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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  • Thats true IT in India is getting Matured only the better & best persons can survive. We need Technical Managers in India not the Project Managers to check the timesheets alone anymore, he should have some knowledge about the project.
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  • Nope!

    Originally Posted by Natarajg007
    IT guys are over paid, especially in the last few years. So if they have a fear of job loss who cares. If even 20% of them lose jobs so what?
    Did I answer your question?



    Agreed IT largely overpaid due to $ rs differential.

    But its psychological.

    Understand one person in ur department gets laid off, WHO & WHEN will be the next on everyones mind. Those unpaid bills -credit card + cars + holiday last yr + life style + etc.

    Four relatives in IT, 2 US + 2 India in resptble position in good company.

    None ready to commit to buy, inspite of attractive properties avble.
    Fear psychosis at work?
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  • You hit the nail on the head

    Originally Posted by Natarajg007
    You hit the nail on the head.


    I think higher-end properties do not have fixed rates, it is what high-income peoples are ready to pay.

    So there are properties sold at 40K psft at Malabar hills in Mumbai (an extreme example).
    A similar structure 5-10 km away will fetch 10K psft only!!!

    The expectation of rise in property-rates is also built into existing rate just like stock price.

    It is also demand & supply game. If 20% of I.T workforce rendered job-less with fear-psychosis at work, demand may reduce by 40%.
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  • Originally Posted by contra
    A lot of average, below average good for nothing people got into IT industry when jobs were easily available for taking. Many well deserving, hard working candidates particularly those coming from middle class/ lower middle class families, rural areas, villages face many hurdles in IT industry right from the start during job interviews, promotions, appraisals, onsite openings etc.

    So if about 30% useless unbillable project managers, business analysts, Ivy league sweet talking consultants, urban educated hi-fi rich/upper class freshers and such crazy people are laid off nothing will happen to real estate or IT industry.

    There will still be 60% hardworking technical people taking moderate income, mostly working at offshore (except a few who could conquer this system and go onsite) who will stay and keep earning their salaries. They will still take rented homes or buy own flats (both decisions are positive for real estate). FULL STOP


    Excellent point about unbillable/useless IT consultants.

    But if 40% of useless/unbillable IT staff lose job, doesn't mean losing 40% of potential RE buyers? Will this do good or bad for RE?
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  • Originally Posted by hitmady
    I think higher-end properties do not have fixed rates, it is what high-income peoples are ready to pay.

    So there are properties sold at 40K psft at Malabar hills in Mumbai (an extreme example).
    A similar structure 5-10 km away will fetch 10K psft only!!!

    The expectation of rise in property-rates is also built into existing rate just like stock price.

    It is also demand & supply game. If 20% of I.T workforce rendered job-less with fear-psychosis at work, demand may reduce by 40%.

    Many have been hoping that this fear psychosis will happen and prices will fall! Unfortunately the fear psychosis is just about to begin when people see prices moving up and desperately start buying once more sending prices to dizzy heights in RE. A few IT guys dont make much difference!
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  • Originally Posted by Natarajg007
    Many have been hoping that this fear psychosis will happen and prices will fall! Unfortunately the fear psychosis is just about to begin when people see prices moving up and desperately start buying once more sending prices to dizzy heights in RE. A few IT guys dont make much difference!


    I know RE price
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  • With every passing day good news is trickling in. The problem with investors is that they are so pessimistic that they assume a fall will continue for ever. Even US reality is perking up with Housing starts showing healthy improvements. In India and in Chennai in particular where RE price almost never even tapered off any bit, I think a big gold rush has begun. Many buyers are trying to pick up at cheaper prices but wiser landlords aint selling. This trickle is going to become a flood very soon and in the next few months our pessimists are growing to cry over spilt milk.
    It is better to be late than never to do a thing. You missed buying in 2003, you want to miss again in 2009?
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  • Sorry folks! This is another example of spin :)

    Originally Posted by Natarajg007
    With every passing day good news is trickling in. The problem with investors is that they are so pessimistic that they assume a fall will continue for ever. Even US reality is perking up with Housing starts showing healthy improvements. In India and in Chennai in particular where RE price almost never even tapered off any bit, I think a big gold rush has begun. Many buyers are trying to pick up at cheaper prices but wiser landlords aint selling. This trickle is going to become a flood very soon and in the next few months our pessimists are growing to cry over spilt milk.
    It is better to be late than never to do a thing. You missed buying in 2003, you want to miss again in 2009?



