Hi Friends,

I had been to the FAIRPRO '09 Fair.My Impression after seeing, is that prices are stagnating for all ongoing projects and builders are trying hard to hold them up.

Prices are 10-20% lower for new projects in the pipeline and for ready to occupy flats.

The discount offered at the stall was very less and were in the range 150-500 Rs/sqft max.

For the benefit of fellow members I am posting the project/price details of some of the properties.



Akshaya Foundations

Adora - OMR - 3750/sqft
Aikya - Adyar - 12500/sqft

Alliance Group - Orchid Springs - 3199/sqft

Arihant Foundations

Heirloom - Thalumbur - 2499/sqft
Escapade - Thoraipakkam - 4150/sqft
Villa Viviana - Maramalai nagar - starting from 1 Crore

Asvini Foundations

Amarisa-phase1 - Ramapuram - 4500/sqft
Amarisa-phase2 - Ramapuram - 4250/sqft
Akshita - Madipakkam - 3800/sqft

Casa Grande

Riveira - Palikkarnai - 3450/sqft - before discount 3600/sqft
Silver Oak - Perungudi - 4300/sqft - before discount 4500/sqft
Madhuban - Madipakkam - 3300 /sqft - before discount 3500/sqft
Mylapore - R.K.salai - 12500/sqft
Plots
Ponmar -785/sqft - before discount 825/sqft
Maraimalainagar - 790/sqft - before discount 825/sqft

CeeDeeyes - Chenni Pattinam

Basic Rate - 1600/sqft All Inclusive - 2075/sqft

Chaitanya shanthiniketan

Sunnyvale - Ayanavaram - 4850/sqft
Serena - Rajkilpakkam - 2550/sqft
Gardenia - OMR - 1900/sqft
Green Park - Chitlapakkam - 3300/sqft

DLF

Gardencity - 3200/sqft - was told slash in prices expected in coming weeks.

Doshi Housing

Etopia I and II - Perungudi - 3895/sqft
Nakshatra - Tambaram - 2995/sqft - Completion May 2010
Tranquil - Velachery - 5500/sqft - Completion February 2010
Trinity park - Santhoshpuram,Vengaivasal - 3195/sqft - Completion April 2009
Serene Couny-Villas - Santhoshpuram,Vengaivasal - 2200,2600/sqft
LlanStephan - Chetpet - 9000/sqft - Completion May 2009
Sri Mahalakshmi - Ayanavaram - 4495/sqft - Ready to Occupy

ETA

Rosedale - OMR - 3100/sqft
Le Chalet - Villas - Sriperambudhur - 26 Lakhs - 37 Lakhs

Hiranandani Upscale - 4200/sqft

Hiranandani Palace Gardens - 3475/sqft

Indus Housing

anantya - Navalur,OMR - 2299/sqft + 400(other charges)
riviera villa - Navalur,OMR - 90 Lakhs onwards
habittera - urapakkam,GST - 2399/sqft + 400(other charges)
amber - Saidapet - 4750/sqft

Jain Housing

Ankush Prakas - Kilpauk - 7500/sqft - Ready to occupy
Amrit Kailash - Strahns Road - 4500/sqft - Ready to occupy
La Gardenia - Nungabakkam - 7500/sqft - Ready to occupy
Ansruta - Valluvarkottam, nungabakkam - 10000/sqft - Ready to occupy
Antariska - Kodambakkam - 4500/sqft - Ready to occupy
Eiffel Garden - Vadapalani - 4250/sqft - Ready to occupy
Saagarika - M.R.C Nagar, sea facing - 10000/12500 - Ready to occupy
Green acres - Pallavaram - 3900/sqft - Ready to occupy
Abhishek - Selaiyur - 3500/sqft - Ready to occupy.

