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: May 20 2021
2453 | Posts
  • Time
  • Show
Clear All
new posts
  • #51

    #51

    Re : Property Price Trends in Chennai

    Originally posted by nabishek View Post
    Hi Friends,
    Bankers....

    Now the wheel seems to have stopped since the market seems to have reached its saturation point.

    Would like to hear from people on the forum, whether my observation is correct or if anything is fundamentally and logically wrong with the argument.

    Would Appreciate your responses.
    the RE market and price trends defy logic leave alone mathematics.
    The prices of plots and flats sold at hithertho uninhabitable places at rates which do not follow any patern or justify the rates.
    the reason :
    it is the educated crowd which willnot believe a small player.

    if the same location sells a plot by an unknown promoter who quotes, lets say, 100/sq ft and a reputed promoter offers one at 175/sq ft most of the IT crowd will go to the reputed person assuming quality and legality of the small player to be susceptible.
    exploiting this mentality the big builders started giving fantastic ameneties
    and sold jungles as "self contained townships" eg hirco's oragadam ,cee dee yes chennaipattinam etc) and plots 100 kms away from chennai saying greenfield airport,samsung,***** etc putting good looking bitumen roads(by the time people start living there the roads would cease to exist) coloured flag poles,a magnificient welcome arch etc.
    and an amazing brochure claiming tremendous growth in the 'jungle'.
    the educated crowd lapped it up and justified or even prided their decisions bcoz of the price increase fuelled by the boom.

    i still dont understand people buying flats at oragadam,thiruporur,sripermbundur (where few years back people were selling farm houses with 5 coconut,2 guava,5 teak tree saplings)and other far off places.
    coming to the point when a flat was sold at 3000/- at oragadam the price of
    3600/- at east tambaram became easy to digest and they were priced accordingly this made a benchmark in that locality and land prices adjusted to flat prices.and the stupidity of assuming same price at all areas in the locality. like when advt says velachery or near MRTS we start assuming same rate pan velachery and nearby madipakkam,pallikarnai etc.

    simply put the builders and promoters started quoting fancy rates at far off places and sold them to investors who did not even visit the place ,this led to city places look reasonable at higher prices this led to the current increase.

    I am not sure that we can analyze and predict the RE graph like it is done in the stock market(tech anlyss).
    but if we think these prices in established localities to roll back as easily they increased,its a long shot.
    school vans increased rates from 400/ to 500/ bcoz of fuel rate hike, refuses to reduce the rate back to 400/- inspite of fuel prices rolling back.
    Last edited February 27 2009, 03:24 PM.

    Comment

    • #52

      #52

      Re : Property Price Trends in Chennai

      Originally posted by nabishek View Post
      Hi Friends,

      I am putting forward my understanding on how the RE boom and steep appreciation happened.

      In the Recent past,Builders starting promoting living spaces as against land as the new form of asset class.

      Builders started commanding huge premiums and fixed high profit margins,without giving proper break-up thus fudging the mathematics behind the transactions.

      In a locality where the market rate is 2000/sqft and guideline value is 1000/sqft, a premium builder would quote above 3000/sqft for a flat because of brand name and facilities like club, exclusive community etc..

      cost of flat = 2000/1.5 + 1200(constuction charge) + 1000(profit margin/othercharges) = ~ 3500/sqft

      If a Seller owns 2400 sqft land there.

      Seller would claim that in 2400 sqft land 3600 sqft builtup can be achieved and by citing the possible end use and that flats in the locality are being sold for more than 3000/sqft with less UDS would justify the land rate

      asking land rate = (Allowed FSI * market price) = (1.5 * 2000) = 3000/sqft

      A land worth 48 lakhs in the market is quoted for 72 lakhs.

      Not many know the way to calculate rate/sqft of flat from the land price.I learned this method only through this forum, courtesy Nataraj.

      A Buyer who wants to estimate cost of the house will do as follows

      (UDS * guideline value/market price) + (built up area * construction cost)

      (2400 * 2000) + (1200 * 3600) = ~ 2500/sqft

      Some prospective buyer will fall for the price, thinking they are getting a ground of land to own for themselves and later they can build a house or flat and sell for a price not less than 4000/sqft.It seems a better decision buying the land by stretching a bit which also doubles as an investment when compared to buying a flat for the price which is just 500/sqft less.

      when such a land transaction happens the market price increases to 3000/sqft.

      Both land owners and builders increase and revise their price accordingly as and when market price changes.

      The next seller B would peg higher at around 4500/sqft,Seller C at 6750/sqft and so on.

