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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 maverick007 View Post
    ^^^ Correction: It should read " speculated in to vast track of land in their regional areas (outside their towns) for current or future business use."

    Mostly in acres and that too in Chennai suburbs. Crazy! They do not seem to have much clue. They should have most of it in High Streets. Chennai has only few investment worthy Places - Poes/BC/Wallace. Are you sure they have invested their couple of Bungalows in those places ? If not, they are not invested in Chennai. Period. How come they are wealthy and connected but do not know the best kept secret of wealth creation ?

    Brand new apartment available in Ceebros, Kairali in Nageswara Road , Nungambakkam - ~1600 sqft for 2.6 crore was on classifieds by the builder. Looking from the price it must be from a 'Low Street'.
    Yes they tend to invest in vast tracks of land in villages outside their town situated on Highways,they use them for future factories,warehouses, Collages, Residential schools etc etc.

    Yes, Small percentage of their assets (10% - 20%) gets invested in acres of lands outer suburbs of Chennai. They tend to have couple of house/bungalows in Chennai.

    They do not prefer flats or Villas. I am yet to see a seriously big wig from regional TN to buy a flat or Villa.

    Acres of agri lands are easy to convert black to white.

    I am talking from personal knowledge of few big business an politicians from Erode, Salem, CBE, Shivakasi, Viruthunagar & Tuticorin.

    They are conservative guys, they believe in land. Flats, Villas are not in their league.

    They live in big houses in their towns. They like their privacy.

    You can see that with chetinad Group, Lakshimi mills groups, PSG group, Rajashri group, Standard fireworks group, VMM group, PRP group, RMK group, Jayavilas group,

    Same with politicians.

    Most people are well aware of their investments, I do not want to list it.

    Comment


    • Re : Property Price Trends in Chennai

      I do not think we can compare Kairali with projects like Vijayshanthi Art, Akshaya Private, Amara Villa, VGN Whatever, etc.

      I was looking at the Kairali floor plan.
      They have small dinky 10X11 rooms. The whole apt itself would be less than 800sqft.
      Kairali is at the most a middle class apt. No multi millionaires will live in such a place.
      No big amenities, no pool, small complex.

      Ceebros is targeting middle class people with such projects, this is not the high end.
      This might be a JV or some small low margin development they might be doing.

      2.6C might be base price, they will tack on other charges and make it 3C.

      I still find value in older apts.
      Instead of spending 3C for such a small 800sqft carpet unit with 500sqft UDS, you can buy a 1200-1300sqft (carpet) older apt with 900-1000sqft UDS.
      I think a good apt in a nice complex like Courtyard would go for 4C and odd, it would have 1800sqft carpet and around 1400sqft UDS atleast.
      Attached Files
      Last edited March 30 2014, 09:58 AM.

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      • Re : Property Price Trends in Chennai

        Originally posted by k11
        I do not think we can compare Kairali with projects like Vijayshanthi Art, Akshaya Private, Amara Villa, VGN Whatever, etc.
        That's been my point too and why bring in Art/Amara in to this. You finally came to the point on what started this discussion - Septaa's mention of 1.65 cr ad of a 1850 sq ft apartment and related discussion on whether these 16000 psft apartments make sense for the rental yield etc. As long as you keep the focus on the above and discuss, we are game.

        Originally posted by k11
        Ceebros is targeting middle class people with such projects, this is not the high end.
        This might be a JV or some small low margin development they might be doing.

        2.6C might be base price, they will tack on other charges and make it 3C.
        ...
        precisely the point I have been driving at but it failed to get your attention ...how can middle class people can afford such prices with such high carrying cost and meager rental yields..this is the crux of the argument and throw light on how these prices can make sense.

        I was looking at the Kairali floor plan.
        They have small dinky 10X11 rooms.

        .......
        .......
        Dinky or not is besides the point. Equally irrelevant is the point on whether it is a JV or low margin development. How does it matter to the buyer from the value or needs perspective? Keep the mindless buying of multi-millionaire also outside the context.

        No Pool, No amenities etc - exactly my point, our crux of the discussion is on no-frills that command 16000-18000 psft pricing.

        Multi-millionaires do not live in this kind - do I care for where I want to live or whether multi-millionaire lives with me or not. Reasonable gentry can be an attribute one can look at but not how much wealth they carry with them. More wealth can also mean more kinkiness and not necessarily a desirable attribute in Indian environment where one can buy even the laws of the system - dinky can be a better trade off if it can keep that kind away

        It is a middle class apartment - yes, this is exactly the class I want your views on, but you keep digressing moving and veering the discussion to Luxury Apts.

        We should not be getting in to resale side to keep slipping away from the crux of the argument - let's avoid another digression.

