Hi Friends,

I had been to the FAIRPRO '09 Fair.My Impression after seeing, is that prices are stagnating for all ongoing projects and builders are trying hard to hold them up.

Prices are 10-20% lower for new projects in the pipeline and for ready to occupy flats.

The discount offered at the stall was very less and were in the range 150-500 Rs/sqft max.

For the benefit of fellow members I am posting the project/price details of some of the properties.



Akshaya Foundations

Adora - OMR - 3750/sqft
Aikya - Adyar - 12500/sqft

Alliance Group - Orchid Springs - 3199/sqft

Arihant Foundations

Heirloom - Thalumbur - 2499/sqft
Escapade - Thoraipakkam - 4150/sqft
Villa Viviana - Maramalai nagar - starting from 1 Crore

Asvini Foundations

Amarisa-phase1 - Ramapuram - 4500/sqft
Amarisa-phase2 - Ramapuram - 4250/sqft
Akshita - Madipakkam - 3800/sqft

Casa Grande

Riveira - Palikkarnai - 3450/sqft - before discount 3600/sqft
Silver Oak - Perungudi - 4300/sqft - before discount 4500/sqft
Madhuban - Madipakkam - 3300 /sqft - before discount 3500/sqft
Mylapore - R.K.salai - 12500/sqft
Plots
Ponmar -785/sqft - before discount 825/sqft
Maraimalainagar - 790/sqft - before discount 825/sqft

CeeDeeyes - Chenni Pattinam

Basic Rate - 1600/sqft All Inclusive - 2075/sqft

Chaitanya shanthiniketan

Sunnyvale - Ayanavaram - 4850/sqft
Serena - Rajkilpakkam - 2550/sqft
Gardenia - OMR - 1900/sqft
Green Park - Chitlapakkam - 3300/sqft

DLF

Gardencity - 3200/sqft - was told slash in prices expected in coming weeks.

Doshi Housing

Etopia I and II - Perungudi - 3895/sqft
Nakshatra - Tambaram - 2995/sqft - Completion May 2010
Tranquil - Velachery - 5500/sqft - Completion February 2010
Trinity park - Santhoshpuram,Vengaivasal - 3195/sqft - Completion April 2009
Serene Couny-Villas - Santhoshpuram,Vengaivasal - 2200,2600/sqft
LlanStephan - Chetpet - 9000/sqft - Completion May 2009
Sri Mahalakshmi - Ayanavaram - 4495/sqft - Ready to Occupy

ETA

Rosedale - OMR - 3100/sqft
Le Chalet - Villas - Sriperambudhur - 26 Lakhs - 37 Lakhs

Hiranandani Upscale - 4200/sqft

Hiranandani Palace Gardens - 3475/sqft

Indus Housing

anantya - Navalur,OMR - 2299/sqft + 400(other charges)
riviera villa - Navalur,OMR - 90 Lakhs onwards
habittera - urapakkam,GST - 2399/sqft + 400(other charges)
amber - Saidapet - 4750/sqft

Jain Housing

Ankush Prakas - Kilpauk - 7500/sqft - Ready to occupy
Amrit Kailash - Strahns Road - 4500/sqft - Ready to occupy
La Gardenia - Nungabakkam - 7500/sqft - Ready to occupy
Ansruta - Valluvarkottam, nungabakkam - 10000/sqft - Ready to occupy
Antariska - Kodambakkam - 4500/sqft - Ready to occupy
Eiffel Garden - Vadapalani - 4250/sqft - Ready to occupy
Saagarika - M.R.C Nagar, sea facing - 10000/12500 - Ready to occupy
Green acres - Pallavaram - 3900/sqft - Ready to occupy
Abhishek - Selaiyur - 3500/sqft - Ready to occupy.

