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Property Price Trends in Chennai

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  • Re : Property Price Trends in Chennai

    citi insight Property trends Q1 2014

    http://www.online.citibank.co.in/pro...ts-Q1-2014.pdf

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    • Re : Property Price Trends in Chennai

      Random googling brought me to this blog which has the price trends for some major places in the city as per 2007.
      Link: http://chennaiteblog.blogspot.in/200...ies-rates.html

      My earlier Post about 2004 - Just to show how prices were at that time.
      https://www.indianrealestateforum.co...?p=947#post474

      Note: I am only referring to the rates of fringe areas (at that time) like Velachery , Guindy, Valasaravakkam, Kodambakkam and even Thiruvanmiyur. I think rest of them have doubled and some more than that.

      The reason I want to post it here is because of the rates. They look pretty steep for 2007, because I always thought 2007 is 7 years back, so Velachery etc must have been 2500-3000, Porur must be 2000 etc.

      I remember reading lot of people saying in IREF that 2007 was the peak pricing period.

      So does this mean between 2007 - 2010, pricing sort of corrected and now post 2011 its again hitting high for places within city?

      Or is it that the blog writer might have conveniently picked only the pricing of some high priced projects?
      Last edited May 7 2014, 12:33 AM.

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      • Re : Property Price Trends in Chennai

        Originally posted by vettipayyan View Post
        Random googling brought me to this blog which has the price trends for some major places in the city as per 2007.
        Link: Chennai Realty News: Chennai Properties Rates

        My earlier Post about 2004 - Just to show how prices were at that time.
        https://www.indianrealestateforum.co...?p=947#post474

        Note: I am only referring to the rates of fringe areas (at that time) like Velachery , Guindy, Valasaravakkam, Kodambakkam and even Thiruvanmiyur. I think rest of them have doubled and some more than that.

        The reason I want to post it here is because of the rates. They look pretty steep for 2007, because I always thought 2007 is 7 years back, so Velachery etc must have been 2500-3000, Porur must be 2000 etc.

        I remember reading lot of people saying in IREF that 2007 was the peak pricing period.

        So does this mean between 2007 - 2010, pricing sort of corrected and now post 2011 its again hitting high for places within city?

        Or is it that the blog writer might have conveniently picked only the pricing of some high priced projects?

        @Vetty,

        Your post will add value to this thread:

        https://www.indianrealestateforum.co...mation?t=59946

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        • Re : Property Price Trends in Chennai

          Please suggest latest price trend in and around Padappai, Vandalur, Perungalathur, gudvanchery, ponmar, kandigai, mambakkam...

          I am looking plots Ranging from Rs.400-700 Please let me know if you know anything in these areas. Specification
          Site should have atleast 24" road inside the layouts expected will 30"ft road.
          even offroad around 1 to 2Kms is fine from connecting road in these major area like vandalur, perungalathur, mambakkam, padappai

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          • Re : Property Price Trends in Chennai

            Chennai amongst the top 12 in upcoming luxury real estate market globally

            As Per Servey :
            Chennai has been picked as one of the top 12 upcoming destinations for Luxury Real Estate, according to a report by Savills World Research, in cooperation with design firm Candy & Candy and Deutsche Asset and Wealth Management. The top cities includes Tel Aviv, Melbourne, Miami, Chicago, Dublin, Panama City, Beirut, Istanbul, Cape Town, Jakarta, Laos and Chennai in that order. Tel Aviv is the most expensive city where a 2 bedroom luxury apartments costs 1.45 million USD and Chennai is the least expensive luxury destination where a 2 bedroom costs 160,000 USD
            The report also highlights that cities like Chennai and Lagos might offer higher returns to investors but also have higher risk. All in All, it is a good time for investors to cheer and continue to invest in Chennai.

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            • Re : Property Price Trends in Chennai

              Originally posted by shilpa2014 View Post
              As Per Servey :
              ]The report also highlights that cities like Chennai and Lagos might offer higher returns to investors but also have higher risk. All in All, it is a good time for investors to cheer and continue to invest in Chennai.
              You are quoting a report commissioned by a company with a (financial) interest in Chennai, specifically about luxury flats. Not a particularly good indicator of the RE market people will be investing in. And asking a seller, if a property offers good value is not very wise.

              I have the cash available to buy such a luxury flat, but Chennai, for me personally, no longer offered value compared to other cities.
              Last edited June 10 2014, 01:55 AM.

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              • Re : Property Price Trends in Chennai

                Originally posted by househero View Post
                You are quoting a report commissioned by a company with a (financial) interest in Chennai, specifically about luxury flats. Not a particularly good indicator of the RE market people will be investing in. And asking a seller, if a property offers good value is not very wise.

                I have the cash available to buy such a luxury flat, but Chennai, for me personally, no longer offered value compared to other cities.
                I do not think we can classify a 2-Flat costing $160K (95L rupees) as luxury.
                95L for a 1200sqft flat is around 6-6.5K psft base price. It is kind of regular flat.

                For that much price you probably can get something in the suburbs only.
                Even in the edges of the city it probably will cost more. So technically it will not be in the city but might be in the metro region.

                In Indian RE market they call everything as luxury nowadays.
                Hard to see what is a real luxury. Everyone has different opinion including me.

                We do not have a lot of 2-BHKs in the nicer areas of the Indian cities, most are bigger.
                A good luxury flat in the center of city will cost 25K+ psft. Construction cost itself for any 'Luxury' flat would be in the range of 4-5K psft, anything under that would be barebone ordinary flat devoid of anything. Now you add the expensive land costs on top of it.

