Home sales went up by 97% in September

Mumbai: The sale of houses in Mumbai, which was plunging in the corresponding period last year, revived significantly in July-September. The figures are showing a drop again after realtors increased prices, data from the house registration department in the city shows.

September saw a 97% jump in house registrations — which includes new and resold homes with 6,112 properties stamped compared with 3,107 in September 2007.

The components of registration include certificate of sale, apartment deed, conveyance and agreement deed.

This led to a 68%, or Rs180.4 crore, jump in revenues for the state exchequer. Hari Prakash Pandey, vice-president, finance, Housing Development and Infrastructure Ltd (HDIL), the third-largest realtor in the country based in Mumbai, said the rebound has been quite significant.

“We have seen a V-shaped recovery since March. Though prices are still below 2007 levels, they have risen 10% from 2008. We are seeing record sales since July,” Pandey said.

HDIL recently launched its Bhandup project, where it is developing 1.3 million sq ft with approximately 1,000 apartments.It has already sold 15% of the properties, priced at Rs5,751 per sq ft, in week since launch. “We have priced it competitively and after selling more than 60% stock we would revise our prices.”

Despite the price hike, sales are very good, said Abhisheck Lodha, director, Lodha Developers. “Sales are higher by 40-45%. In our Dombivili project, we sold 900 units in the first 9 days since launch. I hope it is a long-term recovery. As for prices they can increase at a moderate pace, but if there is a sudden price rise demand will vanish,” Lodha said.

A real estate analyst with a domestic brokerage points out the sales trend is very impressive in March-July, when prices were low. “But if you see the numbers since, sales have been slipping in inverse proportion to prices,” he said.

Source : http://www.dnaindia.com/money/report_home-sales-went-up-by-97pct-in-september_1307381

Home prices up in 15 cities, shows Residex

The new index of residential price movement – Residex, released by the National Housing (NHB), shows a mixed trend among 15 major cities.

As many as nine out of 15 cities, covered by Residex across the country, have witnessed hardening of residential property prices. Prices of homes have recorded a decline in cities such as Delhi, Bangalore and Bhopal, between December last year and June, but the same went up in cities such as Mumbai, Kolkata and Chennai, among others.

Prices of residential property in Mumbai have increased by 5.98 per cent between December and June, and by 26 per cent and 13 per cent in Chennai and Kolkata respectively. Prices of residential property in Ahmedabad increased by 27 per cent in the same period and during the same time, Faridabad, the neighbouring city of Delhi, reported price hardening to the extent of a whopping 36 per cent.

Other major cities that witnessed price hardening include Lucknow, Pune, Surat and Patna.

On the other hand, the National Capital registered a fall of 7 per cent in prices of residential properties, while Bangalore and Hyderabad witnessed a correction of 24 per cent and 29 per cent respectively. Other cities where prices fell are Bhopal, Jaipur and Kochi.

NHB, a 100 per cent subsidiary of the Reserve Bank of India, comes out with pricing index of residential properties across 15 major cities in the country twice a year.

http://www.mydigitalfc.com/news/home-prices-15-cities-shows-residex-714

Recession good for property buyers

The market may witness an over supply like condition in the affordable segment of residential real estate making prices range bound in times to come. Though the global financial crisis affected developers badly, it brought cheer to the middle class end users as builders were forced to bring down their units prices to the affordable range of Rs 5 lakh to Rs 30 lakh.

In fact, the crisis led to emergence of a new segment of affordable housing in residential real estate in the country. This helped revive realty market and instilled a new confidence among developers and end users, according to Samir Jasuja, founder CEO of PropEquity Research.

In order to bring down prices to drive sales, developers cut the rate by lowering specifications and also by reducing the size of units. The combined effect of cutting the rate and reducing the size led to a steep fall in prices of two and three-bedroom apartments, by as much as 30% to 40% from their peak level of early 2008.

The fall in prices spurred demand. Many developers even sold their entire projects in only a couple of days. This is mainly because developers could successfully convey the impression to buyers that availability of apartments at prices at which they offered would not last long. This made the buyers queue up to buy these apartments.

But as demand rose sharply in this category, more and more developers launched apartments in the affordable segments and supply increased manifold. According to Jasuja, this category is now beginning to get overcrowded with a rapid increase in supply, which is outstripping absorption and leading to an inventory pile up. According to the accompanying chart, absorption rate or sold-out rate in the last one year in apartments in the price range of Rs 5 to Rs 15 lakh is much better than that in the Rs 15 to Rs 30 lakh range. This is also because of the number of apartments launched in the Rs 5 to Rs 15 lakh price range is much smaller than that in the Rs 15 to Rs 30 lakh range in the National Capital Region (NCR).

Gurgaon saw the launch of maximum number of apartments in the affordable range. But the sold-out rate here is the second worst at 37%, next only after Greater Noida, where it is only 25%. As sales in affordable range of apartments picked up, many developers jumped onto the affordable housing bandwagon to bail themselves out of the global economic crisis.

Many of them treated affordable housing category as the new mantra in marketing and launched several projects in this category resulting in an oversupply in the market, Jasuja says. Interestingly, as demand picked up and number of transactions increased, many developers revised prices upwards, by around 10%. However, consultants feel price hike is more cosmetic in nature as developers are giving discounts over quoted prices. Some developers increased the quote prices, but the discount was also suitably hiked.

Data collected by PropEquity from 13 cities suggests that rate of sales (absorption) of affordable units have slowed down in the September 2009 quarter. In the early phase, the euphoria was mainly due to a huge pent up demand in the category. Falling absorption velocity coupled with an over supply in this category has now resulted in an inventory pile up. As cost of carrying inventory in real estate sector is very high, developers will resort to price correction at the cost of profits. But developers argue the prices are at rock bottom. In most of the areas of NCR, developers are selling apartments at 30% to 50% discount to the average price of apartments in the area. In most of the cases, they are working on a very thin profit margin.

Therefore, a further cut in prices will be a big disincentive to launch the project itself . However, bankers and consultants feel that most developers are under a huge debt. As they are not able to raise funds through equity-sell, they have no choice but to launch projects for the purpose.

Source:http://mail.google.com/mail/?shva=1#inbox/124a85c163d611fe

Realty builds on affordable homes

NEW DELHI: Ekam and Roma Bansal’s (names changed on request) dream of owning a home came true last month when they booked a 12th-floor

two-bedroom apartment on the Greater Noida Expressway, near Delhi. They will be paying about Rs 30 lakh, of which some Rs 20 lakh will financed by a loan.

The Bansals are thanking their stars that they failed to seal a deal in the past two years they were looking to buy an apartment. Prices in the National Capital Region (NCR) are currently down a third from their peak at the end of 2007 and the slowdown has forced property developers to drop prices and build cheaper, compact homes that fit the budget of those such as the Bansals. Their builder Unitech was down in the dumps earlier this year as real estate prices crashed and buyers disappeared. The company is now patting itself on the back after deciding to launch so-called affordable homes, the relatively lower-priced apartments that are attracting buyers such as the Bansals.

Unitech says it sold 8.16 million sq ft of residential space between March and September out of a total of 10.11 million sq ft, helping it post revenues of Rs 3,913 crore that are higher than in the boom years of 2006 and 2007. And all the apartments it sold were in the affordable category, costing less than Rs 30 lakh apiece.

For Unitech and other real estate developers, building affordable homes is paying rich dividends. A survey of India’s top property firms and estimates from industry body Confederation of Real Estate Developer’s Associations of India (Credai) show that over 70 million sq ft of residential space was sold in the first six months (March-September) of the fiscal 2010). Bulk of the sales happened in the last 90 days and majority of the homes sold were in the affordable segment.

By the end of the fiscal in March 2010, builders hope they will have sold close to the 190 million sq ft they managed in 2007.

Across the expressway, where the Bansals plan to shift in about two years, Jaypee is building Wish Town, a 1,162-acre swish golf township with premium homes, malls, school, colleges and hospitals. It originally launched apartments with a view of a golf course and priced these at a minimum of around Rs 1 crore. But over the past few months, it has launched smaller flats starting Rs 25 lakh.

“In six months, we sold 10,000 affordable homes, while we also managed to sell another 2,000 luxury apartments around the golf course,” says Manu Goswami, head, sales and marketing, Jaypee Greens.

Unlike three years ago, when most developers were not offering affordable houses, now everyone is in that segment, says Hiranandani Group chairman Niranjan Hiranandani. Mumbai, where Hiranandani is based, has seen close to 8.4 million sq ft of housing sold in the past 6 months.

“Sanctions have picked up and we are already at 70% of the peak. We expect home loan disbursals to reach the peak levels of 2007 by the end of this fiscal, subject of course, to the fact that developers do not increase rates further,” says SN Nagendra, senior general manager, HDFC, one of the country’s largest housing finance companies
.
Developers say enquiries for homes began around March 2009 and conversions started to happen July onwards, with bulk of the demand in the affordable segment.

There was latent demand but it was not converted into sales due to economic uncertainty, observed Mr Hiranandani.

“The sudden spurt in demand due to perceptible change in the economic environment in the past three months, combined with lower interest rates, has bolstered the confidence of home buyers.”

Among the major developers who have ridden this new real estate wave are Unitech, the Jaypee group, DLF, BPTP and Omaxe, witnessing a sharp rise in demand, particularly for new projects.

Home loan trends bolster this claim. In the first six months, State Bank of India’s disbursements were in excess of Rs 10,000 crore, compared to Small is beutiful

Rs 3,900 crore in 2007-08 and Rs 4,900 crore in 2008-09 for the April-September period.

“We are sanctioning much higher volumes now for home loans. The growth in home loans has been even higher than in 2007,” says P Nandakumaran, head retail banking, SBI.

However, due to lower pricing, average realisations for most real estate players is down 25-30% per sq ft in comparison to 2007-08. Unitech has seen its average sales price coming down from Rs 4,000 per sq ft before September 2008 to Rs 3,234 per sq ft in the past 6 months.

The profitability of these companies will surely come down due to the decline in realisation, says Aditi Vijayakar, executive director, residential service at real estate consultancy Cushman & Wakefield.

“The profit margin of these companies depends upon when and at what price these developers bought the land,” she added.

Jaypee, which has sold close to 11.5 million sq ft of residential space in six months, has seen a decline of 25-30% in average basic sale price, primarily because it is selling more affordable homes.

Unlike during the last boom period when developers concentrated solely on luxury housing, this ongoing surge is seeing a mix of both affordable and luxury housing.

“The market was overheated and people were waiting for it to come back to a realistic level. The expectations of developers and buyers were mismatched. Everyone was working on the wrong product, including us,” says Manu Goswami.
A senior official of DLF, the largest real estate player in the country, said that the company has sold 2.5 million sq ft of space in the past three months. Of this, about 2.1 million sq ft has been sold in the past 30 days.

“The confidence of the people is back as the economy is turning around. This has led to robust demand for housing at good locations and affordable prices,” says Rohtas Goel, CMD, Omaxe. The company has sold close to 1.8 million sq ft of housing space over the past three months.

Delhi-based developer BPTP has sold about 6,800 homes across three properties in Faridabad totalling about 7.76 million sq ft. According to Prakash Challa, vice-president (south) at Credai, the southern region has seen sales of around 20 million sq ft in the past 6 months. The eastern region saw close to 3 million sq ft of sales.

Ashish Puravankara, director of Puravankara Projects, says that while demand was always there, it is sentiment that has changed.

“Now, with companies showing great results, hiring again and even giving a 8-10% hike in salaries, the sentiment is getting better.”

Source:http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Realty-builds-on-affordable-homes/articleshow/5147148.cms?

Indian Property Developers Expects Higher Sales

DUBAI — Indian property developers expect bigger post event sales as a large number of Non-Resident Indians, NRIs, visit IndiaHome, an annual real estate event in Dubai, concluded 
on Sunday.

Around 18 prominent builders from across India showcased their projects during the three-day event for the Indians working in the UAE.

Organisers of IndiaHome claimed over 5,000 footfalls during the last two-days of the event.

Cityscape Dubai 2009, the region’s largest property show, concluded last week on a subdued note, with preliminary estimates showing a 50 per cent drop in visitors.

“This year’s show is much better than last year despite the global economic downturn,” Sidharth Sengupta, Senior Sales Executive of Gera Developments told Khaleej Times on Sunday.

Majority of the expats in the UAE belong to India and according to recent government statistics Indians account for 1.8 million of total 6 million population of the country.

Despite a good number of visitors no purchase or booking was done till the third day and developers are expecting the deals after site visits by the interested buyers.

“We are expecting some site visits by NRIs in November and after that any booking can be done,” 
Sengupta said.

Citibank NA was the sponsor of the event, which was jointly organised by the Dubai based Media Agency Middle East and Signature Events.

Citibank NA offered a loan of up to Rs.50 million to NRI customers for ready-to-move and under-construction properties which can be obtained under flexible repayment plans.

Radhakrishnan, one of the visitor and NRI, said that he does not need to go to India for site visit as the location of the project, he is planning to select, is close to his native town.

Another exhibitor Jackbastian Nazareth, Executive Director of Sobha Group, said that the first two days were ‘super busy’.

Sobha Group showcased 15 properties at the event. “No booking done because site visit a must before buying a property, Nazareth said, adding: “Even domestic buyer prefers site visit first.”

An NRI Ghulam Roshan, Managing Director of Dubai-based BlackHood Real Estate, said that there is a big gap between supply and demand in India. There is a demand of 6.5 million units in India in only mid-sized segments, Roshan said.

Companies participated  at the event included Brigade Enterprises, Chaithanya Projects, Emaar MGF Land, ETA Star Constructions, Fairy Land Foundations, Gera Developments, Goel Ganga Group, Hiranandani Constructions, Hiranandani Palace Garden, Hiranandani Upscale, Jaiprakash Associates, K Raheja Corp, Kalpataru, Kumar Properties, Lancor Holdings, Paranjape Schemes (Constructions), Sobha Developers and Three C Universal Developers.

Source : http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2009/October/business_October258.xml&section=business&col=

Indian Residential property prices rise 15%

Wonder why Indian realty woke up so late when the US realtors started this almost 3-4 months back and are about to wind up their campaigns as there aren’t anymore buyers left for them to lure at these prices. Is RE really getting better in India, let’s see. Residential property prices rise 15%

The upswing has begun. Not only have the sales picked up, but the prices of residential property too have increased 5-15 % in the last couple of months. With a long festive season ahead, realty experts believe property markets could see heightened activity, provided developers desist from increasing prices of residential space any further. “After almost a year-and-a-half, we see a renewed demand in the residential sector.

