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Property Price Trends in Chennai

Last updated: July 14 2020
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  • Re : Property Price Trends in Chennai

    Originally posted by nabishek
    Let me talk about the mood in 2009..It was eerily very similar to how it is now..
    Mood then was world coming to an end and doom all around. Nowhere near that now (may be more so for India alone) and other part of the world is flourishing and flush with wealth creation. There was a sense of "value" in those prices then than now. Reason why it got there was people were reluctant to commit with apocalypse stories abound.

    Now, there is no sense of such panic and the mood seems to be, worst is behind us or here to stay for little longer. Must have made people to believe there must be light at the end of the tunnel even though it is still dark - light can show up anytime. There is a sense of stability despite mood being sombre. Rarely a set up like this can make prices attractive. I think people may be feeling unwilling to commit because they do not see prices attractive enough. Further, money from the other part of the world may have realized absolute returns on INR means nothing if it is meant for investment.

    For 2009 to happen, one needs to feel the earth under the foot to crater and now, there are enough counter forces to make that very unlikely in the short term. Even if election results throw a spanner dousing all the optimism, RE still would not get to those 2009 level(not in absolute numbers) attractiveness and it is likely to kill by being where it is much longer.
    Last edited January 24 2014, 02:30 PM.

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    • Re : Property Price Trends in Chennai

      Eitherway, Chennai RE will have only one direction! We have seen it, the prices have raised sharply after dull moments in 2009! According to Times of India, RE is the top Investment destination in 2014! I agree with Mavs.



      Originally posted by maverick007 View Post
      Mood then was world coming to an end and doom all around. Nowhere near that now (may be more so for India alone) and other part of the world is flourishing and flush with wealth creation. There was a sense of "value" in those prices then than now. Reason why it got there was people were reluctant to commit with apocalypse stories abound.

      Now, there is no sense of such panic and the mood seems to be, worst is behind us or here to stay for little longer. Must have made people to believe there must be light at the end of the tunnel even though it is still dark - light can show up anytime. There is a sense of stability despite mood being sombre. Rarely a set up like this can make prices attractive. I think people may be feeling unwilling to commit because they do not see prices attractive enough. Further, money from the other part of the world may have realized absolute returns on INR means nothing if it is meant for investment.

      For 2009 to happen, one needs to feel the earth under the foot to crater and now, there are enough counter forces to make that very unlikely in the short term. Even if election results throw a spanner dousing all the optimism, RE still would not get to those 2009 level(not in absolute numbers) attractiveness and it is likely to kill by being where it is much longer.

      Comment


      • Re : Property Price Trends in Chennai

        I have been hunting for next investment but got aback as none of the Top builders which i chose from 1-5 in come to the request level of customer .

        Hung Parliament is the most likely outcome and RE is the one along with Stock Market with fund outflow would get affected

        But Construction cost has gone up with shortage of skilled man power in this Digital Era and not definitely get corrected like share price per se.

        It remains to be seen what is the election outcome but RE market is steady as Builders are basically bound to make money out of Customers as usual than putting their own money

        Because builders are always smart and hence we are customers always for them .

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        • Re : Property Price Trends in Chennai

          Few weeks back had a visit in a luxury apartment in Adyar just after globus in Adyar it is top end builder just 30 apartment in a acre block all are identical floor plan 2 apartment the building is complete 4000 sqft is the size of flat
          The landowner has few apartment r sale the landowner his offer is 19000 net 7.6 cr however broker said 6 cr would be be his final offer Uds is around 1452 I am thinking of offering 1452*20k 2.9 cr plus 4000* 3000 1.2 plus 10 lakhs for three car park total 4.2 cr is right price but I think landowner will not take the offer however I think 6 cr is seller price 4.2 cr is the buyer price expert in IRSF what ur take on this and price is a investment apartment I am expecting rent of 120k to 150k per month if I invest another 25 Lakh on furniture may be 250k fully furnished
          RE overpriced still fancy then 4% yield is must anything less is overpriced

          Comment


          • Re : Property Price Trends in Chennai

            You do the math and find out if it really makes sense to invest 4-6 crores with the returns not matching your investment on the long run, unless you expect this apartment goes for Rs 12-15 Crores in the next 5-10 years....if you think so, you may go ahead....If you have that much money, without sweating you can invest in Bank and take peacefully!!!! Now you need to pay registration charges, sales tax, property tax, maintenance (of course you will give it for rent but rent need not be long term, hence maintenance headache is there).....

