Many on this board including the so called Wise and also the Sethus to Jadhavs have a problem of my pricing on land. Just 2 minutes ago I called up a builder in Urapakkam. He is selling a flat. This is not on the better side of the Urapakkam and is quite some distance from the Railway station....1.5km. I know there are no shops on this side either and development is tardy. He was quoting a price of 2600psft on the advt posted in Oct 2008. On phone he quotes 2400psft. I said that was high. His logic...land price is 30L per ground! and it increases to 35L per ground if you are a bit closer. Then he says..."saar price of construction is also to be taken na... and he says 1K psft".
Let us come to the bare mathematics. Let us assume he wont build 2 times the land area even though that is possible in todays new Master plan but uses only 1.5 as FSI.
So it works out like this (all figures in rupees).
Cost of land = 30L/2400sft = 1250psft
Cost of land needed per sqft of building at 1.5 FSI = 1250/1.5= 833psft
Cost of construction = 1000 psft
So net cost incurred is 1000+833=1833psft.
Giving him a Fair margin of 200 rupees profit psft we can assume that 2033 is a fair price but in reality he charges 2400. So he yet has a Safety Bumper margin of 2400/2033= 18% over an above his fair profit margin. Now remember he would most likely have got a deal with the land owner where he will repay the landowner over period of time. So the builder's investment is zero on the land. Next he constructs using the buyer's money. Nowadays that is where he might be chewed a bit, since bookings are not fast enough. So he has to pay that interest portion for his construction activity.
Finally I assumed FSI=1.5. Most builders easily take this number to 1.8 and they also price car parking etc as separate. So if u use 1.8 in the argument and add 1.5L for car parking as this builder quotes it will mean his price is about 2600psft and his cost of land is 700psft. So his Safety Bumper margin is
2600-1000-700-200=700psft.
In other words he can yet reduce his price by 700psft and go home with a fair profit of 200psft.
Why am I saying this?
a. As many on this board with almost rudimentary Mathematics knowledge seem to say (rudimentary as in class 3 and no better even if one of those shit colleges gave them a B.E. degree sadly though!) if DLF reduces price by 400psft, it does not mean RE market is crashing. Just that it is stabilising at best and the pinch is felt for the EVER CONNING BUILDERS.
b. Let us assume that 2600psft is the end price and 1.8 FSI. Then if you back calculate (2600-1000(cost of construction)-200(fair profit))=1400 is the cost of land you are actually paying that too at 1.8FSI. So price of land is 1400*1.8=2520psft which translates to 60L per ground. So it is clear that if you have land (like I do) and I just become a builder I will gain 60L-30L=30L for my land. Being fair I try to ask for 45L for such a land and I know on the worst day the biggest Mathematical idiot on this board will buy it for 35L. So why should I sell land? Or why should anyone sell land...Unless he/she is hardup for money!!

In net, the builder in Chennai is minting money like mad, and in recent times his minting has come down. This will mean slightly cheaper flats. However in the process land price wont come down but with more of the buyers becoming SANER (move from Class 3 to Class 7 ... LOL ... Hopefully Wiseman reaches Class 7 soon!), they will prefer to buy land and build homes than flats.

Only when that class also disappears will there be a RE collapse. In Bangalore (I mean proper city...not Whitefield or Devanahalli which is almost same as Chengalpet or Tindivanam in development!), price of land to flat is extremely clean. Builders have clean profit margins and they are able to sell their property much more fairly than in Chennai. Ofcourse the Brigades who try to mint money have got chopped in the process. So Brigade which was quoting fancy prices in Rajaji Nagar has been forced to take a lot of shit, with FSI as high as 4-4.5 while the normal flat in that vicinity having hardly priced any bit lower.

In summary, if you want a flat to live tommorow (not after 2 years like India Bulls is selling in Medavakkam!) then buy it at that fancy price ... after all 2600psft and 2200 psft wont matter much in the long run as u might as well stay in your house today than pay rent. However if you are an INVESTOR and have cleared Class 7 mathematics (not by mugging but by understanding!) then you better buy Land for investment. If you book a flat with a long delivery time and then cry, especially if you are losing your job like that Fidelity guy, then u can use abuses like That HECK of a Fool or Like Jadhav the Bus driver, but in reality you need to improve your brain. So go to the nearest Mutton shop and try to fit that brain into yours! LOL!
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  • Reduced to 20 %

    Originally Posted by sethugm

    "It is like riding a tiger, not knowing how to get off without being eaten" are the everyone's statement as many of them are from Raju's state.

