Hi,

I heard through my friends that property price is chennai is going down drastically. Does any one have an idea about this. I am a NRI. I recently bought a flat in Velacherry. Will the price go down more?

Thanks.
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  • Facts are Facts !

    First let me start with Shares

    Some of the transactions I made.

    Reliance Natural bought 500 shares at Rs 57 -65 sold at Rs 185 now 45-55
    RPL bought 500 shares at Rs 100 - 115 sold at Rs 240s now 75 - 85
    IFCI bought 300 shares Rs 25 sold at Rs 75 now trading at 20s

    (Moslty I bought shares during aug 2006 - feb 2007 and sold them during oct 2007 - may 2008)

    I booked a flat in 2005 and sold it in early 2007 on completion when it was in peak for 40+ (location chennai's heart). So I'm waiting for prices to crash in the next 6 to 1 year period, which is my educated guess..........

    If the prices are going to fall by 30%,

    Cash in hand =40L, I sold,
    30% of 40L = 12L
    Cost of one flat 40L - 12L = 28L;
    For two flats :28L* 2 = 56L.
    Cash needed : 56L-40L = 16L (loan+ extra cash) required, If I go
    blindly and buy them

    would it not be possbile for me buy as I said previuosly, if the prices come down by even 30% and rest with loan, people always go to the extreme,
    I never said it would fall by 50%, thats the difference between educated guess and blind guess.......

    Moreover,
    Once the prices start falling, I can bargin with the builder or seller and get additional price cuts, for ex, If I can bargain for Rs 100 per sqft for a 1000 sqft flat, it will save me 1L per flat. Also if I'm buying two flats from the same builder I can press him more sops. By watever amount the I can force the builder, I will reduce my loan amont.

    "Remember prices are yet to fall in Chennai"

    Other places prices have come down, I came across in one place in Mumbai or Noida I'm not sure, where builder is offering buy one get one offer.

    Its not that I have always made gain/ profit, I sold my land in 1996 for a every cheap rate, now its gone nealry 20 folds even in shares got nasty hits, these were lessons to me.

    Always do some research and take an calculated risk, dont decide becoz somebody is saying its going to fall or its going to rise. Do some basic math.

    During the boom period the prices used change on a hourly basis. I can still remember the shock I got in 2007. We were looking for a property to buy, morning we spoke with owner he said 18L when we went in evening to pay advance he said its 21L now, within 5 hours difference.

    My honest belief is Chennai is over inflated or over heated, from 2003 to 2007/8 the prices went high nearly by 200%- 300% or more, I dont think anyone will contradict this. Does any one has seen or have doubled their salary during this period, except for people in IT who often jump, govt sector in the Sixth pay commission (and the auto drivers, just kidding)?

    My question is
    Whats the belief/ cause why one would think that prices are going to sustain and hold on or be optimistic that prices will go up?
    If the prices go up against my belief then it should be a lesson for me !

    With IT sector in deep trouble, spending is going to get cut and job loss or pay cuts will drive IT people to keep off spending as they did in that last few years, like going out to hotels for lunch everyday, spending for auto/cab, planning for vacation every quarter,which I myself did with my team. Which will impact other sectors too.

    FIIs pulling out, people in Gulf too are facing job cuts, which I'm hearing for the first time, finally banks are also not willing to extend loan to RE sector that too if you are from IT who were the most buyers for the past years, from where the money is going to flow into RE.

    Latest :

    Recently the some banks have asked some the IT people to whom they have lent loan,to provide their Dec month payslip and have enquired their HR to confirm if they are in job.

    I would like to hear the facts from others too.Anyways thank for views keepp posted.
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  • More clear evidence of how Chennai is inflated.

    One of my friend planned to buy a second hand flat, he approached some brokers. Found one 700sqft 2BHK apartment second floor for 21 Lakhs which was five years old as communicated. Finally settled for 18.5 Lakhs with 5 Lakhs advance and owner wanted 10 in white and rest in black.

    We paid 1001 for token advance and got the papers after getting the papers we were in a great shock.

