Wednesday, July 09, 2008

Prices correcting in Hyderabad - Maytas

Here is something I received in the mail.The slowdown is coming. The combined offer translates to over 15% drop in the cost of the house. Not bad for a start. Last year this property was quoted at 3200 which means there is no appreciation over the past year, Actually people who have bought have lost 10% of the down payment. Also such big projects get delayed by atleast 1 year.
For the long term resident, 2800 seems a good entry price. still 15% lower then what is quoted.
Fabulous offer for top tier corporates employeesMaytas Properties has developed 400 acres of land at Bachupally, which is located just 10 km from Hi-tech city. The name of the venture is Maytas Hill County. In this spectacular venture we have a world-class township spread over 85 acres which has a decent mix of Villas, Independent Bungalows & Semi-furnished Apartments. Government has approved to develop an IT Special Economic Zone in 75 acres adjacent to the Residential Township, this helps the residents can ‘Walk to Work’ in the IT SEZ. As the bookings are going berserk we have come up with a COMBO offer for top tier corporates.
Here is COMBO offer which comes in with:
PRE-EMI offer & Corporate offer
PRE-EMIis a fantastic mode of payment where the EMI need not be paid till the property possession is taken ovev, the Interest to the banker during this period will be borne by Maytas. Infact the interest component will be paid on behalf of the customer. (This is applicable for applicants who avail Bank Loan for purchasing the property with us).
Corporate offercomes with Rs.200/- less than the regular price (per square feet). This is offered to the Employees of Corporate companies which have been listed by us.
Regular Price : Rs. 3699 per sft
Corporate offer : Rs. 3499 per sft


Anonymous said...

It is a matter on months that prices in suburbs will be in a freefall. Suburbs of all big cities will be hit first and hard.
I predict that the suburbs would be down close to 50% of their current value in 6-8 months. Which means this particular place as mentioned in the article would be around Rs. 1600-1800 psft. At the same time the cities would show less declines of upto 20-25%.

The second phase would be when there would be no one to buy the suburb properties and cities would take 50% hit. This I predict to happen in 1-2 years.

Happy buying and selling. Cash is king.

Anonymous said...

construction cost is around 1200-1500 rs so I think anything 1800 is not possible unless construction cost goes below 1k. however I think 2700 is possible here if we have a credit crunch. Time will tell but the good thing is that prices have dropped. so the wait has been worth waiting for.

Anonymous said...

sabar ka phal meetha hota hai.

Once it all slows, construction cost will also go down by 50%. There won't be any shortage of cement or other building material.

This is just the beginning and when it has reached bottom, masses would get so burnt that they would stay away from investing in property for a while.

Anonymous said...

People have been saying that US had subprime loan issues and their bubble popped.

Well, I would say that subprime is just a small part of the overall problem US had. The main problem the whole thing crashed is GREED. Everyone from banks to loan officers to realtors to appraisers and above all buyers were all greedy. You can now judge yourself if this phenomenon is there in India? It was the same in UK and and the bubble is bursting, same is Australia, Korea, South Africa, Australia, Spain and a lot of other countries. It was a worldwide GREED phenomenon triggered by low interest rates. Thanks to Alan Greenspan for his vision and wisdom that gave world this massive issue to deal with.

Anyway, the slump in US started in 2006 and is not even half way yet. To all bloggers, it takes time for RE to adjust and not like stock market. Sensex will go down by 700 points today. Watch it and let me know. Ashish doesn't like me.

Happy buying and selling.

Anonymous said...

The big difference with India was the creation of hundreds and thousands of jobs thanks to outsoucing. This was the perfect storm which benefitted the builders the most, where they could hike prices and there was demand ready to support it thanks to cheap loans. The era of cheap money has ended and so will prices will return to mean over a period of time. While we may not revisit 2003 prices one can get deals if they are patient and get distress sales which will soon be on the horizon

Anonymous said...

"One may not visit 2003 prices"

Well, this is what everyone used to say in US. Buy now or be priced out of the market. People all over were overjoyed and spending their new found fortune.

Everyone was of the opinion that their place will not fall as it is different. Well, it is really bad out there in US. What India is seeing has already happened in US in the past few years and what US is seeing now is coming to India and elsewhere in the world. People are just throwing the keys back to the bank and walking out.

