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Correction arrives - whats the Gurgaon scene?

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Correction arrives - whats the Gurgaon scene?

Last updated: June 16 2011
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  • Correction arrives - whats the Gurgaon scene?

    ITS OFFICIAL - Slump in realty sales hits brokers really hard

    Correction is official in IREF at least. Pune, Mumbai and NOIDA are facing the heat.

    But GGN seems to have escaped the slump? Or is it waiting to happen.

    Vote your opinion on the link as to how long and how deep the correction would be. My bet was 18 months and 15% downturn for NOIDA.

    Has to be more for Pune and Mumbai because of more excess - maybe 25-30% correction and last 18 months.

    It can only get worse tomorrow after the RBI meeting. Since RBI has to keep its credibility in international fora, after 9% plus inflation, 25 bps rate hike is inevitable.

    What about GGN? What is going to happen in DEway? and GCX/SPR? And NH8?

    What is the ground scenario?
    Venky (Please read watch a or before posting)
  • #2

    #2

    Re : Correction arrives - whats the Gurgaon scene?

    Venky - do you have any facts supporting correction in Noida..

    are projects available in 10-15% less than what they were few months back??

    Comment

    • #3

      #3

      Re : Correction arrives - whats the Gurgaon scene?

      Correction....

      My feeling is that the projects on DEway will suffer the most...unless it becomes operational...prices of 3200-3300 K ++ does not seems to be justifiable ....
      then it would be NH8 projects with pricing 3500+...

      Its huge land bank(DEway projects )...certainly the builders will face the heat in selling at higher rate....

      May be we see 5-10% price correction in next 3-6 months...or as it has happened in the last one month or so....the prices will be stangnant...for some more time..if the rates are not dropping...

      again....just my PoV....

      Comment

      • #4

        #4

        Re : Correction arrives - whats the Gurgaon scene?

        Hi everyone,

        I recolelct there was an article in TOI (delhi) nearly 7-10 days before on reality peak & lean season. Interestingly, apart from Inflation, Interest rate, property price etc factors, seasonlity also has a role to play. During this time in the year, activities are always low as against sep to dec.
        Again it could be that sep to dec has got many festivals Vs summer holidays now. from investment point of views, most of the the NRI come to india during Diwali / Dec holidays.
        This infact holds true to most of the business.
        My view is that activities may be less during this time but i do not see correction of 15% in GGN. It will be stagnation only (which in practical may be called as correction).

        Thanks
        Prasoon

        Comment

        • #5

          #5

          Re : Correction arrives - whats the Gurgaon scene?

          I dont know what slump are we talking about in gurgaon!!!!
          inflation at 10% const cost up 30% market not unduely leveraged. new FSI getting sold at 1200-1500/ sq ft( a sec 113 fsi sold at 1700)
          so i wonder where is the margin for slump.
          yes new sales slow.. buyers not jumping/lapping all and sundry..
          expect slow returns/difficulty of exit but excpet for marginal correction here and there... REAL slump is still some time away in GURGAON.

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          • #6

            #6

            Re : Correction arrives - whats the Gurgaon scene?

            Correction or corrective action

            Hi
            Greetings

            Perceive 10%-50% pa ROI depending upon area/developer/budget/format/entry price for residential projects over the next 5 years. Might have blips but not drastic drop in prices and long term stagnation
            Such blips might provide ample opportunities to reenter and enter enabling to take corrective action.

            Also 1% increase in housing loan will cause all leveraged to pay 15-20% extra installments depending upon size and tenure of loan.


            Cheers!!!
            Last edited June 16 2011, 01:43 AM.

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            • #7

              #7

              Re : Correction arrives - whats the Gurgaon scene?

              My own estimate is that Gurgaon might not correct at all. Prices might remain static during this period though - maybe 1.5-2 years period.

              GGN builders played a good hand this last 2 years. They should hold out for the slow down period.

              Only exception might be DLF and Unitech - heavy leverage - cannot survive with zero sales. They might release some cheap plots or sales of RTM flats, which might be a good thing to pick up in the slow down period.

              What say Janta here?
              Venky (Please read watch a or before posting)

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              • #8

                #8

                Re : Correction arrives - whats the Gurgaon scene?

                venky do you feel that in case of slow sales the only way developer can book more revenue is to complete projects and get money by way of CLP?

                when a developr launch a project he gets only 20%, rest of the revenues it will get only when it constructs....

                it can slow the projects after completing the shell.....when over 60-70% of payment has been taken....

                do you think in case of slow sales projects launched in the last 1 year will be constructed and prijects which are 60% complete will be slowed down??

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                • #9

                  #9

                  Re : Correction arrives - whats the Gurgaon scene?

                  Healthy Resale, Possession and Infra Key

                  Hi
                  Greetings

                  Key to the growth would be hinged on healthy resale to provide exit and entry, timely possession and Development of key infra. Key infra include Metro/dway/Sector Roads.
                  Given the current climate and feelers received from various quaters ranging from local MCG elections, T&CP, Min of Urban Devlp.. political powers have huge stakes in varied colours.
                  Simple indicators are bulk purchases in groups by bureaucrats in various projects..
                  Other members might have similar tips/indicators which need to be followed to ensure better returns in the long to medium turn..

                  Comment

                  • #10

                    #10

                    Re : Correction arrives - whats the Gurgaon scene?

                    Originally posted by amit001 View Post
                    venky do you feel that in case of slow sales the only way developer can book more revenue is to complete projects and get money by way of CLP?

                    when a developr launch a project he gets only 20%, rest of the revenues it will get only when it constructs....

                    it can slow the projects after completing the shell.....when over 60-70% of payment has been taken....

                    do you think in case of slow sales projects launched in the last 1 year will be constructed and prijects which are 60% complete will be slowed down??
                    Depends on how the builder operates. Both DLF and Unitech are likely to speed up deliveries I feel.

                    Its all a revenue and expenditure balancing act - nobody can predict. But builders had 2 years to prepare for this, especially DLF and Uniteck.

                    BlessU, you have hit the nail on the head. ?I will post a poll for GGN and let us see how resales are happening
                    Venky (Please read watch a or before posting)

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