        However, I can still show lot of resale apartments 3-4 year olds in similar area and class as Kairali asking Rs 14000-Rs 15000 psft. So, Ceebros may look like a value even at Rs 16000 psft on a relative basis in comparison to those. Hence, whether you take Ceebros at Rs 18000-19000 all inclusive or Rs 14000-Rs 15000 psft (excluding registration) may not have much impact on the craziness in the pricing both commands.

        If you bring substantive argument to defend these prices, resale or new do not make a difference - just that one is marginally crappier than another in valuation. Keep your focus to the above if you can defend.
        Last edited March 30 2014, 10:54 AM.

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        • Re : Property Price Trends in Chennai

          guys , how do i open a new post

          Comment


          • Re : Property Price Trends in Chennai

            Originally posted by maverick007 View Post
            precisely the point I have been driving at but it failed to get your attention ...how can a middle class people can afford such prices with such high carrying cost and meager rental yields..this is the crux of the argument and throw light on how these prices can make sense.
            Well, my take on this is that this is not a middle class area. I do not think middle class people should even look at these locations. Affordability is not even in question in these areas for middle class folks. There are very few homes and flats, the area is already getting gentrified and will become more so.

            Builder has many alternatives for such small projects. He could have just built a small bungalow instead of those dinky apts and sold it for 20-25C. Ceebros might not handle money in black, but there might other ways out if he cannot find a white buyer.
            Smaller projects are not the norm in such areas, you have bigger ticket flats generally.
            Redevelopment projects might be smaller tickets but the last two big land sales (VGN & Akshaya) might not have smaller sized flats for middle class.

            People looking for yield need to look at other areas - more value oriented or affordable areas. They are building thousands of flats in suburbs where IT jobs are there.

            However, I can still show lot of resale apartments 3-4 year olds in similar area and class as Kairali asking Rs 14000-Rs 15000 psft. So, Ceebros may look like a value even at Rs 16000 psft on a relative basis in comparison to those.
            You are trying to standardize the prices with per sqft pricing. Though I agree it is easier to look. But you should look at carpet area, UDS, amenities, high rise/low rise, specs, street to draw comparison. Builder putting crazy loading does skew the numbers.
            Lets give more clarity.

            Ceebros flat is 800sqft carpet at 3C with 500sqft UDS and no amenities in Nungambakkam.

            Is this a good price.
            Last edited March 30 2014, 11:20 AM.

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            • Re : Property Price Trends in Chennai

              Your earlier post said this:
              Ceebros is targeting middle class people with such projects, this is not the high end
              Recent post:
              Well, my take on this is that this is not a middle class area. I do not think middle class people should even look at these locations.
              Keeping the above confusions apart, Middle class or which class does not matter....I used your notion 'as is' and referred it the same way. Regardless of notional differences, it certainly does not belong to the money splashing class below:

              Originally posted by k11
              Who calculates depreciation, returns and all in a luxury car dealership, or at airport before going for vacation, or when planning a massive wedding, etc. I am sure people with lot of money look do not look at housing the same way.
              Do you agree with above, so far?

              If yes, you need to tell which class can buy the Ceebros - Kairali or a 4-5 year old resale with the ask of 10-15% lesser than Kairali and how it can make sense with the carrying cost and other operational overheads..

              Let's also not get in to the judgement on where middle class should buy and whether they should buy in suburbs and how Ceebros should have marketed Kairali differently etc...which is besides the point. I also think Ceebros has a better sense on the market than the sum total of the collective brain in Chennai IREF - it is the reasonable assumption to make given their huge successful past sales record.
              Last edited March 30 2014, 11:34 AM.

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              • Re : Property Price Trends in Chennai

                Originally posted by k11 View Post
                I do not think we can compare Kairali with projects like Vijayshanthi Art, Akshaya Private, Amara Villa, VGN Whatever, etc.

                I was looking at the Kairali floor plan.
                They have small dinky 10X11 rooms. The whole apt itself would be less than 800sqft.
                Kairali is at the most a middle class apt. No multi millionaires will live in such a place.
                No big amenities, no pool, small complex.

                Ceebros is targeting middle class people with such projects, this is not the high end.
                This might be a JV or some small low margin development they might be doing.

                2.6C might be base price, they will tack on other charges and make it 3C.