You are right that jobs were created and money tap from US was open. But average household income in US is close to $50,000 and avg. house prices are $280,000.

In India avg. household income is $2,000 and house prices are $120,000. I think it is going to be even worse than US in India.

And when financial companies in US go bankrupt in the near future, there would be a 50% impact on outsourcing of US jobs. Moreover the use of illegal means by big Indian IT companies like illegal use of B1-B2 visa is under tight scrutiny and a lot of other violations.

Moreover, if US consumers lose money, they drive 75% of US economy and a major portion of Chinese and now Indian IT economy,
all will come to a halt. Trust me, US consumers don't have enough money nowdays and a lot of new stores, Malls and chain stores are going bankrupt. Even Starbucks is closing a lot of their stores. If US consumer activity drops, it will imapact outsourcing big time.

And if Obama wins in November, Indian economy is toast to a great extent.

Anonymous said...

Prices in US are already at 2002 levels in a lot of areas. Suburbs have lost close to 50% in value.

Please like California, Detroit, Phoenix and FLorida are seeing maximum drops. For example a house selling for $600,000 in 2006 in Sacremento, California, is now on the market for $275,000 and no takers for this house also at this price.
Now you can analyse this situation from India's perspective. Staying in denial mode would be there for a lot of people for at least a year and a half. People in US started believing the downturn only by 2008 and the slump started in late 2006. Now they are in angry mode.
India still has to pass the denial mode before they get to angry mode. And there would be disaster.

Anonymous said...

there would be massive layoffs of indian tech coolies in next 1-2 yrs. This will get very interesting indeed.
Indian gangadins have been so overexuberant now a days, it is not even funny.

Anonymous said...

Everyone is soooo desperate for decline. Its not happening no matter how wild your imgination goes. There is no hard evidence.

Anonymous said...

To the Anon above,
You are still in denial mode. Wait till the shit hits the fan.

Ok, How much is the Sensex going to go down today? Since you know everything you can tell this also.
I'll tell you at least 500 point down. Why and how? Use your brain that how much India is now dependent on US?

Anonymous said...

"Everyone is soooo desperate for decline. Its not happening no matter how wild your imgination goes. "


Happy buying and selling. Cash is king.

Anonymous said...

Everyone is soooo desperate for decline. Its not happening no matter how wild your imgination goes.

I don't think people are desperate for a decline. Everyone here wants properties and all investments to do well. The problem is that anything that goes up too fast without any real fundamentals is risky and people are afraid of that. People don't like surprises especially when people in India have not seen many downturns and layoffs.

Jab gaand lagegi, you will feel the hard evidence in your arse.

Anonymous said...

"You are still in denial mode. Wait till the shit hits the fan.

Ok, How much is the Sensex going to go down today? Since you know everything you can tell this also.
I'll tell you at least 500 point down. Why and how? Use your brain that how much India is now dependent on US?"

It is you who knows everything. you know shit will hit the fan :-)
There will be deline in home value
sensex down by 500

But no matter what you say there is no big decline in home values coming up.

Anonymous said...

Hey Anon,
There is no use fighting with me.
Why don't you buy some more properties and tell all your friends and relatives to the same.

Good for the bubble. Time will tell what is coming. You are here and I'm here. Just wait and watch.

Anonymous said...

ok, just wait and watch for the nonexisting bubble to pop. Many people kept doing it from 2005. Ask you friends relatives to sell their houses of course if they have any. Then they can live in my houses on rent to watch the buble grow big and bigger from the terrace. Then They can buy back there flats at much much higher price from me later on. Once they are done buying then only bubble will definitely pop ;-)

Vik said...


Lets not fight. The blog was started in dec 2005 when I first noticed rapidly increasing prices in Mumbai. I then realised that this was not limited to Mumbai but all over the country, whether it was Pune, Bangalore, Delhi or Ludhiana. One place where prices didn't jump is Kolkatta and Chennai in 2006. But in 2007 Chennai has taken off and prices have gone thru the roof as well. I think pricing without fundamentals is the reason for the bubble. The debate is affordability. If one cannot afford 140$ oil, then they surely cannot afford 1 cr apartments. The money has to come from somewhere. There will be many people who can afford 1cr apts but that number is still very low as compared to the those who can afford 25L apartments. If the 1cr apartments have something special, many of these consider the community to be of similar affluence level, for e.g. Palm meadows in Bangalore. These communes will hold value. But expecting every apt/villa plot of land to be similar is the reason for the bubble. Realtors quote any value without fundamentals. Apartments in Mumbai are priced at 1cr when residents in those buildings make an annual average salary of 5L. Betweeen 1996-2003 Mumbai prices didn't move at all and all new construction was crappy. Since 2003 we have been seeing good quality buildings but those have priced out mostly everyone. Anyone buying a 1cr apartment please post your experience now. I'd like to see how many readers who read this blog and argue on the negatives are willing to put their money where their mouth is.

