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NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

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NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

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  • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

    Khalsa Ji

    I am not doubting or casting aspersions on your targets, well entitled to it.

    Also, I agree with your conservative estimate but do you think it makes any sense for a person to enter DEW for 10 years for such low returns? I am assuming 6.5-7.5 as the entry point for a relatively good located unit with a good builder which can withstand 10 years of wear and tear.

    Also, this journey of DEW would continue to be a frustrating one for someone with a short horizon.



    Originally posted by Khalsa View Post
    sir,
    I am talking for everybody not only Tata, some have invested as low as Rs 3500/- sq ft also.
    This is my own thought, i am not doing any over exuberance or over confidence.
    If we both still here on IREF in 10 years we will see.

    Comment


    • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

      Originally posted by JethroNull View Post
      Dear Gupta Ji

      Coming out in vehement defence of a particular builder with which you are invested is slightly colored. Better to run a disclaimer about your investments because a lot of newbies come here looking for advise.

      Before you guys pounce on me, my limited point is that it is better to invest in equities or even debt for 10 years if DEW would be 20k in 10 years.

      It's gonna take a lot more than DEW getting through to revive that market. Entire gurgaon is down in the dumps, no reason why DEW would look up in the next many years.

      So, the optimism and exuberance is fine, but needs to be calibrated with ground realities of dead RE.

      Cheers!
      My dear,

      Don't take it personal or feel anything personal.

      If you think, Equity Market is better and many a guys would think so, including me as well, please do so.
      No one is stopping anyone to take own decision.

      I do concur with you that Equity has performed very well. BSE Sensex 100 in 1979 is around 27000 in 2015, 270 times rise. Crux of the matter is PATIENCE.

      Regards

      Comment


      • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

        Originally posted by JethroNull View Post
        It absolutely does, call it price correction or whatever.

        My Vasant Kunj GF was quoting at 3.5 cr some 2 years ago, now it is quoting at 2.5 cr. Many of the buyers who come through are disgusted with the old construction and want to move to newer constructions.

        In plots, old construction loses price and with time cost of construction is considered sunk after a point in time.
        How much was cost to you??????
        Please state that as well.

        Don't get misguided by Loss in PROFIT!

        Regards

        Comment


        • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

          Dear khalsa ji,

          I think u take things personally. Its perfectly OK to be in non agreement with someone else's view point.

          What I am saying is that people do not want to buy a say 10 yr old apartment... Coz at the same price a new one might be available. U try offloading ur dew flat 10 yrs from now.

          Paseenay nikal jayengay.
          Last edited by MANOJa; November 18 2015, 09:30 PM. Reason: Text formatting.
          God is Great

          Comment


          • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

            Gurpreet ji,

            You mean to say that after 10 years you might get an apartment for range of 5000 to 7000 psf. In DEW.

            Which you can easily get now in resale market.
            Last edited by MANOJa; November 18 2015, 09:30 PM. Reason: Text formatting.

            Comment


            • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

              Originally posted by drgurpreet View Post
              Dear khalsa ji,
              I think u take things personally. Its perfectly OK to be in non agreement with someone else's view point.
              What I am saying is that people do not want to buy a say 10 yr old apartment... Coz at the same price a new one might be available. U try offloading ur dew flat 10 yrs from now.
              Paseenay nikal jayengay.
              Sir ji,
              Nothing personal here DR, we can have disagreement.
              I sold my apartments after 10 years, it took me 2 days to sell, there is nothing like that people looking new house only.Depends on location people buy.
              Thanks

              Comment


              • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

                Sirs - Just to attempt any prediction or projection of rates for any micro-market of RE we would have to project/assume the following factors -So for a 10 years projection we will have to assume developments in -

                1. Economy of the micro-market - If Gurgaon continues to build on its strengths and dont lose the plot. becomes a smart city, actually gets its due share of infrastructure (roads/water/power), transportation (Metro/mrts), commercial hubs (like cyber city), institutional centres, entertainment/sports centres (sec. 114/115) and is able to generate quality* employment/attract businesses, its one of major contributors to a robust RE market.

                2. Planned development : If going forward gurgaon development strictly follows a master plan and doesn't get mired in political populism or grandstanding and if the administration is able to project a "no-nonsense" image and zero-tolerance to squatters and slums and if amenities & infrastructure can keep pace with demand/development, it will be another big "Yes" for this market.

                3. Gentry/Exclusivity/Security perception : This is closely linked with the above 2 points, yet have its own place. Gurgaon should be able to keep and develop its edge as an exclusive destination (like Bangalore of the north). Good economy, safety and security, proximity to capital, well planned infra should attract and retain cream of population (intellectual & economic & entrepreneurial). This is also a key point for Gurgaon as micro-market in NCR.

