Bangalore Real Estate: Sobha Primrose discount sale?
The Sobha Primrose apartment project continues to give some indication of real estate supply vs. demand in the ORR/Sarjapur road area in Bangalore. In my previous post, I highlighted a drop in the asking rate from Rs 3900 per sq. ft to Rs 3200 (give or take Rs 300 for the overhead). Now check this ad at Realty Offline dated June 16, 2007:
But that’s not it - a recent ad in Craigslist was down to 2850:
The posting has since been removed - wonder if there’s been a sale? If yes, it brings the “going rate” down by ~ 20% within a few months. Are we seeing a bottom?
September 12 Update: New ad in Craigslist offers a rate of 2800 per sq ft.
Oct 4 Update: New ad in Craigslist offers a rate of 2750 per sq ft.
Related Posts:
September 4th, 2007 at 11:26 pm
“Are we seeing a bottom ?”
You’re kidding right ? The bottom will be in when:
1. CNBC stops airing property shows like “High Rise”
2. You start seeing “Mortgage/debt-free grooms preferred” in Times Matrimonials
3. People like you (and me :-)) lose interest in tracking house price declines
September 6th, 2007 at 8:20 am
I beleive apartment prices have reached a peak in BLR and there might be corrections or atleast they will be stable for some time and as pointed out in this blog, the current going rates does not make any sense from investment point of view.
On the Land, i beleive the prices will shoot up more. The main reason is that most of the supply is managed by Politicians, their associates in nexus with criminal gangs. As it is illegal money, they don’t care about the returns and don’t do all sorts of calculations like us, they are prepared to hold long term. They just need a secured place to park their money and Indian system has all the loopholes to help them.
September 6th, 2007 at 1:36 pm
Corrections (just like booms) will not occur in a straight line. I think there will be one or more dead-cat bounces that will suck in those who are currently waiting for a dip to buy.
10% or 20% corrections after the 400% run-ups we have seen are a drop in the pond. That is why the sentiment changes I listed earlier are a much better tell than just the numerical amount of correction observed.
About the politicians - I dont think it will have much of an impact because most of their bulk holdings are on the outskirts of metros (where else will you get “new land” to buy). And with apartments in central parts of metros reducing in price, who cares what happens on the outskirts.
As long as people use words like “corrections” and “dips” to describe the current scenario, we are far off from the bottom. When people start talking about real estate like they now talk about the nasdaq in 2000, that might be closer to the bottom..
September 6th, 2007 at 7:25 pm
I feel politicians/black money is NOT only in the outskirts of the city. they can easily spend 5crore for a 50×80 plot in indiranagar. I have recent first hand experience about people paying 7 or 8 lakhs per month rent for a house. if we apply the current rent yield of 3 to 4% like any other property, the capital cost will be 25crore+.
If you visit any of the BDA auctions, you can see the bidding to 80000+ Rs /Sq Meter and the kind of people bidding, IMHO the kind of people don’t look like genuine white money earners. So I think even within the city the prices are inflated with “investor” money.
But I do agree that prices are correcting and we are no where near the bottom. The sentiment indicator I want to use to is 1) kind of bidding happening in BDA auctions. 2) Number of news paper pages dedicated for real estate. 3) banks openly trying to offload the re-possessed properties. 4) bank loans for real estate growing much smaller % then last few years.
As we all know real estate prices are always sticky on the down side, so I guess we will have to wait for a year or more to see of the signs.
September 10th, 2007 at 9:48 pm
Do you see any other such things. It might not make great sense if we see this trend across various areas and for various developers.