Sunday, June 28, 2009

Budget impact on Indian housing loans

If SBI can lower car loans to 8%, how much lower can they go on property ? I remember in Jan 2003, StanChart was offering loans at 7.75% with the some other banks offering 7.25% variable. Now the rate schedules are announced in advance, so people will have visibility into the rates for the 2nd and 3rd year, instead of just floating/variable rate. As of the latest SBI announcements its 8% for the 1st year and 10% for the 2nd and 3rd year. Still not bad when compared to 12-14% rates a year ago. Add to this the increase in the income tax deduction for housing interest loans from 1.5L to 3L. It appears that just like the US, the Indian government bailout of the housing industry is on track to boost property prices. We are back to the races now. How much will the home buyer bite is everbody's guess ?



60 comments:

shayna said...

As i understand the GOI is trying to compensate the builders for the expected drop in house prices by offering them prime land at cheaper rates.

There will be more houses built i.e. BPL labourers get employment, consequently supply side increases with resulting drop in prices.With the fear of stating the obvious my belief is the GOI is aligning the house prices to reflect the softening of wages in this deflating jobs market.

Like i have mentioned earlier, there has been paradigm shift in the Indian political landscape with the advent of MM, RG & SG. Friend of mine informs me, central govt employees are clearing legally binding contracts without any hinderance. I guess they have been asked to produce the returns by way of increasing govt tax revenues..........Jai Hind.

shailesh said...

Flat 50% Discount

Krome is planning to construct a 425 apartment complex spread over 400 acres in Vishrantwadi, which is a 20-minute drive from Koregaon Park a posh Pune locality.

While the rates in Vishrantwadi are between Rs 2,800-3,500 per sq ft, Krome is offering flats at Rs 1,500-2,000 per sq ft.

Anonymous said...

Sad News

'Property brokers expect prices to increase'

http://sify.com/finance/fullstory.php?a=jg2q31hcedf&title='Property_brokers_expect_prices_to_increase'&scategory=real%20estate

Anonymous said...

ET is such a bore.


Housing sector sees a silver lining, sales up 25%


28 Jun 2009, 0730 hrs IST, Neha Dewan & Anand Rawani, ET Bureau

http://economictimes.indiatimes.com/Markets/Real-Estate/News-/Housing-sector-sees-a-silver-lining-sales-up-25/articleshow/4711368.cms?curpg=2

Anonymous said...

Any idea about the rates in Jal Vayu Vihar Noida Sec-21

Anonymous said...

No doubt in India too it has found way to stock market and Real estate...

China Bank Lending Funneled Into Stocks, News Says

June 29 (Bloomberg) -- Chinese new bank loans worth about an estimated 1.16 trillion yuan ($170 billion) were invested in the stock market in the first five months of this year, China Business News reported, citing a government economist.

That’s 20 percent of the 5.8 trillion yuan loans banks extended in the period, the Shanghai-based newspaper said, citing Wei Jianing, a deputy director at the macro-economics department of the Development and Research Center under China’s State Council.

Wei’s assistant said the economist is traveling and can’t be reached. She declined to give her name. Calls to the press offices of the China Banking Regulatory Commission and the China Securities Regulatory Commission weren’t answered.

China’s Shanghai Composite Index has rallied 61 percent this year, the world’s third-best performer, after plunging a record 65 percent in 2008. The nation’s property sales jumped 45.3 percent to 1 trillion yuan in the first five months, the statistics bureau said June 11, compared with a 19.5 percent decline for all of 2008.

Record lending after the central bank scrapped loan quotas in November last year is helping the economy to revive after the weakest growth in almost a decade.

Some new loans must have entered the nation’s stock and property markets in the first quarter, Cheng Siwei, former vice chairman of the standing committee of the National People’s Congress, said June 27.

Market Rebound

About 2.4 trillion yuan worth of bank loans were invested in projects in that quarter, Cheng said, leaving a further 2.18 trillion yuan in new loans of the total.

“Where did it go? It’s undeniable that a portion of the lending may have flowed into stock and real estate markets and triggered the rebound in these two markets,” the former official said at a financial forum in Ningbo city in eastern China.

A further 30 percent of the loans in the first five months may have been used for discounted bill financing, or short-term credits used to fund working capital needs, China Business News said today. These funds may help form a financial bubble, the newspaper cited Wei as saying, adding this is the economist’s personal view.

Peng Wensheng, an economist at Barclays Capital in Hong Kong, said that the rally in stocks and property was to be expected given the size of the stimulus spending.