During the last three months, sales have picked up by almost 100%, and with a long buying season ahead, the property prices will definitely move up the graph,” says Sameer Sinha of Savvy Infrastructures Ltd. “In Ahmedabad, going by conservative estimates, the prices of residential property is expected to rise by another 25-30 % in the next one year”, Mr Sinha said adding that the prices in the city have already risen by about 15% since the markets bottomed out earlier this year.

The fresh demand in the housing sector has boosted the confidence of developers as well. Earlier this month, the city-based body of developers, GIHED (Gujarat Institute of Housing and Estate Developers) displayed about 500 projects worth Rs 3,000 crore at property show in Ahmedabad. “As the economy recovers and grows on a pan-India basis, residential demand is expected to grow along side. C&W Research estimated demand to be over 7.5 million units by 2013 across all categories such as Economically Weaker Section, affordable mid segment and luxury segment. The residential demand for NCR, Mumbai, Bangalore, Pune, Chennai, Hyderabad and Kolkata is estimated to be 4.5 million units by 2013”, Ms Aditi Vijayakar added.

Has the author actually gone to ground zero. If you walk around Wakefield/IT park in Bangalore, you will see 1000’s of flats in vacant position either to be sold or lent out with NO takers. In fact, you can easily find an apartment that is NOT even ready at this time being sold at a discount of upto 40% to what the builder is quoting.

For example, if the builder is quoting 50L for a 2 BR in wakefield, Blore, you can easily find the same sized flat on some of the RE websites where owners have put up theirs for sale at a whoppingly low price of 30L. Now that’s the kind of demand these analysts who write all “hypothetical stuff” are seeing. Sentiment is improving in Hyderabad is another article. Hindu Business Line article

Referring to the supply situation, Mr Agrawall said that while there is glut in the Rs 50 lakh to Rs 1crore apartment and villa segments, the supply in the affordable segment is inadequate. In the Rs 1 crore and above category too the number of builders and projects are very few, he added.

All these projects costing 1 crore are at least 10-15 Kms away from the city. Traveling within city, from one end to the other takes an easy 2 hours. One can only imagine the pain one would need to take to travel if they buy at these places that too at exorbitant prices. This is a trend that is way too familiar. Stock market rises 100%. Everyone blindly puts money in it. Makes ton of money. They now move to RE. RE picks up for a little bit. Folks start the “cat and mouse” chasing game and force the prices to go up. When the number of such folks are done. RE comes crashing down.

One can write up a program depicting this behavior and pattern in india and put it in a loop. Unfortunately, common man who may not have access to gory stock markets or higher salaires is the one that gets trapped in all this mess. Common man always gets inot the chasing game at the very end. Like folks who have bought stocks in the last month are trapped for a good 6months to 1 year before they could realize a profit. Similar is the case with RE too.

Coming to affordability, with Labor pains growing not many folks are out there who could a) afford to buy a house, b) qualify for a loan to buy a house. If US market is any clue, then Indian RE market too will go down further. At the current juncture the oversupply of units is hurting and NOT the demand. Demand is and will always be there in a country that is growing. However, unrealistic predictions got Realtors into building too many units when they did not need. Another case in example is Raheja builders who are stuck with a multi-crore residential project in Bangalore whose construction has been shut-down after almost 70% of it being complete. What we at SB would like to state is that do NOT get swayed by those analysts articles and get too pumped up.

Always do your own research before jumping into any ship. Internet is a great resource, make the most of it. We have gotten so many feedbacks stating that we are always on the pessimistic side rather than being optimistic. Please do realize that you switch on TV, everyone will say buy stocks, buy houses. There wouldn’t be anyone who would say do NOT buy. Because everyone has a vested interest. We do NOT and hence our analysis is unbiased and true to our knowledge. And truth is always bitter.

Source:http://www.marketoracle.co.uk/Article14114.html

Low-cost flats to boost demand in real estate sector

Affordable housing seems to be the flavour of the day. This is not just among salaried class, real estate players on the ground too visualise fortune in building low cost flats.

A survey on current scenario on country’s real estate sector reveals that 34 per cent of demand in residential segment is in the price bracket of Rs 5-15 lakh; 26 per cent in the bracket of Rs 15-25 lakh; 22 per cent in the range of Rs 25-40 lakh; 12 per cent in the range of Rs 35-50 lakh. In luxury house segment with properties costing above Rs 50 lakh the demand level is just six per cent, the Ficci survey shows. Interestingly, the survey reveals that parking funds in affordable housing projects has emerged as safest bet for developers followed by developing demand based commercial spaces. Special Economic Zone (SEZ) and retail segment are expected to be the least preferred asset class to drive the sector towards recovery. Although real estate sector has started to show some signs of revival a majority of the industry experts expect the residential segment to recover by the end of 2009 with a 25-30 per cent renewal in demand. The commercial segment expected to pick up after the third quarter of 2010.

Realotrs believe that retail segment will revive only marginally by end of 2009 by approximately 10-12 per cent rise in demand and will recover only by the last quarter of 2010. Developers now seem to concentrate on high volumes and lower margins as against low volumes and higher margins and have shifted focus towards affordable housing segment, the survey reveals. As per the findings the stimulus packages and interest rate cuts have to an extent eased accessibility for bank finance for the developers. However, banks are still cautious in lending and prefer lending for projects nearing completion to lower risk.  Most respondents feel that there is an urgent need for a real estate regulator (RER) that would not only act as a nodal agency for all real estate developments but also quell the concerns of consumers as well as the real estate industry as a whole.

The Ministry of Urban Development has already floated a Discussion Paper in the public domain on the need for setting up a RER.

Source:http://www.deccanherald.com/content/29872/low-cost-flats-boost-demand.html

Residential realty prices moving up

Residential real estate prices are going up. In the last three months, prices of affordable apartments have appreciated by around 10%
across the country.

“With improvement in the sentiment in the economy, transactions in the affordable range of residential real estate have gone up. This has made developers to increase prices by 5% to 10% in the last three months,” said Anshuman Magazine, MD of real estate consultancy firm CB Richard Ellis, South Asia.

The developers had cut prices by around 30% in first two quarters of calendar 2009 to revive the demand of residential units, which plummeted to a low due to the global financial crisis. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery, he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

According to an IIFL report, in Mumbai, prices are up 25%-40% from the bottom in early 2009, while in NCR, the corresponding figure is 15-20%. ‘‘Constrained supply and a revival in demand drove up prices in Mumbai, and NCR,” the report said.

In Mumbai, the prices of apartment in Metropolis, being developed by HDIL appreciated by 38% since March to Rs 10,500 per sq. ft. Similarly, the project, Planet Godrej, has become 20% costlier to Rs 25,000 per sq ft in the last six months. In NCR also, many developers like DLF, Unitech, Jaypee Greens, Mahagun and Amrapali among others, have increased prices by around 10% from the launch prices in March-June. In the premium segment also, there is revival in demand, said Vibhor Gupta, senior official of Jaypee Greens. However, the prices have not witnessed any escalation in the premium segment. Similar trend has been noticed in cities like Bangalore, Pune and Chennai.

“The current trend of price escalation can not be sustained as it will affect the demand,” said Aditi Vijayakar, ED of Cushman and Wakefiled, adding, as the demand has revived following interest rate cuts by banks, many developers have announced projects in the affordable range. This will increase the supply and will put pressure on the price rise.

At the same time, another consultant said the financial condition of the developers has not improved to a level that they can hold a project for long. They need cash flow to service the debt, which they have taken to buy lands. The source said the money from other sources like dilution of equity is still not easily available. This has forced developers to depend on the sales proceeds to service debt.

Source:http://timesofindia.indiatimes.com/business/india-business/Residential-realty-prices-moving-up/articleshow/5103968.cms

Commercial property sector boom expected in India from 2010 to 2013

A surge in demand for office space in India is set to revolutionize the commercial property market by 2013, it is predicted.

According to an investment report from consultants Cushman & Wakefield, the pan Indian demand for office space is expected to grow to 196 million square feet.

Demand for retail space and in the hospitality sector is also expected to be high with analysts predicting growth of 43 million square feet in retail and a requirement for 690,000 room nights in the same time space.

‘Though the high growth trajectory of the previous years saw a setback during the global economic slowdown, the inherent strong economic fundamentals, low exposure to debt and state intervention, would help the sector to gradually return to the path of recovery and witness robust demand for real estate across sectors,’ said Anurag Mathur, Managing Director, India, Cushman & Wakefield.

The report, Survival to Revival – Indian realty sector on the path to recovery, also indicates that demand for residential property will be over 7.5 million units by 2013 across all housing categories of which 85% is expected in the mid segment and affordable housing segment.

Of the total demand expected across India, 60% would be generated in the country’s top seven cities. Mumbai is expected to witness the highest cumulative demand of 1.6 million units by 2013 whereas Bangalore and Hyderabad are expected to see the highest compounded annual growth rate of 14%.

Total office space demand will be down in 2009, the report says, but from 2010 onwards the markets will experience a healthier demand.

The highest demand is expected in Bangalore with the need for 34 million square feet followed by Chennai at 27 million square feet.

This increase in demand is largely due to improving economic conditions leading to positive market sentiments and growing corporate confidence, the report adds.

In the retail sector Bangalore in likely to see the highest demand with approximately 6.8 million square feet needed and Pune is expected to record the highest compounded annual growth of 51% in the retail segment.

NCR and Mumbai are expected to see the highest increases in demand for rooms due to the higher volume of business travellers in these cities.

Various initiatives taken by the Indian government to promote commercial and tourism activity in these locations will add to growth.

Source : http://www.propertywire.com/news/asia/report-predicts-commercial-boom-200910063561.html

Despite Slowdown India to Add 40 mn sq ft Office Space This Year

With the economy regaining its momentum slowly, India will add up to 40 million sq ft of office space this year, which will be higher than many other advanced countries, but lesser than China. “Despite the slowdown, India will add highest ever office spaces this year. We will see 30-40 million sq ft of office space coming up in 2009,” global real estate consultant firm CB Richard Ellis Chairman and Managing Director (South Asia) Anshuman Magazine said.

The addition of office space will be more compared to many other advanced countries, except China, he added. Magazine, however, said demand has not picked up yet and the huge supply would lead to correction in rentals. “Prices can further fall in certain pockets depending on how much supply these places can absorb. In other places, prices have almost stagnated,” Magazine said, adding that some locations in Bangalore are likely to see decrease in rentals.

“After 2-3 years when supply will decrease and demand will increase, probably then we will reach at a stage of equilibrium,” replied Magazine when asked about the time by which office-space rentals could stabilise. Although office-space demand has increased in the first two quarters in 2009, Magazine said it would take time for “actual demand to pick up”.

“IT companies are responsible for 80 per cent of the total demand for office locations and these were the most impacted firms during the recession… But next year supply will dip by atleast 20 per cent,” he added. Of the total anticipated supply this year, Mumbai, Bangalore and the National Capital Region will house most of the spaces. “Chennai, Hyderabad, Kolkata and Ahmedabad will also see considerable addition of office spaces,” Magazine said.

Source : http://www.indianrealtynews.com/property-prices/despite-slowdown-india-to-add-40-mn-sq-ft-office-space-this-year.html

It’s boom time again for home sales

It took just two hours for DLF, the country’s largest property developer, to sell all the 1,250 apartments in the second phase of its Capital Greens project near the Moti Nagar area of Shivaji Marg (Najafgarh Road) in West Delhi. The project was launched on September 23 and the prices were around 25 per cent lower than the prevailing market rates.

In Mumbai, Rustomjee, a prominent private property developer, got bookings for 44 apartments in its Global City project in Virar, a distant suburb of Mumbai, in the first two days of a property exhibition organised by the Maharashtra Chamber of Housing Industry (MCHI) from October 1-4

The developer has already received bookings for 600 apartments in the Global City and another 200 apartments in Rustomjee Urbania project in Thane, on Mumbai’s outskirts, in the last three months, all in the Rs 10 lakh to Rs 50 lakh category.

Another realty firm Nahar Group says it has sold 800 apartments in its Amrit Shakti project in Powai in the last five months. Nahar expects booking for another 15 apartments after MCHI exhibition.

After witnessing a revival of sorts in home sales in the first and second quarters, developers are hoping to cash in on the demand for affordable homes in the third quarter too, due to a large pent-up demand and the general feeling that prices may not go down further.

“Buyers have realised that prices may not go down further and there is no point in waiting now,” says a senior State Bank of India executive. SBI’s stall at the property exhibition got over 500 enquiries every day during the four-day exhibition and the bank expects a good conversion.

All bankers are also expecting the good run rate on home loan disbursals to continue. ICICI Bank Managing Director Chanda Kochhar expects a surge in home loan disbursals in the third quarter. “The confidence is coming back due to increased job security and the feeling that real estate prices have corrected enough,” she says. There is also a general consensus that interest rates have bottomed out, she says.

JS Augustine, director of marketing at Everest Developers, says there was a huge pent-up demand which is coming into the market now. Buyers who were holding back are now buying. Developers who had pulled back a lot of projects earlier are also launching new projects given the improvement in the market,’’ Augustine says.

The period from October 2008-March 2009 was the toughest period for developers when property sales touched lowest levels since 2004. Property prices had fallen over 40 per cent from their peak in 2007-08 as buyers stayed away due to salary cuts and fears of job losses.

But successive interest rate cuts, stimulus packages from the government and overall improvement in economic conditions changed the scenario since April this year with the country’s biggest developers, DLF and Unitech, selling over 6,500 units in the first quarter of FY 2010.

“We expect better sales in Q3 and Q4 as well. We have got very good response in Delhi which gives a good value for developers like us,’’ says Rajeev Talwar, group executive director of DLF. Even a Unitech spokesperson said the company expects to continue its growth momentum in the coming quarters.

Home loan lenders are naturally bullish. SBI is targeting a growth of 30 per cent in the current quarter against 21 per cent in 2008-09. HDFC, the country’s largest home loan provider, saw disbursals rise 22 per cent in first quarter and expects the trend to continue.

Normally, there is a lag of three to six months from the time of purchase and disbursal of loans by a bank or a housing finance firm.

Developers, which have increased prices by 10-15 per cent in the last six months, say this is the best prices buyers can get.

