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One data point does not a trend make, but . . .
Here’s an ad in Bangalore Craigslist:
Let’s say the “considerable” discount is 15% - that drops the rate to Rs. 2400 per sq-ft. The ad is by the owner, so no 1% - 2% brokerage involved either. Now what do you think will happen to those wanting to sell at rates of 2850, 3045 + brokereage, 3445 + brokerage, and such.
It’s all about supply & demand, people!
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April 27th, 2007 at 6:49 am
What i would want to know what are the invariants in building a house - i mean construction costs and such. Once those are factored out, one can know the extremes of any apartment pricing.
I think 1000 Rupees/Sq ft has to be the max construction costs. What say you?
April 27th, 2007 at 9:34 am
Rs. 1000 per sq-ft sounds like a reasonable average for construction costs. For Tier 2/3 builders, it’s probably 20%/40% lower, given the differences in construction quality & amenities. And the ultra-premium constructions probably cost more than 1000 psqt, but those are in the minority.
For most of the popular builders (e.g. Sobha, Brigade, etc. in Bangalore), 1000 sounds right.
May 1st, 2007 at 5:54 pm
C’on Kaushik,
I think you are living in your dreams…Let me give you a small and over the top perspective.how could it be 1000 Rs/SQFT.
What happened to builders and people who sold n bought houses for more than 2000 Rs/SQFT? Will they allow price to decline?
No way my friend. Real estates prices are here to stay.
I think only Media is speculating this based on the projectios of US HH market but we should not forget that India even now doesn’t have the basic infrastrustures (Be it Households, Roads, AirPorts etc.) There is plenty of rooom for improvement.
May 1st, 2007 at 5:59 pm
Gurivi: I meant 1000/sqft as the “construction” cost. That does not include the cost of the land on which the apartments are built. Naturally, the builder will add that to the construction cost and that’s how you get the 1500-2000 per sq. ft rates that most people booked apartments at in 2003/2004. The questions is whether those same apartments are worth 3000-4000 per sq ft now.
May 2nd, 2007 at 11:12 am
The decline will come not because of slow down.It will because of pathetic state of Bangalore. Already Whitefiled/Sarjapur/Bannergatta area is facing accute shortage of water. Even a single rain can make life miserable . There will be no takers in 5 years if the situation goes like this
May 3rd, 2007 at 3:28 am
Thanks for clarification Kaushik and my other point is well complemented by today’s article (indian-real-estate-market-opportunities) in Galatime. Now even you are agreeing the fact that Property booom in India is here to stay.
Cheers !!
February 16th, 2008 at 8:19 pm
gurivi, lets say the current rate of the property is 3000/-per sft but the fact is more than 50% of owners would have bought it for lets say 2000/- … these are the guys who can get out . . . they could sell potentially at 2800/- whatever, leaving the person who bought at 3000/- high & dry . . .remember be a stock or real estate or for that matter any market only the last 20% of the guys (who entered late) get slaughtered.