Investors Clinic witnesses 20% demand rise for Indian properties

DUBAI — Investors Clinic Infratech, a leading real estate marketing and brokerage firm operating under the brand name of “Investors Clinic”, has successfully marked its footprint in the UAE within just six months of starting Dubai operations.

In a short span, the company has successfully served over 1,000 NRI families and have witnessed a strong 20 per cent increase in demand from Indian expats in the second quarter of 2012. The UAE-based NRIs are generally looking for investment property back home (rather than end use) within a price range of Rs7.5 million to Rs15 million with an assured return.

In the GCC alone, an estimated 5.5 million to six million NRIs are working today including semi-skilled and unskilled labourers. According to banks in the Gulf, the average home loan size is Rs3-7 million and the predominant demand revolves around apartments. The overall home loan business in Dubai alone ranges from Rs7.2-8 billion, according to an Economic Times report.

Honey Katiyal, CEO, Investors Clinic, said: “Rupee falling might be a bad news for India but real estate tends to gain from the development. It is the time when Non Resident Indians will benefit the most in Indian real estate market. The real estate market especially in Delhi NCR is vibrant with offerings for every segment. The NCR is the largest residential market in the country by sheer volume of residential units launched. Currently, it has more units than the combined tally of the other five metropolitan cities of Mumbai, Chennai, Bangalore, Kolkata and Hyderabad.”

Source: http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/uaebusiness/2012/June/uaebusiness_June92.xml§ion=uaebusiness

India No. 3 in world in realty price rise

MUMBAI: Even as first-time buyers are exhausting their savings to buy a home, realty rates in India are going through the roof. Property prices increased by 12%, propelling India to third position among 53 countries where prices have appreciated in the past year.

The global house price index survey by property consultants Knight Frank shows that Brazil recorded the strongest annual growth (23.5%) in the past year, followed by Estonia with a growth rate of 13.9%. Globally, however, the picture isn't so rosy, the index shows.

The index is compiled on a quarterly basis using official government statistics or central bank data where available.

Property prices rose 0.9% in 2011-12 globally, shows survey

According to Samantak Das, national head (research) of Knight Frank, intrinsic factors drive property prices in each city. "Base prices in tier-2 cities like Bhopal and Guwahati are affordable compared to big cities like Mumbai, which are reeling under price pressure. The price difference in turn reflects on flat sales across various cities across the country,'' said Das.

According to house price index survey by Knight Frank, while real estate markets in some countries are doing well, globally picture doesn't look so rosy. "Global property prices have seen their weakest annual performance since depths of recession in 2009, recording 0.9% growth in the year ending March 2012. Doubts over Eurozone's future, along Asian governments' efforts to cool their markets and deter speculative investment, have taken their toll and house prices were static in the first three months of 2012,'' says the report.

Times View

The fact that property prices in India are rising at such a fast clip is good news for the real estate business and clearly also reflects India's status as one of the world's fastest growing economies. However, it also means that affordable housing remains a dream for many who flock to our cities as job seekers.

An important reason for this is that mega cities continue to bear a disproportionate share of the burden of providing economic opportunities to people. The government can ease the pressure on these cities and hence on property prices by rapidly developing transport infrastructure and satellite towns that can absorb some of the load. That will not only spread growth more evenly, it will make life in the cities more pleasant for everyone.

Source: http://timesofindia.indiatimes.com/business/india-business/India-No-3-in-world-in-realty-price-rise/articleshow/13860510.cms

How southern cities escaped the real estate bubble

Everybody cribs about how costly buying real estate in Indian cities is. It's a national pastime of sorts. But nowhere is the collective griping greater than in cities like Mumbai and Delhi, where prices have moved northwards faster than the rest of the county.

In comparison, realty prices in south India are saner and everybody, from banks to realty developers to the first-time buyer feels a lot more comfortable. Like RV Verma, chairman of the National Housing Bank (NHB) puts it, "For banks, Chennai and Bangalore are one of the best centres. They feel comfortable as these markets are stable and the potential for NPAs [non-performing assets] is lower."

The past year has seen home sales slow down across the country. The slump in sales has been pronounced in Delhi-NCR and Mumbai, over 40% compared to the previous year. A combination of exorbitant property prices and high home loan rates made buyers balk. Realty sales in south India were down too, but thanks to an improvement in the fortunes of the IT sector, not as sharp.

"Bangalore and Chennai are still more affordable compared to other big cities," says Hariharan Ganesan, manager, research at property advisory firm Jones Lang LaSalle (JLL) India.

Land as Gold

So what's keeping prices in check in southern cities? "Scarcity and expensive land parcels have hit the affordability factor in Mumbai and Delhi. However, land is not priced out in the south," says JC Sharma, managing director and vice-chairman of Sobha Developers, which had reduced property prices by 10% post-2008 slowdown.

The north has also seen a rise in property prices because of the speculative nature of the market. It is also largely an investor-driven one. "In the north, a passion for real estate along with the need to park black money has pushed up property prices dramatically in recent times," says Anckur Srivasttava, chairman of GenReal Property Advisers.

Says Anshul Jain, CEO of DTZ India, a real estate consultancy: "Around 70% of the realty market in NCR-Delhi and Mumbai is investor-driven." An investor-driven market sees more distortions and is less transparent. Residential property prices in Bangalore, Hyderabad and Chennai have seen a rise of 1-35% since the fourth quarter of 2009, says JLL in a recent report. In contrast, Mumbai and the NCR have seen residential values run up between 20% and 40% in the same period.

