Let the 5000 per square foot come to 2000 per square foot, and only then start thinking of buying.

This could be predicted easily with a simple "back of the hand" calculation.

1. 85% of the apt sales are to salaried class in IT/BPO sector. Hence there is less scope for black money transactions as opposed to Mumbai/Delhi. This poses a limit to which prices can be afforded.
2. 25000 new apts will be in market by next year-end with an average price of 50 lacs. (Better ones at 75-85 lacs)
3. 90% of all apts are bought on home loans. A 50 lac apt will mean about 40-50k per month EMI at current interest rates. They should have a take home income of atleast 80k considering the rent(8-20k) they may be paying. To take 80k per month home, the annual pay must be atleast 15 lacs.
4. Of the 2 lac IT/BPO employees in Blore, only about 15% will have such pay. That is 30000 people. Of which atleast half are already decently settled and another 5-10000 people are waiting for their apt completion to move in.
5. That leaves another 5-10000 propective customers at the maximum. This cannot change drastically in one year.
6. Clearly there is a demand-supply gap in favour of the latter

One more thing, about 50% of the buyers are NRIs whose pay have come down (relative to INR) over the last one year due to currency appreciation. Interest rates in US also hurting for those who have invested there.



Edited by Buffet - 12/Dec/2007 at 9:28pm

   Mr. V,
  My experience was not directly in the property market but my tracking the listed company-SI Property Development Ltd.
The boom  in property prices had been largely speculator-driven and India's economy was not so sound.An insider told me that he knew the boom was fizzling out when the same number of buyers came to his office to buy flats  but fewer transactions actually took place.
  SI Property collapsed as they had been too aggressive in their bid to dominate the market.
  SI Property missed out on a chance to dominate the market-achieve a market cap of Rs.10000 crores- if they had just survived.Purvankara  was very small in 1995 but they survived and thats important.


Edited by Ajith - 12/Dec/2007 at 10:10pm

Bangalore is getting crazy land valuation....dont know if it is coz of IT and BPOs ..it is like people are poring money on property.Guys like Purvankara are really demanding some premium.75 lakhs for flats my goodness .These days lakhs are nothing .Can the middle class afford it  only time will tell.


Edited by PrashantS - 12/Dec/2007 at 11:42pm