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Property Price Trends in Chennai

Last updated: 4 weeks ago
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  • Re : Property Price Trends in Chennai

    Originally posted by balab1405 View Post
    One thing I observe is either their is a demand or not. People raise at the rate of 10% every year. If their is more demand it increases further. If no one agreeing to that price they are not bothered and they keep increasing since they know someone would be buying for sure. Its a pure speculative game.
    RE and Gold are always in demand because they are considered hedge against inflation and troubled times.It is because they have inherent value in peoples mind that is priced according to the then currency valuation and demand - not the other way round.It is the reason why our society and country is well off comparitively to other economies.It has been in our culture and traditionally we have been investing in Real Assets.

    Things get majorly skewed when we introduce leverage and use RE for diversification rather than for living/necessity without properly understanding and start expecting 20% CAGR YoY.Banks, Builders and sometimes even governments mislead people in thinking so.There is no guarentee of assured returns in any market irrespective of however powerful the people who control/manipulate it.This was the path taken by western capitalists.We know what happened to them.

    To put things realistically.Rate of RE appreciation is closely tied to rise in peoples income.Affordability and Location are the only major factors to be considered.

    Real appreciation is only with more job creation/migration of new people/significant infrastructure development/Excess liquidity increasing affordability which creates new demand.This is when you will get returns above inflation.

    If the above factors are non-existant and demand plummets then we will also have times when RE just appreciates with inflation i.e. stagnate in real terms.RE can also correct significantly i.e. stagnate when there's inflation over period of time or correct signifcantly when need arises to liquadate.

    Comment


    • Re : Property Price Trends in Chennai

      Perfect ...!

      Originally posted by nabishek View Post
      RE and Gold are always in demand because they are considered hedge against inflation and troubled times.It is because they have inherent value in peoples mind that is priced according to the then currency valuation and demand - not the other way round.It is the reason why our society and country is well off comparitively to other economies.It has been in our culture and traditionally we have been investing in Real Assets.

      Things get majorly skewed when we introduce leverage and use RE for diversification rather than for living/necessity without properly understanding and start expecting 20% CAGR YoY.Banks, Builders and sometimes even governments mislead people in thinking so.There is no guarentee of assured returns in any market irrespective of however powerful the people who control/manipulate it.This was the path taken by western capitalists.We know what happened to them.

      To put things realistically.Rate of RE appreciation is closely tied to rise in peoples income.Affordability and Location are the only major factors to be considered.

      Real appreciation is only with more job creation/migration of new people/significant infrastructure development/Excess liquidity increasing affordability which creates new demand.This is when you will get returns above inflation.

      If the above factors are non-existant and demand plummets then we will also have times when RE just appreciates with inflation i.e. stagnate in real terms.RE can also correct significantly i.e. stagnate when there's inflation over period of time or correct signifcantly when need arises to liquadate.
      Perfectly written!!!

      Comment


      • Re : Property Price Trends in Chennai

        WiseMan,

        Which Investor do you like most

        Jim Rogers

        Mark Fabor

        peter shiff

        or

        somebody else ?

        Comment


        • Re : Property Price Trends in Chennai

          80% appreciation over a period of 4 years at an average of 20% /pa. That is what I meant. Yes the actual year wise appreciation/depreciation/lull varied vastly during this period.

          Originally posted by unlikely View Post
          Dear friend blogger,
          It was definitely not an average increase of 20% a year.There was a period of stagnation roughly starting from mid 2008 to early 2010.Simultaneously, there was a drastic drop in the volume of property transactions.A routine enquiry at any of the registrars office would give u this information.Last few months the rates have gone up, but whether there is a corresponding increase in the number of property purchases remains to be seen.
          regards
          unlikely

          Comment


          • Re : Property Price Trends in Chennai

            Hi Friends,

            Sharing the rates from Budget & Luxurious Properties 2010 Fair

            Apart from few, none of the big developers were present.Could see an interesting trend where all big projects absent in stalls were showcased by marketing and real estate agents hitting hard to sell them.Focus was primarily on GST road and plots.