Anonymous said...

"Ok, How much is the Sensex going to go down today? Since you know everything you can tell this also.
I'll tell you at least 500 point down. Why and how? Use your brain that how much India is now dependent on US?"

sensex closed down 38 points but you said it will be at least 500 points down!!!

If this is your ratio then when you say home prices will decline 50% I think it would be actually 3.8%, or not?

I do not have super brains like you but know one fact that is never be overconfident when you guess the rise and fall of sensex or home price or anything else not in your control.

Now cheer because such things happen in life. Better luck tomorrow ...

Anonymous said...

Don't worry. It is coming. Stock market is also full of fools like you. Didn't it go down from 22K level to current 13K level and heading towards 10K level.

There are speculators everywhere. I'm not against growth or increase in investments. But any investment done without fundamentals supporting and masses buying it leads to bubbles.

You don't have to believe it. You may want to buy some more flats and wait for them to double in another 2-3 years. Good luck.

Anonymous said...

I remember all those "stories" about how the India growth "story" was intact. Not sure which novel they were reading. Even until December 2007, the market manipulators, including brokerages like Kotak Mahindra, DSP Merrill Lynch, Societe Generale, and others were claiming that the Sensex would go up to 25000, and that doomsayers saying the Indian market was overvalued were plainly ignorant and did not have any shred of evidence. Here are some links and some quotes below:

and many others. Some were even claiming that the Sensex would touch 30,000 soon! Demographics, India Growth Story, Geopolitical events, outsourcing, insourcing, globalization, and other reasons were touted as justifying the excessive P/E ratios of Indian companies. Most were extrapolating the spectacular 18% growth in earnings for Indian companies in 2007 well into the future. I had withdrawn from Indian stocks back in February 2007 itself, fearing they were overvalued, and were going to go down by 40% in a couple of months. Yes, the bubble did go on for longer than that, but eventually every market reverts to the fundamentals, no matter the propaganda and justifications. It is just simple arithmetic. Now, I do not claim that the Sensex will never touch 25,000. It may. If Indian companies keep growing earnings at 20% every year for the next 4 years, sure the Sensex could be at 25,000 and still be fairly valued.

Rates quoted by builders have more than doubled in the last 3 years, while wages for white collar professionals have only gone up by 80% at most. This is based on the salary surveys in 2003 and 2007 for the metros. Metro apartment rates were taken from the Business Section of Deccan Herald. People should not expect this rate of wage growth to continue well into the future.
They should not forget that unlike investing in the stock market, there is a significant amount of leverage that a white collar professional commits to when buying a house with a bank loan. For rich people who pay cash for their houses, of course none of the cautions apply. They are probably not wage earners anyway.

The very fact that investors like Ashish, Boss and others are now out in full force to start offering justifications on why property prices will continue appreciating should be a warning to end users. Buyer beware.

Anonymous said...

Western countries ne Murgi India ko itna khila-2 kar pehle stocks mein mota kiya (22k levels) aur phir dheere-2 halaal kar rahe hain.

All the institutional investors are using retirement funds of US tax payers and investing in emerging markets. The 401 K statements for this quarter are so bad that these institutional investors will have to pull their money out of risky markets and put it back in Dow/Nasdaq.

Similarly, RE ka mrga bahut mota ho gaya hai. Uska halaal hone ka time aa raha hai.

The Boss said...

