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Property Price Trends in Chennai

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

    Basically GDP growth should touch 7+ to increase consumer sentiment to further increase capital values.

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    • Re : Property Price Trends in Chennai

      Originally posted by chennaidesi View Post
      Basically GDP growth should touch 7+ to increase consumer sentiment to further increase capital values.
      It is not that people do not have money or the sentiment to invest in this luxury sector in India it is more the case of people do not want to invest at these price with such low rental yield when u have better opportunity in international market with yield around 6% to 8%.
      RE overpriced still fancy then 4% yield is must anything less is overpriced

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      • Re : Property Price Trends in Chennai

        Market is slow and stagnation ahead - totally agree. But do not agree on some of the above statements.

        Capital values on luxury housing do not depend entirely on rental values.

        Truly well do people do not care about rents or yeilds.
        They buy it for end use, 2/3/4/nth home. They will keep it locked, use it for holiday home, business trips, etc.

        Renting, yeild calculation and all, is what regular IT/NRI/Upper middle class people do.
        Most of this population do not buy luxury flats, they buy in suburbs or buy in cheaper apartments in city.
        Let's exclude people who have most of their portfolio in RE.

        There is a difference between regular people and actual rich people.
        There are many people who have money in businesses, stocks, career (sports/celebrity/politics), etc.

        Folks with money do not calculate yeild on expensive cars, foreign trips, jewellery, parties, weddings, etc.
        Luxury flats are sold as lifestyle choice not necessarily as investment.

        The number of people who are making the big money are increasing.
        It was a rapid increase in earlier years as the economy boomed. Once the economy improves, they will go up.

        India is new to this type of luxury housing. Chennai is well behind Mumbai and Delhi.
        There is a big demand, many people are moving up the ladder and there is a demand for such units.

        I do not think we call all the housing projects in Chennai as luxury.
        That is a wholly different topic. Let me not deviate.

        By the way, most high end Apts in growing markets like Hong Kong, Singapore, Shanghai, etc yeild under 2-4%.

        Let's not use rental yeilds as barometers.
        Use Economy, rising incomes, dispoable incomes, increase in number of rich people or ultra rich people.


        I might have used many confusing terms - semi rich, rich, truly rich, ulta rich, etc.......
        Putting a numerical bracket around these is very difficult and even I am having hard time even thinking about it.

        I think most expensive apts in the city cost around 10-15C.
        So if you do not have atleast 50C you cannot call yourself rich in Chennai. That number will keep on increasing.

        There are many politcos, movie stars, sports folks, industrialists, businessmen, etc who have 250-1000 crores(white/black) in every single city in India. There are people in villages with that much money.
        In Chennai, I think these guys must be 5000 or more.
        Politcos from various parties alone might make up a huge chunk.
        Adding rural surrounding areas, nearby states you might be looking at roughly double the number.

        Then you have certain people who are in thousands of crores.
        It would be a small number but they do play a big role too buying up entire buildings.
        Last edited March 29 2014, 04:55 AM.

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        • Re : Property Price Trends in Chennai

          That is what I am saying why suddenly people hold their investment is if they dont see good yield or year on year at least 12% capital growth then they look for other investment options or just hold on to cash. That situation will change when 7-8% gdp growth returns.

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          • Re : Property Price Trends in Chennai

            Stagnant or falling Chennai RE market is the best time to buy properties (mainly land/plots/house) for long term investors.

            Speculators, delars, Switching brokers will be out and sellers expectations will be realistic.

            Closing decent deals will be a possibility.

            Buyers will have time to negotiate and arrange terms and finance.

            Comment


            • Re : Property Price Trends in Chennai

              Originally posted by Economist
              Stagnant or falling Chennai RE market is the best time to buy properties (mainly land/plots/house) for long term investors.
              Above statement need not hold when you include Apartments in the list and your omission is unlikely to be accidental, I guess .

              With 40-60% of the apartment cost representing the land share, the long term view becomes dismal - from the investment perspective. Much of the context in which Septaa brought in his views and where I added further, is for apartments.

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              • Re : Property Price Trends in Chennai

                Originally posted by maverick007 View Post
                Above statement need not hold when you include Apartments in the list and your omission is unlikely to be accidental, I guess .

                With 40-60% of the apartment cost representing the land share, the long term view becomes dismal - from the investment perspective. Much of the context in which Septaa brought in his views and where I added further, is for apartments.
                The reason why I did not add new apartment to the list (although they may or may not have slightly similar impact) is because:

                1.New flat/Of the plan Builders pricing tend to be more structured and the pricing not as volatile as private vendors who change their price and mind on a daily basis.

