Mar 26, 2009

Do Indian Newspapers Report False Real Estate Prices??

Almost all the Indian newspapers that I read on a daily basis have started an exclusive section called 'Real Estate'. This particluar section is a major revenue generator for them because I see a lots of advertisement on the pages.

On the right hand side of the main page there was a column that talked about the rates that are 'prevalent' in the Delhi/NCR region. I was absolutely shocked to read the prices, they were higher than what even the brokers were quoting. The Source of the property rates in various locations of Delhi/NCR was a property website.

So I picked that newspaper and website and started some analysis. (I will not take newspaper or names of the property website for obvious reasons.)

The 'prevelant price of any product be it cement, steel , stocks, food, property is determined by the 'Transaction' price. For the benefit of the starters when a trade happens it has two prices. One is the 'Seller' Price , which is the price at which seller quotes a product. Other is the 'Bid' Price, which is the price which buyer is willing to pay for the product. And when the seller and buyer price matches the product is sold at a price which is called 'transaction' price. The same principle applies across all markets and stock exchanges of the world.

So if a seller wants to sell a house at $200,000 but the buyer is willing to pay only $150,000 the transaction does not happen. Now if somebody asks what is the 'Prevalent' rate of the house. What do you say? Do you quote Seller's price $200,000 or the $150,000 which buyer is willing to pay. We know that no transaction happened. Here the newspapers fool peole by doing a small fraud.

I logged in to the property website whose source the newspaper had quoted and started looking for rates in Delhi/NCR region. I noticed that the 'prevalent' property prices quoted were the "Seller' Price. It was not the price at which the 'transactions' were happening. The property websites in UK always report the 'Transaction' price in an area. It doesn't matter what stupid price the 'Seller' wanted to sell his house for.

If some persons log into a website and wants to sell 1 BHK for 1 million dollars, does it become the so called 'prevalent' prices in that area. who is validating it? No one. And all these newspapers report these ambiguous rates.

Interestingly on the same property website there was Find buyer section where I tried to find what is the price a buyer is willing to pay for the 'property' in Delhi/NCR area. There were more than 45K buyer's and they also had mentioned the price they were willing to pay for the house.
Below is the chart. You can see the number of buyers who have the budget between a price range.


(Click on image to enlarge)

So you have seen that these are the kind of prices a buyer is willing to pay for the house. This is the 'prevalent' rates of property. This is the price at which the supply should come in.
You can see that hardly there is any demand for houses priced at above 60 lakhs INR. But 90% of the prices are above 60 lacs. Even after my IIT degree I am not able to undertand the maths of the property websites, newspapers and the builders. Clearly some nexus exists between them.

Let us create the awareness movement and let us tell to everyone so that these guys are not able to fool us.

81 comments:

  1. excellent analysis

    ReplyDelete
  2. I closely follow anything related to genuine discussions on real estate for several years, and have found this is one of the best pieces written by a common person. there is no question that several publications led by (market leadrer) have fallen into trap of becoming virtually mouth pieces of real estate big players. Witness how in a national daily(TOI), every week without exception there is an article as to how this is the best time to buy property in their real estate supplement- only the reasons offered are different eery week.Unfortuntely there is no platform for consumers to unitedly fight their cartelisation and exloitation.

    ReplyDelete
  3. An excellent article. Way to go.. Brilliant..

    ReplyDelete
  4. The graph matches my thinking. Even if you factor in the increase in land, steel, cement and labor prices...the prices for homes should not exceed 40-50 Lacs. And clearly that's the price buyers can afford.

    You forgot to add banks in the property cartel list. Banks also introduce teaser rates to lock in buyers and then try to suck them dry. So the nexus is politicians, bankers, underworld, builders and the media. Looks like we poor suckers have no chance of surviving against this coterie..

    ReplyDelete
  5. good job. your analysis is spot on

    ReplyDelete
  6. The blogger has written about the Bank nexus in Feb article http://fraudsofindia.blogspot.com/2009/02/government-bailsout-builders-in-india.html

    ReplyDelete
  7. An Eye opening blog. Thank You very Much

    Regards
    Chirag Ali

    ReplyDelete
  8. Very good point of view. They can only expect what people can afford to pay. And during these uncertain times people will hold back even what they can afford to pay.

