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Real Estate Scenario in Chennai

Last updated: December 17 2008
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  • Real Estate Scenario in Chennai

    Hi All,

    I am new to this forum. I would like to know the RE scenario in Chennai...
    I had purchased an apartment in Ambattur, in Aug 2007(one of the worst mistakes i had made). It costed over 38L for 1250 sq.ft. The builder was supposed to hand over the flat in Sep 2007. But he did so only in Oct 2008 :-((. I was paying a lumpsum amount as EMI throughout this period without any return.

    Now, due to the slump, its very difficult to find a tenant also. There are nearly 45 flats in that building, which are unoccupied(without being able to find a tenant). I work for an IT company, which adds to the pressure that is mounting up.

    Please suggest, if I can sell the flat now, for a no-loss-no-gain situation. I fear that the longer I wait, the loss may be higher.

    Waiting for all of ur valuable suggestions.

    Regards,
    Tina
  • #2

    #2

    Re : Real Estate Scenario in Chennai

    If you can, sell and get some peace of mind ...

    Buying a house at any cost is so deeply embedded in our Indian psyche that many people will suffer great hardship for decades so that they can realise "their" dream (actually its other's dreams) of "owning" their house (for a good part of the time actually the bank owns a larger part of the house.

    In my opinion, things are only going to get tougher before they become better (and they will become much better later). Selling is your decision alone (so if you sell now at no loss and the price runs away upwards, its your problem alone). Rest assures, with the pain going on in the economy there is no danger of prices running away upwards.

    Sell now, gather more financial strength and come back in a couple of years when the dangers of falling price are past and you know that future will only bring you good gains on the house.

    Good luck.

    cheers

    Comment

    • #3

      #3

      Re : Real Estate Scenario in Chennai

      Originally posted by Tina View Post
      Hi All,

      I am new to this forum. I would like to know the RE scenario in Chennai...
      I had purchased an apartment in Ambattur, in Aug 2007(one of the worst mistakes i had made). It costed over 38L for 1250 sq.ft. The builder was supposed to hand over the flat in Sep 2007. But he did so only in Oct 2008 :-((. I was paying a lumpsum amount as EMI throughout this period without any return.

      Now, due to the slump, its very difficult to find a tenant also. There are nearly 45 flats in that building, which are unoccupied(without being able to find a tenant). I work for an IT company, which adds to the pressure that is mounting up.

      Please suggest, if I can sell the flat now, for a no-loss-no-gain situation. I fear that the longer I wait, the loss may be higher.

      Waiting for all of ur valuable suggestions.

      Regards,
      Tina
      Rs 3040 per sqft is a good rate for the buyer.

      You have purchased it in Aug 2007 & builder supposed to hand over in Sep 2007. That means it was almost ready when you bought since just 1 month was the gap. Then how another 1 year delay happened!!!

      What is the rent potential there if some one takes it on rent

      Comment

      • #4

        #4

        Re : Real Estate Scenario in Chennai

        Limit your losses

        I don't have much knowledge about Madras but I feel RE is same worldwide , here in Toronto , Canada People see the prices falling . I just happened to know that the CIBC ( Canadian Imperial Bank of Commerce ) has sold (Power of sale) couple of 2 bedroom + DEN with 2 Washroom condo units in my building for around $94,000.00 only . 2 - 3 years back the same units were financed by the same bank for $145,000.00 - $150, 000.00
        almost 33% down. You could still see ,in the same building, people listed their condos for $140,000+++ and refusing to accept the offers evn in $125,000 range because their mortgage is higher than the price offered. I wish good luck for them. They really paid more , but what can you do when the banks selling the unit next to you way lower. Banks don't want to keep these defaulted units for longer since the cost of maintenance ( common element maintenance fee apprx $450.00/month ) and due to needed cashflow. Those who defaulted the mortgage may file personal bankuruptcy and soon be out of trouble and banks would sell those property for whatever they could get and claim the rest of the loss in Mortgage default Insurance. See , who is in trouble now ! those of who owns the property and Paying interest for more than its worth. Can these people go after the banks and sue them for bringing the price down by selling cheap or , ask the banks to lower the mortgage amount since the property doesn't worth the money they owe due to the Power of sale by the banks . Banks dont care . they still want the full money to be paid with the interest of course.
        So , if you plan to sell , do it before rest of the people think about it. When there too many units for sale , Price go down significantly but when there are too many for Power of Sale the price would nose dive. Because banks want to get rid of the properties as fast as they can and sell them very cheap. Talk to some experts in this matter b4 making any decision.
        GoodLuck
        Last edited November 16 2008, 07:06 PM.

