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Property Price Trends in Chennai

Last updated: 4 weeks ago
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  • Re : Property Price Trends in Chennai

    Originally posted by nabishek View Post
    The contradiction is more of a paradox. Its like how one expects RE prices to go down while hoping their affordability increases with promotion/hike so that they can buy their dream house. But long term, the person buying would also want the RE price to go up..

    One has to be clear against which benchmark they are going to compare to arrive at a buying decision. The choice is relative to each inidvidual and cannot be generalized. In a location, when a new project is selling at 10K..a 2-3 years old flat at 7K is a good buy. For a person who is not worried about the location, buying a bigger new flat at 7K/sqft 2-3 kms away is a value buy. Similarly the base price we compare also gives a different picture, a higher priced project will give slower appreciation but maybe well planned and specced. ROI will not give true picture of value. Getting attractive/value deals and getting cheap deals are not the same.

    Sentiments are very important for any investments, when the mood is dull the spotlight is away and people are hesitant to take any decision. How many can confidently put their money knowing its going to get hard to make profit? Only people who have vested interest like family in location, wealth for heirs and genuine necessity will venture. Speculation will come down. I am sure it applies to people sitting on appreciating currency and huge money also. RE is highly illiquid asset and one could be forced to sell at half the price if in distress to find buyers. A slow market is the time we will have genuine buyers/sellers with whom its easier to make a hassle-free deal.
    so is the going in theory that the buyer sentiment is dull ?
    What are some of the primary reasons can it be elaborated

    Weaking economy
    Shrinking gdp
    increasing inflation
    Higher gas/diesel prices
    Asset bubble
    loss of jobs, unemployment
    Paycuts, Bonus reductions ?

    What are the top 5 reasons ?

    Comment


    • Re : Property Price Trends in Chennai

      Originally posted by SRajagopalan View Post
      so is the going in theory that the buyer sentiment is dull ?
      What are some of the primary reasons can it be elaborated

      Weaking economy
      Shrinking gdp
      increasing inflation
      Higher gas/diesel prices
      Asset bubble
      loss of jobs, unemployment
      Paycuts, Bonus reductions ?

      What are the top 5 reasons ?
      You must say top 10 reasons and you have already quoted all of them!!

      Most importantly, builders and government are the main culprit for not building infrastructure but collecting tax from all sides while all builders(no exceptions here, please) are honestly cheating all buyers...

      It is a lose-lose situation for anyone venturing into RE unless they are part of the system.

      Comment


      • Re : Property Price Trends in Chennai

        Originally posted by SRajagopalan View Post
        so is the going in theory that the buyer sentiment is dull ?
        What are some of the primary reasons can it be elaborated

        Weaking economy
        Shrinking gdp
        increasing inflation
        Higher gas/diesel prices
        Asset bubble
        loss of jobs, unemployment
        Paycuts, Bonus reductions ?

        What are the top 5 reasons ?
        It could be that more and more people realizing that, at these prices, does it really make sense to call RE as an investment or for end use. If the price is right, above has no bearing on what you are buying in to. Attribution to various reasons is our reasoning but the most ignored reason is the price itself. Markets often take triggers for correction which may not have much correlation to the correction per se.

        Our RE, for the majority, is a momentum driven asset class as for as pricing goes. What derails the momentum could be many - like in the reasons above, it could be a NHB residex index or call it a regulation bill. They just take the blame but the reason lies with the price.

        Mav

        Comment


        • Re : Property Price Trends in Chennai

          Price is a very important factor but what is the use of Amarprakash kind of price but never going to finish. Someone here mentioned long back one of the Arun Excello type builder ready to reduce the rate from Rs 3700 to somewhere closer to Rs 2500....But careful buyer would question this as well.

          Comment


          • Re : Property Price Trends in Chennai

            Numerical price is different from Value-adjusted-price Amarprakash can be expensive when compared to higher priced ones in that regard.

            Comment


            • Re : Property Price Trends in Chennai

              Originally posted by maverick007 View Post
              It could be that more and more people realizing that, at these prices, does it really make sense to call RE as an investment or for end use. If the price is right, above has no bearing on what you are buying in to. Attribution to various reasons is our reasoning but the most ignored reason is the price itself. Markets often take triggers for correction which may not have much correlation to the correction per se.

              Our RE, for the majority, is a momentum driven asset class as for as pricing goes. What derails the momentum could be many - like in the reasons above, it could be a NHB residex index or call it a regulation bill. They just take the blame but the reason lies with the price.

              Mav
              The interesting perspective is the very exact same valuation/price point on a rising market will be seen as a steal and a falling market will be viewed as over valuation and bubble
              Ex AAPL at 450 or a flat in perumbakam at 3500rs a sqft as examples -- im not comparing them , just examples - so people relax...dont start with how can you compare AAPL to embassy residency
              If you stand down the mountain and look at it its value, if you are on the top of the mountain and look at it its scarry .

