Sunday, January 11, 2009

Property agents turn auto drivers and fish sellers

The rats are the first to escape a sinking ship. Who will be the last man standing ?? Speculators, black money lenders, banks or builders ?

Ground realty put him in the rickshaw driver's seat

The Metro project and recession brought a slow death to Sediq Sharief's real estate business, reports Malvika Tegta

It's 10.30 in the night. We size up a "gang" of auto drivers from a distance, ready for tough negotiation. A young man of 24 gawkily takes visual cues from the seniors and gestures at us to hop into his autorickshaw. But the way Sediq Sharief double-checks directions is a giveaway: he is just two months into the profession and still discovering the city's insides. Almost a year ago, Sediq lived without a care, worked on an average of 10 hours a month and made a neat Rs20,000. That was till the real estate sector slumped, as the airport went the Devanahalli way, the Metro branched into the interiors of the city and the recession dealt the final blow.

Sediq's smooth moving real estate business soon got traded with the auto. Today the shutters are down on his five-year-old office on Artillery Road and its signboard gathers dust in some distant garage. He is out driving the auto from six in the morning to 12 noon and then again four in the afternoon to one in the night. At the end of the grind, he is left with a paltry Rs150-200 to live another day. But the one thing that has remained constant "since childhood" is the need to be his own boss. "I could have done other jobs too, but when you drive an auto, there's no one telling you what to do," he says. Property rates in his domain – Airport Road, Cambridge Layout, Koramangala, Ulsoor and Indiranagar — have crashed by "close to 50%." "There was a time when there were no sellers and only buyers; today there are only sellers and no buyers," he says. Call centre employees, the chunk of his clientele, went from "preferring to stay in middle class areas rather than high-end neighbourhoods like Airport Road or Koramangala" to not calling at all.

Metro only made things worse. "Four agents and I had sealed a deal for Rs65 crore. I would have got close to Rs10 lakh as commission in that one deal alone, but when the government marked a part of the property to be cut later for the Metro, the buyer opted out," he says. Sediq's business had taken him a year to set up, all on his own. "Dealing in houses requires links and a strong network," he says. After one year of getting into the chain of brokers, he said his life was free and there was never a thought spared on how much he spent in a go. Now he feels chained and responsible to earn for the other four members of his family, only one of whom works. Unlike the days when he used to wake up at 10, he now gets up at 5.30 am and goes to bed at 1.30 am, the little sleep he manages being a troubled one at that. He has parted ways with five of his friends who "began to look down on him". As an auto driver, "everyone considers you dirt and even abuses you."

Other switchovers
Sediq Sharief isn't alone in this. Five friends of his have either taken to driving autos, welding, driving oil carriers or opening up tea stalls.

Munnabhai, a broker friend from Coles Park, has left for Bombay to open a boutique there. Kumar, who used to deal in properties worth "lakhs and crores", now runs a "chai shop". Syeed Rehan, known famously on Artillery Road as Mahboob Bhai, now sells fish. "After my shop closed, my income has gone down by Rs10,000-15,000 a month," says Syeed. "Everything has changed, par ghar to chalana hai nahin to bhooke marenge."

Abdul Qader, a property dealer from Ulsoor, has also turned to auto driving. "I earn close to Rs12,000 a month, out of which I pay Rs6,600 monthly as rent for my auto," he says. He had also invested Rs5,00,000 that he got from a property deal in a property, the price of which fell, fetching him a payback of Rs2.5 lakh. The news in the market is that things won't look up anytime before five years. "Par ummeed hai," says Mahboob Bhai.


Anonymous said...

more harikari time for the mungerilal yuppi (but now phatti) young ones.

Anonymous said...

Would the laid off IT guys also drive auto rickshaws and sell fish?

Anonymous said...

Off course, IT guys will also join you & will give you tough in auto rickshaws & fish business. So don’t think it’s going to be easy.

Anonymous said...

