Indian Property News on 'April, 2007'

Protest Against SEZ Becomes Huge in Gurgaon

The confrontations against development of Special Economic Zone (SEZ) along the KMP Expressway to come up at the place of village land for industrial zones are getting fiercer day by day.  Farmers have decided to block all roads leading to Gurgaon on May 13 to make their concerns heard.

A large number of families will out protest rally against the state government and private companies’ decision to acquire village land. All farmers would spread out to different entry points of Gurgaon and will not allow traffic to enter from neighboring districts.

The farmers will also submit a memorandum to the Gurgaon District Magistrate on May 13, announces Braham Parkash, the president of Kisan Majdoor Krishi Bhumi Bachao Sangharsh Samiti.

About 1,000 people from 24 villages attended a meeting arranged in Garoli Village and raised slogans criticizing the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) regarding their shift to acquire land for institutional and industrial zones.

HSIIDC had issued notices to farmers on seven villages on either side of the proposed 135-km KMP Expressway for acquisition of 3,700 acres. “Now, the state government wants to pursue its own plans of taking up the development of a Global Corridor on our lands. We have been ploughing the land for generations. Why we should give it to them against our wish, says a farmer.”

Property Tax Payments Goes Online, says MCD

MCD has received an enormous response to its online tax payment scheme. Encouraged by the same, the authority is pondering over to make it mandatory from June 1.

The shift will enable the MCD to extend the benefits of online payment scheme to the rural areas as well as the Capital, says MCD Collector, AK Ambasht.

There are several advantages of making online payments. Apart from cutting on the messy legwork, it is also a faster medium which helps both the payee and the authority to maintain work efficiently.  For that reason, the authority is contemplating making it compulsory.

The MCD is also drawing plans to come up with separate places in each zone where a multitude of computers can be set for public convenience.

Also, online filing of taxes is easier and offers a user friendly approach. Indeed, the payees have also liked the scheme, which is clearly evident by the kind of response received to the scheme.

The scheme will bring great solace for the Capital’s working population, who hardly find any time other than Sundays to take up such chores. Time saving is one of the reasons attributing to popularity of the scheme.

Those who don’t have access to computers can make their payments through cybercafés which are available everywhere. The persons who are not computer literate can visit any cyber café and take help from computer professional to get the work done, says Ambasht when asked the significance of the scheme for the residents who cannot use computer to file their taxes.

KOAPA to Launch a Real Estate Policy

The Real Estate Expo of the Karnataka Ownership Apartments Promoters Association (KOAPA), organized at the Grand Ashok had received exceptional interest from the potential investors.  This two-day show, with over 30 property developers and promoters, gave the investors a never before opportunity to view exclusive property projects in Karnataka.

Sponsored by LIC Housing Finance and co-sponsored by ICICI Home Loans, the exhibition was officially inaugurated by S.K. Mitter, Director and Chief Executive of LIC Housing Finance Limited.

The state requires meeting up the demand for 30 million dwelling units to cater to increasing populace and their growing interests to have quality accommodation. And, when the property market is expanding, competition to stay ahead is obvious, said Mr. Mitter.

Shankara Raju, Regional Manager of LIC Housing Finance shed light on the loans scenario. He also talked about the availability of the best competitive rates with LIC. The company helps the customers to minimize their legal legwork and cut down on their processing fee, Raju adds.

Balakrishna Hegde, President of KOAPA, suggests cutting on taxes and duties to make houses reasonable for common man. Paying one-third of property costs in the form of taxes is of no use, says Hedge.

KOAPA is soon coming forward with a draft of its real estate policy where it could help the Government to take up some issues. Also, the citizens are required to have full knowledge about their rights and duties to voice their protests effectively.

A Coding System to Deter Scams in Property Market

Demand for greater transparency in Indian real estate seems to have encouraged the Delhi government to take stringent steps. It has come up with an effective coding system to be called ‘Land Title Registration System’ to track property sales.

The system will certainly be of great help in preventing fraud by enabling online property verification, minimize litigation relating to property rights and establish legality of ownership. The government will allot a unique code to all the existing properties in the Capital which will further help to bring the growth of unauthorized colonies under the lens.

