Posts

Showing posts from May, 2009

Real Estate India Ready to Roar Again

Investors and analysts have begun re-rating the realty sector on optimism that the worst may be over, as the efforts of recent months and a stable global environment will help developers attract funds and boost earnings. Developers in the past year have restructured debt, sold non-core assets and tweaked product mix, helping to push up sales. This has encouraged investors to buy stocks of real estate companies and motivate analysts to revise price targets and upgrade the outlook on the sector. “The stabilisation in the international market improved financials arising out of restructuring of loans and enhanced liquidity from banks have resulted in revision in the outlook for the sector,” said Dipesh Sohani, an analyst with MF Global, an equity brokerage. “The real estate players are better placed now than what they were two-three quarters before.” Reflecting the positive sentiment, the Bombay Stock Exchange Realty Index rose 58 per cent in the past month, outpacing the benchmark Sensiti

Assotech Chief - Rajeev Rai speaks

Discounts Are Not The Answer, Says Assotech Chief Rajeev Rai speaks to Pallavee Dhaundiyal Panthry of how radical discounts on real estate inventory, harms the customer rather than helping the cause of the buyer or the industry Developers today say that realty prices in NCR have come down and they are flaunting up to 40 per cent discount? Is it true? How? Such level of discounting is not true in our case. Our group believes in launching projects at low rates, which can easily be absorbed by the local market. The BSP rates of apartments in our mass housing project in NCR was reduced by 5% to honor the call given by the then finance minister P Chidambaram and to show solidarity with developer's associations like CREDAI and NAREDCO. Moreover, we never ask our customers for additional payments on account of increase in the prices of construction material as our prices are escalation free. As we don't charge premium for our property, there is no need to reduce the prices or give hea

Interest Rates Are Likely To Go Down

Interest rates are likely to go down by two percentage points as the newly-elected UPA government is all set to tell banks to lower lending rates as part of a fourth stimulus package to be announced within 100 days of its formation. The objective of the government is to boost domestic demand to pull the economy out of slowdown. The stimulus package will also bring relief for the export sector, which has been badly hit due to global slowdown. In April, exports were down 33% from the same month last year. According to a source, government will also expedite the implementation of the infrastructure projects under public private partnership (PPP) programme. However, sources said that the fourth package will not have large element of fiscal measures like tax rate cuts as government has already lost huge amount of revenues while announcing previous three packages. The fiscal deficit in 2009-10 is likely to be over 6% of GDP. Government is also worried over decline in exports, which has affec

New Realty Projects May Not Find Any Takers

New Realty Projects May Not Find Any Takers, Say Analysts A lot of new projects have been announced by real estate developers across cities like Mumbai, Delhi, Chennai and Bangalore. While there have been a large number of enquiries for these projects, those tracking the industry believe that these may not necessarily convert into transactions. This is on account of the fact that these projects scheduled to be delivered about 2-3 years from now. Take the case of Hiranandani's new project in Panvel (Navi Mumbai) for which possession is expected only in December 2011 or that of the Marathon Group which has launched three properties in Mulund in central Mumbai. HDIL's properties in Mumbai's suburbs of Andheri and Kurla are scheduled for completion by the end of 2011. "People want to buy into completed projects, since the risk there is negligible," says Amit Agrawal, Real Estate Analyst at Ambit Capital. Importantly, there have been enough instances in the past where

Sluggish Realty Market Empowers Buyers

The property market in India was on a dream run like never before. Upbeat developers launched project after project even as bullish home buyers lapped them up. A large number of buyers bought at pre-launches, launches, in large cities and small, till the American subprime crisis hit and many dreams turned sour -- since the end of 2008. The current sluggishness in the realty market, however, could perhaps be used to shift the focus to buyer interest. In fact, the present situation has seen a sea change in the way buyers are expressing their grievances and trying to get an advantage for themselves. Says Rajiv Sahni, partner, real estate practice, Ernst & Young: "A noticeable difference in grievance redress is the emergence of young buyers, who are quality conscious and demanding for the premium they pay. Use of technology like internet groups, forums, blog sites has provided a platform for buyers to connect to a large target audience in order to collectively protect their intere

More Hit On Bigger Realty Developers

Bigger Realty Developers Hit More Due To Crisis Real estate developers with a pan-India presence are in trouble. With few buyers in the market, majority of their projects have not taken off in various markets, say realty consultants. Almost all major real estate Developers such as DLF, Unitech, Omaxe, Parsvnath Developers and Emaar MGF had moved out from their core areas to construct projects in different cities. However, 65-70% of these projects have not taken off. DLF, for instance, recently pulled out of many commercial projects in Gurgaon and Manesar. Buyers also moved out of the developer's Garden City Residential project in Chennai. Similarly, Unitech's projects in Kolkata and Mohali have also not taken off as per plan. A severe cash crunch has also made Parsvnath Developers hold back its plans to construct several projects that were in the pipeline. Kaustuv Roy, executive director at consultancy Cushman & Wakefield says performance of any player depends on the cost o