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Property Price Trends in Chennai

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

    Originally posted by Economist View Post
    That sentance is the key.

    That sentence "QE is over"

    To me is a big positive sign for US & USD.

    That sentence would confirm that the patient does not need medication he can get back to normal duties.

    I think that day is not very far.

    All the gains USD made in May (not June) is the strength of USD.

    USD gained against most majors in MAY. It gave up some of MAY gains against a handfull of currencies in June.

    INR 53.6 to INR 56.6 was USD strength.

    INR 56.6 to INR 58 is Indian weakness in June.
    My predicament is that it wont be in BEN's tenure, and he is not planning to work with the next president, he will drag it out and leave like Greenspan
    I hope they wont push a QE4

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    • Re : Property Price Trends in Chennai

      Originally posted by ramki830 View Post
      I agree with Rajagopal. INR fall against USD is not a surprise to me. India has had such a large and unsustainable CAD, that this is so obvious...

      Our Indian Media is never known to work anything more than propaganda arm, so they never saw this coming...

      I think we will have a rough time for next 6-12 months and we will surely cross Rs 60 per USD. But the results of this fall will do lot good for us in long run...

      As far as RE Investing, the cost of construction will continue to rise in next 12 months, courtesy diesel price rise (which will also hit rs 60 per liter) and this is election year, expect more profligate spending by UPA2 govt, all in all get ready for rolller coaster ride.

      Me think - all this will lead to slowdown in sales of built apartments by early 2014 (Esp in Chennai). Those who disagree , welcome to put your views , will be most happy to hear a bullish case...
      I have a different take on it, not sure if it should be called bullish or bearish..it depends on how you are reading it..Let me explain in third person.

      I feel the gap between the have's and have-nots is going to widen dangerously and very fast. The decision one takes now with their finances is going to decide whether their children are going to remain wealthy or not. Buying RE is no more just investing for returns beating inflation. Its establishing a home for securing your family. If the things we are talking like Rs 65/$, Rs. 60+ diesel and Rs. 100+ petrol price are going to be true and that coupled with moderate salary increases not matching price rise..It is going to put tremendous presssure on the earning class. They are going to have enough challenges to handle and buying a flat/RE taking loan would be the last thing on their mind.

      Having said that..what is the refuge for a person wanting to buy when the price due to inflation pressure doesnt come down and it is still remains unaffordable? Wait for price to correct/crash? The whole situation may never become conducive for everything to fall in place and for buying. Traditionally in India Buying RE has always been beyond one's means and involving fair degree of risk. Its never a decision of buy/rent or P/E ratio alone. I dont see that changing anytime soon. The best we can do is try balancing our affordability and preference to identify a value deal.

      Generally RE is called hedge against inflation. One of the main reason why so is, In an inflationary environment when rupee is also depreciating it gives additional incentives to borrow as we can repay with currency of diminished value at later point. This fact is the fundamental reason why property prices are going up and is not factored in by potential buyers. Credit if managed judicously can act as a catalyst to make you richer faster than your counterpart.

      I have stated this before - buyers dont estimate their affordability properly..many dont consider the future flow of money and repayment capability properly and often find themselves caught in the wrong foot when they either bite too much or feel they could have over-leveraged more if successful. When unaware of what are the factors that control the environment/market its better to understand by participating in it rather than speculating from outside. One has to keep failsafes ready though like leveraging within repaying capacity for instance and by evaluating all risks and taking well informed decision.

      General stagnation in prices and slow down in sales I agree..but If one come across a property thats affordable and to their liking. There is no point fearing the unknown and delaying the purchase, If currently its unaffordable one should focus on earning more and re-positioning themselves to increase their affordability and move in immediately when they get a good deal. Leveraging to be done only if job/business outlook is secure. Waiting for price correction/crash can be done if you are exposed to a stronger currency/better economy or are planning to sell a property and buy one or have divested part of the money in RE already.

      Finally, It would help to keep in mind..When the tough gets going, a roof above your head and shelter for your family is invaluable.

      Comment


      • Re : Property Price Trends in Chennai

        Originally posted by ramki830 View Post

        Me think - all this will lead to slowdown in sales of built apartments by early 2014 (Esp in Chennai). Those who disagree , welcome to put your views , will be most happy to hear a bullish case...
        My counter view is very simple, no complex terms like QE or equity or currency fluctuation.

        Lot of people are going onsite these days, watching foreign locations in movies and TV commercials. They yearn for first world lifestyle. They want well paved streets, lawns, security, gym, etc... Unfortunately our town planners are not able to match expectation of new generation. The only solution is township, that is why apartment sales keep increasing every year and will continue to increase.

        Unless...young generation suddenly realize all these maya and give up their materialistic expectation. Everyone yearn to return back to golden socialistic 80s. In that case, apartment sales will go down.

