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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  • Thanks K11. I also feel there will be a stagnation. It could be a good time to look for deals in premium properties if one could afford. It seems we can easily bargain 10-15%. Resale market will surely become attractive..a slow market is good for buyers..they can take time and identify good projects and need not decide in haste.

    SR - The primary reason I think is..most of them are cash buyers and since the layouts are very old in those region you mentioned, it gives the buyers ample scope to strike deals. Layout promoters like Abi Estates, BLB, VGN, Motherland etc have to be blamed..5-6 years back they camped and did several property shows in middle east and sold many plots..many who bought land with them have profitted a lot. This has created a impression on the people's mind that its the best place to buy. Many of the middle east people who I know also buy in porur,kundrathur vicinity.

    Also..the sudden spurt in demand can be attributed to new nitaqat law in saudi arabia. It seems all over tamilnadu and kerala people are anxious to know whats going to happen and how its going to affect them.

    Several NRI groups also buy at sriperambathur and GST. Areas in the north like tiruvallur, avadi, redhills are all preferred by people who have resided and are from that place. I may be wrong..but I havent seen anyone buy a land there just for diversification purpose.

    Local chennaites give lots of importance to schools and train/bus connectivity. They tend to buy in Medavakkam/Tambaram/GST areas surroundings.

    For an outsider looking for just investment, he would read only about OMR, VK Stretch in the news..It is so over-hyped, so naturally the interest is more and entry cost is very high. People from IT who intend to move there or investors who can afford are the only ones buying in that stretch. End users interest in plots are very less, its more of GC's and townships.We can find lots of other state buyers/sellers in OMR-ECR stretch.
    CommentQuote
  • But the land cost in MWC area or sriperumbudur have not gone up for the past 5 years
    CommentQuote
  • Welcome back Abishek

    Originally Posted by nabishek
    Thanks K11. I also feel there will be a stagnation. It could be a good time to look for deals in premium properties if one could afford. It seems we can easily bargain 10-15%. Resale market will surely become attractive..a slow market is good for buyers..they can take time and identify good projects and need not decide in haste.

    SR - The primary reason I think is..most of them are cash buyers and since the layouts are very old in those region you mentioned, it gives the buyers ample scope to strike deals. Layout promoters like Abi Estates, BLB, VGN, Motherland etc have to be blamed..5-6 years back they camped and did several property shows in middle east and sold many plots..many who bought land with them have profitted a lot. This has created a impression on the people's mind that its the best place to buy. Many of the middle east people who I know also buy in porur,kundrathur vicinity.

    Also..the sudden spurt in demand can be attributed to new nitaqat law in saudi arabia. It seems all over tamilnadu and kerala people are anxious to know whats going to happen and how its going to affect them.

    Several NRI groups also buy at sriperambathur and GST. Areas in the north like tiruvallur, avadi, redhills are all preferred by people who have resided and are from that place. I may be wrong..but I havent seen anyone buy a land there just for diversification purpose.

    Local chennaites give lots of importance to schools and train/bus connectivity. They tend to buy in Medavakkam/Tambaram/GST areas surroundings.

    For an outsider looking for just investment, he would read only about OMR, VK Stretch in the news..It is so over-hyped, so naturally the interest is more and entry cost is very high. People from IT who intend to move there or investors who can afford are the only ones buying in that stretch. End users interest in plots are very less, its more of GC's and townships.We can find lots of other state buyers/sellers in OMR-ECR stretch.


    Abishek. Long time no hear from you.

    As usual very balanced, comprehensive, data-rich posts! :D

    Will we be seeing more frequency from you going forward?

    cheers
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  • But the land cost in MWC area or sriperumbudur have not gone up for the past 5 years


    Above is true only if you bought from *layout promoters* who spent money on Thotta Tharani arches for entrance. As always, it is what is *inside* that counts and will sustain. People who bought from the old layouts on resale has done well doing anywhere from 60-90% in the last 5 years in the very same area. Not a great bang-busting returns but nothing to sneeze at.

