Guys,

I just saw this info from ]http://nhb.org.in/Residex/CHENNAIres.php. This says that overall the prices seem to be coming down.

Want to see this forum's response to this. I know natraj,wiseman and others will provide good points :-)

Regards,
lsjey. This says that overall the prices seem to be coming down.

Want to see this forum's response to this. I know natraj,wiseman and others will provide good points :-)

Regards,
lsjey
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  • Attention Nats!

    Nats ,

    Did you see this index ? I am expectoing your valuable(?) comments?

    Ragards,

    Nattu Dasan
    CommentQuote
  • Chennai prices

    Dear friends,

    In view of less demand for flats and more flats ready/under construction, the prices are down by atleast 20% within city areas and much more in outskirts even in the range of 25 to 35 % dpending on the area and location of the project. The rent rule at Rs. 8000 to 10000 for a 2 bed about 750 sq. ft. ,Rs. 10000 for 850 to 1000 sq. ft. in Saidapet. In Tambaram better located areas nearer to Rly. Stn. and main road, the rent also rule at the above indicated levels at Saidapet.

    ks2071746
    CommentQuote
  • Originally Posted by venkit
    Nats ,

    Did you see this index ? I am expectoing your valuable(?) comments?

    Ragards,

    Nattu Dasan

    I dont need a Venkitu mada bear as a dasan! LOL!
    CommentQuote
  • Guys,

    Jokes apart... What do you guys think is the reason behind this drop...

    I feel confounded by this:

    1. RE developers are acting cagey and not lowering prices by as much as this index says it has dropped.
    2. Rental is not coming down for middle class kinda houses.

    So what are these index boys tracking???

    Regards,
    lsjey
    CommentQuote
  • Originally Posted by ks2071746
    Dear friends,

    In view of less demand for flats and more flats ready/under construction, the prices are down by atleast 20% within city areas and much more in outskirts even in the range of 25 to 35 % dpending on the area and location of the project. The rent rule at Rs. 8000 to 10000 for a 2 bed about 750 sq. ft. ,Rs. 10000 for 850 to 1000 sq. ft. in Saidapet. In Tambaram better located areas nearer to Rly. Stn. and main road, the rent also rule at the above indicated levels at Saidapet.

    ks2071746


    Hi ks
    can you give me a comparision of rates in east tambaram(your forte) to validate the crash of 35% . as you have been saying the current rates are 3000-3500 now, so a 35% drop means they were selling at 4600 to 5300 at peak.go ahead and give me any other locality in the outskirts where this has happened.pls discount areas far away.
    the fact is the peak rates at E tambaram were 3000-3500 where is the 35%correction
    CommentQuote
  • Originally Posted by lsjey
    Guys,

    Jokes apart... What do you guys think is the reason behind this drop...

    I feel confounded by this:

    1. RE developers are acting cagey and not lowering prices by as much as this index says it has dropped.
    2. Rental is not coming down for middle class kinda houses.

    So what are these index boys tracking???

    Regards,
    lsjey




    This is what they claim on how they are tracking

      Prices have been studied for various administrative zones/property tax zones constituting each city.
      The index has been constructed using the weighted average methodology with Price Relative Method (Modified Laspeyre’s approach).
      Primary data on housing prices is being collected from real estate agents by commissioning the services of private consultancy/research organisatons of national repute; in addition data on housing prices is also being collected from the housing finance companies and bank, which is based on housing loans contracted by these institutions.
      I dont believe that the index captures the data accurately and should be expected to reflect the market scenario.There will be lots of inconsistencies owing to the unregulated nature of RE market.

      Neverthless, the index is a good start to know the trend.

      If you really want to use the index to arrive at the market price.Try the following.

      We have the guideline value that was last updated in 2007 which is the same as the base year of the NHBResidex.



      From my observation, Generally the market price has been (FSI allowed)*(guideline value)

      so if you want to calculate for Velacheri

      The guideline value will range from 1500/sqft-2500/sqft for residential areas depending on the location.

      guideline value - 2500/sqft
      market value - (1.5)*2500 = 3750/sqft = 90L/grnd in 2007

      adjusting for inflation and returns from RE and assuming it as 20% p.a. = current price = 1.30C/grnd

      NHBResidex for velacheri - year 2007 = 100 year 2009 = 77

      Please note, NHBResidex is adjusted to inflation

      so calculating directly, market value as per NHBResidex
      = (77/100*1.30C) = 1C/grnd

      Comments are welcome.