“Some people are concerned about this so-called speculation but in reality with such a large monetary expansion if asset markets did not respond something must be wrong,” Peng said. “There’s a risk of a very excessive rally in the asset markets but we are not at that point yet.”

Jayaram

shailesh said...

‘Affordable housing is a misnomer’

Acknowledging that the housing agenda is a daunting task for the new government, Parekh said the challenges of rural housing are very different from urban housing and hence solutions are also different. "For instance, key reforms such as permitting mortgage of agricultural land for residential purposes and introducing title insurance could give rural housing the much-needed thrust,'' he wrote. "One is hopeful that this government will be more sensitive to both the rural and urban housing needs of the aam aadmi (the common man).''

The HDFC chief also looks forward to a real estate regulator. "There is such a compelling need for state level real estate regulators whose role would be to oversee and monitor the affordable housing agenda, promote real estate reforms, ensure transparency, especially by mandating that flats be sold only based on carpet area, and, most importantly, act as a platform to protect buyers from real estate fraud,'' Parekh wrote to his shareholders.

Parekh also brought to notice a growing trend of developers asking homebuyers for full upfront payment on start up housing projects "under the guise of offering a substantial discount''. Calling them "hawa mahal (castles in the air)'', Parekh said, "There are instances where homebuyers have made the entire payment despite the developer not having commenced construction at all.'' He warned that this seemingly attractive proposition could come with high risk.

Although real estate prices have come down, Parekh feels it could fall further. "Some correction in prices has happened but real estate prices are still high,'' the HDFC chairman wrote.

Anonymous said...

Parekh is a double speak. On one hand he distributed oans to real estate companies. On the other hand he is claiming this bol vachan.

Anonymous said...

Received a mail this morning, thought of just sharing with you all!!

Greetings to you!

I'm getting many queries on the direction of the markets, that I thought, I'll address it.

Broadly, I expect the budget to be positive for the economy. But the way stock market reacts to budget pronouncements is anybody's guess. For instance, if the STT is not reduced as anticipated, the stock markets may plunge, inspite of other positive policy initiatives.

So, what does one do?

Especially, when markets are in the region of 15000 already. This is the classic problem an investor always faces. When the markets are down, it looks scary and they would not invest. When the markets starts climbing up, they feel they have missed the bus and they wait for the next correction. When it does happen, they are again not sure if it is a good idea to enter as it may go down further!

This is further made worse by markets pundits who had predicted that it can go all the way to 2003 levels ( which is Sensex 3000 levels ). If they were convinced about what they were saying they should have shorted the market bigtime. And if all their predictions do come true, they need not talk to newspapers and need not work for a living. They can mint money by correctly predicting when to by and when to sell. After all, that is all there is in stock market, isn't it?

The fact is this - no one can predict the stock markets in the short term. So please don't ask me where will it be 60 days from now.  Ofcourse, in the longterm things become easy. It is easier to say if the stock markets will rise in the next 3 years or next 5 years. For that you need to look at broad economy & macroeconomic indicators.  Those point to a decent growth potential in times to come.

But that brings us back to the question, if 15000 levels are not too high?  15000 is a mere number. Stock markets in the longterm track the performance of the companies and by extension, the economy. Hence, since there is lot of further potential for development in the country, the economy will move forward. It is hence not a question of "if" it will move, but how much and by when. Given time, the answer to these questions is very positive, though putting numbers is always a dangerous pursuit.

Hence, three to five years and a 12-15% returns are something one could look at. Not bad, if you consider, these are post tax returns.

--
Regards

Suresh Sadagopan
Certified Financial Planner
Ladder 7 Financial Advisories
ladder7@gmail.com

Anonymous said...

Lets post current rates from the areas one is , here are some that I found out :
Sindhi soceity : rangeing from 7.2k next to vesit, to 9k near gymkhana. almost all kukreja constuctions. dint like most floor plans.
Chembur naka : 9k
Some under construction buildings near chembur station : 7.5k posession in 1.5 years.
Union park: 7.5k but hard to get building which is not within 10 feet of another.
in short, everything unaffordable.
please post rates of other locations here . thanks.

Anonymous said...

Please post the cheapest buy in your respective areas. Now time has come to buy.We have shooed BB from this blog and i feel that he will be laughing looking at our post.

shailesh said...

I can't even fathom the rates being posted for Chembur. The area has highest pollution due to RCF. In Navi Mumbai, I had quote of about Rs 2800 in Kharghar. Why would anyone pay 3 times that amount in Chembur?

Anonymous said...