Mega land deals did Ramalinga Raju in
K V RamanaMonday, January 12, 2009 4:

Hyderabad: In the first indication yet that ill-advised land deals may have done him in, disgraced former chairman of Satyam Computer Services B Ramalinga Raju reportedly told police that he was big time into the property market. When prices fell, he was trapped.

According to information pieced together by DNA from sources, Raju told the police that property deals had squeezed all his resources. Like any other realty player, Raju, too, joined hands with friends and relatives tobuy large chunks of real estate.

When prices started weakening, his partnerswere keen on selling off the property, but he was still interested in holding on. He, therefore, paid off his partners and took control of the properties completely.The probe officers are trying to check how much of this money came from his own resources, and how much from Maytas or Satyam Computer Services.

Raju probably assumed that he would be able to return the funds if the property market revived. But when it moved further southwards, he was not in a position to liquidate the assets and recover his investments. This is what led to a severe cash crunch.

Sources said the interrogators had recorded all this in the remand sheet, which was produced before the magistrate on Saturday. This couldn't be confirmed independently though.

Anonymous said...

TOI Article - Unitech banks on Rs 800-cr loan rejig

In Talks With PSBs; Cracks Under Rs 2,500-Cr Debt

Sanjeev Choudhary NEW DELHI

UNITECH, India’s second largest listed real estate company, is looking at restructuring a Rs 800-crore loan from public sector banks, as it attempts to save itself from sinking under a huge debt burden. The company is pinning its hopes on debt restructuring, asset and stake sales to private equity (PE) funds to pay a debt of Rs 2,500 crore, which is due by March ’09.

“We are in discussions with public sector banks for rescheduling our loans,” Unitech head of strategy and planning, R Nagraju, told ET. Another company executive, requesting anonymity, said Unitech was seeking to restructure a loan of over Rs 800 crore.

The Reserve Bank of India (RBI) recently allowed banks to restructure loans taken for commercial real estate without turning them into non-performing assets (NPAs). The RBI directive had come following intense lobbying by realty firms, which were finding it difficult to service debt, as sales had dried up and fresh debt was not available.

Most developers are hopeful that banks will reschedule their loans. “It makes sense for banks to reschedule loans, as it will help them show lower NPAs on their books. If banks repossess land, given as collateral by developers, they may get into trouble,” says a Delhi-based mid-sized developer, who didn’t want to be named. “Land in most cases was overvalued, and prices have been falling since the loans were disbursed. Moreover, in a market where you have no buyer for land, banks are unlikely to recover even half their cost,” the developer added.


Anonymous said...

Looks like the Vulture guaranty of minimum 50% price cut is getting implemented in market.

Thanks VIK for the article.

Unitech banks on Rs 800-cr loan rejig[ref : ET]
The above snippet also confirms the 50% price drop in land prices.

Agree, the market will take some time to implement it in all areas & locality.

So what‘s ahead? Economy is not even at it’s bottom, more pain is ahead for everybody. Though the epicenter of crisis was RE & credit market, it has affected every sector of economy. Even the honest peoples in other sectors who had nothing to do with RE or financial leverage are suffering due to this crisis.

So guys let it fall then only pick up, minimum 50% price cut is guaranty.


Anonymous said...

tech workers are back to hard reality of india...

OT: Satyam is just the tip of the iceberg. Reliance has been cooking books for years.. Of course all realestate bullcrap co like DLF/Unnitech they all either be banktupt or very small entities.
Do not forget Tata motors that is so overextended, it could really falter.
2-4% growth will be like a huge SLAP back to reality for this 5% of yuppie indians who were in mugerilal trance gorging easy money. Rest of the oor poulation couldn't care less

Anonymous said...

Don'e forget PATNI computers. They are also in the same league as Satyam in terms of corruption.

Anonymous said...

A wake-up call for ALL OF US who have been indulging in cheap credit and forgotten about the future obligations.

Credit dries up, tears flow - Triple shock — no money, no credit, no jobs

Hyderabad, Jan. 11: Humiliating warnings from banks not to default on loans. Suddenly deactivated credit cards causing embarrassment at shops and malls.