One peculiar difference between stock market advance and real estate gains of last few years is the perception of interested parties. The stock rally was uniformly loved by all and sundry. The calls of 25000 and 30000 were very common and these targets seemed inevitable. Although the stock market came down because of a host of global and domestic factors, this extreme bullish sentiment displayed by investors accentuated the fall. In real estate, the scenario is quite different. If you exclude builders and major RE companies, a great majority of people are unanimous in the call for a crash/big correction and have been predicting it almost for a couple of years now. Many of the doomsdayers and naysayers are actually very insecure fence sitters providing vital support for the prices as they succumb one by one and keep buying homes. And this crowd is very big, just pay attention to all that noise. So if it is a bubble, which I doubt it is, it can last much, much longer than anyone can endure. Fence sitters should make a note of it. Although the property rates have doubled, or tripled in some cases, over last 3-4 years, the sensex also has gone from 3000 to 21000 and currently it is at 13000. The wages have been growing for a decade and real estate started playing catchup only in 2003-2004. I don't intend to advise investors/speculators one way or the other. I respect decision of people to stay on rent if the down payment/EMI is too much for them. But for the large number of people who can afford to buy a house but have turned into fence sitters fed on false hopes of a serious correction, only frustration and pain is in store.

Anonymous said...

Tu ghonchu hi rahega.

What are you bloody trying to prove? You like to buy, then keep buying.

Anonymous said...

Well well, the Sensex did drop by almost 500 points today. Good prediction Anon. Looking at the market fundamentals, it appears that the Sensex is still overvalued by 20%. So, it would be fairly valued if it drops to 11K. The market always corrects eventually. Industrial growth has slowed to 3.8% last quarter. If companies were to grow annual earnings at 20% every year, it would mean that in 4 years, their earnings would double, thus justifying a doubling of the Sensex to 25K. Simple arithmetic.

The correction in the housing market has started. In Bangalore, the Prestige Shantiniketan apartments at Whitefield is dropping in price from Rs 3200 psf to Rs 2850 psf, as a relative of mine negotiated hard yesterday. Even then, he is considering waiting for some more time. This is a 15% correction. So it looks like people like "the Boss" and Ashish, who claim that there will be no correction, are living in denial. I believe, by looking at wage/price fundamentals, there is an additional correction of 15-20% that my relative is hoping for.
The annual increment in Bangalore IT companies is coming down this year into the single digit percentages. House price growth has overshot wage growth by at least 40% over the last 3-4 years. Buyer beware.

On the other hand, for people in Bangalore who are interested in Prestige Shantiniketan, please start negotiating hard, it looks like they are now willing to deal :-)


Anonymous said...

I should state that I am a neutral observer in all this. I am not planning to buy real estate for another 8-10 years at least. Nor do I have any real estate to sell. It is just that my interest got piqued when I noticed that apt prices in India have started approaching US prices. Having been to the US often, and knowing the standard of living in the US and India, I find this to be rather incongruous. Hence, I decided to observe the situation and do some basic analysis and then comment.

I do not have any real agenda. I think in the end, every individual should judge his own risk tolerance, and do the arithmetic themselves before entering or exiting the property market. Instead of purely relying on the internet for advice, people should do their homework.


Anonymous said...

One other note. It is not that I am against builders. I do think it is important that the builders make profits. This will allow them to invest in new technology, expand their business and participate in the development of India.

However, whenever things become too skewed one way or the other, for example when ordinary people are going deeper and deeper into debt, it is not good either. For the country overall to do well, both users as well as producers should find a balance.


Anonymous said...

Observer anonymous is very happy because sensex's 500 point fall or will that be 456? Small detail so we can ignore this. We can again see the original prediction :-

"Ok, How much is the Sensex going to go down today? Since you know everything you can tell this also.
I'll tell you at least 500 point down. Why and how? Use your brain that how much India is now dependent on US?"

The day of sensex going down and total number of points in the prediction was wrong as I showed yesterday. But small detail so let us ignore.....
The poster said yesterday sensex will fall because US was down. Didn't happen. Yesterday night US index was positive still our sensex falls. why you ask?

Too high inflation number reported
Slow growth in industrail sector reported
Infosys result OK but market still disappointed, all IT stcks fall

None of this got predicted by any correction crowd but they are very busy taking credit for that. Now everyone is jumping up and down coz they see few projects in few citis offering discounts. That happens all the time.I had seen one project in Delhi NCR in 05. Even if the prices were booming everywhere they had to offer discounts coz their 1 st phase was useless, people were complaining and none was booking in later phases. After selling for low price and promising better quality they could sell all. It is still a shit complex and they have no resale value. Few examples like this do not prove anything.

