Friends,

The peak time for Chennai Real estate in chennai is over.

If chennai RE is at peak anyone can sell their property in no time.
In 2007 everyone was running after land. It was like getting 'sundal' at vinayagar temple.
Banks also gave loan like giving 'sundal' at temples. Now banks are not able to get back the loan amount.
They dont know for sure the amount of non performing loans.
Banks are in denial mode in giving loans. Not only that. people also are not in loan buying mood.
They have lost their confidence about repaying the loans.
Those who have accumulated black money dont want to invest in 'non performing' properties.
Because of various reasons like these, peak time for Real estate in chennai is over.

Everywhere owners are telling rate at their will. Its like telling "Ayiram... rendayiram... naalayiram....".
Those who realised the facts are gradually reducing the price. But in most of the cases, plots are lying unsold.

If one is willing to sell a plot, and if there are many buyers we can say there is demand.
If there is demand from many sides, there will be price escalation.
But no demand... No increment in price. But rebate sale has started without buyers.
thanks
chataara

chataara
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  • Originally Posted by chataara
    Friends,

    The peak time for Chennai Real estate in chennai is over.

    Those who have accumulated black money dont want to invest in 'non performing' properties.
    Because of various reasons like these, peak time for Real estate in chennai is over.

    thanks
    chataara

    chataara


    chataara black money cannot be invested in anything traceable like
    FD,gold,stocks etc.
    if they dont invest in RE where can they invest and rather black money
    requires to be safegaurded not invested.
    and i have a thread the best place to park black money??
    if you can suggest anything safer than RE let me know,
    CommentQuote
  • You assumtion is wrong

    Gold + Locker should have been the first place for Black Money and not RE.

    RE is no more best bet for back money. Registrations are being tracked and source of income is accountable.
    CommentQuote
  • Opinion from a leading asset management leader.



    Note: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt Ltd and Quantum Asset Management Company Pvt Ltd.. Views expressed in this article are entirely those of the author and may not be regarded as views of the Quantum Mutual Fund or Quantum Asset Management Company Private Limited.
    Mutual Fund Investments are subject to market risks. Please read the offer documents of the respective schemes before making any investments.

    http://www.equitymaster.com/ht/detail.asp?date=2/14/2009&story=3

    The loan chela14 FEBRUARY 2009 PRINTER FRIENDLY | ARCHIVES | | RSS


    The real estate market is dead.
    People who need homes are not buying property because the buyers feel that the prices are too high.
    The developers are not selling any property because the sellers still want the prices they had predicted in their Excel sheets - vetted by the specialist property consultants (the equivalent of the rating agencies who approved junk mortgage bonds as "AAA").
    So there is a standstill.
    The buyer and the seller are like the two cowboys in a western film each with a gun in a holster. Poised to pull the trigger.
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    ---------------------------------------------
    All things equal, the buyer should be the winner. The sellers - the real estate developers - have debt on their balance sheets. They need to pay an interest on that debt. They are not selling any properties anymore. So how do they service that large debt? The obvious answer is that the developer must slash the prices of the property that he wishes to sell. To a price point where it will actually sell. Then the developer will get the cash to pay the interest on the loan and repay the loan.
    But there is nothing obvious about real estate.
    And there is nothing obvious about the real estate business in India.
    Particularly when this is election season. And real estate has a natural tendency and a perception to be linked to politics and political funding.
    Protecting profits
    There are probably tens of millions of square feet of property in various stages of readiness lying unsold and available across India.
    This is ironic because there are probably buyers for all that unsold property. Unlike the USA where most people already have a home, India is in a situation where people do not have homes - and there are homes lying unsold across the country.
    So there are buyers for property. But at a price that makes sense for the buyer. A price at which the buyer can afford the home. That price may be Rs 1,500 per square foot in "middle class areas" of cities like Nagpur or Rs. 2,000 per square foot in Pune, and Rs. 3,000 per square foot in northern Bombay.
    But those "willing-to-buy" prices may be pretty far away from the "wishing-to-sell" prices in the Excel sheets of the real estate developers.
    Left to the market, the prices would collapse - or the banks would take over the property as the real estate developers default on loans.
    Instead, we have a government that is keen on cutting rates of interest for home loans (a good idea for sure) but not forcing the developers to cut their prices! In fact, the actions of the government seem to suggest that they are willing to rescue the developers.
    So State Bank of India, a bank controlled by the government of India, announces that they wish to disburse Rs 1,500 crores of home loans at 8% every month for the next 3 months. (Note that, in a convenient coincidence, the elections will be over by then.) In a loan mela, you give away loans to people knowing you will never get the money back. In a loan chela, you follow a government directive even if economic sense tells you that you have the power the turn the terms of trade in favour of the buyer.
    With no price cuts and simulating an average price of Rs 3,000 per square foot for a 1,000 square foot apartment on which SBI gives a loan of 70% of the property value, we see that SBI can help the developers clear about 21 million square feet of stock. The buyer, borrowing an average Rs 21 lakhs for a 10 year period at 8%, has an EMI of Rs. 25,478.
    But, what if the developer was to blink and drop prices by, say, 30%? SBI’s Rs 1,500 crore per month will then help clear 32 million square feet of property (50% more) and the EMI of the individual will collapse by -33% to Rs 16,985 because the buyer now needs a smaller loan of Rs. 14 lakhs to buy that same 1,000 square foot home.
    Table 1: State Bank's loan chela No price cut With price cut price/sq foot (Rs) 3,000 2,000 area (sq feet) 1,000 1,000 total value (Rs) 3,000,000 2,000,000 loan facility 70% 70% loan given (Rs) 2,100,000 1,400,000 money to spend (Rs) 15,000,000,000 15,000,000,000 number of flats 7,143 10,714 total area sold (sq ft) 7,142,857 10,714,286 over 3 months (sq ft) 21,428,571 32,142,857 50.00% loan taken 2,100,000 1,400,000 interest rate 8% 8% Tenure 10 years 11 years EMI, for 120 months 25,478 16,985 -33.30%