Jamals

Orchid - Palikkarnai - 3500/sqft
Palazzo - keelkattalai - 3700/sqft
Grandeur - Velappanchavadi(near saveetha dental college) - 3200/sqft

KGEYES

3 Projects on L.B.Road, Thiruvanmiyur - 6650/sqft
Delmare - Beach road,Thiruvanmiyur - 7000/sqft
Carolina - Velachery,Taramani - 4500/sqft
Swathi - Sastri Nagar,Adyar - 8500/sqft
Kalakshetra - 8000/sqft

Landmark Constructions

Tiara - Perungudi - 4000/sqft - Completion on August 2009
Aston Ville - Vadapalani - 5500 sqft - Completion on July 2009
Tudors Place - K.K.Nagar - 6500/sqft
The Address - Adyar - 11500/sqft
The Grange - Palavakkam - 7500/sqft
Cenralia - Chrompet - 2950/sqft - prelaunch
Gem Towers - AnnaNagar - To be launched.
Mahalakshmi Heights - Ashok Nagar - To be launched

L&T Estancia
Construction in Progress
1st-3rd Floor - 3950/sqft
4th -12 floor - floor rise charge of 20/sqft for each floor
13th - 17th - 4450/qft

L&T Eden Park - 3600/sqft

Mantri Synergy - OMR
2800/sqft - with 20/floor rise
Special offer - First Floor - all inclusive
1140 sqft - 33,67,000
870 sqft - 28,50,000

Navin Housing

Dayton Heights - Nelson Manickam road - 6500/sqft + 30/sqft floor rise from 2nd floor
Subha Mangala - Ramapuram - 4200/sqft
Brookfield - Nanmangalam - 3500/sqft
Merrylands - Medavakkam - 3500/sqft

Olympia Opaline - 3441/sqft - spl budget flats available

PACE Builders

Anna nagar west - 4195/sqft - before discount 4495/sqft
Selaiyur - 3195/sqft - before discount 3495/sqft
Valasarvakkam - 2795/sqft - before discount 3295/sqft

PS Srijan

The Grand - Velachery - 5250 sqft - before discount 5500/sqft - Floor Rise applicable from 4th floor

Rajparis

Harmony - Medavakkam - 3100/sqft

Rajarathnam Constructions

RC Prince Gardenia - Perambur redhill road,Kolathur - 3600/sqft

Rajkham

Independant houses - Ayyapathangal - 2600/sqft

Real Value

Sai Skanda - Velachery - 4200/sqft
Sai Surya - Palikaranai - 3800/sqft
OMR opp SIPCOT - 13.20 Lakhs onwards

Shriram Properties

Trishakti - SIPCOT - 2750/sqft
Shankari - 1990/sqft

Sidharth foundations

Tulip - k.k.nagar west - 4800/sqft - completion march 2009
Natura - medavakkam - 3100 /sqft - completion july 2009
Visvaleela - Annanagar - 8500 /sqft - to be launched
Dakshin - Urapakkam - price TBD - to be launched
upcoming projects in porur, thoraipakkam, rajkeelpakkam, mogappair.

SIS

Safaa - Urappakam - 3150/sqft

SSPDL

Crescent - Kelambakkam - Vandalur Road - 2500/sqft
Upcoming 2 villa project one in OMR and one in Sriperambathur.

Sumanth & Co

Thiruvanmiyur - 6000/sqft
Besant Nagar - 11500/sqft

TVH

Lumbini square - Pursaiwalkam - 5500/sqft + 30/sqft floor rise from 5th floor
Ouranya Bay(Premium) - OMR,Padur - 3100,3200 + 25/sqft floor rise from 5th floor
Ouranya Bay(Budget) - 2bhk - 20 Lakhs
3bhk - 30 Lakhs
Ekanta - Coimbatore - 3100/sqft
Revata - Mogappair east - 4500/sqft
Kamya - K.K,Nagar - 7000/sqft
Metro Golden Nest - Sriperambathur - 1bhk - 15 Lakhs
2bhk - 22 Lakhs
3bhk - 28 Lakhs

VGN Group

Minerva - Mogappair,Nolumbur - 2975/sqft
3 in 1, 4 in 1 - 3800/sqft
Mahalakshmi Nagar,Thiruverkadu - 3500/sqft
Plots
Mugalivakkam - 52 Lakhs/grnd
Selaiyur - 50 Lakhs/grnd
SPKoil - 34 Lakhs/grnd
Katankulathur - 22-27 Lakhs/grnd

Yuga Homes

Shem Park - chemmenachery - 3300/sqft
Upcoming in Koyambedu, R.A.Puram(8000/sqft)



There are lots of properties and also lots of potential buyers.There is sure a sense of uncertainity among the builders and also the buyers on when to make the next move.It was evident that correction in RE prices have started to happen.