At the Satyam office coffee shop last evening, the women wept openly and their male colleagues blinked back tears as they spoke of the ways their daily lives had already taken a hit amid the uncertainty about their jobs and future.

Many banks and credit-card agencies have apparently deactivated Satyam employees’ cards amid rumours that the company may not be able to pay salaries for long. Others have set stringent limits.

Vinod Mendi had bought CDs and a CD player at a mall in the morning. When he swiped his card, the authorisation didn’t come. He can’t forget the look on the shop assistant’s face. “I was squirming. I had to call up a friend and ask him to bring me some money,” he said.

“My banks are not authorising payments through my debit and credit cards for purchases above Rs 3,000.”

Even eateries and bars in Hyderabad’s IT hub are refusing credit. “How can we, when it’s clear they can’t pay their dues by month-end?” said bar owner Raghubir Singh.

Since Friday, most Satyam employees who had taken house or car loans have received calls and text messages from banks warning against payment delay or default. Even the vendors who sold pani puri and dahi vada outside the complex have vanished.

Anonymous said...

Tax cuts will boost real estate: PBAB

Saturday, January 10th, 2009 AT 10:01 PM
Tags: Promoters and Builders Association of Pune, Pune-Real estate
PUNE: The Promoters and Builders Association of Pune (PBAP) on Friday claimed that the prevailing housing costs were at its lowest level and any further reduction in rates would be possible only when the authorities reduced taxation and premium charges and pave way for affordable housing.

“In the last six months the cost of houses have come down substantially and currently it is at the lowest level. Further reduction in costs is viable if the State government and the PMC reduce their taxes and premium charges respectively,” PBAP president Lalit Kumar Jain said,

Giving the break-up of the tax structure for construction industry in Maharashtra, Jain said that the item cost for one sq ft is Rs 1,977. This cost involves land cost of Rs 600 per sq ft, material (Rs 773), labour charges and overheads (Rs 400) and profit available for developer (Rs 204). This, when added with various taxes amounting to Rs 1,023 makes total cost for a tenement Rs 3,000 per sq ft.

Citing from a survey report of 458 ongoing projects in the city brought out by the PBAP for its members, Jain said the if the stock available in the market was demarcated budgetwise, the maximum stock of around 61 per cent was available in the bracket till 25 lakh, 50 per cent in bracket of 25 to 40 lakh, 30 per cent in bracket of 40 to 60 lack and 31 per cent in the bracket of above 60 lakh. Overall maximum stock available is in the bracket of below 40 lakh.

The report has divided Pune into four zones. Zone 1 covered Undri, Manjri, Hadapsar, Fatimanagar, Wanowrie, Kondhwa and Katraj. Here 78 projects were surveyed and had a total unsold unit of 41 pc where the maximum stock was in the range of less than 25 lakh i.e. 51 per cent of available stocks.

In Zone 2, areas covered were Pimple-Nilakh, Aundh, Baner, Pashan, Balewadi, Wakad, Pimple Saudagar, PCMC and Hinjewadi. Projects surveyed in these locations were 186 and total unsold unit of 47 per cent. In this Zone, maximum stock unsold is in the bracket of up to 40 lakh, which is around 52 pc of available stock.

In Zone 3, areas covered were Vimannagar, Vishrantwadi, Wagholi, Wadgaonsheri, Kharadi, Kalyaninagar, Boat club/Koregaon Park, Mundhwa, Magarpatta, Sopanbaugh and City area. In this Zone total number of projects surveyed was 110 and total unsold stock was 34 per cent.

Zone 4 comprised of Kothrud, Erandwane, Warje, Sinhgad road, Bavdhan, and Hingne. In this Zone total projects surveyed was 110 and total unsold stock was 49 per cent.

He said with every percentage decrease in home loan interest rates there is 14 per cent increase in registration.

Anonymous said...