    Folks,

    With every passing day, parties with a vested interest (like the Govt and speculators stuck with properties bought at high prices) are creating a spin that all is well, the bottom is in and it will be a wild bull market all over again.

    Fact is that unless we get to the totally insane levels of debt creation like in the 2007/08 period, prices have no reason to go above previous peaks. So, it has to be a strong spin about the coming bull market.

    The real economy, in the meanwhile has simply taken a break from falling hard for a whole year. Once this breather is over, the fall starts all over again, once the spin gets seen as just that - spin! Then it is DeJaVu all over again.

    As I'd said only 2 weeks back, 15580 on the sensx would be the end of this bear market rally in all probability. As this market is showing (stock markets are always leading indicators of things to come in the underlying economy), prices have gotten far ahead of the fundamental performance of companies. And this time, just to prive Nats wrong, I stated this before the event when the market was going up. Since then I have been short (and obviously you know who is making the moolah hand over fist! :). I believe we will reach 13400 sensx levels in the near future and then we will see!

    Our markets are stuck in a range for a long time to come with fairly weak growth in India and much worse elsewhere. If things get much worse in the USA (and I for one believe they will) before they get better, do not leave out the possibility of our markets revisiting the bottom of 8000 and even breaking it downwards. At that time, sentiment will be much weaker, the savings of people will be much thinner and ability and willingness of people to buy at any price will be much lower. This demand by much weaker buyers - to lower prices to an affordable level without recourse to large amounts of debt - will see RE prices come down significantly for a while. By then builders too will be in a serious quandary because of their huge debt, inventory and weaker ability to sustain themselves in business.

    This situation is surely coming and I believe it will be sometime in the 2010-11 period. I will wait till then!!! :D

    If you missed in 2003/04, then you will surely want to skip in 2009, but not miss the buying opportunity in 2010/11!!! :D

    cheers
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  • Originally Posted by wiseman
    Folks,

    With every passing day, parties with a vested interest (like the Govt and speculators stuck with properties bought at high prices) are creating a spin that all is well, the bottom is in and it will be a wild bull market all over again.

    Fact is that unless we get to the totally insane levels of debt creation like in the 2007/08 period, prices have no reason to go above previous peaks. So, it has to be a strong spin about the coming bull market.

    The real economy, in the meanwhile has simply taken a break from falling hard for a whole year. Once this breather is over, the fall starts all over again, once the spin gets seen as just that - spin! Then it is DeJaVu all over again.

    As I'd said only 2 weeks back, 15580 on the sensx would be the end of this bear market rally in all probability. As this market is showing (stock markets are always leading indicators of things to come in the underlying economy), prices have gotten far ahead of the fundamental performance of companies. And this time, just to prive Nats wrong, I stated this before the event when the market was going up. Since then I have been short (and obviously you know who is making the moolah hand over fist! :). I believe we will reach 13400 sensx levels in the near future and then we will see!

    Our markets are stuck in a range for a long time to come with fairly weak growth in India and much worse elsewhere. If things get much worse in the USA (and I for one believe they will) before they get better, do not leave out the possibility of our markets revisiting the bottom of 8000 and even breaking it downwards. At that time, sentiment will be much weaker, the savings of people will be much thinner and ability and willingness of people to buy at any price will be much lower. This demand by much weaker buyers - to lower prices to an affordable level without recourse to large amounts of debt - will see RE prices come down significantly for a while. By then builders too will be in a serious quandary because of their huge debt, inventory and weaker ability to sustain themselves in business.

    This situation is surely coming and I believe it will be sometime in the 2010-11 period. I will wait till then!!! :D

    If you missed in 2003/04, then you will surely want to skip in 2009, but not miss the buying opportunity in 2010/11!!! :D

    cheers

    Nice one! LOL! Wisey states
    1. Govt has vested interest! So if govt wants growth our Wisey wants India to collapse. So once more the NRI coterie game of self aggrandisement is exposed.
    2. Sensx falling for 2 days and our friend is talking about 8000. Markets correct. The game is not over yet. I would expect even 3300 on Nifty (Wisey can translate into Sen terms). That does not mean it is over. Just that it will consolidate and shoot up.
    Wisey, please try to trade then you will know what markets are all about. Just once try something before writing here. We will be blessed then!
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  • Some Mathematics

    Originally Posted by Natarajg007
    Unfortunately the fear psychosis is just about to begin when people see prices moving up and desperately start buying once more sending prices to dizzy heights in RE. A few IT guys dont make much difference!


