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Property Price Trends in Chennai

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Property Price Trends in Chennai

Last updated: May 20 2021
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  • Re : Property Price Trends in Chennai

    A big debt is going to be a big burden

    Originally posted by sunr2i View Post
    Hyperinflation scenario is real and its impact on RE is inevitable. Lot of smart folks comparing rental yield and other factors to un justify the price. Though they are right in their opinion, they don't get that there are unprecedented level of money printing going on by various govt. Having a hugh population, the govt having a nightmare of maintaining robust job growth and economy. The direction would be more reforms and mainly attracting foreign money with the hope of eventually attracting domestic money to sustain. One has to be realistic when comes to price and get into the deal with the balanced mind.
    We see banks constantly telling us to go in for long term deposits to "lock in" high interest rates. Who are they trying to fool?

    A banker knows about as much as you or me where interest rates are going to be 2 years from now. As you have correctly put we are already running unsustainable deficits on both accounts and the Govt seems to have no room to cut spending (just like other Govts all over the world). The entire world (but for a few pockets here and there) seems to have become permanent debt junkies and the threat of serious withdrawal symptoms only keeps them taking more and more of the opium of debt and going beyond the point of no return.

    The additional problem is permanent resource scarcity as we go along. An interesting piece by Jeremy Grantham postulates that there are already too many humans on earth to be sustainable. The only reason Malthus was wrong so far was the power of technology to dig out more resources and enable an excessive human population to survive till now. Soon, unless we find other ways to continue to supply our population with food, water and other esentials, there will be global conflict for depleting resources and many millions will die due to various reasons.

    Inflation will start rising up in the foreseeable future (except for periods when global economic activity temporarily slows down in recession/depression).

    Big debt now or in the future is going to be increasingly hard to repay and rising inflation may make it even harder. The only saving grace could be the increasing price of the asset (RE), which could prevent you from going bankrupt.

    The race then (once you have created the high-debt situation) is whether your surplus generation capacity (increasing savings - not salary - which is going to be hit by increasing inflation not to mention taxes as Govt is not going to be able to increase resource generation any other way, as you can see in the US right now) is able to close out the debt ot will it grow big to close you out!

    The risk occurs when prices of RE temporarily declines and simultaneously one is hit with a reduction or stoppage of income for a length of time. Always better to keep debt low (or zero) and only buy with surplus money in pocket.

    My current aim is to only spend the proceeds of my investments, just like it pays to only eat the fruit of the tree rather than the tree itself, since, then you have to start all over again planting another tree (and trying to get a tree up successfully in this increasingly competitie world is so much more difficult and uncertain)!

    cheers
    Last edited December 9 2012, 06:25 AM.

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    • Re : Property Price Trends in Chennai

      Wiseji,

      Can you please say what is your stand these days in "3 to 5 Lines"

      Some of us will be confused with Cat, Tiger, Tree, Fruit, Global Conflict, Million's dead etc etc.

      Comment


      • Re : Property Price Trends in Chennai

        Originally posted by Economist View Post
        Wiseji,

        Some of us will be confused with Cat, Tiger, Tree, Fruit, Global Conflict, Million's dead etc etc.
        Are you trying to scuttle the very idea :-)

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        • Re : Property Price Trends in Chennai

          If you take a closer look at balance sheet of every public sector banks you could notice how much cash infused in by govt in last 5 yrs. This has been norm to keep NPA lower %. This is just one among the causes of India inflation issue. Major factor comes from supply side constraints that have been fueling the inflation and historically speaking India as in other Asia countries always encourage moderate inflation to sustain growth. Precious metals offer liquidity but it comes with security issues. If you want to keep them in ETF not there are choices for all types metals. Holding basket of other currencies provide protection to some extent but one should be very diligent in selecting the currencies and market timing. In general if you have primary home then you can think of investing surplus in other asset classes to hedge. But doing the same with out primary home would jeopardize the long term wealth.

