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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  • Bear Amusement

    Many of these bear writers might benefit from past experience. Around the place I live about 10+years ago a builder started a project. He got into trouble. Till today that property is standing uncompleted. No trace of builder! Just that some stray folks use that as their living space!
    That is what happens to these unbuilt properties of DLF and the one mentioned by the Delhi guy in that link by Nabhishek. In other words many builders will disappear and many projects will die.
    Does it mean the locality goes into trouble. NOT ONE BIT. All the other empty pieces of land in this locality are filled to the brim and not a piece is available. However this MOTTAI GOPURAM (incompleted castle!) is yet remaining as it is.
    Moral: Buy something you can possess. Dont buy fiction.
    Corollary: If you buy land, you atleast have it, if you buy a completed flat you certainly have it. If you buy a dream then you lose it once you wake up. All the OMR projects were dreams!
    Future:After a bust, land prices will actually soar since people will get something to hold. Completed flats will become premium properties. Incompleted flats will remain as is.
    Does this mean RE is not a good investment?
    Well Bears will continue with their old Kirukku argument. So I leave!
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  • This time I hope its for good, unlike last time 'crying wolf' :)

    Originally Posted by Natarajg007
    Many of these bear writers might benefit from past experience. Around the place I live about 10+years ago a builder started a project. He got into trouble. Till today that property is standing uncompleted. No trace of builder! Just that some stray folks use that as their living space!
    That is what happens to these unbuilt properties of DLF and the one mentioned by the Delhi guy in that link by Nabhishek. In other words many builders will disappear and many projects will die.
    Does it mean the locality goes into trouble. NOT ONE BIT. All the other empty pieces of land in this locality are filled to the brim and not a piece is available. However this MOTTAI GOPURAM (incompleted castle!) is yet remaining as it is.
    Moral: Buy something you can possess. Dont buy fiction.
    Corollary: If you buy land, you atleast have it, if you buy a completed flat you certainly have it. If you buy a dream then you lose it once you wake up. All the OMR projects were dreams!
    Future:After a bust, land prices will actually soar since people will get something to hold. Completed flats will become premium properties. Incompleted flats will remain as is.
    Does this mean RE is not a good investment?
    Well Bears will continue with their old Kirukku argument. So I leave!



    Not asking you to leave, Nats. After al, its everyone's forum. But I'm confused about this flip-flop behavior of yours. Leaving, not leaving.

    I recollect last time you did one sob story and said you were leaving for good. Only, it was a case of crying wolf as you were soon back with your "weekend banter" post, a slick way of returning without raising too much of dust!

    This time too, you are talking of leaving. Is it for good? :D

    Just asking!!! :D:D:D

    cheers
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  • Originally Posted by Natarajg007
    The first article in Hindu clearly shows what has happened and will happen in every boom bust scenario in RE in Chennai. During the bust the price of prime land remains static with lesser transactions and with some move upwards, the price of lands in outskirts becomes unsaleable. It will however boom in the next cycle to a level that will justify its purchase with a CAGR of 20%.
    Now flats are a different ball game and this time they have been bought by foolish folks with BORROWED MONEY. SO the second article is showing the story of one such fella. Well even those type of apartments dont seem to be falling in Bangalore or Chennai. Yet an Adarsh palace is being quoted at 1.4cr for a 1800sft 3bd apartment. Strange though are the ways of RE and the ways of the silly bears!


    More Than 50% Homes Built in Six Major Cities in 2007 Remain Unsold
    According to a leading real estate agency, more than half the houses built in six major cities over the last two years are lying unsold. Only 3.86 lakh homes out of the 8.21 lakh built in the last two years in the Mumbai Metropolitan Region (Mumbai, Thane and Navi Mumbai), National Capital Region (Delhi, Faridabad, Gurgaon, Noida, Greater Noida and Ghaziabad), Bangalore, Chennai, Hyderabad and Pune found buyers, says a report by the Mumbai-based Liases Foras. The agency surveyed 5,810 apartments in residential projects in these cities in December and January.
    20 March 2009 Indian Express
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  • Dear friends,

    Both wise & nats ( in fact there are 2 nats ) should remain in this forum and contribute.

    ks2071746
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  • Originally Posted by wiseman
    Not asking you to leave, Nats. After al, its everyone's forum. But I'm confused about this flip-flop behavior of yours. Leaving, not leaving.

    I recollect last time you did one sob story and said you were leaving for good. Only, it was a case of crying wolf as you were soon back with your "weekend banter" post, a slick way of returning without raising too much of dust!

    This time too, you are talking of leaving. Is it for good? :D

    Just asking!!! :D:D:D

    cheers


    Dear Wise

    I believe, you have to be prepared to get scolded by the great gentleman of this forum.