    It seems speculators specially (2nd time buyers, investors) are desperately moving out of RE.
    It would be double whammy for builders, as lot of 2-3 years old flats are off-loaded in mkt. These investor-resale flats are quoted at much lower rate than builder rates.

    This recession is not only related to IT and it is making lot of difference already.
    I checked few areas in Pune, RE is down by 20% in last 12 months. Similar is the case in Mumbai.
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  • I stay focused :)

    Originally Posted by Natarajg007
    Nice one! LOL! Wisey states
    1. Govt has vested interest! So if govt wants growth our Wisey wants India to collapse. So once more the NRI coterie game of self aggrandisement is exposed.
    2. Sensx falling for 2 days and our friend is talking about 8000. Markets correct. The game is not over yet. I would expect even 3300 on Nifty (Wisey can translate into Sen terms). That does not mean it is over. Just that it will consolidate and shoot up.
    Wisey, please try to trade then you will know what markets are all about. Just once try something before writing here. We will be blessed then!



    Folks,

    I continue to stay focused on what I believe will happen based on studying relevant facts and coming to my own conclusions.

    I continue to maintain that Govt does have undue vested interest in "manufactured" growth - i.e, one that is not natural, but one that is created by creating distortions in the economy which will show up as problems later on. You only have to see the example of the USA and how blowing bubbles created all this mess. Therefore, the Govt does have a vested interest in spinning the news to always show "up, up, up", like the "Shining India" campaign.

    This does not mean that "wisey" does not want growth! :D What Wisey wants is sustainable growth based on honesty, not selfish interests like Nats .

    Second, the markets have fallen for more than 2 days and I only mentioned that 8000 is a possibility especially if the US takes a turn for the worst. In my belief, there is even a possibility that the DOW will eventually reach a nominal level of 1500 which looks unbelievable now, but how many unbelievable things of 12 months ago have already happened!!!

    Third, no one really knows what the markets are all about. So, if you wait to know about it like Nats, you will forever wait to trade and not make any money at all - just like him who has turned away so many buyers for his property because they did not quote what he wanted. And even with an imperfect knowledge of he markets, somehow I seem to be making over 100% per month in the markets. I like it, don't you? :D

    Finally, buy property now only if you need to stay in it, you feel that it will save rent and if you have the payments covered in a guaranteed way. Otherwise, it will be wise to see where the world ends up in a couple of years and then decide, when - as I believe - prices will be at least around 25% lower or worse AND you will have more savings to put down a larger chunk of the price. I think thats sensible. How about you?!

    I stay focused and steady on this course. Now with Obama finally throwing in the towel, all pretences are off. Markets will take years to come back (of course the usual ups and downs will be there for people like me to make a "few peanuts" :D. But a sustained Bull Market in any area is a few years away from starting in any case. Meanwhile concentrate on your respective core competencies and get ahead in your respective professions!!!;)

    cheers
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  • Originally Posted by wiseman
    Folks,

    I continue to stay focused on what I believe will happen based on studying relevant facts and coming to my own conclusions.

    I continue to maintain that Govt does have undue vested interest in "manufactured" growth - i.e, one that is not natural, but one that is created by creating distortions in the economy which will show up as problems later on. You only have to see the example of the USA and how blowing bubbles created all this mess. Therefore, the Govt does have a vested interest in spinning the news to always show "up, up, up", like the "Shining India" campaign.

    This does not mean that "wisey" does not want growth! :D What Wisey wants is sustainable growth based on honesty, not selfish interests like Nats .

    Second, the markets have fallen for more than 2 days and I only mentioned that 8000 is a possibility especially if the US takes a turn for the worst. In my belief, there is even a possibility that the DOW will eventually reach a nominal level of 1500 which looks unbelievable now, but how many unbelievable things of 12 months ago have already happened!!!

