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 jadhav_ravi
    Wishful thinking!
    When everything tanks, Mumbai RE will tank.
    Till then just keep wishing.

    "The present day economic crisis" Which crisis are you talking of??
    "The whole world has learn that every bubbles bust one day" Justify that it is a bubble first. That way : Is Stock market at 18K also a bubble?? Are salaries of 15-20L per annum for middle-level manager also a bubble? Are all onsite/NRI guys earning US salaries a bubble? Is 100% growth in Tata Motors profit a bubble?

    And if you are so worried about the bubble Mr Tubai, then why do you claim to have booked in Noida? Noida is speculator's heaven.
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  • Hey tubai...have been seeing ur posts...i dont know why u are being so personal and acrimonious in your comments. This is not just in this post but almost every other post written by you. Most of us are present in this forum because we are looking to invest in RE. If you see so much of doom and problems in this sector and are not really looking to invest am not sure why you are hanging out here for so long! It is absolutely OK to be negative about the scope of RE and everyone worth their salt knows that prices have been going through the roof. If you cannot afford a home dont think that others in this forum are crorepatis and are able to do so very easily. Am sure am going to get yet another nasty and personal reply to this but someone has to bell the cat! Nothing personal.. just take my advise as a responsible forum members comments.

    Originally Posted by tubaibabu
    What a piece of writing ???
    The present day economic crisis all about this misplaced belief that price increases all the time even it has no rational reason behind. The whole world has learn that every bubbles bust one day but unfortunately nither you nor Mr. Jadhav ravi has learnt a lesson.
    But the days are not far, the RE bubble is going to bust very soon. Hope nither you nor Mr. Jadhav ravi have invested havily in Mumbai RE.
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  • Originally Posted by sreekys
    Hey tubai...have been seeing ur posts...i dont know why u are being so personal and acrimonious in your comments. This is not just in this post but almost every other post written by you. Most of us are present in this forum because we are looking to invest in RE. If you see so much of doom and problems in this sector and are not really looking to invest am not sure why you are hanging out here for so long! It is absolutely OK to be negative about the scope of RE and everyone worth their salt knows that prices have been going through the roof. If you cannot afford a home dont think that others in this forum are crorepatis and are able to do so very easily. Am sure am going to get yet another nasty and personal reply to this but someone has to bell the cat! Nothing personal.. just take my advise as a responsible forum members comments.


    I am extremly sorry if my reply has hurt anybody. My intension was not to hurt anybody but to say what i believe.
    Recently in a artical in Indian express it has been reported that 96.3 million Sq.ft of residental area in proper mumbai is being unsold till end of June 2010.This was nearly twice of what was two years ago. Thus the situation is very disturbing from a investor perspective.
    It is best that such indicators are not ignored so that we are too late to stop the bubble from busting.
    As a investor i have sold my stake more that six months back and waiting for right oprtunity to enter the market and feel that this is not the time to enter the market.
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  • Originally Posted by tubaibabu
    I am extremly sorry if my reply has hurt anybody. My intension was not to hurt anybody but to say what i believe.
    Recently in a artical in Indian express it has been reported that 96.3 million Sq.ft of residental area in proper mumbai is being unsold till end of June 2010.This was nearly twice of what was two years ago. Thus the situation is very disturbing from a investor perspective.
    It is best that such indicators are not ignored so that we are too late to stop the bubble from busting.
    As a investor i have sold my stake more that six months back and waiting for right oprtunity to enter the market and feel that this is not the time to enter the market.


    First thing first: The data is not accurate.
    In June 2008, total unsold residential space in MMR was 58.9 million sq. ft.
    In June 2010, total unsold residential space in MMR was 96.3 million sq. ft.

    So it is NOT nearly twice. It is 60% more!!

    Second point it is not just Mumbai, it is MMR (Mumbai, Navi Mumbai, Thane, Kalyan, Dombivali).

    Third point: 96.3 msf corresponds to 80,000 homes.
    According to MCHI, there is an immediate demand for 1.4 million flats in MMR region. Even if 10% of the aspirants make it to the property ladder then there is enough demand.
    You have to take into account that Mumbai has a population of more than 2 crores (20 million). Even if the prices fall slightly there are thousands of people waiting on the sidelines to jump in.
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  • Originally Posted by jadhav_ravi
    First thing first: The data is not accurate.
    In June 2008, total unsold residential space in MMR was 58.9 million sq. ft.
    In June 2010, total unsold residential space in MMR was 96.3 million sq. ft.

    So it is NOT nearly twice. It is 60% more!!

    Second point it is not just Mumbai, it is MMR (Mumbai, Navi Mumbai, Thane, Kalyan, Dombivali).

