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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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  • #41

    #41

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

    Originally posted by rickyofsnow View Post
    Well said,The future movements of the market cannot be predicted.

    Anyone who thinks that they can predict the movement are either kidding themselves or kidding others.
    Some members try hard to create panic, spread view of imminent real estate crash.

    This forum is not going to help control the direction Chennai real estate.

    THE TRUTH IS NO ONE CAN PREDICT THE FUTURE DIRECTION OF REAL ESTATE.

    This forum would be good if people discussed about real estate without personal AGENDAS.

    Lots of fellow members talk about all aspects of RE in Chennai, like suburbs certain builders, tax issues, Legal issues etc but you will see one particular member will only talk negative speculations about future direction of RE.

    Well this is acceptable to an extent but when you see this particular member is not interested in talking about anything else other than creating a negative sentiment, It is clear that there is a hidden agenda.

    If you look at my past postings it will be clear that I have recommended to certain members (where they seek advice on price) that if the quoted price is high I have said so (based on my experience).I have discussed legal issues in Chennai RE etc.


    IF CERTAIN MEMBERS HAVE NEGATIVE VIEWS ON PRICE THAT IS FINE - POINT TAKEN – but trying to create panic and trying to control the market just makes it SICK.

    My views have been made clear many times (Once again for those who do not know):

    • RE and Equities (shares) are long term investment (Ie; at least 5 – 10 years)
    • I do not support speculators,brokers and agents in the market.
    • RE investment must meet your personal risk profile, moderate gearing (debt), diversification is key, must meet your personal goals and needs.
    • I believe in Indian RE Investment strongly (Due to Inflation, INR devaluation, Population density, shortage of housing and economic growth)
    • Investing in Indian RE is only suitable for people who has strong people link in the cities where invested (Due to potential short comings in Indian legal system in Transfer of properties act, Rent control act, Registration act etc).
    • I do not care about short term market volatilities as I go in with long term investment horizon (I am not a day trader, speculator or broker).
    • Yes the market will go up and down in the short term but it will only go up in the long term (Ie: over 10 yrs) If one does not have long term view he /she should not be investing in RE.


    My views are based on personal investment experience since the 90’s in India and 2 other countries and family investment experience in Chennai RE since 80’s.

    THIS IS A GREAT FORUM BUT SOME PEOPLE JUST MAKE IT SICK WITH THERE PREDICTIONS AND SELF CENTERED AGENDA .

    Comment

    • #42

      #42

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

      Originally posted by wiseman View Post
      Almighty,

      All that you say is okay. And I for one have seen Chennai prices actually fall, not only in my locality where we have tried to sell some prime land, but if you look at various posts, most people do agree that there has been at least a 15% to in some cases a 30% fall.

      In fact your statement that prices in Chennai has not fallen one bit (I assume that means ZERO%) is a blatant lie and perhaps its your who is dishonorable and full of shame to make that claim! Unless you would like to include the various other posters (into my category) who have stated in various posts that indeed prices in specific parts of Chennai have fallen as stated above.

      When a man is honorable and has stuck to his postulates (which timewise have not still ended) on the basis of which prices are still expected to fall, one wonders what connection shame has got to do with it. Maybe you do not understand the word shame.

      And to prove it, I attach 3 images where prices of each locality in Chennai has been brought out in a much earlier post and you will understand that prices indeed have fallen (where have you been looking?). Check the images posted by someone else, which incidentally was much apprerciated when it was posted. Btw, I only joined around June 2008 and its well below 2 years now!!!

      In my book, shame comes in only when you do an about face (not likely in my case) or talk with forked tongue or similar such behavior. Maybe you need to polish up you English or stop using random words that discredit your otherwise okay post (everyone is entitled to his opinion)! Maybe you were trying to show off your Shakespear knowledge, but in this case, it falls flat!