Supported by the United States Agency for International Development, a presentation by the Urban Institute before the state government left no room for doubt regarding the efficiency of the coding system. This gets the system “in principle” approval. The recommendations of the presentation include replacing registration of transactions with registration of titles (proof of ownership).

The registration will also be a guarantee of land rights and help set the legality of the title. This would allow banks to lend with larger confidence and households to borrow without any stress on mind.

The government will soon start preparing the database of all available properties in the city. The project is likely to utilize an investment of over 200 crore and it may take 10 years to complete.

Realty Projects Draw India, UAE Closer

Love of Indian property developers for Dubai property and vice versa apparently shows both the countries being bullish on expanding their footprints in each other’s arena.

A number of prominent Indian real estate developers such as Nahar Group and Sheth Estate are looking forward to carve out a substantial niche in Dubai, the most lucrative emirate of UAE. And then there are UAE based construction companies like Sternon Group are setting up real estate projects in India.

Sheth Estate has plans to invest 1.5 billion dirhams into Dubai’s real estate market. The company will foray with its first two residential towers – Iris Blue and Iris Bay, located within Dubai Marina. The construction is likely to be over by December. Indeed, the company boasts of being ahead of time with already having built 23 floors.

Close on the heels is Mumbai based real estate developer Nahar Group who has opened an office in Dubai to cater to demanding requirements of the growing clientele. The group also envisages serving NRIs base in Hong Kong, United Kingdom, and United States.

Now, it is time to check out growing interest of Dubai property developers in Indian real estate. Sternon Group, a leading real estate developer in Dubai is coming up with a Rs. 1,200 crore mega-project on the Mumbai-Pune Express Highway in proximity to the proposed New Mumbai International Airport in Panvel.

Sternon is marketing the project in international market, and has entered into an exclusive global marketing alliance with Garnet Construction Ltd, a decade-old real estate developer.

Indian Realty Cos Become Prey of Falling Stock Market

Hit by rising interest rates, it is no more a  ‘bull market’ for Indian real estate stocks. Shocked and suffered by the same, eight real estate firms have put on hold their plans of listing on the Alternative Investment Market (AIM) of the London Stock Exchange.

These companies now find themselves unable to raise the expected funds. “Although we have filed the papers but we don’t find it an ideal time to list”, says a Mumbai based property developer Lok Housing and Companies, who are among the real estate companies who have deferred the AIM listing. Following in footsteps are the prominent players such as Ansal Properties & Infrastructure Ltd and the Embassy Group of Bangalore.

Embassy Group has refused to comment on their future moves whereas Ansals seem to have lost interest in AIM listing at this stage after seeing the slowdown of real estate stocks.

With properties in smaller cities and towns have stopped appreciating and are undergoing a price correction, the real estate boom is completely dependent on the metros. Three leading Indian real estate firms have shed between 8% and 36% in market value since January.

Lesser stringent rules and regulations make the Aim more lucrative than other stock exchanges. Wooed by the same, as many as 12 Indian companies raised over over $2.7 billion from AIM. Of this, $2.2 billion was raised by real estate developers including Unitech Corporate Parks, Hirco Plc., Ishaan Real Estate Plc., Evolvence India Fund and Kubera Cross Border Fund.

Most previously listed real estate stocks are trading below their offer price, a fact which has scared the most investors.

The stock market has brought some major modifications in its laws regarding listing to include a revaluation of land banks based on present value. Also, the companies would be asked for details before listing, says the regulators. The shift is taken to bar the entry of fake operators in the market.

Insight of Mumbai Real Estate Market

To own a beautiful house in first-rate area of any city is everyone’s dream in India today. But this dream becomes all the more difficult if you would like to own a house in big cities like Mumbai, Delhi, Kolkata, Chennai, and Bangalore. In metros like Mumbai, it is a gigantic task to come across an appropriate house within your means. But this tricky task can be made easy and trouble-free if you can engage the services of a competent property consultant who knows the in and out about Mumbai Real Estate market.

