Friday, June 18, 2010

Where the rich live ?

Soft marketing article by the WSJ to pump up real estate in India. Mostly sponsored by the builders. The question to ask is where do the rich get the money , and how much tax do they pay and have paid over the past few years. I dare WSJ to carry out an article on this topic.

Super-luxury apartments are back in vogue and they are bigger and better than ever before.

As India's economy has gained momentum over the past several months, super-wealthy corporate professionals and businessmen are once again ready to pay $1 million or more for their dream homes. That can buy apartments with five bedrooms or more spread over 5,000 to 10,000 square feet and with amenities like personal lap pools and jogging parks in the sky.

From gold tiled bathtubs to sky-high verandas, luxury living is back. Following a market lull in 2008, India's wealthy class is again dishing out top dollar for luxury apartments. WSJ's Shefali Anand reports.

Home builders are rushing to meet this demand. At least a dozen super-luxury apartment complexes are being built across India right now, mostly in the major metro cities of Mumbai, Delhi and Bangalore.

The recent flurry of activity is a sharp reversal from early 2009, when the luxury housing segment was all but abandoned as the Indian economy's growth slowed. Developers had to slash apartment prices by 30% to 40% in February and March 2009, in order to find buyers, says Sanjay Dutt, chief executive officer for business at Jones Lang LaSalle Meghraj, a real-estate services firm. Developers are trying to outdo each other in breaking fresh ground in luxury.

Some market experts are now getting worried about prices, which they say have reached near peak-2007 levels. Given that, and the huge upcoming supply, there could be downward price pressure on these apartments over the next few months, says Poonam Mahtani, national director of Colliers International (India) Property Services Pvt. Ltd., a real-estate-services firm.

In south Mumbai's Lower Parel neighborhood, for instance, around 10 million square feet of area is likely to be freed up for building high-end apartment buildings, according to an estimate by Religare Capital Markets Ltd. To create enough demand for these apartments, prices need to drop by 20% to 25%, says Suhas Harinarayan, managing director and co-head of research at Religare Capital Markets.

S.D. Corporation Pvt. Ltd.

While real-estate prices are tough to predict, buyers might benefit by waiting for a few more months. When many of these apartments come to market at the same time, they can get better prices, say consultants.

Buyers who don't want to wait are still getting a better deal than they were before the downturn, because developers are providing more value for the same price.

"Up till now, we didn't have properties which were fully fitted out in terms of closets and woodwork," says Shveta Jain, director, residential services, Cushman & Wakefield India Pvt. Now, however, these fittings are commonplace.

9 comments:

Anonymous said...

india's property boom has really screwed over people on the lower end of the economic spectrum.

plus, the emerging middle class growth will really drive up inflation, especially food costs.

it seems right now that someone around the age of 25 or younger is really screwed unless their parents have wealth accumulated (at least owning a house or a flat). that's because even with an above average college degree (maybe a masters too), it'd be very difficult to afford a place to live (w/o renting of course).

it seems as if the characteristics of the caste based system is being translated into real life modern economics. if you're not from a wealthy background, then there's now way of moving up the economic spectrum by working hard.

even in the medical field, people bribe as much as 2 crore to get into a specialty training program (after mbbs). this means physician training is based on wealth not necessarily true expertise.

the way i see the housing bubble in india is this: a bank for black money. somethings gotta give sooner or later.

Anonymous said...

I really don't know...if things are coming down or no. Even if one buys a flat in thane resale one too, the builder i.e hiranandani charges 500 per square foot to transfer it even thoug leglly they cannot charge more than 25000 bucks. This is why they do not form the societies immediately.

Anonymous said...

@Anonymous 2:01

Your comments are thought provoking and true to the core. Our country is going to dogs and I don't see any light at the end of the tunnel.

This sort of disparity is going to drive the youth to criminality . If this is development, then India would have been better off before the UPA govt took over the rule

Anonymous said...

Saudi Arabia's Binladin group to invest in Maytas Infra:
http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/Maytas-Infra-surges-20-per-cent-after-stake-sale-to-Saudi-firm/articleshow/6073696.cms

The Maytas management, it seems, is no longer with the Raju
family. But did the new management complete the earlier projects
started by Maytas Infra. I remember a blog post about people
protesting about the "Maytas Hills" project that was not complete. So
is that project near completion or complete?

http://indiahousingbubble.blogspot.com/search/label/Maytas

If not then on what basis is the Binladin group Maytas investing in
Maytas?

Anonymous said...

@Anonymous Bhayya,

Don't worry about Bin Laden. Someone saw some potential in Maytas and invested in it. Not a big deal.
Corruption is condoned in India. It is a integral part of Indian civilization because it is condoned by Hiduism. We, Hindus consider graft as a virtue.
We need rulers like British or Portuguese to set things right.

Jai Hind. Jai Kaali Ma

Anonymous said...

It's clear that people in India are sick and disgusted with corruption and nepotism. A catalyst is needed for a sea-change to occur. Sooner or later something will happen..

I look forward to the day when people take to the streets to agitate against corruption and eliminate these gandhi topiwalas..

Anonymous said...

The Delhi High Court on Monday said most of the government departments are filled with corrupt officials who are eating away the funds meant for poor people and held that jail should be the place for such persons.
"Most of the staff in various departments are corrupt.

Whether you take DDA, police or MCD, 90 per cent of their staff are corrupt," Justice Shiv Narayan Dhingra said adding "the only field in which India excels is corruption."

The court made the remarks while denying bail to a senior officer of a nationalized bank, Gopal Krishna, who is behind bars on corruption charges.

"Bail, and not jail, cannot be the maxim in cases of such corrupt persons who eat away the schemes meant for poor persons floated by the government for their upliftment," he said.

The bank officer was arrested by CBI following a complaint from a girl that she had applied for a loan of Rs two lakhs under the Prime Minister Employment Generation Programme but the deputy manager of the bank had demanded Rs 20,000 from her to issue the cheque.

Anonymous said...

India is a land of thieves. If the HC admits it, why don't they round up corrupt people and give 2 dandas in their arse so that Govt. employees at least stop stealing. Then get after all those thieves who are stealing taxes and trade in black money. ALl this nonsense of black money in RE should be stopped. Everyhting should be white and proper taxes should be paid.

Country being run by a bunch of losers. A corrupt nation like India can never shine for a long time on the world map. All this corrupt people will sooner or later take the country down.

Shame on all these thieves.

rajni sharma said...
This comment has been removed by the author.