Shailesh, I agree about the pollution thing, but its quite central compared to Khargar right. Thus the higher prices, but then again anything more than 6k is an overkill. but the ground reality is that its hard to find anything decent even at 7k ! you get 7k around the last end of sindhi soceity which is so near to rcf. diamond garden area is unaffordable at 10k +. also very few projects accept full white. ^so that means only businessmen with black money are buying in these areas? i see lots of ads for 2000 sq ft plus homes, definitely a salried person cannot afford.

on the economy front, everything is still the same, only stock markets are up. our jobs are still not as secure as before.

if anyone has struck a deal at better rates, it would be great to post here.

Anonymous said...

Why not Vashi ? Vashi is nearby compared to Khargar. Ofcourse it is not in the central locations but prices should be between 4k and 5k. If one does not have black money, it doesnt make sense to convert white to black. Where do you guys work ? that is more important these days.

Anonymous said...

yes vashi is a good option if one works in new mumbai. which i sadly do not. however dont know the current rates in vashi, heard they were around 5k pre elections, now I am sure the greedy builders must have hiked some. dint bother to check really. but would like to know from people who are scouting.

Anonymous said...

Guys, do some basic calculation. If you stay in vashi and save some money including lower cost of living due to staying in vashi and shift a small portion of those savings to having a better commute experience by buying car/pooling..etc. Wouldn't you be more peaceful with lower burdens of EMI plus more luxurious living. Chembur is so congested and polluted and shows all signs of being more so in the future...why would one want to sacrifice one's life and health for such a decision?

Shriniwas K said...

Comment to Vik, Someone (possibly form the builder realtor lobby) is flagging this blog as violator.
I will make sure that Blogger certifies this blog as genuine. (I can contact Google over the phone/email to do this).

Also I suggest to improve the look and feel of the blog, get analytics set up on the blog - its free and simple, and helps you track who all are visiting this blog and how many different people are viewing which articles. This blog has matured and I want it to be up to the mark as a complete timeline of the property bubble. !!!

priti said...

must be the agents/builder sides who are reporting htis blog. they do not want information to be shared, and want to keep these inflated rates propped up.
i for one, willing to do anything to keep this blog from disappearing.

Vik said...

Not to worry, I've asked for the blog to be reinstated and this will happen in a few days. I remember this happened few years ago. Real estate agents should be happy that loan rates will drop, though from where will the buyers get black money is anybody's guess.

Vik said...

I will work on the look and feel, however there are only limited templates available. I will drop that image, sinc that is consuming some screen real estate

Anonymous said...

Budget Hopes & Hype?

High expectations lead to disappointments. Today every industry wants tax sops like IT, RE, Infra, Hostelling, Power, Agri. The question is then who will pay the taxes? Builders supported election campaign & parties purchased employees vote through pay commission. Now who will support the deficit? If public sectors become private sectors, votes will go forever. It’s a tough equation, time is only solution.

IT biggies take 40% hit in billing rates

“In certain projects the billing rates are down to $16 an hour, which, analysts say are the lowest ever rates. And such rates will continue at least till Q1 next year, they add. “We have seen such sustained decreases in pricing in most projects. I expect this to last until the year end at least,” says Siddhartha Pai, Partner and MD, at the India offices of TPI Inc, a global outsourcing advisory firm”.

http://economictimes.indiatimes.com/articleshow/4719043.cms

How well do individuals predict the selling prices of their homes?

“Most homeowners overestimate the value of their properties by 5% to 10%, primarily due to the large expected capital gains implicit in the self-reported home values. Overly optimistic expectations about the evolution of house prices may have planted the seed of the current mortgage crisis in the US”.

Home owner’s calculated capital gain = self-reported original purchase price - self-reported value of the home

“While most individuals overestimate the value of their homes (some by as much as 20%), those who acquire their properties during economic downturns (and a slowing housing market) tend to be more accurate, and in some cases even underestimate the value of their houses”.

http://www.voxeu.org/index.php?q=node/3721

NOTE: As banks are not extending the credit more than 60%, clearly shows that their valuation is much lower than market price. It doesn’t mean that banks are facing liquidity problem OR they are not interested to expand the loans.

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

Vulture.

Anonymous said...

http://economictimes.indiatimes.com/News/News-By-Industry/Banking-Finance-/Nahata-owned-HTL-in-SARFAESI-net-SBI-takes-possession-of-prime-land/articleshow/4721348.cms

SBI takes land away from defaulters

Anonymous said...

I had taken up a Floor in Sushank Lok , Gurgaon by Ansal Buildwell Ltd.
These floors wer built in yesr 2004. Recently the plasters of the walls is falling down. despite repeated complaints to the Ansals they have no paid any attention to it. There is sometimes leakage in the ceiling as well.