      From my observation, Generally the market price has been (FSI allowed)*(guideline value)

      so if you want to calculate for Velacheri

      The guideline value will range from 1500/sqft-2500/sqft for residential areas depending on the location.

      guideline value - 2500/sqft
      market value - (1.5)*2500 = 3750/sqft = 90L/grnd in 2007

      adjusting for inflation and returns from RE and assuming it as 20% p.a. = current price = 1.30C/grnd

      NHBResidex for velacheri - year 2007 = 100 year 2009 = 77

      Please note, NHBResidex is adjusted to inflation

      so calculating directly, market value as per NHBResidex
      = (77/100*1.30C) = 1C/grnd

      Comments are welcome.

      From my observation, Generally the market price has been (FSI allowed)*(guideline value)

      so if you want to calculate for Velacheri

      The guideline value will range from 1500/sqft-2500/sqft for residential areas depending on the location.

      guideline value - 2500/sqft
      market value - (1.5)*2500 = 3750/sqft = 90L/grnd in 2007

      adjusting for inflation and returns from RE and assuming it as 20% p.a. = current price = 1.30C/grnd

      NHBResidex for velacheri - year 2007 = 100 year 2009 = 77

      Please note, NHBResidex is adjusted to inflation

      so calculating directly, market value as per NHBResidex
      = (77/100*1.30C) = 1C/grnd

      Comments are welcome.

      From my observation, Generally the market price has been (FSI allowed)*(guideline value)

      so if you want to calculate for Velacheri

      The guideline value will range from 1500/sqft-2500/sqft for residential areas depending on the location.

      guideline value - 2500/sqft
      market value - (1.5)*2500 = 3750/sqft = 90L/grnd in 2007

      adjusting for inflation and returns from RE and assuming it as 20% p.a. = current price = 1.30C/grnd

      NHBResidex for velacheri - year 2007 = 100 year 2009 = 77

      Please note, NHBResidex is adjusted to inflation

      so calculating directly, market value as per NHBResidex
      = (77/100*1.30C) = 1C/grnd

      Comments are welcome.

      From my observation, Generally the market price has been (FSI allowed)*(guideline value)

      so if you want to calculate for Velacheri

      The guideline value will range from 1500/sqft-2500/sqft for residential areas depending on the location.

      guideline value - 2500/sqft
      market value - (1.5)*2500 = 3750/sqft = 90L/grnd in 2007

      adjusting for inflation and returns from RE and assuming it as 20% p.a. = current price = 1.30C/grnd

      NHBResidex for velacheri - year 2007 = 100 year 2009 = 77

      Please note, NHBResidex is adjusted to inflation

      so calculating directly, market value as per NHBResidex
      = (77/100*1.30C) = 1C/grnd

      Comments are welcome.

      From my observation, Generally the market price has been (FSI allowed)*(guideline value)

      so if you want to calculate for Velacheri

      The guideline value will range from 1500/sqft-2500/sqft for residential areas depending on the location.

      guideline value - 2500/sqft
      market value - (1.5)*2500 = 3750/sqft = 90L/grnd in 2007

      adjusting for inflation and returns from RE and assuming it as 20% p.a. = current price = 1.30C/grnd

      NHBResidex for velacheri - year 2007 = 100 year 2009 = 77

      Please note, NHBResidex is adjusted to inflation

      so calculating directly, market value as per NHBResidex
      = (77/100*1.30C) = 1C/grnd

      Comments are welcome.
    CommentQuote
  • In summary as you rightly said, the unregulated RE market does not have any means for an index. It is just a beginning and given the diversity of India I think it will be a joke forever.
    CommentQuote
  • http://www.nhb.org.in/Residex/Data&Graphs.php

    I think this is a good link, and we would have more information once we have data for 2010.

    In Pune, prices have increased from 100 to 117 in three years - it doesnt even cover the inflation, forget the interest rates...

    Infact, I was checking magic bricks - the same 1500 sq feet apt at Bhandarkar Road was available in 2007 at 8000 Rs per sq feet, the price available is SAME there now.

    LUCKY ME !
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  • Yes you are right, untill a property beats the intrest rates or inflation parameters, the property is actually loosing its value. We must remember the time value also while evaluating the increase in property prices. Infact except Mumbai and GGN most of the regions in India has posted negative returns . Iam not considering speculative areas like Yamuna expressway. etc.
    CommentQuote
  • The credibility of ads in Magic bricks and 99acres has been discussed for long....of course real transactions data is not available to judge the trend.

