Thursday, March 25, 2010
Saturday, March 20, 2010
Thursday, March 18, 2010
Buyers of second homes back in Delhi NCR
Second homes are now a revived real estate category and all class of buyers are active here.Brix Research finds out why
Girish Bindra bought a single-floor apartment in South City for Rs 73 lakh.With registration of single floors restarted in Gurgaon market,he wanted to beat the rush and purchase a home that would remain affordable.It also helped that Delhi Metro's soonto-be-opened Sector 29 station is a mere walking distance away.For Bindra,who had been scouting markets for a while,it made sense to strike before property prices went out of control.A critical third factor was that rental values are not showing signs of abating.For a well-maintained home,there are always takers and a walking distance from Metro line is an added advantage.Bindra is by no means an exception.
Real estate developer and asset management company,Alpha G: Corp,is currently in the process of handing over plotted development of 141 acres in Phase-I of Alpha International City,Karnal.Just a two-hour drive from Delhi,and close enough to Chandigarh,the group found among its buyers an interesting mix of users.
For some young couple from established families in Karnal,it was a weekend option to get away from the crush of living in a joint family.The Alpha City home was their small nest where they experienced nuclear family comfort.For some others from Delhi and Chandigarh,it was a weekend or holiday home accessible in under two hours from the city of their work.The scenic surroundings,the pleasant drive,the impeccable infrastructure and availability of water and electricity in abundance made this a good second home option.
So what is a second home Rohit Gera,executive director of Pune-based Gera Properties,says: "People buy second homes either for an investment or to upgrade to a larger home,with better facilities,amenities or a better location.Most second homes are in the same city,but probably in a new upcoming suburb,which offers better infrastructure and amenities.If they buy in some other city,it will be due to the exposure they have had to that place before.They would have studied,lived or worked there."
This is borne out by Aplha G: Corp's experience in Karnal.S K Sayal,director & CEO of Alpha G: Corp,says: "Extensive research done by our team before the launch revealed very clearly that there was an ever-increasing aspiration and demand for more wholesome and organized lifestyle among adults,as well as children in families of Tier 2 & Tier 3 towns,as also people from Delhi and Chandigarh.They seized this opportunity for a second home in a destination deemed as a premium investment opportunity in real estate."
Gera's observation seems to be bang on target.For Prince Khattar,who purchased a small two-bedroom apartment in Gurgaon in 2003,this seems to be the right time to upgrade.The money he gets from selling his existing flat becomes seed money for a newer apartment and having finished his first home loan,he is ready to take on a new home loan to meet the shortfall in the second property.The stabilizing values give him confidence to do so.
For Mamata and Anil Saxena,a second home did not necessarily mean a place that was at an easy driving distance from the city.They chose one in the heights of Geeling in the Himachal."We wanted a place away from radio,television,close to nature and one which is still to be made motorable."It helped that their present home in Nirvana city already has all benefits of spacious layout and likeminded neighbours.Therefore,the forbidding drive to Geeling became pleasurable for them.
A third category buying a second home,Sayal found,are "NRIs looking to trace their roots with an option to invest in their country of origin with all the amenities and comforts of a truly international lifestyle here."This is a segment that most developers today are targeting.NRIs are game to purchase in areas that have future potential and are well-connected from international airports.For Shailaja and Kishore Nair,a home in Gurgaon near their relatives' homes meant they could drive there straight from the airport when they returned home for holidays from Singapore."It is a pleasure to stay in your own house,than stay with relatives,"says Nair.
For Anup Nair,the purchase of a premium apartment has given him the option to switch to apartment living whenever he decides to do so.Currently staying in a premium villa in Gurgaon,he has used his surplus resources to purchase an apartment in a condominium to be used whenever they decide.
The parameters for an investor are slightly different,as an investor will buy into a location which is slated for robust development and promises a good return on investment."They prefer locations that are closer to large work places like IT parks or industrial centers that would generate yields or capital appreciation,"explains Gera.
Today,in a stable real estate market,there are all these categories of buyers actively scouting for good deals.And many are finding the house of their dreams yet again.