Mumbai property market is the largest real estate market in India. With a population of around 19 million people, Mumbai and its suburbs encompasses one of the biggest urban agglomerates in the world, that is only second to Tokyo. The population of Mumbai is increasing at a massive rate. Unfortunately, the rate of new residential and commercial property development in Mumbai has always been lower than the rate of increase in population. As a result, you come across families in Mumbai who are forced to live in small rooms. All these facts point to the amount of intricacy you can face while locating a suitable property in Mumbai either to buy or rent-in.

To stay away from this difficulty, my advice for you would be to take into service a competent real estate consultant in Mumbai. These agencies with years of practical experience of working in Mumbai real estate market can help you under different circumstances. They can help you to locate and buy a commercial or residential property in Mumbai for you. As well as, they can be a great helping hand if you want to sell property in Mumbai. They can even help you in case you are looking for long or short term rental in Mumbai.

Since population graph of Mumbai shows an upward trend, it means that property prices in Mumbai would be higher when compared to any other Indian city. Lack of space for new property development from Juhu Beach to South Mumbai, has made the property prices in this area to shoot skywards. Of-late there has been a new craze of redevelopment of property in posh Mumbai areas like Bandra. But the property prices in areas like, Juhu, Bandra are to some extent unaffordable to middle class. With the intention to win this segment of the society, the market of real estate in Mumbai is developing various projects in the suburbs of the city. .

Navi Mumbai, a suburb of Mumbai, is their main target in order to provide affordable commercial and residential property in Mumbai. Known as the twin city of Mumbai with a population of 0.75 million, the future of Navi Mumbai real estate is very bright and property prices here are already started to move upward quickly. And to me it is the best time to buy property in Navi Mumbai.

As a Mumbai real estate consultant my advice to you would be to buy property in Mumbai suburbs instead of main Mumbai city. As suburbs like Navi Mumbai are being developed with modern plan and infrastructure providing every facility of life; property prices here are surging in these areas. The choice is yours but there is one thing certain. The property value in Mumbai is going to increase with course of time and an astute investment in Mumbai real estate market can earn you massive profit in future.

Submitted by Daniel Marshel

Which Country Will Falter in The Race of Real Estate Stocks?

An unexpected poor selling of Spanish real estate stocks has sent warning signals to property market worldwide. Industry connoisseurs are predicting the end of Spain real estate boom that has sustained itself for the past 10 years.

Outline below are the real estate stock trends of some major countries which boasts to have bullish realty stock market. Let’s scout who emerges as a true winner and who falters in the long run?

Spain

Spain realtors who were earlier making a killing in the wake of booming real estate seem to be worried these days. After five years of growth, prices of residential property in Spain were believed to go through the roof in 2006 but are likely to be moving at snail’s pace this year.

Foreign buyers seem to be loosing confidence in Spain properties, while relatively high prices and competition from cheaper destinations like Morocco and Bulgaria has shattered demand.

However, a few realtors in Spain still believe the prices to hold their value in the short term and deliver healthy returns in the long run. As far as mediocre property in over developed areas is related, they cannot be optimistic now.

UK

UK’s booming residential segment has so far not shown any signs of a sharp slowdown, but there are tentative signs that higher interest rates and stretched affordability have begun to take their toll. For residential properties in UK, the prices are still climbing. The average rates of a home in UK have shot by 2.8% in the first three months of the current year as compared to 4.2% in the previous quarter.

Indeed, some peripheral locations in UK are doing amazingly well whereas others are struggling.  The prices of houses in South of England have been twice as much as those in the North UK. Although, the market has slowed down its pace but experts do not forecast a crash. There are still a few doom-mongers out there, but most experts see bright prospects.

US

US Realty especially the residential segment has been showing dramatic swings for the past few months. A year ago, house price inflation was running at mere more than 13 per cent and then slipped to 4 per cent. At present, the prices have not shown any significant rise.

First-time home buyers in US were unable to go by traditional financing options. The situation encouraged them to take out interest only mortgages and buy expensive home loans which eliminated any need for deposit. Prices of residential property in US continued to rise for a while. It as being made possible by the relaxation of lending norms to help first-time buyers stretch their finances.