“Prices have bottomed out. We do not see any reason to cut prices further. Though prices will not go up sharply, they will certainly go up slowly in the coming months,’’ says Parag Shah, general manager, sales, Nahar Group, which sells apartments in Rs 60 lakh-Rs 75 lakh in its Powai project.

Apart from launching premium housing projects in the last few months, developers have also withdrawn freebies such as free parking, waiver on stamp duty, free holidays and so on after the spurt in sales. “Last year there was a recession and sales were sluggish. That is why developers needed to doll out freebies. Now products sell without this,” says Nahar’s Shah.

But that’s precisely why some analysts are concerned. Pankaj Kapoor, chief executive of Liases Foras, a realty research firm, says “there is high demand only in the lower price bracket of Rs 10-20 lakh. August and September sales have fallen by 20 to 25 per cent as developers have increased prices again. There is still lukewarm response for premium properties,’’ he says.

Prospective buyers like Govind Chitre, a retired government employee, agrees: “The moment developers see increase in the Sensex, they jack up the prices. They charge on the super built-up area, which is really absurd. I feel there should be a strong regulatory authority to control builders.’’

Source : http://www.business-standard.com/india/news/it%5Cs-boom-time-again-for-home-sales/372338/

Good time to invest in commercial property

Anup Nair was a proud owner of a 1,500 sqft office space in an A grade office unit in Gurgaon. When slowdown hit, he decided to put this space up  for lease and move the entire office operations to his South Delhi unit. However, he did not get lease rates anywhere close to what had been quoted prior to the recession. Even at lower rates it was difficult to find a tenant. However, in June 2009, he found a tenant who was willing to pay reasonable rates for fully furnished ready-to-move-in property.

Nair is no exception. The commercial property market today is hugely oversupplied. Says Arun Goel, CEO of Dewan Housing Finance Ltd Venture Capital, “Commercial property markets across India are oversupplied at the moment. However, with business showing signs of a turnaround, take-up is happening today at 40-50% lower rates than in June-September 2008. When supply exceeds demand values are bound to drop.” As a result, real estate-backed private equity firms like DHFLVC are holding back from picking up office projects and going for residential projects which are performing better in the market today.

So who are the new drivers of demand? Explains SC Jaisimha, managing director of international real estate consultancy firm AsiaPac International, “Today commercial property is being taken up by telecom companies, banks which are getting licences to open up credit facilities, insurance and pharma sectors and specialised technology companies such as VLSI, semi-conductor and embedded technologies and video-conferencing companies.”

However, Ashok Kumar, principal and managing director of Cresa Partners, says this is not enough to sustain organisations such as his, which primarily focuses on commercial real estate transactions. “Information Technology, the prime driver of commercial real estate in the country, has taken a back seat and that explains the slump. The real estate was constructed to suit the growing demand of this sector and therefore the slow take-up. “

However, Jaisimha maintains that this is the best time to invest in commercial property. “The first sellers are liquidating their investment and developers are offering 10-11% returns to new investors as opposed to the earlier 7-8%. This is because the developers need money as first investors exit fearing a downscaling of tenancy rates over the next cycle of negotiation.

Anup Nair was a proud owner of a 1,500 sqft office space in an A grade office unit in Gurgaon. When slowdown hit, he decided to put this space up  for lease and move the entire office operations to his South Delhi unit. However, he did not get lease rates anywhere close to what had been quoted prior to the recession. Even at lower rates it was difficult to find a tenant. However, in June 2009, he found a tenant who was willing to pay reasonable rates for fully furnished ready-to-move-in property.

Nair is no exception. The commercial property market today is hugely oversupplied. Says Arun Goel, CEO of Dewan Housing Finance Ltd Venture Capital, “Commercial property markets across India are oversupplied at the moment. However, with business showing signs of a turnaround, take-up is happening today at 40-50% lower rates than in June-September 2008. When supply exceeds demand values are bound to drop.” As a result, real estate-backed private equity firms like DHFLVC are holding back from picking up office projects and going for residential projects which are performing better in the market today.

So who are the new drivers of demand? Explains SC Jaisimha, managing director of international real estate consultancy firm AsiaPac International, “Today commercial property is being taken up by telecom companies, banks which are getting licences to open up credit facilities, insurance and pharma sectors and specialised technology companies such as VLSI, semi-conductor and embedded technologies and video-conferencing companies.”

However, Ashok Kumar, principal and managing director of Cresa Partners, says this is not enough to sustain organisations such as his, which primarily focuses on commercial real estate transactions. “Information Technology, the prime driver of commercial real estate in the country, has taken a back seat and that explains the slump. The real estate was constructed to suit the growing demand of this sector and therefore the slow take-up. “

However, Jaisimha maintains that this is the best time to invest in commercial property. “The first sellers are liquidating their investment and developers are offering 10-11% returns to new investors as opposed to the earlier 7-8%. This is because the developers need money as first investors exit fearing a downscaling of tenancy rates over the next cycle of negotiation.

Source : http://economictimes.indiatimes.com/features/the-sunday-et/property/Good-time-to-invest-in-commercial-property/articleshow/5085103.cms

Demand For Housing To Cross 75 Lakh Units In 5 Yrs, As Per A Report

The overall demand for housing in India is likely to cross 75 lakh units within the next five years, while the same for commercial space will reach 195 million sq ft, indicating a revival in the realty sector. According to a report by global real estate consultant Cushman $ Wakefield (C&W), the cumulative demand in the residential sector will be about 75.43 lakh units between 2009 and 2013. The demand in the housing segment this year is estimated to be 11.96 lakh units and is expected to grow by over 55 per cent to reach 18.64 lakh units in 2013, the report said. In the commercial space, the consultancy said the total five-year demand would be 196.3 million sq ft from the estimated 26.5 million sq ft in this year. In 2013, the demand might touch 53.9 million sq ft. Out of the total commercial demand, about 42 per cent is expected to be generated in the Tier I and II cities.

Source :  Business Standard

All property deals to be scanned by fin watchdog

NEW DELHI: Financial Intelligence Unit (FIU), India’s anti-money laundering agency, wants to scan real estate deals. It has asked states to submit  monthly data on registration of properties, a state government official, who did not wish to be identified, told ET. FIU is a central agency responsible for receiving, processing and analysing information relating to suspect financial transactions.

Often the real estate deals in the country involves unaccounted cash transactions leading to money laundering, the official said. Money laundering involves disguising financial assets in a way that they can be used without detection of the illegal activity that produced them. Through money laundering, the launderer transforms the monetary proceeds derived from illegal activities into funds with an apparently legal source.

At present, all property registrars have to send data to income tax authorities on property transactions above Rs 30 lakh as part of the Annual Information Return. The FIU, now, demands data for all property transactions.
The complete data is required for the agency also for co-ordinating efforts of international intelligence in checking money laundering and related crimes. If timely data are available, any intelligence generated by it could be acted upon promptly, the official said.

Since India is on the verge of becoming a member of the elite inter-governmental body `the Financial Action Task Force’, which has been founded by the G-7 group to develop policies to combat money laundering and terrorist financing, it is obliged to keep a tab on any such transactions that could be used as a means to launder money.

The body recommends placing real estate agents and brokers, besides a host of other entities, under reporting obligations. However, India, which recently amended its anti-money laundering law—Prevention of Money Laundering Act—skipped them even as it brought overseas payment gateways such as Visa and Master, money changers and money transfer service providers and casinos under reporting obligation. Banks, stock brokers, foreign institutional investors are among the entities that already submit data to FIU on a regular basis.

Source : http://economictimes.indiatimes.com/markets/real-estate/news-/All-property-deals-to-be-scanned-by-fin-watchdog/articleshow/5079409.cms

Property prices could get costlier this Diwali

If you are a homebuyer looking for some hefty discounts to come your way this festive season, you are in for some bad news. Real estate companies across the country are all set to increase prices this season in a bid to improve investor sentiment. CNBC-TV18’s Priyanka Ghosh reports.

Traditionally, the Diwali season has great offers for homebuyers. Developers shell out free parking, price-offs and in some cases even a Mercedes Benz to kick in bumper sales. But such offers may be hard to come by this time around. Analysts rule out a further price reduction as prices have already corrected by 30-35% since last Diwali. In fact, a price increase seems imminent.

Says Anuj Puri, Country Head of Jones Lang Lasalle Meghraj, “If the schemes have done well, you’re going to see some price increase. I think where the developers are coming in, they want to provide confidence to the buyer who had bought may be three-four months ago to say: look, when you bought it, it was at x price but today it is 5-7% higher.”

In the past few months, the real estate sector has seen a sharp price increase led by mumbai and the NCR market. An IIFL report says Mumbai has seen a price recovery by 25-40% from the bottom of early 2009. Prices in the NCR market has revived by 15-20% from March-April levels. Take a look at a few projects: HDIL has revised prices upwards by 38% along with Peninsula Land. Godrej Properties too has increased prices in its Planet Godrej project by Rs 5,000 per square feet.

In the NCR region, both Unitech and Indiabulls Real Estate have revised prices by 18% and 23%.

A slew of real estate companies are set to hit the primary market in the next six months. A price revival boosts cash flow income — that’s vital for the valuation these companies are vying for. There are projects where volume has been kicking in — both DLF and Unitech have doubled transactions in the first five months of this financial year compared to FY09. However, analysts caution that growth of income could soon fail to keep pace with the indicative price increase.

Source : http://www.moneycontrol.com/news/cnbc-tv18-comments/property-prices-could-get-costlier-this-diwali_417525.html

Genuine demand still hasnt returned to realty market

SO IS the demand for homes getting real again It seems to be a mixed bag so far. While developers are aggressively talking about a spurt in demand, industry experts and buyers attribute this revival to the strong nexus between developers and intermediaries .
SundayET spoke to a cross section of developers, bankers, buyers and realty brokers to assess the ground situation. In fact, the demand in the residential segment for Q3 of this calendar year remained marginally higher than the previous quarter. However , leading developers said that the growth has been optimistic and some even claimed a 30% rise in demand in these three months.
Last month, Indias largest real estate developer DLF claimed to have sold 1,250 flats in two hours in the second phase of its Capital Greens project in Delhi. Rival Unitech too said that they had a sale of 3,500 apartments across cities between July and September . Similarly, BPTP sold nearly 2,100 apartments in the same quarter.
For Delhi-based realty firm Omaxe, Q3 got a sale of Rs 300 cr, up 50% from the previous quarter . And according to Niranjan Hiranandani , MD of Mumbai-based Hiranandani Developers, there has been an overall industry sale of 10,000 units in the Mumbai region in these three months.

These figures, no doubt, look impressive. But there is a catch. Industry experts and buyers say that this business is mainly the result of a strong developer-intermediary network. To some extent it is artificial hype but it is not completely a false story. Around 35-40 % of such stock goes to end users and 50-60 % goes to brokers or investors who want to sell it off later, says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm.
Jain is not the only one echoing this view. Other reputed brokers in the industry also have a similar take. Rajesh Arora, vice chairman of Arora and Associates Realty, puts it this way, It is not practical to sell 2,000 or 3,000 apartments within a few hours. They would have sold it to middlemen or agencies. The demand in the sector has remained the same as in the last quarter and though the prices in Mumbai have increased, in Delhi they are at the same level.
Businessman and prospective buyer, Anil Dhawan, says that such claims by developers do not hold any meaning. Financiers take up most of the stock. End users would possibly make up only 10% of the buyers in these cases. Dhawan says that although the time is conducive to buy right now, he would mainly look at a ready to move in property over an under construction one to avoid delivery hassles.

Developers, however, are upbeat about the housing demand. DLF is basking in the glory of good demand. We have launched the second phase of Capital Greens project. We are selling one flat per pan card and buyers cannot sell the property within a year. So I am sure that end users are the buyers right now, says Rajeev Talwar, group executive director, DLF.

The demand is robust, says CMD of Omaxe, Rohtas Goel. There has been a 30% increase in this quarter. We had a sale of Rs 300 cr in these months as against Rs 200 cr in the last quarter.
Many also are of the view that the fear of increased prices later is propelling more number of buyers to come forward right now. That is leading to increased enquiries as well as conversions. People think that is the best time to buy as prices may go up later. The price band of Rs 15-Rs 40 lakh is doing quite well. We will be launching more projects in the affordable segment. Our target is to launch 30 million square feet in residential space by the end of this Financial Year, reveals a Unitech spokesperson.
Home loan offtake too bears out increased demand statistics. The management of HDFC is upbeat about 20-25 % growth in the home loan disbursement. Also, according to a senior official from Indian Bank, the demand of home loan remained the same as it was in the previous quarter. The demand for loans between Rs 15-20 lakh is more than the rest, said the official.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=ETD&pubLabel=ET&pageid=3&mydateHid=04-10-2009

Right time to buy your dream house

Mumbai: Expect a hardening of interest rates and a spike in property prices soon. At least that is what banking circles and real estate players would like their prospective clients to believe.
Bank officials say the soft interest rate regime is set to end with rates likely to creep up in a couple of quarters. Real estate players say property prices have corrected and the demand has started picking up. Bankers and realtors also say the festive season is the most fascinating period for house hunters. That means, if you have been waiting to buy your dream house at the right price , probably this is the time for you to go for it.

Why so Clearly, we have seen customers coming back to the market in the last three months as they see value in deals. Also, everythingbe it economy, monsoon, or global issueshas started looking up. That gives people additional confidence, says Dharmesh Jain, MD, Nirmal Group. The pick-up in demand is vouched by other industry players, too. The demand is genuine. There is no evidence to prove that investors are getting into the market. It is regular home buyers who are in the market , says Harsh Roongta, CEO, Apnaloan.

If that is the case, then real estate players could be right. Prices are not likely to fall any further on the face of renewed demand. In fact, the opposite looks very likely . That, along with a spike in interest rates, could once again force many house hunters go on the back foot.

How far the scenario is likely First, most bankers say that though hardening of interest rate looks imminent, chances of a huge spike in lending rates is very remote. The central bank and the government will not like a higher interest rate regime immediately. They have to make sure that rates are kept at reasonable levels to boost economic growth, which is a top priority at the moment, says a senior banking official . According to him, housing loan rates wont go up over 50 basis points (100 bps = 1%) in the near future.
As for property prices, never the ones to lose an opportunity to make money, builders have already begun quoting slightly higher prices in most places, say analysts . Some builders have started quoting higher rates (up to Rs 500 extra per square feet) since the last month. Though many players believe this may drive away genuine customers, greedy elements are cashing in on the opportunity , says an analyst. Dharmesh Jain also says prices are firming up . Roongta says buyers would once again find it tough if the interest rate, as well as property prices, go up.
Genuine buyers would find it difficult to finance their purchase if prices started going to their previous levels or even anywhere near those levels. So, if you were looking for houses in the market, it may be the best time to buy, he says.