Jamals

Orchid - Palikkarnai - 3500/sqft
Palazzo - keelkattalai - 3700/sqft
Grandeur - Velappanchavadi(near saveetha dental college) - 3200/sqft

KGEYES

3 Projects on L.B.Road, Thiruvanmiyur - 6650/sqft
Delmare - Beach road,Thiruvanmiyur - 7000/sqft
Carolina - Velachery,Taramani - 4500/sqft
Swathi - Sastri Nagar,Adyar - 8500/sqft
Kalakshetra - 8000/sqft

Landmark Constructions

Tiara - Perungudi - 4000/sqft - Completion on August 2009
Aston Ville - Vadapalani - 5500 sqft - Completion on July 2009
Tudors Place - K.K.Nagar - 6500/sqft
The Address - Adyar - 11500/sqft
The Grange - Palavakkam - 7500/sqft
Cenralia - Chrompet - 2950/sqft - prelaunch
Gem Towers - AnnaNagar - To be launched.
Mahalakshmi Heights - Ashok Nagar - To be launched

L&T Estancia
Construction in Progress
1st-3rd Floor - 3950/sqft
4th -12 floor - floor rise charge of 20/sqft for each floor
13th - 17th - 4450/qft

L&T Eden Park - 3600/sqft

Mantri Synergy - OMR
2800/sqft - with 20/floor rise
Special offer - First Floor - all inclusive
1140 sqft - 33,67,000
870 sqft - 28,50,000

Navin Housing

Dayton Heights - Nelson Manickam road - 6500/sqft + 30/sqft floor rise from 2nd floor
Subha Mangala - Ramapuram - 4200/sqft
Brookfield - Nanmangalam - 3500/sqft
Merrylands - Medavakkam - 3500/sqft

Olympia Opaline - 3441/sqft - spl budget flats available

PACE Builders

Anna nagar west - 4195/sqft - before discount 4495/sqft
Selaiyur - 3195/sqft - before discount 3495/sqft
Valasarvakkam - 2795/sqft - before discount 3295/sqft

PS Srijan

The Grand - Velachery - 5250 sqft - before discount 5500/sqft - Floor Rise applicable from 4th floor

Rajparis

Harmony - Medavakkam - 3100/sqft

Rajarathnam Constructions

RC Prince Gardenia - Perambur redhill road,Kolathur - 3600/sqft

Rajkham

Independant houses - Ayyapathangal - 2600/sqft

Real Value

Sai Skanda - Velachery - 4200/sqft
Sai Surya - Palikaranai - 3800/sqft
OMR opp SIPCOT - 13.20 Lakhs onwards

Shriram Properties

Trishakti - SIPCOT - 2750/sqft
Shankari - 1990/sqft

Sidharth foundations

Tulip - k.k.nagar west - 4800/sqft - completion march 2009
Natura - medavakkam - 3100 /sqft - completion july 2009
Visvaleela - Annanagar - 8500 /sqft - to be launched
Dakshin - Urapakkam - price TBD - to be launched
upcoming projects in porur, thoraipakkam, rajkeelpakkam, mogappair.

SIS

Safaa - Urappakam - 3150/sqft

SSPDL

Crescent - Kelambakkam - Vandalur Road - 2500/sqft
Upcoming 2 villa project one in OMR and one in Sriperambathur.

Sumanth & Co

Thiruvanmiyur - 6000/sqft
Besant Nagar - 11500/sqft

TVH

Lumbini square - Pursaiwalkam - 5500/sqft + 30/sqft floor rise from 5th floor
Ouranya Bay(Premium) - OMR,Padur - 3100,3200 + 25/sqft floor rise from 5th floor
Ouranya Bay(Budget) - 2bhk - 20 Lakhs
3bhk - 30 Lakhs
Ekanta - Coimbatore - 3100/sqft
Revata - Mogappair east - 4500/sqft
Kamya - K.K,Nagar - 7000/sqft
Metro Golden Nest - Sriperambathur - 1bhk - 15 Lakhs
2bhk - 22 Lakhs
3bhk - 28 Lakhs

VGN Group

Minerva - Mogappair,Nolumbur - 2975/sqft
3 in 1, 4 in 1 - 3800/sqft
Mahalakshmi Nagar,Thiruverkadu - 3500/sqft
Plots
Mugalivakkam - 52 Lakhs/grnd
Selaiyur - 50 Lakhs/grnd
SPKoil - 34 Lakhs/grnd
Katankulathur - 22-27 Lakhs/grnd

Yuga Homes

Shem Park - chemmenachery - 3300/sqft
Upcoming in Koyambedu, R.A.Puram(8000/sqft)



There are lots of properties and also lots of potential buyers.There is sure a sense of uncertainity among the builders and also the buyers on when to make the next move.It was evident that correction in RE prices have started to happen.