      Can you explain what shame has got to do with what has otherwise been an honorable (in your own words) act - lets leave Ceasar and Mark Antony alone here, huh?

      cheers
      Simple question..How accurate are those attachments? If I remember right Nabhishek had pasted these earlier this year. Have the values changed, do they get updated? Finally I am not bothered about some freak data that can say anything, and Wiseman who claimed to know TA will know that this is a lag indicator. The lead indicator on the ground shows desperation to buy. Infact the bears on this forum and in general should be thanked for checking euphoria or the upmove in the past 5 months would have been phenomenal. I for one am happy as for me I seem to be nearing the time when I can swap property for property across states, but as for Wiseman and his RK Salai property, I think unrealistic prices in the old CITY are no longer worth it. Remember prices in city centre will go up lesser than the developed cum developing portion and the newly developing portions will only spurt up and down till they are in developing state. So RK Salai will never go up in percentage times like Mogappair or Saligramam or Palavakkam. Cheers.

      Comment

      • #43

        #43

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

        Originally posted by sethugm View Post
        Could see many people are trying to keep the RE Prices high. The intensions are very much visible.And nothing new on their mud-slinging campaign on someone who is advising to be rational on your RE buying/investment.

        Almost everyone accepts that the RE has given better-than-expected returns in the past 4 years until 2007.If you see the trend post 2007, the trend is downwords or flat. This is mainly because the sellers who were thitherto dreaming of 40-50 lacs appreciation per ground will not be to digest the actual prices being offered in the market.The upward trend was possible when there were < 10 % plots were available for sale but many buyers d by easy bank credits. Now buyers have become rational and think twice of repaying the loan and value for money.

        Friend of mine bought a Flat in Velachery and hearing the 'appreciations' on the flat he was prompted to invest in land and bought half-a-ground land in KamakotiNagar/Pallikaranai for Rs 27 Lacs in 2007.When there was a urgent necessity for 6-7 lacs in July 2009, the first option available was to dispose the land and for his surprise there was absolutely no takers even on the cost price and now its been reduced to 25 Lacs and still no takers.As everyone says,the RE appreciation is purely based on when you bought the property.With the current highly-inflated prices, it would be highly impossible to see an 'appreciation' in 5-8 years timespan.I have also come across few friends working in IT,bought plots in Perumbakkam for 6-7 lacs in 2004 with bank loans, sitting now with good 35-40 lacs 'appreciations'.If someone claims better RE returns even in long term with the current prices,its nothing but vested interest and its just to protect their paper assets running in crores.

        The banks now neither provide 50 Lacs loans nor the availability of people with this amount.Even those who have money wish to diversify from high-low liquid assets than the low liquid RE Assets.I have dont much information on other citiies but seeing the availability of lands available in North, GST, OMR and ECR the prices will undergo good correction but land/property owners will try their best to resist with their Smear Campaign.
        There is something one should realise. You can only buy what you can afford.
        Affordability has increased terribly in the past few years. Now taking the example of 7L becoming 35L in Sethugm post, it is atbest 5times in 5 years giving a yield of 38%. Pretty good no doubt. I have stated in my earlier Avatar and repeat, have properties whose conservative growth calculation even using the bear values quoted by the Sethugms of this board will yield 22% cumulative growth. I must talk of one property (land) bought in 1966 and today's sale value (if I sold like a despo beggar for money!) will yield 4000 times the old value in 43 years, showing 22% cumulative growth (CAGR for those who want to be esoteric and not mathematical). No doubt this includes a growth of about 5 times in past 5 years. So if I knock that out I will get 19% yield in the first 38 years.
        Now remember the Industry has provided super growth in the past 5 years in India. Folks who talked of 18K salary p.m. in ICICI bank now earn 18L p.a, or more than 8.5 times growth. Also the spread of growth has permeated more wildly. So if I bought land in the outskirts and expect to sell in a dip, I am mad. If I bought USABLE land in the city it is always resaleable.
        One ad of mine is yet eliciting super responses and they want that 10% down in price (typical Madrasi katharikai vyabaram...vegetable business tendency) but I know I am getting super responses than earlier. One wanted a quote from me if he paid down straight in one lot, I did not budge. Even if I had budged I would yet have made a mighty fortune from the best offers in 2008 and before. In other words the bears on this board have been repeating the same stuff a million times and I dont see even an iota of truth.
        I wont diagree with Sethugm that his friends who bought desperately arent unable to sell out. However that is true always if you have high supply. So going and buying a Hyegrevar deal in ECR somewhere near Mahabs and then trying to dispose it off in slightly bad times wont work. If you bought in Uthandi then you will yet sell it at decent profit and if you bought at Tiruvanmiyur then it will not fall and the person who wanted 1C flat there to fall to 50L is going to wait for his next lifetime!
        Cheers.