However, an increase in defaults in sub-prime mortgage market which hold proficiency in lending to borrowers with patchy records was the final straw.

Mumbai, India

Known as the financial capital of India and a place witnessing technology boom, Mumbai has certainly gained the status of the country’s property hotspot. The demand for residential colonies in Mumbai is both investment and residential driven. The prices have doubled over the last two years. Mumbai real estate is drawing quite large interests from businesspersons and entrepreneurs, many of them are foreign players.

However, the property market in Mumbai is not fully mature. There is a feeling among industry watchers that the market is on the brink of a collapse.

The last time a property bubble burst in India – between 1995 and 2001 – prices slumped by up to 70 per cent. This time, a fall of 30 to 40 per cent is on the cards.

Dubai

With tax free salaries and an array of shopping and leisure facilities, Dubai can woo and invite anyone to thrive in. The large availability of large chunks of land for development, the city has set itself on course to emerge as a property paradise.

With property projects in Dubai developing at a fraction of the price a similar property would fetch in Europe, the real estate appeal in Dubai is obvious. In addition, the investors who largely invested in Dubai properties a few years back are now reaping high profits. It would be baseless to comment on future sustainable popularity of Dubai real estate.

HFCs Fear to Loose Market Share to Banks

The profits of housing finance companies (HFCs) are likely to be majorly affected by the race among banks and rising home loan interest rates. Incremental net profitability margins of HFCs are believed to have fallen to 1.52% in the first half of 2006-07, from 1.76% in 2004-05.

HFCs may loose against banks in gaining market share race. From 23% of the incremental market, the share of these companies is likely to fall to 20% at the end of the financial year. However, banks seem to be on safer side this time because of their resource profile. They can easily attract deposits and also have current and saving accounts. Contrary to this, HFCs are largely dependent on wholesale borrowings.

Small companies are in a look out for making a base tier II and tier III cities, where banking does not have a strong presence. They may also try to raise loan pools, securitise and sell them to generate large fund for future disbursals.

The ratings on HFCs do not show any significant changes. But the large companies like LIC Housing and HDFC are still in a better situation, concerning 70% market share among housing companies.

Limited Time Offer on Bangalore Property Sale!

You must have heard about sale on apparels, accessories, household commodities. But have you ever seen sale on properties? Or think about the real estate sale advertisements wooing you with the catchlines like Hurry! Limited Time Offer! Must Act Today! Interesting enough! Isn’t it? The prime properties in Bangalore are on sale and offers 80% off!

This was the catchline at the auction sale in Bangalore urban deputy commissioner’s office where they have put several plots on auction for unbelievable cheap prices. However, the auction has gone below the guidance value rates.

The shift indicates the long awaited correction in property prices to take place now. Or, it can be an organized cartel of land mafia which managed the show; the auction was a damp squib.

A plot of land spread over 30 in Tavarekee on Magadi Road fetched just Rs. 1.5 crore. It was bought by Ramajah Reddy for a mere Rs. 5 lakh per acre and he will register it at Rs 20 lakh an acre according to the guidance value.

Such auctions were to hold at the Income Tax Office as well because certain minimum values are fixed, here the auctions continued. The auction fetched a mere Rs. 24 crore for 102 acres of land.

Another 33.2 acres of plot in Tavarekere was sold out for Rs. 2 crore to Rosin Developers at Rs. 6 lakh per acre. The buyer will get it register at the cost of Rs. 25 lakh per acre. It is the guidance value. The sale price is less than a quarter of guidance value. However, the astonishing fact is that the guidance values of properties are higher than their market values.

Three pieces of land in Sarjapura Hobli measuring 2.1 acres, 3.04 acres, 16.2 acres were sold for Rs 1.71 crore, 3.04 acres for Rs 1.41 crore and Rs 10.4 crore respectively. In Jigani, two land plots were put for an auction: a 14 acres plot that fetch Rs 3.71 crore and a 2.2 acres plot which was sold for Rs 2.5 crore.

The lands put up for auction are government lands reclaimed from encroachments.