Requesting members to respond with their thoughts on the current trend.
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  • Originally Posted by abk
    some of the reasons u have given r what i also have been arguing about 'oversupply in chennai in only far off places'.

    the mass psyche is also termed as the 'present bias' the thinking that what is happening will continue till eternity.

    the same exprts who said the sensex will touch 30000 in a yaer or two are
    saying 12000-15000 levels now.
    the same experts who predicted that IT hiring on OMR will be huge and require huge no of houses and predicted a requirement of 50000 houses on OMR.
    now they are ranting and comparing this with 1929.
    common sense does not allow me to believe them.

    ALL THESE YEARS THEY HAVE ONLY PREDICTED HOW THE ECONOMY SHOULD BEHAVE RATHER THAN HOW IT BEHAVES.
    drawing parallels between slumps and economies(nations) is senseless.
    every economy has its own inherent strengths and weakness.every situation was different.
    the world moves at a diff pace now than in 1929.distances have disappeared,
    borders are imaginary,in short the world has shrunk and things have changed to unimaginable levels since 1929,how could you compare them.

    what happened then need not necesarily happen now.

    everybody here agrees chennai prices have not crashed yet compared to
    other places.there is a difference among geographies,chronologies and effect of the same.


    exactly,everything cannot be compared.the situation,circumstances and
    the world itself is on a diff plane now when you compare it with 1929.
    like japan is stagnating for 19 yrs doesnt mean india will stagnate for 19 years

    zimbabwe may not be replayed in india.
    CommentQuote
  • Originally Posted by jhulafranky
    I don't agree with the appreciation calculation. If real estate only appreciated at 10% why wouldn't everyone put it in Savings Bank instead of taking a loan at a higher interest? Real Estate on an avarage, appreciates about 15% p.a. Generally Real Estate in Chennai grows at 15% p.a. Calculate with a Rs.450 / sq.ft in 1989.


    No second opinion that fixed deposits are the safest and if done systematically,in long term huge returns can be gained due to the compounding effect.Thats how my parents saved money.

    RE returns may vary from region to region and depends on when you get in and when you get out.You gain the maximum returns when you sell in the boom or hold it long enough to see 2,3 complete RE cycles.

    In the case of availing home loan and investing in RE, We are not dependant only on the RE returns.

    The point is,By taking loan you are leveraging on the banks money in an attempt to gain more wealth than you could possibly do by investing your own money.

    For instance

    Suppose you are a salaried person having 25 lakhs savings and would want to invest it and gain good returns.

    You can buy a property outright using the money and expect 15-20% p.a. returns.

    But if you opt for 20 lakhs loan from the bank and 5 lakhs downpayment to buy the house,meanwhile parking the other 20 lakhs in a FD.

    At the end of 20 years, your FD would have given great compounded returns.Your property would have grown and given you returns around 20% p.a. and the cost of borrowing is only 10% p.a.

    Moreover, you get Tax benefits on the money you are repaying to the bank.

    By this way, you are diversifying and making your money work more than it normally does.
    CommentQuote
  • Originally Posted by nabishek
    No second opinion that fixed deposits are the safest and if done systematically,in long term huge returns can be gained due to the compounding effect.Thats how my parents saved money.

    RE returns may vary from region to region and depends on when you get in and when you get out.You gain the maximum returns when you sell in the boom or hold it long enough to see 2,3 complete RE cycles.

    In the case of availing home loan and investing in RE, We are not dependant only on the RE returns.

    The point is,By taking loan you are leveraging on the banks money in an attempt to gain more wealth than you could possibly do by investing your own money.

    For instance

    Suppose you are a salaried person having 25 lakhs savings and would want to invest it and gain good returns.

    You can buy a property outright using the money and expect 15-20% p.a. returns.

    But if you opt for 20 lakhs loan from the bank and 5 lakhs downpayment to buy the house,meanwhile parking the other 20 lakhs in a FD.

    At the end of 20 years, your FD would have given great compounded returns.Your property would have grown and given you returns around 20% p.a. and the cost of borrowing is only 10% p.a.

    Moreover, you get Tax benefits on the money you are repaying to the bank.

    By this way, you are diversifying and making your money work more than it normally does.


    Dear Friend,

    A good and logical view expressed.

    ks2071746
    CommentQuote
  • good for invstment but for 1st house......

    Originally Posted by nabishek
    No second opinion that fixed deposits are the safest and if done systematically,in long term huge returns can be gained due to the compounding effect.Thats how my parents saved money.