Also, one can make use of the new schemes offered by public sector banks, where the interest is fixed for first 2-3 years, he adds. The interest rate on these products are very competitive, he points out.
Take Your Pick

Demand for houses has already started picking up Revival in economy, monsoon have raised peoples confidence If demand remains, property prices may go up. Instead, some builders have started quoting higher rates (up to Rs 500 extra per square feet)

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=TOIM&pubLabel=TOI&pageid=19&mydateHid=28-09-2009

Residential property prices may go down: Knight Frank

Global property consultancy firm, Knight Frank India, said prices in the residential property segment are likely to decline in a short time. “We feel prices of residential segment may go down over a period of time,” Knight Frank India Chairman Pranay Vakil said.

“The residential segment may see a robust demand in certain markets,” he said, adding that it was also a good time for property developers to invest in land.

“Demand for real estate at this stage is a combination of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and a corresponding increase in property prices,” he said.

“Today, property buyers are worried that prices may go down after they purchase property and projects may not be completed on time,” Vakil said.

Knight Frank launched a book titled Real Investment-a real estate investment guide for India. The book seeks to lend a helping hand by covering all the information that one may require while investing in real estate.

The book compiles the perspectives of real estate industry experts to help deepen knowledge about real estate and consider it as an asset class.

Commenting on the book launch, Vakil said, “as property advisors, we continuously work with some of the best minds in the sector. We felt the need for a single credible source of information, for which we brought together the best minds in the business”.

“This book makes the seemingly daunting task of delving into the real estate market simpler by offering tips on how to make real estate a lucrative investment option.”

Source:http://mail.google.com/mail/?shva=1#inbox/123f41b466c74002

Buying home to get safer

New Delhi: The aam aadmi looking to own a home might soon be able to breathe easier, thanks to a bill mooted by the housing ministry, a draft of which has been circulated to all stakeholders. The bill requires developers to post project details, including civic clearances, on the real estate regulators website.
The model Real Estate (Regulation of Development) Bill has been long awaited and states are expected to legislate in keeping with the provisions of the proposed law. They will also set up regulators to give effect to the bill which recommends a three-year jail term or penalty which may amount to a percentage of project cost for failure to register.
The law to regulate real estate developers will call on builders to provide details of the number and size of plots, layout plan, carpet area and plinth area of flats, apartments or any other housing complexes.
Importantly, it will prevent builders from changing the plans or inserting charges as the sale agreement will be considered binding. They will also post authorised brokers and dealers.
The legislation seeks to prevent advance payments being extracted from buyers without a written sale agreement containing project timeline , payment details and possession date. The promoter will not be able to cancel the sale deed unilaterally. If there is sufficient reason to do so, a notice will have to be given and the money paid will be returned with interest fixed to bank rate. The promoters would furnish a bank guarantee equal to 5% of estimated cost of projects.

Providing A Solid Foundation

Builders will have to register with regulator and provide details of number and size of plots, layout plan and other facilities before launching any project They will not be able to take any advance payment from buyer without written sale agreement mentioning project timeline, payment details and possession date Promoter cant cancel sale deed unilaterally. Will have to give notice and provide entire amount with interest Buyers will have to be clearly told the carpet area, super area, common area and other specifications of apartments by the promoter If developers fail to provide services like supply of electricty, water, sewerage and drainage, consumers can approach the regulator for relief

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=CAP&pubLabel=TOI&pageid=3&mydateHid=26-09-2009

Residential property prices may go down: Knight Frank India

MUMBAI: Global property consultancy firm, Knight Frank India, on Thursday said prices in the residential property segment are likely to decline in a  short time. “We feel prices of residential segment may go down over a period of time,” Knight Frank India Chairman Pranay Vakil told reporters here today.

The residential segment may see a robust demand in certain markets, he said, adding that it was also a good time for property developers to invest in land.

Demand for real estate at this stage is a combination of investor-led demand and end-user demand. While investor demand is due to shift in money from equity markets, end-user demand is due to increased consumer confidence and pent-up unmet demand from the recession period. This leads to a rapid increase in demand for real estate and a corresponding increase in property prices, he said.

Today, property buyers are worried that prices may go down after they purchase property and projects may not be completed on time, Vakil said.

Knight Frank today launched a book titled Real Investment-a real estate investment guide for India. The book seeks to lend a helping hand by covering all the information that one may require while investing in real estate.

The book compiles the perspectives of real estate industry experts to help deepen knowledge about real estate and consider it as an asset class.

Commenting on the book launch, Vakil said, as property advisors, we continuously work with some of the best minds in the sector. We felt the need for a single credible source of information, for which we brought together the best minds in the business.

This book makes the seemingly daunting task of delving into the real estate market simpler by offering tips on how to make real estate a lucrative investment option.”

Source : http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Residential-property-prices-may-go-down-Knight-Frank-India/articleshow/5052294.cms

Citys affordability index soars

Bangalore: Is it actual demand or pent up demand or just plain affordability Call it what you may, theres literally a slugfest now in the affordable housing market, homes priced between Rs 12 lakh and Rs 30 lakh.

The big daddy of the Indian real estate market, DLF, is looking to enter the affordable home market and Bangalore could well be its launch pad.

According to sources in the know, DLF is looking to attract buyers with annual household incomes of Rs 3 lakh to Rs 5 lakh per annum. This income group would be able to afford homes that cost between Rs 9 lakh and Rs 15 lakh, said a source. The company is said to be initiating a national market survey to find out what exactly buyers are looking for in an affordable home.
Since Bangalore is seeing a lot of action in the affordable housing space as compared to other metro markets, DLF would look at a roll out in Bangalore first, said a source. A point that can be corroborated by the number developers in the city who have launched projects in the Rs 12 lakh to Rs 30 lakh bracket.

In the last seven months, Puravankara, Confident, Mantri, CSC, Ozone, Nitesh Estates and Shriram Properties have all launched such homes. P Dayananda Pais Century Group has just announced its foray into this segment. The company launched Century Indus, located in Rajarajeshwari Nagar, comprising of 2 BHK (850 sqft to 950 sqft) and 3 BHK (1,120 sqft to 1,135 sqft) apartments in the price range of Rs 22 lakh to 30 lakh.

The Prestige Group is believed to be looking at launching homes in the Rs 25 lakh to Rs 40 lakh price band in Electronics City. Brigade Group has already spelt out plans of foraying into the affordable space early next year. Silverline Group too is looking at unlocking its land bank by developing affordable homes.

According to Cushman & Wakefield India, demand for housing in Bangalore is likely to be about 570,000 units over the period 2009-2013 , with a compounded annual growth rate of 14%. The affordable and mid segment housing category are likely to be the primary focus of most developers , says Anurag Mathur, MD of the real estate consultancy firm.

Source:http://lite.epaper.timesofindia.com/getpage.aspx?edlabel=TOIBG&pubLabel=TOI&pageid=17&mydateHid=24-09-2009

Developers Raise Property Prices- Plan to Give Discounts During Dussehra-Diwali

The last fortnight of Pitrupaksh, a period considered inauspicious for buying a new home, had few property transactions as usual but that did not stop developers from hiking their rates for projects under construction. Real estate players say this is a tactic to lure buyers with discounts during Dussehra-Diwali. “It is nothing but a strategy to make the festive pricing look attractive. Even new launches that were reasonably priced have seen a rise in prices,” said Pankaj Kapoor of the real estate research agency Liases Foras.

The 15-day Pitrupaksh phase ended Friday. “In North and West India, this period is considered inauspicious for buying a home or starting anything new. Sales normally pick up after Pitrupaksh between Dussehra and Diwali,” said Aditi Vijayakar, director of residential services at Cushman & Wakefield. Developer Sunil Mantri, vice president of the Maharashtra Chamber of Housing Industry (MCHI), ruled out substantial discounts during Diwali. He pointed out that prices have been rising anyway. “After a 30 to 40 per cent fall in rates, overall the market has stabilised and prices have been increasing since June. There might be festive period add-ons and marginal discounts on prices to attract sales, but nothing substantial,” he said.

Overall, between July and mid-September, prices of several projects including relatively affordable ones have been jacked up. For instance, the average rates at Rustomjee’s Global City in Virar, around Rs 1,900 per sq ft in July 2009, is Rs 2,750 per sq ft today. Flats at HDIL’s Premier Residences at Kurla, sold for about Rs 5,250 per sq ft in July, cost Rs 6,151 per sq ft today. Many other projects such as Kalpataru Aura at Ghatkopar, Lodha’s Casa Bella at Dombivli, Ackruti Greenwoods in Thane, to name a few, have each seen a rate increase of Rs 200 to Rs 1000 per sq ft.

Source : http://www.indianrealtynews.com/real-estate-trends/developers-raise-property-prices-plan-to-give-discounts-during-dussehra-diwali.html

Property Demand Resurges in India

Investors are once again interested in India’s housing market after residential prices dropped as much as 30 percent earlier this year.

The country’s largest home developer, DLF, sold close to 1,400 units in one day alone this spring; while in Mumbai, another company sold 90 percent of its premium apartments in less than four months, a surprising economic feat after the market’s sudden downturn in 2008.

While some real estate companies, including DLF, have been quick to adjust property rates due to the recent demand—increasing newer housing projects by 15 to 20 percent in the last few months—many economists believe price levels will still stay at all-time low. In the last quarter of 2008-09, developers cut middle-income home prices by 25 to 30 percent, after sales fell 50 percent from the housing market’s peak in 2007.

Despite a few recent economic dips, India has been on the radar of property investors for last eight years. It’s still one of the fastest growing economies in the world with an increasing middle class and strong technology industry that’s driving entrepreneurs to relocate to the world’s second largest country. Cities like New Delhi, Bangalore and Mumbai have been built up with residential and commercial properties to accommodate India’s BRIC (Brazil, Russia, India, China) powerhouse status— a conglomerate of countries expected to dominate the global market in the next ten years.

The increased interest in Indian real estate may also be an example of investors wanting what they can’t have: Nonresidents, tourist visa holders and business partners of the two are restricted from buying properties in most areas of the country, and are only allowed to lease properties for a period of no more than five years. However, economists encourage those looking to establish residency and take advantage of IT opportunities in India to invest in real estate now, as values will appreciate around 2011.

Source : http://www.buyassociation.co.uk/property/news/india/property-demand-resurges-in-india-13876.html

Best time to look for a value deal in real estate

It’s perhaps the best time to look around for a value buy in real estate. With lower price points in locations which were not earlier within your Land as investment

wallet’s reach, buyers are scouting for good ‘value’ bargains at this time. And with developers going big on affordable home launches, the timing may just be one of the best for buyers seeking a steal deal.

Anshuman Magazine, CMD of global real estate consultancy CB Richard Ellis (CBRE) says that value buying is happening mostly in suburban locations as that is where the current supply is. “Certain pockets in Gurgaon and Noida, where the price earlier used to be Rs 65 lakh-Rs 1.5 cr, today have deals to offer anywhere between Rs 35 lakh to Rs 50 lakh! Developers have reduced the total ticket sizes, adjusted area, price and given amenities. This has got people back and is making them hunt for value deals right now.”

Locations such as Gurgaon, Faridabad, Noida in Delhi NCR and Navi Mumbai and Thane in Mumbai are some of the good locations for value buying, feels Navin M Raheja, chairman and managing director of Raheja Developers. “Anything which is available between Rs 2,500 to Rs 3,500 per sq ft is the right price depending, of course, upon the location and infrastructural facilities available in the vicinity with specifications offered.” The developer is soon going to launch a housing project, ‘Raheja Shilas’ near IGI airport wherein the price would range between Rs 2,575 to Rs 2,875 per sq ft.

Raheja further adds that there are three kinds of value buying that are taking place in the real estate market right now. Ready to move in residential property in and around metros and their suburbs, ready to move in commercial property which is already leased or generating income and low income and middle-income housing ranging from Rs 15 lakh to Rs 40 lakh are the primary types of value purchases in his opinion.

Many of those who were holding out have also decided to make a purchase now as prices have bottomed out. Plus with many affordable housing launches by developers, the view is that prices are more pocket friendly at this time. “Prices have reached the bottom and in these prices you are bound to get good appreciation in future. So if you are buying a particular property now, one is definitely going to feel later that they grabbed a good deal,” says Vijay Jindal , CMD, SVP Group.

Jindal’s view is shared by many others in the market as well. Smaller investment opportunities with a starting price bracket of Rs 35 lakh-Rs 40 lakh have fuelled the demand. “Earlier the prime focus was on high-end purchases, but today, the conversions are happening mostly for smaller properties. At least 50-60% conversions are there in the market today for properties priced between Rs 30 lakh – Rs 80 lakh, 20-25% are for the expensive ones priced between Rs 90 lakh – Rs 2.5 cr and a miniscule number is for the ones above Rs 5 cr,” says Pankaj Jain, executive director of Realistic Realtors, a North Indian real estate consulting firm.

But are people also looking at Tier II and Tier III cities right now, which were prime investment hubs in the good times? “People are not primarily Land as investment

seeing these locations for investment at this time. Value buys here are mostly end-user driven,” adds Magazine.

However it’s best not to overlook the pros and cons before deciding on such value buys. Though the pricing and the product may both look highly appealing, it’s best to read the fineprint carefully. This will hold in good stead for the future. Rajeev Rai, vice president, corporate, Assotech, advises about key strategies that should be followed. “One shouldn’t get carried away by sops or discounts offered and one must also not ignore the sold stock status of such a project. As far as the dos are concerned, one must set their priority of the price, location, size etc. A due diligence about the supply and demand of such projects is necessary. Lastly, one must check the developer’s profile, delivery schedule and legality of the project.” Assotech has projects such as The Nest in Crossings Republik at Rs 2,300 per sq ft and Metropolis in Rudrapur at Rs 1,850 per sq ft.

So if you have been thinking of investing your money in a home, it’s the right time to go deal hunting. Negotiate a bargain, go for value and close the deal.

http://economictimes.indiatimes.com/features/the-sunday-et/property/Best-time-to-look-for-a-value-deal-in-real-estate/articleshow/5032421.cms

Indian Landscape goes greener

Globalization and free market economy being the order of the day, the landscape activities are no more confined to a few professionals. Landscaping has got the industry status with a lot of activities taking place over the last few years.