    And about statements like 'real estate investments making negative returns everywhere'....well it shows what people want it to be rather than what it actually is...

    Personally I bought a land in Feb 2009 in Trichy(tier II city)
    at 700 psft and I'm getting calls asking if i have plans to sell and offering 900 psft (June 2010-i dont have plans to sell and haven't told anyone i'm selling)...
    is it negative return ?...why did i buy in trichy ?...because i could not enter into chennai mkt with anything less 1.2cr - I will be the happiest if prices fall in chennai - but i have not come across a single instance where the price has reduced.

    I am actively looking in chennai south besant ngr/t'miyur and perungudi...
    CommentQuote
  • You are correct Sri.
    CommentQuote
  • Originally Posted by sri_idea
    The credibility of ads in Magic bricks and 99acres has been discussed for long....of course real transactions data is not available to judge the trend.

    And about statements like 'real estate investments making negative returns everywhere'....well it shows what people want it to be rather than what it actually is...

    Personally I bought a land in Feb 2009 in Trichy(tier II city)
    at 700 psft and I'm getting calls asking if i have plans to sell and offering 900 psft (June 2010-i dont have plans to sell and haven't told anyone i'm selling)...
    is it negative return ?...why did i buy in trichy ?...because i could not enter into chennai mkt with anything less 1.2cr - I will be the happiest if prices fall in chennai - but i have not come across a single instance where the price has reduced.

    I am actively looking in chennai south besant ngr/t'miyur and perungudi...


    We cannot treat both land and flats as the same.Land is seen as an asset, whereas flats are being sold now like commodities.

    Also, more than one source of income is involved in most land transactions and many of them are joint-purchases which may involve huge black money.Whereas, Flat purchases are directly linked to a persons savings, income and loan eligiblity.Affordability can be extended only by means of joint loan or more downpayment, liquidate someother investment elsewhere.

    Any change in sentiment/economy will reflect immediately only in flats sqft rate and not in land.

    Currently the scenario in Chennai is such

    Looking for land? Buy in suburbs/outskirts (or) join with like minded friends and invest.

    Looking for flat? Overleverage and buy using all the money you have (or) wait and search for the best bargain.
    CommentQuote
  • I agree the part regarding difference between land and flat. I was just making a point that RE investment in land will beat FD returns anyday ...and cannot agree that RE investments apart from bby and GGN are giving negative returns

    As far as Flat purchase within city (Chennai) goes - i agree with all the risks involved with job security etc. - i feel its an indvidual decision

    choosing trichy is also individual decision as i have more contacts there and its safer for me compared to chennai

    even my flat purchase experience in chennai (rather from my attempts) i find that nowhere has the price reduced (within city) - and if you are talking to a builder frequently on the same project you'll find in 6 mths the prices are revised upwards - how it is happening? (dont have clue ...i'm not an expert/ my expertise is in a different field) but so-called experts keep denying it happening...
    CommentQuote
  • Originally Posted by sri_idea
    I agree the part regarding difference between land and flat. I was just making a point that RE investment in land will beat FD returns anyday ...and cannot agree that RE investments apart from bby and GGN are giving negative returns

    As far as Flat purchase within city (Chennai) goes - i agree with all the risks involved with job security etc. - i feel its an indvidual decision

    choosing trichy is also individual decision as i have more contacts there and its safer for me compared to chennai

    even my flat purchase experience in chennai (rather from my attempts) i find that nowhere has the price reduced (within city) - and if you are talking to a builder frequently on the same project you'll find in 6 mths the prices are revised upwards - how it is happening? (dont have clue ...i'm not an expert/ my expertise is in a different field) but so-called experts keep denying it happening...



    The price of Flats before MP elections were less than the current price. IT was quoting Rs 2700-2800 psft near Meenambakkam. And Ruby builder was quoting Rs 2600 in Pallavaram (near Jains).

    In Villivakkam it was Rs 2800 (year 2009, till May).

    Some of friends bought Flats at the above price in these locations.

    Due the uncertainty in the world economy and 2009 MP elections the prices were less and it was bargain-able.

    We can not get flats for this price now.

    The Kulathur (adjacent to Anna Nagar) quoting at Rs 3500. And Villivakkam, Pallavaram, Chrompet also.

    We can not get a SQFT less than RS 3500 in Chennai corporation area.

    No one can buy land in Anna nagar and so the people are buying in Kolathur ( Ground RS 60L) :)
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