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            • Re : Property Price Trends in Chennai

              @Septaa,
              I am not sure if new apts at this range and size makes a good investment unless it is under a good staggered payment plan.
              Also I am not sure if the seller will accept a 4.2C offer, they would like to see 5C atleast, even 5.5C might be his minimum.
              Also 2.5L rents are not easy to get. There is a market at 1-1.5L but that is it. Anything beyond is very hard or rare to even hear.

              If I was you, I would look for resale units in better location.
              Check out Venus Colony, Pycrofts Garden, Rutland Gate, Binny/KR Rd, Kothari Rd, etc.
              Adyar has only couple of pockets that are good and get premium rents, but most of the area you will struggle as there is too much housing. If you have the budget, Alwarpet, Nungambakkam, parts of RA Puram, etc are better for high ticket rentals anyday.

              Also remember in a 4000sqft new flat you might get only 3000-3200sqft becasue of loading.
              You can get a 2500-3000sqft resale flat and still you would not lose a lot.

              Well you can also look at 2 smaller resale apts of 1800-2000sqft, one in a upscale area and one in a middle class area with higher yeilds.
              Or you can get one new apt under staggered payment and one older apt.
              or just get side by side 2000sqft new flats which could be combined or seperated easily.

              For end use, this does not matter, bigger is better.

              The bigger the apt goes you need to be conscious of the surroundings. I left out some deals like that because I felt the apt is too upscale for the area. Chennai is a very location specific place, rates in both rentals and capital value are determined by this.
              If you go to suburbs, it is a different story, some GCs are better than others and you can see that in the pricing.

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              • Re : Property Price Trends in Chennai

                Originally posted by Septaa View Post
                Few weeks back had a visit in a luxury apartment in Adyar just after globus in Adyar it is top end builder just 30 apartment in a acre block all are identical floor plan 2 apartment the building is complete 4000 sqft is the size of flat
                The landowner has few apartment r sale the landowner his offer is 19000 net 7.6 cr however broker said 6 cr would be be his final offer Uds is around 1452 I am thinking of offering 1452*20k 2.9 cr plus 4000* 3000 1.2 plus 10 lakhs for three car park total 4.2 cr is right price but I think landowner will not take the offer however I think 6 cr is seller price 4.2 cr is the buyer price expert in IRSF what ur take on this and price is a investment apartment I am expecting rent of 120k to 150k per month if I invest another 25 Lakh on furniture may be 250k fully furnished
                If your total portfolio is 100C + research to see if this game is worth = spend your time and also expend IREF members time ..
                if your total portfolio is 50C + there are many options for 10% of your total portfolio
                20C or less - dont play this game -- just look for other options

                my 2 cents

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                • Re : Property Price Trends in Chennai

                  Septa potalum potaaru oru matteraaaa ,,, alwarpet to adayar options abound .... enjoy pannu .....nalla enjoy pannnu........

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                  • Re : Property Price Trends in Chennai

                    Originally posted by maverick007 View Post
                    Mood then was world coming to an end and doom all around. Nowhere near that now (may be more so for India alone) and other part of the world is flourishing and flush with wealth creation. There was a sense of "value" in those prices then than now. Reason why it got there was people were reluctant to commit with apocalypse stories abound.

                    Now, there is no sense of such panic and the mood seems to be, worst is behind us or here to stay for little longer. Must have made people to believe there must be light at the end of the tunnel even though it is still dark - light can show up anytime. There is a sense of stability despite mood being sombre. Rarely a set up like this can make prices attractive. I think people may be feeling unwilling to commit because they do not see prices attractive enough. Further, money from the other part of the world may have realized absolute returns on INR means nothing if it is meant for investment.

                    For 2009 to happen, one needs to feel the earth under the foot to crater and now, there are enough counter forces to make that very unlikely in the short term. Even if election results throw a spanner dousing all the optimism, RE still would not get to those 2009 level(not in absolute numbers) attractiveness and it is likely to kill by being where it is much longer.
                    Thanks Ramchi, Mav, rockeyireb, REC2013 for your comments.