    Third, no one really knows what the markets are all about. So, if you wait to know about it like Nats, you will forever wait to trade and not make any money at all - just like him who has turned away so many buyers for his property because they did not quote what he wanted. And even with an imperfect knowledge of he markets, somehow I seem to be making over 100% per month in the markets. I like it, don't you? :D

    Finally, buy property now only if you need to stay in it, you feel that it will save rent and if you have the payments covered in a guaranteed way. Otherwise, it will be wise to see where the world ends up in a couple of years and then decide, when - as I believe - prices will be at least around 25% lower or worse AND you will have more savings to put down a larger chunk of the price. I think thats sensible. How about you?!

    I stay focused and steady on this course. Now with Obama finally throwing in the towel, all pretences are off. Markets will take years to come back (of course the usual ups and downs will be there for people like me to make a "few peanuts" :D. But a sustained Bull Market in any area is a few years away from starting in any case. Meanwhile concentrate on your respective core competencies and get ahead in your respective professions!!!;)

    cheers

    Interesing WIsey. So your core competency is writing here? Right! You have agreed to this one as well. So you are paid by some force to write here and my writing here puts your writings to shame is your anger with me!! Sorry I cant help it, since I try to educate folks and pass my free time.
    BTW, for all your talk. I have a buyer ANANDXX who writes here. He is seriously asking for land in CHennai (need not be RK salai, he will be pleased with Saligramam without fail and will take even in Porur, Manapakkam etc). His budget is 40L to 60L. His want is minimum 1/2ground. Can you get this for him? I have given more details in another post under Hallucinating Bears!
    Please help him. If you can do that then you have some meaning in writing here. If you cant then your bluff will get louder and like Rasputin you will face an end. Just 1/2ground for 50L (fifty lakhs) is what he wants.
    PS. You are also talking about future and not of today. So dont tell others as if I am waiting even with sellers available. I cant sell one ground in Saligramam right across Arcot road for 1.5C that crooks like you ask. I will quote 3C! Gotcha?
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  • Originally Posted by wiseman
    Folks,



    Third, no one really knows what the markets are all about. So, if you wait to know about it like Nats, you will forever wait to trade and not make any money at all - just like him who has turned away so many buyers for his property because they did not quote what he wanted. And even with an imperfect knowledge of he markets, somehow I seem to be making over 100% per month in the markets. I like it, don't you? :D

    cheers

    BTW Wisey why did you not sell your RK Salai land or your RE in Kormangala (2 grounds). Answer that and then talk about whether I sold my land or not!
    Let us not bother about my understanding of markets but let us find out why you ask others to sell when you are not selling in the first place. Arent you a terrible liar?
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  • How are you so sure I did not sell? :)

    Originally Posted by Natarajg007
    BTW Wisey why did you not sell your RK Salai land or your RE in Kormangala (2 grounds). Answer that and then talk about whether I sold my land or not!
    Let us not bother about my understanding of markets but let us find out why you ask others to sell when you are not selling in the first place. Arent you a terrible liar?


    The problem with conceited people like you Nats is that you think that there is only one way to think and thats yours. So, there is nothing more to be known or learnt because you already know everything, right?

    Well, brilliant man, how did you arrive at the deduction that I have not sold either or both? Some more of your mathematics? :D

    cheers
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  • Originally Posted by wiseman
    The problem with conceited people like you Nats is that you think that there is only one way to think and thats yours. So, there is nothing more to be known or learnt because you already know everything, right?

    Well, brilliant man, how did you arrive at the deduction that I have not sold either or both? Some more of your mathematics? :D

    cheers

    Why dont you tell us if you sold them? Now this is a double joke? One you own property and two you sold them that too overnight. You mentioned that you own Koramangala property in the last 10 days. You sold them suddenly in the past 10 days.
    I know you lie. However the limits of your lies is making you suitable for Vijay awards! ROTFL.
    PS. I will ask Vijay TV to award you with the BIGGEST LIAR OF THE CENTURY AWARD.

    Given below is the post from Wiseman not too long ago. JUST A WEEK AGO. I think with this I will like to refer to him as LIARMAN only!

    Originally Posted by wiseman ="http://www.indianrealestateforum.com/chennai/t-better-to-invest-in-stocks-than-real-estate-4886-post23251.html#post23251"]
    Nats,


    I could buy a 2400SFt plot (land) around half a km from the Koramangala BDA complex for less than 15k - 4 months gross pay for me and I got 2 of them! :D
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