    Its the same case with few here ...have bought the land at higher price and did not book the profit at the correct time ...now they see the value had depreciated to 40-50 percent and waiting to see this decimated to 20%.


    I wanted to say that some of the properties will be redued to 20 % as rightly predicted by Wiseman.

    Originally Posted by Nataraajg007
    Sethugam,

    2009 will see another 20% fall


    We can say a minimum of 20% further fall in 2009 . The slowdown , markets , employment and Satyam-like findings/revealation etc etc..will have to define the maximum..

    Cheers
    CommentQuote
  • Sethugm, you are a bear on RE for sure. I will appreciate if you can quote actual prices in 2007 and then in 2008 for the same place and show us if prices fell 20%. Dont talk about flats where the builders jacked up prices to anylevels since they had profit margins of 200% and have reduced it to 150% now. Talk about land.
    Dont state prices will fall in 2009. THey havent fallen in 2008 in reality so why are you spreading an imaginary misinformation like Wiseman.
    CommentQuote
  • Originally Posted by Nataraajg007
    Incidentally for all the doomsday talkers on this board. Last month I visited AECS layout in Bangalore. In 2002 December I missed buying a property there for 32L (4000sft).. I saw a land on the same road with a SALE advt board on it. I called the number and the guy who spoke to me said that it was sold just a few days ago and with some prodding said that he asked for 4500psft and got 4200psft.

    Wiseman has visted AECS layout in Kundanahalli (Whitefield area) to find it out for himself. He mentioned that this road has been made into a commercial site. He is right. Almost 10 times in exactly 6years. And this place is about 20km from MG Road.
    So those of you who yet believe in the bull story, you are most welcome to do so. It is just an obsession of the have nots to imagine that prices are rising. No doubt even approved lands and flats have fallen. However in the first place only fools will buy such land.. Just that number of fools in Chennai have reduced.


    That means that property price in Tiruvanmiyur has reduced from 10000 to 8000.
    So Wiseman is right to some extent. He can write here about bull story,. Fools who dont know about today, who cant plan for tomorrow

    You are employed by Wiseman to write crap. Enjoy!
    CommentQuote
  • Originally Posted by wiseman
    There are fools. One can sympathise with them because they know not what they do.

    Then, there are greater fools. They buy when every one else is running scared. One can only pity them!

    Then there is the greatest fool of all. He is the one who talks about missing buying a plot in 2002 and asking for a price today. But mind you, he does not say that he actually bought any land. He acts as though he is a buyer, only to sell some land he is holding (maybe at a loss) to you so that you become the sucker he is now.

    Welcome Nats, the greatest fool of all! :D

    Note: till date he has never admitted to buying anything in the last couple of years. But he keeps goading all you others to buy as if there is no tomorrow. Why? So that he can sell his land and get out! And leave you holding the crap!

    Btw, Nats, I have been short IT for last nearly 2 years. Started going short in Infy around 2400 levels and have only made a lot of money, not lost any. I wish I had shorted Satyam. But sadly for you, you seemed to have forgotten that I've been a bear on the markets for quite some time. So, please tell me, how could I have lost money on this Satyam Fiasco while I've been a bear? :D

    Sometimes, in your efforts to froth at the mouth, you must also pause to use your brains!!! :p ROTFL