    ReplyDelete
  9. Thanks very much for this article ... Atleast I'm able to see that lot of people are sailing in same boat ... Real-estate prices are unrealistic and the property owners, builders are very rude and arrogant and cheating in nature.

    Please be careful when you purchase property in Bangalore ... The property owners are cheating here in lot of ways.

    ReplyDelete
  10. "Interestingly on the same property website there was Find buyer section where I tried to find what is the price a buyer is willing to pay for the 'property' in Delhi/NCR area."

    hi can you let me know how you did this I need same info for Hyderabad. r4rushabh@gmail.com
    thanks
    Rushabh

    ReplyDelete
  11. Some days back builder were asking for bail out package , now they are trying to increase prices again. I feel, we work for builder and bank only.

    ReplyDelete
  12. We buy and sell properties. Pragati Resorts is the fastest growing real estate business in hyderabad. Many Plots for sale in hyderabad, villas, Flats etc. check it out hyderabad real estate

    ReplyDelete
  13. Villas In Hyderabad is situated in a eco friendly and quiet environment at affordable price... Get prices & details at Keerthi Estates.

    ReplyDelete
  14. Thanks for your information.Here I would like to tell you one thing that NRI's prefer premium real estate developers like LGCL or Real estate Companies, who offer luxurious properties like premium homes in Bangalore, luxury houses in Bangalore, residential villas in Bangalore and Villas plots in Bangalore.
    villas in Bangalore

    ReplyDelete
  15. This comment has been removed by the author.

    ReplyDelete
  16. This comment has been removed by the author.

    ReplyDelete
  17. Great work dude,you have been done great job. Thanks for sharing such a excellent analysis.
    Find Property

    ReplyDelete
  18. Thanks for providing the information. This is very nice post and information about real estate...
    Shopping mall in delhi ncr

    ReplyDelete
  19. Thank You for above information this is relay nice but i have something to tell you. Horizon Concept Lunch Iridia Noida in Sector 86. 2BHK and 3BHK Aprtment. For more information Visit

    http://iridia.in/

    ReplyDelete
  20. Good information share.
    Thanx. I have a residential project in Noida. Imperia Group launched this residential project.Imperia Mirage Homes Yamuna Expressway

    ReplyDelete
  21. Wow its really a Great post,Thanks For sharing with us.For the idea of prices villas in Mysore,take a glance at its villas in Mysore services.

    ReplyDelete
  22. Very good blog. Very nice. Thank you for making a wonderful blog. It’s truly the most exquisitely beautiful blog ever, ever ever..
    A project at Yamuna Expressway Supertech Fable Castle which is launched recently by Supertech. That's provided 2/3 and 4BHK apartments at affordable price.Supertech Fable Castle.

    ReplyDelete
  23. Very Good Blog it is actually useful for me. Keep writing and happy blogging. Great blog post. Really looking forward to read more.
    Sunworld Vanalika.

    ReplyDelete
  24. I Have Read some Excellent Stuff Here.
    Certainly worth Bookmarking for Revisiting.
    I Surprise How Much Effort you place to make one of these Great

    Tender Informative Website.

    My Page: Real Estate Services Tenders

    ReplyDelete
  25. Wonderful blog & good post.Its really helpful for me, awaiting for more new post.
    I have a good Information about real estate residential project.
    Sunworld Arista Noida Sector 168 is newly launched by Sunworld Group. It is offering 1/3/4 BHK residential flats. The available sizes are 615 sq.ft to 3500 sq.ft.

    ReplyDelete
  26. Thanks for good share.For your information here is the link to see villas in Bangalore

    ReplyDelete
  27. Excellent article and thanks for the information you have provided. In present days, the demand for real estate properties has increased in Hyderabad and it is the best place for the investors/buyers to invest in real estate activities.
    Real Estate Property

    ReplyDelete
  28. Great job and interesting article. Thanks for sharing this information.
    Real Estate Property

    ReplyDelete
  29. This is a great content, I’m so glad that I’ve found this high quality blog!

