Posts

Showing posts from November, 2008

Banks blank out builders

Banks blank out builders?, Infrastructure projects in jeopardy as wary banks refuse to lend Increasing Hesitation on the part of banks to lend to infrastructure projects has rung alarm bells in the government, as this could delay several critical current and planned projects by several months for want of funds. "Banks have also been reneging on the sanctioned terms, especially relating to interest rates agreed in the loan documentation. These include even loan documents executed in the current fiscal. Even if a couple of banks block disbursement, the entire disbursement schedule gets seriously disturbed," a finance ministry official said. Data collated by the finance ministry have shown that banks are charging above 15 per cent interest rate. This year alone, interest rates for infrastructure projects have gone up by a whopping 3 percentage points. "At this interest rate, infrastructure projects may not be viable," the official said. Banks are now stipulating variab

Noida To Take Over UP Land In Delhi

Noida To Take Over UP Land In Delhi Which Are Presently Governed By DDA Land Use Policy Noida Authority Board in its 156th meeting today decided to dispose of the UP properties in Delhi after taking them over from the Delhi Development Authority as the properties are presently governed by DDA land use policy. The UP irrigation department has some 311 acres of land at about eight different locations in Delhi, viz Okhla, Jamia, Mathura Road, etc. After taking it back, Noida Authority will take a decision about its future use, said Noida chief executive officer Mahinder Singh. Noida Authority Board also approved three schemes of group housing in Sectors--50, 51, 56, 99, 100, 108, 110 and 121 on 13 available plots of 40,000 to 80,000 sq mtr sizes. In group housing, FAR ratio has also been changed and more floors allowed so that the Noida skyline will be changed with taller building blocks, the CEO said. The Board also approved the setting up of Kanshi Ram Shehri Garib Avas Yojna in Sector-

LIC Housing Finance

LIC Housing Finance Shifts Focus To Loaning Builders/Developers While the frozen liquidity lines have checked the real estate boom, LIC Housing Finance is disbursing more loans to builders/developers who constitute 6 per cent of their business as against individuals which make up 94 per cent of their business. "We are supporting the builders and developers by funding their upcoming projects to support individuals to afford real estate properties. This will, in due course, result in escalating business in our home loan segment," said R.R. Nair, director and chief executive, LIC Housing Finance. Ground reports suggest builders are now negotiating prices with buyers, although they still refuse to reduce property prices officially. LIC Housing aims to convince builders to bring down prices to a reasonable level by offering easy and hassle-free loans to builders (for new projects). The idea behind the shift in focus is to encourage individual buyers to book properties. The intenti

311 acres for housing projects in S Delhi

Image
Here's good news for those looking to buy a house in a city bursting at its seams. The Noida Board on Monday approved a proposal to develop an integrated residential cum institutional project on 311 acres of land -- three times the size of Jawaharlal Nehru Stadium -- in south-east Delhi. The land belongs to the Uttar Pradesh Irrigation Department. Pieces of land earmarked for the project are located along Mathura Road close to Madanpur Khadar, Okhla, the Jamia Millia Islamia University and Kalindi Kunj. Experts said the project would help augment the enormous demand-supply gap for affordable housing options in the city . Plus, the project is in a central location. "The area falls on the Delhi Metro route close to Jasola. These 311 acres can go a long way in tiding over the shortage in housing stock in Delhi," said Anshuman Magazine, managing director, CB Richard Ellis, a real estate consultancy firm. According to Census 2001 figures, there were 24.5 lakh housing units in

Real estate: 7 common mistakes to avoid

The wheels of fortune for the real estate, especially the residential property market, have turned since the stockmarket crash in January this year. The sector, which was already battling with high interest rates and high cost of property that were, to an extent, keeping homebuyers away from the market, received a death blow in terms of the negative sentiment. The global economic turmoil in the later months only increased the intensity. While homebuyers are deferring purchases to catch the bottom, real estate speculators, who invested in property purely for gain, are finding it hard to pull out at their desired price points. Whether you're a home-buyer or an investor, the present scenario is the perfect setting for inducing wrong calls. We list the commonest ones - and ways to avoid them. Money Mistake 1 With prices likely to cool off in the short-term, there is no point in holding on. I should pull out of the investment. This is the first thing most of us do when we get bad news a