The Steady South

Southern realty's absorption rate has been helped by the cautious pricing strategies adopted by local builders. In contrast, in Mumbai and NCR, property prices have already crossed the peak levels of 2007. New launches in south India are still predominantly in the Rs 4,000 per sq ft range compared to many parts of the NCR and in Mumbai where project launches are in the Rs 7,000-10,000 per sq ft range.

"We have seen stable sales in the south. Sales in the last fiscal were better here than in the north," says Jackbastian Nazareth, CEO at Bangalore-based developer Puravankara Projects. According to real estate research firm Liases Foras, Bangalore sold 10.55 million sq ft of property in the March quarter, as compared to 9.16 million sq ft over the same period last year. Chennai's property market registered a growth of 26% in the quarter.

Low Inventories

All this put together has meant that unsold inventory is far lesser in south. Chennai and Hyderabad have a total of 42.75 mn sq ft and 33.38 mn sq ft of unsold stock each. In comparison, Mumbai metropolitan region and NCR have 121 mn sq ft and 233 mn sq ft of unsold inventory, which will take at least 23-40 months to get absorbed, says Liases Foras.

On the housing finance front, the southern cities accounts for nearly 40% of the nationwide disbursals of Rs 1.95 lakh crore (retail home loans) for 2011-12. "While Mumbai and Delhi-NCR have slowed down, Chennai, Bangalore, Hyderabad, Pune and Kolkata have led the demand for home loans," says VK Sharma, chief executive officer of LIC Housing Finance.

Going Strong

The commercial property segment also continued to be in an upbeat mode with Bangalore, Chennai and Hyderabad accounting for nearly 45% of India's office stock, largely due to the IT and ITeS sector.

"Commercial space supply in the southern cities is in line with demand. We have leased 99.4% of the office space and have an additional 7 million sq ft under execution," says Raj Menda managing director of RMZ Corp, a developer. Demand was driven by IT and ITeS sector, with 64% of the country's IT SEZs are housed in the southern cities.

"With a total stock of nearly 140 mn sq ft in the major cities of south India, the vacancy rate by end 2012 is expected to be 16%, considerably lower than the pan-India vacancy rate of over 20%," says a JLL report.

Source: http://timesofindia.indiatimes.com/business/india-business/How-southern-cities-escaped-the-real-estate-bubble/articleshow/13550940.cms

Indians wary of investing in property: Survey

Uncertainty in the real estate sector is keeping the Indian home buyers away, according to a survey.

"While property still remains the preferred choice of investment of nearly all the Indians, as high as 92 per cent, they are pretty scared of trading in the property market now," real estate market tracking news portal Track2Realty's survey titled 'Home Buyer's Satisfaction Index' said.

The survey further said that buyers are looking at other options, including infra bonds for investment. "Nearly 70 per cent of Indians who are looking to invest again after occupying a house assert they prefer relatively safer bets like infra bonds than be sorry after the new launches are stuck up due to developers' poor financial condition, regulatory hassles or other legal issues."

The survey was conducted in 10 cities: Delhi, Mumbai, Kolkata, Bangalore, Kochi, Ahmedabad, Chennai, Patna, Pune and Chandigarh. As many as 2,000 house-buyers were surveyed.

"Almost 60 per cent of home seekers active in the property market believe there is artificial demand in a new launched project and after 12-24 months, prices can be realistic, if not outrightly downward," it said.

Due to lack of confidence in the new launches, buyers are preferring ready-to-move properties. "Nearly 62 per cent prefer to settle for a flat in the secondary market as against the temptation of brand new in the recently launched apartment."

Source: http://profit.ndtv.com/News/Article/indians-wary-of-investing-in-property-survey-304379

Chennai realty market rates zoom ahead of guideline values

Chennai

If you need any proof of how buoyant the real estate scene in Chennai is, here it is. In the five months since the guideline values (government-notified rates for registration of properties) were revised across Tamil Nadu, the market rates have already overtaken them by 10-45%.

The guideline value is used by the state government to assess the actual value of the property for levying stamp duty. Guidelines values were revised late last year after a gap of five years so that they would be indicative of prevailing market rates.

Growing demand for housing in the city has resulted in a steady climb in apartment prices both in the city and the suburbs over the last six months. “Hence, in most areas, the guideline value is below the market price and the difference ranges from 10% to 45%,” real estate consultant S Ramaswamy of RECS Group said.

For instance, the guideline value of land on the Arch Bishop Mathias Road in Boat Club is 18,000 per sq ft whereas the prevailing market value for the street is around 33,000 per sq ft. Similarly, guideline value for RK Salai is 19,000 per sq ft whereas the market rates are close to 25,000 per sq ft. Guideline values are on the lower side even in central business districts. Guideline value on Khader Nawaz Khan Road, which is a premium shopping hub, is only 9,500 per sq ft. Guideline value on Haddows Road is also similarly low.

Experts say prices in most parts of the city have increased by close to 20% in the last six months, going by the residential price index (Residex) brought out by the National Housing Bank.

According to recent figures, Chennai is one of the fastest growing real estate markets among all metros, but this boom is not reflected in the new guideline values finalized five months ago. Guideline values were revised after a span of five years. In the meantime, prices within city had increased two to four-fold while the jump was about five to six times in the suburbs.

However, property consultants also point out that many buyers and sellers are keen on registering properties at market price. “Whenever a property is registered for a price higher than the guideline value, that becomes the new benchmark for the locality. Hence, over a period of time, the gap between guideline and market rates will reduce,” said P Ramesh, a mediator.

