Announcement

Collapse
No announcement yet.

Property Price Trends in Chennai

Collapse
This is a sticky topic.
X
X
Collapse

Property Price Trends in Chennai

Last updated: 4 weeks ago
2452 | Posts
  • Time
  • Show
Clear All
new posts

  • Re : Property Price Trends in Chennai

    Originally posted by k11
    There should be a reason why these guys are piling on. Think about it for a moment.
    Pool of buyers is ever increasing.
    So it is not just the locals but everyone is getting in.
    Fallacy lies in the assumption that they must be right. Nobody knows whether they will be right is the correct position at this moment. Financially Savvy are the ones who made the Lehman Bros go kaput. So, equating financially savvy NRI buying to allude that there must be something is a guess work and has no meaning.
    Originally posted by k11
    Now why would they do that if Indian RE is expensive and unaffordable.
    Nasdaq broke record after record in trading volume during 2000. Pool of buyers ever increasing is one reason and why would people pile on if Nasdaq was expensive did not apply then as we all witnessed much later. NRIs are not immune from Herd mentality even if I were to take your anecdotal statement that NRIs are piling on India like there is no tomorrow. Smart NRIs who look at currency-adjusted returns do not make mistakes at this valuation. Dumb NRIs who invested in 2010 and 2011 taking HELOC had realized that currency means something and interest rate is not everything.

    Comment


    • Re : Property Price Trends in Chennai

      Originally posted by k11 View Post
      I think the prices can go much higher as the investment demand increases irrepective of End use.
      My thought: this is fundamentaly wrong. However i have seen this hapening in last 5 years.Ghost condos are perfect examples. How long is my question and i also understand answer to my question is not easy.

      i consider price increase because of invesment is like building built on ground without foundation.

      For me if no end use, then there is no real demand. investment demand is an illusion. the only thing which could help investment is economical growth, more jobs which will increase end use.

      sometimes i feel people who exit their investment NOW are smart, but i dont know if i am correct.

      Comment


      • Re : Property Price Trends in Chennai

        Originally posted by iceemani View Post
        My thought: this is fundamentaly wrong. However i have seen this hapening in last 5 years.Ghost condos are perfect examples. How long is my question and i also understand answer to my question is not easy.

        i consider price increase because of invesment is like building built on ground without foundation.

        For me if no end use, then there is no real demand. investment demand is an illusion. the only thing which could help investment is economical growth, more jobs which will increase end use.

        sometimes i feel people who exit their investment NOW are smart, but i dont know if i am correct.
        Buyers sentiment is very important and plays a crucial factor deciding how big the bubble can grow. In late 2009/10 when the impact of GFC on India was uncertain, many properties saw a correction of nearly 30%. Despite that it couldn't attract buyers because no one was willing to buy in a falling market. Builders realized and saw when they increased prices it convinced the people on the fence to jump and take the plunge.Prices were artificially hiked and that coincided with the infusion of liquidity and economy revival leading to another RE boom. As long as there is possibility of greater fool to buy and there are enough such buyer target coupled with scarce good properties the price of property will continue to be in upward bias rising sharply but falling flatly.
        Last edited September 3 2014, 01:31 AM.

        Comment


        • Re : Property Price Trends in Chennai

          Originally posted by iceemani View Post
          My thought: this is fundamentaly wrong. However i have seen this hapening in last 5 years.Ghost condos are perfect examples. How long is my question and i also understand answer to my question is not easy.

          i consider price increase because of invesment is like building built on ground without foundation.

          For me if no end use, then there is no real demand. investment demand is an illusion. the only thing which could help investment is economical growth, more jobs which will increase end use.

          sometimes i feel people who exit their investment NOW are smart, but i dont know if i am correct.
          Your post does make sense to me.
          Look at this from my perspective.

          Indians (including NRIs) are brainwashed into 'Indian RE is the best investment'.

          People are paying premium prices for plots in barren layouts and apartment projects resembling ghost condos.
          This is happening TODAY.

          People continue to pile on, they did this even when all of this was happening 5 years ago.
          It is not like situation drastically improved now. As I was saying low inflation/currency adjusted returns have not deterred them.

          So I am not sure why people will suddenly stop buying.
          If this is a bubble, it was bubble 5-6 years ago too.

          Price increase will happen when there is enough demand (buyers).
          Lack of end users is not stopping buyers.
          Poor inflation/currency adjusted returns in recent years is not stopping buyers.
          Lack of Infra is not stopping buyers.
          Opportunity/Interest cost is not stopping buyers.
          Better alternative investment options is not stopping buyers.

          If there are no buyers, then prices has to come down significantly.
          I am not sure it is going to happen anytime soon.

          I am not a perma bull nor a perma bear.
          I am not convinced Chennai RE is best for me at the moment, as my expectation of returns are high but it might work out for others.
          I feel prices will continue to increase, albeit slowly.
          If you have lesser avenues to invest, I think Chennai RE is not bad.
          You can expect returns greater than zero, I have a feeling it might not fall into -ive territory.

          Some of the threads started by me related to prices.
          http://www.indianrealestateforum.com...ars-77611.html
          https://www.indianrealestateforum.co...d-city?t=32894
          https://www.indianrealestateforum.co...ountry?t=52398
          http://www.indianrealestateforum.com...-re-80130.html

          Comment


          • Re : Property Price Trends in Chennai

            Buyers interest will remain and buy now and somebody will pay more - is more on the lines of Greater Fool theory as abishek put it.