UK investor to buy 86 units from Sunil Mantri Realty

S. Shanker

Mumbai, Jan. 10 In what appears to be first signs of a revival of foreign investors’ interest in Indian realty after a prolonged drought, a UK-based FI has agreed to purchase 86 units from Mumbai-based Sunil Mantri Realty for about Rs 50 crore.

The units comprise a single tower and are part of a 900-unit project the realty firm is developing at Goregaon in Mumbai.

Mr Manish Grover, Vice-President , Marketing, Sunil Mantri Realty, said the buyer intended the purchase for investment. He was not ready to divulge any names.

Mr Grover said FI interest seems to be returning and this investor was among the many who had contacted him. “One should understand that such investors apparently understand that market sentiments are down as well as prices,” he said, adding that most of them were forthright in demanding over 30 per cent discount on the price.

The Mantri Group has finalised the sale close to its retail price of Rs 6,050 a square foot.

About 60 per cent of the project has been sold and there appears to a jostle among FIs for the remaining units.

Mantri Realty was the first among the builder fraternity to offer a buyback agreement to its clients in case the apartment sale rate fell below today’s purchase rate three years later. However, the offer was open only for a short duration and closed after 100 units were booked with Mr Sunil Mantri, Chairman, stating that he could commit only as much as he was comfortable with.

The FIs have just approached the Mantri Group and almost all developers are being contacted, said Mr Grover.


Matheran Realty, which is building 15,000 affordable homes at Karjat, about 100 km from Mumbai, too appears to have been bombarded by FI enquiries for bulk purchase.

Matheran, which initially came out with 300 sqft apartments priced at Rs 3 lakh last year, had in December launched bookings for 160 sqft units priced at Rs 2 lakh each.

Mr Pravin Banavalikar, CEO, said he was getting queries for 1,000-plus units assuring immediate settlement as a matter of routine, but had rejected them as the company had decided to partner the Mumbai Metropolitan Region Development Authority to launch the Government agency’s rental housing programme.

Matheran will provide 6,000 homes of 160 sqft each valued at Rs 2 lakh to the authority, which in exchange will permit a higher floor space index of four for the project against the earlier 0.5. In addition, MMRDA will also provide offsite infrastructure support such as power, roads and water supply to the project.

“We are also getting offers for equity participation in the project,” said Mr Banavalikar

Anonymous said...

PBAP expects interest rates to fall to 7.5%
10 Jan 2009, 0211 hrs IST, TNN

Print Email Discuss Share Save Comment Text:

PUNE: Promoters and Builders Association of Pune (PBAP) said on Friday that it expected the interest rates to come down to around 7.5 per cent in a
few months and that it will be the take off point for the city's realty sector once again. PBAP president Lalit Kumar Jain told the media that the industry has been doing its best to sell their projects at the lowest possible rates and the expected fall in interest rates would bring the buyer back into the market.

Jain said the real estate rates have been coming down for the four months and have now reached a bottom. "As there is no scope to reduce the prices further, we expect the affordability factor to come from a slash in the home loan rates."

Jain explained how the construction costs have moved over the last four years and what has been the impact of the municipal taxes, charges and premiums on the selling prices of homes. He also noted that the stamp duty and registration charges collected by the state government is adding to the cost structure.

Earlier, on Wednesday, Jain had said the amount of money payable to the PMC and the state government had staggered to over Rs 400 per sq ft and was a main obstacle in the realisation of affordable homes concept.

The prices of homes have come down by nearly 30 per cent in most parts of the city and the present rate in many areas is around Rs 3,300 per square foot.

Reacting to the argument that the people may not insist on a spacious house at this stage and would settle for something like a 700 sq ft unit, Jain said smaller size homes are actually costlier to build and there are prospective buyers who would rather wait than buying a small house.