Girish Bindra bought a single-floor apartment in South City for Rs 73 lakh.With registration of single floors restarted in Gurgaon market,he wanted to beat the rush and purchase a home that would remain affordable.It also helped that Delhi Metro's soonto-be-opened Sector 29 station is a mere walking distance away.For Bindra,who had been scouting markets for a while,it made sense to strike before property prices went out of control.A critical third factor was that rental values are not showing signs of abating.For a well-maintained home,there are always takers and a walking distance from Metro line is an added advantage.Bindra is by no means an exception.
Real estate developer and asset management company,Alpha G: Corp,is currently in the process of handing over plotted development of 141 acres in Phase-I of Alpha International City,Karnal.Just a two-hour drive from Delhi,and close enough to Chandigarh,the group found among its buyers an interesting mix of users.
For some young couple from established families in Karnal,it was a weekend option to get away from the crush of living in a joint family.The Alpha City home was their small nest where they experienced nuclear family comfort.For some others from Delhi and Chandigarh,it was a weekend or holiday home accessible in under two hours from the city of their work.The scenic surroundings,the pleasant drive,the impeccable infrastructure and availability of water and electricity in abundance made this a good second home option.
So what is a second home Rohit Gera,executive director of Pune-based Gera Properties,says: "People buy second homes either for an investment or to upgrade to a larger home,with better facilities,amenities or a better location.Most second homes are in the same city,but probably in a new upcoming suburb,which offers better infrastructure and amenities.If they buy in some other city,it will be due to the exposure they have had to that place before.They would have studied,lived or worked there."
This is borne out by Aplha G: Corp's experience in Karnal.S K Sayal,director & CEO of Alpha G: Corp,says: "Extensive research done by our team before the launch revealed very clearly that there was an ever-increasing aspiration and demand for more wholesome and organized lifestyle among adults,as well as children in families of Tier 2 & Tier 3 towns,as also people from Delhi and Chandigarh.They seized this opportunity for a second home in a destination deemed as a premium investment opportunity in real estate."
Gera's observation seems to be bang on target.For Prince Khattar,who purchased a small two-bedroom apartment in Gurgaon in 2003,this seems to be the right time to upgrade.The money he gets from selling his existing flat becomes seed money for a newer apartment and having finished his first home loan,he is ready to take on a new home loan to meet the shortfall in the second property.The stabilizing values give him confidence to do so.
For Mamata and Anil Saxena,a second home did not necessarily mean a place that was at an easy driving distance from the city.They chose one in the heights of Geeling in the Himachal."We wanted a place away from radio,television,close to nature and one which is still to be made motorable."It helped that their present home in Nirvana city already has all benefits of spacious layout and likeminded neighbours.Therefore,the forbidding drive to Geeling became pleasurable for them.
A third category buying a second home,Sayal found,are "NRIs looking to trace their roots with an option to invest in their country of origin with all the amenities and comforts of a truly international lifestyle here."This is a segment that most developers today are targeting.NRIs are game to purchase in areas that have future potential and are well-connected from international airports.For Shailaja and Kishore Nair,a home in Gurgaon near their relatives' homes meant they could drive there straight from the airport when they returned home for holidays from Singapore."It is a pleasure to stay in your own house,than stay with relatives,"says Nair.
For Anup Nair,the purchase of a premium apartment has given him the option to switch to apartment living whenever he decides to do so.Currently staying in a premium villa in Gurgaon,he has used his surplus resources to purchase an apartment in a condominium to be used whenever they decide.
The parameters for an investor are slightly different,as an investor will buy into a location which is slated for robust development and promises a good return on investment."They prefer locations that are closer to large work places like IT parks or industrial centers that would generate yields or capital appreciation,"explains Gera.
Today,in a stable real estate market,there are all these categories of buyers actively scouting for good deals.And many are finding the house of their dreams yet again.
RBI rules out further rejig of realty loans
: The Reserve Bank of India (RBI), worried about soaring asset prices, has ruled out one more round of restructuring of bad real estate loans which may increase non-performing assets of banks, but bring down prices of homes as developers sell off properties to pay lenders, said at least two people familiar with the matter.