Here is my prediction, sensex will go up 300 points on Monday. Even if it does not go up Monday it can still happen next day, week or even next year. Then I am very confident observer anonymous will say "Shabbash, Bahot Khub" to me. A preiction is a prediction who cares for timing ...

Anonymous said...

If oil prices keep appreciating, that is bad. If vegetable prices keep appreciating that is bad. If wheat and rice prices keep appreciating that is bad. If electricity charges, telephone call charges, water charges, education costs keep appreciating, that is bad.

So why would house prices appreciating every year be a good thing for the country?


Anonymous said...

Abe Ullu ANon,
Tu gahda hi rahega. On what basis Sensex will go up by 300 points next week.

Sensex will be down 1000 points next week. There is a financial slaughter going on in the world markets.

The only point I wanted to make was the way Indian stocks behave more or less the way US stocks do, similar would be the housing trend. There ia a major worldwide liquidation coming.

No need to panic yet for Indians as it would still take months for it to happen in India.

Anonymous said...

Lehman Brothers ki maa chudne wali hai. That stock will be worth pennies soon.

These are the companies who have employed all these incompetent IIM MBAs who are in their own world.

Massive layoffs are coming in India. Just wait and watch. There will be a bloodbath in Indian housing and blame games.

Anonymous said...

All these overpaid MBA's from Harvard and Stanford are useless in their jobs. If they are so smart, how come they have caused their own ships to sink. Yesterday it was Bear Stearns, Today its Fannie/Freedie. Tomorrow Wachovia, Washington mutual. I think wall st is going to bleed jobs and the Indian stock market MBA's are about to get their bout of the US flu.

Anonymous said...

US economy is expected to lose 200,000 jobs per month starting in winter 2008.

I think most MBAs and investment folks are interested in short term profit and quick money. They come up with all these ponzi schemes or I would say scams to rip people off their money. And after the 1980deregulation of US industry, they are like unleashed dogs trying to bite everything. UD feds are now contemplating more regulations to leash these educated unethical idiots. Corporate America even sold the US to China. Businesses don't care about country or their citizens. Their prime focus is money, money and money.

It is coming back to bite US corporates in their arse. All those hefty pay packets for CEOs would soon be history. And all those $200K salaries for investment bankers would be gone.

It would be interesting to watch the state of affairs over in the US and here in India.

I'm sure Ashish and Boss are trying to unload their properties.
Shayad unko akal aa rahi hai. Nahin to 3-4 months mein akal aa jayegi.

Anonymous said...

sensex would dip down to 3000 in 2 yrs.
massive layoffs in IT/BPO and Finance sector will kill the buoyancy that gaggle of mungerilals felt over last 5 yrs of credit orgy unleashed by their western patrons.
indian govt clowns would be aghast at the carnage and public outcry and renewed calls for public sector jobs where at least mugerilals had security (of course,at the expense of 80% of poor gangadins)..
some companies like Tata motors will go bankrupt as their debts would exceed assets

Anonymous said...

Mujhe lag raha hai ki bhuchal aane wala hai India mein.

Sab kuch easily mil raha tha. I met some people in the last few weeks around Delhi, mostly were in decent jobs earning around 30-40lacs p.a. working with GE or other foreign Co. Most of them were basically Chutiyas. Apni aukat se jyada paisa kama rahe hain log. The guy I met from GE says that housing is good because of some games in Delhi on 2010 and would remain like that till after games.
I asked him about his education. He said he did his BTech from IIT Kanpur and MBA from IIM-A.

I told him that both your degrees should be forfeited. Such a mother fucker that he didn't have a clue of world markets and overall macro economy. A lot of Indian MNCs are full of fools like these.

Anonymous said...

Koi bhuchal nahi aya. Jis purane, phatichar makan mein tu kiraye pe rahta hai, uski neev dhah rahi hai. Koi naya achcha sa ghar khareed le varna roj bhuchal ayega. Aukat se jyada paisa kise bhi nahi milta. Jisko aukat ke hisab se kum paisa milta hai, use jalan jaroor hoti hai

Anonymous said...

Jaise behanchood tujhe ho rahi hai.

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Anonymous said...

So, another boomer (Realty Rider)joins the league. Lets see what kind of rabbits he keeps pulling out of his hat...

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