They always promise and forget. Once when their broker came with his client to sell a floor near to me, I told his client not to purchase these floors. Seeing this the broker threatened me and cut electricity and water supply to my house. To avoid further harrasment I left the place. But I want to teach these people a lesson.

Please suggest me ways so that I can take him to task. I went to consumer court but since Gurgaon is in Haryana, they asked me to go to chandigarh. Now it being 250 Kms from Delhi, I can't even chase that. I am very angry please help me teach Ansals a lesson.

Anonymous said...

Anyone interested in Chembur, I have for 7k diamond garden. Kindly contact me on 9819952083

Suresh

Anonymous said...

I think one of the things that can be added to this site is a review and opinion section. There are so many sites scattered over the internet, constructed by people trapped by a builder or a particular scheme. These people keep posting articles about that particular builder.

If we can make a review section where we have links to such sites or even people could come and post articles about a particular builder and then circulate that to folks via email or other forms of awareness..then we would have done a big service.

Case in point the post by Anon on the Ansals. I know that the Ansals are one of the worst creatures ...similarly one of my friends got totally fleeced by Ajmera's in mumbai. We need to wrest power away from these builders and be able to blacklist them. So that anyone with access to google or this site should be able to look up a particular builder before making a decisions.

Vik said...

Suresh has a good deal for Chembur folks. Suresh it would be better if you list some more details about the flats including amenities if any. Also the builder so that people can voice their opinions.

Anonymous said...

Are not these the same group who was convicted by the Delhi court for the Uphaar theatre fire?

Shriniwas K said...

@Vik Good Idea about look and feel. Thought the available templates are limited, we can easily nmodify the CSS to give it a cool look. I will work on a blank blog as demo.

Also analytics is a tool developed by Google for the Blog/ site owners to know how much traffic you are generating every day/week/month. This helps you / the moderators to closely watch how many people visit the site.
Also we can have a tag cloud, we can make a grievances and information forum for individual cities. Expect to see some templates by weekend and we can all vote for the good one.

Ciao folks ...

Anonymous said...

BUDGET VIEW-Indian realty sector awaits demand spur

The distress is more locally generated and more to do with property prices," Raja Kaushal, executive director and chief operating officer of BNP Paribas Real Estate India.

We don't need to generate demand, it just needs to come at the right prices," Kaushal said.

However, demands on exemptions may not be answered, analysts point out. "Their margins are fairly high, they're higher than software, so why (should they) get benefits," Shailesh Kanani an analyst at Angel Broking.

http://in.reuters.com/article/domesticNews
/idINBOM18582520090701

Anonymous said...

My relative wants to lease his apartment to Mint guest house. Any idea about the guest house? Any general information on whether one can lease his apartment to the guest house people? Any help is appreciated.

Anonymous said...

Hi, can any one Vik or Vulture or anyone, analyze the impact of fuel price hike and effect on inflation and real estate?

Anonymous said...

DLF'S RESULTS

Guys DLF has posted net sales of Rs 55 Crores for March Quarter in 2009. This is pathetic. It was 3,255 Crores last year for the same quarter.

Check Out at

http://www.dlf.in/dlf/wcm/connect/DLF_Common/dlf_site/home/top+link/investors/financial+results/quarter+2008-2009_q4+standalone

Guys I guess Don K.P. Singh is doing some Fraudelent things in the company. If any of you hold DLF Stock. Please exit Now.

Anonymous said...

Yes This is the brother of the same guy who was convicted in Uphaar case. However he is out and roaming free today. Indian Judiciary is as corrupt as MCD.

Anonymous said...

Indian RE and the whole economy is fucked for at least 4-5 years. If the govt. won't meddle, things would improve fast. Govt. is just delaying the improvement process. They should let the RE prices take its own course based on fundamentals rather than the Govt. trying to keep them propped up.

When the shit will hit the fan, India will take a long time to get out of recession. Whatever is happening now like salaries going down, layoffs etc. are all permanent changes and things will never go back to whre they were in Bush era.

Shubh Chintak

Anonymous said...

Whatever you may say... But real estate is one area where the investment is quite safe.

We have seen Stock Market capitualted to 40% of its peak value. Can we say the same for RE??

Definitely the prices have come down by 15-20% but definitely not as low as 60% drop in prices..

I think real estate sector will frow and the price rise of property will remain. Though not 50% inc. per annumn that we have seen in last 3 years... But yes 11-13% annual price rise will we there.. and this is also healthy for the buyer as well as seller and the whole economy..