Requesting members to respond with their thoughts on the current trend.
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  • Originally Posted by subramania
    waiting to :D:D:D
    got the answer

    also explain the tier 1 tier 2 tier 3.....

    every area gets upgraded in mean coarse of time.

    velachery and guindy too tier 3 before some years.

    dont just oppose city hunters work

    its too good according to him and many other who had given likes


    Just think RE as a commodity and remember "All that goes up has to come down". Things are going up by mere hype and correction is not far off. When is an question mark?

    Also housing market in western countries where base rate are near zero is struggling to maintain it's growth think about the base rates we are paying. I am still surprised we came this far as prices are not tallying with fundamentals.

    If someone is taking history as a benchmark for future appreciation then think twice going forward is my caution.
    CommentQuote
  • If someone is taking history as a benchmark for future appreciation then think twice going forward is my caution.


    Historically, RE appreciation in the developed markets such as US is expected to maintain inflation at the best. This is from 112 year housing index history from Robert Shiller. Data may be far from perfect, as Shiller himself confides. But, the trend and the direction is something most come to agree on.

    Closest equivalent to developed markets is well-developed areas in India. One may argue that our growth is much better - true, but our inflation is no less, it is at least 2-2.5 times that of US. But, then why doesn't it reflect in proportionate rise in rentals - that is a true reflection of growth and overall lifestyle improvement. How can a 2500 psft Apt in Alwarpet in 2000 goes to 20000 psft in 2013 where the rentals are not up more than 400-500% during similar duration? Working backwards, one may say land cost has shot up and hence these prices. Land cost is not going to come down. True. For it to sustain, it has to make sense from top-down.

    100 year Housing Index from US

    "You might be more interested to know that the average annual home price increase for the U.S. during the whole 1900 - 2012 period was only 3.1%/year -- just a shade better than the inflation rate of 3.0%/year."

    Longer term, RE as an asset will toe the line of how it performs globally. It is very clear that our RE is being hoarded as there are no invest-able assets in the country. Technically speaking, our core developed CBDs cannot rise faster than inflation over time but suburbs can, as it becomes developed - such transitions are not without precedence and more logical to boot. Due to lack of initiatives from Govt on infrastructure, people hoard even more on those with infrastructure leading to price bubble.
    CommentQuote
    1 Comments
    • RE King10 months ago
      Hmm, one who does not understand Chennai RE now dragging US figures. Brilliant! Do we see Beggars in the traffic junctions in the US! Just curious?
  • Mav, I agree with most of what you say. However CBD has a limited suppy, but the demand is growing(more people are able to afford more so today than say 10-20 years before). I'm just making a guess here on affordability. But purchasing power of many residents have increased thru overseas earnings and investments from NRIs. Purchasing power is increasing across many sections of the society but land area is not. I suspect along with black money, money earned abroad(NRIs or residents) is a big factor and will continue to be more so in future. US has a huge supply (of land) and good infra, so there is really no need to get hungup on a specific location unlike in Chennai. Also the rate of growth of incomes in India is more than that of US (of course inflation plays a big role too).
    This may continue to keep the prices in the upward direction. Just my 2c.
    CommentQuote
  • But purchasing power of many residents have increased thru overseas earnings and investments from NRIs. Purchasing power is increasing across many sections of the society but land area is not. I suspect along with black money, money earned abroad(NRIs or residents) is a big factor and will continue to be more so in future.


    I do get the rationale on why prices keep going up in CBD. But, the point is, you are overpaying for the asset because of the above factors. Are you paying the fair price for the asset is the question? Demand/supply based asset price support is unsustainable. All of your reasons in your post is predicated on demand/money power chasing those assets - they are not the only drivers for asset prices. If people can throw that kind of mind in buying an asset - why are they not throwing it on rentals in the same area? Rental yield tell a different story. If land availability is scarce, people should pay more for usage, right?

