Hi all
I have not been in chennai for the last 2 years.What is happening to chennai real estate with the rising inflation?Is this a good time to invest? Any inputs will be much appreciated.
Thanks
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  • No. Its not a good time to invest anywhere in Chennai. Prices are falling slowly. It is expected to fall atleast another 30% by the end of this year. So just wait.
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  • Originally Posted by strongsville
    No. Its not a good time to invest anywhere in Chennai. Prices are falling slowly. It is expected to fall atleast another 30% by the end of this year. So just wait.

    hey there(strongsville),
    you havent got much ideas about real estate right?
    you expect prices to fall 30%. how long have you known anything about real estate in india?
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  • Originally Posted by sridharbabu111
    hey there(strongsville),
    you havent got much ideas about real estate right?
    you expect prices to fall 30%. how long have you known anything about real estate in india?


    hey there, Do you think you have a Phd. in RE business? What the hell you know about RE boom and bust, inflation, recession and other things related to economy?

    What do you expect man? RE to go up another 500% in one month?
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  • sridharbabu should have invested too much in chennai or he might be a promoter. I can see that from his frustration
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  • Originally Posted by sridharbabu111
    hey there(strongsville),
    you havent got much ideas about real estate right?
    you expect prices to fall 30%. how long have you known anything about real estate in india?


    The real estate is part of larger economic cycle.

    Inflation will lead the RBI to Mop up liquidity and increase the price of money (Interest rate).
    This process will & Must slowdown the general economy and create demand for cash.

    This is like taking bitter medicine when you are sick (Inflation) and take rest from active work,while your body (Economy) gets better.

    If you dont take medication and work hard as before you risk death (Economic meltdown)

    Remember Argenitina in early 2000's Thailand,Malysia,Indonesia took 10 years to recover from the 1997 Asian economic criss.

    NOTHING CAN KEEP GOING UP WITHOUT A PERIOD OF CORRECTION AND RECESSION.

    Expect a 3-4 of property down turn in India.
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  • You got the name wrong, everything else right :)

    Dear Sridharbabu,

    You should have started this post with "hey there (sridharbabu)".

    Since everything else you wrote seems to show your knowledge (or lack of it) about Real Estate.

    Lets cut to the chase. Lets take a bet. I will sell you Rs.1 crore worth of property notionally today at current prices. You sell it back to me exactly 2 years later at whatever price it is on that day. The difference shall be paid for in cash! This is called Futures. Ever tried it?

    I really want to get rich in 2 years time and you are offering me a great opportunity. I believe I will make at least 50 lakhs profit on this deal.

    I'm betting property will go down AT LEAST 50% in most areas it has gone up 3-4 times in last 5 years. In 1995-98 crash RE came down 75%. And there was not even a hint of any crisis in the world. In fact US was booming in those days.

    I'm very careful when I open my mouth to say something, lest my foot not find its way into it! :D

    No offense.

    cheers

    Originally Posted by sridharbabu111
    hey there(strongsville),
    you havent got much ideas about real estate right?
    you expect prices to fall 30%. how long have you known anything about real estate in india?
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  • Rupee Devaluation

    How the coming inflation( or rupee devaluation) is going to affect RE?

    Is it possible for our government/politicians to keep the RE prices high by devaluating indian rupee?


    Thanks
    Venkit
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  • Originally Posted by venkit
    How the coming inflation( or rupee devaluation) is going to affect RE?

    Is it possible for our government/politicians to keep the RE prices high by devaluating indian rupee?


    Thanks
    Venkit


    When Inflation is high, as you know asset price and wages goes up.
    Goverment has some blunt tools to try and reduce inflation that is RBI repo rate and Bank cash reserve holding (To mop up some liquidity)

    The risk of using the above tools over a certain limit will affect the growth,economic health of the country and hurt the common man.

    But if asset prices and wages are high (Due to uncontrollable inflationary pressures) overseas investment,exports, tourism will be hurt.

    That is if the wages or high or equal to other countries then there is no cost savings for them to make those goods/service in India.

    The easiest thing to in such situation is phased/structural devaluation of currency. The price of the asset or wages will not reduce but due to currency devaluation it will still remain cheap for overseas market.

    India did that in 1990/91
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  • Originally Posted by strongsville
    No. Its not a good time to invest anywhere in Chennai. Prices are falling slowly. It is expected to fall atleast another 30% by the end of this year. So just wait.