    Thanks

    chataara
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  • Originally Posted by chataara
    Dear Wise

    I believe, you have to be prepared to get scolded by the great gentleman of this forum.

    Thanks

    chataara


    Dear friend,

    I do not think any one of them is unprepared to face the other.

    ks2071746
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  • Originally Posted by ks2071746
    Dear friend,

    I do not think any one of them is unprepared to face the other.

    ks2071746



    Dear KS

    If the other person is counter arguing it is acceptable.

    But, the moment one finds something opposite and gets antagonised means... Its terrible.

    btw, I welcome wholesome arguments.

    Thanks

    chataara
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  • Dear friend,

    I look at the good or reasonable arguments, leaving aside any bad or irrelevant words ?

    ks2071746
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  • Originally Posted by ks2071746
    Dear friend,

    I look at the good or reasonable arguments, leaving aside any bad or irrelevant words ?

    ks2071746


    Dear KS

    You are like Saint. Only few people who are matured in thinking can behave like you.

    Ofcourse, I have to learn many thing from you. First of all, I should keep silent on seeing arrogant words.

    Thanks

    chataara
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  • Please don't misunderstand what I said :)

    Originally Posted by ks2071746
    Dear friend,

    I do not think any one of them is unprepared to face the other.

    ks2071746



    All you folks,

    If you see carefully, I only asked Nats the reason for this flip-flop. Go, No Go behavior.

    I also mentioned that this is everyone's form and am not actually asking him to leave.

    In fact, Nats and I are on the same side of the argument! We both want to sell our property. Only thing is, he says to the buyer, buy because prices are going to go up. While I say to the buyer, I'm selling because prices are going to go down!!! :D:D:D

    Got it? :D

    cheers
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  • Originally Posted by wiseman
    Not asking you to leave, Nats. After al, its everyone's forum. But I'm confused about this flip-flop behavior of yours. Leaving, not leaving.

    I recollect last time you did one sob story and said you were leaving for good. Only, it was a case of crying wolf as you were soon back with your "weekend banter" post, a slick way of returning without raising too much of dust!

    This time too, you are talking of leaving. Is it for good? :D

    Just asking!!! :D:D:D

    cheers

    It looks like you cant feel SECURE if I am writing here! You cant just boast nonsense and get away..right? Sorry Wisey, I will write when I want and when time permits, particularly during weekends. However I dont plan to write regularly. Obviously you are so pained to see me as you cant talk your bear crap continously!
    Finally you are no one to tell me what to do! High time you understand atleast something in life!
    PS. Calling oneself wise shows how debased the person is!
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  • Insecurity is YOUR middle name :)

    Originally Posted by Natarajg007
    It looks like you cant feel SECURE if I am writing here! You cant just boast nonsense and get away..right? Sorry Wisey, I will write when I want and when time permits, particularly during weekends. However I dont plan to write regularly. Obviously you are so pained to see me as you cant talk your bear crap continously!
    Finally you are no one to tell me what to do! High time you understand atleast something in life!
    PS. Calling oneself wise shows how debased the person is!



    Nats,

    I was not telling you what to do. I was merely asking you why you are not doing what you keep threatening to do? :D Maybe its like your behavior of promising to sell to the prospective buyers, only to turn around at the last minute and give some silly reason to back off. That, my friend is true insecurity! :o

    As you can see, there are many on this forum who have benefited from my "bear" talk. I do not see anyone yet who seems to have benefited from your "bull" crap!!! :D Can you point anyone who has bought on the basis of your advice and actually made some gains with prices going up?

    And with some benefit acruing to general public, don't you think I rightfully reserve the right to use the term "wise"? Though its you rather than I who seems to be needled by the term (as you know I never once took any credit for the word! :D)

    Ultimately, my "bear" crap (as you call it) seems to have had more value till date over your "bullcrap"! :D

    Its you who needs to feel insecure.

    cheers
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  • Get your theory right

    When I joined the board Nats was, to put it bluntly, abusive. He responded strongly to those who talked of

    even teddy bear :-) But I think he has changed a bit, mind you - just in tonality, but he is still a bull. A

    bull that is very hard to please.

    This board definitely do need a different angle to look at and Nats fits that bill nicely.

    In essence, both wiseman and nats could be wrong, just like how few investors are calling this market as

    "the sale of the century" and few believe we are heading towards depression. Most of the economists do say

    what they believe in, but they are wrong many times than right, let alone wiseman or nats.

    In my opinion, both wiseman and nats have got their theory right. But have you ?

    From what I glean at from this board, most here want to buy a flat (and very few are looking to buy land

    esp. near OMR). We all agree that flats in Chennai are overpriced and builders are ripping people off. Some

    builders are lucky to get away with it and some are in distress. A year ago, we all believed such sky high

    prices is real and few who bought in 2007 still defend paying upto Rs.5000 psqft (or may be more).