While guideline values in the city are higher than market values, in the suburbs it is the reverse, and that is a matter of concern, say realtors. This disparity is partly owing to the slow growth of real estate prices in suburban areas. “Even if properties are available at lower rates, we have to pay a higher stamp duty and registration fees there as they are calculated based on guideline values, which are higher than market prices,” Chitty Babu said.

There is also a section of developers who feel that in some areas, the guideline value revision has been far too steep. “With such upward revisions, middle income people will find it difficult to buy properties in the city. Already, many of them are moving to suburban locations,” PV Sanmugam, managing director, Kgeyes Residency said. But how far this argument will cut ice is a matter of debate.

Even when the guideline values were low, builders kept apartment prices high, said P Manikandan, who ended his five-year hunt for an apartment a month ago.

Source: The Times of India, Chennai

Home prices to undergo a wave of high appreciation after six months: JLL

MUMBAI: Real estate consultancy Jones Lang Lasalle India (JLL) expects home prices to undergo a of wave of "high appreciation" after six months. Potential home-buyers have a small window of opportunity over the next six months to buy real estate, analysts at JLL said.

Stable demand coupled with affordable pricing, waning interest rates and higher absorption rate will enable developers to keep real estate prices firm, analysts said.

Over 60% of residential launches in the top seven cities -- mostly in cities other than NCR and Mumbai -- are priced in the range of Rs 2000-4000 per sq ft; this meets the demand of middle-income buyers. New project launches have started gaining traction. This should improve cash flows for developers with land banks during 2012, a note issued by JLL said.

"With rising input costs, developers do not want to sell below a threshold which does not justify their minimum replacement returns," JLL said.

The real estate consultancy has ruled out a hard-landing of real estate prices. Despite slow sales, highly leveraged balance sheets, expensive finance in a high interest rate environment and rising input costs, developers have been able to avoid a market-wide crash.

"They have been able to generate sufficient cash flow through the gradual process of price discovery, and several factors are in their favour in the near term," the JLL note said.

"Over the next six months, home prices should witness marginal appreciation. After six months, a second wave of high appreciation is expected," the note summed up.

Source: http://economictimes.indiatimes.com/markets/real-estate/realty-trends/home-prices-to-undergo-a-wave-of-high-appreciation-after-six-months-jll/articleshow/12720902.cms

Pallikaranai realty sees rise in NRI buyer interest

Chennai

Pallikaranai locality in Chennai has seen an increase in NRI buyer interest in the recent past. T. Madavan, a local realtor with Remax Gold pointed out that many residents of this locality, living abroad, are investing in the locality. He attributed this to both, sentimental and investment reasons.

Majority of the residents from this locality have shifted base to countries like Australia, Canada and Dubai. One of the projects that has especially seen increased interest from the NRIs is KG Green Meadows by KG Builders, Madavan added. KG Green Meadows offers luxury apartments for about Rs 5,100 per sq ft.

Another reason that can be attributed to the increased NRI interest here is the presence of neighbourhood areas like New Colony, IIT Colony, VGP Shanti Nagar, Maxworth Nagar, Viduthalai Nagar and Kamakoti Nagar.

As per MagicBricks data, the capital value of builder-floor apartments in this locality is from Rs 3,600 to 3,800 per sq ft depending on the area, location, age of the property, developer, typology and other attributes of the property. The locality has seen an increase of about 4% in capital values of multi-storey apartments in the Oct to Dec quarter compared to the Jul to Sept quarter last year.

Major part of this locality is a part of a reserve forest area and therefore, the locality is surrounded by a calm, peaceful and green environment. Some prominent builders here include Doshi Housing, Maxworth Homes Ltd, Puravankara Projects Ltd, Real Value Builders & Developers, Akshay Builders, among others.

Source: MagicBricks Bureau

Summer homes popular amongst Chennai home buyers

Chennai

When 47-year-old city-based homemaker Sharanya Shankar, decided to build a house in Kodaikanal 25 years ago, the idea seemed like a smart investment to make. However, as years passed, her children began growing up, and a summer vacation to the hill station was more or less, an annual affair. It was then that a closeness to their second home, developed.

“It was like a home away from home in more ways than one,” says Sharanya, “Our children started making friends at Kodai and before we knew it, the annual visit, especially during the unforgiving summers, became a ritual.”

Purchasing a property in the hillside and constructing a home there, may not exactly be your idea of a new trend. For – as city based architect, Durganand Balsavar points out – changing homes with alternating seasons, dates to centuries ago. “With changing work schedules, moving into a summer home has become quite practical,” he says, “People have the option of working from home and your own business, allows for that luxury anyway. So working from the confines and comfort of a nice little house in the hillside is a great idea.” Durganand points out that summer homes, apart from boasting of a distinct “close-to-nature feel”, also have the ability to evolve with the family. “You move in during the summer with your kids, then begin visiting for longer periods when they go away to college, and even stay there for longer periods of time when you grow older.”

Maintaining a summer home – and the cost that this might incur – is a key factor in purchasing a property in the hills. “Frequency of usage is paramount,” says Mehul Doshi, Managing Director, Doshi Housing, “Short stays and long periods of no occupancy, ensure that maintenance of a summer home drains your resources.” And maintenance, going by what most architects believe, is the biggest challenge that a summer home poses, postpurchase.