        Comment

        • #44

          #44

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

          Originally posted by Economist View Post
          [*]Yes the market will go up and down in the short term but it will only go up in the long term (Ie: over 10 yrs) If one does not have long term view he /she should not be investing in RE.[/LIST]
          My views are based on personal investment experience since the 90’s in India and 2 other countries and family investment experience in Chennai RE since 80’s.

          THIS IS A GREAT FORUM BUT SOME PEOPLE JUST MAKE IT SICK WITH THERE PREDICTIONS AND SELF CENTERED AGENDA .
          Please have a look to - ="http://www.indianrealestateforum.com/real-estate-updates/t-proof-unsold-flats-houses-inventory-indianexpress-article-8586.html"]http://www.indianrealestateforum.com/real-estate-updates/t-proof-unsold-flats-houses-inventory-indianexpress-article-8586.html[/URL]

          I have good investment capability in RE but after reading posts on this forum & my own research my take is that salaries have not risen according to house prices, i have kept on hold my decision to buy 1st property of my life (i am 28) until i get sensible deals.

          I stay in Pune & i have seen for myself that flats are not selling here, when i leave numbers on sites that act as mediator b/w builders & buyers (for NCR), i get calls like crazy & with multiple follow ups - truth is that RE is not selling right now in India.

          Got one more HDFC auction today thru email

          ="http://images.********************/newsletter/attach/297.pdf"]http://images.********************/newsletter/attach/297.pdf[/URL]

          India cannot count growth only on basis of IT people, where will other sectors go if only IT people can afford homes & luxury?

          Moreover remember - things you cannot verify can be goofed up.

          If i say i own an Audi A6 you can't verify my claim, similarly if someone says that he has sold his studio lake facing apartment in Lavasa to Priyanka chopda, Sonu Sood, Shahid kapoor - I can't verify.

          So fake bookings & saying everything sold out - does not actually sell.

          In Pune Magarpatta City area 1.25 Cr bungalow fetching 20K rent is justified according to global rentals? - you tell me, either property is overvalued or owner is doing social service.

          RE prices going up in next 10 years but remaining stagnant for even 5 years is a pure loss - it will be luck if the overall 10 yrs appreciation covers the loss of stagnancy period.

          Chennai prices rising day & night while rest of India not selling? i can't comprehend this. NCR has the best infrastructure in India - visit Gurgaon & Greater NOIDA once & you will never want to go back to Chennai if you like US/UK like housing & infrastructure.

          When they are not selling despite having Manesar & Sona road like investment zones declared by Haryana govt. then how can Chennai keep selling unabated?

          My father bought a 2L house in NCR in 80s & today value is 80L+ but remember it is on its own land, but then India really needed many houses & he completed his loan very easily w/o compromising on other expenditures, while being in a state govt. job.

          Flat feels like a house arrest & when you try to mortgage then bank gives more consideration to a house on its own land than a flat. 2BHK flat for 40-45L can be afforded by one who has minimum 80K-85K monthly take home salary.

          For reality check go to Payscale.com & check the percentile of population that can get a package of around 13L-15L per annum in India.

          Comment

          • #45

            #45

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

            Originally posted by logix View Post
            Please have a look to - ="http://www.indianrealestateforum.com/real-estate-updates/t-proof-unsold-flats-houses-inventory-indianexpress-article-8586.html"]http://www.indianrealestateforum.com/real-estate-updates/t-proof-unsold-flats-houses-inventory-indianexpress-article-8586.html[/URL]

            I have good investment capability in RE but after reading posts on this forum & my own research my take is that salaries have not risen according to house prices, i have kept on hold my decision to buy 1st property of my life (i am 28) until i get sensible deals.

            I stay in Pune & i have seen for myself that flats are not selling here, when i leave numbers on sites that act as mediator b/w builders & buyers (for NCR), i get calls like crazy & with multiple follow ups - truth is that RE is not selling right now in India.