            Aakam Constructions

            Hygrevar Enclave - Opp MWC - 2299/sqft

            Abinaya Constructions

            Abinaya Enclave - Urapakkam - 2750/sqft

            Agni Estates

            Lakshmi Kripa - Hasthinapuram - 3975/sqft
            Lakshya Kripa - Kazhipattur,OMR - 3150/sqft
            Fairyland(Villas) - Porur - 52 lakhs onwards

            Alliance Group

            Orchid Springs - Padi - 4235/sqft

            Banu Promoters

            Sri Sai Nagar(Plots) - Thiruporur,OMR - 686/sqft

            City Square

            Spanish City(Plots) - Sriperambathur - 475/sqft

            Dhanishka Constructions

            Allegria - Kandigai, Vandalur-Kelambakkam Rd - 2199/sqft

            Edward Homes

            Anna Nagar - 8500/sqft
            Avadi/Arakonnam/Tiruvallur(Individual Houses) - 18 lakhs, 28 lakhs onwards

            Featherlite Developers

            Vaikuntham - Urapakkam - 3150/sqft

            Hallmark Infrastructure

            Golden County - Maraimalai Nagar - 2750/sqft

            Handsel Constructions

            Tulip II - Karapakkam - 3699/sqft
            Sholinganallur - 4100/sqft

            Home Finders

            Palm Coast(Vacation Homes) - ECR - 9.95 lakhs onwards

            Jain Estates

            Sri Om Nagar(Plots) - Sriperambathur - 470/sqft

            Jeyaram Civicon

            Malgudi (Vacation Homes) - Vittalapuram,ECR - 37 lakh onwards

            Lakshmi Builders

            Madipakkam - 3400/sqft - 3800/sqft
            Velachery - 4800/sqft
            Nerkundram - 3200/sqft
            Choolaimedu - 4950/sqft

            Mahindra Lifespaces

            Iris(Flats) - Mahindra World City - 2650/sqft

            Majestic Homes

            Padmam - Madipakkam - 3300/sqft
            Kumarakom - Velachery - 4600/sqft
            Sneham - Madipakkam - 3300/sqft

            Marutham Group

            Gateway - Tambaram - 3200/sqft
            Paradise - Urapakkam - 2600/sqft
            Spring - Urapakkam - 2600/sqft
            Blossom - Medavakkam - 2900/sqft
            Pearl - Vandalur - 2550/sqft

            MCB Estates

            Retreat(Plots) - Sriperumbathur - 475/sqft
            Injambakkam Villa - 2.5 Crores

            Selva Ganesh Constructions

            Akira - Pazhadhandalam,near chrompet(plots) - 700/sqft
            Lake View Estate - Porur - 4000/sqft

            Sharon Builder

            Camp Road Junction - 2300/sqft - 3200/sqft
            Rajakilpakkam - 2500/sqft - 3000/sqft
            Around Tambaram(Individual Houses) - 35 - 65 lakhs onwards

            Shunithas Builders

            Pallikarnai - 3500/sqft

            South India Shelters

            Safaa - Urapakkam - 3400/sqft

            Sreeja Developers

            Boomi(Plots) - Sunguvarchatram - 345/sqft

            TVH

            Svasti - Thoraipakkam - 4750/sqft

            Victory Homes

            Crystal Garden,Victory Sunrise - Valasaravakkam,Porur - 5211/sqft

            Vinoth Builders

            Viruksha - Mogappair - 4200/sqft
            Valencia - Mogappair East - 5500/sqft
            Vishakha - Mogappair West - 4300/sqft
            Vipula - Nerkundram - 4250/sqft
            Vahini - Valasaravakkam - 5000/sqft
            Ventura - Porur - 4200/sqft

            Winner Foundations

            Thanigai Enclave - Madipakkam - 3600/sqft
            Mantra - Sembakkam - 3000/sqft
            Sreevasta - Sembakkam - 2800/sqft
            Nakshatra - Pallikarnai - 3750/sqft
            Please share your views.