“Owing to the climate at the hillside, fungal moulds tend to develop on walls,” says P K Ramanathan, Principal Architect, Ramanathan and Associates, a city-based architecture firm, “So employ a caretaker to ensure that your home stays dust-free and is regularly maintained.” Archana Bhansal, who runs city-based architecture firm, Two Tone Design believes that the off-season (winter months) is when maintenance becomes the most challenging. “Ceilings and walls need to be properly insulated to protect the superstructure from the cold, even as proper checks against termites and dust, must be conducted.”

As far as design of the home itself is concerned, the close-to-nature feel that a summer home ought to provide, is precisely what must matter in its construction, feel developers and architects alike. “Since you are off on a retreat – away from urban claustrophobia – you need a lot of open space,” says Mehul. “So the design has to be minimalist in nature, ever-respectful of its environment,” points out the architect in Durganand. “Then there’s also the need for a sloping roof to tide over seasonal rainfall,” adds Ramanathan.

Can a summer home double up as a worthy investment option? Is an investment capable of fetching profitable returns? “That would depend on the owner,” says Mehul, “Some consider it as a combination of a second home and a smart investment. However, since it is a second home, it may not be bad investment.” Durganand however, feels that investment and summer homes do not go hand in hand. “The main purpose of constructing a summer home is to move away from the hustle and bustle of the urban landscape,” he says, “But when you begin calling that an investment, rest assured that others are going to make a beeline and ‘invest’, thereby defeating the purpose of constructing a summer home in the first place.”

From an environmental perspective, Durganand points out, owning two homes can contribute to an unhealthy carbon footprint. “This is where minimalist designs play a vital role. Mumbai-based architect Charles Correa constructed a home in Ahmedabad that contained living quarters for both summer and winter,” he says, “During summer, the living quarters were located in the east to escape the heat of the setting sun, while in winter, it was the exact opposite, so as to enable its residents to soak in the warmth of the sunset.” Interestingly, as Durganand points out, this was common construction practice centuries ago, before houses became segregated into distinct living quarters. “In these times of environmental instability, it only makes sense to conserve and make the best of what we have,” he signs off.

Source: Times Property in The Times of India, Chennai

CREDAI property fair draws positive response

Chennai

The 3-day event by Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu members, drew an encouraging response from prospective home buyers in and around the city. The property fair showcased 250 plus properties in Chennai Trade Centre from developers across the city.

Over 32,000 people visited the event and the volume of business generated by 65-member developers during the show has been estimated to have crossed Rs 100 crore. The developers are quite upbeat over the outcome of the show and the impending potential for housing market in and around the city for the rest of the year.

Housing finance companies and banks have issued in-principal sanctions for home loans worth Rs 150 crore on submission of basic documents during the show. The encouraging response for home loans could be attributed to the flexibility in terms of lending rate and concessions extended during the show. Even the property developers have offered sops by way of reduction in rates for those who were buying during the event.

According to CREDAI sources, residential properties in the price range of Rs 50 lakh to Rs 4 crore including high-end homes drew good response. The properties showcased during the show varied from Rs 15 lakh to Rs 10 crore covering apartments, villas and developed plots. A majority of the response was from the end users who have evinced keen interest to invest in residential properties.

The number of exhibitors was more than previous years and the layout was done in such a manner to give a thrust to the concept stalls over traditional cubicles. This has given a better image of the exhibits in a market where fierce competition dominates today.

In order to create awareness about the intricacies involved in the home buying exercise, leading law firm Rank Associates has been engaged to provide free legal advisory services to prospective buyers. CREDAI Tamil Nadu has a consumer redressal mechanism and the grievances received have been passed on to the committee for quick processing.

As the overall response to the Fairpro 2012 has exceeded CREDAI’s own expectations, they are contemplating to extend the show to NRIs as well in future in select countries like Middle East, Singapore and UK.

Source: http://content.magicbricks.com/credai-property-fair-draws-positive-response

Chennai

The 3-day event by Confederation of Real Estate Developers’ Association of India (CREDAI), Tamil Nadu members, drew an encouraging response from prospective home buyers in and around the city. The property fair showcased 250 plus properties in Chennai Trade Centre from developers across the city.

Over 32,000 people visited the event and the volume of business generated by 65-member developers during the show has been estimated to have crossed Rs 100 crore. The developers are quite upbeat over the outcome of the show and the impending potential for housing market in and around the city for the rest of the year.

Housing finance companies and banks have issued in-principal sanctions for home loans worth Rs 150 crore on submission of basic documents during the show. The encouraging response for home loans could be attributed to the flexibility in terms of lending rate and concessions extended during the show. Even the property developers have offered sops by way of reduction in rates for those who were buying during the event.

According to CREDAI sources, residential properties in the price range of Rs 50 lakh to Rs 4 crore including high-end homes drew good response. The properties showcased during the show varied from Rs 15 lakh to Rs 10 crore covering apartments, villas and developed plots. A majority of the response was from the end users who have evinced keen interest to invest in residential properties.

The number of exhibitors was more than previous years and the layout was done in such a manner to give a thrust to the concept stalls over traditional cubicles. This has given a better image of the exhibits in a market where fierce competition dominates today.

In order to create awareness about the intricacies involved in the home buying exercise, leading law firm Rank Associates has been engaged to provide free legal advisory services to prospective buyers. CREDAI Tamil Nadu has a consumer redressal mechanism and the grievances received have been passed on to the committee for quick processing.

As the overall response to the Fairpro 2012 has exceeded CREDAI’s own expectations, they are contemplating to extend the show to NRIs as well in future in select countries like Middle East, Singapore and UK.