    Third point: 96.3 msf corresponds to 80,000 homes.
    According to MCHI, there is an immediate demand for 1.4 million flats in MMR region. Even if 10% of the aspirants make it to the property ladder then there is enough demand.
    You have to take into account that Mumbai has a population of more than 2 crores (20 million). Even if the prices fall slightly there are thousands of people waiting on the sidelines to jump in.


    All your points are accepted.

    The questions that beg some answers:

    Why is it that these 10% aspirants aren't filling that gap then?
    If the unsold inventory is rising, then does it mean that the aspirants increasingly aren't able to afford housing?

    If someone could get a breakup of the unsold inventory by the MMR constituents, then the whole discussion could become very interesting.

    I reckon, the bulk of the unsold inventory is coming from Thane, and Navi Mumbai. If so, then it's even more ironic, because these two regions are more affordable than proper Mumbai. :bab (38):
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  • Originally Posted by razer
    All your points are accepted.

    The questions that beg some answers:

    Why is it that these 10% aspirants aren't filling that gap then?
    If the unsold inventory is rising, then does it mean that the aspirants increasingly aren't able to afford housing?

    If someone could get a breakup of the unsold inventory by the MMR constituents, then the whole discussion could become very interesting.

    I reckon, the bulk of the unsold inventory is coming from Thane, and Navi Mumbai. If so, then it's even more ironic, because these two regions are more affordable than proper Mumbai. :bab (38):


    Also there is unabated construction on Ghodbunder Road, Virar, Kharghar sector 35, kalyan & Dombivali.

    As more and more people have started accepting these places to be suburbs, the builders have increased their stock in this area. However jobs are still spread across: South/Central Mumbai, Bandra, Andheri, Vikhroli & Goregaon. So demand in Mumbai suburbs is still strong. As richer people hardly get affected by 3-5K increase in EMI, it is the remote suburbs that will face the axe in case of a correction.

    I am not suprised by the rise in inventory. Just look at the big township projects in Virar, Dombivali and Thane. The builders are adding 10s of thousand of flats in these projects. Given that they got the land for a pittance and construction is based on booking, these builders will not bulge for a long time. Slower demand will just delay projects but not lower prices. e.g. Lodha has 1000s of flats under construction for the ones who booked between June-Feb. Since March the market has dried up so the new buildings are postponed indefinitely. He will wait till he gets bookings and then resume construction for these new bookings.
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  • One question to everyone in this thread: Where do you get your data from?

    There are a lot of "approximate" figures being flaunted in this thread - by everyone. Can everyone please back up your data with your sources?

    Thanks!
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  • Originally Posted by korchha
    One question to everyone in this thread: Where do you get your data from?

    There are a lot of "approximate" figures being flaunted in this thread - by everyone. Can everyone please back up your data with your sources?

    Thanks!

    There was only one data: about free residential inventory and tubai said he read it from indian express. why don't u read stuff before putting allegations.
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  • Originally Posted by jadhav_ravi
    There was only one data: about free residential inventory and tubai said he read it from indian express. why don't u read stuff before putting allegations.


    No offense meant. I was asking for data sources so that I could analyze them myself. There is very little data about Indian Real Estate that is available to the aam aadmi and hence it is very difficult to analyze anything about real estate here. Builders say something, brokers say something else, the newspapers have their own skewed opinions, and we are being taken for a ride. Consider this blog as an example - Bubble Meter It contains so many great charts/graphs/tables about the US Real Estate Market. Is there any source like this for the Indian RE Market?

    The only source I could find is the RBI website and this paper : Macroeconomic and Monetary Developments in 2010-11 It has a couple of interesting graphs:

    EDIT: The pictures below may not show up on office LANs - if so, please refer to the PDF above, page 57 Table V.10 and chart V.8.

    1>

    See the Mumbai QoQ price growth between May 2009 to May 2010 - the chart indicates a 36% growth in prices.

    2>

    This is a great graph. See the red line which indicates the number of transactions in the Mumbai RE market - since the global recession started in 2008-2009, housing transactions have increased from 19,000 units to 45,000 units in 2010. This is surely the reason for the increase in prices. There is such HUGE demand for homes in Mumbai, it is natural that the prices will rise.

    Again, I have no idea who is buying so many houses - maybe you guys can help me here - but it is clear that there is great demand for houses in Mumbai - and till this demand persists, the prices will not come down.

    I have been trying to find a house in Mumbai myself for the past 6 months - what i have observed is that the prices have been steady since May-June and not a lot of transactions are happening. Houses I had seen in Feb-March (and rejected because I thought that they were too expensive then) are still vacant, unsold - but the builder has hiked prices by 5-10%. I don't know what the future holds - I just feel like I am in a system which I do not understand.
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  • Lets take an Under construction property..