    It is easy to see why: the resale prices (DTCP approved) around the new launches at that time were quoted at 50% of the new promotion prices and the shine/gloss of new promotions has worn off now and they have to compete with the old layouts and hence the price normalization. What is surprising is, this fleecing is so blatant and apparent and those promoter's still do launches - shows the confidence and stronghold they have on the gullibles !!
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  • Originally Posted by wiseman
    Abishek. Long time no hear from you.

    As usual very balanced, comprehensive, data-rich posts! :D

    Will we be seeing more frequency from you going forward?

    cheers


    Hi Wise,

    Where were you all these years.

    Abishek has been contribution good stuff as usual.

    But you were the one who was missing for years.

    I think you are smelling a bear market again.

    You could be lucky this time around and get you bear moving in this time.
    CommentQuote
  • Originally Posted by nabishek

    SR - The primary reason I think is..most of them are cash buyers and since the layouts are very old in those region you mentioned, it gives the buyers ample scope to strike deals. Layout promoters like Abi Estates, BLB, VGN, Motherland etc have to be blamed..5-6 years back they camped and did several property shows in middle east and sold many plots..many who bought land with them have profitted a lot. This has created a impression on the people's mind that its the best place to buy. Many of the middle east people who I know also buy in porur,kundrathur vicinity.

    Also..the sudden spurt in demand can be attributed to new nitaqat law in saudi arabia. It seems all over tamilnadu and kerala people are anxious to know whats going to happen and how its going to affect them.

    Several NRI groups also buy at sriperambathur and GST. Areas in the north like tiruvallur, avadi, redhills are all preferred by people who have resided and are from that place. I may be wrong..but I havent seen anyone buy a land there just for diversification purpose.

    Local chennaites give lots of importance to schools and train/bus connectivity. They tend to buy in Medavakkam/Tambaram/GST areas surroundings.

    For an outsider looking for just investment, he would read only about OMR, VK Stretch in the news..It is so over-hyped, so naturally the interest is more and entry cost is very high. People from IT who intend to move there or investors who can afford are the only ones buying in that stretch. End users interest in plots are very less, its more of GC's and townships.We can find lots of other state buyers/sellers in OMR-ECR stretch.


    Abishek -
    ME folks never keep money in ME they always transfer monthly basis to india, whether nitaqat or not, but this new law is a scar tactic and it can cause issues
    Secondly i have a feel there are few folks ( i call them triggers to herd) who had worked in orgadam sriperumbdur walajabad manufacturing corridor who know the value of these ares in ME who bought eaarly on, on mouthspread, it catches up and causes a lot of following
    True Porur projects are showcased in property expo my cousin bough from Allianz porur in one such expo - deep trouble now -
    vrey true about North/west , only folks who lived in anna nagar look at thirumazhisai, puzhal, ponamalle etc
    Different country/ NRIs have diffferent prefernces which by itself is an interesting pattern to follow.
    i recently saw several pics /videos / progress info about ORR being floated and discussed heavily in ME dominated online forums ever since i have seen high activity in
    Kundrathur, Thirumudivakkam erandam kattalai thirumazhisai west tamabaram mudichur mannivakkam padappai orathur etc
    lot of activity and discussion which is leading to transactions --
    speaking to local brokers / traders reveals the same - no IT guy no US nri is even looking in these areas much except new launches
    sad part is lot of these ME buyers are gullible so brokers take them for a ride as well :(
    CommentQuote
  • Originally Posted by wiseman
    Abishek. Long time no hear from you.

    As usual very balanced, comprehensive, data-rich posts!