Opportunity For Buyers

Crunch Time For Players, Opportunity For Buyers None in the real estate sector can be completely immune to the effects of the current situation; developers may have to therefore think hard before deciding on the phasing and pricing of their projects. While we have been living with the credit squeeze for several quarters now, September was a bizarre month in the global financial markets, with every day bringing one financial catastrophe after another. A number of global financial institutions went bankrupt or were forced into mergers or were rescued by governments. Real estate and financial markets are closely linked the world over, and so, these financial developments will definitely impact the Indian realty market. None in the real estate sector can be completely immune to the effects of the current situation; developers may have to therefore think hard before deciding on the phasing and pricing of their projects. This financial meltdown is expected to further lead to a pullback of de

Prices Have Fallen Considerably

Prices Have Fallen Considerably: Realty experts say this is the right time to buy flats and houses Suddenly, owning a house has become a lot easier. After reigning high for a couple of years, property prices have fallen considerably in the last six months bringing cheers to those planning to buy a house or plot. Realty experts say this is the right time to buy flats and houses since the prices are `lucrative'. To attract middle-income customers, real estate companies are offering discount schemes. Firms that developed layouts in city outskirts have reduced prices of property to give tough competition to rivals. Fall of steel prices has also helped realty firms to rationalise prices of property. Steel prices which touched a high of Rs 50,000 per tonne have now come down to Rs 32,000 per tonne. This has brought down the cost of construction by around Rs 70 per sq ft, bringing cheers to both realtors and buyers. There is hope construction cost would get reduced again with inflation an

Distress sales in real estate

Tight credit, small bonuses hurt real estate; distress sales expected The giant cranes that once worked long into the Mumbai night are still, the roar of concrete mixers has dulled, and hundreds of migrant workers have gone home. A slowing economy, high interest rates, tighter credit and a falling stock market have left developers in India's financial hub scrambling for cash and delaying or cancelling ambitious commercial and residential projects. High Risks: A view of Niriman Point, Mumbai. According to one estimate, rentals in even such prime locations have fallen by 10-25%. The Mumbai skyline has been transformed in recent years as developers rushed to build gleaming office blocks, swanky apartment towers and sprawling malls. Land prices quadrupled in some areas in the last three years, and commercial and residential spaces in Mumbai come under the world's most expensive. Rising incomes, low interest rates, a soaring stock market and foreign investment fuelled the boom. Now,

Slowdown - not really !!!

Slowdown? Home Loans Grow 20-25% Contrary to popular perceptions that the Indian housing market is in the doldrums, the home loan market is exhibiting surprisingly positive trends. Sunday ET spoke to a cross-section of bankers and came out with the conclusion that the home loan segment is quite robust. During the last three months, the segment has witnessed an average growth of 20-25%, largely due to small-ticket buying. And with real estate developers planning to announce major discounts in the coming days, housing finance companies are getting ready to meet an increased demand as they expect more first-time buyers to come to the market. Bankers say the demand never evaporated from the market, it just changed hands from speculators to genuine home buyers. Says Uday Sareen, country head, retail banking, ING Vysya Bank: "It's all about perception. We have seen a growth of over 40% in the home loan segment in the recent quarter against the year-ago period. This shows that genuin

Ground Realities of real estate

Home Truths - Checks Out The Ground Realities And The Best Scenario For Consumers Developers say property market growth hinges on fall in home loan interest rates but banks, taking cue from global disasters, are playing it safe. Heard the buzz around falling realty prices? And the fact that even interest rates are set to see a downward revision. Well, you may get tempted to start looking out for your dream home, but hold on. There's still a gap between the proverbial lip and the sip. Most developers have indicated that it's difficult for them to squeeze margins further and more price cuts won't be feasible for them. DLF chairman K P Singh, for instance, recently evaded the question about price cuts. "A number of taxes have been imposed on the real estate sector. These need to be rolled back for a push in demand. Prices are a function of demand and supply and in the current scenario, supply is in excess of demand," said Mr Singh at an Assocham meet. The situation i