“The rapid urbanization and industrialization leading to the ongoing construction boom, malls culture, green belts, amusement parks and residential townships, all these have given a new dimension to the art of landscaping, points out S Jafar Naqvi, President, Indian Flowers and Ornamental Plants Welfare Association (IFLORA)

In fact, Naqvi notes, India is availing itself of the services of landscape professionals from Europe, Malaysia, Singapore and importing all kinds of high value products from all over the world”,

Today, green architecture and energy-efficient landscape designs propose an alternative idea of how the appearance of landscape can integrate more fully with the life processes of plants, rather than remain dependent only on their shape and form, says Professor M Shaheer, Shaheer Associates, a prominent landscape architect, based in Delhi.

Indian real estate developers like Ansal API, DLF Universal Ltd, Omaxe Ltd., Hiranandani Developers, MGF Emaar Properties (Dubai), Prestige Group, Supertech, Unitech Builders, Rizvi Builders, Hafeez Contractors, K Raheja Group, Raheja Developers, Meriton Group, Parsvnath Developers, International Land Developers Ltd., Aashiyana Group, Sahara Group, JMD Ltd., Amrapali Group, Panchsheel Buildtech, M2K, Kalpataru Constructions, Merlin Group, Prestige Builders, Rungta Group and many more have joined the new urbanization revolution in India by creating new “Green Living” concepts.

It is undeniable that plants and trees play a key role in the development of our society and culture. Healthy environment is a boon especially for the growing children. Professor Dario Gamboni puts it even more pithily: “Plants make the shape of life itself visible”,

Naqvi adds, “The concept of using Indoor plants in offices and work places is growing in India rapidly because it enhances the employees’ working capability and creativity, while making the environment more peaceful and friendly.” Alongside, some of these plants are useful in curing many common diseases. Therefore offices of MNCs and many corporate bodies in India are growing them often in their office premises

Secondly Pune is a major production hub of quality plants, trees, shrubs and playing an important role to protect environment by supplying nursery plants to almost all top landscape designers, real estate developers, Urban development departments, and also exporting to other countries.

The following from Pune based companies participated in the expo. Display of Maharashtrian produces in this expo is a major attraction among landscape designers, officers of Urban development departments and nurserymen from all over India coming to source their requirements through this mega platform.

K F Bioplants, a leading tissue cultue lab in the country and a most successful Indo-Dutch joint venture project, supplying and exporting tissue culture plants from India.

Tukai Exotics -one of the prominent nursery project involved in developing of all kinds of trees and plants and placing Pune as a sustainable long term suppliers to green projects.

Tropica Nursery- the collection of different imported and indigenous accessories and inputs is the specialisation of this company supplying all kinds of pots, plants, trees, and other inputs all over India.

Vardhaman Fertilizer -a leading soluble fertilizer company focusing on high quality growing of plants, flowers and other horticulture crops.

Gajra Nursery -Ornamental plants and the variety of big size trees is the specialization of this company and became a reliable supplier to sports complexes and new urban projects coming in different metros.

Jagtap Horticulture-Pune’s one of the oldest nurserymen diversified into gardening centre, landscaping and importers of inputs for landscape and golf course sector.

It is also proven through various surveys that in the developed world the productivity of working staff has increased by 10 to 15 per cent by providing green surroundings or a good green plant nearby.

The country’s landscape industry has devised its own architectural creativity in the last five decades.

In view of the growing consciousness on Redesigning India thorough promotion of environment-friendly concepts, the 4th International Landscape & Gardening Expo 2009, to be held on 2-3-4 October 2009 in Hyderabad, India, will be an ideal destination for the entire landscape industry. It will be a single platform and a meeting place for all stakeholders under one roof. This mega event will be a world class experience for all professionals in this sector to increase their business through interaction and business dealings.

Adding value to the event will be a two-day conference devoted to “Plants, Places and People”. The discussions will focus on improving the quality of life of people by preserving the environment through proper planning of public places, parks and recreation centres. It will open a new chapter in the history of India’s greening movement.

Key speakers, who have been invited, are: the President of Indian Society of Landscape Architects (ISOLA) Ms. Savita Punde and the presidents of IFPRA, GCSMAI, HMDA, IBA, ITC Group, Raheja Group, Tourism Industry, Nursery Industry, Sports Authority, Amusement Park Industry, Lighting Industry and individuals working for Green sector.

Source  : http://www.indiaprwire.com/pressrelease/agriculture/2009091834008.htm

One-stop solution to housing problems

KANPUR: For those worried about how to buy their dream house in times of recession, Houses ‘N’ Homes organised by The Times of India in association  with JK White Cement at Lajpat Bhawan lawn on Friday proved to be the perfect solution.

The two-day fair was inaugurated by Union minister for Coal and Energy, Sriprakash Jaiswal, who was of the view that organising such an event would be beneficial both for the participants and the customers.

With as many as 16 stalls ranging from real estate developers, housing consultancy, interiors, housing schemes and vastu consultation, the fair offered a complete solution to the housing problems. Be it design solutions on how to do up your dream home or attractive schemes on white goods to vastu consultation and interior counselling, Houses ‘N’ Homes provided a chance to explore the best housing options like never before.

Eldeco Housing and Industries Ltd, who have earned a name for their work in developing townships in Lucknow, Panipat, Ludhiana and Gurgaon, had much more on offer for Kanpurites through this fair. They presented their scheme of developing duplex houses for the residents.

Sunil, marketing head of Raghunath Builders — already a known name in the city after developing the NRI city with
integrated villas — said, “Metros and A-grade cities have reached saturation in terms of townships and integrated societies and hence the group has turned towards Kanpur, it being viewed as a potential market for investment.”

When asked about the effect of recession on the real estate industry, Anshuman Singh, senior marketing manager Eldeco said, “Unlike metros, Kanpur still has got a lot to prove in real estate. Recession has not affected the tier II cities and is thus attracting more and more housing and township developers.”

JK White Cement, one of the most promising brands of the city in white goods attracted architects, officials of military engineering services (MES) along with the individuals, who arrived with house and wall-related problems. “The products being economical and durable speak about the brand value and thus attract majority of the locals when it comes to trusting the brand,” said Ajay Jain, area manager of a project by JK White Cement.

Briefing about the trends in the development of housing societies and townships, Nivedita Gupta, sales executive of
Dolphin Developers said, “With majority of the cities turning into a concrete jungle, the thrust now is on the outskirts away from the cramped environment of high-rises.”

The event is being managed by Good Show Events and Promotions, and the participants in the fair include Raghunath Builders, Rimjhim ISPAT, Eldeco Townships and Housing Ltd, Anand Builders, Agarwal Group, Premier Group, TATA TISCO, Lubi Pumps and Motors, Kutchina, Srishti BS Structures, Corfom Mattresses and Resinova among others.

Source : http://timesofindia.indiatimes.com/news/city/kanpur/One-stop-solution-to-housing-problems/articleshow/5031518.cms

Best deals on prime properties in India

The best time to invest in India is now, according to leading analysts, and Bahrain residents will have a chance to do so at a leading exhibition that will take place this weekend.

The Pan-Eastern India Property Show 2009 (IPRO) will take place on September 25 and 26 at the Gulf Hotel’s Gulf Convention Centre.

The event will be an exclusive showcase of top Indian properties and experts will be on hand to offer assistance and address any queries investors may have.

The exhibition has been organised in a buyer-centric way and the organisers are looking to provide complete satisfaction to buyers.

India is presently witnessing hectic construction activity.

Most builders are working towards completing their projects and property prices are more or less stable.

The common man is keen as ever to purchase the home of his choice.

It is wonderful to know that in spite of the ups and downs in the financial sector, both builders and home buyers continue to remain upbeat.

Home loan rates in India have indeed reduced.

People are realising that they can go ahead and book homes and let things take their own course.

It is clear that homebuyers are absolutely sure about what they want and will not allow anything to stop them from making the right choice.

Clearly the best time to invest in India is now.

With property prices corrected and within everybody’s reach, this is the ideal opportunity to get good deals.

“With every exhibition worldwide we raised the bar and this time too we hope to do the same,” said Pan-Eastern Trade and Exhibitors Worldwide managing director Sayyali Chawla.

“For us every exhibition is a new challenge and we go about it as if it’s our first.

“You will find thorough and reputed builders registered with builders associations in their respective cities and quality information at our exhibition.

“It is our desire to help every visitor make an informed choice and help them to overcome any hesitation that he or she may have in buying a home.”

Leading builders will display luxurious and comfortable homes during the exhibition.

The best thing is that builders have kept in mind affordability for all types of buyers with various related schemes.

Investors will be able to take advantage of attractive options and facilities.

“I would like to sincerely thank every individual in Bahrain as well as back home in India and all those who have put their efforts to make this exhibition a lovely reality,” continued Ms Chawla.

“We want to be a contributing force in your joy and make every effort to provide you with all the help and support.”

Source : http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=260108

Housing sector is shining again

Last August, Gurgaon real-estate broker S Karan was planning to move out of his tiny basement office in a small building to a fancy new one in one of the tall steel-and-glass buildings that have become the signature of this booming Delhi suburb.

Then, Lehman Brothers, one of the Big Four investment banks in the US, collapsed on September 15, sparking off a global recession, an Indian economic slowdown, and a slump in the once booming real-estate sector.

Karan (34) then thought his dreams would remain still-born — till the first signs of a recovery in the first quarter of 2009-10.  “Usually, we seal 70 per cent of our deals around Diwali. Last year, that figure dropped to 30 per cent.”
There were many reasons for the death of his dream.

The global recession took the Indian stock markets down with it. The BSE Sensex fell from 14,001 on September 12, the last trading day before the Lehman collapse, to a low of 8,198 on March 5, this year.

So, the supply of speculative money that had mainly fuelled the 2005-08 real estate boom, in which house prices doubled and rentals soared more than 75 per cent, stopped.

Rising inflation also forced the Reserve Bank of India to hike interest rates. Result: interest rates on housing loans rose from 7-8 per cent levels at the end of 2007 to 12 per cent a year later.

Housing was no longer attractive for speculators, and out of reach of the middle class.

The bubble had burst.

Between October last year and March this year, housing sales dropped from 10,000-12,000 units per month in the National Capital Region to less than a third of that number.

“Earlier (prior to the Lehman collapse), I used to conduct two to three transactions in the resale category and three to four original bookings every month. After October, that number fell by half,” says Karan.

Transaction values also fell as realtors, who had got used to net profit margins of more than 50 per cent, cut prices to lure buyers back.

But the double whammy of lower prices and plunging sales took its toll. DLF, India’s largest real estate company, saw its January-March 2009 sales and profits plunge 96.6 per cent and 95.3 per cent, respectively, to Rs 55.5 crore and Rs 29.8 crore.

Unitech, India’s second-largest real estate developer, and a host of other biggies like Omaxe, Parasvnath, Prestige, Puravankara, etc., also suffered similar setbacks.

Then the tide began to turn in the first quarter of 2009-10. The global recession brought down crude oil and commodity prices worldwide.

The wholesale price-based inflation rate began to ease – and even entered negative territory for a while. Interest rates started falling once again.

Realtors cut prices, by up to 30 per cent, and launched a slew of affordable housing projects (priced at Rs 15-50 lakh per apartment).

And the release of arrears to government employees, following the Sixth Pay Commission Report, thus, putting massive sums of money in the hands of government employees, provided the icing on the cake.

Buyers returned to the market.

Unitech Managing Director Sanjay Chandra says the company booked nearly 4,000 housing units in the first two-and-a-half months of 2009-10.

The number of registration agreements signed has also seen a healthy improvement. In Mumbai and Pune, registrations increased 24 per cent and 21 per cent month on month, respectively, said a June 2009 report, On the road to recovery, by Religare, Hitchens Harrison.

“The residential property market has been driving this recovery,” says Aditi Vijayakar, director, residential services, Cushman & Wakefield India, a large real estate consultant. The commercial and retail segments, though, have not yet picked up.

“The worst is over,” says Kumar Gera, chairman of the Confederation of Real Estate Developers Association of India, the apex body of realtors in India.

So, Karan can probably breathe easier now, even though his dream office may still be out of reach.

Source : http://www.hindustantimes.com/Housing-sector-is-shining-again/H1-Article1-455508.aspx

Govt plans regulatory reform for housing sector

The central government is working on a model real estate regulation bill to provide guidelines to facilitate growth and promotion of healthy and  transparent, efficient and competitive real estate sector in the country, said the housing and urban poverty alleviation minister Kumari Selja.

This is a welcome move and will help the sector in becoming efficient and competitive. However, developers feel the government should form a separate regulator on the lines of Securities and Exchange Board of India (SEBI) to regulate the sector.

Addressing a conference on real estate, the minister said Indian real estate market is unorganised and fragmented and that most of property transactions are based on certain perceptions and not necessarily on sound business principles. In this, customer satisfaction is low and redressal procedure is long and cumbersome. This has created problems for both buyers and developers. As end users are not sure of delivery of a house by builders on time, they dont want to risk a purchase by taking a loan from the bank.

Apart from this, many buyers are not even sure of the specifications, which developers promise while selling them the houses/flats. Worse still, when developers do not deliver on time or stick to the promised specifications while selling, buyers do not know where to for redressal.

Going to a court is not only time consuming but also expensive. This has forced buyers to either defer their purchase or to go for completed projects. But, this apprehension of end users has affected genuine developers as well, which have a plan and required finances to complete a project. However, in the last couple of months, end users have started showing interest in buying new projects. But, they want to buy in the projects of reputed developers alone. This has created problem for the new but good developers.

A senior developer says if the sector is well regulated, the role of brokers and investors can be reduced. In most of the cases, investors, who have better understanding of the sector and who can invest time and money to know about developers, invest at the early stage of implementation of a project and make easy money by selling them to end users at high prices when the project comes to a close. The end users, on the other hand, are comfortable in buying a house when projects are close to completion, hence making the sector over dependent on investors.

Consequently, in the last one year of market downturn, the entire real estate sector came to a screeching halt as investors disappeared from the market. But, had the sector been well regulated, end users would have been bold enough to buy at the early stage of project implementation. This would have helped developers also.

