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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 chennaidude View Post
    I think the NHB residex data is deeply flawed because of odd groupings, registration not in full white money, etc???
    Let me tell you this, NHB data is much better than other indexes that Makaan, India Property, 99 Acres and other sites put in, most of them using list prices on their website.
    Some companies take avg price of new flat and index it, they forget about resale market and focus only on suburbs where most transactions take place.

    There is no perfect data source to track to proper details. Please post if you see a good data source.

    By the way, I do not think NHB tracks suburbs. Their definition of Chennai is different from what people know of Chennai. Old city limits, it ends with Guindy and Thiruvamyur. So it excludes the entire OMR region.

    Registration data might be off, but you cannot register the property under guideline value.
    So the gap between guideline value and Market value (white to black money%) becomes critical. If the gap is stable, then the trend still holds, if the gap changes and % of white or black increase/decrease you will see bigger variations.

    By excluding suburbs, the NHB data might not have a lot of variation or transactions with biggest white to black variation. But this also means underperformance or overperformance of suburbs is hidden.

    Coming to grouping, yes it is not geography or demography based. Maybe they do not have enough data and probably there are bigger variations due to sparse data and they smoothed out the curve using these groups.

    Anyway I applaud the govt for doing this - however good or bad.
    There is no incentive for anyone to do such excercise and publish it for free of cost.

    Comment


    • Re : Property Price Trends in Chennai

      Nevertheless, the couple purchased a plot. They paid Rs.10, 000 for one ground in `D' block. Today, even by conservative estimates the land is worth more than Rs.50 lakhs. At a recent meeting of welfare associations, speakers joked that no landowner in Anna Nagar could consider himself middle-class anymore. Upper middle-class? Yes.


      Hindu article dated 25/03/2005

      The Hindu : Metro Plus Chennai : Boomtown
      BTW even boat club or pose garden did not command that price in 2007 at 2.5 per ground
      Last edited April 10 2014, 12:25 AM.
      RE overpriced still fancy then 4% yield is must anything less is overpriced

      Comment


      • Re : Property Price Trends in Chennai

        DLF surprised chennai the market in early 2007 by buying a prime land in Egmore for 8000 sqft lot have rewritten abt this purchase
        RE overpriced still fancy then 4% yield is must anything less is overpriced

        Comment


        • Re : Property Price Trends in Chennai

          Septaa, I agree that early to mid 2007 was (to my recollection) the start of huge upside in real estate in Chennai. First time that people probably heard of such high valuations. Other than areas like Poes Garden and Boat Club (which are pretty small areas), other areas like Egmore and Annanagar are very vast, and price varies a lot with location.

          It would be interesting to hear members views on when Poes Garden and Boat Club touched the over 2 crore mark.

          My understanding is that 2007/2008 had huge gains in Chennai, and then brief slowdown in 2008/2009 (at time of US downturn), followed by good gains in 2009/2010/11. I think 2007/2008 was probably the biggest percentage increase overall.

          Comment


          • Re : Property Price Trends in Chennai

            Originally posted by k11 View Post
            Let me tell you this, NHB data is much better than other indexes that Makaan, India Property, 99 Acres and other sites put in, most of them using list prices on their website.
            Some companies take avg price of new flat and index it, they forget about resale market and focus only on suburbs where most transactions take place.

            There is no perfect data source to track to proper details. Please post if you see a good data source.

            By the way, I do not think NHB tracks suburbs. Their definition of Chennai is different from what people know of Chennai. Old city limits, it ends with Guindy and Thiruvamyur. So it excludes the entire OMR region.

            Registration data might be off, but you cannot register the property under guideline value.
            So the gap between guideline value and Market value (white to black money%) becomes critical. If the gap is stable, then the trend still holds, if the gap changes and % of white or black increase/decrease you will see bigger variations.

            By excluding suburbs, the NHB data might not have a lot of variation or transactions with biggest white to black variation. But this also means underperformance or overperformance of suburbs is hidden.

            Coming to grouping, yes it is not geography or demography based. Maybe they do not have enough data and probably there are bigger variations due to sparse data and they smoothed out the curve using these groups.

            Anyway I applaud the govt for doing this - however good or bad.
            There is no incentive for anyone to do such excercise and publish it for free of cost.
            Agree that it is a valuable effort. New thing that I learned today -- NHB is owned by RBI. Only thing I meant to say was that when common man tries to make decisions or form opinion, some of these things have to be taken with a grain of salt.

            Comment


            • Re : Property Price Trends in Chennai

              Originally posted by Septaa View Post
              BTW even boat club or pose garden did not command that price in 2007 at 2.5 per ground
              I hope you meant 'Poes' not 'Pose'.

              I think it was beyond 2.5C in 2007. I do not know of transactions, you are talking about few streets, they are more like a colony not an area by itself if you look at size and number of homes.

              New Apts were above 10K at that time, so land might be definitiely above 2.5C if you could ever find one.

              I do not live in PG, but I have a couple of family members and even some of our neighbours moved there. It was big in late 90's itself. I know of a late 90's transaction of a flat at 5K psft. Another one happened in mid 90's at 2-2.5K I think for a RAMS building.

