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No Property Price Correction in Mumbai Before 2015

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No Property Price Correction in Mumbai Before 2015

Last updated: 2 weeks ago
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  • #11

    #11

    Re : No Property Price Correction in Mumbai Before 2015

    Originally posted by nidhu299 View Post
    Perfect analysis,

    Builders are not even offering 2% discount even after putting token cheque.

    Another trend is setting up... for example, Kabra galaxy and Regency heights in Bramhand - They are building the units first and then selling in the end. Realising all profit in their own pocket. Kabra is coming up with 3rd tower with money coming frm Tower 1 and 2.

    Nothing wrong in that - but see how the industry is changing.

    Ultimately, the eager buyers in 2004 to 2008 have made the builders sitting on large cash and now they are not in need of any money.

    Sheth literally told me - they dont need money at this point of time.

    So where is the correction ?

    People are buying with or without smiling face. Once they make downpayment of 20 Rs for 100 Rs flat and 80 Rs loan, and if Interest for 1 year is going to be another Rs 10. How come property prices will go below 85 Rs ?

    Why the new buyers will sell at less than 85 Rs?


    So dont expect any price correction soon, unless sky falls.

    I am going to cease the deal in another months time, as mentioned in my earlier post.
    Please do so and let us know at which project and at what rate?
    Thanking you in advance.

    Comment

    • #12

      #12

      Re : No Property Price Correction in Mumbai Before 2015

      Home sales could rebound in 2013 helped by quicker approvals and lower finance cost

      Home sales could rebound in 2013 helped by quicker approvals and lower finance cost - The Economic Times

      BANGALORE | MUMBAI: Home sales in India could rebound in 2013, helped by quicker project approvals and lower cost of finance, according to analysts.


      "Residential markets have entered CY13 on an encouraging note, with [COLOR=#0000ff! important]robust offtake[/COLOR] seen in new launches across markets over the last three months," global financial services group JP Morgan said in its January report. "We expect volumes in residential markets to improve over the next 12 months on pick-up in pace of [COLOR=#0000ff! important]new launches[/COLOR] coupled with price discounting and mortgage rate cuts."

      According to CRISILBSE -1.80 % Research, absorption of new [COLOR=#0000ff! important]residential units[/COLOR] across six key cities - Mumbai, [COLOR=#0000ff! important]the National Capital Region[/COLOR], Pune, Bangalore, Chennai and Hyderabad - is expected to increase at a compound annual growth rate (CAGR) of 7% to 251 million sq ft in the next two years. During this period, Mumbai is expected to record the highest CAGR of 14% due to pent-up demand, while capital values across regions are expected to rise marginally in the second half of 2013, the research body said.

      The projection is a contrast to numbers reported for last year. According to [COLOR=#0000ff! important]JP Morgan[/COLOR], sales of residential units across major markets like Mumbai and NCR had dipped between 7% and 38% in first three quarters of 2012. Only Bangalore and Kolkata bucked the trend, recording growths of 3% and 6%, respectively.

      "Sales at new projects are showing signs of recovery and a lot of new launches are being worked based on customer responses. Prices may not see any major uptick, but demand is certainly better than last year including in Mumbai and NCR," said Lalit Kumar Jain, president of developers association CREDAI, which has about 10,000 members.

      Backing the estimate is state-run lender Punjab National BankBSE 0.14 %, which has seen a 14% growth in home loans in the last quarter. "In the last four to five years, property price escalated steeply in major metros, but now it has stagnated. The next six months will be a turnaround time for the housing industry with inflation easing and chances of the cash reserve ratio coming down," said SS Bhatia, its general manager for retail.

      Last month, the Reserve Bank of India reduced the repo rate by 25 basis points to 7.25%, fuelling hopes that home loans will become cheaper.

      "Further reduction of interest rate will lead to higher offtake of property. Loan disbursal has been reasonable, but actual recovery will depend on the economy," said VK Sharma, chief executive of LIC Housing FinanceBSE 0.27 %.

      Ashish Puravankara, joint managing director of Puravankara ProjectsBSE -0.49 %, said, "Last year was a consolidation phase for builders but this year the market will recover, riding on new launches across various geographies. Markets like Chennai and Bangalore have outperformed other bigger real estate markets."

      The Bangalore-based builder saw about half its stock in a newly launched property in the city being snapped up in 10 days. "We have already sold 2.14 million sq ft in the current fiscal and expect to exceed three million by the end of the year."

      Similarly, Mumbai in last few months has seen a rise in the number of launches on the back of approvals and response to new projects. Property sale registrations in the city rose to a 24-month high in December, reflecting a jump of 5% from a year ago and 42% from the previous month.

