Indian Property News on 'October, 2006'

Fresh curbs likely on runaway home loans

54% growth in year to June may invite higher risk weight.

Commercial banks are still disbursing home loans at a break-neck speed as there is no slowdown in the demand for mortgages, despite some signs of moderation in the rate of growth in bank credit.

The unabated growth in home loans may prompt the Reserve Bank of India (RBI) to further increase risks weights on such loans and make them expensive. The risk weight on home loans is now 15 per cent. The objective will be to dampen the demand by making loans dearer. Read More »

Insurance cos to be permitted to invest in SEZs

Insurance companies can invest in special economic zones (SEZs), particularly in infrastructure such as roads and power plants and other facilities, reports Business Line.

Depending on the activity that is being pursued, investment by insurance companies will be allowed. If a power plant is being set up and the tenure of investment is 15-20 years, it would qualify for infrastructure investment, sources added.

According to insurance regulation, infrastructure includes roads, power plants, irrigation and housing. While it does not include SEZs, the applications would be scanned based on the nature of activity, sources added. Read More »

Loans for second house may get costlier

If you are planning to buy a second house, you may need to speed up your decision. With RBI trying to tighten credit flow to the housing sector, some state-owned banks are debating raising rates on loans to those buying a second house.

If the move — termed as ‘informal discussions’ by a finance ministry official — goes through, interest rate on the loan for your second house could be higher than what you are paying for the first. Read More »

Centre notifies list of authorised activities in SEZs

In the wake of criticism that Special Economic Zones (SEZs) are becoming a real-estate business, the government on Friday notified the list of authorised activities, related to social infrastructure in the zones. However, it omitted construction of golf courses from it.

It cleared 44 SEZs bringing in investments worth over Rs 40,000 crore. Formal nods were given to 24 SEZs including those of developers like Global Health’ Biotech SEZ in Gurgaon, Wockhardt’s Pharma SEZ in Maharashtra, Suncity’s and Ansal’s IT SEZs in Haryana. Read More »

Parsvnath to raise Rs 1,090 cr from its IPO

Real estate firm Parsvnath Developers Ltd (PDL) plans to raise Rs 1,090 crore from its Initial Public Offer, which will hit the capital market on November 6, to finance the construction of its ongoing 11 projects.

“We are currently executing 90 projects aggregating to a saleable area of over 108 million sq ft. We are planning to raise Rs 1,090 crore to meet the construction cost of 11 projects,” PDL Chairman Pradeep Jain said. Read More »

Booming Real Estate Business Pushes Indian Cement Industry Upwards

Remarkable growth has been observed in the cement industry in India, with reasons being the growth in real estate activities and boom in the development of infrastructure.

The seventy years old cement industry in India is ranked 2nd in the world. The industry is fragmented, with its top 5 players making up for about half of the installed capacity of around 150 Million tons. While small players hold the balance in this industry. With the growth in real estate activities and boom in the development of infrastructure, cement industry is on a roll in India.

According to a survey conducted by Assocham’s Industry body said that an average growth of ninety-five percent was registered by the cement manufacturing companies in Q1 2006. An upsurge of 32 percent in the sales volume was witnessed by the key cement producing companies due to the strong demand in western as well as northern regions. Read More »

Real estate price will plummet

The government will soon repeal the Urban Land Ceiling Act, 1976. In an all-party meet held in Mantralaya on Thursday, the chief minister indicated his government would make provisions to repeal the Act. He said as part of pre-conditions of Jawaharlal Nehru National Urban Renewal Mission, repealing the Act would release almost 500 hectares of the land in the state. Officials of the Urban Development Department claimed that real estate prices in Mumbai would go down by 40 per cent once the Act is abolished.

The government has acquired 2,066 hectares of land from defaulters in the last two years under the Act, including 433 hectares in Mumbai, 271 in Pune, 354 in Thane, 361 in Nagpur, 377 in Ulhasnagar and 183 hectares in Nashik. The state was bringing in the housing scheme from November 1, and people would be taken into consideration before scrapping the Act. Read More »

Govt. wakes to implement the building code

The government has finally decided to act in the direction of implementing the National Building Code (NBC), 2005 to prevent Bhuj-like disasters and ensure structural safety of constructions in the country.

The Urban Development Ministry has filed an affidavit in the Supreme Court stating that NBC guidelines should be made mandatory in the wake of earthquakes in Gujrat and Jammu and Kashmir. Both these earthquakes resulted in huge loss of life and property due to collapse of buildings. Read More »

For Delhi traders, its time to go extreme

The Delhi Traders Association has decided that it’s high time now to take some intense steps against the sealing drive which is scheduled to restart from November 1.

The association has called for a complete strike where all Delhi markets will be shut from October 30^th to November 1^st.

Threatening to go on an indefinite strike, traders have also planned to gherao the Delhi assembly on October 30, when the assembly session starts. Read More »

India’s SEZs Set To Raise US$5bn

India’s Special Economic Zone (SEZ) program has run into stiff resistance, but premier Manmohan Singh is sticking to his guns against a motley crew of opponents.

The SEZ law was passed in 2005, but detailed regulations were issued only in February this year, and there have already been more than 500 applications for SEZ status, of which 180 had been approved by the end of September. They range in size from 10 to 100 hectares, and give firms 100% tax exemption on export profits for first five years. Foreign investors are automatically allowed to have up to 100% direct control of firms in SEZs.

The initiative is seen as part of the government’s attempts to liberalize India’s constipated economic structure, where every move forwards falls prey to special interests. And it’s exactly those special interests which are intent on stopping the SEZ program in its tracks. Read More »