    RE returns may vary from region to region and depends on when you get in and when you get out.You gain the maximum returns when you sell in the boom or hold it long enough to see 2,3 complete RE cycles.

    In the case of availing home loan and investing in RE, We are not dependant only on the RE returns.

    The point is,By taking loan you are leveraging on the banks money in an attempt to gain more wealth than you could possibly do by investing your own money.

    For instance

    Suppose you are a salaried person having 25 lakhs savings and would want to invest it and gain good returns.

    You can buy a property outright using the money and expect 15-20% p.a. returns.

    But if you opt for 20 lakhs loan from the bank and 5 lakhs downpayment to buy the house,meanwhile parking the other 20 lakhs in a FD.

    At the end of 20 years, your FD would have given great compounded returns.Your property would have grown and given you returns around 20% p.a. and the cost of borrowing is only 10% p.a.

    Moreover, you get Tax benefits on the money you are repaying to the bank.

    By this way, you are diversifying and making your money work more than it normally does.


    I see the first house as an insurance for bad times.if you have a house you can in all conditions earn enough for your bread.and hence you should pay maximum for a house and own it.with the EMI you save you can invest in FDs or cumalative depositsor any other avenues.
    this is the advice of my grandpa,he says bcoz he owned a house even his loss in business was taken care of in the course of time and he from his house started a appalam mfr and did well.the point is if you dont own a house
    you should start buying one.
    CommentQuote
  • Originally Posted by abk
    I see the first house as an insurance for bad times.if you have a house you can in all conditions earn enough for your bread.and hence you should pay maximum for a house and own it.with the EMI you save you can invest in FDs or cumalative depositsor any other avenues.
    this is the advice of my grandpa,he says bcoz he owned a house even his loss in business was taken care of in the course of time and he from his house started a appalam mfr and did well.the point is if you dont own a house
    you should start buying one.


    Dear Friend,

    I agree. The first house is a good investment in most cases which will come to your help/rescue at the time of need, may be after some years, may not be in the near future.

    ks2071746:)
    CommentQuote
  • If the house is for self use, the question of profit or loss doesnt apply at all.It is bought on need based and is not bought as an investment keeping ROI in mind.Thats a different ball game altogether.

    The catch in taking a home loan, is that one has to commit themselves long term to repay the amount.They are largely betting on their monthly income.If they are unable to keep up, It may sweep them of their feet and the risk of ending up without the house and all the savings looms large.People should properly assess risk before plunging in.

    Buying a first home using debt should be avoided.If one cannot afford it now, save enough to buy one later.meanwhile you can rent it.

    Buying a house on loan to save on rent is not a great idea.while you can move to another house for lesser rent you cant do so in paying EMI.

    Bank loan should be availed only if you want to leverage.

    One should invest only their savings and not their life by stretching their limits in the greed to become rich quickly.

    Every Investment instrument is profitable provided the money is invested in the right proportion and the money is closely monitored.

    The proportion how to diversify depends on the risk taking capacity of individuals.There are people from different strata of life and same rule does not apply to all.

    When I see Builders and Banks still pushing loans to unwary buyers.I feel the urge to explain what getting into loan really means and what are the pros and cons of it.

    Getting into Debt and living on credit is not easy and fashionable.The old generation knows it better and we are beginning to learn it the hard way.

    In this forum, I am just trying to share the knowledge i have gathered while trying to understand how the market works and learn more from other experienced members.
    CommentQuote
  • Originally Posted by nabishek
    If the house is for self use, the question of profit or loss doesnt apply at all.It is bought on need based and is not bought as an investment keeping ROI in mind.Thats a different ball game altogether.


    Abishek,

    Its nice to read your postings & really has good insight .

    Though some of the points have been already discussed by Wiseman & few others , You have discussed some more new ideas which are must-thought before making any decision on buying property.

    Would like to thank both of you. Appreciate your posts.

    I just to want to add on my opinion on the first-house. You have noted that first-house on leveraged fund is not advisable. Thats great . This is definitely applicable when you buy your first-house with your savings. Just because one has reasonable money , he should not commit everything on first-house . There can be other needs like HealthCare Education et all. Actually these are the people who trigger the price escalation.

    Whats your thought on it ?