Monitored real estate cycle

Ends and beginnings: The end of the first-ever monitored real estate cycle in India is on. The housing crisis is seeping into the credit markets and the global banking system, threatening to derail many heavyweight economies. While a number of governments are scampering to do damage control, it's difficult to say how fruitful their efforts will be. Globally, economic systems are reeling under the impact of this epidemic-like financial squeeze. The Indian economy also has begun to feel the pressure. The massive correction in the stock market has left no doubt in anyone's mind that we are completely integrated with the global machinery. The decoupling theory has been debunked. What goes up... The intellectual within many of us has been tricked into turning a nervous speculator, from the well-balanced analyst. In the real estate sector, it is important to understand two things clearly. Firstly, India may just be witnessing the close of its first-ever monitored real estate cycle, w

NRI and PIO can invest in India

Non-Resident Indian (NRI) and Person Of Indian Origin (PIO) can invest in real estate in India A non-resident Indian (NRI) and person of Indian origin (PIO) can acquire residential property in India. They can rent it out, transfer it, or sell it as well. They can take the rental income and their investments in the property out of the country , subject to the foreign exchange regulations. Under the present relaxed conditions, NRIs can invest in property in India easily. A NRI is an Indian citizen residing outside India. A PIO is an individual who at any time held an Indian passport, or whose father or grandfather was a citizen of India. However , a PIO who is a citizen of Pakistan, China or Bangladesh has restrictions in acquiring property. Also, NRIs and PIO cannot buy agricultural land, plantation property and farm house. A NRI/PIO may use his own funds to acquire immovable property. He can also avail a housing loan from a bank. Own funds is money received in India through an inward r

Developers slashes property prices

Developers to slash property prices by up to 15 per cent NEW DELHI: It seems that the realty froth is finally settling down. After holding property prices for a long time, developers across the country agreed on Friday to cut prices by up to another 15 per cent. Property prices across the country have seen a correction by 20 to 40 per cent, Rohtash Goel, chairman Omaxe Developers and president of the National Real Estate Development Council (NAREDCO) told reporters here. "We are asking our members to reduce rates. The reduction will be up to 5 per cent for existing projects, 10 per cent on new projects and 15 per cent for the affordable housing section," Goel told reporters. "However, there will be further discount for the customers who are paying on time," Goel said. "Developers do not have enough cushions for further price reduction as the cost of lending has gone up considerably. Also the price of cement and steel has gone up," he added. Most of the big

Prices can fall if taxes lowered

Prices can fall if taxes, interest rates are lowered: Assocham Prices in India may come down due to lower demand but will fall further if the government cuts taxes and banks lowers interest rates, a top industry lobby said Thursday, two days after Finance Minister P. Chidambaram asked India Inc to cut prices and not production. "We came to the conclusion that prices are a function of demand and supply and since demand has come down prices have begun to come down and may come down further," said Sajjan Jindal, president of Associated Chambers of Commerce and Industry (Assocham). "But if taxes that were imposed in good times are reviewed and revised in view of the bad times now prices will come down further," Jindal told reporters after a meeting of the chambers' full committee. The Indian equities markets have been very badly hit by the current global meltdown because of a crisis of confidence and the real estate industry has been badly affected because of high i

Owner's right is supreme

Boost for landlords in fight against tenants, Owner's right is supreme, says High Court The Delhi High Court on Thursday said that a landlord's right was supreme and even courts, forget the occupant, "cannot dictate terms". The ruling comes as a major relief to thousands of landlords struggling to get their premises vacated. "(The) landlord is the best judge of his residential requirement and the place where he has to live. It is not open for the court or the tenant to dictate in what manner he should live, where he should live nor the court can impose its own standards on the landlord," said Justice Shiv Narayan Dhingra. Landlord-tenant relations in the Capital are governed by the Delhi Rent (Control) Act, 1958, which is tilted in favour of tenants. A new Delhi Rent (Control) Act passed by the Parliament in 1995 and signed by the President could not be notified in view of fierce opposition from the trader-tenant lobby. Passing the order, the court ordered t

NHAI bid norms relaxed

National Highway Authority of India (NHAI) bid norms relaxed, failed to attract investors' interest The National Highway Authority of India (NHAI) has relaxed the norm limiting a bidder to bid for more than eight road projects as certain stretches have failed to attract investors' interest due to the current economic slowdown. This flexibility will be applicable for those projects that have received less than five price bids. The move is expected to benefit large infrastructure companies like GMR, L&T, Gammon India, Reliance Infrastructure and Simplex who have shown interest in National Highway Development Programme (NHDP) projects. Prevailing norms say that a company (as standalone or as a consortium) cannot bid for more than eight projects and cannot be awarded more than four projects. As per the changed rule, six players would be short-listed for bidding in each road project. However, if companies withdraw and the number of bidders falls below five, NHAI would make fresh