                I would say among the current project 4C is a good budget to a get a nice so called luxury flat. Maybe you can squeeze in at 3-3.5C, if they ever make smaller units.

                So if you calculating affordability in $, we are looking anywhere between $510-$675K.

                I do not think every other guy on the street will have that kind of money.
                It might be restricted to only top 5% or some smaller pocket of city's population. If everyone can have luxury, would it be luxury anymore. Our definition of luxury will have to get upgraded for sure.

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                • Re : Property Price Trends in Chennai

                  Originally posted by k11 View Post
                  I do not think we can classify a 2-Flat costing $160K (95L rupees) as luxury.

                  So if you calculating affordability in $, we are looking anywhere between $510-$675K.

                  I do not think every other guy on the street will have that kind of money.
                  Its great to read an opinion from somebody who knows the Chennai market first hand.

                  Please allow me to point out, the report quoted a luxury flat in Chennai as being $160,000, it was not my own assessment. The report states a 'normal 2 bhk flat' in Chennai as being valued at $40,000. Placing even more doubt on the facts that the report is even based.

                  The report was commissioned by a UK based RE agent to sell Chennai property to Europeans. I also I don't think $160,000 would buy a European standard luxury flat in Chennai at all. (As they are selling these flats as luxury to Europeans, they would expect European standards of Luxury) Not as you point out, what a Chennai developer would describe as 'luxury'.

                  The report is useless propaganda. And Chennai RE remains over valued.

                  Many Europeans can afford $500k, but they are never going to invest in Chennai when they can invest in much more stable and attractive RE across Europe and the USA at half the price of Chennai, with greater potential gains (only 5 years ago the very same property would have sold for double) and European markets are rising once again. US property prices have reached 2004 levels once again. (Up from 2000 levels in the recession, 2007 being the peak)
                  Last edited June 10 2014, 05:08 AM.

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                  • Re : Property Price Trends in Chennai

                    Originally posted by househero View Post
                    Its great to read an opinion from somebody who knows the Chennai market first hand.

                    Please allow me to point out, the report quoted a luxury flat in Chennai as being $160,000, it was not my own assessment. The report states a 'normal 2 bhk flat' in Chennai as being valued at $40,000. Placing even more doubt on the facts that the report is even based.

                    The report was commissioned by a UK based RE agent to sell Chennai property to Europeans. I also I don't think $160,000 would buy a European standard luxury flat in Chennai at all. (As they are selling these flats as luxury to Europeans, they would expect European standards of Luxury) Not as you point out, what a Chennai developer would describe as 'luxury'.

                    The report is useless propaganda. And Chennai RE remains over valued.

                    Many Europeans can afford $500k, but they are never going to invest in Chennai when they can invest in much more stable and attractive RE across Europe and the USA at half the price of Chennai, with greater potential gains (only 5 years ago the very same property would have sold for double) and European markets are rising once again. US property prices have reached 2004 levels once again. (Up from 2000 levels in the recession, 2007 being the peak)
                    Hi househero,

                    I agree with you that Chennai RE is overvalued and makes no investment sense. But If I may so ask, How would you value if your need is to buy something where your native is? buy some place near where your family is? Can you put a price tag for it? Chennai price is high because of scarcity of good properties. When there is necessity to buy, it is not demand vs supply..none of the investment fundas apply..What happens is competitive bidding for good properties whose bar gets pushed higher and higher as supply of good properties go down. People pay higher price for RE in good location to out buy other potential buyers before it gets sold and not just because the asset is valued more and offers better quality or RoI. Hope you get this difference between Indian/Chennai RE and other world markets where RE is just another asset class.
                    Last edited June 10 2014, 01:26 PM.

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                    • Re : Property Price Trends in Chennai

                      Originally posted by nabishek View Post
                      Hi househero,

                      I agree with you that Chennai RE is overvalued and makes no investment sense. But If I may so ask, How would you value if your need is to buy something where your native is? buy some place near where your family is? Can you put a price tag for it? Chennai price is high because of scarcity of good properties. When there is necessity to buy, it is not demand vs supply..none of the investment fundas apply..What happens is competitive bidding for good properties whose bar gets pushed higher and higher as supply of good properties go down. People pay higher price for RE in good location to out buy other potential buyers before it gets sold and not just because the asset is valued more and offers better quality or RoI. Hope you get this difference between Indian/Chennai RE and other world markets where RE is just another asset class.
                      Do you believe all the families who were made homeless in the US and Europe by the Great Recession were investing in RE? or just living in a house they paid market price for?

                      The answer?
                      ...wise money rents until the crash

                      Indian RE market is determined by the exact same economic fundamentals of every other RE market. It is not special. Everybody needs a home to live, Indians and Europeans alike. Investors (speculators) are FAR more prevalent in Indian RE than US/Europe. Be warned, prices are artificially high and unsustainable without India hitting 8+ GDP figures and wages rising significantly to support current Indian RE prices (even then its not guaranteed to avert stagnation at the least).

                      "People pay higher price for RE in good location to out buy other potential buyers before it gets sold and not just because the asset is valued more and offers better quality or RoI"

                      You are describing the irrational actions of individuals in a bubble, all assets are rational in the Med/long term. Nobody has a divine right to own a property. There is nothing wrong with renting. The Indian RE market has been irrational for too long and the lowest common denominator has been exhausted, every* property owner in India thinks they are RE investors after seeing over a decade of increases. Only time will tell if holding on to Indian RE will result in a 45% gain over the next three years, or a 45% loss.

                      Unfortunately losses don't care if you live in the property, or if its just an investment. Economics are indiscriminate and emotionless. Its sad and I truly hope that Indian families do not experience the trauma of loosing their homes like so many in the West.

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