    cheers

    Wiseman, just setting up a name like that cannot make you one bit wise and does not give you any right to call me a fool. After all you can do no better than get one chela to have a name id similar to mine and try to confuse readers. Shows the abyss of your CHARACTER.
    As for your great intelligence about stock markets. Did you predict on any board about a fall in dec 2007. I have asked people to sell out of Stock markets when nifty was at 5900 and it tested 6300 and fell. So please dont sell your stock market crap on this board as it is about Realestate and REALESTATE IS NOT STOCK MARKET. Ofcourse you can always talk in retrospect about your so called right decision and your shorting Infy.
    BUT LET US COME TO BRASS TACKS. YOU YOURSELF CLAIMED TO BE OWNING/MANAGING A SOFTWARE COMPANY DEALING IN HEURISTICS TO AI TO ANYTHING ELSE. HAVE YOU SOLD OUT YOUR COMPANY? ARE YOU YET HAVING MONEY TO PAY YOUR EMPLOYEES? OR ARE YOU BANKRUPT AND THE ANGER OF YOUR FAILURE MAKING YOU WRITE DISPARINGLY IN THIS FORUM. YOU DID NOT SHORT SATYAM IS OK. DID YOU SHORT YOUR OWN COMPANY...MEANING DID YOU SELL IT OUT? ATLEAST YOU SAID YOU OWNED THE COMPANY JUST A COUPLE OF MONTHS AGO. THAT SHOWS YOU ARE THE BIGGEST LIAR ON THIS BOARD.
    Now if you even have a little sense of shame (I know you never took my challenge about your post graduation college...shadily gave some info on your background) then without using your silly battery of nonsense writers like whatheheck and your new id nataraaj... try to take up my challenge on finding me property with your bear prices in the areas I mentioned. You can go back to the message to which you replied and answer it.
    I bet you dont have even an iota of worth in you to answer it. You simply keep talking about stock market when challenged about bearishness.
    Now since you claim to be a PISTA in stock markets. Please tell us the index level bottom for Nifty in the next 2 months or 12 months. Tell us data on Nifty.
    Stop talking like a coward and crybaby. Try to put up some worth about yourself. Dont disappoint your parents for having given birth to a coward like you! Got it...got some shame buddy?
    CommentQuote
  • Originally Posted by sethugm
    I have few (5-6) of my colleagues invested 8-10 lacs in stocks.

    Dec-2007 , everyone of them were happy to have invested as their portfolio were 50-60 percent up.

    But March-08 , their shares came down to the original price at which they have bought. As months passed on,the prices have been falling atleast 10 percent per month and Sep -08 they were reduced to 30 percent of the bought value. Since July-08 they were waiting for the increase in price so that they can exit(they know the slowdown as they keep upreast with all the industry/finance news) and atleast break-even.

    Had they sold the stocks between Apr-Aug 08 , they would have escaped with minimal loss.

    "It is like riding a tiger, not knowing how to get off without being eaten" are the everyone's statement as many of them are from Raju's state.

    Its the same case with few here ...have bought the land at higher price and did not book the profit at the correct time ...now they see the value had depreciated to 40-50 percent and waiting to see this decimated to 20%.

    Dont worry guys , we will have more lands for sale at the price of our wish(realistic).

    Prolonged waiting is the characteristics of a bear & Natraj and Co are waiting and waiting to sell the land.Real Bears Bears Bears. As there is no standard index for RE , trying to portray the wrong story .But everyone is aware of the scenario.

    People whom were called as bears in this forum are cash-rich and waiting to buy lands/apartments. Real Bulls..

    Comeon Kings and Emperors ... More they wait ... More good for us.

    Comeon buddy, come up with facts. Simply writing long stories is like politicians who say things they like without any meaningful data. Please come out Sethugm if you are worth even a bit and tell us data about prices of land in some 3 selected places in 2007 and 2008. And show us the correction.
    Dont give lectures, for that there are other forums? Talk about RE not stock lectures and your hopeless friends who bought in 2007.
    CommentQuote
  • Originally Posted by Natarajg007
    Comeon buddy, come up with facts. Simply writing long stories is like politicians who say things they like without any meaningful data. Please come out Sethugm if you are worth even a bit and tell us data about prices of land in some 3 selected places in 2007 and 2008. And show us the correction.
    Dont give lectures, for that there are other forums? Talk about RE not stock lectures and your hopeless friends who bought in 2007.


    Nats,

    When there is no transaction in RE , that means the RE market is dead now and there is no buyers because greedy people you/brokers who have manipulated the prices.

    Am not writting long stories like you. Am writting the facts collected from field and from friends .And all the market researchs done by the leading companies say that prices are undergoing 'correction' and will undergo 'correction' . Whats needed at the moment is 'correction' in your mind .Accept the facts you poor guy.