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        • #5

          #5

          Re : Real Estate Scenario in Chennai

          My reply has not appeared. I do not know why? Is the moderator seeing each & every reply & then get posted?

          Comment

          • #6

            #6

            Re : Real Estate Scenario in Chennai

            Its a bug in the system ... moderators note ...

            Originally posted by maeswaran View Post
            My reply has not appeared. I do not know why? Is the moderator seeing each & every reply & then get posted?
            Hi Folks,

            I faced this due to the long posts that come from me .

            Noticed that, after posting, if the application asks me to re-login due to timeout, it routes my post to the moderators for review.

            But if I post before timeout, it lists the post immediately.

            So, the workaround (or trick) is, when it tells you to re-login, simply open another tab or window, login through that, go to the topic/thread where your post should appear and copy/paste the text from the original tab/window to the new login window.

            Voila, the post appears immediately. I suppose, even the moderators must be fed up with so many posts coming their way due to this bug !!!

            cheers

            Comment

            • #7

              #7

              Re : Real Estate Scenario in Chennai

              Hi Tina,

              You decide upon whether to sell or not & never look back your decision. That being said, I believe I can give a honest reply to you, becoz of the fact that I was born & bought up in Ambattur, thou I don't live there currently. I am quite aware abt the prices over there.
              38L for 1250-- a sq ft comes around 3000. Even new builders are not quoting this price. Re registering this if you sell would still cost more.
              The prices in Ram Nagar & Venkatapuram are hovering around 2700 & still I know a builder who is finding it extremely difficult to find a buyer in these areas. So finding a prospective buyer for such a huge price in this area is tough.
              If you wish to sell anyway, I would suggest you to befriend a builder and ask him to direct some potential customers to you who is interested in buying 2nd hand flat.

              Comment

              • #8

                #8

                Re : Real Estate Scenario in Chennai

                You seem to claim to be WISE, (wiseman) in timing the top. Just because real estate fell in US or in Canada as another international loser seems to say is no reason for a fall in realestate in Ambattur. Remember, by telling it is the top, you are also telling that the job of that Ambattur Software pro is in jeapardy and that many will be losing jobs in INdia. Well there is a rumbling in INdia, but bankruptcy, I havent heard one yet. This entire Indian REalestate forum seems to be hard up on reducing realestate price. I dont find that it is necessarily prudent to listen to these bear tones!

                Comment

                • #9

                  #9

                  Re : Real Estate Scenario in Chennai

                  Originally posted by Natarajg007 View Post
                  You seem to claim to be WISE, (wiseman) in timing the top. Just because real estate fell in US or in Canada as another international loser seems to say is no reason for a fall in realestate in Ambattur. Remember, by telling it is the top, you are also telling that the job of that Ambattur Software pro is in jeapardy and that many will be losing jobs in INdia. Well there is a rumbling in INdia, but bankruptcy, I havent heard one yet. This entire Indian REalestate forum seems to be hard up on reducing realestate price. I dont find that it is necessarily prudent to listen to these bear tones!
                  Natarajg, Where in the world are you in and what kind of profession you are in? Can you please let me know. I would like to know if your place of living and profession makes you think otherwise.

                  I am a software engineer working in USA.

                  Comment

                  • #10

                    #10

                    Re : Real Estate Scenario in Chennai

                    Patience. It will happen in its own time!