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          • Re : Property Price Trends in Chennai

            Next time I'll be smart for a change!

            Originally posted by Economist View Post
            Wiseji,

            Can you please say what is your stand these days in "3 to 5 Lines"

            Some of us will be confused with Cat, Tiger, Tree, Fruit, Global Conflict, Million's dead etc etc.
            You are asking to be economical with my words (true to your name on this forum!

            Next time the earlier post would read as ...

            Banker, inflation ... angry [cat, tiger] ... tree ... fruit ...conflict ... 12-21-12 EOW!

            and leave the rest to reader's imagination!!!

            cheers

            Comment


            • Re : Property Price Trends in Chennai

              Prices have stabilized in the last 5 months. I have not seen much movement in the apt prices in the city. It might be the same in most suburbs too or even a slight decline in some projects.
              High pricing itself will be a deterrent to sales.
              Higher interest rates would also reduce returns, biggest impact would be on plots.

              Only reason I can think of is because elections are coming and there are some big wigs liquidating or atleast stopped buying. By Feb-April I think there might be good deals coming around.
              Last edited December 23 2012, 01:28 PM.

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              • Re : Property Price Trends in Chennai

                True. In Tulip Horizon, saligramam case, they jacked the price from 6500/sq.ft to 7200/sq.ft in one go because they had good sales initially. Now they unable to sell any units and running behind every potential customer.

                Originally posted by k11 View Post
                Prices have stabilized in the last 5 months. I have not seen much movement in the apt prices in the city. It might be the same in most suburbs too or even a slight decline in some projects.
                High pricing itself will be a deterrent to sales.
                Higher interest rates would also reduce returns, biggest impact would be on plots.

                Only reason I can think of is because elections are coming and there are some big wigs liquidating or atleast stopped buying. By Feb-April I think there might be good deals coming around.

                Comment


                • Re : Property Price Trends in Chennai

                  new apt cost now 20k/sq.ft in alwarpet non posh area. Old apt quoted 15k.
                  six months back it was 18k and 13k respectively. So much stability!


                  Originally posted by k11 View Post
                  Prices have stabilized in the last 5 months. I have not seen much movement in the apt prices in the city. It might be the same in most suburbs too or even a slight decline in some projects.
                  High pricing itself will be a deterrent to sales.
                  Higher interest rates would also reduce returns, biggest impact would be on plots.

                  Only reason I can think of is because elections are coming and there are some big wigs liquidating or atleast stopped buying. By Feb-April I think there might be good deals coming around.

                  Comment


                  • Re : Property Price Trends in Chennai

                    Originally posted by k11 View Post
                    Prices have stabilized in the last 5 months. I have not seen much movement in the apt prices in the city. It might be the same in most suburbs too or even a slight decline in some projects.
                    High pricing itself will be a deterrent to sales.
                    Higher interest rates would also reduce returns, biggest impact would be on plots.

                    Only reason I can think of is because elections are coming and there are some big wigs liquidating or atleast stopped buying. By Feb-April I think there might be good deals coming around.
                    Cartelling and price fixing you mean....

                    These builders / promoters never price their projects to their actual worth but to the potential of their brand value and to the abilities of their marketing personnel

                    Comment


                    • Re : Property Price Trends in Chennai

                      Thanks for many wise contributions from everyone.

                      Am looking at buying a 2 BHK flat (Apprx between 1280 sq.ft and 1330 sq.ft) in OMR. After looking at some projects, i liked "The Village" (Kalavakkam) by Phoneix and Hodu. Apprx price comes at 56L (Excluding reg and stamp duty). Offer is for a Fully Furnished apt and delivery by Mid 2015.

                      Pl post in your comments about this. Am 31 years old and looking for a few years rental and later on possibly end use (if my off moves to Siruseri or i get a new job in siruseri)

                      P.S - Already have 1800 sq.ft land in maraimalai nagar and this new flat will be 80% loan

                      Thanks in advance

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