Latest Property News on 'Real Estate Trends'

Real Estate Recovery Possible by Mid 2010

Major office markets in India will revive by Q2 2010 with increased interest from tenants and a downward correction in rentals taking place, according to DTZ’s latest research, ‘The Second Coming’ issued on 10 December. Marred by a liquidity crunch, slackening demand, piling inventory and falling rentals for over a year , the real estate markets of India breathed a sigh of relief with visible signs of recovery towards the third quarter of 2009. At a time when the worst for commercial real estate seems to be over and recovery appears visible, DTZ undertook a study to examine how this recovery will come about and analyse what this means for the future.

The study reviews the last twelve months performance of commercial real estate markets across six Indian cities (namely Delhi NCR, Mumbai, Bengaluru, Kolkata, Pune and Chennai) against its estimates of 12 months ago and predicts the recovery path and key drivers for each market going forward over the next five quarters. Priyankar Bhikshu, head of India Research at DTZ comments: “The pace and scale of market recovery will be led by the Tier 1 cities of Delhi NCR, Mumbai and Bengaluru. Tier 2 cities such as Kolkata and Chennai will see a gradual recovery in the later part of 2010 while the Pune market is unlikely to see any major changes.” Read More »

Real Estate Stocks on High despite Dubai Fiasco

Domestic realty stocks that bore the brunt of heavy selling last week following the Dubai debt crisis have, in fact, outperformed the broader market in the past one week. The BSE realty index has give a return 9.57% during the period compared to the BSE Sensex gain of just 1.96%. Even on a monthly basis, realty stocks have generated a higher return of 15.30% to Sensex gain of 11.56%.

Experts feel that the sentiment towards real estate sector has improved after lenders slashed their housing loan rates that are very positive for the industry. Further last four months of robust IIP numbers, along with better-than-expected GDP growth for the second quarter ending September 30, signifies the underlying strength in the domestic economy that augur well for the Indian real estate sector. Read More »

Orrisa Government may Cancel Agreement with Unitech

The Orissa government today said that it may cancel the agreement with ‘Unitech’ for a 10.74 acre land in Bhubaneswar, if any developer bids more than the reserve price for the land, which has been put up for retendering after the real estate major defaulted in its payment to the Bhubaneswar Development Authority (BDA) Unitech was selected to construct a commercial complex on the plot through an open tender in 2007 after the state government decided to develop the property on public-private-partnership mode. Unitech had then quoted the highest price of Rs 211 crore for the 10.74 acre land.

As per the tender condition, the company had deposited Rs 52.75 crore (which is one fourth of the full amount) upfront and signed an agreement with BDA. The remaining money was to be paid in next four months. But the Delhi-based real estate major failed to pay the rest amount taking the plea of economic slow down and requested BDA to give it one fourth of the land in proportion to the amount paid. Read More »

Real Estate Funds are Back on Track

After hitting a five-year low in fund-raising globally, real estate funds are back on track. A number of new and existing real estate funds are planning to tap domestic and offshore markets to raise funds. The revival of sentiment globally and in the real estate sector has led to funds chasing high net worth individuals (HNIs) and ultra HNIs flush with liquidity. Domestic real estate funds are using this opportunity to expand their existing funds or do a fresh round of fund-raising.

The Piramal group-promoted Indiareit Fund Adviors is planning to raise a Rs 500-crore real estate fund. ASK Investment Advisors, which raised a domestic real estate fund recently, is planning to raise a $250-million offshore real estate fund. Dewan Housing, a player in the housing finance segment, is planning to raise a $250-million real estate fund. Sources said ICICI Ventures was also looking at launching a real estate fund by the fourth quarter of this year. Morgan Stanley, which has a global real estate fund in India, might also look at raising an India-focused real estate fund by the end of this year, sources said. Read More »

NAR Developing Live Property Valuation Index

National Association of Realtors (NAR), an apex organisation of real estate brokers in the country, is working towards developing a live property valuation index, which will become the benchmark for real estate deals in the country. NAR President Ravi Varma told TOI that the brokers’ body has almost concluded talks with the National Housing Bank (NHB) for development of such an index. The NHB is the norm-deciding body for all housing finance institutions (HFIs). “We will soon formalise the arrangement and start developing the index for which data collection is already under way,” Varma said.