    Also I would like to hear your opinion on >1Crore residential plots/Apartments in Chennai in any place ..be it any Besant/Anna/Gandhi/KK/RA Nagar ..Leave the commercial properties just on the bank of big roads.

    Cheers.
    CommentQuote
  • Originally Posted by sethugm
    Abishek,

    Its nice to read your postings & really has good insight .

    Though some of the points have been already discussed by Wiseman & few others , You have discussed some more new ideas which are must-thought before making any decision on buying property.

    Would like to thank both of you. Appreciate your posts.

    I just to want to add on my opinion on the first-house. You have noted that first-house on leveraged fund is not advisable. Thats great . This is definitely applicable when you buy your first-house with your savings. Just because one has reasonable money , he should not commit everything on first-house . There can be other needs like HealthCare Education et all. Actually these are the people who trigger the price escalation.

    Whats your thought on it ?

    Also I would like to hear your opinion on >1Crore residential plots/Apartments in Chennai in any place ..be it any Besant/Anna/Gandhi/KK/RA Nagar ..Leave the commercial properties just on the bank of big roads.

    Cheers.



    The End users have always been from this category who buy out of their savings, The demand generated by them is genuine and I dont believe that they could have contributed much to the escalation.

    I feel probably they would be the ones who are trapped now, looking out in far off places 50km away from the city and expecting prices would fall.

    Following are the reasons i will attribute to the boom

    The primary reason being

    Availability of Easy credit and money.Nothing else happened significantly to increase the demand so much in these 4-5 years.

    This boosted the purchasing power of the current generation to surpass their capacity and enabled them to buy more than what they really could afford.

    There are lots of other reasons that contributed to the boom. some like

    1.Political will to promote RE by relaxing the interest rates for home loans and providing tax exemptions.
    2.Tie up between Banks and Builders enabling launch of mega projects and providing pre-approved loans to customers.
    3.Entry of corporates into real estate market.
    4.Opening of the RE market to global investors by attracting FDI.
    5.Getting public money through stock market.
    6.Surge in the inflow of money from NRI's into RE.
    7.IT industry in its peak.
    8.Industries like automobiles, healthcare flourishing.
    9.Increase in construction cost.
    10.Shift in focus to develop townships, and to developing areas around OMR,GST which resulted in less supply within the city.

    Regarding the Houses priced at 1C etc.

    As I have explained in my earlier posts, I am still trying to understand how to arrive at the correct price of a property.Its still not clear to me how a property should be valuated.There seems to be no rationale behind the way builders fix the price.

    I calculate using the (UDS * (market rate/sqft of land)) + (builtup area * consruction cost) + registration charges + car parking + other charges.

    generally I find market value of the land is (FSI allowed for the extent * guideline value)

    I feel the price is inflated and is not sustainable for long.Almost most of the factors that supported the boom is now non-existent.

    The pricelist of the properties in Fairpro is that of the peak period.Seeing it one would get the feel that the market price in adyar is 12500/sqft.

    The reality is, there are new ready to occupy flats with high UDS(stilt + 4 floor) in Adyar at 8500/sqft negotiable while another flat in the same locality with open car park at 7000/sqft negotiable.

    I feel the market still needs a correction of 30-40% minimum.Rentals are bound to come down.

    In speculative locations the market could crash.
    CommentQuote
  • Originally Posted by jhulafranky
    I don't agree with the appreciation calculation. If real estate only appreciated at 10% why wouldn't everyone put it in Savings Bank instead of taking a loan at a higher interest? Real Estate on an avarage, appreciates about 15% p.a. Generally Real Estate in Chennai grows at 15% p.a. Calculate with a Rs.450 / sq.ft in 1989.

    Actually I have posted with clear examples. REalestate grows in the long run (20years) at about 20 to 30% CAGR based on past data.
    CommentQuote
  • Originally Posted by nabishek
    The End users have always been from this category who buy out of their savings, The demand generated by them is genuine and I dont believe that they could have contributed much to the escalation.

    I feel probably they would be the ones who are trapped now, looking out in far off places 50km away from the city and expecting prices would fall.

    Following are the reasons i will attribute to the boom

    The primary reason being

    Availability of Easy credit and money.Nothing else happened significantly to increase the demand so much in these 4-5 years.

    This boosted the purchasing power of the current generation to surpass their capacity and enabled them to buy more than what they really could afford.