Anonymous said...
This comment has been removed by a blog administrator.
Shriniwas K said...

@ Anonymous - 5.14 PDT, Please dont think RE is an investment in profit. Stocks are easy to liquidate. In a Buyers market try selling RE for a profit, you will hardly find any buyers. In India there is a fake feeling that there is a demand for 25 lakh houses over the next decade. This is flawed. The need for housing corresponds to the Urban - semi urban growth and rise of jobs. With the main pillar of the new urban Indian economy being IT and ITES followed by Jewelery and domestic manufacturing, all of which have begun drastic decline, there is no way the demand for anything other than energy will exceed supply. Even if the prices say the same, then the inflation will adjust itself to make that price worthless. Example if you are expecting to sell a 30 lakh house for 40 lakhs in 2 years, after 2 years, if 40 lakh is worth much less than today's 20, then it makes no since to say you got a XYZ% return.

AFAIK the WPI Inflation rate of India is completely flawed. I remember that in 2005, when I moved to US the prices of daily use food items was exactly 1/2 not kidding 1/2 of todays price. Think about it. Real estate for future of your kids and for living makes sense, its not worthy an investment to rake profits.

Anonymous said...

I am from Bangalore. I know a carpenter who was a childhood friend of mine. About 3 years ago he asked if i was interested buying a site in Kanakapura Road. (Looks like he gets some commission ) I was never keen on that. He quoted 1800 per sqft. A few months after that, i happened to meet him for some other reason. He spoke as if i missed a once in life time opportunity (by not buying that site )and said the price increased to 2500 rs per sqft. In the last year he used to call me very frequently. (Actually he gave only missed calls. cuts the call after 1 ring :-) And i was calling him back). He always used to say buy now otherwise it would go up further. I got irritated and stopped calling him back. Knowing that i wasnt going to call back, he stopped missed call thing and really tried calling. I kept on avoiding. Believe me he would have tried about 100 times. There was no attempt in the last 3 months. I thought he gave up. But the other day he tried again and as usual i didn't receive. Then a series of calls to my landline. He tried again in the evening and i rcvd the phone by mistake. I was embarrassed. ( for avoiding all his calls). Then he came to the topic. He said there was a BDA approved site in Kanakapura road. I told him i wasnt intersted. But i asked him the price. he said 1800. I was surprised. (it may not be the same location as the one he mentioned abt 3 yrs ago. but going by the landmark its more or less the same). I asked him why should i buy. He said Investment :)

Sorry i wrote way too much. But i wanted to highlight how desperate he was. This also shows its not easy to sell RE off .( as shriniwas wrote)

Bharat said...

To add to what Shriniwas wrote and Anonymous above. In India, buying land or even flats is not an easy thing -
1> First valuing the flat/land is not an easy proposition as its subject to interpretation and subjective evaluation.

2> Second the buying process is fraught with all kinds of paper work and is extremely painful.

3> Third you have to keep an eye on squatters.

4> Fourth there is always a danger of somebody or the other misappropriating your land/flats leading you to courts and 10+ yrs of headache and heartburn...

On the other hand-
1> As an investment, land/RE is never liquid thus leading to grief when you need to sell it in a hurry.
2> Secondly, from an investment point of view, unless you manage to time RE cycles, the yield is not even better than the rate of inflation!!

So RE cuts a sorry figure as an Investment. The people who push RE as investment are the same real estate brokers, agents and builders. The way you can make money from the land is to buy it, have the muscle power or political reach to protect it and then wait for a boom period. At which point you raise funds/partners, put up notices and do bookings, construct the building and try to squeeze the buyer for every last drop of blood you can and then try to exit as soon as possible. Hold some flats and try to speculate on that...then quickly try to move on to another piece of land and try to maximize the yield from the boom period..Also, stand close to the exits to run for your life when the boom party gets over.

If you cannot do that then try the stock markets they are easier. You can open a demat/trading a/c and buy/sell shares of known companies whenever you want out of your own home/office. Its definitely more liquid and more safe than RE.

As anyone can see the boom party is over in RE for the current period. The builders and brokers are holding on for dear life and trying to maximize their investment yield till the coming festival season is over..watch out for the drama of the RE great collapse soon.

Anonymous said...

Fuel price Hike & Inflation.

The current move to hike fuel prices has 2 objectives,
1. To reduce budget deficit by reducing fuel subsidy
2. To hike the inflation because govt. is worried that deflation has started.