                I still find value in older apts.
                Instead of spending 3C for such a small 800sqft carpet unit with 500sqft UDS, you can buy a 1200-1300sqft (carpet) older apt with 900-1000sqft UDS.
                I think a good apt in a nice complex like Courtyard would go for 4C and odd, it would have 1800sqft carpet and around 1400sqft UDS atleast.
                I agree with u on this K11 what suprise me is Ceebros does so many JV hardly does any formal ads one such project has crept on my st in Gopalapuram in one best street call them in this regards was informed itis JV total 19 apartment 11 to landlord any sale nope at the moment no sales in 2 months the property has gone down from a bungalow to vacate plot to a second floor slab when most builders r finding hard to any business this builder time again does project at super speed does not no pre sale my first question is how does he finance this kind of construction activity this project looks like 30000 sqft project total cost would be around 6 to 7 cr say ceebros get around 12000 sqft bare minimum sells at 12000 per sqft he will still make 100% minimum profit may bethis this how he makes money
                RE overpriced still fancy then 4% yield is must anything less is overpriced

                Comment


                • Re : Property Price Trends in Chennai

                  Originally posted by maverick007 View Post
                  Your earlier post said this:
                  Recent post:
                  Keeping the above confusions apart, Middle class or which class does not matter....I used your notion 'as is' and referred it the same way. Regardless of notional differences, it certainly does not belong to the below:

                  Do you agree with above, so far?
                  NO
                  My view and Ceebros view might not be the same.

                  Ceebros will do whatever suits them and makes them money. This could be a JV project, or some share, who knows. Kailari is an exception than a norm in the area.


                  If yes, you need to tell which class can buy the Ceebros - Kairali or a 4-5 year old resale with the ask of 10-15% lesser than Kairali and how it can make sense with the carrying cost and other operational overheads..
                  My view - To me, Ceebros does not make sense for end use. I would not buy if I was in market. I would not advise anyone to buy this. Those are my views. Ceebros fans might like it.

                  Resale apts - Depends, varies case to case. There are many nice older 100% legal buildings with nice layouts, large carpet areas and good UDS would make good buys.

                  I do think yeild chasers, rental investors, IT/NRI middle class people should avoid this area, they have other options.
                  These areas are for end users.
                  Last edited March 30 2014, 11:45 AM.

                  Comment


                  • Re : Property Price Trends in Chennai

                    Originally posted by k11
                    My view - To me, Ceebros does not make sense for end use. I would not buy if I was in market. I would not advise anyone to buy this. Those are my views. Ceebros fans might like it.

                    Resale apts - Depends, varies case to case. There are many nice older 100% legal buildings with nice layouts, large carpet areas and good UDS would make good buys.
                    I was referring to the class that Ceebros is targeting and every project has its pluses and minuses.

                    I know many in the market looking for good UDS/nicer plans/less loading/good price - they are a rare planetary alignment and don't exist or gets snapped up even before it comes to the market and hence finding one has the odds of locating MH370 in the ocean. Once in a blue-moon opportunity do not make it a trend. Buyers who are tired of finding such rare combinations with plethora of crappy choices often overpay when they find one and hence the 'good price' aspect is a mirage which does not exist.

                    We can only assess the current pricing based on what is prevalently available - the likes of 14-16k available in the market today, most of it are crappy valuation wise. End Use is an excuse to take the valuation exception because what one pays does not commensurate with what one is getting - it is the liking that drives the decision. With end-use asset forming the substantial portion of people's networth these days, paying attention to what one pays is prudent for overall financial health - especially for the middle class and upper middle class.

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                    • Re : Property Price Trends in Chennai

                      We as consumers have no idea how much debt the RE company r holding since many companies are private company just take the case of VGN. They have 50 million dollars from Ajay primal company 25 million dollars from Kotak bank at high NCD. Nothing bad in taking debt however how many customer know that the property u r investing is hedge to PE funds and bank not sure what is total borrowing however in its press release it stated it is planning to borrow 900 cr to invest in RE that is big amount for company with a paid up capital of 60 cr

                      Since RE is so unregulated we see many good developer struggling to manage its repayment I would as a investor would avoid buying a new project and just stick to RTM apartment

                      http://www.brickworkratings.com/pres...18June2013.pdf

                      http://www.brickworkratings.com/pres...-22Mar2013.pdf

                      Other project Loan VGN group

                      Funding for Projects - (1) Rs. 66 Crores Equipment Funding – SREI BNP Paribas (2) Rs. 40 crores Bank Guarantee Limits Andhra Bank (3) Rs. 15 Crores – Construction Equipment funding ICICI / RELIANCE CAPITAL (4) Rs. 40 Crores - Residential Project Term Loan Union Bank of India (5) Rs. 45 Crores – ICICI Bank Residential Project Term Loan (6) Rs. 45 Crores - Land Loan from Kotak Prime (6) Processing a Term Loanof Rs. 100 Crores for a 1.5 million square feet Residential project
                      Last edited March 30 2014, 05:14 PM.
                      RE overpriced still fancy then 4% yield is must anything less is overpriced

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