    There are lots of other reasons that contributed to the boom. some like

    1.Political will to promote RE by relaxing the interest rates for home loans and providing tax exemptions.
    2.Tie up between Banks and Builders enabling launch of mega projects and providing pre-approved loans to customers.
    3.Entry of corporates into real estate market.
    4.Opening of the RE market to global investors by attracting FDI.
    5.Getting public money through stock market.
    6.Surge in the inflow of money from NRI's into RE.
    7.IT industry in its peak.
    8.Industries like automobiles, healthcare flourishing.
    9.Increase in construction cost.
    10.Shift in focus to develop townships, and to developing areas around OMR,GST which resulted in less supply within the city.

    Regarding the Houses priced at 1C etc.

    As I have explained in my earlier posts, I am still trying to understand how to arrive at the correct price of a property.Its still not clear to me how a property should be valuated.There seems to be no rationale behind the way builders fix the price.

    I calculate using the (UDS * (market rate/sqft of land)) + (builtup area * consruction cost) + registration charges + car parking + other charges.

    generally I find market value of the land is (FSI allowed for the extent * guideline value)

    I feel the price is inflated and is not sustainable for long.Almost most of the factors that supported the boom is now non-existent.

    The pricelist of the properties in Fairpro is that of the peak period.Seeing it one would get the feel that the market price in adyar is 12500/sqft.

    The reality is, there are new ready to occupy flats with high UDS(stilt + 4 floor) in Adyar at 8500/sqft negotiable while another flat in the same locality with open car park at 7000/sqft negotiable.

    I feel the market still needs a correction of 30-40% minimum.Rentals are bound to come down.

    In speculative locations the market could crash.

    Nabhishek,
    U have been writing fantastically. Kudos. Just that I need to add a few points to your EMI calculation argument in one of your earlier posts.
    a. With 5L salary in 1990s I would not have taken a 20L loan as you calculated. Low interest rates has made many mad and they have bought flats as if there was no tommorow.
    b. Does this mean that prices will crash? It may not, because either the entire country has to go the Zimbabwe way, or prices have to go up to counter this.
    c. In INdia inflation is allowed not deliquiency. In other words govt of whatever party will let the rupee weaken badly if economy is in trouble. So the salaries may not fall, the return on realestate will continue to go up and so the justification will happen. Also as Madrasi says, we cannot use other countries' logic for us. So we might very well have another RE boom.
    d. Finally RE based on flats is one thing. However there are other points. One is black money. Most landowners are holding ancestral land or those bought in 80s or before. Now these can be bought by the super rich.
    e. So this will lead to Bombay like situation. So in future flats might continue to be at 20L (IN CHENNAI) but size might decrease. In effect rates may not fall one bit.
    f. Finally one of the points missed out on this board is the FSI in Madras is extremely low. So with SIMILAR LAND PRICE in Chennai and Bangalore flats in Chennai are much costlier. I can yet get you a clean decent flat in Bangalore for 25L in a place within 10km radius from MG ROad. U can do that only in Urapakkam or some far away place in Madras.
    SO GET THE CHENNAI GOVT TO CHANGE FSI.
    Nabhishek I liked this particular thread. For once there was someone talking facts even though you are bearish and I am bullish I appreciate your logic. I hope the bears can learn from this and not behave like Mad wiseman!
    CommentQuote
  • I think the builders are reducing from the quoted cost offline more than 25% like corporate offer, first 100 booking like..
    Be patient and get the best deal.
    CommentQuote
  • RE Prices in Chennai will fall after the elections....
    until then it will stagnate with support from Private lenders.
    Many kept rotating land in Chennai outskrits, with the help of brokers,
    who often buy and sell within 4 - 6 months, with nearly 75% - 100% profit
    which generated artificially inflated price like stocks.
    Same with most of the apartments which are bought by speculative investors, buying 2 3 flats.
    India is yet to face the brunt of Economic slowdown and IT
    layoffs! Once things set in, Rentals and Flat prices will come by atleast 50% and the land prices by 30%.
    1 year from now would the time when prices will settle