                (between above 3 factors you can see how Noida/Ghaziabad/Faridabad have different strengths but have failed its population on different parameters)

                Then when you talk long-term you will have to consider the larger macro-economic development in the country and (some) specifically in and around the micro-market (gurgaon) :

                Personal Income, labour productivity, interest rate, inflation, foreign investments, transparency and ease of doing business, political/policy stability, friendly tax regimes etc. These factors will influence upward mobility of people and convince them of lifestyle upgrades and RE is a major beneficiary to this sentiment. If there is a good development overall in the country and states/cities compete with each other in being able to score higher on these factors then there would a good amount of demand for better and bigger RE developments.

                Socio economic fundamentals : While history is a good indicator, it has to be taken cautiously and subjectively for smaller durations. for eg. the past decade (2000-10) is not the same as the one before (1990-2000). If we were in 1992 we definitely would not have predicted about the pricing or lifestyle in 2010, except in a larger economic context. Societal changes & aspirations alongwith economic mobility is the key to an RE equation.This becomes very important as any market nears saturation in terms of demand/price points. (there is nano/alto/santo and there is city/verna and there is passat/jetta's, and then there is BMW/Audi/Rover - so clearly its not about "if" its about "how")

                So IF India progresses rationally and Gurgaon gets a share of that pie. a growth of 12-15% p.a. can be expected, depending on the above points. While the comparison of sensex etc. may sound dramatic (100 in 1979 Vs. 30000 in 2015 ie. 30000% or 300 times etc.) its only 15-16% p.a. (CAGR). RE returns in NCR region have been 15-20% CAGR at best in the last 15 years. (so Rs. 1000 per sq ft in 2001 sold for 8000 in 2012 is 19% p.a.). Volatility, unpredictability, above par risk and abnormal returns are indicators of low regulation & immature markets.

                Robust Growth of RE in India in the last few years (2000-2015) have been due to their historical undervaluation, policies, infrastructure development, societal perception to RE as emotional Vs. economic asset and above all new found economic growth (incomes) drivers. This would not be the same forever. As the market stabilizes and matures and RE investments becomes primarily an economic decision. This growth will and should stabilize at a reasonable level. Infact it will compete with other investments/asset classes. So I would bat for a 10%-12% returns on RE (including rental and capital growth). So whether its 10% or 15% in the next 10 years will depend upon various above parameters. There will always be short term and cyclical movements like any markets. but if you are looking long term, lets ignore these. That's only for traders, speculators and punters and not for investors.

                Assuming the current value of the investment (forget when you bought them or for how much, because that's an unending discussion). In my opinion NPR should be able to give 8-12% p.a over the next 5-7 years (the 12% is in favour of undervalued pockets and 8% is for fairly valued projects). The returns will increase as possession happens and liveability of the area improves and rental returns (2-3% p.a) (or saving of current rent being paid) start supplementing to this return. Over the next 10-15 years the average returns could range in the region of 12-15% (including rentals) and here the outlook is favourable for higher quality to luxury housing segment as against middle, lower or affordable ones. Because in the medium term (10 years) EWS,lower & lower middle demand will grow proportional to their personal incomes, but higher and luxury housing will grow proportional to the number of growing HNI's. While the former is macroeconomic factor depending on larger fundamentals while the latter is a micro-economic factor depending on the specific market.

                At the NPR I wont be surprised at all to see delhi side sectors at 25-28K in 10-12 years (10-12% growth) and 16-20K (12-14%) for the NH8 side sectors. so the band of 16K-28K for different classes, locations and neighborhoods of housing. Currently these are 5.5K-10K. Pls. dont compare UC valuations with RTM valuations, there is time value and risk premium attached.
                Last edited by Bala2107; May 16 2015, 06:04 AM.

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                • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

                  The speed of being able to sell a unit is directly proportional to the rate u demand from the property. Under value ur demand and it becomes easy to sell it off......this is just on of the factors.
                  God is Great

                  Comment


                  • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

                    Originally posted by sunnyj View Post
                    Gurpreet ji,
                    You mean to say that after 10 years you might get an apartment for range of 5000 to 7000 psf. In DEW
                    Which you can easily get now in resale market.
                    No I don't mean that....what I mean is property is not easy to offload
                    God is Great

                    Comment


                    • Re : NPR - Northern Peripheral Road, Dwarka Expressway, Gurgaon Updates

                      Originally posted by drgurpreet View Post
                      The speed of being able to sell a unit is directly proportional to the rate u demand from the property. Under value ur demand and it becomes easy to sell it off......this is just on of the factors.
                      While what you say is mostly true - I think what you mean is the speed of a transaction is directly proportional to the Demand. So one side of the coin is "at lower prices there is more demand". The other side of the coin is "Perception" lower prices may mean negative perception (could be anything distress, title, location or any other issues) and more negotiation (bottom fishing) and therefore delayed sale. Lower price may also mean low money supply, incomes or illiquidity, or negative perception to investment which means that even at lower price point there is no demand and therefore slower sales. You will be astonished to know that products have sold faster (relatively) at growing prices than at falling prices. This is human mentality. There are no buyers in a falling market so less number of sales, whereas in a growing market rate of sales is much faster.

                      Comment

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