      "Market has started to respond and there is a change in sentiment, especially after the interest rate reduction. For long, there was only anticipation of fall in prices, but now customers are acting upon it," said Gaurav Gupta, director of Omkar Realtors and Developers.

      Omkar Realtors has sold 150,000 sq ft in the last 15 days at its nearly 2-million-sq ft premium residential project at Worli, Mumbai, taking its total sales across three Mumbai projects to nearly 0.5 million sq ft in the last two months.

      According to some property brokers, engineering firm Larsen & Toubro's realty arm has sold nearly 300 apartments in a recently launched residential project at its campus in Powai. "We have done a soft launch of L&T Emrald Isle at Powai. The response was very encouraging, and bookings will resume shortly," a spokesperson for L&T said.

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      • #13

        #13

        Re : No Property Price Correction in Mumbai Before 2015

        You are absolutely correct however most people are allergic to logic. They think prices will continue to rise exponentially and will continue to buy causing the little demand we see. However we have reached a point in price where number of sellers vastly outnumber the number of buyers ( i know many listings which are being renewed on daily basis at exorbitant prices but have no takers so far) so a price correction is around the corner. Just wait and watch which fool gets caught up at the top.

        Originally posted by wildfire View Post
        people can afford only until a certain amount..once the prices go beyond a point, people won't be elibigible to get the 80% loan..for a 3cr property, down payment is 60lacs and monthly emi is 2.5lacs...how many people can buy at that price...now consider that going to 6cr after 3 years, downpyament 1.2cr and monthly payment 5lacs ....do you think the salaries are going to increase at the same proportion...

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        • #14

          #14

          Re : No Property Price Correction in Mumbai Before 2015

          Just because something should happen doesn't mean that it will happen.

          Due to population rise and poor infrastructure in old areas,
          Long-term trend of RE prices will be up ( on inflation adjusted basis ) due to severe pent-up demand, especially for newer developments.

          At the same time, everything is cyclical. RE is no exception.

          Every so often, brief down cycles will be obviously felt in form of price-stagnation in old buildings in certain areas.

          If somebody is waiting for a massive inflation-adjusted-price-correction (to buy a primary home) in Mumbai metro RE......what else can I say....Gooooooood Luck !
          Last edited February 7 2013, 08:30 AM.

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          • #15

            #15

            Re : No Property Price Correction in Mumbai Before 2015

            lodha guys are offering 5L and trip abroad, a car and god knows what else since a long time. It has nothing to do with price correction. Its like clothing stores / showrooms offering sale/discounts on products round the year with new new festive names. Its all marketing tricks.

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            • #16

              #16

              Re : No Property Price Correction in Mumbai Before 2015

              i was literally bored of waiting for correction to happen hearing the same reasons for correction, finally book one which suited my pocket. As an end user, its simple, u can afford it, go for it.

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              • #17

                #17

                Re : No Property Price Correction in Mumbai Before 2015

                demand?

                Originally posted by Superduper View Post
                Just because something should happen doesn't mean that it will happen.

                Due to population rise and poor infrastructure in old areas,
                Long-term trend of RE prices will be up ( on inflation adjusted basis ) due to severe pent-up demand, especially for newer developments.

                where is this demand ?
                At the same time, everything is cyclical. RE is no exception.

                Every so often, brief down cycles will be obviously felt in form of price-stagnation in old buildings in certain areas.

                If somebody is waiting (to buy a primary home) for a massive inflation-adjusted-price-correction in Mumbai metro RE......what else can I say....Gooooooood Luck !
                `

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                • #18

                  #18

                  Re : No Property Price Correction in Mumbai Before 2015

                  Shashank,

                  I or you or anyone else can not predict, over a short-term, what is going to happen to price of a particular apartment in a particular building in a particular area.


                  But nevertheless......

                  Look at the inflation-adjusted price of Mumbai real estate year over year for past 50 years...

                  And, considering next 50 years, we have yet seen nothing my friend....
                  Last edited February 7 2013, 08:35 AM.

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                  • #19

                    #19

                    Re : No Property Price Correction in Mumbai Before 2015

                    Last whole month i have carried out extensive research on major builders and projects and have come to this conclusion

                    Further in 2014 elections are there, congress is not going to let down any major downside in any market.

                    Global Economy which drives everything is insulated.

                    Yes i agree that growth won't be much but even correction won't be much and doesn't seems to come shortly

                    Everybody talks about affordibility, fact remains 80% is sold to NRI's and Black Money Investor/Politician which don't care about EMI

                    So don't expect any correction or even if it comes it will be minimal

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                    • #20

                      #20

                      Re : No Property Price Correction in Mumbai Before 2015

                      Basics of Economics say that demand is dependent on prices.

                      There is demand at lower prices and at the present absurd prices; there is close to zero demand.

                      Registration data is a clear indicator of that.

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