    ReplyDelete
  30. Your post is very well. You share the nice information about the Apartments. You create the lifestyle luxury homes.

    real estate Barcelona & sitges accommodation

    ReplyDelete
  31. Hello,
    Nice Information....
    WTC Noida is the famous real estate project located at Tech zone-1, greater noida which launched by Spire World. WTC project spread more than 330 cities and 100 countries. It's a standard class economic zone offers sizes are 350 square feet ti 15050 square feet at an affordable price.

    ReplyDelete
  32. Thanks for your information.Here I would like to introduce most trusted websites for office spaces for lease and office space bangalore.

    ReplyDelete
  33. It is always recommended to research the property details from online as well as off-line resources before investing. Thanks for sharing.
    Dreamz Infra Reviews

    ReplyDelete
  34. I appreciate you sharing this blog..It’s very helpful for the people who are searching for this..corporate office space and furnished office space on rent in pune

    ReplyDelete
  35. Media has become biased this days. they print for money this days. so they are just publishing the prices that are said to them by the developers. developers are not ready to compensate with their profits in this tough market too.

    ReplyDelete
  36. As it is said that every coin has a bad side too, the disadvantage of today's media is that they sell themselves easily. they can post false news if they are paid well and even hide the negative points of people if paid well too. but i can even say that today's media has been also playing very essential role in taking out scams that take place in this society.

    ReplyDelete
  37. Hello Authors.
    World One is the new class commercial complex to locate Noida. It offers office space , retail shops and service apartments with the sizes of 600 to 850 sq ft at an affordable price.

    ReplyDelete
  38. Thanks for sharing. I would like to recommend you. I hope you will post again soon.
    Kind regard
    Villas in Sarjapur road

    ReplyDelete
  39. Crs Property offers Residential properties in delhi ncr with all amenities and facilities that are important for home buyers.

    ReplyDelete
  40. Aman Heights Flats in Ghaziabad an Integrated Township Flouting Building by Laws. Stringent Measures have been Taken Against these units.

    ReplyDelete
  41. Arihant Buildcon is a leading builder, offers high rise flats in Greater Noida West, Indirapuram, Delhi NCR, India.

    ReplyDelete
  42. New Projects in Yamuna Expressway
    :-very nice information, we are glad to read this news or post,

    ReplyDelete
  43. Thanks for the information you have provided. In present days, the demand for real estate properties has increased in Hyderabad and it is the best place for the investors to invest in real estate.
    Real Estate in Hyderabad

    ReplyDelete
  44. I think, this is really very well information given about Supertech Eco Village 3 Greater Noida West. Thanks for giving this information in front of me.
    Flats For Sale In Dwarka

    ReplyDelete
  45. Very useful information, specially for people who are looking to invest in real estate. These kind of articles are very helpful for property investers. Also read my blog 1 bhk flat in Pune hope you like it.

    ReplyDelete
  46. Find new launch properties from reputed builders in delhi, gurgaon , Noida , faridabad etc Get real estate in delhi/ncr – buy , sell , rent , sell property in faridabad, buying real estate in delhi Ncr, commercial Property in faridabad , residential property in faridabad .

    ReplyDelete
  47. A very informative and enlightening post thanks for sharing this piece of information it is indeed very helpful. I also want to share a new commercial project Assotech Business Cresterra

    ReplyDelete
  48. Commercial Property in Faridabad - With better infrastructure, well connectivity to Delhi, better medical competence and fast developing industry, Faridabad has been looked forward by investors and buyers as an attractive investment option. Nothing can be better than acquiring a real estate property in Faridabad because it is one of the highest developed areas in the National Capital Regions of Delhi, capital of India.