However, another problem in regulating the sector is that it comes under the state subject as well. Thus, a senior official says nothing much can be done unless state governments show interest. Haryana Government has already passed an act to regulate the sector. But, the results are not encouraging, thus far. It was assured all the stakeholders that the government will accord full cooperation and support to encourage affordable housing.

She said the housing sector in India holds tremendous potential and has positive impact on the social and economic development of the country. In

2006-07 the sector was about 4.5% of country’s Gross Domestic Product and comprised approximately 7% of the total urban workforce. Housing is the largest component of the construction sector and central to economic growth.

However, provision of affordable housing for all is a complex problem with challenges emerging from many facets of urban sector. The minister said there are many impediments to the growth of affordable housing land and capital being the two key constraints.

To increase the stock for affordable housing the focus has to be on augmenting land supplies. Kumari Selja said the issue is a critical one and requires a number of measures such as alternative methods of land assembly, development and disposal to be pursued, check on prices of urban land, encouraging public-private partnership, promoting intense use of land-higher densities, revision in Floor Area Ratio or Floor Space Index and change of norms to suit local situations, discouraging speculation in land development, and allotment or disposal process to check rising prices of land.

http://economictimes.indiatimes.com/Markets/Real-Estate/Policy-/Govt-plans-regulatory-reform-for-housing-sector/articleshow/5025022.cms?curpg=2

Best time to go home shopping

If you are planning to buy a house, now is the time. Do it now, because a rise in interest rates might not be too far away.

Ending a 13-week streak of contraction, the wholesale prices based inflation rate returned to the positive zone in figures relating to the week ending September 5, triggering speculation about when the Reserve Bank of India (RBI) would announce a rise in lending rates.

Inflation measured by the wholesale price index (WPI) rose by 0.12 per cent for the week.

It had fallen by 0.12 per cent in the previous week.

The RBI faces the dilemma of containing prices without making loans costlier for individuals and corporations in an uncertain economy.

One way to contain inflation is to reduce the amount of money circulating in the economy.

The RBI usually does this either by sucking out liquidity from banks by raising the cash reserve ratio (CRR, or the percentage of deposits commercial banks have to park with the RBI) or by raising interest rates and reducing demand for money.

A rise in interest rates could upset plans of realty firms as people defer plans to buy homes.

“Borrowing rates may go up in three months’ time and that may result in a rise in lending rates,” said R.R. Nair, CEO, LIC Housing Finance.

The government said the rise in inflation rate was not unexpected. “This is a trend we were expecting,” finance minister Pranab Mukherjee told reporters.

http://www.hindustantimes.com/Best-time-to-go-home-shopping/H1-Article1-455169.aspx

Yesterday once more: Realty firms start raising prices

Mumbai: DLF, the country’s largest property developer, will soon conduct a poll among property brokers to decide the pricing and number of apartments to be offered in the second phase of its Capital Greens project in West Delhi.

Yesterday once more: Realty firms start raising prices

It’s a novel experiment, but property brokers in Delhi say the company is trying to test the waters in view of the vastly changed situation in the real estate market.

Though DLF’s spokesman said the company is yet to fix a final price, feedback from brokers suggests the company is exploring the option of charging around Rs 7,000 a square foot (sq ft). At this level, the price is 56 per cent more than Rs 4,500 a sq ft it charged in the first phase of Capital Greens, when DLF had sold 1,356 apartments in a single day in April this year.

Developers such as DLF, Unitech, Omaxe, Parsvnath and HDIL were among those that cut property prices or forayed into mid-income housing, which were 25 to 30 per cent lower than prevailing prices, in the last quarters of 2008-09, as the economic slowdown and fears of job losses impacted home sales. Property sales fell 50 per cent from their peak in 2007-08 (when prices had more than doubled froom 2004-05) as buyers stayed away.

Those days are rapidly becoming a distant memory, with many developers increasing prices 15 to 30 per cent the moment they became sure of demand returning.

Take Mumbai-based Lodha Developers. The developer has increased prices 30 per cent in its premium housing project, Lodha Primero in South Mumbai, since its launch about four months ago. It has already sold 90 per cent of the apartments. For its mid-income projects, Lodha has increased prices 12 to 14 per cent.

Neptune Group, another Mumbai-based property developer, has increased prices in its Neptune Flying Kite project in Bhandup 26 per cent, from Rs 4,691 a sq ft a couple of months ago to Rs 5,900 a sq ft.

The national capital region (NCR) is not far behind with housing prices in Gurgaon having moved up to Rs 3,200 a sq ft from Rs 2,800 a sq ft six months back, brokers in the locality say.
Unitech, the country’s second largest developer, which is mostly focusing on mid-income housing projects under the Unihomes brand, is also considering a minor price rise in its home prices, a company official says.

“Markets are looking up and this is prompting developers to come up with increased prices for their Navratra launches. Prices are up by 15 to 20 per cent in the secondary market,” says Anil Singhal, a property consultant based in Connaught Place, Delhi. Navratra, a Hindu festival, is considered auspicious for property buys and developers generally launch new projects in the 10-day period.

Developers say the move to increase prices is in tune with rising demand from home buyers. “We are not hoarding our property. When the market was down, we were quoting low prices. Since it has moved up, we have increased prices. We sell according to the forces of demand and supply,” says Nayan Bheda, chairman and managing director of Neptune Group.

Adds R Karthik, senior vice president of marketing at Lodha Developers: “It is a standard way of operating projects. It is a strategic as well as tactical move so as to offer value for those who have bought properties.”

However, the move to raise housing prices has had its fair share of criticism. Analysts warn that property sales may fall again if developers increase prices sharply since the economic recovery is hardly complete.
“Demand is coming back with much difficulty. It does not make sense to increase prices now. They have to hold prices steady till demand comes back fully,” says Anuj Puri, chairman of Jones Lang LaSalle Meghraj (JLLM), an international property consultant.

According to a recent CII study, the Indian real estate market is expected to recover only in 2010-11. However, the government growing fiscal deficit is expected to impact the sector negatively with increases in the cost of funding and falling return on investments through exchange rate variations.

Some have been once-bitten-twice-shy and have avoided raising prices. Parsvnath Developers Chairman Pradeep Jain says he doesn’t see any scope to increase prices for the next couple of months. “We have to concentrate on selling properties and generating internal accruals first. We are planning to sell properties with attractive discounts in the festive season,” says Jain who is also president of NCR chapter of the Confederation of Real Estate Developer’s Associations of India (Credai).

Going by the trend in property prices in recent weeks, few of his counterparts in other real estate companies agree with Jain.

Source:http://news.in.msn.com/business/article.aspx?cp-documentid=3229249

Indian Real Estate can See Recovery by End-2009

The Indian real estate is expected to enter the recovery phase by end-this year and macro-economic and sector-specific factors will act as catalysts in this recovery, a leading real estate consultancy said. “Economic recovery during CY 2010-11 is likely to reinvigorate the interest of foreign investors in India’s real estate market. We expect enhanced capital inflow in the real estate sector in the medium-to-long-term,” Jones Lang LaSalle said in its report. Initial yield is expected to show compression during CY 2010-11 and capital values are likely to decline during 2010 before recovering in 2011, the company said in the report.

“Initial yield has already started to show a declining trend during 2009 which is likely to be the case in the near-term. Yield on 10-year Indian Government Bonds is likely to harden due to higher fiscal deficit,” it said. The report said although the high fiscal deficit is likely to harden interest rates in the economy, all other macro-economic variables are expected to improve during CY 2010-11 which is likely to induce real estate market recovery after the slowdown of CY 2008-09. According to the World Economic Outlook Report by IMF, the world economy is likely to contract by 1.4 per cent during 2009.

While advanced economies are expected to contract by 3.8 per cent by the end of this year, emerging and developing economies are likely to grow by 1.5 per cent. India and China are expected to grow by 5.4 per cent. “India and China are expected to witness a robust recovery with increase in real GDP growth from CY 2008-09 levels and Indian economy is expected to grow at 5.4 per cent during 2009 (the second highest in the world after China, which is likely to grow at 7.5 per cent),” the report said. Fiscal deficit in India leaped from 3.1 per cent in 2007 to 6.1 per cent in 2008 and is further expected to inch up to 6.4 per cent during 2009, it said.

Source : http://www.indianrealtynews.com/real-estate-india/indian-real-estate-can-see-recovery-by-end-2009.html

FDI to flow into housing sector

Foreign investment in the real estate is likely to flow into the residential sector in India in the near-term as it has an enormous potential for growth due to the massive unmet housing demand.

A report by real estate service firm Jones Lang LaSalle says, “While risks may be higher for investment in real estate in India than in developing econo-mies, the returns on investment are significantly higher in India.

Speaking on the report, Mr Anuj Puri of Jones Land LaSalle Meghraj said, “Global capital flows are looking for existing and futuristic growth indicators and patterns and India has displayed both to a measurable degree. These factors, coupled with an already discernible return of positive sentiments in the real estate business, will result in enhanced interest by foreign real estate investors.”

The report was released at the conference on Turnaround in the Downturn- An insight into the current Real Estate Scenario organised by the Confederation of Indian Industry (CII) here.

Mr Arun Nanda, the executive director of Mahindra & Mahindra, said the revival of the Indian real estate sector lies in providing affordable housing by cross subsidisation and conscious effort on part of the developers to inculcate corporate social obligation.

Calling upon the stake holders of the Indian real estate sector to analyse the reasons of the downturn in the sector, he emphasised that with the reduction in interest rates from 14 per cent to eight per cent, the sector was now showing signs of revival. He also laid emphasis on development of satellite centres as a means to tackle the issue of growing urbanisation and urged the need to ensure balanced urbanisation.

Source : http://stockmarkettoday.in/2009/09/12/fdi-to-flow-into-housing-sector/

Realty prices unlikely to rise in next 6-months: Hiranandani

Real estate prices are unlikely to go up in the next six-months and the industry may witness huge volumes of sales of residential properties, a top industry player said.

“There is a huge improvement in real estate and prices will not increase, at least for the next six months,” Hiranandani Group of Companies’ Managing Director Niranjan Hiranandani told reporters on the sidelines of a conference here today.

The industry may see a huge volume growth in the next six-months, Hiranandani said.

“In the last 60-days, we have seen sales of almost 8,000 apartments in the Mumbai region alone, spread in all sectors of the real estate market, but especially focused on the lower segment. But we do see across-the-board increase in demand,” he said.

Demand for residential projects in a number of cities is picking up on account of lower home loan rates, property price-cuts by developers and job market recovery, market players said.

Source : http://www.business-standard.com/india/news/realty-prices-unlikely-to-rise-in-next-6-months-hiranandani/73161/on

Personalised property tax bills from 10

Mumbai: This will come as a relief to a large number of citizens who diligently pay their property tax. From the next financial year when the BMC introduces the capital value-based property tax system , every citizen owning property in the city will receive a personalised property tax bill. In fact, a person will be able to calculate his/her property tax and pay it directly into an account created for that citizen and not in a common account.

In the present rateable system of assessing property tax, the civic body give a single property tax bill to a housing society. It is then left to the housing society committee to apportion the bill amount amongst the residents . The money is also collected by the society and the BMC puts the amount paid into the societys account.
The current system recognises a housing society as the owner of the property. The flat-owners are merely occupants . So the property tax bill is prepared in the name of the housing society and the amount is collected by the society from individual members . The problem with the current system is that when some members default on payment, all the members are penalised. So we introduced a system where a society could pass a resolution and ask for property tax bills for every individual member but there is a requirement that there must be no arrears, said N A Pathan, chief assessor and collector, BMC.

The result is that individuals who want to opt for a personalised bill cannot do so unless the arrears are cleared. When a society regularly defaults , the BMC does not distinguish between those who have paid and the defaulters because the current system does not allow such distinction with the result that it can auction off the entire property to recover its dues. The onus is then on individual members to prove she/he is not a defaulter which can be quite cumbersome.

At present, there are 3.15 lakh properties from which the BMC collects property tax. The property tax bill will be in the name of the housing society but for every flat, the tax will be calculated individually and the amount will be credited into the individual account.

Unless the BMC Act is amended it will be difficult to take action against an individual defaulter as the property card bears the name of the housing society, said Vinod Sampat, an expert in co-operative housing society laws.

http://lite.epaper.timesofindia.com/getpage.aspx?pageid=2&pagesize=&edid=&edlabel=TOIM&mydateHid=10-09-2009&pubname=&edname=&publabel=TOI

Bring your dream into a reality; buy a beautiful real estate property in India

If you at all want to establish yourself in India personally or professionally or if you want to shift to a new place in India and settle there or even if you are you interested in taking a personal or commercial property on rent or lease, then now you don’t need to worry at all. Rather what you need to do is to take help from Propirika and immediately you will get the solution and services.

Buying a commercial property in India or for that matter, even the residential properties of India is indeed an achievement, because it apart from providing you with the space, will also give you a sound financial investment. However, it would be very true to say that buying a real estate property in India is not as easy as it used to be once upon a time. And this is one of the major reasons why most of the people do not prefer to get into property transaction in this country. But now with the arrival of a dedicated real estate website offered by Propirika, there is no reason for you to feel hesitant, because Propirika can help you in getting your dream place with ease and moreover will also help you in getting a genuine transaction done to save your hard earned money.

With the sole motive of satisfying their customers at any cost with genuine efforts, Propirika can assist you in buy sell real estate property in almost every part of the country like Delhi, Mumbai, Bangalore, Kolkata, Chennai, Hyderabad, Gurgaon and many other places as well.

Therefore if you are interested in buying or selling of real estate properties in India or even if you want to take them on a rent or lease basis, then all you need to do is to log on to Propirika, fill the form and raise your demand. And then you will be provided with the best services which can make you dream come into reality.

About the website:

Propirika is a real estate website based in India, which has excelled in offering the best services regarding real estate property transaction in any of the major parts of India. It also offers the facility of presenting you with the most reliable and reputed property consultants who can guide and help you in property transaction till you get a fruitful deal done. Some of the major cities for which Propirika can offer you its expert services are Delhi, Mumbai, Gurgaon, Chennai, Hyderabad, Kolkata, Bangalore and many other cities as well. Not only in the purchase and sale of properties, but it also offer its services to those who want take these properties on rent or lease.

Source : http://www.bignews.biz/?id=813533&keys=RealestatepropertyinIndia-commercialpropertyinIndia-realestatepropertyinIndia-buysellrealestate

Housing for senior citizens

Amidst the clamour and claims of realtors that they are making a range of houses, from luxury to affordable, for their customers, a major question remains – whether there is anything in it for senior citizens? Not really, at least in this part of the country.