    Will we be seeing more frequency from you going forward?

    cheers


    Nice to hear from you wiseman. I try to write as frequently as I can. I recently got promoted to senior member :) sometimes I feel my views have become so repetitive that I feel I will bore others and myself writing same thing all over again :). I still follow your posts in Pune forum..Please do come to chennai forum often..It seems you have dedciated yourself to Pune Forum..have you moved your house to Pune too? :D

    Originally Posted by SRaj001
    Abishek -
    ME folks never keep money in ME they always transfer monthly basis to india, whether nitaqat or not, but this new law is a scar tactic and it can cause issues
    Secondly i have a feel there are few folks ( i call them triggers to herd) who had worked in orgadam sriperumbdur walajabad manufacturing corridor who know the value of these ares in ME who bought eaarly on, on mouthspread, it catches up and causes a lot of following
    True Porur projects are showcased in property expo my cousin bough from Allianz porur in one such expo - deep trouble now -
    vrey true about North/west , only folks who lived in anna nagar look at thirumazhisai, puzhal, ponamalle etc
    Different country/ NRIs have diffferent prefernces which by itself is an interesting pattern to follow.
    i recently saw several pics /videos / progress info about ORR being floated and discussed heavily in ME dominated online forums ever since i have seen high activity in
    Kundrathur, Thirumudivakkam erandam kattalai thirumazhisai west tamabaram mudichur mannivakkam padappai orathur etc
    lot of activity and discussion which is leading to transactions --
    speaking to local brokers / traders reveals the same - no IT guy no US nri is even looking in these areas much except new launches
    sad part is lot of these ME buyers are gullible so brokers take them for a ride as well


    RE is generally sentiment driven..market forces just act as a catalyst/deterrent, not as a price mover. Many of us buy due to societal reasons than actual necessity..you were mentioning about Triggers making NRI's to buy..I would say they are just a mouth-piece in their circle. The real trigger are the senior citizen fathers/mothers who live in good status by saying my son/daughter is in abroad and discuss RE with others. They are the people who do the ground-work in identifying good locations and plots for their children. We can find so many such people everyday morning at parks and restaurants. Invariably they end up talking RE. Sometimes when we overhear them , it is surprising the way they talk as if they have gone into the future and seen how the outskirts have developed. They are so convincing, their gray hair and wise demeanour has such influence that we dont question them out of respect.

    Indian parents, esp in Tamilnadu are very conservative and protective. They treat their children's success as their own. They are paranoid when their kid (yes, 30+ year old is also a kid to them :)) earn a lot. They fear the money will be blown and become useless. The belief that RE is a safe-haven is unshaken. Stockt/MF's are a big no..youngsters are encouraged to buy a flat on loan as early as they can and invest in plots when they earn surplus..Indirectly when one is forced to save and pay EMI, they become financially disciplined and cannot splurge..It results in wealth creation is their belief.

    Personally, I dont think its wise to focus too much on one asset class.

    Regarding affordability, I think we will see more builders adopting the forgotten motto - Price it right, size it right.

    Regarding buying patterns, have anyone of you identified where the local IAS/IPS/Politicians/government officers are buying in layouts? Looks they have totally boycotted it and started focussing on buying acres of patta/agricultural land..in chennai they are confining themselves to some extent in ECR. Primary reason is colored money, but I am trying to figure out which area can become posh in future?have not got any clear indication yet.
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  • Good thoughts - very true about parental paranoia
    I have the opposite of the problem you mentioned, my family is very slow and not interested in RE nor do my siblings, they still beleive in equity, fixed instruments, debt, mutual funds, post office, FD etc , Im the big RE proponent more by accident since i started doing RE as a part-time business in US and hence my interest drove in that field

    Reg the following of IAS/IPS etc, its not a worthwhile effort IMHO , the class of such in 70/80 when they settle in a location used power to get stuff done for their community
    But today those retireds are flushed with color money that they want to hide, in most cases they dont want to be known that they live there, i have a few examples of such near my properties in ECR, infact i speak to a wife of one sr IPS (retd) when i drive by, she does part-time real estate/broker work, so she has interest asking when im going to sell, but beyond that their kids are well settled they are having fun half the year they travel, they really dont want to be known.