            Got one more HDFC auction today thru email

            ="http://images.********************/newsletter/attach/297.pdf"]http://images.********************/newsletter/attach/297.pdf[/URL]

            India cannot count growth only on basis of IT people, where will other sectors go if only IT people can afford homes & luxury?

            Moreover remember - things you cannot verify can be goofed up.

            If i say i own an Audi A6 you can't verify my claim, similarly if someone says that he has sold his studio lake facing apartment in Lavasa to Priyanka chopda, Sonu Sood, Shahid kapoor - I can't verify.

            So fake bookings & saying everything sold out - does not actually sell.

            In Pune Magarpatta City area 1.25 Cr bungalow fetching 20K rent is justified according to global rentals? - you tell me, either property is overvalued or owner is doing social service.

            RE prices going up in next 10 years but remaining stagnant for even 5 years is a pure loss - it will be luck if the overall 10 yrs appreciation covers the loss of stagnancy period.

            Chennai prices rising day & night while rest of India not selling? i can't comprehend this. NCR has the best infrastructure in India - visit Gurgaon & Greater NOIDA once & you will never want to go back to Chennai if you like US/UK like housing & infrastructure.

            When they are not selling despite having Manesar & Sona road like investment zones declared by Haryana govt. then how can Chennai keep selling unabated?

            My father bought a 2L house in NCR in 80s & today value is 80L+ but remember it is on its own land, but then India really needed many houses & he completed his loan very easily w/o compromising on other expenditures, while being in a state govt. job.

            Flat feels like a house arrest & when you try to mortgage then bank gives more consideration to a house on its own land than a flat. 2BHK flat for 40-45L can be afforded by one who has minimum 80K-85K monthly take home salary.

            For reality check go to Payscale.com & check the percentile of population that can get a package of around 13L-15L per annum in India.
            If you said 2L in 80s became only 80L today in NCR and that too a house it is not a good growth. A 10L house in late 80s, read 89 in Mylapore costs atleast 3.5C today.
            As for your view on growth. In Bangalore there is a guy selling villas and other stuff on the other side of WHitefield. TO put it simple in his words distance from there to HAL airport is 29Km which means to MG roaD WILL BE about 38km. And he sells villas 6000sqft land with 5000sqft building for 1.8C. If this can happen the prices of land in CHennai are cheap but again in Chennai the outskirt builders are selling stories and I wont ask anyone to buy those fancy apartments on GST road or OMR or ECR. When I say that I am talking of Safaas and the ones in SHolinganallur, beyond tollgate in ECR etc.
            As for Pune what does it provide?

            Comment

            • #46

              #46

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

              Well said, I agree to you.

              I'm not against anyone buying flats for 1C,2C or even 5C(Exceptional guys). But when I think about affordability, infrastructure, traffic, pollution and mainly Living,
              It does not make sense to go far 50 lakhs and above for flats.

              How many years the flats will with stand, that too in the current pace of construction, which I strongly feel lacks Quality?

              Instead of buying property's in C's in Chennai better get settled in emerging towns(Tier 4,5,6) and kick-off own business.

              I have seen salaries in dollars in US and lakhs in India, the best way for insuring for the future is to setup business rather than being a salaried class, that is my lesson learnt experience.

              Comment

              • #47

                #47

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

                OMR still costly

                Just Recently, I verified the prices for the apartments around OMR starting Thiruvanmiyur to Kelambakkam.
                I did not find any apartment with 1100 (2BHK) less than 50 Lakhs.

                I'm not sure if the prices have come down in Chennai esp in OMR.

                Comment

                • #48

                  #48

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

                  you can take a person out of chennai but cant take 'chennai' out of a person

                  Originally posted by logix View Post



                  Chennai prices rising day & night while rest of India not selling? i can't comprehend this. NCR has the best infrastructure in India - visit Gurgaon & Greater NOIDA once & you will never want to go back to Chennai if you like US/UK like housing & infrastructure.

                  When they are not selling despite having Manesar & Sona road like investment zones declared by Haryana govt. then how can Chennai keep selling unabated?