    ReplyDelete
  49. Thanks for sharing such great post.Really your post is truly informative and useful.Keep updating.
    Villas in Hoskote Near Bangalore |Flats in Hoskote around Bangalore

    ReplyDelete
  50. Wow!! The information given here is so remarkable. The given information will very helpful to know. The premium villas in mysore are the best villas to come through and to live in. ypu will find such villas @ zuariinfraworld.com

    ReplyDelete
  51. Great Investment Opportunity in UTC Code 60 Knowledge Park V Greater Noida
    Buy One Studio, Get One Office Free
    PM Modi's #Startup India launch

    ReplyDelete
  52. Resorts in Hyderabad are fun and joy to celebrate parties and day outing with families,friends..
    <a href="http://www.palmexotica.com/>Resorts in Hyderabad</a>

    ReplyDelete
  53. Realty World Infratech Pvt. Ltd. is having best and prominent real estate team of professionals who deals in sale / buy & rent/lease of office space for lease near fng. I want to share some new commercial project www.propertiesinnoida.com

    ReplyDelete
  54. Search over a Million real estate properties for sale and to rent from top developers, real estate agents, direct owners in India - Shopsandhomes.com

    ReplyDelete
  55. I think, this is really very well information provided about few upcomming commercial spaces in Rajarampuri. Thanks for given this information here about this blog.
    4BHK Flats in ITPL

    ReplyDelete
  56. Very information information you shared.if any one hunting a house of a flat in anywhere in India then visit Searchpropertyindia.com. i am sure you get property in very attractive price.

    ReplyDelete
  57. Nice Blog, Thanks for sharing this blog of related land/plots for sale in Mysore. If I have any queries about site rates then I will ping your Blog.

    ReplyDelete
  58. thank you for the post its very help full those who are searching for villas it is very difficult to find villas so who want good features of villas contact.
    Log Cabins

    ReplyDelete
  59. Thanks for sharing information and I have also some property for sale in BENGALURU/Mysore/Hyderabad/Vizag.for more detail contact property developers/land for sales.

    ReplyDelete
  60. This is really a nice blog in which you discuss some useful things, thanks for sharing this and keep going on.premium luxury villas in thrissur

    ReplyDelete
  61. We have Residential plots for sale in Bangalore, Hyderabad, Vishakhapatanam and Mysore Plots for sale in Hyderabad

    ReplyDelete
  62. Well and informative content given about Prestige Misty Waters Bangalore. Thanks for given this information here about this blog.
    1 bhk for sale in noida

    ReplyDelete
  63. Thanks for sharing this blog of Land for sale in Mysore, Plot for sale in Mysore, If you want to any enquiry need call to us.

    ReplyDelete
  64. If you're a businessman and you consider setting up your own call center, the best scheme that you need to try is the call center seat leasing.
    Website :
    www.callcentreseatsingurgaon.com

    ReplyDelete
  65. Nice article Thanks for sharing very helpful information. We all appreciate with your blog post Search for property on Terracon Projects

    ReplyDelete
  66. For most would-be real estate agents, the courses and the test for licensing turn out to be less fearful than they anticipated. Web Design Bangalore

    ReplyDelete
  67. Aashiyana Properties provide property in sonipat and apartment in sonipat. Also find here residential property for sale in sonipat, apartment for sale in sonipat. Purchase property in sonipat. Property in sonipat

    ReplyDelete
  68. Find upcoming new housing residential project in gurgaon and commercial project in gurgaon. View Gurgaon upcoming commercial studio new ready to move residential project and commercial project in golf course ext road, aipl joy centre, bhiwadi, neemrana, dwarka expressway and sohna. VIEW MORE:- Residential project in Gurgaon

    ReplyDelete
  69. 3 bhk flats available in greenfield colony Faridabad. VIEW MORE :- 3 bhk Flats

    ReplyDelete
  70. 3 bhk flats available in greenfield colony Faridabad. VIEW MORE :- 3 bhk Flats Faridabad

    ReplyDelete
  71. 3 bhk floor available for sale in greenfield colony faridabad. VIEW MORE :- 3 bhk floor available for sale

    ReplyDelete
  72. Find here for sale and rent of 3 BHk/2 BHk apartments in lucknow and 3 BHk/2 flats in lucknow. VIEW MORE :- 2 flats in lucknow

    ReplyDelete
  73. Great pieces of advice! Thank you, guys. This is really great and informative post about Luxury Property in Faridabad . You are doing good and I like your blog post.

    ReplyDelete