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  #1  
Old April 2nd, 2007, 09:29 AM
HarHarMahaDev HarHarMahaDev is offline
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India real estate prices dropping?

Everybody in India seems to be euphoric these days about the real estate boom in India..

Well....my position has been that Indian real estate is way OVERVALUED in several HOT areas - e.g. Bombay, Gurgaon, Faridabad, Bangalore, etc..

Here is one example of real estate prices cooling down.

---
http://www.moneycontrol.com/india/ne...article/273622

Andhra's Knowledge City phase-I auction ends kaput

Andhra Pradesh was hoping to rake in Rs 1800 crore from the sale of 60 acres of land. But the auction had barely any takers, reports CNBC-TV18.

The first phase of the Hyderabad Knowledge City remains unsold. The Andhra Pradesh Infrastructure and Industries Corporation had put two 30-acre plots under the hammer at a reserve price of Rs 16 crore rupees per acre and it expected the winning bid to be twice as much given the booming property market. While one of the plots received no bids at all, the other plot received only one bid at Rs 16.1 crore.

The APIIC is now awaiting the advice from the state government as to whether the plot should be handed over to the sole bidder or whether the auction should be invalidated altogether.

Hyderabad property consultants pin the blame on the new service tax on commercial rentals. This land was meant exclusively for an IT park and at Rs 16 crore an acre it would have to be leased out at Rs 55 per sq ft to break even. A rate higher than some parts of Mumbai.This coupled with a dampening of sentiment in the overheated property market would explain why the government's price was considered too high!
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Old April 2nd, 2007, 11:34 AM
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krishna krishna is offline
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Re: India real estate prices dropping?

BumBumMahadev ji,

I smell a rat in this. India, our loving little shit hole with more than a billion people and a rising middle class can have property prices decline? There has to be more to this than meets the eye.
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Old April 2nd, 2007, 11:48 AM
HarHarMahaDev HarHarMahaDev is offline
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Re: India real estate prices dropping?

Quote:
Originally Posted by krishna
BumBumMahadev ji,

I smell a rat in this. India, our loving little shit hole with more than a billion people and a rising middle class can have property prices decline? There has to be more to this than meets the eye.
I think everybody thought the same way...and so people have begun to believe in the myth that real estate prices can never collapse. So prices have sky-rocketed (in sync with stock prices)

However, with stock prices stabilizing and potentially dropping..it is likely that real estate prices are going to fall as well...imo
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Old April 2nd, 2007, 11:38 PM
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Re: India real estate prices dropping?

A rising middle class and growing economy does not mean prices double or treble in a year. There are too many speculators out to make a quick buck.

It is just that people are refusing to pay ridiculously high prices for property.
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Old April 3rd, 2007, 03:18 PM
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Re: India real estate prices dropping?

Quote:
Originally Posted by sgars
A rising middle class and growing economy does not mean prices double or treble in a year. There are too many speculators out to make a quick buck.

It is just that people are refusing to pay ridiculously high prices for property.
In other words, it is just that people doesn't have the bucks to pay, so they won't come forward, unless the rates again come to reasonable levels. There are always a few rich / NRIs for whom it may not matter much, but bulk of real estate market rests with sales to middle and lower middle class, whose only aim of life is to have their own roof on their heads. And when these classes can't afford to buy, then comes the time where the prices have to come down and stabilize.

Moreover the interest rates have risen on homeloans and difficult to get by for a family having an annual income < 3 lacs, aspiring for a moderately decent flat which costs anywhere above 25-30 lacs in cities like mum, hyd, blr etc
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Old April 4th, 2007, 01:09 AM
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Re: India real estate prices dropping?

Nahi bhai...koi price dropping nahi hai

wanted to purchase a flat in kandivali...they are quoting prices in 4.2 to 4.6K PSF
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