    What if the inflation is very high over the next few years and even Rs. 6000 psqft at OMR looks cheap ? For

    e.g., Rs. 20 lakshs for a 2 bed flat was costly for me at Doshi Gardens, Vadapalani in 2002, but is it now ?

    How do you know whether the RE market has bottomed out ? What is the bottom price ? The market participants

    in Chennai could have easily tripled over the past few years, because of the no. of jobs newly created. Over

    the next few years, more jobs could get created or re-located to OMR. The builders have better advisers than

    you. They will raise the price few months before the market starts picking up, i.e., before you realise

    there is an upswing. Expect the builders to change the price overnight. Yes it is their asset after all.

    Today, you think that many are worried about their jobs and not RE, mind you - not for all. Learn to look

    beneath the surface.

    It never pays to bet against the dollar (Warren Buffett) and in India never pays to bet against the RE.

    Bizzarre that I do not have any RE asset or (should I say, liability ?)

    Thanks,
    Salim.
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  • Good different perspective Salim.

    What you are saying is what we were and still are witnessing till today in RE.

    Prices dont come down at the same speed it went up, rather its not coming down at all at many places.

    There are many people who are still buying at the current rates and hoards of people just waiting for the expected 30% correction to plunge in.

    This sudden spurt in demand can once again make the builders raise the price every week.It sure is a possibility.

    This is what wiseman calls "squeeze and release" within bear period and nataraj calls the final bull run before bottoming out of RE.

    Sometimes I feel both are talking the same thing, the only difference that they are in different timeline.Wiseman feels that market has bottomed out and downslide has already began while Nataraj still believes that there is still one or two years for the bottom to appear.

    Both are right and wrong at the same time, but they are clear and convinced on what they believe.

    Its only the cat on the wall types who dont know whether and when to plunge or not to plunge, which is very risky.I urge them to take an informed decision.

    The current reality is market is holding up and stagnating with corrections in speculative areas.Trend will be clear in 3-6 months and by year end we will know what we are facing.

    If we see what has changed within the last three four years is the market sentiment.No one buys the story that RE will keep rising forever.Gone are the days when people used to buy a flat within the city on loan, two three plots in the outskirts hoping that it will become crores worth each in five years and they can repay their loan by selling one of them and buy another flat within the city with the other land.

    The risk taking capacity has diminished and so is the affordability.

    Many realize that things are not rosy as pictured by the government,economist,banks.builders etc as earlier.

    Today jobs are not being created but are getting vanished.Lot of the new development that happened was globalization effect.

    When RE price will rise again it will happen only because of genuine demand and not because of easy money and mad rush.

    If people want to move near to their workplace, they would first evaluate renting than going and buying straightaway.

    There is report that 53% of residential space built since 2007 is lying vacant in the metros.Most of them are in these suburbs.So, there is still oversupply and scope and possibility for correction.
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  • Interesting possibilities ...

    Originally Posted by nabishek
    Good different perspective Salim.

    What you are saying is what we were and still are witnessing till today in RE.

    There is report that 53% of residential space built since 2007 is lying vacant in the metros.Most of them are in these suburbs.So, there is still oversupply and scope and possibility for correction.



    Abishek,

    I agree with you that prices are down in some places and some places have held on. But volumes are drastically off in all places, don't you agree?

    So, it is easy to get carried away with a short bullish period and assume that the bottom is over and the market will boom again.

    But how do you explain this one?

    Around 53% of residential space is lying vacant in major metros. If this volume of RE was not able to be absorbed when markets were booming and credit was easy to get,

    1. How long do you think it will take for this volume to be absorbed at a current volume of say 10% to 20% of peak year volumes? Will it take 5 years? More?

    2. During this stage of inventory selloff, do you agree that the RE industry is in a Catch 22 situation that volumes are tied to prices and higher volumes will come only at lower prices, so, either prices fall and volumes pick up to reduce inventory OR prices stagnate making the inventory closeout phase much longer (many years).

    2. Under these circumstances, what do builders do to keep business ticking? Remember, they have huge inventories riding on huge debt positions. So, if they drop prices to clear inventories, they will take big hits in revenues and profits and make losses for some years. If they hold on to prices, they will suffer in terms of interest on debt ripping off big chunks from their revenues and profits.

    And of course, in all this, they cannot build much more, since this will increase supply and make things messier.

    In conclusion, if this stagnation (and stagnation is a downturn in real sense if you incorporate time value of money - inflation) is to end quickly, prices must be brought down significantly (note another post where, when a builder launched at much lower prices there was a surge in interest). Or if prices remain stagnant or come down slowly, the recovery will last much longer.

    An all this is assuming Credit situation becomes like in 2007, which, under present conditions of Fiscal Deficit and stagnating incomes, seem quite unlikely!

    Catch22!!!:D

    cheers
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