Prices likely to fall 25 per cent

Indian property prices likely to fall 25 per cent by a quarter in the coming year Indian property prices are likely to fall by a quarter in the coming year as the global economic crisis saps homebuyer confidence, adding to the problems of capital-strapped developers. A property market boom has been waning for a year, with land prices already falling about 15 per cent from a mid-2007 peak, although forced sales have been rare. But consultants and investors at the MIPIM Asia conference in Hong Kong this week predicted tougher times ahead. "We're expecting a horrible 2009," said Anshul Jain, chief executive for property services firm DTZ in India. "Prices have already shown signs of coming off, and chinks in the armour are surfacing." Indian property prices doubled in the two years after the country eased rules in early 2005 on inward investment in the construction industry, sparking interest in home-building among foreign funds. Developers, sometimes in league wit

RBI makes recast of realty loans tougher

India’s struggling real estate sector is set to come under further pressure in the coming weeks as the Reserve Bank of India (RBI) has made it tougher for banks to ‘restructure’ loans, forcing them to cut house prices or risk being starved of bank funding. Banks often resort to restructuring loans — a practice aimed at preventing loans from being classified as bad — when they sense their borrowers are facing difficulties in repaying loans. In a typical restructuring, banks give borrowers more time to repay the loan by extending the loan tenure, and sometimes, even at reduced interest rates. Such an exercise enables banks to keep their non-performing assets (NPA) ratios under check and their books clean of the stigma of dud loans. But in a little-known directive issued earlier this year, the central bank has ordered that the moment a loan to a builder is restructured, banks must classify the account as an NPA. However, for restructured loans in all other sectors, the account can continu

CREDAI appeals for reduction

Real estate developers across the country expected to review prices. CREDAI is the apex body of real estate developers in the country with a membership of 3500 plus developers in 18 states across India. CREDAI is concerned with the general slowdown of the economy. CREDAI is also aware of the negative consequences of this slowdown in terms of falling growth rates and potential loss of employment to many of the 10 million skilled and semi-skilled workers engaged in the real estate sector. Most of these workers are at the low income, daily wage levels. Government has commenced taking some proactive steps in easing liquidity to this sector as well as in starting the decline of interest rates for the home buyers. Further, inflation has also started showing a clear downward trend. CREDAI believes that this is a time for all stake holders (developers, financial institutions, Government, manufacturers, service providers) to work together in order to cumulate the benefits they can pass on to t

Interview with KV Kamath

ICICI Bank Chief Executive Officer K V Kamath says high borrowing costs and a slowing economy are denting demand for loans. But there is more scope to ease liquidity and help banks cut interest rates, he adds. Excerpts from his remarks at a press conference held in New Delhi on the concluding day of the India Economic Summit of the World Economic Forum. When would we see banks bring down interest rates? Interest rates or any other rates are subject to supply and demand. In the supply context, which is liquidity, banks would like to see enough of it in the system before they are able to reprice credit. So, first you have to ensure that borrowings are repriced and then lending repricing will follow. It could happen in a few days or a few weeks. Steps are being taken and intentions are very clear. I am the first to say there's a need for price cut in this market. Do you expect further monetary action by the government? Yes. There is more scope for more action on the monetary front and

Central Business District

Crossings Republik launches Central Business District Crossings Infrastructure (P) Ltd., India's leading real estate company engaged in the development of Rs. 600 crore project, Crossings Republik, UP's first private sector integrated city spread over 360 acres and coming up in the neighbourhood of Noida, Greater Noida and Ghaziabad, today announced its two major commercial projects, the Crossings City Center and Crossings Galleria, which will cater to a population of over 1,00,000 residents. Crossings Republik is the first city designed on global standards by renowned master planner and architectural firm, SASAKI ASSOCIATES, a Boston, USA based company in association with leading Indian architect, Mr. SK Das. Mr. Manoj Gaur, Director, Crossings Infrastructure (P) Ltd. said, "Crossings Republik is a new city being added in the Delhi NCR and will set new standards. It will be a truly self sufficient, environmentally sustainable and shall have its own public transport syste