Under the mandate from NHB, the brokers body will develop Residex’ which will be an index similar to the stock exchange index that will reflect the valuations of home properties in different locations across the country. Varma said Residex will be a quarterly indicator of property prices that will come in handy for HFIs to assess the correct value of a property they are considering to finance. “The index will also act as a guide for property buyers,” he added. Varma informed that initially, the exercise will be of an experimental nature and will eventually become a benchmark for property valuations for the HFIs. Read More »

Ahmedabad Tops the List of Maximum Home Buyers

A recent survey conducted in Indian metros and tier-II cities has revealed that buyers in Ahmedabad will purchase the most property in the country, out of the maximum home-seekers across India, in the coming year. According to the survey, 80% of those who responded will be buying homes by the end of 2009, against the national average of 72% for property seekers. The corresponding figures for the other cities in the study were between 62% and 76%.

The survey was conducted by makaan.com, an online portal, in October and saw participation from more than 3,800 property seekers and 312 leading developers from seven metros and tier-II cities - Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Mumbai and Pune. A majority of the respondents were between 26 and 35 years of age. According to officials of makaan.com, the real estate market in India traditionally sees a surge in property buying and selling at the beginning of Diwali. Real estate developers introduce the most attractive offers at this time, and property seekers keep a lookout for these. But considering that the last one year saw property prices undergoing various levels of correction, would developers continue to have these offers this season is the question. Read More »

Ahmedabad: Vertical Growth is the solution to Space crunch

Impressed by the infrastructure development and synergy between town planning and bylaws in Japan and South Korea, real estate players in the city now believe vertical growth is the solution to the crunch of land in Ahmedabad. Recently, a team of around 120 real estate developers of Gujarat had been on a 10-day tour to Japan and South Korea. The tour was organised by Gujarat chapter of Confederation of Real Estate Developers Association of India (Credai).

The developers were very much impressed by the city development projects undertaken by the governments of the two countries. Unlike the US, Japan and Korea feel severe crunch of land, so they prefer vertical development, said Dushyant Pandya of Vishwanath Group. He also said horizontal development would mean higher prices of land. Read More »

London-based firm to Showcase Residential Project in India to British Investors

With the global economy looking up, a London-based firm plans to host a property show to showcase residential projects in India to British investors. The event, organised by real estate agent Hamptons International, will be held Oct 30-Nov 1 at the firm’s head office in London.

“India has always been a major market for Hamptons International, given the UK’s long and close ties with this country,” said company international sales manager Dean Foley. “We have certainly seen, over the last few months, an upturn in the amount of transactions completing by our UK NRI (non-resident Indian) clients due in part to long term growth plans and affordable real estate,” Foley said. Read More »

Big Homes Regaining Demand

Two and three bedroom homes, which commanded high popularity among home buyers from Pune in pre-meltdown times, have made a comeback. The last three months have demonstrated that the aspirational buyer is returning to the residential market again to check out developers’ sites in search of good deals, a report by real estate research and advisory firm Jones Lang LaSalle Meghraj (JLLM) said on Wednesday.

In the twists and turns realtors took during the recession, a major shift was seen from the large size homes in the 1200-1600 sq ft area bracket to one bedroom and studio units in the “affordable” category. The general buyer preference has once again evolved to 2-3 BHK flats, the most popular price tags falling within the range of Rs 25 to 35 lakh, the report said. Read More »

FIU to Scan Real Estate Deals

Financial Intelligence Unit (FIU), India’s anti-money laundering agency, wants to scan real estate deals. It has asked states to submit monthly data on registration of properties, a state government official, who did not wish to be identified, told ET. FIU is a central agency responsible for receiving, processing and analysing information relating to suspect financial transactions.

Often the real estate deals in the country involves unaccounted cash transactions leading to money laundering, the official said. Money laundering involves disguising financial assets in a way that they can be used without detection of the illegal activity that produced them. Through money laundering, the launderer transforms the monetary proceeds derived from illegal activities into funds with an apparently legal source. Read More »