            All of the data so far shown are purely anecdotal. NRIs are piling on, nothing is stopping the buyers - it is hard to see how far the reality could be disconnected from these illusions.

            When the train starts moving and if one pushes, one believes that push is what is moving the train. One can come up with various anecdotes which suits the current behavior of the markets and jump in - all of the anecdotes are classic indicators of momentum investing. In momentum investing, you buy because you think it goes higher. Nothing else matters. Short punts in RE can work at times but it rarely works in a long haul.

            Comment


            • Re : Property Price Trends in Chennai

              If any of you know current market price pls help with price of land with old house kind of property within 1 km of Camp Road junction. Thanks,

              Comment


              • Re : Property Price Trends in Chennai

                Originally posted by maverick007 View Post
                Buyers interest will remain and buy now and somebody will pay more - is more on the lines of Greater Fool theory as abishek put it.
                Not right. End users do not think about disposing it while buying it!. Greater fool theory is for some one like who buys based on serial actors advertisements.

                All of the data so far shown are purely anecdotal. NRIs are piling on, nothing is stopping the buyers - it is hard to see how far the reality could be disconnected from these illusions. .
                Not right. Locals are much richer than NRIs. Only difference is that the locals never show of their wealth and very silent on their bank balance!. Without the local population support this market could not survived until now.

                When the train starts moving and if one pushes, one believes that push is what is moving the train. One can come up with various anecdotes which suits the current behavior of the markets and jump in - all of the anecdotes are classic indicators of momentum investing. In momentum investing, you buy because you think it goes higher. Nothing else matters. Short punts in RE can work at times but it rarely works in a long haul.
                Not right. In a long haul RE in established location always beats inflation. But the interpretation of long haul with timeline varies among masses!
                Last edited September 5 2014, 05:42 AM.

                Comment


                • Re : Property Price Trends in Chennai

                  Originally posted by sunr2i
                  Not right. End users do not think about disposing it while buying it!. Greater fool theory is for some one like who buys based on serial actors advertisements.
                  End users affordability has limits and just because there are needs for end-use and buyers will not enter at any prices. However, current bulls seem to ignore that if seller do not sell at these prices, buyer will have to buy. At best, it is a hope. Hope may have worked for some time or little longer. But, hope is not fundamentals. There is a limit to this thinking in terms of how far it can stretch. That is greater fool theory in action and no need to waste money on serial actors to drive home these basics.


                  Originally posted by sunr2i
                  Not right. Locals are much richer than NRIs. Only difference is that the locals never show of their wealth and very silent on their bank balance!. Without the local population support this market could not survived until now.
                  You say 'Not right' but seemed to echo a part of what I was driving at. Looks like cut paste error of the same string 'Not right' in all the quotes !!

                  Originally posted by sunr2i
                  Not right. In a long haul RE in established location always beats inflation. But the interpretation of long haul with timeline varies among masses!
                  Above has no relevance to the quote of mine you responded to. Not right . First, learn about momentum investing and what drives the madness and then will discuss.
                  Last edited September 5 2014, 11:20 AM.

                  Comment


                  • Re : Property Price Trends in Chennai

                    Originally posted by maverick007 View Post
                    End users affordability has limits and just because there are needs for end-use and buyers will not enter at any prices. However, current bulls seem to ignore that if seller do not sell at these prices, buyer will have to buy. At best, it is a hope. Hope may have worked for some time or little longer. But, hope is not fundamentals. There is a limit to this thinking in terms of how far it can stretch. That is greater fool theory in action and no need to waste money on serial actors to drive home these basics.
                    I think you are confused with varies theories of investment in RE. You got to learn basics of momentum investing!. Investment in RE and physicals are not same as investing in stocks.

                    There is no momentum in RE currently otherwise we would not have stagflation and inventory pileup. There are mainly two type of buyers now. One is real end user who does not care of price fluctuation in short term and the other is buyers who afraid of getting priced out in future. These two are end users who never mind plunging in RE at any time.

                    Your assumption of end user affordability is ridiculous. There is always affordability as there is always something available if one does not bother about the distance from the city and market eventually forces both the buyers and sellers to arrive at equilibrium.
                    Last edited September 5 2014, 08:38 PM.

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by maverick007 View Post
                      End users affordability has limits and just because there are needs for end-use and buyers will not enter at any prices. However, current bulls seem to ignore that if seller do not sell at these prices, buyer will have to buy. At best, it is a hope. Hope may have worked for some time or little longer. But, hope is not fundamentals. There is a limit to this thinking in terms of how far it can stretch. That is greater fool theory in action and no need to waste money on serial actors to drive home these basics.
                      Why is it not affordable now all of a sudden?
                      If it was affordable 4-5 years ago, it is affordable now too.

                      Flats for end users on popular locations like OMR, places like Shols was 4K psft. Now it is 5.5K psft. If you add in Inflation and other factors, it is not a big move. Median prices all over the Metro region did not move a lot.

                      Petrol prices, Food, Air/Rail/Bus fare, labor, construction materials, furniture, etc - everything went up in leaps and bounds. RE did not go up a lot in relative comparison.

                      Prices are affordable still. There are takers for the right property in good in-demand locations.

                      Comment

                      Have any questions or thoughts about this?
                      Working...
                      X