“Let them lower the prices and clear their inventory,” a senior RBI official had told bank chief executives ten days back. The banks were seeking permission continue classifying some bad real estate loans as standard assets even after developers failed to pay.
One more restructuring would rather be a boon for developers to hold on to prices and profit, while hurting consumers, the official had said.
“Banks are wary of the risk associated with commercial real estate because demand for commercial space such as malls has come down and (at the same time) there is a decline in demand in the residential sector across all income groups,” said AC Mahajan, chairman and managing director of Canara Bank. “This problem cannot be solved by repeated restructuring of loans, but by reviving the market by lowering the price, making property more affordable and showing the customer some economic value in their purchases.”
The RBI allowed banks to restructure loans to both manufacturers and developers and continue showing bad loans as standard assets to save banks and developers from financial strain after the collapse of Lehman Brothers in 2008.
That was for only those loans where the borrower was regular in repaying dues until September 1, 2008 and where the bank was able to restructure it by March 31, 2009. While this helped banks and developers, consumers were at the receiving end since real estate companies held on to properties at high prices as they were not obliged to pay immediately.
The subsequent pick up in economic activity and the re-election of Manmohan Singh as the prime minister in May 2009 pushed up all asset prices, including real estate, to levels almost close to those prevailing before the credit crisis.
“There are signs that high levels of global liquidity are contributing to rising asset prices,” RBI governor Duvvuri Subbarao said on January 29 while reviewing the monetary policy.
The total outstanding loans of banks to the real estate sector stood at Rs 88,581 crore as of November 2009, according to RBI data. The asset classification norms, which decide when a loan is to be treated as a non-performing asset, are much stricter for non-manufacturing companies which includes property developers.
“Let them lower the prices and clear their inventory,” a senior RBI official had told bank chief executives ten days back. The banks were seeking permission continue classifying some bad real estate loans as standard assets even after developers failed to pay.
One more restructuring would rather be a boon for developers to hold on to prices and profit, while hurting consumers, the official had said.
“Banks are wary of the risk associated with commercial real estate because demand for commercial space such as malls has come down and (at the same time) there is a decline in demand in the residential sector across all income groups,” said AC Mahajan, chairman and managing director of Canara Bank. “This problem cannot be solved by repeated restructuring of loans, but by reviving the market by lowering the price, making property more affordable and showing the customer some economic value in their purchases.”
The RBI allowed banks to restructure loans to both manufacturers and developers and continue showing bad loans as standard assets to save banks and developers from financial strain after the collapse of Lehman Brothers in 2008.
That was for only those loans where the borrower was regular in repaying dues until September 1, 2008 and where the bank was able to restructure it by March 31, 2009. While this helped banks and developers, consumers were at the receiving end since real estate companies held on to properties at high prices as they were not obliged to pay immediately.
The subsequent pick up in economic activity and the re-election of Manmohan Singh as the prime minister in May 2009 pushed up all asset prices, including real estate, to levels almost close to those prevailing before the credit crisis.
“There are signs that high levels of global liquidity are contributing to rising asset prices,” RBI governor Duvvuri Subbarao said on January 29 while reviewing the monetary policy.
The total outstanding loans of banks to the real estate sector stood at Rs 88,581 crore as of November 2009, according to RBI data. The asset classification norms, which decide when a loan is to be treated as a non-performing asset, are much stricter for non-manufacturing companies which includes property developers.
Monday, March 15, 2010
Residential property prices may rise by 10 per cent: Cushman
NEW DELHI: Residential property prices are likely to rise by up to 10 per cent in the next six months as demand has picked up, says a realty consultant firm.
"Prices can rise up to 10 per cent in the next two quarters in the housing segment. In the last eight months, the segment has seen very robust demand," Cushman & Wakefield Executive Director (India) Ravi Ahuja told media on the sidelines of a CII real estate event here.
The country has seen and upswing in demand for both affordable and the premium housing segments, he added. "In 2009, the prices had gone up, on an average, 15-20 per cent across the country. The highest rise was in Mumbai and it was in the range of 30-40 per cent," Ahuja said.