    The middle east pattern i called out does not fall in the category of parental influence you explained. The parents of such folks are still in villages near chennai or in south trichy madurai thanjavur area. They buy purely because of peer influence and some times pressure.
    they dont know any other asset class than Land, they dont even buy flats, i have been observing such groups for last couple of years, they all buy in group in a area, for example padapai , a large group in saudi went and bought in padappai near amma distellery, once known all the near by layouts were bought by friends , family etc. its very widespread and it spreads very fast. Its interesting to watch it
    Also another observation they dont come to IREF that much at all,
    a recent video by a ME member posted the ORR update
    they are really big into this corridor --

    Chennai Outer Ring Road - YouTube
    CommentQuote
  • Originally Posted by SRaj001
    Good thoughts - very true about parental paranoia
    I have the opposite of the problem you mentioned, my family is very slow and not interested in RE nor do my siblings, they still beleive in equity, fixed instruments, debt, mutual funds, post office, FD etc , Im the big RE proponent more by accident since i started doing RE as a part-time business in US and hence my interest drove in that field

    Reg the following of IAS/IPS etc, its not a worthwhile effort IMHO , the class of such in 70/80 when they settle in a location used power to get stuff done for their community
    But today those retireds are flushed with color money that they want to hide, in most cases they dont want to be known that they live there, i have a few examples of such near my properties in ECR, infact i speak to a wife of one sr IPS (retd) when i drive by, she does part-time real estate/broker work, so she has interest asking when im going to sell, but beyond that their kids are well settled they are having fun half the year they travel, they really dont want to be known.

    The middle east pattern i called out does not fall in the category of parental influence you explained. The parents of such folks are still in villages near chennai or in south trichy madurai thanjavur area. They buy purely because of peer influence and some times pressure.
    they dont know any other asset class than Land, they dont even buy flats, i have been observing such groups for last couple of years, they all buy in group in a area, for example padapai , a large group in saudi went and bought in padappai near amma distellery, once known all the near by layouts were bought by friends , family etc. its very widespread and it spreads very fast. Its interesting to watch it
    Also another observation they dont come to IREF that much at all,
    a recent video by a ME member posted the ORR update
    they are really big into this corridor --

    Chennai Outer Ring Road - YouTube


    Thanks SR..I have also been hearing from my friends that there are many people in US,ME who take loans locally because of low interest rates and buy properties in India. Many it seems dont have the idea of repaying it at all..they intend to return to india in 6-10 years..make as much as money as they can and never go back so are thinking they need not pay any obligation. Banking is becoming computerized and world over sharing data with each other..I know a person who took personal loan in private bank and didnt pay..he shifted states..phone number etc..but guess what?they traced his new bank account in public bank and froze it..he had to pay immediately..otherwise would have lost his new job too..they used the PAN number he gave for salary account to track him. Similarly such behaviour could catch you unaware in future..hamper your childrens prospect to visit the foreign countries forever..I am surprised how greed makes people blind to such risk that can have far fetching implications on generations. It is not feasible to live invisibly anymore. NRI's? can you confirm..This seems to be a very dangerous trend.
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  • Originally Posted by SRaj001

    she does part-time real estate/broker work, so she has interest asking when im going to sell, but beyond that their kids are well settled they are having fun half the year they travel, they really dont want to be known.



    Has she come out of Jail?

    I thought her bail petition was rejected a few months back.
    CommentQuote
  • Originally Posted by Economist
    Has she come out of Jail?

    I thought her bail petition was rejected a few months back.


    I think the person you are referring to is S / wife of T , not her , but she was in the area in December 2012 too when i was making my visit, apparently she had just gotten out and there was a lot of folks outside of her panayur modern builder house layout house when i went there.
    the person i referred to is another but fairly low profile only not like Subbu
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  • I see the same trend in RE prediction as one predicts using macros/micros like in other markets and asset classes. Going through the several the posts below, it may appear to many that there is a correlation between crash and bubble and after seeing a bubble, crash is imminent. Never works that way. If the so-called experts can hardly predict the direction of markets, one can guess how can one predict the crash.

    Seasoned investors do not manage risks that comes from the crash of an asset class from analyzing the macros and micros - it is a losing game and waste of time. Only through diversification.

