Latest Property News on 'Property Prices'

25% Upswing in India’s Housing Market

Activity levels are gaining traction in the near moribund housing market as a flurry of interest rate cuts, price drops and the building industry’s focus on affordable housing start to lure buyers back into the market. A cross section of banks, property developers and real estate consultancies that SundayET spoke to confirmed that the rise in activity levels since the start of the year had picked up momentum in the last three months, with some in the sector saying that sales were up by as much as 25-30% since April, after witnessing a growth of 10-15% during the first quarter of 2009. India’s property market started showing signs of serious trouble nearly a year ago with first the American sub-prime crisis and later the Lehman bankruptcy playing havoc. The overpriced projects by builders found few takers which was worsened with the IT industry facing a major setback.

Builders were stuck with high-end apartments which had no takers. There was a severe drop in sales with people wanting to conserve resources. As a result, property prices too fell 30-45% since peak of 2007, according to industry estimates. But today the scenario is different, with builders getting a mix of mid end and affordable housing into their portfolio. Raminder Grover, CEO—Homebay Residential, Jones Lang LaSalle Meghraj, says the revival in sales has been, conservatively speaking, to the tune of around 25% across the mid-to-high income segments, according to his company’s sales records. Rohtas Goel, CMD of Delhi-based Omaxe too says there has been a 30% increase in sales thanks to factors such as a reversal in general economic sentiment after the elections and more options available in affordable housing. Read More »

Residential Real Estate will Lead Real Estate India Recovery

Residential real estate will lead the recovery of India’s wounded property market in 2010 thanks to accelerating economic growth, lower interest rates and improved liquidity, Indian ratings and research agency CRISIL said Wednesday.

Prices for commercial and retail space will likely remain weak through 2010 because of oversupply and slack demand, CRISIL said in a new study of 10 cities across India. “Residential real estate is where we think by 2010 we can look for some kind of recovery,” head of research Sudhir Nair said in a conference call with reporters. “There is a significant overhang of supply in commercial projects. … You can’t see a lease rental increase for a couple of years in this market.” Read More »

Signs of Recovery for Real Estate India

Spurred by price corrections, new launches, lowering of interest rates, increase in sales inquiries and, more importantly, the newfound mantra of ‘affordable housing’, the real estate industry has started showing signs of recovery. Industry body Assocham has gone to the extent of saying that the real estate recovery is possible in the coming three months. A recent Assocham Business Barometer (ABB) survey has found that anticipating strong policy measures for the real estate in the forthcoming Budget, embattled realty majors see positive signs of recovery taking place within the next three months as affordable housing projects rev up demand and improved cash flows address their liquidity concerns.

As per the survey, a whopping 92% of the respondent developers considered affordable housing as the most dominating segment to shore up the demand in real estate sector. And the policy actions supplementing the robust demand in the housing sector are likely to hold the key for a speedy recovery. Although the findings of this survey may seem to be too optimistic, particularly in view of the prolonged slowdown in the industry, but taking the current positive signs in the property market into account, both industry majors as well as ex perts feel the real estate recovery is not a distant dream. And they have ample reasons to believe this. Firstly, after a gap of more than a year, some real ‘actions’ are being witnessed in the realty market, including the high-profile launches of some major projects coupled with increased sales inquiries. Along with that, some realty majors are also said to have recorded an overwhelming response for their upcoming projects. Read More »

CPI to lease Prime office space in Chennai

If the lure of political power was not enough to convince the Leftists of the advantages of pragmatism then the state of the economy seems to have done the trick. The Communist Party of India (which, incidentally, has admitted that Left’s withdrawal of support to the previous UPA government was a mistake) is all set make the most of its resources in this economy by leasing out prime office space in Chennai.

But, if the picture that comes to mind is that of an stolid, dimly-lit Soviet style construction or even that of a worn-out , colonial-era structure being given out on rent, banish the thought. The party’s Chennai unit, which works out of one the city’s most prized commercial areas in T-Nagar , is set to get itself a modern, multi-storey building complete with a plush auditorium and a roomy car park. The party hopes to give out four floors of the new six-storied corporate style building on South Boag road to commercial establishments such as banks on rent once it is ready. While the line on who can rent the office space is being drawn at anyone who is not “anti-social” for the moment, it would be interesting to see if MNCs would make the cut for the Communists. Read More »

India Property Expo in Dubai Seals Rs 65.33 cr Deal

The 12th India Realty Expo 2009 held in Dubai saw 106 flats worth Rs 65.33 crore being booked, a senior real estate industry official said. “106 flats worth Rs 65.33 crore were booked (during the expo),” Maharashtra Chamber of Housing Industry (MCHI), CEO, Zubin Mehta, said in a press release issued here. “Around 86 flats worth Rs 80.18 crore are in the pipeline when the NRIs come down to India in July-August on their annual vacation,” Mehta added. MCHI is a leading body of real estate builders and developers. The expo evoked an encouraging response with 2,700 NRIs visiting the exhibition in three days during June 4-6, the release said.

