Latest Real Estate News on 'Members Contribution'

Receding Housing Demand May Hamper Real Estate Recovery

Add comment   |  January 5, 2011

The demand for residential properties, a major revenue source for most real estate companies, is receding. An expected increase in borrowing rates and the near-peak realty prices may reduce the demand further. This will affect most realty firms that had started showing signs of recovery in the recent quarters. This explains why the 29-stock ET Realty Index has underperformed the broader benchmark Sensex in the past three months. During the period, the realty index fell by 16% while the Sensex gained 13%.

The negative impact of the tapering housing demand may be partially offset by the gradual recovery in the commercial segment. The pick-up in business activity last year has led to a revival of demand for commercial properties, especially in the past six months. The segment was previously struggling even as residential housing demand bounced back from the slowdown. As much as 70% of commercial realty demand is for office space, followed by retail leasing. Under office space, demand is dominated by the information technology (IT) sector followed by banking & financial sectors. Better growth in these sectors over the past few quarters has improved demand for office space across various pockets of the country.

This is reflected in the 2-4% sequential increase in office rentals in commercial business districts of Mumbai, Delhi and Bangalore during the September 2010 quarter. The improvement in commercial property business has propped up earnings of realty firms for the quarter ended September 2010. It is likely to provide some relief if demand for residential properties dwindle. Companies who derive a significant portion of their business from commercial segment include DLF , Unitech and Anant Raj Industries . These firms could be relatively less impacted by the expected slower growth in housing demand.

Managing borrowing costs and supply absorption would be key for realty companies, given the spiraling interest rates and higher supply by builders. Besides 161.1 million sq ft of office space that is under construction, developers launched commercial projects with cumulative space of 88.2 million sq ft in the top-seven Indian cities as of October 2010, according to a report by property consultancy Jones Lang La Salle India. The ET realty index trades at a P/E of 20 compared with 35 a year ago. Given the relatively benign valuations, the stocks of realty companies with diversified assets and better operating cash flows may regain momentum in the near term. In the long term, execution capabilities would be crucial to justify valuations.

Transparency Required in Burgeoning Indian Real Estate

Add comment   |  December 24, 2010

The recent boom in real estate prices in and around big cities in India has given a new dimension to the investment in real estate. The investments in real estate have shifted from need based to profit oriented. This change in philosophy has made even middle class people to purchase flats and vacant land with an intention to reap huge profits. The developments during the last decade and half had given around 150% to 500% returns, in investments made in real estate. But the million-dollar question is whether the same trend will continue in the near future or not.

It is needless to say that the real estate prices have reached a stage of saturation. As it happens in other commodities, here also buyers are searching for alternative locations. The increases in real estate prices are not uniform through out the country. In places like Delhi, Mumbai, Bangalore and Gurgaon the land price had doubled in the last one year and the development in and around the aforesaid cities has taken at breakneck pace and yielded huge dividends to the investors.

India’s National Capital Territory is surrounded by satellite cities on all sides. For a case in point is Gurgaon in Haryana. Gurgaon is mainly selected by the middle class for its strategic location and easy accessibility to Delhi. Compared to other suburbs like Ghaziabad, Noida, Faridabad Gurgaon is peaceful and ideally located.

The property prices in Delhi and Gurgaon are quite high as compared to other places or even countries. Most of the Indians living abroad also invested hugely in real estate in and around Delhi, especially in Gurgaon area. Despite all the benefits associated with investment in real estate sector in and around Delhi, consumers should be careful before putting their hard earned money in real estate project, because any lapse or carelessness will jeopardize the investment. And at the end the purchaser will not get a property with a clear title to pass on to others. A bad investment decision with regard to purchase of property can be avoided if one takes a couple of precautions.

There are several recent cases regarding fraudulent transactions, which are an eye opener to consumers. Recently in DLF Phase-2, Gurgaon, one Ms Anupama Jain after taking a General Power of Attorney (GPA) from one Mr. P.P. Singla sold common terrace on property bearing N-1/1 DLF Phase-2 Second Floor, with connivance of a property dealer called Mr Anurag Nagpal without any title rights and, authority sold to Ms Ruchika Agarwal. In another transaction, Ms Anupama sold Ground floor, basement and servant quarter to another buyer, here also she cheated the buyer, by changing the word “original” to Photostat in the Sale Deed on dated 13.7.2010, without the information, knowledge and consent of the buyer.

