It seems prices has started falling in Mumbai, many builders have started quoting less than what is being advertised, also many flats owners have reduced their prices to sell their flats as soon as possible before the price drops more, any first hand input welcome...:D
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  • Originally Posted by AyaanD
    It will be good if the prices fall but it seems like prices will only fall in Premium and highly priced segments in Mumbai like South Mumbai.For suburbs and beyond suburbs there still seems enough demand so prices will increase. People with budget for Bandra are now looking for a home in Andheri and those with budget for Andheri are looking for a home in Kandivali and so on...because today Kandivali is what Andheri was till a few years back..so the buyers are adjusting themselves rather than the builders reducing any prices..same is the case everywhere...South Mumbai will be priced out and Suburbs will see all the action and increase in prices.


    Key driver of these prices is expectation . So fall in South Mumbai rates would definately have an effect on Andheri as buyers would vanish once they see the rates falling ,Banks would start jumping on Builders head and builder would find his financing cut off. However such a fall would be dangerous as it would ruin banks esp. HDFC and ICICI and have a v bad effect on the economy.. In addition such a fall is also likely to be in a case of a emerging markets collapse which can satrt due to any odd event in russia or brazil
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  • There is a mention in a separate thread (Vasant Oasis) in this forum that one tower was sold out in that project in one day.
    If the towers are getting sold out in one day, does that means that we still have a good number of these so called "Investors" (read: politicians, underworld goons, businessmen with a lot of blackmoney, etc) in the market. If yes all the talk about Mumbai RE correcting doesnt look to be happening in the near future as these "Investors" obviously have a lot of money surplus which is being invested in even the latest projects and then the builder reselling it for them. The builder is probably holding very little financial liability, atleast thats what it looks on the surface.
    Will be glad if the forum members can share their views on this.
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  • What typically happens is that the builder sells some flats to the investors(politicians,businessmen with black money) at lower rates mainly to recover the project costs. The remaining flats are sold to end users at a high price. The builder can sustain the high price because he has already recovered the cost of the project. So the builder just keeps on jacking the price to recover maximum profit. Later the investors sell thier stock at a price marginally lower than that of the builder and usually through a broker. There is still enormous demand for affordable housing but all those buyers are pushed to far-flung areas.
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  • 3rd News Article in consecutive days

    Here is another article in Financial Express raising the same concerns of unsold inventory of builders.

    Not just one media i.e. TOI, but also Express group posted this. And Express group is more fairer than any other media house.

    Off-course builders are expecting an up-swing in sales during festive season, however, at the present price levels, I wonder if sales will be up at all.

    For sure new schemes and offers increase the inquiries, however, that may not result in sales.

    Who will win?:bab (38):
    {Builders supported by Banks + Investors} VS Buyers.
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  • Originally Posted by buyerserious
    There is a mention in a separate thread (Vasant Oasis) in this forum that one tower was sold out in that project in one day.
    If the towers are getting sold out in one day, does that means that we still have a good number of these so called "Investors" (read: politicians, underworld goons, businessmen with a lot of blackmoney, etc) in the market. If yes all the talk about Mumbai RE correcting doesnt look to be happening in the near future as these "Investors" obviously have a lot of money surplus which is being invested in even the latest projects and then the builder reselling it for them. The builder is probably holding very little financial liability, atleast thats what it looks on the surface.
    Will be glad if the forum members can share their views on this.


    These are oldest techniques used by builders...
    Only one flat left..
    Sab sold to investors ..buy there
    Subtract 33% from saleable area for carpet area..
    legal docs only after cash..
    transfer cost on resale if society not formed

    Ultimately the builders greed kills him as he over-leverages himself by putting money on land..or other businesses...
    This Money has a mind of its own ....so builder retains of lot of flats..and is invested in many places..for him cash flow is necassary(In White as he cannot use black for many transactions) and he gets this only from Banks or from future buyers..

    Interest rates have gone up by 2% in past two years increasers builders interest payments by around 15-20%.. In addition..land prices are also shooting up..

    As a value investor and blogger Katsenelsons says..
    ' As long as there is an incremental buyer, prices keep going up, but at some point everybody who wants to buy a house has bought a house, so when an incremental buyer is not there, the prices start declining and then it becomes self-feeding. It's very difficult to time the end, but there is always an end.' repeat always an end
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  • Originally Posted by mamba
    These are oldest techniques used by builders...
    Only one flat left..
    Sab sold to investors ..buy there
    Subtract 33% from saleable area for carpet area..
    legal docs only after cash..
    transfer cost on resale if society not formed

    Ultimately the builders greed kills him as he over-leverages himself by putting money on land..or other businesses...
    This Money has a mind of its own ....so builder retains of lot of flats..and is invested in many places..for him cash flow is necassary(In White as he cannot use black for many transactions) and he gets this only from Banks or from future buyers..

    Interest rates have gone up by 2% in past two years increasers builders interest payments by around 15-20%.. In addition..land prices are also shooting up..