Normally central banks target for moderate inflation. There is an exponential relationship between inflation & full employment [Phillips curve], so to reduce the unemployment govt. follows simple approach i.e. inflation. Agreed, the real growth will remain same but everyone only look at salary hike.
In current economic scenario inflation dynamics is very different, it’s not same as 2007.
Though globally central banks have printed huge money the counteracting factors [consumption side] are much stronger.
--Unemployment
--Wage deflation
--World’s largest consumption economy (US) is in bad shape.
Compare the commodity prices of 2007 & today, it’s still in bad condition. It means inflation is not near term (may not be this year).

RE is an asset; asset price inflation is fueled by credit growth. Till the time excessive credit is available in market, RE will not move anywhere. Because even though you wish, without loan you can’t buy any RE.

How market is behaving in short term?
--People who are sitting on cash, looking to get into RE, after reading economy bottoming news.
--Sellers who are eagerly waiting for market to stabilize, will jump up with more houses.
--After this capitulation it will remain stagnant till 2012.

Inflation falls to -1.3% despite costlier food

“Inflation rate for the week ended June 20 fell by 1.3% compared with the year ago period, despite a week-on-week increase in the prices of food items, manufactured items and fuel items manufactured items and fuel items”.

http://economictimes.indiatimes.com/Economy/
Inflation-falls-to-13/articleshow/4730981.cms

Is Inflation a Fact… Or Just an Opinion, Pt 2

“Indeed, the dollar chart and commodity charts paint a very different picture from the common opinion that “the Feds is printing dollars ad infinitum and inflation is exploding higher.” Clearly, the market is trying to tell us something different”.

http://gainspainscapital.com/index.php?option=
com_content&view=article&id=86:is-inflation-a-fact
-or-just-an-opinion-pt-2

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

Vulture.

Anonymous said...

Property begins to sell again

Posted: Friday , Jul 03, 2009 at 0211 hrs IST
Mumbai: Related ArticlesMost Read Articles
Exit low building clusters, enter skyscrapers at Girgaum and Parel
Builders jack up rates with market handle
Slowdown hits Lower Parel’s realty dreams
Realty show in bad shape, retail rentals nosedive
Realty shows signs of revival in mill belt
Property transactions have picked up in the last month or two, brokers have reported after nearly a year of stagnancy in the market.

A pan-India survey by Edelweiss Securities Limited has found that most brokers, 87 per cent of those covered, had seen a higher number of transactions in June than in the previous month. About 100 brokers in 20 micro markets across the cities of Mumbai, the National Capital Region, Bangalore and Chennai were surveyed.

The investment banking firm attributes the buoyancy in the market to the general election result, which has boosted consumer sentiments.

“A significant change in sentiments post elections, preceded by stimulus measures, has contributed to a strong recovery in volumes and prices. We believe prices have increased in the past 1-2 months, and expect another round of price hikes (especially for Mumbai, NCR), around the budget,” the Edelweiss report says.


The survey notes that while prices have fallen over the last one year, they have risen over the last month. These include the prices for projects launched at affordable prices during the slump. For instance, HDIL’s project at Kurla, which was launched at Rs 4,251 per sq ft (psf), is today priced at Rs 5,500 psf, while its Versova project, launched at Rs 7,651 psf, now costs Rs 10,000 psf. In Delhi, the price of DLF’s Capital Greens project has gone up from Rs 4,500 psf at launch to Rs 5,500 psf today.

Over half the brokers surveyed, 53 per cent, expect prices to continue upward over the next one year.



Raminder Grover, CEO of Homebay Residential, a wholly owned subsidiary of Jones Lang LaSalle Meghraj, says the main reason for the recent rise in the number of transactions is the confidence in the new government and expectations of a good budget. He said transactions in the mid-income segment have gone up 20 to 25 per cent over the last couple of months, though volumes have not risen in the high-income segment.



“Most of the transactions are happening in the affordable housing projects. Seeing this demand, builders have increased their rates lately, which may not augur well for the market,” he said.



Grover said that it cannot yet be said that prices have bottomed out. “Despite talks of a stable government, our economy is linked to the global economy, so prices could continue to come down” he said.



Broker Yashwant Dalal, president of the Estate Agents Association of India, said, “The stock market may be riding back but it will be long before people who have lost money recover it completely. Prices will not increase for the next two years, creating a market where those who cannot yet afford a house can finally buy one,” he said.

http://www.indianexpress.com/news/property-begins-to-sell-again/484412/2

Sabe ke lage ge !! :-(

Anonymous said...

I do agree property is the best investment atleast you get some rent.

Anonymous said...