                    Mav- There is a certain bearish tone in the market..regarding the global optimism you are pointing out..I dont deny it, but however we cannot overlook the fact..that is laced with cautiousness..We all know the original issue of 2008/2009 sub prime issue was never addressed..The current green shoots are due to quantitive easing and not recovery of fundamentals..the dirt was pushed down the road..We dont know if we turned the corner as yet. Even today bigger instituitions are cannibalising the smaller ones to paint a healthy outlook..Banks in US are continously getting bankrupt..Indian Banks NPA are at all time high, People are still losing jobs, business are contracting..but they all dont make mainstream news. With the US Fed Tapering this year a withdrawal of $75 billion per month, we never know..the old ghosts may come back to haunt..The situation in EU isnt rosy either..One instance like Lehmann can bring all hell loose..and this time we stand totally exposed and the impact will be real.

                    In RE too we witness the smaller players being unable to sustain themselves..we are seeing so many projects and layout being taken over by bigger builders/brands either just for marketing or as joint-venture..This certainly shows the operation cost to remain in business is very high and is not a indicator of healthy industry.

                    Having said that, I am bullish about India..a stable government is what we need..Lets compare two likely policy outcomes

                    BJP-NDA - A focus on domestic economy, stengthening rupee, lowering inflation, lower interest rates, lower taxes, stable salaries/jobs, building local infrastructure
                    vs
                    Congress-UPA - Opening the market for foreign investment, weakening rupee, controlling inflation, higher interest rates, higher subsidies, increasing job opportunities, more public-private partnership.
                    vs
                    Third front - Cant even imagine..it would be catastrophic as our president says.

                    In both scenario, RE is going to play a huge role..there is going to be heavy clamor for land..which is a sure shot recipe for value appreciation. While the first would be value addition due to creation of satellite cities, new roads, infrastructure etc, the second would see demand from new segment of buyers with increased affordability.

                    Also, If RE regulator is in place and there are stringent rules on black money..I expect price to be increased sharply..good clean properties will demand huge premiums and builders and promoters will charge more for the increasing operational overhead. The competition would keep the prices in check, but I expect the market to certainly suffocate due to mismatch in expectations of the buyers and sellers. The contrast of demand vs supply will come to the fore. This provides an opportunity for buyers to act amidst a slow market, where the choices are more..pressure is less and its easier to value pick the property they want.
                    Last edited January 26 2014, 09:45 AM.

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                    • Re : Property Price Trends in Chennai

                      Differences in our views are narrowing...the only difference between now and 2009 is the synchronized fall of many, if not all legs, at the same time...it could happen again if several of your premonitions come true..I see less odds, though.

                      Originally posted by nabishek
                      The current green shoots are due to quantitive easing and not recovery of fundamentals..
                      To an extent, yes and balance sheet of the country(US) as a whole, can agree too. But, the corporate balance sheet is in the healthiest shape one could have seen in a long time. Significantly better in shape than in 2008 as they are still not yet out of cautious optimism carrying the skepticism and not willing to spend the cash on their balance sheet. Innovation and productivity levels enhancement as a consequence of that will give a tremendous long term edge. Even if tapering and resultant mayhem causes an havoc(more on outside than on self), on a relative basis, this pillar will be a show of a relative strength. I am a believer in strong becoming stronger after every boom-bust cycle. It is this aspect, I feel, gives me a low odds on 2009 repeating itself. Europe is a mess I am not counting on to provide any strength.


                      Originally posted by nabishek
                      In both scenario, RE is going to play a huge role..there is going to be heavy clamor for land..which is a sure shot recipe for value appreciation. While the first would be value addition due to creation of satellite cities, new roads, infrastructure etc, the second would see demand from new segment of buyers with increased affordability.
                      Above is the segment, I am bullish on and have no time set for it...that's the type/nature of the investment that is abound today...all easy money (3-5 year) opportunities are taken or discounted enough to leave very little..also have my concern when the above shapes up as the rest of the prices have premium built in betting against the same and they could come off over time...
                      Last edited January 26 2014, 10:49 AM.

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