    No approval for the second floor. The flat was more that 12 years old.
    More shocking was the said owner is not the real owner he has just got Power of Attorney. When searched for the details, we found through another broker whom we know for years said that he only finalized the deal 4 months ago, the current owner has finalised for 10 lakhs and took power of attorney and did not even register the flat in his name, which is common nowadays.

    When we contacted the owner for approval he said he has applied for it and demanded 5L advance with 2 3 days else he may sell it to another person. We gave back the papers.

    10L to 18.5L in 4 months time thats the true condition of the real estate in Chennai, which happened in 2007 end.
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  • Originally Posted by abk
    you seem to have the answer to my question.
    pls specify when was the peak of the boom,month & year i.e when you sold your house. and it would help if you can tell me what rate you sold,location and what rate it is available now,i have not come across any 50% discount in chennai.

    Test is a joker. I think he had other crap to write before. I bet he wont answer you question of when and where. Now Wiseman is not an individual, he is just a senior person of a gang of vested interest bears who are accumulating realestate and talking about a fall. Infact Wiseman is conspicous by his absence, so maybe there are now almost completed their accumulation.
    Be careful. While the choice of having to buy is yours, the situation is not in anyway pessimistic to sell and worse still imagine that you can get a buy at low prices. IT JUST AINT HAPPENING? I mentioned the Sobha prices in another message. In Bangalore near Devanahalli airport (similar to Sriperumbudur in Chennai in terms of distance from City) Sobha is selling 5000sqft land and 3200sqft building for 3.2 Crores. So much for imaginary fall in RE.
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  • Good one Nats. But no luck :)

    Originally Posted by Natarajg007
    Test is a joker. I think he had other crap to write before. I bet he wont answer you question of when and where. Now Wiseman is not an individual, he is just a senior person of a gang of vested interest bears who are accumulating realestate and talking about a fall. Infact Wiseman is conspicous by his absence, so maybe there are now almost completed their accumulation.
    Be careful. While the choice of having to buy is yours, the situation is not in anyway pessimistic to sell and worse still imagine that you can get a buy at low prices. IT JUST AINT HAPPENING? I mentioned the Sobha prices in another message. In Bangalore near Devanahalli airport (similar to Sriperumbudur in Chennai in terms of distance from City) Sobha is selling 5000sqft land and 3200sqft building for 3.2 Crores. So much for imaginary fall in RE.



    Natraj, you really must see a shrink :D.

    Can anyone make sense of this phrase: "senior person of a gang of vested interest bears who are accumulating realestate" ?

    How is a bear (who sells with a view of buying cheaper later on) accumulate land now?

    Even assuming this is true, how is it I'm trying to sell prime land in the heart of town? You still have not come back to me on whether you have the 9C for land on Dr. Radhakrishnan Salai!!!

    Nice try. But no luck.

    cheers
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  • My posts are not shown. Moderator has delibrately deleted, becoz of my facts, it seems or due to technical issues.

    Let us c who is going to be a joker at last.

    I sold the my at chennai's heart for 40L
    If chennai RE comes down by 30% : 30%40L = 12L
    so total cost : 40L - 12L = 28L
    For 2 flats : 28L*2 = 56L

    56L-40L = 16L If I buy blindly.

    I can negotiate with the builder/seller as the prices are going down.
    Ex get sqft rate by 100 that would save 1L for a 1000sqft.
    Similarly I can force him, if I'm buying two flats.
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  • Bulls losing patience & becoming Jokers by denying facts !

    I have reached some of the builders in chennai for flats and have got 10% reduction in price with free car park. So 6 months to 1 year down the line,
    I will be able to achive my target.

    NO FREE LUNCH. If you want to buy or get the real price spend some time in the market.

    I have posted the facts, you can check with the moderator if you want.

