- Bangalore in 'higher demand-rising prices-speculation' spiral leading to higher realizations, cash flows & profits for the RE developer. Affordability ensures no dent in end-user demand.
- 10% increase in sale price / sf of housing will lead to 20% increase in land value considering inflationary increase in construction costs and 45% gross operating profit margins.
- Rising fragmentation & INR appreciation - key deterrents to Blore's RE developers' growth. While former affects capital churning, latter could stumble the potent demand from NRIs.
Bangalore housing market update; Rising demand & prices.
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gautham1212
- Posts: 24
- Joined: December 24th, 2011, 1:00 am
Re: Bangalore housing market update; Rising demand & prices.
Hi Pyaretaj,
I am not clear on what you have mentioned in your post. It looks more like some bullet points. Can you please give more details of what you wanted to inform?
I am not clear on what you have mentioned in your post. It looks more like some bullet points. Can you please give more details of what you wanted to inform?
Re: Bangalore housing market update; Rising demand & prices.
Prices are going up everywhere - small villages, towns, cities. There are 1.2 billion people in India. Prices going up is not surprising
Re: Bangalore housing market update; Rising demand & prices.
I think Rupee is losing value ( purchasing power) due to inflation and hence every thing looks expensive than a year ago. This applies to Real estate as well.
Re: Bangalore housing market update; Rising demand & prices.
Pyare mia,
I feel you forgot to include many more points like,
- Lot of inventory is in backlog from the developers who are unable to sell their assets. Hence we can see lot of home
fairs/exhibitions/Gruhotsava from every banks/NBFC and CREDAI every fortnight.
- Majority of the developers/sellers are not ready to do property transactions in 100% transparent way. prefers cash transactions to avoid paying taxes to the Govt.
- Too much of speculation in the real estate market and there is no "value for Money" logic.
- Lot of criminalization in the Real Estate Business.
- Cost of Construction raw materials has skyrocketed in the last 5 years.
- Cost of Paints/dyes have trippled in last 4 years.
- Labor problem and charges taken steep increase.
- Home Rentals have gone up significantly in the lat 3-4 years. Still not matching the bank interest returns for the investment.
- Home Loan Rate of interest is more than doubled compared to 2005-2006 period.
- With the recent hike of petroleum products, we can expect many more items to become costlier.
- Rainwater Harvesting, Solar Water Heaters become mandatory, Hence the Builder has to Invest another 30-50K extra.
- Severe Electricity Problem and Drinking Water Problem across Bangalore this year due to lack of rains, as the Green & agricultural areas are disappearing at an unpredictable Percentage.
- BDA has not even executed a single layout development project since 2003.
- Severe water crisis in bangalore East, North Zones, inspite of Kaveri 4th Stage II Project.
- Entire Bangalore has become a Garbage City.
- Even the local Corprorators started collecting HAFTA/MAMOOL from all the Developers and BBMP/BESCOM/BWSSB Officials. Hence Bribery Level taking north way.
- Cost of basic needs are going high without any control after UPA Govt came into Power.
- Non-Performing Assets of all the banks have crossed the acceptable limit as more and more people are becoming defaulters.
- Banks are looking for innovative ways to penalize the home loan borrowers at any cost.
- Country's Inflation rate is still at unacceptable rate and very stubborn.
-
-
-
etc
Summary: A common man was unable to make his own nest at his affordable capacity 15 years back. Even now also he is unable to have his own dream house at affordable rate.
I feel you forgot to include many more points like,
- Lot of inventory is in backlog from the developers who are unable to sell their assets. Hence we can see lot of home
fairs/exhibitions/Gruhotsava from every banks/NBFC and CREDAI every fortnight.
- Majority of the developers/sellers are not ready to do property transactions in 100% transparent way. prefers cash transactions to avoid paying taxes to the Govt.
- Too much of speculation in the real estate market and there is no "value for Money" logic.
- Lot of criminalization in the Real Estate Business.
- Cost of Construction raw materials has skyrocketed in the last 5 years.
- Cost of Paints/dyes have trippled in last 4 years.
- Labor problem and charges taken steep increase.
- Home Rentals have gone up significantly in the lat 3-4 years. Still not matching the bank interest returns for the investment.
- Home Loan Rate of interest is more than doubled compared to 2005-2006 period.
- With the recent hike of petroleum products, we can expect many more items to become costlier.
- Rainwater Harvesting, Solar Water Heaters become mandatory, Hence the Builder has to Invest another 30-50K extra.
- Severe Electricity Problem and Drinking Water Problem across Bangalore this year due to lack of rains, as the Green & agricultural areas are disappearing at an unpredictable Percentage.
- BDA has not even executed a single layout development project since 2003.
- Severe water crisis in bangalore East, North Zones, inspite of Kaveri 4th Stage II Project.
- Entire Bangalore has become a Garbage City.
- Even the local Corprorators started collecting HAFTA/MAMOOL from all the Developers and BBMP/BESCOM/BWSSB Officials. Hence Bribery Level taking north way.
- Cost of basic needs are going high without any control after UPA Govt came into Power.
- Non-Performing Assets of all the banks have crossed the acceptable limit as more and more people are becoming defaulters.
- Banks are looking for innovative ways to penalize the home loan borrowers at any cost.
- Country's Inflation rate is still at unacceptable rate and very stubborn.
-
-
-
etc
Summary: A common man was unable to make his own nest at his affordable capacity 15 years back. Even now also he is unable to have his own dream house at affordable rate.
Re: Bangalore housing market update; Rising demand & prices.
Good points msn1270 but everything you have said is also true about other cities, towns and villages. Bangalore is following the trend, and is not an exception.
Re: Bangalore housing market update; Rising demand & prices.
You are right Plotguy.
Just viewing from one angle that, Real estate prices are appreciating year on year makes a very narrow view, as its not the only thing appreciating and rest all stagnant or depreciating over a period of time.
When we look at ground realities in 360 degree & its consolidated impact on our life, I say real estate price is relatively in line with other developments/destruction, earnings, expenses, risks we are facing.
Just viewing from one angle that, Real estate prices are appreciating year on year makes a very narrow view, as its not the only thing appreciating and rest all stagnant or depreciating over a period of time.
When we look at ground realities in 360 degree & its consolidated impact on our life, I say real estate price is relatively in line with other developments/destruction, earnings, expenses, risks we are facing.
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gautham1212
- Posts: 24
- Joined: December 24th, 2011, 1:00 am
Re: Bangalore housing market update; Rising demand & prices.
Well said MSN1270. However it is sad to note that a common man cannot build a home due to sky high prices. One can only hope that things improve.
Re: Bangalore housing market update; Rising demand & prices.
msn1270 - You always make excellent points. I agree.
Re: Bangalore housing market update; Rising demand & prices.
Also, the fact is quality of life has deterioted, with air, noise pollution rising in the past decade.