    You have to spend atleast 20% of amount of time you spent in this forum ,in reading ET BL TOI Hindu and other leading newspapers/Web to know the financial happenings in India/World.And try to learn to write with proper paragraphs/punctuation and space etc . Am not able to read the long stories you have posted because its not readable/attractive . So I am not wasting my time in reading your posts.

    JFYI , Check 'Preview Post' button b4 you click 'Submit Reply/Post' .If you
    can read and understand your posting , then proceed with 'Submit Reply/Post' . If you religiously follow this , am sure I would have seen hardly 3-4 postings and thats because of the manual mistake . You would have pressed 'Submit' before 'Preview'.

    If you are worth a little bit, Can you tell me any recent RE transactions in the recent past at 60 % of the prices that you are quoting like 2C 3C 4C.

    Am telling about the stocks here because the same guy who was planning to build a house in the land he owns ,does not even have Rs 10 Lacs to start with and may be forced to sell the plot if things go wrong for another 6 months.

    We are seeing more such guys and many of those will plan to shelve off their RE investments ...So ..... More availability of lands ...

    Cheers
    CommentQuote
  • Originally Posted by Natarajg007
    Comeon buddy, come up with facts. Simply writing long stories is like politicians who say things they like without any meaningful data. Please come out Sethugm if you are worth even a bit and tell us data about prices of land in some 3 selected places in 2007 and 2008. And show us the correction.
    Dont give lectures, for that there are other forums? Talk about RE not stock lectures and your hopeless friends who bought in 2007.


    Am not writting stories Nats . I dont have any other intension other than to see RE prices to fumble to the realistic levels. Probably you might own some 750 sqft land (your worth) and striving hard to sell it at unrealistic price .

    I had to narrate the stock story(fact) of my colleague because he was planning to construct a house in a land he owns . Now he does not even have 5/10 Lacs to start the construction . And he is more bothered to go for house loans as there is a possibility the project will be off-shored.

    If things in stock market goes wrong for another 6-12 months , he may plan to sell the land he owns. Result ...one more plot on sale ....We tend to hear more such availabilities and will drive the price to plummet ... He may do it early on a distress sale ...

    You may not have an oppurtunity to know the happenings around the world ...Nortel.. Nadra...RBS . More such 'Halt of Business' to follow .Kindly do atleast 1 hour study/preparation before you comment like "Chennai RE is not IT/ITES dependant and isolated from global slowdown(now its meltdown)" .

    BTW , Whats your quote on your 750 SQFT vadapalani land ===> 3 C now ?

    Pls understand this is not 'Kalakkappovathu Yaaru' (A Comedy Show in Vijay TV presided by senior actor Pandiarajan - whose comedy with bunch of fools bidding in crores for a worthless thing) and you are repeatedly trying to impress Mr Pandiarajan .
    CommentQuote
  • Builders have big fat money

    First of all i would like to say thank you for Mr.Natraj for his vast knowledge in the real estate sector and his way of explaining mathematically the cost calculation of a flat. Actually seeing your calculation i though how much hard earned money these builders make by making fool of MIG people. My opinion to this thread what ever be the market condition(recession etc) these guys wont let the price come down bcoz they have made a big profits in the past and they would survive even in the worst market condition.
    CommentQuote
  • Originally Posted by karthickj
    First of all i would like to say thank you for Mr.Natraj for his vast knowledge in the real estate sector and his way of explaining mathematically the cost calculation of a flat. Actually seeing your calculation i though how much hard earned money these builders make by making fool of MIG people. My opinion to this thread what ever be the market condition(recession etc) these guys wont let the price come down bcoz they have made a big profits in the past and they would survive even in the worst market condition.


    the flat prices have increased alongwith land prices too.so the MIG who sold land to these builders made lots of money too.the flat prices are not going down much bcoz the land prices there (held by MIG) is not going down a lot.see any builder prices his flats according to the market value of land there(cons cost is constant for all locations). and if builder X had bougth at a higher price and quoting a higher price then if land is cheaper there builder Y will buy and quote a lesser price.every one wants to book profit at the earliest.
    the point is if land prices fall the flat prices will too.
    CommentQuote
  • Originally Posted by karthickj
    First of all i would like to say thank you for Mr.Natraj for his vast knowledge in the real estate sector and his way of explaining mathematically the cost calculation of a flat. Actually seeing your calculation i though how much hard earned money these builders make by making fool of MIG people. My opinion to this thread what ever be the market condition(recession etc) these guys wont let the price come down bcoz they have made a big profits in the past and they would survive even in the worst market condition.