                2. The traders, PoA brokers, Switching hand operators, Agreement party etc etc who spike up prices are usualy absent in New flat/Of the plan transactions.

                3. The situation where 10-15 brokers attack the owner and change his mind or interfere and break the imminent deal (arranged by other broker) to some how strike a deal with his yet to aquire client.

                Based on the above points I feel plot,Land,house,old flats etc are much more impacted and quick to react to prevailing market conditions.
                --------------------------------------------
                By the way, my post was just a general comment (observing current slowness in market) and was not a specific response to any post.
                Last edited March 29 2014, 02:50 PM.

                Comment


                • Re : Property Price Trends in Chennai

                  Originally posted by k11 View Post
                  Market is slow and stagnation ahead - totally agree. But do not agree on some of the above statements.

                  Capital values on luxury housing do not depend entirely on rental values.

                  Truly well do people do not care about rents or yeilds.
                  They buy it for end use, 2/3/4/nth home. They will keep it locked, use it for holiday home, business trips, etc.

                  Renting, yeild calculation and all, is what regular IT/NRI/Upper middle class people do.
                  Most of this population do not buy luxury flats, they buy in suburbs or buy in cheaper apartments in city.
                  Let's exclude people who have most of their portfolio in RE.

                  There is a difference between regular people and actual rich people.
                  There are many people who have money in businesses, stocks, career (sports/celebrity/politics), etc.

                  Folks with money do not calculate yeild on expensive cars, foreign trips, jewellery, parties, weddings, etc.
                  Luxury flats are sold as lifestyle choice not necessarily as investment.

                  The number of people who are making the big money are increasing.
                  It was a rapid increase in earlier years as the economy boomed. Once the economy improves, they will go up.

                  India is new to this type of luxury housing. Chennai is well behind Mumbai and Delhi.
                  There is a big demand, many people are moving up the ladder and there is a demand for such units.

                  I do not think we call all the housing projects in Chennai as luxury.
                  That is a wholly different topic. Let me not deviate.

                  By the way, most high end Apts in growing markets like Hong Kong, Singapore, Shanghai, etc yeild under 2-4%.

                  Let's not use rental yeilds as barometers.
                  Use Economy, rising incomes, dispoable incomes, increase in number of rich people or ultra rich people.


                  I might have used many confusing terms - semi rich, rich, truly rich, ulta rich, etc.......
                  Putting a numerical bracket around these is very difficult and even I am having hard time even thinking about it.

                  I think most expensive apts in the city cost around 10-15C.
                  So if you do not have atleast 50C you cannot call yourself rich in Chennai. That number will keep on increasing.

                  There are many politcos, movie stars, sports folks, industrialists, businessmen, etc who have 250-1000 crores(white/black) in every single city in India. There are people in villages with that much money.
                  In Chennai, I think these guys must be 5000 or more.
                  Politcos from various parties alone might make up a huge chunk.
                  Adding rural surrounding areas, nearby states you might be looking at roughly double the number.

                  Then you have certain people who are in thousands of crores.
                  It would be a small number but they do play a big role too buying up entire buildings.
                  Very well put argument and agree to the T investment in luxury apartment is not based on rental yield and it is never will be in future . affordability will never a big issue for buyer in this segment also liquidity could be issue for some but not for all .

                  may be big issue money in other investment asset than RE is the biggest factor imore important then liquidity issue it also sentimently and financial RE it not a very attractive asset class at the movement

                  Just another interesting observation over few drinks with few friends we observed there is very big inverse correlational between stock market and RE in India. We all know money moves from one class to another asset class what more interesting is big stock market moves up RE is down and vice versa this is true from 1991-2014
                  RE overpriced still fancy then 4% yield is must anything less is overpriced

                  Comment


                  • Re : Property Price Trends in Chennai



                    RE overpriced still fancy then 4% yield is must anything less is overpriced

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by Septaa
                      Just another interesting observation over few drinks with few friends we observed there is very big inverse correlational between stock market and RE in India.
                      This is asset rotation which routinely happens - theme behind asset rotation, while some may see as a correlation which can be debated, remains that the asset being sold is considered expensive. One asset cannot continue it's phenomenal run forever. Developed part of RE has had a phenomenal run in the name of land being scarce and suburbs lacking infrastructure, it has its limits. As the article put it nicely, RE had a 15 year run and is this a end game? End game need not be a crash and a possibility of quick erosion in values beyond 10-15% looks unlikely, IMO. With the carrying cost as high as 10-12%, even a lack lustre 5% return p.a from the current inflated base levels, over the next 5 years can be painful, considering that many lack diversification out side of RE.
                      Last edited March 29 2014, 06:21 PM.

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