    As a value investor and blogger Katsenelsons says..
    ' As long as there is an incremental buyer, prices keep going up, but at some point everybody who wants to buy a house has bought a house, so when an incremental buyer is not there, the prices start declining and then it becomes self-feeding. It's very difficult to time the end, but there is always an end.' repeat always an end

    Looks like there will be an end to us before there is an end to this mania.
    on Sunday HT reported that 90 lakhs people live in slums in Mumbai of the 1.43 crore people in total.
    Of these 90L how many will be moving up the ladder, so expect no let up.:bab (45):
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  • Demand for apartment hardly comes from the slum people...
    Currently they earn 15-20k / month.... which too is risky pay since its typically lumpy as mostly they are in small businesses. In addition, no one is targetting thme other than houses in virar ..or further than that..or MHADA
    Some people would have lottery ticket growth but hardly contribute to demand..You can just see ..in one's present society (if it is not SRA or redevelopment) how many ppl have upgraded from slums..

    To buy a apartment in Mumbai ..salary needs to be at least 120k/month after tax...

    In Mumbai you can only afford a house when your net annual salary (post taxes) in petis is more than your age..For e.g for a person of 30 ..his slary should be at least 30L now...
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  • There will always remain a demand for houses from 20L to 75L.. for salaried people, When it gets beyond a crore.. then demand becomes sparse for this segment which I believe is 60- 70% of the market..
    Stock brokers and film personalities have a bigger budget ..
    Even if a person improves his standard.. it is a difficult transition from a slum to house.. If I own a 1 BHK and want to upgrade to a 2 BHK.. in the current scenario, it is almost impossible unless I sell my 1 BHK.. even though my salary has risen..
    I do not see a great demand in the premium segment.. there is always a irrationality that creeps in and people start believing it will continue to increase. .. but stagnation has already set in.. and only time will tell whether these projects looks great or remain an eye sore as incomplete projects..
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  • Look at the state of the top two threads that got maximum views in this site.

    CASA.... Dombivili and India bulls Panvel. Reading out the threads make us feel that all of them who invested are totally in the dark and they are on the mercy of the builders. If it happens, happens kind of optimism....
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  • Damn - Wait 3 more months to see if prices really fall!

    I visited the MCHI Exhibition today. Surprise, shock and Apathy, I am confused between these feelings.

    Surprise and Shock to see the prices of advertised projects; All start at minimum Rs. 1.2 Cr and going up to Rs. 5-6 Cr.

    All the advertised projects (apart from a very small minority) were either going to be finished in end of Dec 2012 or end of 2013 or mid 2014 completion. The quoted prices were between Rs. 9000 - 27000 psf which basically means prices starting at Rs. 1.2 Cr for a 2BHK.

    Apathy: Clearly these future properties advertised at MCHI exhibition showed that the developers are in a desperate fund raising situation.

    I think the hope here is that people (investors + people with some fixed cash) will book properties in anticipation going by current prices in the hope that the prices will further go up in future. The developers will use this money to complete projects + repay loans. And the entire cycle of HIGH property prices can sustain.

    I am sure some people will get sucked into this vicious circle and many will be disappointed and many will continue to do the wait and watch game. It's sad and pathetic to see that the city (because of greed of developers) and many more factors will continue to disappoint the salaried class of people to sulk their entire life into repaying large loans that they will take to buy such properties. Damn, Wait 3 more months to see if prices really fall!

    My personal overall take: Wait and watch!
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  • So was it crowded!!! I never expected anything else so not surprised. Want to understand the real scene before reading news of record foot falls and record sale bull...

    Originally Posted by mark_ninja
    I visited the MCHI Exhibition today. Surprise, shock and Apathy, I am confused between these feelings.

    Surprise and Shock to see the prices of advertised projects; All start at minimum Rs. 1.2 Cr and going up to Rs. 5-6 Cr.

    All the advertised projects (apart from a very small minority) were either going to be finished in end of Dec 2012 or end of 2013 or mid 2014 completion. The quoted prices were between Rs. 9000 - 27000 psf which basically means prices starting at Rs. 1.2 Cr for a 2BHK.

    Apathy: Clearly these future properties advertised at MCHI exhibition showed that the developers are in a desperate fund raising situation.

    I think the hope here is that people (investors + people with some fixed cash) will book properties in anticipation going by current prices in the hope that the prices will further go up in future. The developers will use this money to complete projects + repay loans. And the entire cycle of HIGH property prices can sustain.

    I am sure some people will get sucked into this vicious circle and many will be disappointed and many will continue to do the wait and watch game. It's sad and pathetic to see that the city (because of greed of developers) and many more factors will continue to disappoint the salaried class of people to sulk their entire life into repaying large loans that they will take to buy such properties. Damn, Wait 3 more months to see if prices really fall!

    My personal overall take: Wait and watch!
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  • I thought with current so called price correction, I would hope to see some realistic prices in the advertisements. more in the range of 65-1 crore, as thats what is 'affordable' budget to the ''janta''

    not a drastic lowering of prices so far, the only thing i have seen is the Builders are offering some discounts here and there like car park etc. other than that there is not much relief!
    adverts are all 1.7cr+ to 2.1 cr starting onwards :o
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  • It was not crowded. Much lesser participants as compared to last time. I attended the last one too.

