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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 maverick007 View Post
    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.

    Comment


    • Re : Property Price Trends in Chennai

      Originally posted by randomguy View Post
      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.

      Comment


      • Re : Property Price Trends in Chennai

        Originally posted by iceemani View Post
        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.

        Comment


        • Re : Property Price Trends in Chennai

          Originally posted by maverick007 View Post
          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?

          Comment


          • Re : Property Price Trends in Chennai

            Originally posted by randomguy View Post
            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.

            Comment


            • Re : Property Price Trends in Chennai

              Originally posted by srivat View Post
              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.

              Comment


              • Re : Property Price Trends in Chennai

                Originally posted by rg9274 View Post
                i am 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.
                If dead end of chrompet goes for 1C i cant aruge that prime location in tambaram should be lower than 1 C quoting that chrompet is near to City.

                i cant argue that maruti should sell a 20 lakh car kizashi lesser quoting maruti as a affordable brand.

                Variations between prices calculated by our friend can be 10 percent lower or may be above the ongoing price.

                but no one is here to inflate and earn earnings from your referrals.

                accept the reality or keep or aruging...by the time the plot would be in other hands...

                i have seen a old man seeing a area by coming through bicylce enquiring land prices.

                every times he quotes it it overpriced and leave.

                still after 4 years he is searching in the same place quoting its overpriced.

                wat the man felt overpriced has gone 4 times up in these 4 years.


                but no one is here to inflate and earn earnings from your referrals.

                accept the reality or keep or aruging...by the time the plot would be in other hands...

                Comment


                • Re : Property Price Trends in Chennai

                  Originally posted by subramania View Post
                  i have seen a old man seeing a area by coming through bicylce enquiring land prices.

                  every times he quotes it it overpriced and leave.

                  still after 4 years he is searching in the same place quoting its overpriced.

                  wat the man felt overpriced has gone 4 times up in these 4 years.

                  Good atleast someone is the same page as me. . Not ready to pay inflated market price and derives value on investment.

                  The old experienced man would have definitely thought

                  What is this generation about ready to pay any price for any location in any corner where land is arakonam and chengalpattu are called off chennai.

                  He would have thought that today generation is paying unimaginable price and making property prices unaffordable for many.

                  At the end he would be happy as he did not lose mental agony by paying high prices but also cycling around places for 4 years he has kept himself healthy.

                  A quote which I remember "The value of experience is not in seeing much, but in seeing wisely." - which the old man did.

                  Maybe he missed the boat, bus, train whatever we call but he sticked on to his value investing principle.

                  Comment


                  • Re : Property Price Trends in Chennai

                    Originally posted by subramania View Post
                    If dead end of chrompet goes for 1C i cant aruge that prime location in tambaram should be lower than 1 C quoting that chrompet is near to City.

                    i cant argue that maruti should sell a 20 lakh car kizashi lesser quoting maruti as a affordable brand.

                    Variations between prices calculated by our friend can be 10 percent lower or may be above the ongoing price.

                    but no one is here to inflate and earn earnings from your referrals.

                    accept the reality or keep or aruging...by the time the plot would be in other hands...

                    i have seen a old man seeing a area by coming through bicylce enquiring land prices.

                    every times he quotes it it overpriced and leave.

                    still after 4 years he is searching in the same place quoting its overpriced.

                    wat the man felt overpriced has gone 4 times up in these 4 years.


                    but no one is here to inflate and earn earnings from your referrals.

                    accept the reality or keep or aruging...by the time the plot would be in other hands...
                    with so much unaccounted black money flowing thru RE and huge no of speculators (few in this forum as well), nothing is impossible in RE.

                    i am not a speculator like u. i am a LT investor who looks for reasonale pricing along with LT growth potentials.

                    just look at the areas u have quoted 1c or 1.5c. even RE builders/promoters will laugh.

                    just because a person in cycle feels that an area is costly, does not mean that the area is developed or he is wrong. he is right in his own ways.

                    why the hell shud i buy plots in crooked areas when i can buy it in anna nagar, NM road.

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by srivat View Post
                      Good atleast someone is the same page as me. . Not ready to pay inflated market price and derives value on investment.

                      The old experienced man would have definitely thought

                      What is this generation about ready to pay any price for any location in any corner where land is arakonam and chengalpattu are called off chennai.

                      He would have thought that today generation is paying unimaginable price and making property prices unaffordable for many.

                      At the end he would be happy as he did not lose mental agony by paying high prices but also cycling around places for 4 years he has kept himself healthy.

                      A quote which I remember "The value of experience is not in seeing much, but in seeing wisely." - which the old man did.

                      Maybe he missed the boat, bus, train whatever we call but he sticked on to his value investing principle.
                      bang on.

                      many of today's investors (in RE/stock) dont know the basics of investing. they just think about the price which is the only parameter they look into.
                      they dont formulate proper entry/exit strategies. they blindly invest based on the recommendations made by RE speculators who are all around hunting for 1-2% margins.

                      Comment

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