Crossings Infra - Two new projects

Image
Leading real estate company Crossings Infrastructure, engaged in developing Uttar Pradesh's Rs 600 crore first ever private sector integrated city Crossings Republik, today announced two major commercial projects -- Crossings City Center and Crossings Galleria. ''Spread over an area of 360 acres, Crossings Republik is a new city being added to the Delhi NCR. It will be a self-sufficient, environmentally sustainable and will have its own public transport system as well. It will have more than 30 million sq ft of built-up residential area and two million sq ft of commercial area comprising hotels, multiplexes, malls, service apartments, office complex, community facilities and others,'' Crossings Infrastructure Director Manoj Gaur told a media conference here. The first phase of possession for 2,000 apartments is slated for December next year and by December 2010, more than 500 families are expected to take possession of their condominiums, he added. ''Golf co

NH-24 Hi-Tech Cities

Fate Of Twin Hi-Tech Cities On Both Sides of NH-24 In Ghaziabad Uncertain Those who had bought plots by investing crores of rupees during the pre-launch of Hi-Tech cities on both sides of NH-24 in Ghaziabad, appear destined for a long wait for their plots. The fate of all these projects hangs in the balance. Builders are not buying land from the farmers. Three years have passed since hundreds of crores of people's money is lying locked with the builders while not a brick has been laid on the sites of the projected twin cities. Initially builders had bought large chunks of land from farmers in village Bamhota for the twin-integrated cities. The builders sold a large number of plots in pre-launch for developing separate townships. They set up their offices, but of late these offices have also vanished. One of the builders who had deposited Rs 176 crore with the GDA is understood to have taken his money back. M/s Uppal Chadha of Hi-Tech Developers Pvt Ltd and Sun City Project Pvt Ltd

More Bad Days Ahead For Indian Realty

More Bad Days Ahead For Indian Realty,Infrastructure Sector In The Next 6-9 Months - Deloitte India's realty and infrastructure sector would see more bad days in the next 6-9 months and that would knock off 2-2.5 percent off the country's economic growth, a senior official of consultancy firm Deloitte said. There is a pile-up of inventories in the real estate sector and infrastructure will face funding funding problems as investors such as private equity and venture capital firms stay away, Principal Economist Shanto Ghosh said on Wednesday. "Our impact so far has been largely felt on the financial sector of the economy. I think we have still not seen the worst days in the real sector of the economy," he said. "That trickling down which has been happening in the U.S. over the last 3-6 months has still not happened in India yet, so I think there is going to be some trickling down to the real activity of the economy over the next few months." There could be fu

Crossings Republik Pics

Image

Correct valuation of land

What's the value of that land?, Cos now bidding ridiculously low without proper projec appraisal Redevelopment of the New Delhi railway station; 1,000km Ganga expressway in Uttar Pradesh (UP); development of airports at Gulbarga and Shimoga in Karnataka; development of city-side facilities at Udaipur and Amritsar airports...these are all examples of recently announced projects where the cost of infrastructure asset development is part-funded by the award of land rights. Many more such projects, especially in roads and airports, are on the drawing boards of infrastructure companies, all waiting to be implemented on an "unsolicited proposal basis", which means proposals directly submitted by private companies to governments. Public-private partnerships have become the mantra for governments (Centre or states) for developing infrastructure. Most of them are now structuring road and airport projects by awarding large parcels of land at less than market rates to partly compens

Builders In good mood to negotiate

Buyers in the market are still undeterred by the recent downturn and continue looking for properties Even as the buzz today is that home buyers are adopting a wait and watch approach looking for a price correction, this is not true for all the category of buyers. There is a segment which is looking at buying a home dictated by their own personal needs as much as the fact that builders are now in a mood to negotiate. These are buyers across all segments starting from a budget of Rs 35 lakh to go up to any level. "Despite the current scenario of the stock market crash and the general downturn, there are a lot of buyers in the Rs 50 lakh to one and a half crore segment who are actively looking to buy a house," says developer Abhinandan Lodha, director Lodha Group. Most of them have a family home which may be smaller, and as families grow, they want to shift to a larger 2 BHK or 3 BHK, as per their needs. There are also NRIs who are seeing the dollar appreciating and with the on-