post
                      Hey Nataraj,
                      When did you come out of hospital? Is your treatment already over?
                      All you friends of mine who share my views - and therefore are part of the "bear cartel" which is so powerful as to crash prices in Chennai just by showing our faces!

                      Please do not get personal. Let our analysis - and the power of common sense (which says, like vens, that prices are still way too high) - allow prices to gravitate to their realistic levels, whatever they may be.

                      Natraj is welcome to his opinion, and I expect it to be hyper-bullish since he probably holds a lot of real estate he would like to dump for a profit.

                      Let us all bring forth our respective opinions in good taste.

                      cheers

                      Comment

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