    Nats fear is getting visible by each post. Nats its for you

    The banking system’s plan to bail out cash-strapped housebuilders by restructuring loans to help them survive a market slump is under strain, as builders have gone back on their promise to sell properties at reduced rates, according to senior bankers. Some bankers have complained to the central bank that after making use of the relaxed rules, which permit banks not to classify loans to real estate firms as bad loans the moment they are restructured, builders continue to hold on to artificially-inflated prices.
    Last December, the Reserve Bank of India (RBI) relaxed a key rule on restructuring bank loans to the real estate sector as a one-time measure to help developers cope with falling demand and a credit crunch. The relaxation was to end in June this year. During a meeting with the RBI’s deputy governor Rakesh Mohan on Thursday to discuss monetary policy issues, a senior banker pointed out that the RBI’s relaxation had provided builders with an opportunity to hold on to high property rates that were quoted before the market slump. “There is a feeling among bankers that builders are choosing to retain assets on their balance sheets rather than reducing prices and getting rid of assets,” said one banker, who asked not to be named. “In other words, to overcome the liquidity crisis, builders are pushing for restructuring of loans rather than selling off assets or reducing property prices.”
    Several developers such as DLF, Unitech, Sobha, Omaxe, Parsvnath Developers and Housing Development and Infrastructure have approached banks to restructure their loans. In the past too, bankers have pointed out to the RBI and the finance ministry that real estate companies are reluctant to reduce rates. Builders, in turn, blame banks for causing the market slump and lower sales volumes by charging high rates on home loans. Under pressure from the government to boost home sales and shore up the economy, several public sector banks recently cut rates charged on loans for affordable housing. Many of them now charge a fixed rate of 8.5% for loans up to Rs 5 lakh and 9.25% for loans up to Rs 20 lakh.
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  • My post are not getting displayed

    Is somebody deleting it.....................
    moderator wat happened to my post?

    Does anybody having idea about the law suit against Metrozone (Ozone Group) got over?
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  • Originally Posted by test1234
    Is somebody deleting it.....................
    moderator wat happened to my post?

    Does anybody having idea about the law suit against Metrozone (Ozone Group) got over?


    what happened to my question regd when and where about the peak of the boom and the place you sold and what rate its available now.

    I see a pattern regarding replies. test says his post is missing and rajello says so too.are you evading a reply.
    (type it in a new window cut it and paste it immediately)
    my question remains WHEN and WHERE regarding prices halved at the place you sold.
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  • Moderators - Pls act

    Hi ,

    Some of my postings are not getting updated and get a message "will be posted after the moderator's approval" .

    Moderators ,

    Pls clear the backlogs .

    Thanks

    Originally Posted by abk
    this thread is about how much downfall in RE from peak prices(obviously).
    everybody can calculate "if it falls by 20% it has to gain 25%".
    my point is if you want to buy a house(for living) you should buy if your preferred location has corrected by about 15%. living is not about the price alone it includes your preferences,fancies,your dear ones near,temples,schools,entertainment,established neighbourhood,security etc.
    a diff of 10-15% is overlooked for places of preference.
    you should look for 3 things when buying a house

    1)location 2)location and 3)location


    abk,

    Thanks for giving another perspective.

    Location can make fraction of people to overlook the price.

    From a buyers view point, Value for money and the ability to repay will take precedence than any other factor.

    Think of the people who buy land/apartment which had been already inflated to sky-high price(300 to 400 % in 2-3 years). Will they be able to pay the EMIs for decades where there is no security for jobs/salary . It will only inflate the EMIs .

    BTW , All those high-end projects in OMR have the location advantage ?

    Do they have our dear ones near, temples,schools, entertainment, established neighbourhood,security etc.

    Do you think they are correctly priced based on Location ? If not what they are worth of ?

    What majority of the buyers are bothered about are

    1) Value for money.
    2) Infrastructure (Good Roads/Electricity/Water and Boats )
    3) Security
    4) Ability to repay etc...