“The softening of real estate prices and home loan interest in India were the key reasons that attracted a large number of NRIs during the expo,” Mehta said. Fifteen leading developers and builders showcased their properties at the realty expo. Home finance institutions which participated in the expo included HDFC, DHFL and Bank of Baroda, the release said. “Majority of the walk-ins was Mumbai-specific and this reflected into an opportunity for the developers to close a few deals during the expo itself,” MCHI’s Co-ordinator and Co-Chairman, International Exhibitions, J S Augustine, said. That the expo took place in Dubai when the first signs of an economic revival globally were being witnessed also made a positive impact, he said. Read More »

Affordable Housing Segment has High Expectation from the GOVT

After the President of India, Dr Pratibha Patil, mentioned affordable housing in her joint Parliamentary address a week ago, real estate sector has high expectations that this segment will get a leg-up in the Budget. Housing Min may get Rs 5000-10000 cr in Budget. Kumar Gera of Gera Developers and President of realty body Confederation of Real Estate Developers Association of India (Credai) and Brotin Banerjee, MD and CEO of Tata Housing, talk about how real estate developers are expected to benefit ahead.

Gera said if the government’s intention was to boost affordable housing, “Our wish-list would be multi-fold as to what steps the government should take, and that is what we have been representing to the government.” Banerjee said the government should provide incentives for developers to focus on low-cost housing and also make it easy for end-users to buy property. “The government should bring out schemes that would help in maybe subsidising stamp duty and registration fees for the end-user, for the customers at the bottom of the pyramid,” he said. “ Read More »

Companies Try to Benefit From Receding Real Estate Costs

Adversity opens up opportunities. With lower rentals and lower costs of buying office space, many companies have shifted offices to take advantage of the lower costs and to gear up for future expansion. Companies such as Swan Telecom-Etisalat and Tecpro Systems have leased and bought office space at much lower costs, in the range of 25-50%. A number of other examples too exist. According to industry sources in the know, Inox Cinemas in Mumbai has moved their corporate office from Tardeo to Andheri, Symphony Services in Chennai has moved from the central business district (CBD) to the Outer Ring Road and Standard Chartered Bank has consolidated its operations and moved to newer locations in Bangalore, Delhi and Mumbai.

Various locations in the country have seen a rental and capital value correction. Office space can be bought or rented for at least 25-30% lower value across the top 8 cities of India. According to a recent Cushman & Wakefield report some of the top micro markets in the country have seen a drastic rental correction. In Mumbai, Worli is down 38%, Lower Parel is down 39% and Andheri is down 33%; In the National Capital Region, Gurgaon is down 26%, Noida is down 20% and Jasola is down 24%. Read More »

Price Correction Opens up Investment Options for Buyers

The economic slowdown has brought greater rationality to real estate prices. With prices correcting in overheated pockets of metros and tier II cities, residential real estate has become more affordable and the scales have tilted in buyers’ favour. While an investment in residential property may yield lower returns than an investment in commercial property, it is safer, especially if the property is chosen wisely. For city-based small investors, studio apartments or 1-BHK properties near known demand drivers such as IT hubs, large manufacturing units, and educational institutions offer good return potential. Smaller-format housing continues to have steady demand, especially in metros where company staffers and students seek cost-effective housing on rent. Rental accrual on such properties becomes a steady source of income, while the capital value invariably appreciates over time. The returns from commercial real estate are higher, but so is the risk. Such properties are also more expensive.

Let us now turn to a city-wise survey of residential areas that offer good investment potential even in today’s bleak market scenario. While other areas in these cities are headed for correction, these locations will hold their own and might even offer positive returns. Mumbai witnessed some of the highest prices in the residential market till the beginning of this year. Clearly, those prices were not sustainable since the number of buyers for super-luxury houses is shrinking. Central Mumbai (specifically Lower Parel and Worli) witnessed the highest price escalation. The slowdown has affected these areas. The current slowdown has curtailed demand from investors. Most of the demand today comes from end-users. In Mumbai, there is no dearth of those desperate to buy affordable housing. Three areas of Mumbai offer such housing. These areas are likely to sustain their prices, while others are likely to witness a correction. Read More »

Realtors Plan Low Cost Housing for Poor

The private sector real estate players must reset their priorities so as to provide low-cost housing to the middle class and the poor. S Jaipal Reddey made the pint clear while taking charge of the urban ministry for the second consecutive term here on Friday.

“The private sector, which is a major player in the housing sector, must reset its priorities. So far, they had been building apartments for the rich. They must now concentrate on providing accommodation for the middle class and the poor,” Mr Reddy told newspersons after taking over the reins of the ministry. Read More »

NRI Community Comes in Support of the Realty Sector

Notwithstanding the impact of slowdown on realty sector and even after demand for flats up to Rs 30 lakh and 40 lakh and above really hit a new low, thre are still ready buyers for independent houses. These hardy customers don’t take much time to grab an independent house in any good locality and location. These deep-pocketed guys always look for such properties.

According to realty experts, though not many such properties come up for sale, but once they do come up, there are several buyers staking claim over them. And if the house is free from all kinds of disputes and the title is also clear, a seller need not worry he has to wait very long to meet a customer for his house, says Titu Sethi, a South Delhi-based realtor , who has played a key role in sealing many deals involving bungalows and kothies. Read More »