If this is the situation,why RE prices are not crashing
yes..donno why RE prices arent crashing...the reason i am thinking is all these RE companies when they start their project, get the seed capital from Big Funds and Venture Capitalists...(not necessarily the legal type VCs that you and I know about..most likely black money too)..they wudnt want the builder to reduce the price lesser than what they initially pumped in..so the builder is less likely to reduce prices even if economics dictate other wise as long as NRIs and others lap up the inventory in a trickle...not sure how or when it wud stop. The RE prices cannot go on increasing ..therez a limit on how much the salaries could go up to in India even for IT...In the US there are lay offs..salary freezes..cost cuts..etc..not sure how long the music wud last in India though...my firm belief its gonna happen soon...my 2 cents..othere pls correct me if i am wrong
February 25, 2012:
A realty report released by Pune-based Gera Developers, which surveyed 1685 projects across the city, indicates that till end of December 2011, there were 178,775 apartments at various stages of construction, of which around 20 per cent (36,124) were unsold. The comparable percentage in June 2011 was 22 per cent.
According to the Pune Realty Report 2012, the maximum number of unsold apartments – 58 per cent – is in the sub-1000 sq ft range, while 81 per cent of the stock is in the less-than-Rs 50 lakh cost bracket. The survey, which covers 20 micro-markets across the city, shows that the average price per sq ft ranges from Rs 2199 in Chakan to Rs 4961 in Baner. It also indicates 11.63 per cent appreciation since June 2011 in the average price per sq ft across the city.
The report places the highest number of new launches in Wagholi (3125), followed by Sinhagad Road, while the IT hub Hinjewadi ranks penultimate with 702 new units. Summarising the Pune market scenario, Mr Rohit Gera, Managing Director, Gera Developers, says, “It is evident home buying hasn't come down and the real estate sector is supported by active demand participation.”
Sales registrations down 13% YoY at 4,427
Slew of launches expected post clarity on new DCR rules and conclusion of BMC
Large supply build-up from new launches could trigger the much awaited price
Lease registrations up 10% YoY to 9,111
Large pipeline of launches could trigger much awaited price fall
Jan 2012 sales registrations are down 13% YoY and 25% MoM to 4,427. Post the
spike witnessed in December, sales registration have reverted this month to ~4000-
4500 levels seen in Jun-Nov 2011.
The city’s realty scenario is interestingly poised post the conclusion of the BMC
elections and clarity on new DCR rules emerging in the last two months. A number of
projects which were stuck up at the approval stage in the last year are likely to be
cleared, paving way for a large number of launches hitting the market. At a time
when new launches during the festive season received a tepid response as
affordability issues continue, a large stock of new supply could act as the trigger for
the much anticipated price reduction that buyers have been waiting for in the
Mumbai realty market.
Also, we could see more land deals happening as developers are now sure with the
introduction of the new DCR of how much they can build and sell. We are already
seeing media reports of possible land deals by developers like HDIL who are looking
to sell off land to pare debt levels.
In terms of lease transactions, December numbers stood at 9,111, exhibiting a
growth of 10% YoY and 8% MoM.
Well I have a concern with these kinda analysis ... They have to be taken with a pinch of salt... I think problem in gurgaon not lower absorption rather absorption by mainly investors which is leading to snowballing of price bubble ... real buyers are shunning the market which is simply become unaffordable for them....it would be matter of time before investors are also crowded out... It has already happened Mumbai... Gurgaon is bound to follow unless your hypothesis is that prices will keep rising till perpetuity @15%-20% atleast...I certainly do not subscribe to that hypothesis..
PS: I am not a proponent of domesday scenario
IMHO, false statistcis are more dangerous than no statistics ... the statistics presented here raise some important questions -
1 - Did Mumbai see a price drop of nearly 10% around Oct - Dec 2010? (and this is average drop .. not any project specific drops)
2 - Mumbai RE has been priced at Rs5630 psft for Aug2011????? and it is only 26% more than Gurgaon??? Unless they are treating Dahisar and Virar as MMR .. this figure of 5.6K is unbelievable (Mumbai friends may please ratify)
3 - The entire MMR (with a population of 1.8crores) sees an absorption of 5.8mn sqft ... Gurgaon with a population of between 15-20lakhs absorbs 5.1mn sqft??