Jain said the kind of low cost' homes that are generally perceived as affordable' are not possible to build unless the government and the local authorities are willing to liberalise the tax and duty regime. In any case, the people aspiring to buy homes now will not be comfortable staying in these tenements and those who will find them suitable will not have the wherewithal to pay for them, he said. "An affordable house according to the PBAP is a 1,500 sq ft unit, for which the buyer will be ready to pay if the interest rate come down to 7.5 per cent."

He added that there are quite a few projects on the periphery of the city where homes are available for less than Rs 25 lakh but nearly 61 per cent such units are lying unsold as people find it difficult to commute from there to the workplace and also because of infrastructure inadequacies.

If we break the stock available in the market budget-wise, we find that maximum stock available is in the bracket of below Rs 40 lakh, he said.

The PBAP estimates show that about 16,000 new units will be built over the next one year, and will find buyers because the interest rate would be low and the monthly loan repayment burden much lighter than now. In fact there is a possibility of a shortage of housing stock towards the end of the year 2010, he said.

Observer said...

Given the sad stories about people losing their health, crying, and getting stressed over job worries and reduced paychecks, many of these people will be very hesitant about taking on debt. Thanks to anon who posted the real-life stories about people who are struggling with EMIs and are panicked after losing their jobs. Once you have a debt-load, flexibility is sharply reduced. Best to pay cash for things to have a peaceful life. If the folks in the example stories posted above only had rented instead of buying those overpriced apartments, they would not be so stressed now. They will also have more flexibility to move to other cities for jobs. Also, the savings from the difference between the EMIs and the rent would have really helped them to take some time to find a good job and live off the savings in the meantime.

By listening those brokers like Sabbalseshu and Ashish and Boss/Abdulla etc hyping real estate, they have put themselves in this difficult situation.

As we have all seen, the interest rates can come down and go up within a period of a few years. The only fixed quantity is price. If interest rates come down, and people again start buying, and then later banks up the interest rates, a lot of people will be in trouble. Then, as now, those people may regret listening to these builders and brokers hyping that this is the best time to buy.

Peace of mind is the most important thing in life. Unless the monthly rent is close to the EMI, it is foolish to take on debt instead of saving money.

Observer said...

In the example posted by anon above, the builder says there is no scope for lowering prices. Well, the same builder was saying in May 2008, that prices would never come down. Now he is saying prices have come down by 30%. This is all part of the same hype, to get people to buy now so they can get some cash flow.

All prospective buyers should wait and rent instead. Construction costs are actually Rs. 1000/sqft and not Rs 1200/sqft as the builder is claiming. Also, costs should be lower because builders buy in bulk, and save on economies of scale. It could even be as low as 800 Rs/sqft for decent upper-middle-class style apartments.

The builder is right about one thing though. Because of extremely poor connectivity and road infrastructure, majority of flats built far away from the city center are sitting empty, and serve as trading instruments from one investor selling to another investor.

I myself stay in Koramangala even though flats in Whitefield are finally starting to come down below 3000/sqft. But I save so much time in commuting costs by staying close to the office and spend time with family instead of fighting with other drivers sitting in traffic. And the best part is I pay only 14,000/month in rent. Even if I were to buy the flat in Whitefield, it would still almost double my monthly payment for housing. Even managerial jobs are not safe nowadays, so I would rather prefer to save money, buy a plot in a small town, and build my own house slowly over there.

Metros are beyond the point of no-return in terms of quality of life.

Anonymous said...

soon, the figure of "Only 14000" will also drop down to "7000" as rentals are also getting under pressure

Anonymous said...

And for those living the suburbs....when Oil spikes again and that it will by 2011. The economy will have to severely correct. India will go back to the 70's. The population explosion and especially the so called demographic dividend will hurt India the most. Look at China they are doing everything to garner the natural resources they need. They see it coming. Ah! the cost of India's democracy. Leave India and go to the US, Canada and Australia - these are the only safe havens in the coming world war.

Anonymous said...

Banks wary of lending to Satyamites

A private bank executive, who did not want to be identified, informed that a meeting was convened by his bank recently to discuss the loan scenario in the wake of Satyam developments. "There is no resolution yet but I can only say the loan processing for all would be more stringent henceforth."