              2007-10 was a good time to buy in the city.
              Price did not go down during recession time, but inventory went up. Easier to find deals.

              I was looking in PG for old apts during recession time, even came across couple of deals. Asking was 15K, 12K was possible for older units. Hard to find the units even during that time in this area.
              Nowadays it is close to impossible. Same units are listed for 30-35K or more.
              I was looking at new units in DLF vs older units in better streets. PG was one of my favorites.
              Last edited April 10 2014, 03:06 AM.

              Comment


              • Re : Property Price Trends in Chennai

                Originally posted by chennaidude
                Agree that it is a valuable effort. New thing that I learned today -- NHB is owned by RBI.
                When one is attempting to collect transaction data and project as an index to study the trends, it is a very responsible role. While highest level of accurate projection is impossible, the quality of error or quantum of deviation one sees determines how good the rest of the data can be and what to make of it. It is common in statistics, where data do have anomalies which can be asterisk'ed and deviation explained to some extent.

                If one takes a look at Bangalore data, it moved from 100 to 111 in 7 years. If one digs deeper, one can see that Zone E comprising of established/well developed areas have underperformed in 7 years (100 to 87). No amount of data skew in collection can possibly explain this - either there was a methodology change or assumptions change during the period or something more significant. At least some explanation was in order. By letting out a data like this, their entire credibility of the rest of the data gets undermined. I can understand the level of oversight or lack of attention in explaining the anomaly if it is from 99acres or makaan, but not from RBI brain child which also claims the below:
                Actual transactions prices considered for the study in order to arrive at an Index which will reflect the market trends.

                Primary data on housing prices is being collected from real estate agents by commissioning the services of private consultancy/research organisatons of national repute; in addition data on housing prices is also being collected from the housing finance companies and bank, which is based on housing loans contracted by these institutions.
                When the attempt is to project an index which serves as a barometer of trend in rising/falling prices, there is a minimum level of credibility one should have from the data and that too in a system which is up for 7 years. Projection can either be useful, credible and be trusted with some minimal acceptable standards or it is useless. It is more or less binary.

                Something is better than nothing do not work in projecting indices that has a potential to mislead and plain wrong when it is so apparent even for commoners. How can anyone explain Zone E in Bangalore to move from 100 to 87 in 7 years?
                Last edited April 10 2014, 08:37 AM.

                Comment


                • Re : Property Price Trends in Chennai

                  Originally posted by chennaidude View Post
                  I recall sales in Annanagar in early 2007 at over 2.5 crore per ground. Not on main avenue, but in good area. I have no idea where you get the 60 lakh number.

                  I also think the 6 crore number for today in Annanagar is incorrect -- unless it is in prime avenue location, or very large parcel. Of course anyone can ask any amount, only actual sales matters.

                  I think the NHB residex data is deeply flawed because of odd groupings, registration not in full white money, etc???
                  I think septa is correct (even without the news article)

                  This is what I stated for 2grounds in Annanagar East.

                  https://www.indianrealestateforum.co...?p=171#post205

                  2006 Annanagar was around 75L for 1G plot. 2G plot on wider roads or corner were about 25% -30% more due to development potential.

                  Comment


                  • Re : Property Price Trends in Chennai

                    Perhaps NHB Residex could provide some kind of raw data. Number of transactions, are they relying on new home data as well or resales only, etc. Do they provide methodology? If they are not providing this information, it is an opportunity for someone (academic institution?) to do this, and shine. Example: Case-Shiller index in the US, I believe it was started by Professors by that name.

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by chennaidude View Post
                      Perhaps NHB Residex could provide some kind of raw data. Number of transactions, are they relying on new home data as well or resales only, etc. Do they provide methodology? If they are not providing this information, it is an opportunity for someone (academic institution?) to do this, and shine. Example: Case-Shiller index in the US, I believe it was started by Professors by that name.
                      Too much effort involved in collecting, maintaining and publishing free of charge by any private institution or individual.

                      AFAIK, NHB data includes resales and new home prices, it is indexed and weighted. They do not report smaller micro markets if the do not have enough data.

                      Some big RE companies like DLF are collecting data in major cities. They get the data from Registration, RE brokers and other sources. Though they do not share it in public space. They use for internal reporting.

                      Actually even Banks collect such data. But I doubt they go to registration data and all.
                      They get it from major brokers who do have data mostly on new apt list prices only, thus it is kind of focused on certain major suburban areas, that too list prices could be way off of closing price and thus is not a good barometer to measure trends.

                      State Govts also use various data sources to set their guideline value. Stamp duty is a main source of revenue for State Govt, they have a huge incentive to keep increasing the GVs.

                      So State Govt has to make effort to maintain these than the Central Govt.
                      SG runs the SRO offices, they can get the data if their systems are computerized. CG can aggregate all this info from SG and present it to general public.

                      Anyway Residex is only standard report published free of charge. It is heavily used by Media.
                      Every other article in Newpapers, TV and Internet metions these numbers in one form or another.

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