The illegal manipulation of the documents came in the notice to the buyer when they received the sale deed from the sub registrar office Gurgaon few days after the transaction. Apart from that the Seller did not give the original chain of the documents of the sold property, despite repeated request and demands from the buyer. With no other alternatives, the buyer reported this matter against Ms. Anupama Jain under laws regarding fraud and cheating at Gurgaon police station. When the author asked Ms Anupama Jain, why is she cheating to the consumers using unauthorized means, she told to the author that her father is a retired I.A.S officer and no body can take any action against her.

In the other allegedly fraudulent transaction of the same seller, a buyer Ms Ruchi Agarwal, when came to know that she had been cheated by Anupama Jain, immediately sold the Second floor property along with illegally sold terrace to Ms Renuka Sharma a Central Government employee working with Indian Railways. Ms Sharma without knowing the consequence and illegality immediately started construction on a common terrace. When owner of the Ground Floor reported this illegal construction, Ms Sharma partly demolish the property, who reported this matter to police. Soon the matter becomes public knowledge the it was brought before the attention of the Hon’ble Chief Minister of Haryana. Now Haryana police are investigating the case against the accused persons.

In the real estate business, the value of an asset depends on four basic attributes-utility, scarcity, demand and transferability. Property prices generally depend on the supply and demand conditions in the market. Prices fall when supply outstrips demands and vice-versa. Demand for real estate decreases during a slowdown and rises during an upturn in the economy. In terms of the boom in the real estate sector, the general perception is that the soft interest rates will prevail for another couple of years, but expecting it to continue for more periods is not possible provided one takes into rates of inflation in to consideration.

It is needless to say that the most common dream of everyone is to possess a house of his dreams. In the recent past the biggest constraint is arranging funds for the same. The rising income levels and falling interest rates have rekindled the homes of those with a little income to raise higher loans, and enabled them to pay the earnest monthly installments (EMI) promptly. All those who follow the old adage that goes like it is the foolish people who will construct houses and the wise men will stay in, literally, should also change their views and to rewrite the age old saying by grabbing the opportunity provided by the Banks.

One should also remember that the with the opening up of the economy the market forces are playing a vital role in deciding the interest rates even on the saving of the common man. Slowly and steadily the secured avenues to park one’s hard earned money are not giving effective yield to a common man to cover inflation and also to take care of his needs during this sun set years. Purchasing a house has filled the gap. Even those who are having a house are also thinking to go for another house get good returns on their investment. But investment in a house is only long-term asset to boast, and comes with a high price tag.

With the fall in interest rates and with the availability of other incentives in the form of tax relief, one can think of owning a house instead of waiting till his age of retirement. Unlike in the Western Countries, we can expect good appreciation in property prices, because of constant demand due to population explosion and concentration of industries around cites, provided one invest in a property in growing residential localities of our cities.

ASK Group to Raise 100 crore for Investment in Residential Properties

Add comment   |  December 22, 2010

ASK Property Investment Advisors, part of the Mumbai-based ASK group, will raise Rs 1,000 crore from high networth individuals and family trusts to invest in residential properties. The ASK Real Estate Special Opportunities Fund planned to raise Rs 500 crore by February 2011 and the remaining in two-three months after that, said Sunil Rohokale, executive director, ASK Investment Advisors. “This is the right time to identify and invest in projects of right developers,” says Rohokale, who was earlier with ICICI Home Finance as managing director.

Fund managers such as ASK, ICICI Venture and others are raising money from domestic investors at a time when commercial banks, especially public sector ones, are tightening lending to property developers after RBI’s new norms to curb speculation in the sector and the bribe-for-loan scam. The new fund launches have also made the market competitive as fund managers are tapping the same sources, some fund managers say.

