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Housing Sector May Witness Fall in Prices: Knight Frank India

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Housing Sector May Witness Fall in Prices: Knight Frank India

Last updated: December 4 2013
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  • Housing Sector May Witness Fall in Prices: Knight Frank India

    Global property consultancy firm, Knight Frank India, on Thursday said prices in the residential property segment are likely to decline in a short time. “We feel prices of residential segment may go down over a period of time,” Knight Frank India Chairman Pranay Vakil told reporters here today. The residential segment may see a robust demand in certain markets, he said, adding that it was also a good time for property developers to invest in land.

    Demand for real estate at this stage is a combination of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and a corresponding increase in property prices, he said. Today, property buyers are worried that prices may go down after they purchase property and projects may not be completed on time, Vakil said.

    Knight Frank today launched a book titled Real Investment-a real estate investment guide for India. The book seeks to lend a helping hand by covering all the information that one may require while investing in real estate. The book compiles the perspectives of real estate industry experts to help deepen knowledge about real estate and consider it as an asset class. Commenting on the book launch, Vakil said, as property advisors, we continuously work with some of the best minds in the sector. We felt the need for a single credible source of information, for which we brought together the best minds in the business. This book makes the seemingly daunting task of delving into the real estate market simpler by offering tips on how to make real estate a lucrative investment option.”
  • #2

    #2

    Re : Housing Sector May Witness Fall in Prices: Knight Frank India

    contradiction?

    Originally posted by gsvenkat View Post
    Global property consultancy firm, Knight Frank India, on Thursday said prices in the residential property segment are likely to decline in a short time. “We feel prices of residential segment may go down over a period of time,” Knight Frank India Chairman Pranay Vakil told reporters here today. The residential segment may see a robust demand in certain markets, he said, adding that it was also a good time for property developers to invest in land.

    Demand for real estate at this stage is a combination of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and a corresponding increase in property prices, he said. Today, property buyers are worried that prices may go down after they purchase property and projects may not be completed on time, Vakil said.
    see the underlined statements one says fall the others say rise-crap!

    Comment

    • #3

      #3

      Re : Housing Sector May Witness Fall in Prices: Knight Frank India

      I think smart people will make the most of this opportunity and buy property in the short term (1 to 6 months) for the long term growth(5-10 years).

      People who wait may miss this small window of opportunity.

      Comment

      • #4

        #4

        Re : Housing Sector May Witness Fall in Prices: Knight Frank India

        Markets should remain generally flat for a longer period

        The markets that make money for people are generally interlinked. For example, we know that there is significant money shifts from the stock markets to the RE markets. In fact, when the stock markets rise, with a lag people get bolder and start investing in the Re markets.

        The Stock Markets today have had an extended "Bear Market Rally" and technically they are overdue for a fall. If this fall happens around this level (16700-900) then this bear market should be over in the 2011-12 timeframe with a 1-year extension possible. If this market goes further up to the 18000-21000 levels, then the markets should see flat trend for a much longer period, say till 2015-18. These are the technical indicators speaking.

        RE prices generally rise in a strong and sustained manner when there is confidence about global economic trend being up long term, when jobs are greater in number than applicants and when there is once again a free flow and use of credit.

        Right now none of these things are happening. There is quite a lot of fear among non-Governmental people that the so-called recovery seems to be happening only in the eyes of the politicians in Govt and bereaucrats. Jobs are still very scarce and its only the rate of decline in jobless that is slowing down. The total volume of jobless is still growing. And credit is almost completely frozen.

        Look for improvements in these indicators. The Stock Markets will indicate strength in these around 6-9 months early. At that time, whatever the price of RE, buying will bring good gains with minimal risk of further declines.

        These intermediate ups and downs will keep happening and will swallow up those who are fearful of prices rallying up to unaffordable levels once again immediately.

        cheers

        Comment

        • #5

          #5

          Re : Housing Sector May Witness Fall in Prices: Knight Frank India

          As ABK said many vested interest are praying for land price to fall for them to buy. Knight frank will tell that in press, Wisemen will tell that in boards, but as ABK said they are all Crap!

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          • #6

            #6

            Re : Housing Sector May Witness Fall in Prices: Knight Frank India

            in chennai(proper) prices havent crashed a bit and will not(prices are last transacted prices and not qouted ones) coming to the far off areas the prices where bcoz of a sale by a single or few layouts or a township project,these rates where fixed by the promoters and bought by a few gullible people overawed by the size of the builder and pep talk of the salesman.these rates may or may not sustain and hence are vulnerable to crashes.
            the 'proper' chennai and suburbs where there is existing social infra 'prices crashing' bcoz of economic factors is wishfull thinking.

            USA or europe does not and will not decide the indian GDP so dont tell me what is happening there see what is happening here.see the IIP see the reduction in export fall,see the auto nos(even the commercial vehicles),
            see the school fees,see the food prices all at all time highs but still selling,this shows the inertia and the purchasing power and desire in India
            Last edited December 15 2009, 12:43 PM.

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            • #7

              #7

              Re : Housing Sector May Witness Fall in Prices: Knight Frank India

              in my opinion, basing a decision on macro fundamentals can be misleading, too may times a good deal can be ignored just for the fact the we keep thinking there is bigger fall around the corner so as to compensate for the left out feeling originating from not grabbing the opportunity in the previous fall, one should not confuse investment objectives with where one wishes to live.