    Dear karthickj,

    This is what exactly is happening in the RE arena at Chennai. Only peanut reductions are being offered. Prices like Rs. 1975/sq.ft. for flats are offered at far away places, even 30 KM away. Whereas, near the city, the prices have not been reduced much. The Builders and Promoters have tasted high and unrealistic profits in the past and they would like to hold on for further periods. They may delay the existing ongoing projects, delay the start of the announced projects etc. but continue to book the flats and collect the interest free advances.

    ks2071746
    CommentQuote
  • Originally Posted by sethugm
    Am not writting stories Nats . I dont have any other intension other than to see RE prices to fumble to the realistic levels. Probably you might own some 750 sqft land (your worth) and striving hard to sell it at unrealistic price .

    I had to narrate the stock story(fact) of my colleague because he was planning to construct a house in a land he owns . Now he does not even have 5/10 Lacs to start the construction . And he is more bothered to go for house loans as there is a possibility the project will be off-shored.

    If things in stock market goes wrong for another 6-12 months , he may plan to sell the land he owns. Result ...one more plot on sale ....We tend to hear more such availabilities and will drive the price to plummet ... He may do it early on a distress sale ...

    You may not have an oppurtunity to know the happenings around the world ...Nortel.. Nadra...RBS . More such 'Halt of Business' to follow .Kindly do atleast 1 hour study/preparation before you comment like "Chennai RE is not IT/ITES dependant and isolated from global slowdown(now its meltdown)" .

    BTW , Whats your quote on your 750 SQFT vadapalani land ===> 3 C now ?

    Pls understand this is not 'Kalakkappovathu Yaaru' (A Comedy Show in Vijay TV presided by senior actor Pandiarajan - whose comedy with bunch of fools bidding in crores for a worthless thing) and you are repeatedly trying to impress Mr Pandiarajan .

    Sethu, YOu are the one fit for Kalakkapovathu type of programs, not me. You are talking about Nortel, have you been to Nortel labs in Montreal. I have seen that too. There are bunch of jokers like you from India specifically TN. ONe guy by the name Manikka Thiagarajan knew how to execute 100 test cases. Full stop. AFter 5 years in the company. I had learnt to execute and had executed those cases after a 4 months stay in BNR. I was in WIpro then. ANd I am talking about hi fi Sonet OC technology. So you must have been a urchin crying on the road at that time in 1990s or maybe you were studying in some silly COrporation school then. And Manikka like fellows who will if asked which college u studied in will reply Madras Univ, never telling the specific college.
    Nortel made the mistake of holding such leftovers like Manikka T. WIpros Saskens and the rest milked Nortels and the rest. TOday those Wise idiots are in dire straits not because of poor technology (their Sonet and OC tech are superb!). They are in trouble because of mismanagement and letting folks like you and Manikka to be employed.
    Now CHennai realestate will fall if idiots listen to your peanut brained fundas. ANd you couldnt hide your real want.YOu want RE to fall because you want to enter at the pits and you want your daydream to be a reality. Ofcourse you can go back and quote today's CNBC tell you bout 8% fall in RE stocks today. Does th at mean that land price fell 8% today!
    FOols like you can write a lot of nonsense. NObody can make a bigger mess than teh Manikka Thiagarajans of the world. However there are yet many sane folks who wont sell out to a self centric clown like you who states "I dont have any other intension other than to see RE prices to fumble to the realistic levels."
    SO your intention though not noble will end up being a pipe dream. ENjoy Sethugm!
    CommentQuote
  • Originally Posted by newboy
    the flat prices have increased alongwith land prices too.so the MIG who sold land to these builders made lots of money too.the flat prices are not going down much bcoz the land prices there (held by MIG) is not going down a lot.see any builder prices his flats according to the market value of land there(cons cost is constant for all locations). and if builder X had bougth at a higher price and quoting a higher price then if land is cheaper there builder Y will buy and quote a lesser price.every one wants to book profit at the earliest.
    the point is if land prices fall the flat prices will too.