        I still remember how after Anjali movie released, apartment builders received enquiries if they can construct an apartment complex like one in that movie.
        Last edited June 11 2013, 10:08 AM.

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        • Re : Property Price Trends in Chennai

          Originally posted by Love4land View Post
          My counter view is very simple, no complex terms like QE or equity or currency fluctuation.

          Lot of people are going onsite these days, watching foreign locations in movies and TV commercials. They yearn for first world lifestyle. They want well paved streets, lawns, security, gym, etc... Unfortunately our town planners are not able to match expectation of new generation. The only solution is township, that is why apartment sales keep increasing every year and will continue to increase.

          Unless...young generation suddenly realize all these maya and give up their materialistic expectation. Everyone yearn to return back to golden socialistic 80s. In that case, apartment sales will go down.
          L4L we were discussing some of such roots and causes of those folks you claim to go to onsite and see the first world way of living to clone in chennai
          if the QE faltered not much of chennaities would be going on onsite trips at all, althought a counter theory is for cost cutting there would have been more outsourcing ( markets in india in 2009 did not reflect counter theory).
          If IMF bailouts faltered Eurozone would have been in danger, if the ECB buy backs and brokered agreements between Germany and Greece , spain, portugal , italy did not happen we could have seen the EUROZONE effect on US economy and indian economy
          More than any thing sheer supply in chennai market today is just crazy, you and i are looking at all sat/sunday property plus, thanthi proprety ads, online ads, see the number of new townships, villa communties coming incredible, supply IMO is overwhelming now

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          • Re : Property Price Trends in Chennai

            Originally posted by Love4land View Post
            I still remember how after Anjali movie released, apartment builders received enquiries if they can construct an apartment complex like one in that movie.
            Hahahahhaha you made my day, so funny, yes, the movie had a long lasting effect on designing flats, but you needed a thotta tharani for that,
            Yes we chased girls in all mottai maadi after seeing that movie.
            Mani is a legend, the kitchen, low lying dining table with pull out shades ontop
            the arched panel see through from kitchen to dining, i had this in my first house i bought in US , long lasting impact
            thanks for the nostalgy

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            • Re : Property Price Trends in Chennai

              Chenani RE might be an exception to the Economic Theory of Supply and Demand. I am still not able to understand whether we are in a Seller's Market or Buyer's Market...

              Comment


              • Re : Property Price Trends in Chennai

                Supply in suburbs keeps prices in check. It keeps bubbles from forming.
                Becasue of GCs all the land that would have been locked up are coming out. End users are moving in becasue of the affordability and amenities. The supply also provides cheap rental options as many IT/NRI people buy up and subsidize the renters by keeping the yeild below 4-5%.

                I do undestand people who want to leverage on apts and the plot sellers might not be happy with supply, it is hard to bet in high rate environment when values are not moving up and plot guys do not see plot values going up as prospective buyers end up at cheap flats.

                I say all the supply is good for long term growth. I am all up for it.
                There needs to be some pockets with cheaper prices. Suburbs should offer good cheap housing alternative to people who cannot afford in city.
                Last edited June 11 2013, 10:29 AM.

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                • Re : Property Price Trends in Chennai

                  Originally posted by mukundanmk View Post
                  Chenani RE might be an exception to the Economic Theory of Supply and Demand. I am still not able to understand whether we are in a Seller's Market or Buyer's Market...
                  Depends on Location, Layout , Development, Builder/project,
                  you can find both

                  Comment


                  • Re : Property Price Trends in Chennai

                    It is hard to bet in high rate environment when values are not moving up and plot guys do not see plot values going up as prospective buyers end up at cheap flats.


                    This by far can get the award for the multi contradicting faceted facts statement.
                    Lets decipher so that i can undestand before i go to sleep
                    1 - High rate environment - India the rates are definitely lows now not highs may it be lending, savings etc
                    2 - Values have been moving up atleast until end of financial year March 2013
                    3 - Plot guys are not seeing values moving up -ok , since January most hot locations under 1250 rs /sqft have grown up double digits in %
                    4 - prospective buyers are buying cheap flats - what is cheap 3500/sqft, 4000/sqft, as compared to 25000/sqft in PG or BC ?
                    a 2bhk that yields 10K rent costs 50L how is that cheap ?

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by k11
                      The supply also provides cheap rental options as many IT/NRI people buy up and subsidize the renters by keeping the yeild below 4-5%.
                      Rentals remain cheap because there are no takers. Why use the word subsidize? Subsidy means intentionally selling at lower prices than market price. If folks were caught with the bad expectation at the time of purchase and realize lower rentals, we can't call it as a subsidy and it is simply a bad call and accept lower rentals and move on. Let's not paint a noble intention for a bad call.

                      Mav
                      Last edited June 11 2013, 10:46 AM.

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