              Comment


              • Re : Property Price Trends in Chennai

                Originally posted by SRajagopalan View Post
                The interesting perspective is the very exact same valuation/price point on a rising market will be seen as a steal and a falling market will be viewed as over valuation and bubble
                Ex AAPL at 450 or a flat in perumbakam at 3500rs a sqft as examples -- im not comparing them , just examples - so people relax...dont start with how can you compare AAPL to embassy residency
                If you stand down the mountain and look at it its value, if you are on the top of the mountain and look at it its scarry .
                It is true....it is like a pyramid and only few can see the top and most of them always at the bottom or in between....but everyone think that they will hit the cliff of the Everest....

                In RE market people typically do not talk about bad investments.

                Comment


                • Re : Property Price Trends in Chennai

                  Originally posted by Ramchi View Post
                  It is true....it is like a pyramid and only few can see the top and most of them always at the bottom or in between....but everyone think that they will hit the cliff of the Everest....

                  In RE market people typically do not talk about bad investments.
                  Actually Ramchi , in life no one talks about bad investments in any asset class, None period, i can tell you there are so many here who have been bit but when asked, the answer will be RE ran so high in last 20 years that you have to be fool to lose money, true, how many have done investments that have run into issues, acquisitions, disputes, road expansions, layout approval issues ( infamous gandhinagar housing in omr ) or adayar society etc. Or even the Unitech plots or society plots with very high entry prices from 2008-2009 whose CAGR trails bank deposits - all these are categorically bad investments whether you like it or not.

                  the smart investor is the own who can admit it and makes sure he does not repeat it again.
                  my very first property i bought in bangalore was a B katha property and large extent in area, i realized it was a big mistake i made 7times returns on it but if i had bought a BDA approved A katha i would have made 12-14 times,
                  i got rid of it early this year and the decision i took was only DTCP or CMDA nothing else and the extent has to be in line with the market for resale in chennai thats 1200/1800/2400sqft only, i wont buy however the deal is sweet,
                  There aer so many layouts that sell large extent properties that dont move because at 2000+ price the buyer pool just does not exist

                  Comment


                  • Re : Property Price Trends in Chennai

                    Originally posted by SRajagopalan View Post
                    so is the going in theory that the buyer sentiment is dull ?
                    What are some of the primary reasons can it be elaborated

                    Weaking economy
                    Shrinking gdp
                    increasing inflation
                    Higher gas/diesel prices
                    Asset bubble
                    loss of jobs, unemployment
                    Paycuts, Bonus reductions ?

                    What are the top 5 reasons ?
                    The reasons can be many..but the underlying factor is one - Uncertainity.

                    RE buying/selling requires a symbiotic producer-consumer relationship to be in place..either if supply goes down or price increases too much pushing properties to unaffordable level..the cycle is affected..In many cases because of the inflationary environment the huge appreciation or correction is substituted with stagnation period. As you have said, currently there are no buyers at some price point and certain type of properties like large extent plot/gated communitiy high rises. The logical conclusion is, In the short term RE is more likely to be slow in conversion..even if it were to appreciate it will not beat inflation or have wide swings.
                    Last edited June 7 2013, 06:19 PM.

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by nabishek View Post
                      The reasons can be many..but the underlying factor is one - Uncertainity.

                      RE buying/selling requires a symbiotic producer-consumer relationship to be in place..either if supply goes down or price increases too much pushing properties to unaffordable level..the cycle is affected..In many cases because of the inflationary environment the huge appreciation or correction is substituted with stagnation period. As you have said, currently there are no buyers at some price point and certain type of properties like large extent plot/gated communitiy high rises. The logical conclusion is, In the short term RE is more likely to be slow in conversion..even if it were to appreciate it will not beat inflation or have wide swings.
                      True - In the short term.
                      But the larger investor question is if you are playing this as an asset just like any other asset in your portfolio and if you expect that it will beat inflation handily in say 5 years from or 7 years from now, then one should venture in.
                      Particularly if you can catch pricing or deals that take you back to 1-3 years.
                      For examples ( fyi these are real deals)
                      A layout launched in 2009-10 and if you can catch close to launch price today will you jump in due to distress sale current GV 1300, launch price 950, current price 1000-1100.
                      A flat that was delivered in 2010 in a location like Selayur or Rajkilpakkam which was at sqft price say 2200 and market price today is 3500 or 3700 for resale that you can pick up for 3200.
                      Or Large parcel where 1acre in thaiyur was 1-2C in 2009-2010 now at 3C
                      if you can pick up at 2C ?

                      Comment

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