Mumbai, Delhi, Bangalore and Chennai are not the only cities in india to witness the unprecedented growth in prices and development in the realty sector. Sharing the pie are the Tier 2 and Tier 3 cities.

In fact the appreciation in percentage terms have been higher in these cities and more small time investors have been shifting focus here bcoz the value per sq.ft and the average property values are much lower compared to the Top 4 cities.

Contrary to popular beliefs, land rates have appreciated by 150 to 400% in last 2 years at most of these places. But at some locations, prices of land have crossed the sustainable limits and developers can burn their fingers buying such expensive land

With the entry of FDI players into construction, the prices of land continue to rise unabated. The end result could be higher costs of residential and commercial premises, which can be a shade higher than fundamental pricing of a given location.

Any way it goes, i dont see a correction in prices happening at least till mid 2007

Any views on this ??
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  • RBI denies FII Status to FDIs

    Pinnacle Said -
    With the entry of FDI players into construction, the prices of land continue to rise unabated. The end result could be higher costs of residential and commercial premises, which can be a shade higher than fundamental pricing of a given location.

    Any way it goes, i dont see a correction in prices happening at least till mid 2007


    Hi pinnacle, let me put it this way.(..in contrary)...

    RBI has denied granting FII status to any FDI investment received through private placement of equity by different construction companies. This is taken as a step to keep a check highly booming realty stocks.

    Moreover another check/correction made in this regard is that RBI is no mood to allow any relaxation for FDI brought in through private placement by real estate developers, whose projects are not in fulfillment with the guidelines of Department of Industrial Policy and Promotion (DIPP).

    This will definitely make a check over real estate developers/ constructors and hopefully bring some correction in Real estate prices that these property developers used to put on their RE projects.
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