    Above is very analogous to how IPO shares with limited float are traded post listing. Moon is the limit and every incremental news with limited supply will have magnifying effect. When more supply comes in, say after 6 mos, it falls. Why?
    CommentQuote
  • Originally Posted by randomguy
    Purchasing power is increasing across many sections of the society but land area is not. I suspect along with black money, money earned abroad(NRIs or residents) is a big factor and will continue to be more so in future.


    you touched two real facts.. black money and NRI money only these stuffs played a major role in real estate hike.the average pay hike of a resident is good but again was eaten away by rise in inflation..

    ok here is another fact, assume an US NRI investing in india for 5 years, let us assume that he invested exactly 5 years back when INR was trading at 40 per dollor. in a 2000 psft(i.e $50 psqft) apartment, now the rate has doubled, say it is 4000 psft now

    when he wants to realise his profit now INR is trading at 64.. so 4000 is $ 62.5 psqft.

    let us assume he has paid an interest of 7% pa..which is 3.5 $ per year and for 5 years it is 17.5 $..so now reduce this interest to calculate actual return 62.5-17.5= $ 45.

    so investing 50$ he got 45$ after 5 years realising a loss. so even if the rates are more than doubled, the returns are no attarctive for an NRI.. so whats happening now, all the money invested is going back..

    my conclusion is a wise NRI wouldnt expect the property prices will triple in 5 years from now..so he woudnt invest with risks on Rs. vs $.

    so NRI money will not help the indian properties rise anymore..

    now it is only black money.. i dont have any idea on this.. what i see is 2G, 3G thank god 4G is not in india yet,CG-coal gate..etc etc i dont think it will stop even if govt changes..but i guess black money will eventually find its way to swiss as investing in india would be a risk when govt changes.

    with lack of infrastructure and poor economic conditions do anyone think the property prices will double in india in next 5 years? if so please explain i would like to understand.
    CommentQuote
  • One way to pop the bubble is increase in property taxes. In developed countries like US, UK, etc, property tax is 2-5% of the market value per year. Once they start levying it, it will automatically correct. Another one is a vacant land tax, might not be easy to implement.

    We might already be seeing some type of correction. Biggest impact.
    The overbuilding in the suburbs is keeping the supply wide open and thus been able to meet the demand.
    Keeping a flat locked is a waste of money, so owner has to rent bringing rentals down.
    Rental market is not going up because of this. Many flats few renters.
    So rental market is undervalued and skewed, not necessarily a bad thing. It might appear that there is an imbalance.
    As long as the supply exist I do not think there is a big issue for property prices.
    Once the supply gets over, prices will shoot up.

    In my view, govt should always make sure builders get land for development.
    Competition and supply should help prices in check. Whenever there is opportunity they should acquire vacant land, auction it off to builders putting condition that they have to build immediately.

    I do not think we are in a big bubble.
    Prices are bit high but not crazy high. It is still affordable.

    Supply is the key.
    Plentiful housing for buyers who can afford and cheap housing for renters who cannot afford.

    Now that is hitting two mangoes with one stone.
    CommentQuote
  • http://matrix.millersamuel.com/wp-content/uploads/2012/01/Miller100yearsNYre.jpg
    Originally Posted by maverick007
    Historically, RE appreciation in the developed markets such as US is expected to maintain inflation at the best. This is from 112 year housing index history from Robert Shiller. Data may be far from perfect, as Shiller himself confides. But, the trend and the direction is something most come to agree on.

    Closest equivalent to developed markets is well-developed areas in India. One may argue that our growth is much better - true, but our inflation is no less, it is at least 2-2.5 times that of US. But, then why doesn't it reflect in proportionate rise in rentals - that is a true reflection of growth and overall lifestyle improvement. How can a 2500 psft Apt in Alwarpet in 2000 goes to 20000 psft in 2013 where the rentals are not up more than 400-500% during similar duration? Working backwards, one may say land cost has shot up and hence these prices. Land cost is not going to come down. True. For it to sustain, it has to make sense from top-down.