    The real estate sector in India may have seen its best time for the next several decades. The real estate markets now heads downward, as people cannot make their mortgage payments.
    OP Bhatt, chairman of State Bank of India (SBI), the country’s largest bank, expects 50% correction in the housing sector prices in the country. “In India we may witness up to 50% correction in pricing in the mortgage markets. If that happens, it’s good news for the Indian banking system as NPAs would reduce and new business would fall-in,’’ he said at the concluding session of Ficci-IBA Conference on Global Banking: Paradigm Shift, in Mumbai on Saturday.
    According to other analysts, the market can roll downwards another additional 15 to 20% before stabilizing.
    The commercial and residential sectors in major metropolis are experience severe credit crunch, defaults and bank takeovers. The glut of unsold apartments is skyrocketing. The residential mortgage market is collapsing faster than the subprime mortgage market in America.
    CommentQuote
  • Originally Posted by balaiitm
    I think the builders are reducing from the quoted cost offline more than 25% like corporate offer, first 100 booking like..
    Be patient and get the best deal.


    Dear friend,

    The builders increase the prices upwards first then show discounts in new projects, like any other say, cloth business. In real, discounts like 5%-10% only are coming out even worth very hard negotiations if you want in good areas, not far away from city. As Natarajg has mentioned elsewhere, unless the FSI is increased like Bangalore, the prices cannot be expected to come down appreciably like 25 % etc.

    ks2071746
    CommentQuote
  • Originally Posted by nabishek


    The pricelist of the properties in Fairpro is that of the peak period.Seeing it one would get the feel that the market price in adyar is 12500/sqft.

    The reality is, there are new ready to occupy flats with high UDS(stilt + 4 floor) in Adyar at 8500/sqft negotiable while another flat in the same locality with open car park at 7000/sqft negotiable.

    I feel the market still needs a correction of 30-40% minimum.Rentals are bound to come down.

    In speculative locations the market could crash.


    Dear friend,

    In 2007 builders were able to sell their flats on the opening day itself.

    Now this scenario has totally changed. They are announcing many sops to sell of their flats.

    When it does not work they tend to reduce the price. Even then if the flat is not selling god only can save them.

    thanks

    chataara
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  • Originally Posted by Natarajg007
    Nabhishek,
    U have been writing fantastically. Kudos. Just that I need to add a few points to your EMI calculation argument in one of your earlier posts.
    a. With 5L salary in 1990s I would not have taken a 20L loan as you calculated. Low interest rates has made many mad and they have bought flats as if there was no tommorow.
    b. Does this mean that prices will crash? It may not, because either the entire country has to go the Zimbabwe way, or prices have to go up to counter this.
    c. In INdia inflation is allowed not deliquiency. In other words govt of whatever party will let the rupee weaken badly if economy is in trouble. So the salaries may not fall, the return on realestate will continue to go up and so the justification will happen. Also as Madrasi says, we cannot use other countries' logic for us. So we might very well have another RE boom.
    d. Finally RE based on flats is one thing. However there are other points. One is black money. Most landowners are holding ancestral land or those bought in 80s or before. Now these can be bought by the super rich.
    e. So this will lead to Bombay like situation. So in future flats might continue to be at 20L (IN CHENNAI) but size might decrease. In effect rates may not fall one bit.
    f. Finally one of the points missed out on this board is the FSI in Madras is extremely low. So with SIMILAR LAND PRICE in Chennai and Bangalore flats in Chennai are much costlier. I can yet get you a clean decent flat in Bangalore for 25L in a place within 10km radius from MG ROad. U can do that only in Urapakkam or some far away place in Madras.
    SO GET THE CHENNAI GOVT TO CHANGE FSI.
    Nabhishek I liked this particular thread. For once there was someone talking facts even though you are bearish and I am bullish I appreciate your logic. I hope the bears can learn from this and not behave like Mad wiseman!


    Thanks for your compliment Nataraj.All your points makes perfect sense.

    About me being a bear, I am a kind of person who believes that when in trouble one has to help themselves and cant expect anyone else to empathize with them..Its not fair to blame anyone or any circumstances for the decisions one makes.

    It is one's responsibility to make a well-informed decision and accept gracefully the outcome of it however it may turn out to be.

    I chose to tread cautiously even if it means missing out on many profits.

    I give all the predictions, the same level of importance that i would give for weather forecasting.Its only directional.

    If a news channel predicts its going to rain heavily, It wont hurt to be preapared and carry an umbrella while venturing out.Even if it doesnt rain, The umbrella can be used to provide yourself shade when it is very bright and sunny.
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