“There is competition and investors have to make a decision whom to back,” Sanjeev Dasgupta, president, real estate, ICICI Venture, said at an earlier interview. ICICI Venture is in the market to raise Rs 1,000 crore from domestic institutions. “Money from outside is finding it difficult to enter India. But a lot of NRI, HNI and family trusts are looking at investing in Indian real estate,” said Ambar Maheshwari, head, investment advisory at DTZ, a global property consultant. Last year, ASK raised Rs 326 crore from the domestic market and invested over 70 per cent of it in four housing projects.

Need For Transparency in Real Estate

Add comment   |  August 10, 2007

Transparency is the key to take Indian real estate to the next level. This underlines a need for a federal regulator which will enable to bring best practices with a promise to be clued on to INNOVATION.

Indian property market has come of age and fast attracting interests of global realty players and investors from all over the world. The contribution of these big companies and their bullishness to set a substantial presence has given a major boost to growth of the sector.

The competition among real estate companies is becoming fiercer day by day. Each of them is trying to be ahead of the race with their development projects. This at times may baffle the common consumer regarding where to invest. However, the situation is no less perplexed for the developer himself who finds it a little hard to narrow down on the prospective place for construction or the kind of strategy to follow to stay ahead of competitors. This encourages them to seek the expertise of real estate consultancy firms.

There are several international as well as domestic real estate consultancy firms which offer local knowledge and expertise, along with providing best practices to cater to demanding requirements of national companies. Their main function is to help them in drafting their local strategies and business plans with respect to the market.

Considering the complexities that meet the eye, these firms develop a comprehensive understanding of the current market trends. This is the way they help their clients to accomplish a strategic approach and meet the desired goals.

These real estate consultancy firms possess the right knowledge and can provide a full spectrum of exclusive services. What makes their working efficient are their systemized processes, data management that assist them handling the complete regulation of the industry, and their being cognizant of timelines.

Entry of global players is bringing greater transparency in the sector. Indian property market requires following national standards to bring common standards across the country.

Submitted by Atul Bhardwaj

Celebs Endorsing Real Estate Projects

Add comment   |  May 3, 2007

Earlier, the stars were regarded as the trendsetter in Film Industry but they are now creating an environment for a distinguishing factor – ‘Star Power’ in Indian real estate. Builders have lined up to sign affluent celebrities as their brand ambassadors and are preparing to release their advertisements featuring them.

And, it is not just the filmstars but cricketers, TV actors and even musicians are lending their name to the property market. Close on the heels of real estate giant, DLF, it is now Omaxe which has signed up sarod maestro Ustad Amjad Ali Khan and his sons Amaan and Ayaan.

Such a step can be looked upon as an initiative on the part of developers to drive their growth rapidly. Earlier, Shahrukh Khan was seen promoting DLF’s business whereas Rahul Dravid will bat for Skyline Housing and Construction Ltd.

The famous Chadha Group has signed Kapil Dev as its brand ambassador whereas Preeti Jhingiani will endorse LVL City.

DLF claims the personality of Shahrukh Khan to fall in sync with its product. The very obvious reason for the developers to rope in celebrities is their seamless popularity.  They bring a psychological advantage as their trust factor spills onto the company.

Do the celebrities possess potential to translate their allure into trade? However, most agree to this and expects positive response if the brand and celeb gel together.

Shahrukh Khan, the heartthrob of millions, playing brands ambassador for DLF, had the maximum advertising share (35%) in 2006. Following in the footsteps were Amitabh Bachchan and Aishwarya Rai who endorsed Amby Valley City with 83% and 81% respectively.

By signing an ideal ambassador, any brand can gain fast recognition among the target audience since the popularity factor of the celebrity comes as a support. In addition, it offers the brand a personality to form a quick connection with the customer.  Also, it adds to brand acceptability in a big way.

Submitted by R. Shivanandan

Insight of Mumbai Real Estate Market

Add comment   |  April 27, 2007

Mumbai Real EstateTo 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?

Add comment   |  April 26, 2007

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 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’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 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.


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.

Previous Real Estate News    

Did'nt find what you are looking for? Try this…..