      The actual rate/sqft for a flat should be as follows

      Buyer of Seller A = 3000/1.5 + 1200 = 2000 + 1200 = 3200/sqft
      Buyer of Seller B = 4500/1.5 + 1200 = 3000 + 1200 = 4200/sqft
      Buyer of Seller C = 6750/1.5 + 1200 = 3000 + 1200 = 5700/sqft

      If the Buyer is a builder,

      Builder who bought from Seller A will conveniently manipulate by not applying FSI on the rate 3000/sqft at which the land was bought, but against the market price in the locality at that time.

      Therefore,If the asking price in the market is 6750/sqft(Seller C asking price) a builder would quote

      6750/1.5 + 1200 = 5700/sqft

      one can see, this is a never ending cycle that keeps continuing without any control or regulation.What drives it is also the same Demand/supply dynamics.

      I feel this is one of the major reasons how the price rose by 200-400% in the span of just 3-4 years.It was instigated by the cartel of premium builders/Bankers....

      Now the wheel seems to have stopped since the market seems to have reached its saturation point.

      Would like to hear from people on the forum, whether my observation is correct or if anything is fundamentally and logically wrong with the argument.

      Would Appreciate your responses.
      "Not many know the way to calculate rate/sqft of flat from the land price.I learned this method only through this forum, courtesy Nataraj."
      This is what Nabhishek states in his post. Honestly I feel sad if what he says is true. And when someone like Nabhishek states it, it looks probably true.
      The main reason I am writing on this board is to educate folks on this great anomaly particularly in Chennai where realestate builders LITERALLY CON both the land owner and the flat buyer investing nothing much from his hands.
      Finally I was really surprised when one man who claims he is Wise calls that Conning as BUILDER MARGIN in another thread.

      Comment

      • #53

        #53

        Re : Property Price Trends in Chennai

        Friends,

        Another set of projects and prices from IDBI Homes 2009 Fair - Chennai


        Agni Estates

        Fairyland - Porur - Independant villa's 43 lakhs onwards
        Flamingo - Pallikarnai - 3250/sqft
        Rainbows End - Selaiyur - 2950/sqft

        BBC founations

        BBC City Park - Valasaravakkam - 4000/sqft

        Citysquare - Plots

        NewCity - Sriperambathur - 550/sqft

        Devi Builders

        Independant houses - Medavakkam - 3350/sqft
        Independant houses - Redhills - Srinium - 1750/sqft
        Independant houses - Ambattur - 2100/sqft

        Emarald Home makers

        Meadowville - AV Garden - Mugalivakkam - 2900/sqft
        Springdale - Abinaya Garden - Kolapakkam,Porur - 2900/sqft

        Headway Properties - Plots

        Infotech City - Sriperambathur - 595/sqft
        Greenfield - Sriperambathur - 495/sqft

        Indira Foundtions

        Indira Splendor - Mogappair - 3600/sqft

        Mahindra Projects - Plots

        Capital - Sriperampathur - 595/sqft

        Mettupakkam Foundations

        MF Srivatsa - Sembakkam - 3100/sqft
        MF Baby Nagar - Guduvanchery - 2130/sqft
        MF Adithya - Pallikarnai - 3100/sqft
        MF Srividya - S.Kolathur - 3100/sqft

        RAMS

        Habitat - Sholinganallur - 4250/sqft
        Luv Kush - Pallikarnai - 3600/sqft
        Dwaraka - Perungudi - 4500/sqft
        Grihastha - RAPuram/Mandaveli - 9500/sqft
        Villa Romana - ECR - Uthandi - 5000/sqft

        Vaikund Estates

        Govardhan - Sholinganallur - 3800/sqft

        Vinoth Promoters

        Vinoth Virusksha - Mogappair - 3350/sqft
        Vinoth Vetri - Aminjikarai - 5500/sqft
        Sunstone - Mogappair - 3600/sqft
        Vinoth Viswas - Ambattur - 3300/sqft
        Vinoth Valencia - Mogappair - 5450/sqft
        Vinoth Vajra - Kolathur - 3750/sqft

        VME Properties

        Lakeside - Bangalore Highway(near motel highway) - 2100/sqft
        The prices are still holding up with meagre 200-500/sqft discounts.

        I expect this trend to continue for minimum 2-3 months, during when no new projects(with all approvals, no pre-launches) will be anounced at affordable prices,no significant sales happening in the outskirts, on-going projects progress will get delayed, lots of resale properties and ready to occupy properties will be available on sale and rentals will reduce sharply.

        Requesting members to share on what they expect to happen next in the coming months and any appreciation/reduction in prices known to them.

