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- Huge inventory to keep prices downOriginally Posted by Swapnil NAs per today's Loksatta - there is inventory of 67k unsold houses in Pune....builders playing another gimmic...using FM channels under disguise of good Samaritans for people...where RJ's suggesting / asking people if they want to / planning to buy houses? when? and suggesting people to go to builders with cheque of down payment and do hard bargaining....desperate measures??
The property prices in Mumbai, one of the highest in the world, are expected to be stagnant for the next couple of months.
Besides huge inventory, a slew of launches in Mumbai and its suburbs after a long gap is expected to have a cooling effect on home prices.
“Investors are withdrawing from the market as they do not foresee prices doubling in the next three to four years. For end users, affordability is not there… New supply will pose a challenge for developers. That is why I think prices will stay where they are or correct,” said Amit Bhagat, CEO and managing director at ASK Property Investment Advisors, a Mumbai-based fund manager.
New launches to keep Mumbai home prices stagnant | Business Standard NewsCommentQuote0Flag
- Homebuyers should wait for prices to fall
Scout for locations of choice, study price trends in those areas, and buy if and when prices fall
Chandan Malaviya, 30, manager with a foreign bank in Gurgaon, has been looking for a house to buy for the past couple of years. The locations of his choice are Dwarka Expressway and Sohna Road in Gurgaon, but exorbitant property prices have thwarted his plan. But he is hopeful now. “In almost all the projects, there are units available for sale, and for almost a year, there has been no increase in price; rather, property brokers are offering discounts on their last quoted price,” said Malaviya. He thinks that prices will fall further.
There are many people in a similar position who think that property prices in some areas went too high during the realty boom and have significant scope of a price cut. Besides that, the overall subdued realty market is mounting pressure on developers and they may reduce prices.
Developers have been struggling with low sales, increasing inventory, high debt and liquidity crunch since the past three years.
At present, most homebuyers are waiting for a significant decrease in prices. If the situation does not improve for developers, homebuyers’ expectation may come true.
With discourses of economic revival yet to show empirical evidences of a turnaround and the banking regulator not yet convinced of gifting a substantial rate cut to homebuyers, we don’t see homebuyer sentiment improving. This simply means a continued resolve from homebuyers to stay away from markets. This is expected to add further pressure on the existing moribund finances of developers which rationally calls for a possible price cut,” said Zia.
Agrees Magazine, “Housing sales remained muted even during the festive season, as a cautious buyer sentiment rode over discounts and attractive marketing offers. This is perhaps a signal that prevailing high property prices and high interest rates need to be rationalized.”
A few developers also admit that there is a need to reduce prices, especially in certain locations. Aniel Kuumar Saha, chairman and managing director, Saha Group, said: “Developers in certain locations where prices rose drastically may go for a price cut to clear unsold inventory.
Manish Agarwal, managing director, Satya Group, and secretary, Confederation of Real Estate Developers Associations of India (Credai), NCR, said: “If the slowdown continues even after a year, developers with heavy inventories may be compelled to go for drastic measures, including price cuts.”
Developers also feel that now homebuyers are looking for reasonably priced properties.
Homebuyers should wait for prices to fall - LivemintCommentQuote0Flag
- Builders and their theories!
While we’ve been discussing builder theories for quite some time, this one is baffling:
Since many years, I’ve been taking this small service lane from Santacruz highway to BKC because it cuts my commute to office by several kilometers and few minutes. Like all other by lanes, service lanes of Mumbai, this one too is encroached by slums. You have to be very careful while driving through because there are dogs, rats, pigs, hen and naked babies moving about freely. Best is to take a cab/auto so that you can cover your eyes and nose – people defecate on both sides of the road and on the divider in between. There is also a stinking nullah going through and the stench during monsoons is unbearable.
Right on this nullah –right on it, is a new luxury residential project (SRA obviously) called – (hold ur breathe)- Paris!!
Seriously? Wtf! How?
To cut off the Paris from the Bangladesh – the builder has covered all the sides with 15 feet tall tin sheets. The sheets facing the road have been covered with green creepers and tall posters of blonde models – to give the ‘feel’ of Paris of course. A section of the road divider near the project has now got potted plants. As soon as you enter the magnificent gates, right at the entrance- is a cafeteria called ‘Café de Paris’. You can see the team of the firangi architects and project managers discussing the project details over a coffee table inside.