                    Originally posted by Natarajg007 View Post
                    You seem to claim to be WISE, (wiseman) in timing the top. Just because real estate fell in US or in Canada as another international loser seems to say is no reason for a fall in realestate in Ambattur. Remember, by telling it is the top, you are also telling that the job of that Ambattur Software pro is in jeapardy and that many will be losing jobs in INdia. Well there is a rumbling in INdia, but bankruptcy, I havent heard one yet. This entire Indian REalestate forum seems to be hard up on reducing realestate price. I dont find that it is necessarily prudent to listen to these bear tones!

                    Dear Natarag,

                    I don't claim to be wise (thats your claim, when you keep taking unwarranted potshots at me and others ). Can't help it if some others think I'm wise since thats been my aim all along - take the advice of the really wise guys around the world to help people take cover before the storm, thats what I've been trying to do.

                    Yes. That software person in India (Ambattur is just one place) is in danger of losing something big allright! Maybe its his/her job. Maybe its a reduction in salary. As far as I'm concerned, losing job is only one form of a salary reduction (the 100% option). But rest assured. As per my calculation there will be at least 2 to 3 lakh job losses in Indian IT in this bear market. The Real Estate market may see 2 to 3 million job losses. Did you notice the papers? EcoTimes estimates Textile has already lost 700,000 jobs. Surat alone seems to have lost 50,000 jobs in the gems-n-jewellery business. Job losses have very much landed on our shores and its but a matter of time that software will be taking its fair share.

                    Just 1 month ago, the entire Infosys Top Mgmt team (one of the most savvy teams in Indian software, going by their track record) went on record to categorically say that a. There will be minimum 20% growth in exports and b. There will be no pink slips. NRN, Pai, Gopalakrishnan as well as Nilekani made no bones about their bullishness even coming on TV to say so.

                    Just one month later, they are rapidly backtracking as they see the light of day. Infosys cannot be seen to be giving out pink slips. So they made it into a "voluntary" sabatical. They have offered employees to take a multi-year sabatical with half pay and go work with NGOs. Is that typical of software companies under normal circumstances? Coincidentally, it tallies with another statement by them that IF this goes on for Q3, they will be "revising" their guidance (I'm sure that will not be upwards!!! ).

                    Unitech, the second biggest RE company is just now attempting to sell their telecom venture (not yet sold, mind you). Next, they are selling their hotel venture even during their construction. Their debt is CRUSHING the company rapidly. Next, they will be coming into the market with their retail products (homes) at distress prices. When there is 50% to 75% reduction in construction, do you think these companies will retain employees?

                    Just you go around software companies today, even the bluest of blue chips. Most employees in most companies are living in the same daily fear of when will their turn come to go meet HR. Seriously. If you worked in software during the 2000 - 2002 days, you will understand that feeling. If you didn't, maybe this time you will experience that feeling (if you are in this industry) and never ask that question again!

                    Rest assured. As I have said repeatedly, ad nauseum, these things DO NOT happen in a jiffy (like a 1-day match so there is a result by evening). But we are already currently seeing US, EU, Japan already officially in recession. This has never happened in recorded history. Remember, thats over 75% of the commercial world! .

                    If 75% of the commercial world is heading towards severe recession (and probably a depression), do you imagine India will not even face a recession? Wake up from fantasyland before its too late!

                    Then again, you said "Well there is a rumbling in INdia, but bankruptcy, I havent heard one yet.".

                    Don't you realise that, by the time you hear of it it will be too late and the tsunami will already be upon you. Its like the guy on the beach who is told to get off the beach as he has heard a tsunami has just hit Amdamans and its will be coming this way soon. "Well," you say. "I still have not seen it, so I will sit on the beach". By the time you see it, it may be too late to get off the beach.

                    So, while we hope for the best case, we must be prepared for the worst case. But you only seem to be prepared for the best case. What happens when the worst case hits? Checkmate. Game over.

                    cheers

                    Comment

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