Perhaps, unthinkingly, realty firms have for long ignored the claims of senior citizens. Experts feel realtors must not ignore the special needs of senior citizens when they design their residential projects as these are people who have given their youth to build the society of today, and that they deserve a better deal enabling them to lead a peaceful and dignified life after retirement.

Sunil Jindal, CEO of realty firm SVP Builders, says they keep in mind interests of people of all age groups while designing their housing projects. For youngsters, he says, they provide facilities from gym to swimming pools inside the complex. And for senior citizens, they provide facilities like reading rooms, round-the-clock security, water softening plants, uninterrupted power supply, and maintenance services. However, they have never made homes exclusively designed to cater to them.

There are reports that some realty firms in cities like Chennai, Coimbatore and Kochi are designing and building flats exclusively for senior citizens. Since they are making flats for senior citizens, they are providing in-house medical facilities, available round the week, throughout the year. Most of these projects also have lounges for yoga and meditation. Domestic help, laundry service and maintenance services are also available in-house at all times.

Sanjay Singh, VP (marketing) at Century 21 India, says houses specially designed for senior citizens are not new down South and that many realty firms are making homes for them inside or on the outskirts of major cities there. According to him, Chennai already has some residential projects for senior citizens and more are on the cards. Moreover, professional services such as legal and financial consulting, alarm hooters and community halls are also provided in homes for them. These homes are also equipped with access ramps to common facilities, wider doorways, extra lighting, larger lifts, and centrally located common amenities.

Dr Nazma Rizvi of School of Planning and Architecture (SPA), strongly feels that if realty firms make specially designed homes for senior citizens in NCR, they would get a good response. “Senior citizens purchase such homes. If there is good demand for such flats in places like Chennai and Kochi, there is no reason such flats would not find buyers in this part of the country.”

According to one report, a builder in Chennai specially designed apartments for the elderly with larger ramps and lifts. Extra rest rooms are provided in the common areas, and normally, residents prefer to have a larger green space in these projects.

Pavan Dhir, a social worker active in East Delhi, says that currently our leaders and intellectuals only talk about the youth of India. While talking about them, they should not ignore the legitimate concerns and interests of senior citizens in the twilight years of their lives. According to him, senior citizens were 7.5% of the population in 1991 and the number is expected to go up to 10% by 2015.

Alimuddin Rafi Ahmad, CMD of realty firm ILD, admitted that the realty firms in this part of the country somehow failed to look after the interests of senior citizens. “They can make homes for this section of the society. They deserve something special from the society,” he says.

Dr Rizvi says realty firms must take care the interests of disabled a well as senior citizens while building their projects. “It is really sad that even though real estate sector has taken huge strides in India over the last couple of years, yet not many real estate firms make buildings accessible for the elderly populace. For instance, there are not many building where one can find lifts that can easily accommodate wheelchairs. Cabinets are fixed in bathrooms, bedrooms and kitchens at a height that can give jitters to disabled persons,” he concludes ruefully.

Source : http://mail.google.com/mail/?shva=1#inbox/1239767df20821a2

VAT in realty

Value added tax (VAT) has always been a cause of perplexity to the real estate buyers. While some builders are recovering VAT from the customers, there are others who are not charging their customers at all. This has led to much confusion for the property buyers as to whether VAT needs to be paid and if it does need to be paid, what should be the amount.

The VAT system replaced the sales tax system with the objective of simplifying the tax regime and to avoid the problem of double taxation. VAT is a multi-stage tax levied at each stage of the value chain with the provision that tax credit will be allowed for the tax paid at an earlier stage.

Under the VAT structure, there are two categories of rates – four percent or 12.5 percent. The idea behind this was to bring about uniformity in the levying of tax by different States and simplify the complex structure under the sales tax system. Different States have enacted the VAT Act for their State along with certain variations. While some States have moved away from the basic rate structure, some have introduced certain exemptions and concessions for the benefit of specific sectors.

In Karnataka, the real estate developers or builders have an option to charge VAT to the customers under two schemes. The first one is the composition scheme where the builder pays four percent of the construction cost as VAT. In this case, he does not claim anything from the individual owners.

Under the second scheme, the builder can collect 12.5 percent of 70 percent of the cost of construction from the individual owners. This works out to 8.75 percent of the total cost of construction. VAT is applicable only to materials and 70 percent of construction cost is representative of the materials cost in construction. VAT is calculated on the cost of the flat, parking space cost and amenities.

While some may think that it is unfair for buyers where the builder opts for the second scheme, it is not so. In the first case, although the builder is paying VAT himself, the additional burden will be passed on to the owners by way of a higher price. Similarly, where the builder is recovering VAT from the owners, the price of the flat would be lower to that extent since VAT is an additional cost to the buyer. Failure to do so may render him uncompetitive in his overall pricing.

Source : http://mail.google.com/mail/?shva=1#inbox/1239767df20821a2

India likely to grow by 7-7.5% in FY10: Kamath

With greenshoots of economic recovery becoming visible, a top banker was today optimistic that India will record a growth of 7-7.5 per cent in this fiscal.
“Manufacturing sector has come back to the stream… Infrastructure, mainly power, is coming back in a big way… My belief is that we will see a growth of 7-7.5 per cent (in the current fiscal),” ICICI Bank Chairman K V Kamath told a conference here.

In July this year, Reserve Bank projected atleast six per cent growth in the current fiscal on the back of an expected recovery in the world markets.
Kamath said if the weak monsoon pose hurdles to the agriculture output, the growth can moderate upto seven per cent, while it could be high at 7.5 per cent if the monsoon is favourable.

In the last three months, Kamath said, ICICI Bank seen its coprorate clients resuming their projects, which were shelved previously, on account of a sharp slowdown in the financial markets.

Key-sectors like oil, cement, auto and services sectors have started recovering from the slowdown, Kamath said.   However, a few other export-oriented sectors, primarily textile, still face challenges, Kamath, who was the managing director and CEO of country’s second-largest bank, said.
Banks have significantly slowed down their unsecured lending to avert rise in loan impairments, he said.
However, loan growth to corporates and home loan consumers have picked up in the recent past and is expected to improve further, Kamath said.
The banking system is equipped with sufficient liquidity on account of various meausres from the policy makers and liquidity is unlikely to emerge as a challenge for growth, Kamath said.
On interest rates, Kamath said an upward movement in the rates is unlikely in the immediate future.
Noting that badloans emerged as a major concern to global banks, Kamath said that some amount of “cleaning up” is yet to be done on the “credit side of business and property side of business” globally.
However, a few other export-oriented sectors, primarily textiles, still face challenges, Kamath, who was the Managing Director and CEO of country’s second largest bank, said.

Banks have significantly slowed down their unsecured lending to avert rise in loan impairments, he said.

But loan growth to corporates and home loan consumers have picked up in the recent past and is expected to improve further, Kamath said.

The banking system is equipped with sufficient liquidity on account of various meausres from the policy makers and liquidity is unlikely to emerge as a challenge for growth, Kamath said.

On interest rates, Kamath said an upward movement in the rates is unlikely in the immediate future.

Noting that bad loans were a major concern to global banks, Kamath said some amount of “cleaning up” is yet to be done on the “credit side of business and property side of business” globally.

Source : http://www.business-standard.com/india/news/india-likely-to-grow-by-7-75-in-fy10-kamath/72805/on

Housing Development Says Demand From Overseas Indians Is Rising

Sept. 5 (Bloomberg) — Housing Development Finance Corp., India’s biggest mortgage lender, said home demand from Indians living overseas is rising as the global economy recovers and interest rates remain low.

Home loans to non-resident Indians currently account for 14 percent of Housing Development’s business, Joint Managing Director Renu Sud Karnad said today at a property exhibition in Singapore. The pace of increase in loans extended to non- resident Indians in Singapore could surpass the company’s 20 percent per annum rate of loan growth in the Middle East that contributes the biggest share of business overseas, Karnad said.

Consumer demand for home loans in India is reviving after the central bank cut its key rate by 425 basis points since October to the lowest on record in a nation that has a shortage of 24.7 million housing units. Housing Development in July reported a 21 percent increase in first-quarter profit to 5.65 billion rupees ($116 million) as a drop in borrowing costs and decline in property prices lifted demand for home loans.

“It’s a good time to invest now as prices have come off quite a bit due to the global crisis but have started to inch up already in the past two months, especially in Mumbai and Delhi,” Vice Chairman and Managing Director Keki Mistry, said at a press conference today. “Interest rates won’t be rising too much due to ample liquidity.”

Property prices in central Mumbai and New Delhi have risen 30 percent since May after falling 35 percent to 40 percent during the global crisis, Mistry said.

Source : http://www.bloomberg.com/apps/news?pid=20601091&sid=a2V.zYjgUvOE

Real estate prices won’t rise around festive season

Property prices are unlikely to rise sharply during the festive season as buyers have become very price sensitive and are not ready to pay premium on flats.

Talking to Hindustan Times, Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj (JLLM) said, “Developers have realised that they can no longer increase the prices at will as the customer will just not buy the product,” said Puri.

He added that since consumers had returned to the market after a lull, developers were not keen to alienate them by quoting high prices.

Puri said that the current market rates were similar to that of mid-2006 levels when the market was just picking up and said that it was the best time to buy.

However, unlike the last few years, this year, the festive season will witness fewer number of new project launches, falling by approximately 35 percent. Though major builders like Hiranandani (Goregaon), Supreme and RNA (Chembur) and Matoshree (Parel) will launch some projects around Diwali, many others have deferred their projects.

“During the last one year we have faced a lot of problems and we have recovered. Our focus is to complete our existing projects and only then will we think of launching new ones,” said Anand Gupta, General Secretary, Builders Association of India, an apex body of the construction industry.

Some developers are even adjusting their projects to suit low cost buyers.

Last week, Nahar Builders launched an affordable housing scheme at Powai at Rs 5,900 per sq ft in a complex where the going price was Rs 7,000. “The buyers of affordable houses will have smaller houses and less amenities,” said Sukhraj Nahar, director, Nahar Builders.

Pujit Agrawal, managing director, Orbit Corporation Limited also thinks that people are no longer inclined to pay a premium.

Source : http://www.tradingmarkets.com/.site/news/Stock%20News/2514190/

Real estate moves towards industrial hubs in tier 2 & 3 cities

The demand fundamentals of India are now focused around cities that have sufficient economic activity, be it industrial, service sector-driven or  incentive-driven programs by the State Government. In Gujarat, which has seen considerable industrial progress, cities of Ahmedabad, Surat and Vadodara come readily to mind.

Baddi in Himachal Pradesh and Pantnagar and Rudrapur in Uttaranchal attracted a lot of residential developers, thanks to government policies. In the South, Coimbatore, Vizag and Kochi emerged, either thanks to a large investor segment or as the outcome of sufficient economic activity. Towards the West, Pune, Nasik and Nagpur are noteworthy in this context.

In all cases, developers positioned their development close to industrial hubs, targeting a totally different price segment. While this was a worthy ambition , it was poorly conceived as a plan since many of them did not factor in State Government-level regulatory challenges such as local municipal laws.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/Realty-Trends/Real-estate-moves-towards-industrial-hubs-in-tier-2-3-cities/articleshow/4970256.cms

Changes in Indian Real Estate Affairs

Real estate in India has always been the playing field for entrepreneurs. This industry has witnessed unprecedented highs and frightening lows over the years. One is often left dyspnoeic with the continuous shifts in this sector. Due to rise in demand in the IT/ITeS sector and significant increase in FDI, the commercial and retail real estate markets experienced tremendous growth in the first quarter of 2008. Land deals accrued around Rs 23,000 crore with additional deals worth Rs 10,000-crore in the pipeline. The highest recorded land deal was Mumbai’s Bandra-Kurla Complex. However, it has not been an easy journey for all in the property market. Last year, the global property collapse exacerbated by the credit bubble burst resulted in reduced finance and business activity. Equity markets also remained lacklustre and raising money through IPOs proved to be difficult. Both real estate giants, Unitech and DLF, delayed the plans to raise money through REIT issues after witnessing unfavourable initial response.

Consequently, lack of funds forced developers into high interest loans. High credit amounts proved to be detrimental for property companies. Most companies borrowed a large portion of their land-development outlays up front and relied on advance sales to repay these loans. However, poor sales led to delays and massive cost overruns. According to industry estimates, around Rs 8,000 crore worth of projects had faced considerable delay by June 2008. The collapse of Lehman Brothers, in September 2008, was perhaps the most significant event that spiflicated an already floundering property market in India. It triggered a shockwave that rippled through the liquidity centric commercial and retail real estate markets leaving a trail of defaults, delays, and losses. Even though property prices have corrected by 22-42% in major cities over the last few months, 10-15% downside is further expected. Commercial real estate demand has languished as corporate firms deferred expansion plans to deal with the credit situation.

Negative absorption rate aggravated by falling rentals led to decreasing margins. Companies like DLF, with 40% of its portfolio in the commercial and retail space, reported 29% y-o-y decline in 2009 revenues while its net profit plummeted by 43%. Similarly, the top line was also distorted for companies like Ansal (-26%), Parsvanath (-60%), etc. Timely and synchronised measures taken by central banks and governments around the world restored balance and prevented a total collapse of the financial system. Thus, markets saw a mild recovery. According to Rajeev Rai, vice-president of Corporate Assotech Ltd, “To counter decreasing demand and to gain confidence of all stakeholders of Indian real estate, associations like NAREDCO and CREDAI decided to bring down prices of various properties by reducing overheads and marketing costs.

In some cases, ticket size of the property was reduced with reduction in size of apartment to make it more affordable for the masses.” As per a report by Grant Thornton, the total number of PE deals announced during the first half of 2009 stood at 93 with a total announced value of $2.89 billion with the highest proportion invested in real estate and infrastructure management worth $1.61 billion. Bhim Yadav, CEO, Falcon Realty Services Pvt Ltd, reckons, “A higher FAR not only brings in more supply to the market, it is also vital for creating room for more affordable housing and control the steep rise in prices, ultimately benefiting the common man.” The Mumbai real estate saw a sharp price correction. Average peak rentals fell 40–60%. While there was a slight mismatch with excess supply, (supply of over 30mn sq ft over 2008–10E vs expected demand of 22mn sq ft), the demand in Mumbai has been healthy.