    "You might be more interested to know that the average annual home price increase for the U.S. during the whole 1900 - 2012 period was only 3.1%/year -- just a shade better than the inflation rate of 3.0%/year."

    Longer term, RE as an asset will toe the line of how it performs globally. It is very clear that our RE is being hoarded as there are no invest-able assets in the country. Technically speaking, our core developed CBDs cannot rise faster than inflation over time but suburbs can, as it becomes developed - such transitions are not without precedence and more logical to boot. Due to lack of initiatives from Govt on infrastructure, people hoard even more on those with infrastructure leading to price bubble.


    Mav,

    I was just cautioning on the timing of investment. It is more important for someone as I agree RE is expected to go grow and may beat inflation.

    Below is the 100 years history of NY city. Rental yield falling down with appreciation. I know we are not in the same scenario like the 20's mentioned in chart.



    But as I mentioned IMO the fundamentals are not really kept to the extent of price appreciation and if we take the period of stagnation/correction it is pretty huge in above case and not worth locking the investment.

    It is better to be cautious was my note.
    CommentQuote
  • But as I mentioned IMO the fundamentals are not really kept to the extent of price appreciation


    What are those fundamentals in your view and how?
    CommentQuote
  • Originally Posted by subramania


    also explain the tier 1 tier 2 tier 3.....

    every area gets upgraded in mean coarse of time.

    velachery and guindy too tier 3 before some years.

    dont just oppose city hunters work

    its too good according to him and many other who had given likes



    i am :D:D:D:D:D as expected.

    just look at the crap list of reasons for a property to be quoted 1.5 crores per ground.

    the reasons u have quoted r there in every city and every village in the nook and corner of our country. does it mean that they can be quoted 1.5cr per ground ?
    its absolutely ridiculous or shameless to give reasons for such skewed valuations.
    hope u r not a RE broker having huge unsold land banks in south chennai.

    u have not given any of the areas specific reasons.

    who is opposing city hunter's analysis. just that many areas have been overvalued is being highlighted.
    CommentQuote
  • Originally Posted by maverick007
    I do get the rationale on why prices keep going up in CBD. But, the point is, you are overpaying for the asset because of the above factors. Are you paying the fair price for the asset is the question? Demand/supply based asset price support is unsustainable. All of your reasons in your post is predicated on demand/money power chasing those assets - they are not the only drivers for asset prices. If people can throw that kind of mind in buying an asset - why are they not throwing it on rentals in the same area? Rental yield tell a different story. If land availability is scarce, people should pay more for usage, right?

    Above is very analogous to how IPO shares with limited float are traded post listing. Moon is the limit and every incremental news with limited supply will have magnifying effect. When more supply comes in, say after 6 mos, it falls. Why?


    Agreed. Definitely rents not rising in proportion to the asset value is a real concern. However if bubble was indeed looming, the gap should have closed a long time back as historically rental yield has always been lower.
    CommentQuote
  • Originally Posted by randomguy
    Agreed. Definitely rents not rising in proportion to the asset value is a real concern. However if bubble was indeed looming, the gap should have closed a long time back as historically rental yield has always been lower.



    Look at my earlier post.

    Rentals have not kept up because of very high supply in the lower end of the market.
    Too many starter flats from 20-25L onwards. Renters with money are buying flats.

    Only low end blue collar renters are there.
    Anyone who can afford a 15K is buying a flat and moving in.

    Rental market is very undervalued.
    It could be rightly valued too - We don't know yet.

    All I am saying is rental market has changed with supply coming in.
    I think it will be the new normal.
    CommentQuote
  • Originally Posted by iceemani
    you touched two real facts.. black money and NRI money only these stuffs played a major role in real estate hike.the average pay hike of a resident is good but again was eaten away by rise in inflation..

    ok here is another fact, assume an US NRI investing in india for 5 years, let us assume that he invested exactly 5 years back when INR was trading at 40 per dollor. in a 2000 psft(i.e $50 psqft) apartment, now the rate has doubled, say it is 4000 psft now

    when he wants to realise his profit now INR is trading at 64.. so 4000 is $ 62.5 psqft.

    let us assume he has paid an interest of 7% pa..which is 3.5 $ per year and for 5 years it is 17.5 $..so now reduce this interest to calculate actual return 62.5-17.5= $ 45.

    so investing 50$ he got 45$ after 5 years realising a loss. so even if the rates are more than doubled, the returns are no attarctive for an NRI.. so whats happening now, all the money invested is going back..

    my conclusion is a wise NRI wouldnt expect the property prices will triple in 5 years from now..so he woudnt invest with risks on Rs. vs $.

    so NRI money will not help the indian properties rise anymore..