    Needless to say that the fall in plot prices have propelled this fall in OMR .
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  • Abk,
    Pls read my post. I said I'm awaiting to buy in next 6 Months to 1 Year period with cash.
    I sold my flat Feb 2008 for Rs 4100 per sqft at North Chennai.
    In chennai, the prices are stagnating and yet to come down,
    which will I assume after the elections, thats ny rationale behind What I said earlier.
    Apart from Chennai, at all other places the prices have down by 10-20%.
    And the layoffs are yet to come in India esp in IT sector in Bangalore,Chennai,HYD.
    Satyam effect is still haunting the IT sector very much.
    From late 2005-2008 the prices has increased atleast 200%-300%, I hope no one will object.
    Does anyone has got their salary doubled during this period,
    excluding IT people who jump often and the Auto Drivers (just kidding)?
    RE sector is at the verge of collapse; with visible examples that happened in US.
    Only people like Nats the so called BULLS have to start investing, to save real estate from falling.
    Also the current period is the last chance to sell and make merry in chennai.
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  • Originally Posted by abk
    what happened to my question regd when and where about the peak of the boom and the place you sold and what rate its available now.

    I see a pattern regarding replies. test says his post is missing and rajello says so too.are you evading a reply.
    (type it in a new window cut it and paste it immediately)
    my question remains WHEN and WHERE regarding prices halved at the place you sold.

    Abk,
    Pls read my post. I said I'm awaiting to buy in next 6 Months to 1 Year period with cash.
    I sold my flat Feb 2008 for Rs 4100 per sqft at North Chennai.
    In chennai, the prices are stagnating and yet to come down,
    which will I assume after the elections, thats ny rationale behind What I said earlier.
    Apart from Chennai, at all other places the prices have down by 10-20%.
    And the layoffs are yet to come in India esp in IT sector in Bangalore,Chennai,HYD.
    Satyam effect is still haunting the IT sector very much.
    From late 2005-2008 the prices has increased atleast 200%-300%, I hope no one will object.
    Does anyone has got their salary doubled during this period,
    excluding IT people who jump often and the Auto Drivers (just kidding)?
    RE sector is at the verge of collapse; with visible examples that happened in US.
    Only people like Nats the so called BULLS have to start investing, to save real estate from falling.
    Also the current period is the last chance to sell and make merry in chennai.
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  • Originally Posted by Natarajg007
    Test is a joker. I think he had other crap to write before. I bet he wont answer you question of when and where. Now Wiseman is not an individual, he is just a senior person of a gang of vested interest bears who are accumulating realestate and talking about a fall. Infact Wiseman is conspicous by his absence, so maybe there are now almost completed their accumulation.
    Be careful. While the choice of having to buy is yours, the situation is not in anyway pessimistic to sell and worse still imagine that you can get a buy at low prices. IT JUST AINT HAPPENING? I mentioned the Sobha prices in another message. In Bangalore near Devanahalli airport (similar to Sriperumbudur in Chennai in terms of distance from City) Sobha is selling 5000sqft land and 3200sqft building for 3.2 Crores. So much for imaginary fall in RE.

    Sold 1000 Sqft @ Rs 4000 per sqft = Rs 40,00,000 (40L) (Keeping 4000 instead of 4100 for easy calculation)
    As per my assumption if the prices come down by 30%
    30% of Rs 40L = 12L
    Cost of 1 Flat = 40L-12L = 28L
    Cost of 2 Flat = 28L*2 = 56L
    Cash in hand 40L, by selling the flat on feb 2008.
    Cash needed = 56L - 40L = 16L
    If I go blindly and buy I have to arrange for 16L.
    2005- 2008 period was Sellers market thats why the prices kept changing by hours,
    brokers played a huge role in inflating prices
    Once the price starts falling the pressure will on the seller, as it turns out to be Buyers Market.
    I can pressurize the seller for more sops which would reduce my extra cash required.
    For ex reducing Rs 100 per Sqft will save 1L per flat.
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  • I'm not getting my post displayed !!!!!!!!!!!!!
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  • Originally Posted by badrig
    People Will Realise Slowly As They Have A Herd Mentality As In Sheep .they Will Buy When Everyone Buys And Sell When Everone Sells


    Dear badrig,

    Well said. This is the mentality of most people, though some may not like to agree to this truth. The same thing happens in share market also.

    ks2071746:p
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