    For ages, even before allocation and diversification was talked as a formal science, our ancestors have let the clue wide open: Keep a third in Soil, Keep another third in Gold, and the rest in a business. Above may be crude but drives a lesson and is a only definitive way to manage the risks, crashes and depression and any calamity.

    I understand that besides RE, people have very little choices. Expand your awareness to explore other classes. If you do not want to, don't keep all your RE in chennai and around. Just for the sake of diversification, do not go and invest in a place alien to you - you are adding more risk to yourself. If you are bent on staying invested in Chennai: Avoid CBD only or suburb only cults. Even among suburbs, diversify across areas. This will help much more than reading the macros and predicting directions and crashes. You may be right on reasoning and conviction, markets do not listen to you. Remember this saying: Market may remain irrational longer than you can remain solvent.

    Indian RE has a funny component called color money and it needs a place and no matter what you bring in terms of price/GDP ratio, average people being priced out, it won't come out. It can't and hardly leave the shores. Despite all the odds, if Chennai or other areas have only remain stagnant, it is not about the theories what we bring is wrong, it shows the strength, size and scale of color money and they stand to lose much more coming out than staying in.

    Mav
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  • RE stagnation could happen due to a variety of factors such as weakening end use flat sales, less demand, slower salary rise etc
    These are causes, when such happens the builder or the developers go through prolonged period of negative cashflow if they are not properly funded
    This is where color money plays a very very big role
    Understand Color money in chennai can be bigger than the FED creating bailouts when we had a liquidity crisis, this happened in 2008-2009 and will happen again
    When i say bigger than FED, i mean not in magnitude $ terms but from an impact stand point, there is much more color money in sidelines waiting to be deployed than the need is , of course the terms wont favorable but there is liquidity to keep projects going on
    also this is what keeps the LAND market thriving , plot market where the market price and GV are widely variant ( in chennai there are still many markets where GV is half of Market price) becomes a very good place for color money to chase deals _ ECR is a classic example, when market slows down, color money transaction increases in ECR -( ex a layout in corp limit at 2500 gv is trading at 4000 to 5000)
    So the standard macro micro indicators cannot be applied to a market like chennai, if its as easy as predicting sub prime lending risks as that in US, we would have all predicted the crash in chennai or stagnation long time back
    I strongly beleive last administration has accumulated a significant amount of color money and the best place to hide it is in RE transactions, first 2-3 years in the new rule there is strong vigilance around it and when dust settles and focus goes to national election the color money will have to come out which will be a big favor to RE in chennai and other cities.
    Like MAV pointed crossing shores via mauritius or caymans or other sources is very very risky now
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  • Adding to #1408:

    I did not mean to say that color money will provide the floor, so keep investing in Chennai RE.

    It is one factor that could make it stagnant rather than outright crash. Any action on color money front, in any form, can be a trigger for a crash. It is one theory that politicians will not allow any thing on that front to happen because of vested interest. While it could be true, I will not have that single premise driving an investment conviction.
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  • Originally Posted by nabishek


    Regarding buying patterns, have anyone of you identified where the local IAS/IPS/Politicians/government officers are buying in layouts? Looks they have totally boycotted it and started focussing on buying acres of patta/agricultural land..in chennai they are confining themselves to some extent in ECR. Primary reason is colored money, but I am trying to figure out which area can become posh in future?have not got any clear indication yet.



    There is difference in area preference between Corporate /Business leaders, Movie Fraternity elites and IAS/IPS/Judges.

    1. Cashed up Business/Corporate leaders & Flim stars - Prefer ECR Beach bungalows or Inner city elite areas such as Boat Club, Poes Garden etc.
    Movie fraternity, The Low,Mid -level and some elite level members are mainly located in Kodambakkam,Valsarvakkam and Saligramam.