              Most of these reports nothing but talkshop extensions full of ambiguities which totally ignore the ground realities.

              Comment

              • #8

                #8

                Re : Housing Sector May Witness Fall in Prices: Knight Frank India

                Originally posted by abk View Post
                in chennai(proper) prices havent crashed a bit and will not(prices are last transacted prices and not qouted ones) coming to the far off areas the prices where bcoz of a sale by a single or few layouts or a township project,these rates where fixed by the promoters and bought by a few gullible people overawed by the size of the builder and pep talk of the salesman.these rates may or may not sustain and hence are vulnerable to crashes.
                the 'proper' chennai and suburbs where there is existing social infra 'prices crashing' bcoz of economic factors is wishfull thinking.

                USA or europe does not and will not decide the indian GDP so dont tell me what is happening there see what is happening here.see the IIP see the reduction in export fall,see the auto nos(even the commercial vehicles),
                see the school fees,see the food prices all at all time highs but still selling,this shows the inertia and the purchasing power and desire in India
                abk, mmm wait let me get my crystal ball out.

                mmm it says the Chennai property market will fall 15% in first Q of 2010 and there will be big crash of a further 62% in Q3 2010.

                The ball (crystal) further says that this will be due to:

                • Direct relationship with GDP growth of Iceland and Kazakhstan.
                • Implementation of ETS and carbon credits in pacific island of Tuvalu.
                • core Inflation and non core inflation in Mizoram.
                • W shaped recovery in UK not V shaped (U would have been better).
                • Separation of AP and its correlation with natural Gas production in block D9 in Ghodhavari basin.
                Thanks Crystal Ball.

                Comment

                • #9

                  #9

                  Re : Housing Sector May Witness Fall in Prices: Knight Frank India

                  Very interesting!

                  So folks,

                  For all you guys who have suddenly become tigers on the basis of this "robust" growth in India and China entirely fed by hot-money inflows of at least $ 500 Billion in the last few months, let me see ...

                  How many of you have thrown caution to the wind and boldly went out and bought property in the last 1 years?

                  Today the spin doctors were in full flow, taking a fake "agreement" in Copenhagen (the reality is that the "world leaders" assembled there were soiling their pants wondering what their reception back home would be if they didn't have anything to show for their 2-week paid holiday and so, they resolved in 24 hours, what they could not over 2 weeks), the Economic Times is now back to singing "Happy Days are Here Again!".

                  And the indicators of growth. Car sales in Oct and Nov gone up 60%. While in the real world, this is what I hear. ICICI Bank has Auto loan default rates crossing 40% (basically this business has gone bust already) and have run out of space to park repossessed cars. Apparently you can drive out a 23 lakh Merc (its original price) for 10-12 lakhs if you are a cash party. The "affordable" homes segment is seeing a rapid bookings increase which is making the usually stupid builder to raise rates again to unaffordable levels (how ironic). The builders of India are only better than the big investment bankers in the US. They do not realise that bulk of bookings are from speculative sources (investors and rental-seekers). Simply means builders are transfering debt from their books into buyers books.

                  All of this is typical of a premature euphoria born out of Govt pumping and spin. I'm reminded of the end-2007 time when similar euphoria was rampant. While at the same time, economic conditions are much, much worse with no private sector spending increase happening and around 5 banks per week going bust in US alone. Besides, several countries are seeing increased risk of sovereign debt default.

                  Go ahead guys. Have fun while you can (if beating up my posts give you a sense of security, who am I to complain? ). And load up on as much debt as you can when you can get a loan today. And then wait for interest rates to take off and your jobs to go into risk zone again.

                  The best statement was made by someone in this post who said that US and other countries events do not affect us! Wow! That would be the statement of the year!!! Have you forgotten that its their money thats propping you up in the form of hot money investments? And when their economies crash, as many of you concede will happen sometime soon, this money will flow back in sizeable quantities and you think that won't affect us? Having bought a home, you have the money to settle the loan one-shot if the bank recalls?!

                  There is increasing chatter around the globe that China is another Dubai times 1000 in the making. Arguably the greatest Short-seller in the world currently has taken serious bets on China getting into serious trouble sometime soon. India is at the upper extremity of debt sustainability with a gross deficit (Central + State) nearing 12% (which, by the way is what Greece and the US and UK are at).

                  But then, why bother about global economic situation. The journalist has already told you that happy says are here again! So, lets go out and party like it is December 2007!!!

                  cheers
                  Last edited December 20 2009, 11:50 AM.

                  Comment

                  • #10

                    #10

                    Re : Housing Sector May Witness Fall in Prices: Knight Frank India

                    Are you a doomsayer or financial analyst,

                    If india have to go burst, let it go, Our , auto, diamonds and textiles will get the edge in the exports with our currency go into tailspin.


                    So this is not possible, again the investments for the MNCs in India will become cheaper if India goes belly up,

                    with so much human resources available, if excahnge rates are favourable to MNCs, do you think India can go burst????????

                    Impossible.
                    Last edited December 20 2009, 09:22 PM. Reason: missing word

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