Source: http://content.magicbricks.com/credai-property-fair-draws-positive-response

CREDAI property fair to be held from Feb 17 to19

CHENNAI: FAIRPRO, the annual property exhibition of the Confederation of Real Estate Developers' Association of India, Tamil Nadu chapter, will be held in the city from February 17 to 19. Sixty-five builders will showcase 250 projects at prices ranging from Rs 10 lakh to Rs 10 crore at the Chennai Trade Centre, said Suresh Krishn, convenor, FAIRPRO.

Only projects approved by the regulatory agencies and vetted by CREDAI's legal wing will be listed for sale, he said. With a view to minimizing inconvenience to prospective home buyers, the FAIRPRO team has introduced e-service for issuing entry tickets and registration.

So far, about 20,000 people have hit the FAIRPRO website and 600 people have booked tickets, he said. CREDAI Tamil Nadu president T Chitty Babu called upon the central and state governments to be considerate towards the real estate sector.

The growth of the sector will be affected if tax benefits are not extended to realtors and tax exemption on home loan interest component is not increased from Rs 1.5 lakh to Rs 3 lakh, he said. Ajit Kumar Chordia, MD of Khivraj group, called upon the state government to slash stamp duty for registration of properties before it announces a revision in the guideline values.

Source: http://timesofindia.indiatimes.com/articleshow/11891636.cms

Property Rates in CHENNAI

Chennai, previously known as Madras, is one of the four metropolises of India. Being the capital of Tamil Nadu, the city is the centre of all political, business and cultural activities of the state. The city has gradually changed its profile. Earlier it was popular for being a trading spot, but now a house for sale in Chennai is something which attracts everyone. Now it is gaining repute for its IT and industrial development. The Chennai property market is driven by the commercial and residential segment. Most of the development is happening on the Old Mahabalipuram Road. Here, many plush property projects are coming up. Most of the commercial development is focused around the IT industry. This comprehensive chart is specially designed to keep you in the best knowledge of areas and their ongoing property trends which will help you in finding your dream home right away. Last Updated: September 2010 

CAPITAL VALUE

Locality Apartment (Rs/sq ft) Plot (Rs/Ground* in Lakh) Apr-Jun’10 (%) Sep’10 Apr-Jun’10 (%) Sep’10 North (1) -2 to 0 5300-6000 0 68-78 West (10) -30 to 25 2600-10000 0 to 16 45-118 South (12) -25 to 30 3400-16000 -19 to 20 36-250 Central (3) -9 to 30 6000-9000 0 to 30 216-275 IT Corridor(8) -9 to 14 2800-5500 -7 to 28 31-117 Others (18) -22 to 0 3400-26000 -20 to 15 46-560

RENTAL VALUE

Locality Apartment 2 BHK (Rs/month) Apr-Jun’10 (%) Sep’10 North (1) 0 13000-17000 West (10) 0 to 29 7500-23000 South (12) -12 to 11 8500-21000 Central (3) -9 to 0 19000-26000 IT Corridor(8) -13 to 0 8000-15000 Others (18) -15 to 20 8500-75000

Source: http://content.magicbricks.com/property-rates-in-chennai

Chennai real estate likely to see good times in 2012

In contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai’s residential property market saw steady growth in terms of pricing, demand and supply. Chennai’s residential property market is predominantly end user driven, and this fact did a lot to sustain consistent absorption throughout 2011.

The absence of overt speculation has also ensured that developer has move pricing of homes in a stable and gradual manner. Unnatural spiking has therefore been successfully kept at bay. We expect interest rates to decrease over the course of 2012, and this will result in greater demand for homes in Chennai in 2012.

Increased job security in the city has definitely helped the market to maintain buoyancy and a positive outlook. Over the last 12 months, it became increasingly evident that Chennai’s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues.

CONFIGURATIONS IN DEMAND

The preferred size for 3BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. Again, the main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT / ITES sector.

This is a welcome trend which is enabling architects, planners and developers to come up with better quality dwelling units. Affordable housing units continue to rule the roost in areas where social infrastructure lags and capital values are therefore lower.

We expect overall demand for residential properties in Chennai to increase once the interest rates stabilises from their current peak. There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure.

SUBURBAN DEMAND DRIVERS

• Positive market sentiments

• Possible softening of interest rates

• Increased job security

• Unaffordable property rates in the central city Year 2011 saw residential property pricing in Chennai moving up in a phased and rational manner, which helped in sustaining the momentum. Prices rose by between 8-30% in different areas, but these rises took place in small compartments and in proportion to the actual sales in particular locations and projects. We expect a similar trend to prevail in the year 2012.

Expected Price Movement For 2012

• OMR – 15-30%

• GST – 10-15%

• City – 20%

• NH-4 – 5-8%

AREAS TO WATCH

• Madhya Kailash – Sholinagnallur

This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years. Encouragingly (and in contrast to other parts of OMR) all completed projects here are fully occupied.

• Velachery

Velachery is seeing consistent growth, because it is one of the few areas which are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram-Thoriapakkam, the 200 FT. MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery’s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.

Source: http://content.magicbricks.com/chennai-real-estate-likely-to-see-good-times-in-2012

Price edge drives realty boom on Vizag outskirts

VISAKHAPATNAM: Real estate prices have gone through the roof in the 'city of destiny' and city dwellers are now scouting for open spaces on the outskirts of the city where rates are still affordable. While the real estate market is picking up after a threeyear slump, the boom on the outskirts of the city has gladdened the hearts of realtors and property developers.