    ECR - Kamal, Vijay(Also Saligramam),Illayaraja,Nagma,Ramya Krishnan.
    T-Nagar -Surya & Shankar
    Annanagar – Arya, Vishal
    Poes Garden – Bala & Rajini


    2. Politicians are different altogether, there residence is usually in there constitution (except for few seniors) their monetary reserves are unmatched – Their residence or RE holdings does not relay matter as they have “everything is everywhere” – Therefore we can Ignore politicians for this analysis.

    3. IAS/IPS/Judges are elite bureaucrats with power and influence however many of them cannot match the monetary reserves of Politicians, Business leaders or Elites movie personalities.

    The areas occupied by IAS/IPS/Judges are not super posh, they move in a developing area and there has precedence and pattern for that area to become a good upper middle class area. What is the reason?

    The main reason is - their default choice of Developer and to a some extent their position (you do get water 365 days, electricity more consistent, Road works acted upon, Traffic issues clear).

    Imagine living in the same area of MD of CMWSSB and Principle secretary of TNEB – No current cut, No water cut, All Utilities capital works, maintenance and repair work will be done and supply grid/networks assets will be in good nick.

    I also see a clear pattern of gentle urban sprawl in their residential choice (naturally, just like everyone else)

    The 60s batch (All retired) - residing in Kilpauk, Mylapore, Gandhi Nagar, Alwarpet surroundings.
    The 70s and early 80’s batch (Some in service, most retired) - in Annanagar, KK Nagar, Besant Nagar.
    Late 80s and early 90’s batch (In-service) - In Mugaperu, Nolambur, Manapakkam (River View)
    Late 90s to Mid 2000s batch (In-service) In - Karrapakkam (River View), Nerkundram, Ambathur & Perungudi

    Some retired members do serve in boards of major Government organisations.


    We can analyse the choices of residential locations of some currently serving top brass (In the levels of Special Secretary, Cabinet secretary, ADGP Level)

    Serving – DG and ADGP Level:



      Muthukarupan - Thiruvanmayur
      T Rajendran - Besant Nagar
      Sekar – (Former Commissioner) Annanagar
      Dongra - Nolumbur
      Dr Radhakrishnan – Manapakkam
      Mahendran - Nolambur
      George – (Commissioner, Mtec – IIT Delhi & MBA NYU Brookline) Nolambur
      TK Rajendran- Mugaperu
      Sanga - Mugaperu
      Trrupathi – (Former Commissioner) Mugaperu
      Dr Gandhirajan -Mugaperu
      Shukla - Mugaperu
      Jangid – Manapakkam (River view)
      Tamilselvan- Manapakkam & Neelangarai (STF Reward- Operation Cacoon)
      Sylendrababu – Mugaperu & Nolambur (STF Reward -Operation Cacoon)
      Arora – Karapakkam (River View)


      Some Serving Administrative Service officers –equal and above Special Secretary level.

      1. Sheela Balakrishnan - Annanagar
      2. Sridhar - Annanagar
      3. Sheela Rani -Besant Nagar.
      4. Kutralalingam- Indranagar
      5. Chukanth – Besant Nagar
      6. Rajagopal – Thorapakkam
      7. Bhuruli – Mugaperu
      8. Ganadesikan – Mugaperu
      9. Somnath – Shastri Nagar
      10. Chandramouli – Shastri Nagar
      11. Prabakar - Mugaperu
      12. Ananth – Annanagar
      13. Ranjan - Mugaperu


      Note:
      There is a IAS/IPS society that has a small Layout in Karrapakkam & Manapakkam both called River view, some have also invested there. That is why you see Karapakkam & Manapakkam represented.


      Outcome:

      1. Only a handful of still serving officers are residing in Annanagar, Besant Nagar, Shastri Nagar, Indhra Nagar etc.
      2. Majority of Current top brass is based out of Mugaperu/Nolambur area.
      3. Most IAS/IPS do not live in posh areas like Poes Garden, Boat Club etc.


      Mugaperu, Nolambur, Ambathur, Nerkundram, Maduravoyal, Mannapakkam & Karapakkam are the hot bed of these officials.
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