    SBI wants to act as a catalyst. They want to help kick start the economy. That is great news. But what are they - or the governments in power - acting as a catalyst for? The protection of the wealth of the developers or the increase in the wealth of the individuals? A decline in property prices would be the way to kick-start the economy. The "saving" in EMI of Rs. 8,500 per month can be used to consume many other products. A decline in interest rates kicks the buyer and protects the developers.
    I like SBI and own the stock in client portfolios. But it would have been a better reflection of the times if there was a headline that screamed: SBI takes over projects from defaulted developers and sells them at 30% discount to recover its loans. Now that would be a more honest reflection of the state of the real estate market.
    Truthfully.


    CommentQuote
  • Originally Posted by smartboy
    Gold + Locker should have been the first place for Black Money and not RE.

    RE is no more best bet for back money. Registrations are being tracked and source of income is accountable.


    You are right on Gold + Bank Safety Lockers.

    RE - had been good investment if you are a Politician / Gunda /Political Gunda /Rich backed by Politicians or Gundas. Rere few would have realised the benefit. Or seeing the 'appreciation' they would have gone long on lands with debts and now in a position not to sell.

    Otherwise you 'can only see the appreciation' but not realise ... These politicians and Gundas will 'fix' the price for your land & force you to sell it.

    Its surprising to see people supporting black money and if they see some monetary gain they will also support corruption terrorrism barbarism.We are not far away to see those..
    CommentQuote
  • Posted by Mr sekard in Vikatan/Business Edition.

    "புக் செய்த ஐ.டி. துறையைச் சேர்ந்த சிலருக்கு இப்போது வேலை இழப்பு ஏற்பட்டிருக்கிறது. அப்படிப்பட்டவர்களுக்கு சம்பந்தப்பட்ட நிறுவனத்தின் மனிதவளத்துறையுடன் தொடர்பு கொண்டு உறுதிப்படுத்திக்கொண்டு, அட்வான்ஸைத் திரும்பக் கொடுக்கிறார்களாம்"

    'டி.எல்.எஃப். ஹோம்ஸ் டெவலப்பர்ஸ்' நிறுவனத்தின் தமிழகப் பிரிவு பொறுப்பாளர் கே.கே.ராமன்.

    The above statement by Mr.K.K.Raman,DLF Tamilnadu Director states that IT/ITES guys those lost the job are allowed to cancel their booking on confirmation from HR of the company concerned.

    With IT/ITES job losses and salary reduction , we can see more EMI Defaults and will see all the 'appreciation' will be going to Banks when they liquidate the property.When banks see the value of the 'property' going down the outstanding lent amount , banks will start faltering...
    CommentQuote
  • Originally Posted by abk
    chataara black money cannot be invested in anything traceable like
    FD,gold,stocks etc.
    if they dont invest in RE where can they invest and rather black money
    requires to be safegaurded not invested.
    and i have a thread the best place to park black money??
    if you can suggest anything safer than RE let me know,


    Dear friend,
    Black money is always there. you cannot argue that black money was at peak period of RE only.
    This means that before some 3 years there was no black money at all.
    What I mean is It is always prevailing in our society.
    Bribe and black money has become part and parcel of our society.
    99 percent of our government related work is executed with bribe money.
    If you dont give bribe you cannot complete any work.
    Right from birth and till your death bribe (black money) plays important role. Shame....
    So, this black money will not make great impact or difference in RE market.
    In fact during recession black money also will face slowdown.
    During next few years our government will collect lesser tax amount comparing to previous years.
    This means, lesser projects. And this means lesser income to politicians and government officials.

    Finally this will result in lesser black money.