"Yes, the real estate business is on the upswing and we are expecting things to get even better in the coming months," realtor G Rama Jogi told TOI. He said that skyrocketing property rates in the city was forcing the business and middle classes to look for options on the outskirts.

There is a huge demand for land now in Sabbavaram, Nakkapalli, Chodavaram and Anakapalli mandals, on Vizag's periphery. A cursory glance at land rates in Vizag is enough to illustrate the change the real estate business has witnessed in the last five years. Square feet rates in posh areas like MVP Colony, Lawson's Bay Colony, Kirlampudi Layout, Seetammadhara, Beach Road, Dasapalla Layout, Asilmetta and Dwaraka Nagar used to be Rs 2,200 five years ago. Now, the prices have shot up to Rs 3,800-4,500 a square feet.

In middle-class localities like Madhavadhara, Murali Nagar and Akkayyapalem, the rate is Rs 3,000/sq.ft. Even in areas like Madhurawada, Kommadi, PM Palem, Gajuwaka, Kurmannapalem, Sheela Nagar, Duvvada and Sagar Nagar square feet prices have gone from Rs 1,500 to Rs 2,000-2,500.

Realtors say that, in the city, a two-bedroom apartment measuring 1,000 sq.ft. would not come for anything less than Rs 30 lakh. On the outskirts, the same apartment can be had for Rs 20 lakh. With the suburban property market thus becoming hot, there has been a two to three-fold increase in registrations in Sabbavaram, Narsipatnam, Nakkapalli, Chodavaram and Anandapuram mandals.

However, despite skyrocketing prices, a member of the real estate developers' organisation said that they were selling 5,000 to 10,000 flats in the city.

Source: http://timesofindia.indiatimes.com/city/hyderabad/Price-edge-drives-realty-boom-on-Vizag-outskirts/articleshow/11692688.cms

Realty firms start mega asset sales

Real estate companies across cities, pushed into a corner, have kicked off plans on an unprecedented scale to sell assets so they can trim their bulging debt and generate cash flows.

About a dozen large developers, including the country’s top realty firm, DLF Ltd, are raising about Rs.15,000 croreby monetizing their assets,according to estimates by Mint.

Real estate analysts say that while the rush to sell assets resembles what transpired after the slowdown of 2008, this time it is more widespread. Earlier, it was mostly DLF and Unitech Ltd that wanted to exit largely non-core assets in non-prime markets, but now even mid-size builders are trying to sell assets they don’t want to develop immediately.

“Developers looking at asset monetization today require capital for paying off bank liabilities in a scenario where sales are slow. And secondly, many are in a consolidatory mode where they don’t want to keep futuristic land parcels,” said Rajiv Sahni, partner (real estate practice), Ernst and Young India, a consultancy. “The good part is that there are buyers such as private equity (PE) funds and developers, too, for such assets today, unlike then.”

In December, US PE firm Blackstone Group bought a Pune special economic zone from DLF and Hubtown Ltd (formerly Ackruti City Ltd) for Rs.810 crore. In January, property firm M3M India Ltd bought 28 acres of land in Gurgaon from DLF for Rs.440 crore.

A spokesperson for Blackstone said that with “equity markets virtually closed and banks becoming increasingly choosy about debt financing, many developers are facing tight liquidity conditions. This is putting pressure on them to liquidate some of their non-core assets and land and focus on executing current projects under development”.

Many small- and medium-size developers that are not leveraged are scouting for such deals as these assets come at a bargain, said Kunal Banerji, president, marketing, M3M India. “While M3M already has a 600-acre landbank in and around Delhi, if we find opportunities, the strategy would be to acquire them for future growth because the company is cash-rich,” he said.

DLF, which had a debt of Rs.22,519 crore at the end of September, raised Rs.3,480 crore by selling non-core assets in the first two quarters of this financial year. DLF’s plan is to raise about Rs.10,000 crore through this route over the next few years, Mint reported in January.

DLF and Hubtown didn’t respond to Mint’s queries on their asset sale strategies.

While “non-core” remains a debatable and subjective term, analysts argue that not all assets that are on the block are non-core.

Parsvnath Developers Ltd, for example, has put up for sale a 1.5-acre plot in the heart of Delhi, in Connaught Place, to raise Rs.700-800 crore to cut debt. It had bought the plot three years ago. Parsvnath had a debt of Rs.1,200 crore as at end-September.

Parsvnath chairman Pradeep Jain said the firm has so far monetized assets worth Rs.400-500 crore and will continue to do so, even as it plans new projects. “Going forward, we intend to monetize some of our assets in southern and western India and the capital will all be used for debt repayment,” said Jain.

With the next six-nine months expected to remain difficult for the realty sector and a significant portion of debt due for repayment, defaults by some unlisted companies are unavoidable, say analysts.

“Lack of demand and slow sales, coupled with a liquidity crunch and a debt pile-up, make it look like the slowdown will last longer this time” for real estate developers, said Ambar Maheshwari, managing director, corporate finance, at Jones Lang LaSalle, a property advisory,

Housing Development and Infrastructure Ltd (HDIL) and Emaar MGF Land Ltd, which have debt of Rs.3,900 crore (at end-September) and Rs.4,217 crore (at end-December), respectively, too, are negotiating the sales of some assets, including land meant for township projects, according to property analysts.