He said other cities like Pune and Bangalore as well as the National Capital Region (NCR) witnessed moderate to sharp rise in prices in the residential segment. When asked about the role the forthcoming Budget could have on housing demand, Ahuja said, "If interest rates go up, then the purchasing power of consumers will go down and sales may be affected. We may see a correction in prices then."
"Prices can rise up to 10 per cent in the next two quarters in the housing segment. In the last eight months, the segment has seen very robust demand," Cushman & Wakefield Executive Director (India) Ravi Ahuja told media on the sidelines of a CII real estate event here.
The country has seen and upswing in demand for both affordable and the premium housing segments, he added. "In 2009, the prices had gone up, on an average, 15-20 per cent across the country. The highest rise was in Mumbai and it was in the range of 30-40 per cent," Ahuja said.
He said other cities like Pune and Bangalore as well as the National Capital Region (NCR) witnessed moderate to sharp rise in prices in the residential segment. When asked about the role the forthcoming Budget could have on housing demand, Ahuja said, "If interest rates go up, then the purchasing power of consumers will go down and sales may be affected. We may see a correction in prices then."
Is it time to buy your dream home?
With the economy giving indications of a recovery, the question as to whether this is the right time to buy property has yet again surfaced.
However, the answer as to whether this is the right time to buy, is not a simple yes or no, but depends on a number of factors like whether a buyer is looking for a first or second house, for living or investment and if it is an investment, whether it will be a long-term or short-term one, etc.
If we consider two property hotspots in the country, Delhi-NCR and Mumbai, it has seen two booms and two slumps in the last decade. The ups and downs may continue, regardless of prevailing market sentiments, depending on the project, geographical locations and various other factors.
Although developers have launched a slew of 'affordable houses', the dimensions and specifications of these new offerings are lower than those of earlier apartments. Swayed by the highway billboards, television producer, Preeti Banerjee went on a house hunting spree.
What she was offered with the new affordable launches was not only a cut in the per sq ft prices, but also reduced size of apartments by almost 30-40 per cent. She soon realised that "The combined effect is that prices of these so-called 'affordable apartments' have not gone down, as low as they may appear," she cautions.
From a macro economic perspective, these booms and slumps predominantly affect active investors and traders in property, who want to make money on every deal they make. The dilemma of whether it is the right time to buy, is always there for those who are looking for their first home.
Even when the market was worst hit by the recession, there were good deals in the market for those looking to invest in property. If the fundamentals are strong, i.e., where the property has clear title, is in an area where growth is expected and where prices have already corrected, then one may opt for buying.
Realty companies assert that the prices have reached the bottom and will only move northwards, hereafter. "In a demand-supply mismatch scenario, the prices have to go up, unless there is a case of more land being released," says DLF spokesperson, Sanjey Roy. "Moreover, it is a myth that the buyers are staying away from the market. Even in the recession-hit market, in FY 2008-09, DLF managed to sell more than 8,000 flats," he shares.
All realty experts agree that the days of speculation are over. Property prices are determined by the fundamentals of demand and supply, added with civic amenities and growth potential of the geographical region. The demand in the market had skyrocketed when the economy was doing well, new jobs were being created and salaries were going up. The emergence of the suburban housing market gave people an opportunity to buy property at relatively lower prices and mortgage loans were available at lower rates.
However, the answer as to whether this is the right time to buy, is not a simple yes or no, but depends on a number of factors like whether a buyer is looking for a first or second house, for living or investment and if it is an investment, whether it will be a long-term or short-term one, etc.
If we consider two property hotspots in the country, Delhi-NCR and Mumbai, it has seen two booms and two slumps in the last decade. The ups and downs may continue, regardless of prevailing market sentiments, depending on the project, geographical locations and various other factors.
Although developers have launched a slew of 'affordable houses', the dimensions and specifications of these new offerings are lower than those of earlier apartments. Swayed by the highway billboards, television producer, Preeti Banerjee went on a house hunting spree.