    Thanks

    chataara
    CommentQuote
  • Originally Posted by sethugm
    You are right on Gold + Bank Safety Lockers.

    RE - had been good investment if you are a Politician / Gunda /Political Gunda /Rich backed by Politicians or Gundas. Rere few would have realised the benefit. Or seeing the 'appreciation' they would have gone long on lands with debts and now in a position not to sell.

    Otherwise you 'can only see the appreciation' but not realise ... These politicians and Gundas will 'fix' the price for your land & force you to sell it.

    Its surprising to see people supporting black money and if they see some monetary gain they will also support corruption terrorrism barbarism.We are not far away to see those..


    from your post i gather you dont understand black money
    Black money means money hidden from income tax .
    you seem to be unaware of the mechanism of RE

    black money is hidden in the diference of the market price and regd price.
    eg in many places the rate of an acre is 1c but the guideline value is only 3L so 97L can be stored safely as black money.whether regd are tracked or not the 97L is safe.even if it crashes by 20% it is ok.
    but in gold and FD if confisicated you may end up losing the whole and a penalty of the same amount i.e you lose 200%.
    Re further gives you power of attorney instrument whereby your transaction does not reflect even in the EC and on paper it is not a sale.
    try to understand the topic SETHUGM and SMARTBOY
    CommentQuote
  • Originally Posted by abk
    chataara black money cannot be invested in anything traceable like
    FD,gold,stocks etc.
    if they dont invest in RE where can they invest and rather black money
    requires to be safegaurded not invested.
    and i have a thread the best place to park black money??
    if you can suggest anything safer than RE let me know,


    Dear friend,

    Nothing is safer than RE for Black Money.
    But those really having large BM will not ask about parking the same with any one else and will do it very secretly.

    ks2071746
    CommentQuote
  • Originally Posted by chataara
    Dear friend,
    Black money is always there. you cannot argue that black money was at peak period of RE only.
    This means that before some 3 years there was no black money at all.
    What I mean is It is always prevailing in our society.
    Bribe and black money has become part and parcel of our society.
    99 percent of our government related work is executed with bribe money.
    If you dont give bribe you cannot complete any work.
    Right from birth and till your death bribe (black money) plays important role. Shame....
    So, this black money will not make great impact or difference in RE market.
    In fact during recession black money also will face slowdown.
    During next few years our government will collect lesser tax amount comparing to previous years.
    This means, lesser projects. And this means lesser income to politicians and government officials.

    Finally this will result in lesser black money.

    Thanks

    chataara

    current projection are increased spending by the GOVT i.e more proj more black money.
    you grossly underestimate black money. the amount actually spent by the govt is 25-40%
    of allocated money and 65-75% is filtered in all stages by the politicians and bureacrats
    CommentQuote
  • Originally Posted by abk
    current projection are increased spending by the GOVT i.e more proj more black money.
    you grossly underestimate black money. the amount actually spent by the govt is 25-40%
    of allocated money and 65-75% is filtered in all stages by the politicians and bureacrats


    Dear friend,

    You are not wrong. Over 50% goes to different people including the politicians/bureacrats/agents/brokers/middlemen etc. If such large chunk of BM ( Black Money ) is created on continuous basis, how do we expect in this country of ours, there will be crash in the RE prices like in USA or other countries?

    ks2071746
    CommentQuote
  • Originally Posted by ks2071746
    Dear friend,

    You are not wrong. Over 50% goes to different people including the politicians/bureacrats/agents/brokers/middlemen etc. If such large chunk of BM ( Black Money ) is created on continuous basis, how do we expect in this country of ours, there will be crash in the RE prices like in USA or other countries?

    ks2071746


    Dear friend

    We (general public) always play the role of mute spectators to this sorry state of affairs

    thanks

    chataara
    CommentQuote
  • Originally Posted by chataara
    Dear friend

    We (general public) always play the role of mute spectators to this sorry state of affairs

    thanks

    chataara

    what else can we do chataara?
    SEND PINK CHADDIS.
    CommentQuote
  • Originally Posted by abk
    what else can we do chataara?
    SEND PINK CHADDIS.


    Friend

    Whats special in pink chaddi. why not yellow or green

    thanks

    chataara
    CommentQuote
  • Originally Posted by chataara
    Dear friend

    We (general public) always play the role of mute spectators to this sorry state of affairs

    thanks

    chataara


    Dear friend,

    What else to do? We always have - fear mind- no one will support or go with us if we take the lead. If we take the first initiative, goondas will come to our house and ask how many people live there in the house? Of which how many are ladies? Tell your old guy to keep quiet-otherwise, he will have to face the consequences- let him not interfere in others activities and risk every thing he has etc.etc. Such things are better said than done in this country of ours.

    ks2071746
    CommentQuote
  • Black money will be generated only when business is there. If there is no business, no income and no need of evasion of income tax and hence no black money.

    So investment in RE will also come down
    CommentQuote