HDIL is not only looking to monetize assets in places such as Kochi, far from its comfort zone Mumbai, but also in suburban Mumbai, where it has land, said an HDIL official who didn’t want to be identified. “We already have land and have sold FSI (floor space index, or development rights) as a business model, and there are several unlisted developers who want to acquire landbank to grow,” he said.

An Emaar MGF spokesperson declined to comment on the sale strategy.

Source: http://www.livemint.com/2012/01/29210316/Realty-firms-start-mega-asset.html?atype=tp

Investment in real estate seeing a change

Investment in real estate has seen a change in investors' mindset. Apart from owning a house, people are increasingly looking to buy a second property to earn some investment income out of the property.

And, when it comes to buying a house purely from an investment point, choosing the right city or location becomes most important.

"The focus should be on properties that have potential for assured rental yields and capital appreciation.

This includes residential projects close to workplaces and industrial hubs," says Om Ahuja, CEO - Residential Services, Jones Lang LaSalle India.

Source: http://economictimes.indiatimes.com/quickiearticleshow/11646019.cms

Property prices up by 30% in Chennai

From last several months residential property rates are going through the roof for several months, but according to the fresh reports at the end of the September was 30percent comparatively with the last year.

According to the NHB Residex, an RBI-supervised mechanism that tracks housing prices in approx 15 cities said that “Chennai central business district f\has witnessed of huge rise in prices due to the uptrend in housing demands.” Though in North Chennai there is fall in property prices in the following areas Tondiarpet, Perambur, Dr Radhakrishnan Nagar and Narayanappa Garden due to the slow progress in projects.

In spite of country is facing economic slowdown, rising interest rates and recession property rates in the region are going upward- Anna Nagar, Kilpauk, Nungambakkam, T Nagar and Adyar have been rising. In Nehru Nagar, Chepauk and Marina areas prices rise to 62% comparatively last June. As per the market experts, Chennai’s property will see the robust growth in the forthcoming quarters. However, property prices in the region have plunged to 9% in the 3rd Quarter comparatively to the quarter ended June.

Whereas several market watchers said that, the demand for residential units in Chennai is likely to see a compounded annual growth rate of 11% during 2011-2015.

Source: http://www.accommodationtimes.com/real-estate-news/property-prices-up-by-30-in-chennai/

Realty check

In case you are giving into the positive vibes of 2012 and have decided to invest in a home, these are a few things you need to be on top of

At end of a destructive interest rate cycle that wrecked havoc on property market, the New Year has brought in a ray of hope. If you have given up on the age-old leasing-versus-owning conundrum and finally made a New Year resolution to buy your dream home, 2012 is full of promises. There is a dip, albeit minor, in property rates across the country, while home loan rates are all set to fall from their peaks. On the other, property developers have begun the year on a high note, getting busy with an array of new projects.

So the year marked by prohibitive property prices, sharp rise in home loan rates and overall inflationary pressures has just passed by. Property prices across major cities such as Mumbai, Bangalore, Chennai and NCR have dropped, according to industry experts, by up to 10 per cent. A cursory perusal of property markets across the country brings to the fore enormous hope for house hunters. What is more, the Reserve Bank of India (RBI) has signalled a pause in interest rate hikes. This actually could be the best time to start thinking of buying a home.

To make things easier for you,

FC Build brings to you the dos and don’ts

of house hunting and deal striking, with

the help of experts.

Pocket size

Obviously, the most important factor is your budget. Your budget will determine your location, size and the builder. According to Surinder Chopra, managing director of SCSL Buildwell, the first thing would be to figure out one’s loan eligibility from a housing loan company or a bank. “The best way would be to look at your resources and decide how much you can put in as down payment. That will help you do a back calculation and decide what budget you should have while looking for a home,” says Chopra.

Experts have also been recommending purchasing a house even as average home loan interest rates moved up from 9 per cent to 11.5 per cent in the last 18 months. Their logic is that even if one starts paying high interest rates, because such loans are of long tenures of 15-20 years, there would be cycles when the rates would come down.

Typically, one can only avail a maximum loan of 80 per cent of the property value. You need to pay 20 per cent of the total amount upfront to the developer. Though EMIs are restricted to 40 per cent of one’s salary, they could fluctuate if you have opted for floating rate loans. And, therefore, you have to be pragmatic in deciding what kind of lifestyle you and your family would be comfortable with and can afford to buy and maintain. Making a decision to buy a villa, apartment, individual house, an executive floor or, for that matter, deciding between living in the inner city and a

suburb, all are a lifestyle

decision.

Market research

Chopra segregates potential buyers in two categories — the first category are those who need the residences for their own use and second, those who consider realty sector as an investment option. But both categories should do their groundwork. There is always internet to begin with. With just a few clicks of the mouse, homebuyers can search through hundreds of online listings, view virtual tours and sort through dozens of photographs and aerial shots of neighbourhoods and homes. Om Ahuja, CEO (residential services) of Jones Lang LaSalle India says, “Find out what the prices for a given location were a year ago, what they are now and where they are headed in a year from now. Establish what properties of the same size and configuration with similar facilities and amenities are selling for in the immediate neighbourhood.”

Many decide on the advice of someone they know. But it is always better to do one’s own research while buying a home. Looking at property supplements and trade magazines would be good idea to have an overall view of the market conditions. These will also help you in comparing prices of various properties you are intending to buy. Just remember, by the time you reach your real estate agent's office, you are halfway to home ownership.