What she was offered with the new affordable launches was not only a cut in the per sq ft prices, but also reduced size of apartments by almost 30-40 per cent. She soon realised that "The combined effect is that prices of these so-called 'affordable apartments' have not gone down, as low as they may appear," she cautions.
From a macro economic perspective, these booms and slumps predominantly affect active investors and traders in property, who want to make money on every deal they make. The dilemma of whether it is the right time to buy, is always there for those who are looking for their first home.
Even when the market was worst hit by the recession, there were good deals in the market for those looking to invest in property. If the fundamentals are strong, i.e., where the property has clear title, is in an area where growth is expected and where prices have already corrected, then one may opt for buying.
Realty companies assert that the prices have reached the bottom and will only move northwards, hereafter. "In a demand-supply mismatch scenario, the prices have to go up, unless there is a case of more land being released," says DLF spokesperson, Sanjey Roy. "Moreover, it is a myth that the buyers are staying away from the market. Even in the recession-hit market, in FY 2008-09, DLF managed to sell more than 8,000 flats," he shares.
All realty experts agree that the days of speculation are over. Property prices are determined by the fundamentals of demand and supply, added with civic amenities and growth potential of the geographical region. The demand in the market had skyrocketed when the economy was doing well, new jobs were being created and salaries were going up. The emergence of the suburban housing market gave people an opportunity to buy property at relatively lower prices and mortgage loans were available at lower rates.
Saturday, March 13, 2010
Real Estate:: Recovery in Reality
Residential markets across major cities of India have seen significant appreciation in values towards the close of 2009. This trend is most prominent in NCR and Mumbai, the two key residential markets in India, where values in Oct-Dec 2009 appreciated, compared to the same period the year before, says Cushman and Wakefield in a report.
The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilise but will remain within acceptable range.
The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3% to 25% over the previous year. Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well.
NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown , which created a kind of uncertainty in the job markets. The best outcome of the slowdown is the emergence of affordable housing in the country.
At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.
Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction.
The report said, there was a clear shift towards readyto-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.
In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech , which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days.
The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.
The report said that recovery in NCR and Mumbai is a definite precursor to the expected trends in 2010. However, it would be premature, the report adds, to predict a bounce-back for the entire sector. The other markets which are still witnessing some correction are expected to stabilize only in the next 3-6 months. These are expected to see positive signs of recovery by the middle of this year, when values across the board would stabilise but will remain within acceptable range.
The average increase in capital values in various micro-markets in these two metro areas has been in the range of 3% to 25% over the previous year. Most micro-markets in these two cities have recorded stable to appreciating capital values over the last quarter as well.
NCR and Mumbai have shown a faster recovery than other cities due to the fact that these are high-demand markets, both from end users and investors, who were holding back their requirements as a result of economic slowdown , which created a kind of uncertainty in the job markets. The best outcome of the slowdown is the emergence of affordable housing in the country.
At the same time, the strong recovery in the economy led to sharp upward correction in the capital values for mid-ranged housing due to the quantum of demand and affordability.
Certain broad trends that were noticed across cities were that peripheral and the suburban markets witnessed the highest correction but were also one of the first markets to bounce back, C&W says. Another shift in the trend is the rise in demands for properties under construction.
The report said, there was a clear shift towards readyto-move-in properties during the beginning of the year, when there was uncertainty on the capability of a developer to complete a project. But that has receded now resulting in a rise in risk appetite for properties under construction.
In the NCR region, demand for affordable housing in the range of Rs 20 lakh to Rs 40 lakh could be understood from the fact that a number of projects completely sold out within a couple of days of their launches. Recently, in Noida, Supertech , which launched apartments for Rs 9.75 lakh, (this is the first project in NCR for sub-Rs 10 lakh) could sell around 500 apartments in a couple of days.
The new trend has led to increase in the volume of transactions. Supertech CMD, R K Arora, says that the developers have now shifted to high-volume business from high margin ones. However, he also pointed out that this became possible because of the relaxation in the density norms (number of apartments allowed to be constructed on a given area). Therefore, the construction activities are set to rise in 2010.
Friday, March 12, 2010
Subscribe to:
Comments (Atom)