According to one employee, "I was informed by an email from my bank that my credit card limit has been lowered by 70 per cent."

Talks about Satyam skipping the salary have only got employees more worried. "I have got calls from two companies. I will take a decision on which one to join this week," says Rishi (name changed), another employee. He decided to quit Satyam earlier after learning about the resignations of independent directors from the board. "I would not be able to pay the EMI if I lose my job. It will mount to Rs 100,000 if I don't make the payments for two months. I will be a defaulter then," he says.

Rishi also helped his colleague in buying a house in his locality. For this, his colleague raised Rs 20 lakh (Rs 2 million) as part payment and promised to pay the remaining after encashing his employee stock options. By working at onsite locations, he garnered about 15,000 shares. But the free fall of the company's share price has rendered him incapable of fulfilling his payment obligation.

Anonymous said...

Politics at its best. Taxpayers to pay for Raju's fraud.

Satyam may get financial help from govt: Nath

Vik said...

While Satyam is the showcase of Indian corruption, I wouldn't go so far as to lose all hope in the country. India has survived 4 wars, thousands and riots and hundreds of scams. Corruption is a part of the third world in every facet of life. If you want to move a file, you have to pay up. If you want the police to act, you have to bribe. All real estate deals have a corrupt angle, be it getting electricty, water or title transfer. Indians have accepted this fact. The share holders in the western world are waking up to the gorrilla in the room and most investors in Satyam had no idea that such a thing could happen. This is laundry time for investors in India and everyone is cleaning up their closets and dumping anything that smells of dubious accounts. This will put the Ambani brothers at the top of the list, along with a few hundred family owned public companies including Bombay Dyeing. I think except for the Tata group, Infosys, Wipro I don't seem to remember a good quality ethical company.
This is a bigger test for the stock market then the terrorist attacks of 26/11. For that the Indian govt can point across the border. What will it do now when the apple they have been serving the world is rotten to the core.

As the property agents turned fish sellers have put in, most areas are down 50%. So Koramangala at 3000 should be a steal under any conditions.

I remember Koramangala of 93, when I used to live there and share a house with some Infosys folks. The auto-drivers then never wanted to go there after 6:00 pm. I was so bored I quit and left Bengaluru in 2 weeks. The area then was supposed to the destination for retired IAS officer and those folks built huge bunglows even in those days. It woudn't be hard to guess where most of the folks got the money to build the bunglows. For me coming from Mumbai, Bengaluru was a beautiful but boring city. Little did I know the changes the area and city will go thru over the next 15 years.

Shivaji said...

UK investor to buy 86 units from Sunil Mantri Realty !!!!!!!!!!!!!!

Another scam!!. The UK investor is Sunil Manti himself, and the money involved is part of stash hoarded in off shore banks, probably Swiss or Luxembourg. This is a last ditch effort to woo the investors.
I guess this wont work as in the present economic climate, no investor will risk his white or black money in real estate sector that is doomed.

Shailesh said...

Vik - It seems you and I have similar background. I am Mumbai, worked in 93 for little bit in Pune and 95 little bit in Chennai. Moved to US in 95.

The development in Pune is also visible compared to 93. I am sure that is the case in Chennai.

Yoko Ono's Owner said...

I am well aware that this is a forum covering India's housing bubble - but I wanted to share something related to Oil. By all aspects Oil will be back to its last years highs in early 20teens. Imagine the economic implications for India for whom 70% of all imports is OIL. And to top it off subsidizes it. Which it will have to stop at some point in the next decade or suffer bankruptcy Pakistan style. The point is - that the economy will see a bounce but real estate will come back only in the form of Global inflation flowing thru' not because of hype. But as asset price inflation goes - this will be will become more expensive but no one will buy. It will be like the 1970's - large joint families in small pigeon hole houses will be the norm for economic survival.

Do read.