Getting the location right

No one will blame you if do not want to invest in the middle of nowhere. But, as Chopra points out, with demand for housing in the urban areas has been growing more or less on geometrical progression, staying inside the city may not be an affordable option. True, one always wants a place near work, near the kids’ school, shopping centre and other conveniences. Perhaps, finding out what’s going to come up in the area in future and to what extent things have been planned out could be a good compromise. “The location is a matter of personal choice and convenience, and also a function of one’s budget. Both have to match for the right location to emerge,” Ahuja concludes.

Amenities

You get the property brochure and you get to see the sample flat. There’s a difference between the two. According to Chopra, sample flats are based on project developer’s imaginations as to what you can do with the flat, if you buy. The sample flat represents the artistic presentations of living and other spaces depending on the ability of the interior designer. But the buyer should look for the airiness, availability of sunlight, the quality of visible material used in floors, windows, doors, the fittings in bathroom and kitchen. The placement of water facility, garbage disposal, storage provided, quality of electrical; size and speed of elevators in case of high-rise and movement area outside your flat —all have to be considered carefully.

Any alteration would mean money and time. You should talk to a professional to understand what the finishes in the specification list mean and look like. According to Ahuja, it is important to establish how much the builder is charging for common areas over and above the carpet area, where and how parking is allotted and also how much space is left open. For those who believe in vastu or feng shui, the orientation of different flats within the project can also be identified from layout plans.

Background check

Once you have zeroed in on a project, it is important to look at the track record of the builder. Finding out about the builder’s last few projects would be the best way to judge. Background check of builders is the most difficult thing to do, says Chopra. More than market rumours, information from media, bank approvals and the possibility of monitoring should be trusted. The customer can visit the office of the builder and also can talk to him directly. They can check the financial strength and the background of the people involved in the project from market sources, suppliers and infrastructure at the site.

Consulting a reputed and unbiased property advisory firm and checking internet, paying particular attention to blogs that make reference to the builder and his projects, would also be helpful, adds Ahuja.

2012 goodies

RK Arora, chairman and managing director of Supertech says, “We are optimistic about 2012 as we foresee a lot of demand, be it in the residential or commercial segment.” Also expecting good prospects for the real estate industry in 2012 is Snehdeep Aggarwal, founder-chairman of Bhartiya Group. “If there is a right product, there will be demand for it. Interest rates will not be a deterrent for homebuyers,” says Aggarwal. Ashwani Prakash, executive director of Paramount Group adds that 2012 seems to have started on a right note, providing relief to the industry. The market, according to him, is settling down and customers are out again to fulfil their residential requirements.

While 2011 will be remembered as the year that saw interest rate hikes to 13 per cent on home loans in 12 months, 2012 seems to have ushered in a lot of optimism in the market.

Source: http://www.mydigitalfc.com/real-estate/realty-check-374

Real Estate Players Expect Gloom to Continue

Mumbai: The real estate industry, which saw unsold inventory and rising debt burden in 2011, expect the glut to remain this year as well.

Analysts, however, expect an improvement in terms of completion of existing projects, as they are likely to focus on execution and timely delivery during the new year.

The year 2011 witnessed higher unsold inventories and delay in project execution due to continuous rate hikes by the Reserve Bank of India, forcing buyers to delay purchases, which led to a liquidity crunch for developers and high construction cost due to increasing input prices.

The realty industry is sitting on a debt pile of close to 45,000 crore as of now. This is despite the fact that the RBI had put in place a number of measures to prevent a bubble in the industry.

Gross bank lending to the real estate sector grew by 11.6 percent compared to 15.7 percent during the corresponding period last year. Similarly, the FDI inflow to the sector, too, showed a 26 percent decline even on annual basis.

In addition to this, regulatory bottlenecks such as delay in project approvals and land acquisition-related uncertainties also resulted in unease among developers, forcing them to go slow on new launches.

"The near-term outlook for residential real estate market is likely to remain cautious in 2012, given the likelihood of low market sentiment," said Samir Jasuja, chief executive, PropEquity. Besides, key market indicators, including absorption and new launches are likely to remain low given the execution concerns, he said.

Source: http://www.siliconindia.com/shownews/Real_Estate_Players_Expect_Gloom_to_Continue_-nid-101993-cid-6.html

Buyer-builder deadlock results in 65% less houses

The long standing stalemate in the residential sector has made a heavy dent in new residential projects this year with 65 per cent less projects being launched this year as compared to last year.

According to data released by property consultants Knight Frank, in 2011 only 19,470 residential units were launched in Mumbai as against 54,968 units in the previous year. The report states that the dwindling launches clearly point towards “the lack of buyer interest in the extremely expensive Mumbai property market” and the fact that builders “remained in a denial mode with respect to lowering the prices”. Also, the unsold inventory in Mumbai is high at 32 per cent (i.e. 40,660 housing units).

In addition to the handful of new launches and slack transaction, the year has also been witness to stubbornly high property prices. According to Pranab Datta, vice-chairman and managing director, Knight Frank India, the deadlock between the buyers and developers should break in favour of buyers. “As this happens, the pent up demand from the section of buyers that are sitting on fence in anticipation of price correction would translate into improved fortunes for residential property market,” he said. He added that employment scenario, inflation and interest rate will also have a bearing on the overall sentiment of buyers. Across seven cities in the country including Mumbai, NCR, Bangalore, Hyderabad, Pune, Kolkatta and Chennai, the residential segment saw a decline of 52 per cent in new launches as compared to last year.

Source: http://www.indianexpress.com/news/buyerbuilder-deadlock-results-in-65-less-houses/892931/