            Comment


            • Re : Property Price Trends in Chennai

              Originally posted by nabishek View Post
              Hi Friends,

              Sharing the rates from Budget & Luxurious Properties 2010 Fair

              Apart from few, none of the big developers were present.Could see an interesting trend where all big projects absent in stalls were showcased by marketing and real estate agents hitting hard to sell them.Focus was primarily on GST road and plots.



              Please share your views.
              Thank you sir, being in abroad this informationis very useful

              Comment


              • Re : Property Price Trends in Chennai

                All of the above ...

                Originally posted by tarung View Post
                WiseMan,

                Which Investor do you like most

                Jim Rogers

                Mark Fabor

                peter shiff

                or

                somebody else ?

                Like asking who do you like ...

                Lata Mangeshkar
                Asha Bhosale
                Kishore Kumar
                Mukesh
                or somebody else!

                Each has his/her own substantial contribution and own style. Sometimes they go wrong as well ...

                cheers

                Comment


                • Re : Property Price Trends in Chennai

                  another trick ?

                  Dear friends,


                  As Abhishek has pointed out , lately there seems to be a shift in focus to GST road among builders.This trend seems to be refelected in newspaper articles also.Last few months i have noticed a lot of articles extolling the virtues of GST road.......
                  The sudden development of Omr as the IT corridor was really puzzling, if truth be told.It may be that politicos with a vested interest wanted development to happen in a different direction just because they had investments there.Otherwise, GST had all the existing infrastructure,why go for an entirely new corridor when existing one could have been developed further?

                  Now comes the shift back to GST- is the builder lobby pulling another fast one on us ?

                  regards
                  unlikley

                  Comment


                  • Re : Property Price Trends in Chennai

                    Reality is shattering all predictions

                    Folks,

                    When the apartment rate in Thiruvanmiyur/Adyar/Besant was hovering around 7-10K/sft about 1-2 years ago, there were two popular predictions - 1. This price point is not sustainable and there will be a big crash 2. Don't have much head room and price wil stagnate or moderately appreciate.

                    I call two builders early this week 1. KGEYES 2. Ramaniyam enquiring about their projects in these areas - KGEYES quites 9500 for Thiruvanmiyur and 13000 for Besant Nagar project; Ramaniyam quotes 9000 for to be launched project in Thiruvanmiyur and 10000 for Samarpan which is about to be completed (this was a resale offer)!

                    Most of the projects /flat from these two builders are SOLD OUT!!!!!!

                    Doesn't it shatter all our predictions??? Would be interesting to see next level of predictions from those who argued hard on imminent crash in 2010/11!
                    Last edited January 27 2011, 08:35 AM.

                    Comment


                    • Re : Property Price Trends in Chennai

                      Originally posted by blogger View Post
                      Folks,

                      When the apartment rate in Thiruvanmiyur/Adyar/Besant was hovering around 7-10K/sft about 1-2 years ago, there were two popular predictions - 1. This price point is not sustainable and there will be a big crash 2. Don't have much head room and price wil stagnate or moderately appreciate.

                      I call two builders early this week 1. KGEYES 2. Ramaniyam enquiring about their projects in these areas - KGEYES quites 9500 for Thiruvanmiyur and 13000 for Besant Nagar project; Ramaniyam quotes 9000 for to be launched project in Thiruvanmiyur and 10000 for Samarpan which is about to be completed (this was a resale offer)!

                      Most of the projects /flat from these two builders are SOLD OUT!!!!!!

                      Doesn't it shatter all our predictions??? Would be interesting to see next level of predictions from those who argued hard on imminent crash in 2010/11!
                      The correction that was expected happened to the tune of 15-30% on the 2008/2009 peak rates.Now, It has recovered and in some places even surpassed the peak rates.It is primarily due to positive sentiment of growth,runaway inflation and excess liquidity in the market due to stimulus.