Unlike Mumbai, commercial and retail space in NCR is expected to languish due to weaker absorption rate. As per Centrum, the average vacancy rate in malls across India was about 9% in Q408 and NCR had the highest vacancy rate of around 25%. According a study by Knight Frank India, average rentals in Gurgaon was down from Rs 120/sq ft to the Rs 51/sq ft while rents in Noida dropped from Rs 90/sq ft to Rs 44/sq ft. In conclusion, as market conditions stabilise, the financial markets will slowly pick up resulting in an improved liquidity scenario, stable government, and affordable prices. This may well serve to bring back the shine to this lacklustre sector.

Source : http://www.indianrealtynews.com/real-estate-india/changes-in-indian-real-estate-affairs.html

Commercial property market may revive post-Diwali: Religare

MUMBAI: The commercial property market may witness a revival post-Diwali, says Religare Securities.

“We have seen a strong demand in the residential property market from December-January and now we may see buying activity in the commercial property market post-Diwali,” Religare Securities’ Associate Vice-President, Suman Memani, told reporters here today.

Banks and financial services would be seen buying office spaces, but IT and ITeS sectors are yet to enter realty market as they are still passing through degrowth.

“We still remain negative on retail segments and expect sentiments to improve only 15-18 months from now as the economy gradually gets back on track,” Memani said.

“We believe that there has been a significant rental correction happening in the commercial segment in Tier I and Tier II cities. However, there has not been any erosion of capital value of commercial properties,” Memani said.

Lower home loan rates, property price cuts, apartment downsizing, and a recovery in the job market are translating to a pick-up in demand for residential projects as evidenced by an increase in property registration in major cities.

With the improvement in macro-economic conditions as well as buyer affordability, developers witnessed a stronger response to new launches across cities over the past quarter.

Now that property prices have climbed down and the risk of job lay-offs has diminished, the service class is likely to participate actively in property absorption, leading to a strong recovery in residential demand in Q2 FY 10, he said.

Commenting on realty prices, Memani said, “after going into a severe tailspin from January 08 onwards on account of weakening economic dynamics, we believe realty prices have started to bottom out and have already troughed in a few locations. With the return of liquidity to the sector in the form of FDI, QIPs and bank loans in recent months, the balance-sheet position of realty players has started to improve, in turn changing the risk dynamics of the business.”

Listed real estate stocks were in the danger zone, a key risk measure for bankruptcy-but with equity infusion, the chances of bankruptcy have diminished, he added.

Most developers are looking to enhance their execution capabilities in this space. If 60 per cent of the planned development is executed, it will improve the balance-sheet of realty players and also enhance buyer affordability, he said.

Realty stock prices corrected 85-95 per cent over January 08-March 09, but have bounced back significantly thereafter. Still, they remain 25-30 per cent of their peaks. With positives like liquidity infusion, stronger balance-sheet positions, a stable reform-oriented Government and an improved employment outlook, “we expect the sectors’ fundamentals to improve,” he said.

Source : http://economictimes.indiatimes.com/Markets/Real-Estate/News-/Commercial-property-market-may-revive-post-Diwali-Religare/articleshow/4929472.cms

RE/MAX India Expand its Area of Operation in 7 More Regions

RE/MAX India, the master regional franchisee of RE/MAX International in India, has expanded its areas of operations in 7 more regions. The company has appointed regional owners for seven new regions which include Bangalore, North & South Gujarat, Rest of Tamil Nadu, Delhi NCR, Chandigarh and Pune. Mr. Samir Chopra, head of RE/MAX operations in India, will retain the Delhi/NCR region in order to maintain first hand experience with the trade. With this development, RE/MAX India is nine regions strong in India within a short span of 4 months into operations.

RE/MAX recently forayed in India with the mission of organizing the Real Estate brokerage industry. The company is rapidly expanding its presence and is planning to establish its operations throughout the country within the next few years. Expressing his delight on this development, Mr. Samir Chopra, CMD RE/MAX India said – “I’m extremely happy and excited about the way things are shaping up. We have found like minded people, who share our values and our vision.”

“RE/MAX India with its network of brokers, authentic information and world class standards of operations will certainly infuse transparency in this sector. The organization of the highly fragmented Real Estate sector will not only solve the woes of the consumers but would also generate many entrepreneurial opportunities in the industry,” Mr. Chopra added.

Source : http://www.indianrealtynews.com/real-estate-india/remax-india-expand-its-area-of-operation-in-7-more-regions.html

Housing dream ready to take wings in city

JAIPUR: The time is ripe to strike. For, if you wait till Diwali, your housing dreams could well send your budget awry. At least, this is what most  real estate experts in the city believe. And they have good reasons too.

First, an anxious city has been waiting and watching the market to grow for just too long. And now there is substantial number of residential projects ready for the citizens.

Second, the builder himself having reached the threshold of his holding capacity has now reached a point where he wants his investments to yield return. And third, a fall out of the two combinations puts the buyer in a perfect position to bargain for an additional furnishing or a parking lot or a discount for himself.

“But the situation will not remain like this for long,” says Gopalji Gupta, president of Rajasthan Builders and Promoters’ Association and chairman of Anukampa Group.

Gopalji should know, for with about 1,000 flats in various categories in different parts of the city, he feels that the investor who has been out of the market due to recession, might just jump back after Diwali, sending the price soaring.

Agrees Vibhishek Pal Singh, director of Unique Builders. “In fact, over the past year, our target clientele too has changed. Earlier, it was the investor in an effort to earn most of his money invested in most of our projects. They would just come to know of the project and without even taking a look at it, book one in advance. But ever since the recession, many such investors have lost a lot of money in the stocks and share market and have now withdrawn from the market.

“Now our clientele is the end user. We are now looking at those who are the actual end users while selling our flats,” he says.

“In fact, the buyer of Jaipur has been lucky so long. The real estate boom since the past few years have amply met the demand for flats thereby keeping the prices in check. However, now the situation might just change as not only has there been fewer clearance of plans by the Jaipur Development Authority in the past few months but most builders are working only on their old projects and that might just reduce the number of flats available. In fact, having to hold on to their old projects have escalated their prices too which will be passed on to the buyer,” says Gopalji.

Even if the recession has changed the shape of real estate business in Jaipur and developers spend more time convincing the clients to sell a residential project, none of the builders themselves would agree that recession has actually hit the real estate market in the city.

“The demand for flats has not been affected due to recession,” says Singh. His view is shared by M K Gupta, chairman of the Mangalam Group. “Recession has hit mainly the US market where banks finance 95% of the costs. But in India it is a different system. The book price of any flat is grossly under values from its selling price and the banks finance only 85% of the undervalues book price. So in effect they are just financing about 30 to 35 % of the actual price of the flat. And so banks did not affect the real estate business here,” he says.

However, Gupta too admits that recession while putting the investor out of the market has not affected real estate growth. “What has actually happened is that earlier there were too many investors in residential apartments here. Therefore, for a builder for a project worth say about Rs 1,000 crore, an investment of only Rs 10 crore was actually needed. The rest came in as advances from investors. But now with the investor out, the real estate developer has to invest more money into the project and satisfy himself with lesser profits,” he says.

“But that has not affected demand. There has always been two segments of users — one the middle class and the other with lots of money — and despite the recession, all builders have both categories of projects on,” he said. Gupta currently has two projects one on the Sirsi Road and the other on Hawa Sadak with residential flats ranging from Rs 17 lakh to Rs 80 lakh.

He, however, differs in his opinion that prices of residential property would escalate after Diwali. “It is not just now but every time is the right time to buy a flat,” he says

Be that as it may, the shape of real estate business has definitely changed for now. Many developers are targeting the end user, who most of the time is a middle class family, who look more towards budget houses. Taking a leap in this direction is Unique Builders which is coming up with a Jaipur model of Nano flats on the Tonk road. Targeted towards the middle class, this 3,000 to 4,000 flat complex would sell one BHK flats from Rs 5 lakh onwards.

“With the investor gone, real estate developers are also launching projects where the frills have been done away with. The flats on Tonk Road would have basic facilities and instead of the frill, we would be giving them amenities like a clinic, temple in the premises, a 24 hour take away food shop etc so as to suit the needs of working couples,” says Singh. Facilities like gymnasium, sauna bath have been done away with here.

But that has not taken away the glare from the more posh Rs 20 to Rs 25 lakh flats and villas being built in another part of the city. Even Mangalam’s project of Rs 80 lakh per flat at Hawa Sadak is totally booked.

With the hope of residential projects picking up in the near future, most developers were still doubtful of commercial ventures. “There are not too many MNCs that are venturing into the market now. Besides the lease rates too have fallen. Therefore commercial property market might still take a while to pick up till there is enough liquidity in the market once again,” says Gopalji.

Source : http://timesofindia.indiatimes.com/news/city/jaipur/Housing-dream-ready-to-take-wings-in-city/articleshow/4904327.cms

Signs of Stability for Real Estate India

India’s real estate sector is showing first signs of stability after a free fall that started last year, claims a leading builder. Real estate developers in India think the worst may be over as property prices started to stabilise. Buyers are also returning, encouraged by the government’s decision to provide cheaper home loans, according to Mr Sanjay Rastogi, director, Saviour Builders.

A series of interest rate cuts on home loans and a revival in optimism have encouraged developers to start new projects. Some are even putting a halt to discounts as demand picks up. Property prices are going up by 10 to 15 per cent after falling nearly 30 per cent last year, Mr Rastogi said in a Press statement here.

“For some time, there will be cautious correction and there will be upward trend (of prices). But ultimately, the demand and supply are going to continue because India has globally the largest young workforce whose disposable income is increasing. They will all need houses to live and place to shop,” he said.

Source : http://www.indianrealtynews.com/real-estate-india/signs-of-stability-for-real-estate-india.html

‘Best time to buy real estate’

MUMBAI: Mumbai’s realtors claim this is the best time to invest in residential apartments as prices have touched the bottom of the curve. “Realty  prices will only rise again and the best time to invest is between September and December,” Hiranandani Group of Companies managing director Niranjan Hiranandani said on Monday while addressing a real estate meet. It was organised by Times Property, which launched its annual property event that would come off from August 17 to 24.

Hiranandani said real estate was the best investment. “If you are looking at a five-year cycle and invest in real estate, then you are sure to make good profits,” he said.

Lodha Group director Abhisheck Lodha agreed: “Prices will increase slightly but will stabilise and investing in property, especially from now to December, is favourable. The real estate sector is a tortoise but a stable tortoise.” The panelists felt that the effects of the downturn has not hit India that hard because the of its resilient economy. “A great deal of agility has come into the market now. We are banking on the around 60% of the population of Mumbai that do not own their own homes and who are looking out for their first homes,” said Amit Bhagat, CEO and managing partner ASK Property Investment Advisors.

Source : http://timesofindia.indiatimes.com/news/city/mumbai/Best-time-to-buy-real-estate/articleshow/4895369.cms

India gets $7 bn FDI in first quarter

KOLKATA – India received $7 billion in foreign direct investment (FDI) during the first quarter of the current fiscal, a senior official said here Friday.

“For the April-June period there was an approximate $2 billion FDI inflow every month,” Gopal Krishna, joint secretary to the Department of Industrial Policy and Promotion, said during an interactive session organised by Indian Chamber of Commerce.

He described the $7 billion received so far as a satisfactory amount.

“Services including financial, non-financial, software, telecommunication, construction and real estate are the areas where we see a large amount of FDI inflows,” he added.

Talking about the annual projection of the FDI for the country, Krishna said the government is not setting any target for the year keeping in view the global economic slowdown.

He was confident the country would manage to bag 1.5 percent of the total global FDIs.

In 2009 it is projected that there would be total $1.2 trillion of FDI globally, down from $1.6 trillion in 2008 due to the economic slowdown.

Source : http://blog.taragana.com/n/india-gets-7-bn-fdi-in-first-quarter-139834/

Want to buy a home? Shift to a less costly city

A  study of households with an annual income of Rs 3 lakh (Rs 300,000) to Rs 10 lakh (Rs 1 million) in seven cities shows substantial variations in the type of houses they can afford to buy.

The study on affordable housing, done by property consultants Knight Frank, says the Rs 8-10 lakh (Rs 800,000-1 million) income category in Chennai can afford houses up to Rs 45 lakh (Rs 4.5 million), while the same group can afford houses up to only Rs 38 lakh (Rs 3.8 million) in Mumbai [ Images ] and Rs 37 lakh (Rs 3.7 million) in Bangalore. The same category in Hyderabad, Kolkata [ Images ] and Pune could afford between Rs 40 lakh (Rs 4 million) and 43 lakh (Rs 4.3 million).

In terms of apartment sizes, the Chennai households can afford up to 1,200 square feet, while those of Pune and Mumbai can only afford 800 sq ft and 950 sq ft, respectively.

In terms of affordable rates per sq ft, Pune can afford up to Rs 5,900 a sq ft and Bangalore only Rs 3,600 a sq ft, the study said.

“Mumbai’s high cost of living, coupled with the generally higher maintenance lifestyle, has adversely affected the affordability of households in the city. For instance, middle class households in Kolkata, Chennai and Hyderabad can afford houses valued at Rs 14-45 lakh (Rs 1.4-4.5 million), whereas households of similar stature in Mumbai can afford houses valued at Rs 12-38 lakh (Rs 1.2-3.8 million),” the study said.

“Affordable rates are higher if sizes are smaller. If buyers can compromise on size, they can afford higher priced apartments,” said Samantak Das, national head, research, Knight Frank.

The study assumes significance, as top real estate developers such as DLF, Unitech and Parsvnath have shifted their focus towards the Rs 20-60 lakh (Rs 2-6 million) income category in many cities, with the premium housing segment seeing sharp decline in sales after the economic slowdown and stock market decline impacted home buyers.

The report states that not all of the so-called affordable housing projects in the country are really affordable; they are way beyond the means and preferences of buyers.

“Although preferred unit sizes are less than 1,200 sq ft, many projects are offering greater sizes that are unaffordable. Based on consumer preferences, house property beyond Rs 5,900 a sq ft would be unaffordable across all cities covered,” it said.

The consultancy thinks it is premature for developer to raise prices now.

“It is too short a period for developers to increase prices. It is just euphoria after elections and a stable government and not supported by fundamentals,” said Gulam M Zia, national director, research and advisory services, Knight Frank.

Source : http://business.rediff.com/report/2009/aug/13/shift-to-a-less-costly-city-to-buy-a-home.htm