                  .
                  Chennai sells becoz

                  1)it is still cheaper compared to other metros(land)

                  2)it is on a growth curve with many new industries making their footprint

                  3)availaibility of both skilled and unskilled labour

                  4)it is a very calm place no civil unrests

                  5) no land mafia till date and no 'hafta' collections

                  6)lots of abstracts involved.

                  7)comprises of a conservative population which is culturally more inclined towards chennai's lifestyle.and which is growing.

                  8)more migrations from rest of tamilnadu which is also doing extremely well
                  the sucessfull have always wanted to own a place in chennai.(abstract)

                  Comment

                  • #49

                    #49

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

                    Inner city has a reason for high prices ...

                    Originally posted by Almighty View Post
                    Simple question..How accurate are those attachments? If I remember right Nabhishek had pasted these earlier this year. Have the values changed, do they get updated? Finally I am not bothered about some freak data that can say anything, and Wiseman who claimed to know TA will know that this is a lag indicator. The lead indicator on the ground shows desperation to buy. Infact the bears on this forum and in general should be thanked for checking euphoria or the upmove in the past 5 months would have been phenomenal. I for one am happy as for me I seem to be nearing the time when I can swap property for property across states, but as for Wiseman and his RK Salai property, I think unrealistic prices in the old CITY are no longer worth it. Remember prices in city centre will go up lesser than the developed cum developing portion and the newly developing portions will only spurt up and down till they are in developing state. So RK Salai will never go up in percentage times like Mogappair or Saligramam or Palavakkam. Cheers.

                    Almighty,

                    You are full of questions and doubts about others' data and charts. Instead of trying to create your own brand of confusion, how about you trying to do some amount of work and research and put down some of your own data instead of trying to put down the data produced by Abk, others and myself? Maybe getting off your butt and doing some research might give some credence to your confusion-mongering?

                    You say that bears have sought to dampen the market otherwise it would have risen phenomenally. Please see the attached chart which will show you that, as of 24th Dec, the markets have in fact been blown out of proportions by the bulls such as yourself. Specifically, the Real Estate Sectoral P/E has risen to an astronomical 55 times current earnings. And the RE companies are going to cream the bulls such as you with IPO offerings at these prices and good luck to you!!! And you are expecting people like us to become suckers just because you might have bought property at high prices and are hoping against hope that they will rise under these circumstances of high supply and low demand, not to mention tightening money supply and impending interest rate increases? Good luck to you again!!!

                    Lastly, it is high grade infrastructure, proximity to CBD and a long, steady growth in calue that will see Central areas retain high value over time to come. That is why, South Bombay, MG Road in Bangalore, Central Chennai and suchlike places will fall least in times of distress and still have siginficant liquidity (dude, when we dropped price from 2.5 to 2.3 crores per ground, ee had over 50 prospective buyers with 100% cash in the bank within 1 week; show me that kind of interest in OMR?). Sure, the returns will not be like buying farmland for 500 and seeing it go to 2000. But then, for every 3 plots you buy in different areas, 1 will fail (33% failure rate) and over a 20 year period, CAGR will come down to earth and taper down to 13% - 15%, which is what we got over the last several decades in Central Chennai.

                    Please don't think you have struck upon some magic formula that most of us have missed. I've been buying property for last nearly 30 years and have done all the calculations you have and seen all the phenomenal rises you have (and probably more).

                    More importantly, we have seen some really punishing bear markets you probably have not. Which is why we like to be cautious and wait patiently for the great opportunities serious distress brings so that our investments will be much safer, more profitable and more liquid. While the eager youngsters who have not seen serious bear markets buy too early and high and suffer so that they learn to be a little wiser when a little older.

                    Anything wrong with being a little wiser and a little safer?

                    cheers
                    Attached Files

                    Comment

                    • #50

                      #50

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

                      Remembered a little late ... Welcome back Nats!

                      Nats (or Almighty in current Avatar),

                      Welcome back. Hope this time around you will keep a lid on your vocabulary in deference to your IIT background.

                      Your views are always welcome!

                      cheers

                      PS - Sorry for taking off on you in previous post!!!

                      Comment

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