Across the city there are hoardings like – ‘Live Paris’, ‘Experience the Paris of Mumbai’. I wonder who will buy a 6 crore flat there? The Bangladeshis are still there and the nullah is not even in the list of the new river ministry – it will never get cleaned - not even in 2022.CommentQuote1Flag
Challenge to develop Mumbai or any city for that matter involves work from ground level.
Drainages,leaking pipelines,dirt and squalor.
I really doubt whether anyone has the will to do so.
Slogans and posturing is for votes and not for fundamental change which has to come from each Indian.
The dirt comes because we litter and urinate anywhere and everywhere.
Builders take short cuts and save money.
Nullahs get closed and water diverts somewhere else.
It is too complex and unless there is strong political will change will not happen in big way.Certain changes are happening no doubt.CommentQuote1Flag
- So what makes the builder think he can launch a luxury residential project there and that it will get sold?CommentQuote1Flag
- Originally Posted by rembrantsSo what makes the builder think he can launch a luxury residential project there and that it will get sold?
Indians have resigned to the fact that this is life and we deserve no better. A lot of businessman with black money and a few top high ranking salaried class will stay in this "Paris". They roam around in chauffer-driven AC cars busy on their smart phones so they wont have a clue what's happening right outside their Paris.
The black component in such projects is so much that the builder wont be worried even if it takes more than 4 years to sell all flats. eventually some bakras will take the bait...mostly the people who have never been to paris or any other developed city for that matter.
the builder is not offering the beauty, art or architecture of Paris but rather a dream of Paris which quickly turns into a nightmare the minute you look out of your walled garden.CommentQuote1Flag
- Wadala Dosti is a good example of a premium project in the middle of a slum.
In Mumbai it worksCommentQuote1Flag
- Easier FDI in real estate means govt is inflating India's urban housing bubble
will property bears please comment on above article?
why did prices fall in last saffron rule anyways?CommentQuote0Flag
- Indian home prices fell most among 52 nations, IMF says
Indian home prices fell most among 52 nations, IMF saysCommentQuote0Flag
- Will FDI rejuvenate the real estate sector?
Will FDI rejuvenate the real estate sector?
will property bears please answer?CommentQuote0Flag
- Housing sector could turnaround in 2015 with boost of FDI
Housing sector could turnaround in 2015 with boost of FDI
property bears comments?CommentQuote0Flag
- Originally Posted by VenkytalksWadala Dosti is a good example of a premium project in the middle of a slum.
In Mumbai it works
The builder will sell it as a feature that you will easily get domestic help and your bai will always be on time given the short commute :bab (59):CommentQuote1Flag
- Another lesser-known fact is that if you sell the house within five years of taking possession, the deductions claimed on principal payments are reversed. The amount deducted in previous years is considered as income in the year of sale and taxed accordingly.
Another cost of holding.CommentQuote1Flag
- Originally Posted by FedupBuyerEasier FDI in real estate means govt is inflating India's urban housing bubble
will property bears please comment on above article?
why did prices fall in last saffron rule anyways?
I feel following lines are important:
"Builders increased prices to accommodate investors at every stage of the development, thereby creating a false sense of price appreciation. With a steep slowdown in genuine sales (both Delhi and MMR currently have the highest unsold inventory), they are stuck in a catch-22 situation."
There needs to be an end demand to meet the exit price point. For example if some investor is buying a flat at 70 Lac today with a target of 15% returns, he should be able to find a end user at 1.06 Crore at 3 year horizon. Considering all the decent flats are in this range at this point, how many end users will buy at 1.1 Crore.
FDI expect returns and if returns are not coming, why would they put their money on RE. Moreover there are hardly any transparency and regulations in Indian RE market, which is also a negative point.
But again all these are opinions. Writers opinion, My opinion. Others might have different view.CommentQuote1Flag
- One more thing, buyer profile in Pune can't be compared with that of Mumbai. Mumbai has limited land, has people with multiple diverse industries which are not dependent on fixed salary (Film and Television industry, Import Export, Most of Big businesses in India are based out of Mumbai, Fair IT industry presence, Most of Corporate Headquarters, many PSU headquarters, Civil Servants, Ministers, MLAs). What does Chichwad or Remote Villages like Hinjewadi has to command these rates?CommentQuote4Flag