    I was surprised because the quoted prices were higher than the last time, even when all media is telling that the prices have come down. Infact, the quoted prices have gone up by an average 10%.


    This report is compiled by Edelweiss Research. Source: http://www.edelweiss.in/Research/resdetails.aspx?rid=17624

    Basically developers are raising funds and trying to squeeze out the last bit of investors/aam aadmi to buy at the present prices.

    The news in the Financial Circle is to wait till August - October 2011 time frame when you will see a real downward trend in pricing.

    Originally Posted by Sharpj
    So was it crowded!!! I never expected anything else so not surprised. Want to understand the real scene before reading news of record foot falls and record sale bull...
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  • thanks ninja

    Originally Posted by mark_ninja
    Infact, the quoted prices have gone up by an average 10%. Infact, the quoted prices have gone up by an average 10%.
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  • Originally Posted by mark_ninja
    It was not crowded. Much lesser participants as compared to last time. I attended the last one too.

    I was surprised because the quoted prices were higher than the last time, even when all media is telling that the prices have come down. Infact, the quoted prices have gone up by an average 10%.

    DOWNLOAD the Quoted Price List for all projects from Oct 2010 - April 2011.

    Edel+-+Real+Estate+-+Mumbai+Property+Expo.pdf - File Shared from Box.net - Free Online File Storage

    This report is compiled by Edelweiss Research. Source: http://www.edelweiss.in/Research/resdetails.aspx?rid=17624

    Basically developers are raising funds and trying to squeeze out the last bit of investors/aam aadmi to buy at the present prices.

    The news in the Financial Circle is to wait till August - October 2011 time frame when you will see a real downward trend in pricing.

    This is not good news.....if you look at super expensive properties some of them have fallen by about 10% and i fear this is all the fall that we may see...I am witnessing transactions in Borivali (East) at phenomenal prices 1 BHK (600 sq. ft old building) going for 75 lacs, etc. I have kept the wait and watch strategy for the past few months and it has NOT paid off. there is a line of thought espescially that the people in the 50s tell me that waiting in Mumbai has never paid off and will never pay off. Really confused as to what to do. On the other hand involvement of politicians/underworld in real estate companies means that they will never run out of cash as they are funded with tax payer money sid off by Sharad Pawar's of the world and put back in DB realty's of the world. Little surprise Orchid Ozone can increase price by 31% when 60% of the promoter shareholding is pledged with the banks against loans and borrowing capacity of the company is absolutely zero and company is supposed to be in financial crisis.

    This is not good news.....if you look at super expensive properties some of them have fallen by about 10% and i fear this is all the fall that we may see...I am witnessing transactions in Borivali (East) at phenomenal prices 1 BHK (600 sq. ft old building) going for 75 lacs, etc. I have kept the wait and watch strategy for the past few months and it has NOT paid off. there is a line of thought espescially that the people in the 50s tell me that waiting in Mumbai has never paid off and will never pay off. Really confused as to what to do. On the other hand involvement of politicians/underworld in real estate companies means that they will never run out of cash as they are funded with tax payer money sid off by Sharad Pawar's of the world and put back in DB realty's of the world. Little surprise Orchid Ozone can increase price by 31% when 60% of the promoter shareholding is pledged with the banks against loans and borrowing capacity of the company is absolutely zero and company is supposed to be in financial crisis.

    This is not good news.....if you look at super expensive properties some of them have fallen by about 10% and i fear this is all the fall that we may see...I am witnessing transactions in Borivali (East) at phenomenal prices 1 BHK (600 sq. ft old building) going for 75 lacs, etc. I have kept the wait and watch strategy for the past few months and it has NOT paid off. there is a line of thought espescially that the people in the 50s tell me that waiting in Mumbai has never paid off and will never pay off. Really confused as to what to do. On the other hand involvement of politicians/underworld in real estate companies means that they will never run out of cash as they are funded with tax payer money sid off by Sharad Pawar's of the world and put back in DB realty's of the world. Little surprise Orchid Ozone can increase price by 31% when 60% of the promoter shareholding is pledged with the banks against loans and borrowing capacity of the company is absolutely zero and company is supposed to be in financial crisis.

    This is not good news.....if you look at super expensive properties some of them have fallen by about 10% and i fear this is all the fall that we may see...I am witnessing transactions in Borivali (East) at phenomenal prices 1 BHK (600 sq. ft old building) going for 75 lacs, etc. I have kept the wait and watch strategy for the past few months and it has NOT paid off. there is a line of thought espescially that the people in the 50s tell me that waiting in Mumbai has never paid off and will never pay off. Really confused as to what to do. On the other hand involvement of politicians/underworld in real estate companies means that they will never run out of cash as they are funded with tax payer money sid off by Sharad Pawar's of the world and put back in DB realty's of the world. Little surprise Orchid Ozone can increase price by 31% when 60% of the promoter shareholding is pledged with the banks against loans and borrowing capacity of the company is absolutely zero and company is supposed to be in financial crisis.
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