    I see what you mean. I do share a similar concern. But you can't always look at this way, since you have picked a wrong time where Re is at its lowest. What if the NRI has realized the sale last year when exchange rate was in low 50s or 2 years back when it was close to 45. Also the rupee depreciation will only help the NRI with the loan interests. Also property doubling in the last 5 years is modest. An average area should have appreciated more than that.



    now it is only black money.. i dont have any idea on this.. what i see is 2G, 3G thank god 4G is not in india yet,CG-coal gate..etc etc i dont think it will stop even if govt changes..but i guess black money will eventually find its way to swiss as investing in india would be a risk when govt changes.

    with lack of infrastructure and poor economic conditions do anyone think the property prices will double in india in next 5 years? if so please explain i would like to understand.


    Lack of infrastructure will actually cause property price to rise within the city, right? This is turn would allow suburbs to expand and cause a rise there too.
    CommentQuote
  • Originally Posted by maverick007
    What are those fundamentals in your view and how?



    Where are jobs?. People who were recruited in campus last year are still joining in batches and those who are in bench for more than a year are laid off. Automobile most contract workers are asked to go and even few full time position is slashed.

    Current year campus went off in very bad state with very few offered job. Where will they turn up to after college?

    There is huge disparity in income among people. The RE is getting unaffordable day by day even for upper middle class as well. Combine with job losses and fear of loan default. Things are getting costlier for some but for many it is unimaginable rather to say unaffordable.

    Salary rise not keeping up with inflation. Variable income or performance (Company not individual) bonus near zero or less than 50%. These form 30% of salary in many cases.

    Delay delay delay in RE. Think of people who have leveraged heavily thinking of a place to stay.

    Infrastructure. Is it happening at all or is it just a matter of delay?
    CommentQuote
  • Originally Posted by randomguy
    Agreed. Definitely rents not rising in proportion to the asset value is a real concern. However if bubble was indeed looming, the gap should have closed a long time back as historically rental yield has always been lower.


    Last 12 years have seen an unusually low interest rate around the world - our RE is one of the beneficiary as well. Not just India - the entire emerging market got flooded with cheap money unmindful of the risk because it was yielding nothing in the developed world. 50k Rs EMI bought 50L of asset and buyers did not care about the asset value and only cared about the EMI. Same EMI in mid 90's could have bought only 35L of asset. That could change - anything unusual needs to come to the normal. Look at how the rest of the world is catching cold just for 'tapering' and imagine when it gets to the old normal.
    CommentQuote
  • Originally Posted by srivat
    Where are jobs?. People who were recruited in campus last year are still joining in batches and those who are in bench for more than a year are laid off. Automobile most contract workers are asked to go and even few full time position is slashed.

    Current year campus went off in very bad state with very few offered job. Where will they turn up to after college?

    There is huge disparity in income among people. The RE is getting unaffordable day by day even for upper middle class as well. Combine with job losses and fear of loan default. Things are getting costlier for some but for many it is unimaginable rather to say unaffordable.

    Salary rise not keeping up with inflation. Variable income or performance (Company not individual) bonus near zero or less than 50%. These form 30% of salary in many cases.

    Delay delay delay in RE. Think of people who have leveraged heavily thinking of a place to stay.

    Infrastructure. Is it happening at all or is it just a matter of delay?

    i have quoted many times RE wont get drained becoz of job

    people would minimize their purchase level.

    so movement of reasonable areas...so called suburbs would see lot of activity...

    and this too would become a so called CBD in years coming.

    more over yearly 1.5 lakhs BE are graduating.

    even if they like or not they have no other choice other than chennai in near future for tn people.
    CommentQuote