    Actually you may be wrong. Flat prices are dictated by builders who are strong hands. Land prices are dictated by individuals and are mostly sold when there is a necessity. They are weak hands. SO the truth is builders are making a fortune. Infact my advice to many on this board is go and buy land from a owner along with a couple of your friends and then build a flat for yourself.
    CommentQuote
  • Originally Posted by ks2071746
    Dear karthickj,

    This is what exactly is happening in the RE arena at Chennai. Only peanut reductions are being offered. Prices like Rs. 1975/sq.ft. for flats are offered at far away places, even 30 KM away. Whereas, near the city, the prices have not been reduced much. The Builders and Promoters have tasted high and unrealistic profits in the past and they would like to hold on for further periods. They may delay the existing ongoing projects, delay the start of the announced projects etc. but continue to book the flats and collect the interest free advances.

    ks2071746

    Well KS. Your fundas are clean but you saying high and unrealistic profits of builders is not right. THey have made those profits happen realistically at the foolishness of the land owners and now I see the same hands playing market to fall (Wiseman, Sethugm et. al.) since they want to buy at cheap prices. Honestly salaries have gone up 5.5 times in good cases and atleast 4times in average cases between 2003 and 2009, so realestate going up that many times is more than justified.
    Just that the fools who were getting 2000 in 2003 and are now paid 10000 in 2008 want prices to fall to 2003 levels assuming they have become great and others have gone mad. That explains the rantings of Sethugm and the bear cartel.
    The truth is unless there are huge job cuts resulting in downward growth of salary to say 2003 levels, there is NO WAY realestate will fall to those old levels. In other words if in 2003 one earnt 20K and could dream of a one bedroom flat in some distant part of the city, ONE CAN ONLY DREAM OF THE SAME ONE BEDROOM FLAT TODAY even though the salary might have gone up to 1L, the person's NET INTRINSIC WORTH HAS HARDLY GONE UP. THat is the story.
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  • It is unfortunate that many on this board are consciously missing out an opportunity to enter RE when they can. I wont bother about traders and speculators. Those who need a place to live should enter when it is feasible. I bought the property I live in in 1996, when the boom was going bust. I dont repent it one day. It has not fallen anytime. The benefit was that I could get the best property for the lowest price.
    CommentQuote
  • was just curious abt Manikka and googled him...
    His linkedin profile shows this:

    Current
    Leader, UMTS SW Development at Alcatel-Lucent
    Education
    Carleton University

    Originally Posted by Natarajg007
    Sethu, YOu are the one fit for Kalakkapovathu type of programs, not me. You are talking about Nortel, have you been to Nortel labs in Montreal. I have seen that too. There are bunch of jokers like you from India specifically TN. ONe guy by the name Manikka Thiagarajan knew how to execute 100 test cases. Full stop. AFter 5 years in the company. I had learnt to execute and had executed those cases after a 4 months stay in BNR. I was in WIpro then. ANd I am talking about hi fi Sonet OC technology. So you must have been a urchin crying on the road at that time in 1990s or maybe you were studying in some silly COrporation school then. And Manikka like fellows who will if asked which college u studied in will reply Madras Univ, never telling the specific college.
    Nortel made the mistake of holding such leftovers like Manikka T. WIpros Saskens and the rest milked Nortels and the rest. TOday those Wise idiots are in dire straits not because of poor technology (their Sonet and OC tech are superb!). They are in trouble because of mismanagement and letting folks like you and Manikka to be employed.
    Now CHennai realestate will fall if idiots listen to your peanut brained fundas. ANd you couldnt hide your real want.YOu want RE to fall because you want to enter at the pits and you want your daydream to be a reality. Ofcourse you can go back and quote today's CNBC tell you bout 8% fall in RE stocks today. Does th at mean that land price fell 8% today!
    FOols like you can write a lot of nonsense. NObody can make a bigger mess than teh Manikka Thiagarajans of the world. However there are yet many sane folks who wont sell out to a self centric clown like you who states "I dont have any other intension other than to see RE prices to fumble to the realistic levels."
    SO your intention though not noble will end up being a pipe dream. ENjoy Sethugm!
    CommentQuote