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Reasons for fall of OMR Prices

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Reasons for fall of OMR Prices

Last updated: February 19 2009
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  • #11

    #11

    Re : Reasons for fall of OMR Prices

    Originally posted by sethugm View Post
    Thanks for the details.

    There are some fineprints below that have been discussed long back by many here.At last we could see those who were in denial mode now move to the acceptance stage.

    http://www.hindu.com/2009/02/12/stor...1258520300.htm

    “The areas around the IT Corridor were among the first to experience an escalation in land prices. It is also the first to experience a considerable reduction in the prices following the economic crisis,” said M.K.Sundaram, Chairman of the Builders Association of India-South Centre.

    “We have to accept that it is a time for inflated land prices to come to reasonable levels,” explains Mr.Sundaram.

    “Around 30 per cent of the land near the IT Corridor is available for sale. But there are no takers,” said G.Mohan, Secretary, Federation of Tamil Nadu Flat and Housing Promoters Association.

    When more and more percentage of lands are available , more will be the crash.

    The IT/ITES salary trend is moving downwards , the RE prices will plunge to realistic levels . As rightly stated by DLF Vice President that it will be corrected to Inflation adjusted 1998 Prices.

    Keep watching until it goes to realistic levels and you see value for money.
    why no one has mentioned about any other area? sugests that prices have not crashed elsewhere till date in chennai

    Comment

    • #12

      #12

      Re : Reasons for fall of OMR Prices

      Originally posted by abk View Post
      why no one has mentioned about any other area? sugests that prices have not crashed elsewhere till date in chennai
      No mention of other areas does not mean that they have appreciated by 200% .

      “The areas around the IT Corridor were among the first to experience an escalation in land prices. It is also the first to experience a considerable reduction in the prices following the economic crisis,” said M.K.Sundaram, Chairman of the Builders Association of India-South Centre.

      OMR is the first to get corrected as its heavily inflated . The other inflated places will soon get corrected ...May be we need to wait for few more weeks/month(s) This 's' may not be needed .

      Cheers

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      • #13

        #13

        Re : Reasons for fall of OMR Prices

        Originally posted by sethugm View Post
        No mention of other areas does not mean that they have appreciated by 200% .

        “The areas around the IT Corridor were among the first to experience an escalation in land prices. It is also the first to experience a considerable reduction in the prices following the economic crisis,” said M.K.Sundaram, Chairman of the Builders Association of India-South Centre.

        OMR is the first to get corrected as its heavily inflated . The other inflated places will soon get corrected ...May be we need to wait for few more weeks/month(s) This 's' may not be needed .

        Cheers
        No way. I don't trust Hindu, Eco times or any other media. Our "Nataraj the broker", admin of this forum has said RE will increase another 200%

        So expect another 300% increase in RE. What do you think Nats?

        Comment

        • #14

          #14

          Re : Reasons for fall of OMR Prices

          Originally posted by abk View Post
          why no one has mentioned about any other area? sugests that prices have not crashed elsewhere till date in chennai
          Dear friend,

          As already indicated, faster crash happen in areas whose prices went up very fast in short span. I don't think, in Chennai, the increase has been as steep as in OMR area, in any other areas. Simply it is because of IT guys who went in for a mad rush. Another area could be Avadi/Ambattur and even Sriperumbudur areas where the prices may fall more. I feel, the decrease in prices may not be as steep in areas well connected by rail as compared to non-rail connected areas. Please remember, people who need money very badly, reasons for the same can be many, only will sell. Those who invested with their black money or large savings , many people are in this category, may not sell in a hurry. Afterall, history repeats, you see. Any thing going up will come down and again will increase and the cycle will repeat, only thing being, the cycle may be with different periodicity. I feel, no investment made in RE or gold at any time would be a bad investment if seen in a long term perspective and the over all yield will be much better than a bank FD.
          Of course, one should not buy out of high interst loan unless it is absolutely essential like own house to live or daughter's marriage for buying gold etc..

          ks2071746

          Comment

          • #15

            #15

            Re : Reasons for fall of OMR Prices

            Originally posted by abk View Post
            why no one has mentioned about any other area? sugests that prices have not crashed elsewhere till date in chennai
            Abk, I think you have a way to catch the information cutely.
            That secretary of that federation mentioned in the above article has the knack of buying land at desperately low prices. He would go for a joint venture at abyssymal prices, then pay in small amounts spread over years and will sell his flats once prices rise. So let us say he buys a land in place A for 75L, then he will pay some 10L in the beginning, which is his net investment (rather risk) then he will advertise his flats after 4 months when prices rise. He is such a cunning builder that the seller will have his money after 2 years so in effect lose interest on it. This builder will value the plot based on price in the past and when he starts slowly selling his flats prices have gone up. Even 150% profits are normal for him. Assuming construction cost X and land cost Y, his profit is 150% more than the sum of X+Y. So if he feels deceived in OMR, it is based on his HIGH GREED LEVEL.
            The rest of the jokers too are after all builders with vested interest in conning the poor landlord as also the stupid flat buyer.
            Now unlike what Strong says, I have not said that Flat prices were correct even before this so called fall. (Incidentally I neither control this forum...otherwise I would not let Strong to write and neither am I a realesate agent of any form.) Especially in OMR. So as I said before and am saying now, dont sell your land. That Secretary G Mohan is a classical example of a deadly buyer of lands at throw away prices with conditions of payment spread over time. He will never be a loser but you will be the fool to sell to him.
            Now in OMR flat prices have been marked with obscenity. As they have always been marketed by such builders like the one I mentioned above they took the price to dizzy levels. So if you went and bought a flat in Sholinganallur at 4000 psft then you were a fool. THe builder's cost price was only 2000 or 1500. Now if price came down to 3000 and Strong bought it at 4000 then he was a fool in the first place. The builder will be no loser at 3000 too. In effect RE prices have not fallen one bit.
            Just learn the mathematics I have spent time teaching on this board. Try to find land price and then calculate flat price.
            Regarding other places prices wont fall much. That is because the 4000 to 1500 amount of jugglery does not exist. So price falls hardly exist for flats and as for land prices are yet inching up; since with higher FSI, one can build more.
            So readers look at Abk and his questions, look at KS and his explanation. Dont look at Sethu and his bearishness.
            For every potential buyer RE should fall, but if you are a seller of property you bought without paying OMR like prices, you just have nothing to worry.

            Comment

            • #16

              #16

              Re : Reasons for fall of OMR Prices

              Originally posted by ks2071746 View Post
              Dear friend,

              As already indicated, faster crash happen in areas whose prices went up very fast in short span. I don't think, in Chennai, the increase has been as steep as in OMR area, in any other areas. Simply it is because of IT guys who went in for a mad rush. Another area could be Avadi/Ambattur and even Sriperumbudur areas where the prices may fall more. I feel, the decrease in prices may not be as steep in areas well connected by rail as compared to non-rail connected areas. Please remember, people who need money very badly, reasons for the same can be many, only will sell. Those who invested with their black money or large savings , many people are in this category, may not sell in a hurry. Afterall, history repeats, you see. Any thing going up will come down and again will increase and the cycle will repeat, only thing being, the cycle may be with different periodicity. I feel, no investment made in RE or gold at any time would be a bad investment if seen in a long term perspective and the over all yield will be much better than a bank FD.
              Of course, one should not buy out of high interst loan unless it is absolutely essential like own house to live or daughter's marriage for buying gold etc..

              ks2071746
              U r right KS. Investment in Gold and RE are solid for one. Also Gold has not risen up until very recently but RE is been going up for a long time. I will discuss this sometime.

              Comment

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