    The builder launches the project with say 7500 psf (with some investors getting in at 5000 or 6000). Lets say this happened in Jan 2008. With in the first month 60- 75% of the project is already sold at this rate.
    When he reaches a threshold for sales, he will increase the price to say 8000 and actually he has already recovered the cost of the project by then and does not have any inventory carrying cost.
    By the time he is completing the project say now in 2010, almost all his flats except a few have been sold. He keeps increasing the price depending on the market condition and will never drop the price..
    Now if his project is sold out.. investors also exit.. at appropriate time..
    Investors are the people who also take the risk.. If the market tanks by the time the project is complete, they are stuck.. You might see this scenario in cities like Pune... whereby the builder is selling at 5000 but a broker will call and quote a rate of 4700.. investors have an issue as funds have an interest cost, whereas the builder has no interest cost as he has already recovered his capital when he has sold certain portion of his flats.. so even if the flat is not sold for couple of years.. he will rent it out.. or keep it locked.. and keep increasing the price..
    Problem with dealing with investors is the black and white ratio.. he does not want any C gains and hence will insist on black for the profit he is making.. You will find many such properties in Bandra to Lokhandwala the west..
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  • Originally Posted by korchha

    I have been trying to find a house in Mumbai myself for the past 6 months - what i have observed is that the prices have been steady since May-June and not a lot of transactions are happening. Houses I had seen in Feb-March (and rejected because I thought that they were too expensive then) are still vacant, unsold - but the builder has hiked prices by 5-10%. I don't know what the future holds - I just feel like I am in a system which I do not understand.


    Great find, thank you. These numbers are just blinding. :bab (4):
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  • My funda is if you want to buy house for self use then dont wait for tomorrow buy it today..Otherwise every tomorrow you will think about yesterday & curse yourself for not making buying decision..:bab (34):

    Originally Posted by Sharpj
    Lets take an Under construction property..

    The builder launches the project with say 7500 psf (with some investors getting in at 5000 or 6000). Lets say this happened in Jan 2008. With in the first month 60- 75% of the project is already sold at this rate.
    When he reaches a threshold for sales, he will increase the price to say 8000 and actually he has already recovered the cost of the project by then and does not have any inventory carrying cost.
    By the time he is completing the project say now in 2010, almost all his flats except a few have been sold. He keeps increasing the price depending on the market condition and will never drop the price..
    Now if his project is sold out.. investors also exit.. at appropriate time..
    Investors are the people who also take the risk.. If the market tanks by the time the project is complete, they are stuck.. You might see this scenario in cities like Pune... whereby the builder is selling at 5000 but a broker will call and quote a rate of 4700.. investors have an issue as funds have an interest cost, whereas the builder has no interest cost as he has already recovered his capital when he has sold certain portion of his flats.. so even if the flat is not sold for couple of years.. he will rent it out.. or keep it locked.. and keep increasing the price..
    Problem with dealing with investors is the black and white ratio.. he does not want any C gains and hence will insist on black for the profit he is making.. You will find many such properties in Bandra to Lokhandwala the west..
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  • Originally Posted by neeraj23in
    My funda is if you want to buy house for self use then dont wait for tomorrow buy it today..Otherwise every tomorrow you will think about yesterday & curse yourself for not making buying decision..:bab (34):


    I have never kept track of the current value of the apartment I purchased in Mumbai in Q2 2009.

    But I know two indisputable facts today:

    The home was expensive then, and I had to dig very deep to purchase it.

    It's a home that I technically cannot afford at today's prices, even if I dug as hard as I can.
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  • Originally Posted by razer
    I have never kept track of the current value of the apartment I purchased in Mumbai in Q2 2009.

    But I know two indisputable facts today:

    The home was expensive then, and I had to dig very deep to purchase it.

    It's a home that I technically cannot afford at today's prices, even if I dug as hard as I can.


    So the moral of the story is ,buy, as soon as u can ( with proper analysis, due discretion viz. the builder, price , location & so many other factors) .Do not wait for the prices to go down, they never might. Excessive waiting, might lead to the property being out of yr. bounds financially.
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  • Originally Posted by MANOJa
    So the moral of the story is ,buy, as soon as u can ( with proper analysis, due discretion viz. the builder, price , location & so many other factors) .Do not wait for the prices to go down, they never might. Excessive waiting, might lead to the property being out of yr. bounds financially.

    I think the only thing you have to be careful about is the location. Do not pay in excess for a so-so location when you can find a better location at a cheaper price. This way I think places beyond Kharghar are best value for money if you are investing or will be moving-in after 3-4 years.
    If you are moving-in immediately then go for Kharghar. If you have more money than go for proper Mumbai (upto Mulund/Dahisar), as that will have high-value forever. Spending 4K on virar/kalyan is tpp much I think.
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