        I believe the stagnation period is over and price correction has began, Hoping to use this thread to capture the same.
        Last edited March 1 2009, 05:47 PM.

        Comment

        • #54

          #54

          Re : Property Price Trends in Chennai

          We will have to wait till elections are over, untill then prices will stagnate.
          There is high possibility of second hand flats coming for sale, mainly due to defaults,by home loan borrowers, as IT seems to get started for its difficult/worst times.

          Comment

          • #55

            #55

            Re : Property Price Trends in Chennai

            Originally posted by nabishek View Post
            Friends,

            Another set of projects and prices from IDBI Homes 2009 Fair - Chennai



            The prices are still holding up with meagre 200-500/sqft discounts.

            I expect this trend to continue for minimum 2-3 months, during when no new projects(with all approvals, no pre-launches) will be anounced at affordable prices,no significant sales happening in the outskirts, on-going projects progress will get delayed, lots of resale properties and ready to occupy properties will be available on sale and rentals will reduce sharply.

            Requesting members to share on what they expect to happen next in the coming months and any appreciation/reduction in prices known to them.

            I believe the stagnation period is over and price correction has began, Hoping to use this thread to capture the same.
            Are you telling me that above prices are discounted? If that is the case then I should say a flat in T.Nagar can be priced for Rs 40000 psft!!!

            Comment

            • #56

              #56

              Re : Property Price Trends in Chennai

              Originally posted by Natarajg007 View Post
              Are you telling me that above prices are discounted? If that is the case then I should say a flat in T.Nagar can be priced for Rs 40000 psft!!!
              I meant they were offering that much of discount on the listed price at the stall.I feel the prices are still absurdly high.

              Comment

              • #57

                #57

                Re : Property Price Trends in Chennai

                Originally posted by nabishek View Post
                I meant they were offering that much of discount on the listed price at the stall.I feel the prices are still absurdly high.
                Do check the price of TNHB flat in Vyasarpadi. Govt pricing. 2930psft approx. Now dont tell me prices are high, though a person like me holding land in more vantage points will call it high and living in Bangalore will look at flat buyers in Madras as if I am looking at idiots.
                However to buy a flat in Vyasarpadi as per TNHB advt in today's Hindu is much costlier than a flat I can get you in places 5km from MG Road. So much for your FSI, hiked flat prices, silly system and idiotic Tamil politicians and practices.
                I am planning to leave this lunatic bear board, like I said, filled with foxes looking at grapes.
                Bye to you Nabhishek.

                Comment

                • #58

                  #58

                  Re : Property Price Trends in Chennai

                  Originally posted by Natarajg007 View Post
                  Do check the price of TNHB flat in Vyasarpadi. Govt pricing. 2930psft approx. Now dont tell me prices are high, though a person like me holding land in more vantage points will call it high and living in Bangalore will look at flat buyers in Madras as if I am looking at idiots.
                  However to buy a flat in Vyasarpadi as per TNHB advt in today's Hindu is much costlier than a flat I can get you in places 5km from MG Road. So much for your FSI, hiked flat prices, silly system and idiotic Tamil politicians and practices.
                  I am planning to leave this lunatic bear board, like I said, filled with foxes looking at grapes.
                  Bye to you Nabhishek.
                  Dear friend,

                  You should continue to contribute to this forum, as a person with quite a good knowledge on various subjects/issues. If you decide to leave, it will be a great loss for the members and guests of this forum.

                  ks2071746

                  Comment

                  • #59

                    #59

                    Re : Property Price Trends in Chennai

                    I think TN Govt is playing its part in upholding the prices in Chennai, may be pressure from RE Cartels....

                    Comment

                    • #60

                      #60

                      Re : Property Price Trends in Chennai

                      Originally posted by Natarajg007 View Post
                      Do check the price of TNHB flat in Vyasarpadi. Govt pricing. 2930psft approx. Now dont tell me prices are high, though a person like me holding land in more vantage points will call it high and living in Bangalore will look at flat buyers in Madras as if I am looking at idiots.
                      However to buy a flat in Vyasarpadi as per TNHB advt in today's Hindu is much costlier than a flat I can get you in places 5km from MG Road. So much for your FSI, hiked flat prices, silly system and idiotic Tamil politicians and practices.
                      I am planning to leave this lunatic bear board, like I said, filled with foxes looking at grapes.
                      Bye to you Nabhishek.
                      Dear friend Mr. Nataraj

                      Even though your views are quite different from mine and Wiseman,

                      I like reading your posts curiously.

                      We definitely need opposite views in this forum.

                      Otherwise it will be very passive.

                      Please... continue writing here

                      Thanks

                      chataara

                      Comment

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