I have got raped in mutual funds, I think, now I will take a loan and go for a property. Thanks guys, i have been following this blog for almost two year.

Most of the predicition posted on this site have turned rotten. I have made a big mistake by not buying earlier but now i will go for property before it furher goes up.

You guys keep dreaming that the prices will fall.

HAPPY DREAMING to all Fools over here.

Anonymous said...

We will stay on the roads but will not buy property A$$ hole.

Anonymous said...

Now I can see lot of Non-BDA (Bangalore) houses are coming for fire sale saying BBMP,CMC,DTCP,BIAPPA approved etc.

If you are buying the property outskirts of Bangalore look for these docs.

# R.T.C (popularly known as Pahani) contains details of the total extent of land, names of the present and previous owners, kind of soil and crop, any mortgages, etc.

# Mutation Extract refers to the mode of acquisition of the property and the order stating that the Khatha may be transferred to the name of the present owner.

# Family tree certified by the Village Accountant/Revenue Inspector gives names of the members of the family of the present and past owners of the land and indicates whether they are living or dead.

#Endorsement from the Special Land Acquisition Officer/BDA/KIADB / K.H.B etc.: It confirms that there are no acquisition proceedings in respect of the property in question.

#Encumbrance Certificate: This should be in Form No.15/16 for a period of at least 30 years from the office of the Sub-Registrar exercising relevant jurisdiction over the property in question.

#Conversion Order issued by the Deputy Commissioner or Assistant Commissioner under section 95(2) of the Karnataka Land Revenue Act, 1964 exercising jurisdiction over the property.

#Receipt evidencing conversion fine paid as levied under Section 95(7) of the Karnataka Land Revenue Act, 1964 in the form of a challan to the Treasury at the rates prescribed s in the Table under Rule 107 of the Karnataka Land Revenue Rules, 1966.

#Form No.9, Form No.10 and Form No.11 issued by the Village Panchayat/Tahsildar.
Certified copies of all sales deed

Computerized Khata certificate

Property tax paid receipts

Layout plan OR Sketch fixing sites on Survey Map

Acknowledgement of register of firm

Partnership deed of developers

All the best !

Kannan

Vik said...

If you got screwed by the dalal's of Dalal street, blame CNBC not this blog. If you had followed the warnings coming out of this blog, you wouldve stayed on the sidelines of both the stock exchange as well as property- especially for the last 2 years, when the bubble peaked. Right now you can get discounts of upto 25-30% and loans are cheap at below 10%. THe time to buy is when you get a deal. If you have been carried away by greed blame yourself.

Anonymous said...

anon@1:15 AM
Mutual fund se muh kala karke aaya ab kya RE ke saath bistar layaye ga kya ?

Anonymous said...

India is really unsafe place, what proof you needed? See the testimony by anon@1:15 AM. In day light he got raped by Mutual funds. It’s really pathetic, how society will accept this innocent. Our true sympathy is with you. Please file case against MF under Indian penal code 302.

Well I guess, the blog name is India housing bubble & after reading about housing if someone invested in MF, wonderful, he/she must be from Aalibaugh.

This is nothing but another attack by desperate RE agent, who is trying to divert the attention. So please ignore the noise.

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

Vulture.

Anonymous said...

THe Real estate bullish morons will suffer. IF the real estate industry has to revive the rates have to fall. If the rates fall only then can builders pick land and start new projects.They cant buy land at current prices and make profit. Builders are creating hoopla only sell the existing house units as they are stuck with hugh unused units. You cant compare real estate prices in US with India as there are outrageous diferences between the 2 countries. Real estate loans are available in US for 3-4% with India's at 9-10%. US is asuper power with people across the world invest in it housing sectors. US produces very large number of white collar employment which feeds its housing sector. India is still considered a developing country with 500 million below poverty(figures from ET news article). The real estate bullish idiots should know that if we suffer the same crisis as US, india will become bankrupt as its currency is no match to US

Anonymous said...

Cidco plots beat slump, fetch a record price
3 Jul 2009, 0207 hrs IST, Vijay Singh , TNN


NAVI MUMBAI: Despite the slowdown in the realty market, the City and Industrial Development Corporation of Maharashtra Ltd (Cidco) has sold three
residential plots at rates ranging between Rs 64,771 per sq m and Rs 71,444 per sq m at Kharghar through the tender bid process.

Sources said these rates are the highest in Navi Mumbai for residential plots in recent times.

Navi Mumbai-based developer, Nalin Shah of the Shah Group, won the three plots near Kharghar railway station by making the highest bid of Rs 71,444 per sq m for one of the three plots.