    Strongville said this in July 2008, That is 1.5 years ago.
    Where was the minimum 30% fall that he was saying.
    I haven't seen that did you guys?

    He said at least 30% I wonder how much was the maximum he had in mind.
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  • Originally Posted by Economist
    When Inflation is high, as you know asset price and wages goes up.
    The easiest thing to in such situation is phased/structural devaluation of currency. The price of the asset or wages will not reduce but due to currency devaluation it will still remain cheap for overseas market.

    India did that in 1990/91






    Is there any possibilty for that to happen again in near future.The reason why I am asking is I have all my hard earned money in FD since I strongly believe that RE will go down in future,so that I can buy property at right price.But I am little worried whether my saving will loose its value because of rupee loosing its value,
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  • Its unlike stock market ;waiting for the bottom trough ...so you can make quick bucks in 2 years and sit on cash real estate is always long term investments ,you invest and your next generation sees the appreciation (sometime you yourself also) ...real estate has already showing the downtrends and i am seeing many places demand for black money has reduced substantially.In most of the places in Chennai real sellers are coming out(bloody brokers are out) and their expectation mostly at par with latest registration cost.

    Definitely its not all time high now and not all time low .Its better to invest now rather again struggling when its hot.Land cost has never gone down historically :) so value for your money will never come down.
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  • Yes it has!!!

    Originally Posted by Economist
    Strongville said this in July 2008, That is 1.5 years ago.
    Where was the minimum 30% fall that he was saying.
    I haven't seen that did you guys?

    He said at least 30% I wonder how much was the maximum he had in mind.


    Economist,

    Yes. As per various posts some months ago, property prices in certain areas have fallen 15% to 25%. In fact I have personal experience where, a flat in North Chennai, quoted for 41 lakhs in 2007 was now going (and still not gone) for 21 lakhs! I can give you details.

    All of this is not the main point. This is what I have to support Strongsville's views:

    Firstly, while I agree with you that prices in most places have not declined 30% yet, our own property in Radhakrishnan Salai, quoted (this is the whole problem, we are only comparing quoted prices and any argument can be made about these!:D) around 12k to 14k per SFt. Today, its hard to find buyers for large plots are even 9.5k. So, in my own experience, I can see a 20% to 25% fall in my own experience in a reputed area.

    Secondly, the decline is not yet over! Please do not make the mistake that recovery is going to happen. Its now almost certain that a global double-dip recession will happen in 2010 and if wrong Govt policies (bailouts, etc) are not corrected, it will most likely turn into a much longer depression (I'm not joking).

    India will see much more pain in 2010-2012. RE will face a much bigger brunt of this pain as its going to be very difficult for them to bail themselves out as they are not able to raise money anywhere at reasonable rates.

    Rates will decline and you will be surprised about the amount of decline!

    Till then, its only my word against yours and we will have to wait and see :D

    cheers
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  • Originally Posted by sridharbabu111
    hey there(strongsville),
    you havent got much ideas about real estate right?
    you expect prices to fall 30%. how long have you known anything about real estate in india?



    Long long ago in this forum, there was a man called Nataraj007. Some say he was the orignal great grand father of Real Estate Bulls. He himself has escaped,no body knows where he is now a days, realising that Bull market theory he had been propogating was nothing but BS. So who are you? are you new? or are you the original Nataraj007 with a new avtar.
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  • Originally Posted by sundardj
    Long long ago in this forum, there was a man called Nataraj007. Some say he was the orignal great grand father of Real Estate Bulls. He himself has escaped,no body knows where he is now a days, realising that Bull market theory he had been propogating was nothing but BS. So who are you? are you new? or are you the original Nataraj007 with a new avtar.


    only the 'almighty' can answer this:D
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  • Originally Posted by sammmy
    Its unlike stock market ;waiting for the bottom trough ...so you can make quick bucks in 2 years and sit on cash real estate is always long term investments ,you invest and your next generation sees the appreciation (sometime you yourself also) ...real estate has already showing the downtrends and i am seeing many places demand for black money has reduced substantially.In most of the places in Chennai real sellers are coming out(bloody brokers are out) and their expectation mostly at par with latest registration cost.

    Definitely its not all time high now and not all time low .Its better to invest now rather again struggling when its hot.Land cost has never gone down historically :) so value for your money will never come down.


    I agree 100% with you Sammy.
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