Anonymous said...

i followed your blog quietly.. In Dec'08 still 80000 cars are sold... when i see the views in comments its like blood on the road...

Still i dont understand who is buying all the new cars? Or this data is fictitious?


Anonymous said...

The consumers in India are still not aware of what is coming. Moreover, the RE and economy slowdown is not like stock prices that they crash in a day. It takes easily 10-15 months for the data to sip in and people to get out of denial mode.

Just wait and watch how ugly it is going to get. People would be selling their cars to meet the household needs.


Vik said...

As per CNN, Sales rose to 1.20 million cars from 1.18 million a year earlier, showed data issued Monday by the Society of Indian Automobile Manufacturers, or SIAM.

I think India is still a huge country with a huge government. It could be central/state government and various arms of the government who could upgrade including armed forces/police and god knows who else could be buying these cars.

The sentiment with the IT crowd is definitely hit so any purchases will be done with great degree of caution.

I had been to Pune then on some work and it too was a sleepy town as compared to Mumbai.

Times have changed but greed and fear are universal.

Vik said...

Yoko Ono makes some good points. I agree that the oil shock will be repeated in the years to come. We live in extremely competitive and trying times. Oil producing countries Russia included want a large piece of the Petro dollars. The US is caught in a vicous spiral due to its hunger for oil, where any economic growth activity will cause speculators to spike oil and commodities back over another 50% or higher. US needs large scale nuclear power for its electricity needs due to its huge dependence on petrol for transportation and heating oil and natural gas for cooling and heating. If they had the nuclear grid in place, an electric car woudln't be far behind. However now that they are in a bind, everyone from the US to India and China will bear the brunt on the insatiable desire for black gold

Anonymous said...

I hope this will help the Ghajanies to recall the memories.

--July 1997 to 1999- Asian currency crisis-
--1998 till 2001: Indian economy went in to recession [IT was unaffected till 2000]
--Mar 2001 till Sept 2002 : Dot com bubble burst [IT felled into recession.]
--In 2003 slow recovery started.

16/11/2001: Prices stabilise in Pune
Prices in Pune are stabilising at 35-40 per cent below the boom time prices. Despite unsold properties, development activity is still going on. The growth of the software industry has spurred construction activity off the Westerly Bypass, especially in areas like Balewadi, Varje and Baner Road, besides the area around Rakshak Society, off Anudh. Houses range between Rs 650-850 per sq. ft. The low cost is attributed to the low cost of land.
Many of the new suburbs are also in the growth mode with 36 fringe villages having been brought within municipal limits.
Premium flats are offered for around Rs 1,100-1,200 per sq. ft in the Kondhwa belt, thanks to oversupply. These flats once cost around Rs 2,700 to Rs 3,000 per sq. ft. In Kalyani Nagar, the rates are between Rs 1,200-1,600 per sq. ft for flats and Rs 1,800-2,200 per sq. ft for row houses. At Koregaon Park and Boat Club, the rate is Rs 2,000-2,600 per sq. ft, down from Rs 3,000. For bungalows, it could go up to Rs 4,000. At Deccan Gymkhana, no new projects are coming up and old flats cost Rs 1,600-2,400 per sq. ft. At Viman Nagar, resale flats cost Rs 800-Rs 900 per sq. ft. At Kothrud, the rate is Rs 900-Rs 1,000, down from Rs 1,200 per sq. ft. The upcoming Anudh-Pashan belt is the new destination for house-hunters.
Prevailing rates (per sq. ft): Koregaon Pak/Boat Club Road-Rs 2,800; Deccan Gym/Erandwane-Rs 2,200; Sopan Baug/Uday Baug-Rs 2,500; Kalyani Nagar-Rs 1,200; Anudh-Rs 1,200; Hadapsar-Rs 700; and, Kothrud-Rs 800.

Agree the linear interpolation will not provide the correct price measure, still considering the global recession; current prices will stabilize around 50%.

So guys let it fall then only pick up, minimum 50% price cut is guaranty.


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