The other two plots fetched Rs 67,333 per sq m and Rs 64,771 per sq m. "There were nearly 300 bidders,'' said Shah. In all, the plots have fetched Rs 25.31 crore.

Asked how he would find customers in the current slowdown, Shah said, "The residential projects will be ready in the next two years. With the proposed airport, golf course, Central Park, and ISKCON temple at Khaghar, I am sure to find the right customers.''

The builders' community in the satellite city expressed surprise at this development. "With the present real estate market situation, we will have to wait and see if the Shah Group's Kharghar projects attract buyers,'' said the secretary of Navi Mumbai Chamber of Housing, Manohar Shroff.

Last year, Shah Group had purchased over 70 bungalow plots at Kharghar from Cidco, but eventually had to return several plots due to lack of buyers.

The high-priced flats at Palm Beach Road continue to remain unsold, due to which the developers have brought down the rates from Rs 9,000 per sq ft to Rs 6,000 per sq ft at present.

Realty consultant, Mahesh Hemrajani, said, "Proximity to an airport does not really account for high rates. People basically want a clean location, with good water supply and other basic amenities.''

http://timesofindia.indiatimes.com/Cities/Mumbai/Cidco-plots-beat-slump-fetch-a-record-price/articleshow/4730822.cms

Bharat said...

Raped by MF? Sounds strange...

MF's are not a good instrument to invest in. But anyways before any investment investigate. If equity markets fall, you can sell your stocks or go for redemption any day and within minutes you will have your cash out and losses will be minimized.

Stock markets also go through cycles like RE cycles..but whereas the RE cycles are long drawn out, stock markets are up and running in 2-3 years. So, all the greats like Buffett or Lynch advice you to wait for 3 years before disposing off your clunkers..

Stay away from RE, the rent is no compensation for the poor returns and loss of money. You will lose money and even FD's are more attractive than RE.

Anonymous said...

Any ideas on going rate (rate at which actual transactions happening, if any) for 2 BHK, 100 Sq Yard, builder floor (GF/First/Second floors) in south delhi areas such as CR park, East of Kailash, Malviya nagar, Shivalik etc.

Over the past month or so, their asking rates seems to be inching upwards on magicbricks.com and 99acres.com. I am wondering if it is the right time to make a move.

Cool Head said...

In Thane at a location on Pokhran Road 2, that I have been following closely, the rate being quoted by the builder was Rs. 4600/- psf. Now he is offering the same flats (ready possession) at Rs. 3700/- psf, but the boy who showed around the site to my friend whispers that his boss will even settle for 3100/-. There are several completed buildings, all nearly empty, in the complex. Amongst a e few flats that are occupied, they have actually been rented out by the builder himself, to create an impression that yes, people are buying in this project.
Just four years ago, the rate was Rs. 1800/-, so now I think a reasonable rate would be around Rs. 2200/- , anything more is ridiculous. The complex is legal, not on forest land and the construction quality is good. My own relatives had bought in the earlier buildings at just Rs. 1500/- in 2004. So now, five years later even Rs. 3100/- seems high. Of course there are some HPI (highly paid idiots) who have purchased at quite a few price points like 4600/-, 3900/- etc within the last year. I met the 4600/- buyer recently (he is an interior designer) and now he regrets buying at that price, as his neighbor who moved in recently did so at only 3700/- and then he in turn may be unhappy if the next guy moves in for 3100/-.
So I think, now is not the time to buy , but to watch from the sidelines only.

Anonymous said...

@Cool Head,

If the builder is desperate to show that the housing complex is semi occupied, he might be willing to rent it at very low rates to attract rental income.

Some really intelligent RE players think that the cream of RE investing is rental income :)

While you wait from the sidelines for better prices, pls. also check out the rental rates. They might be unimaginably low..

Anonymous said...

Is this Hranandani ?

Anonymous said...

C R Park rates are at 6500 Rs psf to 9500 Rs psf . depending on the layout and the construction.

Cool Head said...

To Anonymous @ 7:34
No, it's not Hiranandani, its another (medium sized) builder.
Hiranandani is developing it's Meadows at Pokhran Rd 2 and seems to be getting nowhere. One of my classmates has bought there-neither is he giving possession, nor is he able to sell off the property as Hiranandani says that it MUST be sold at higher than what she purchased, else he will not issue NOC!

Anonymous said...

@Cool Head ,

Is this Siddhachal project by Kalpataru in Thane?

rajni sharma said...

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Nd one of your best post...Thanks
Flats in kolkata

Anonymous said...

Vik Grover rape fraud sec fraud