                      I will try to address your question..May not be entirely convincing and may seem biased.Neverthless its my view and I request everyone to base their own priorities to take any decision.

                      The last shake-up during recession exposed severe fault lines in the RE sector..and this time we have enough and more reasons to believe that in the event of another dull phase, the downturn could be equally bad and even worse.

                      I think we should distinguish which projects we are talking about while comparing.When we were discussing in 2009/2010 we were looking into projects that were launched during the peak..that is year 2008/2009..The projects in besant nagar you are referring are yet to be started and are scheduled for completion somewhere in later 2012..Now, Builders price their projects like future pricing..Only on completion and handing over we can validate whether there was actual increase in price..If inflation continues like now then the price quoted can be justified..i.e. If you can book an apartment in Todays price and get it at 2012-2015 while price has increased 15% p.a. then only you are at profit..If the price keeps pace with inflation then the only profit is you have hedged your money against inflation..that is zero real profit.

                      Also, Why would builders advertise sold out projects??Whether their claim is true or not..It is only to set a benchmark of price in that area..When Besantnagar is quoted 12000/sqft..8000/sqft in thiruvanmiyur will seem cheaper..It is simple pshycology and Builders are pretty good in exploiting it.While buying flat from builder you dont pay only for the land and construction cost..you also pay the cost of beating other potential buyer.If the builder has 10 buyers for 10000/sqft..5 buyers for 11000/sqft and 1 buyer for 12000/sqft..then the project will be priced 12000/sqft..It doesnt necessarily mean the average affordability of buyers is 12000/sqft.

                      Most of the under construction projects have stalled due to high construction cost and labour issues..and are getting delayed indefinitely.The completed projects in suburbs are also seeing less occupancy.With such severe problems with existing projects I find it amusing that builders continue pre-launching projects and claiming sold out.First of all they are still not approved..If buyers are end-users then majority would have availed loan..If project is not approved..loan wont be sanctioned..So who are the buyers?It means the project is booked/blocked by whomever..not sold.

                      The original demand is at far less price range than that is advertised.Builders thrive on increasing valuations of their projects..If the price doesnt increase at a X % p.a. then their cash flow will be severely affected..Banks wont give loans..they cannot go public..the investors who have funded money will want to exit and ask money back and such sudden supply in market and liquidity crunch can cause severe damage to them. and RE industry.This is why you see the trend of pricing newly launched projects by leading builders.

                      Now every one wants to have a home in their name..and want to see profit on their investment.I wouldnt be looking to buy a house if I know its not going to appreciate.I will buy only if there is a need or because I know RE in long term is sure to appreciate.So, bottomline is if you are confident of passing the short-term uncertainities unscathed then there is no need to try and time the market.

                      The biggest deterrent in buying decision is affordability..If you are having huge cash reserve, it makes sense to diverse and invest part in RE and Bullion.If you are going to avail credit..then the cost of loan is only going to be costly..and our economy is still struggling to recoup and jobs are not safe..I think we have to wait for another 6 month or so to know clearly where we are heading.

                      In my case I am pretty conservative in my investments.I dont have neccessity of a house until 2015..I have stakes in RE in form of inherited property which is appreciating/depreciating with RE cycles.In that way I am also participating in the market and its movement affects me..but not until I decide to sell..Now when I am looking to buy a home..If I can afford to buy earlier I will be very glad to welcome any correction/crash that helps my interest..In RE, Its generally said..the earlier you buy the better.

                      According to me..Risk taking ability = Amount of money and years of life you can afford to lose..I am trying to mitigate that risk by putting the years wasted prior to the purchase and tolerate any opporunity profit/loss meanwhile saving to buy with maximum downpayment and less credit in the project of my liking and within my affordability and preferred location.I will buy flat only when my criteria - affordability,location are met..until then I am choosing to Wait and no regrets about it.

                      Comment

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