Pune maintain its status as one of the best housing market in india : JLL

Even in the flat growth environment, Pune has maintained its status as a safe residential realty investment destination. The average capital value appreciation rate in Pune is projected to be in the range of 12-15 per cent for the year ahead. With areas such as Hinjewadi, Marunji Road, Kharadi and its surrounding areas to see maximum appreciation in the next one-two years, said a report from property consultancy firm Jones Lang LaSalle (JLL) India.

Cities like Delhi, Mumbai, Bangalore, Hyderabad and Chennai have been witnessing extreme volatility in terms of demand and supply over the last two years.

With assured returns on houses at a constant rate of year-on-year appreciation, Pune has been a favourite location with investors who are averse to high risks, said the report. Delhi NCR's residential real estate prices saw massive depreciation during the last two years while Mumbai has witnessed a marginal appreciation in the same period.      

The Report says that overall, demand as well as the number of residential project launches in Pune reduced in 2014. It also emerged that the city is a largely mid-segment market when it comes to residential property. The ‘sweet spot’ for buyers in this segment lies between Rs  4,500 and Rs  5,200 per square feet (psf). In other words, a 1,000 sq ft flat costing about Rs  50 lakh forms the median ticket size in the city.  "Pune’s ‘mid-segment market’ categorization also stems from the fact that most buyers prefer to book houses in the pre-launch stage, especially at rates around Rs  4,600 psf. Sales went down in projects located in and around suburban Hinjewadi once a price level of Rs  5,500 psf was reached. Interestingly, township projects are in great demand with buyers and investors - but here too, buyers prefer to book properties during the pre-launch stages", said Sanjay Bajaj, managing director, Pune, JLL India.  

"Some other cities in the country witnessed a very high rate of appreciation while the Pune real estate market in comparison showed steady appreciation. As a result when other cities have seen a sharp correction this volatility was not experienced in Pune because the Pune market did not have runaway price increases. The current market situation is seeing caution being exhibited by a section of home buyers and as a result there has been a reduction in the total sales. We find that home buyers continue to be keen on achieving the dream of owning a home and at the same time see value in building their assets through payments of EMI rather than paying rent," said Rohit Gera, vice president  CREDAI, Pune Metro and managing director, Gera Developments.

Small homes are most sought after by buyers in chennai market

       Chennai seem to have changed their preference from large and medium sized houses to smaller ones 

According to data released by the Reserve Bank of India, the proportion of homebuyers seeking loans from banks and housing finance companies for smaller houses measuring 750sqft and below has gone up significantly in the third quarter of 2014 (September to December). Till September 2014, the preference was for medium-sized houses measuring between 750sqft and 1,200sqft.

 

Till September 2014, only around 24% of the loans sought by Chennaiites were for small houses. A majority of the loans (around 46%) were for medium houses and the rest (around 30%) for large houses measuring more than 1,200sqft. But between September and December 2014, the trend changed with around 48.9% of the home buyers seeking loans for smaller houses, 27.5% for medium and 23.5% for large houses.

It is significant to note that prices of apartments have risen by 11.2% in Chennai during the period, while in other cities like Mumbai homes have become cheaper. The trend of people opting for small houses was seen only in Chennai among the 13 cities from which data was compiled.

 

During the period, only 5% to 6% of the home buyers sought loans for smaller houses in Bengaluru, 37% to 38% for medium houses and the rest for large houses. The pattern has remained same in the garden city in comparison to the previous quarters.

 

"The trend has changed in Chennai definitely in the last two quarters. Till recently most of the builders were concentrating on the creamy layer and constructing ultra, deluxe and large apartments with various extra facilities like swimming pool and gymnasiums. But now the builders need to shift their focus on lower and medium middle-class families who can only afford houses measuring 750sqft and below," said former Confederation of Real Estate Developers Associations of India (Credai) president N Nandakumar.

 

The main reason for people opting for smaller apartments is the steep increase in prices of homes. "Construction costs have increased several percentage points in the last two quarters. This is being passed on to the buyers in the form of higher prices," said Nandakumar.

 

As the property prices increase, the customers scale down their plans and go for single-bedroom apartments instead of double-bedroom houses. The RBI survey covered 35 banks and housing finance companies in Greater Mumbai, Chennai, NCR Delhi, Bengaluru, Hyderabad, Kolkata, Pune, Jaipur, Greater Chandigarh, Ahmedabad, Lucknow, Bhopal and Bhubaneswar.

 

Home buyers in Chennai seem to have changed their preference from large and medium sized houses to smaller ones — a response to a sharp increase in realty prices.

Godrej properties looking to liquidate their commercial assets to monetise Rs 2000 crore to reduce debt

Realty firm Godrej Properties is targeting to sell Rs 2,000 crore worth commercial assets over the next 2-3 years to reduce debt. 

The company also plans to launch 14 projects this fiscal and is exploring opportunities to add more projects for future development, Godrej Properties Managing Director and CEO Pirojsha Godrej said. 

"Our debt has increased to reach about Rs 2,750 crore at the end of the March quarter," Godrej told when asked about the company's debt position. 

"We hope to sell Rs 2,000 crore worth commercial properties over the next 2-3 years. This will be utilised to reduce our debt," he added. 

Mumbai-based developer is constructing a large commercial project 'Godrej BKC' in Mumbai. It is also coming up with commercial projects at Chandigarh and Kolkata. 

Godrej Properties, the realty firm of the Godrej Group, is currently developing residential, commercial and township projects spread across 108 million sq ft in 12 cities.

On proposed launches, Godrej said: "We will launch 14 projects this fiscal. About 7 will be greenfield projects and seven will be the new phases in the existing projects". 

He did not give any guidance for sales booking for the 2015-16 fiscal. 

The company had achieved a sales booking volume of 3.9 million sq ft worth Rs 2,681 crore in last fiscal. It achieved highest ever annual residential sales of 3.6 million sq ft worth Rs 2,400 crore in 2014-15. 

Godrej said the company is looking to add new projects during this fiscal through joint venture with land-owners. 

"We are exploring opportunities in the cities where we have presence. We are also looking at Delhi-NCR's micro-markets which include Noida," he added. 

During 2014-15 fiscal, the company added five new projects with about 8 million sq ft of saleable area. 

Godrej properties posted 20 per cent rise in consolidated net profit  to Rs 190.90 crore last fiscal as against Rs 159.43 crore in the previous financial year. Total income rose by 54 per cent to Rs 1,926.56 crore in 2014-15 fiscal from Rs 1,254.22 crore in the previous year. 

Housing price inflation has slipped to nearly four-year low to below 4 per cent

Housing price inflation has slipped to nearly four-year low to below 4 per cent, a survey by the Reserve Bank said today. 

These findings are based on a RBI survey covering transaction level data on housing loans disbursed across select 13 cities, from select 35 scheduled commercial banks/ housing finance companies. 

"The housing market witnessed an upward trend in prices during the past four and half years, as evident from the steady rise in RPPI (Residential Property Price Index) from 107 in first quarter of 2010-11 to 172 in third quarter of 2014-15, an increase of almost 61 per cent," RBI said in a statement. 

The highest growth in the index was in Jaipur at around 78 per cent, whereas the lowest growth was recorded in Greater Chandigarh and Hyderabad at around 40 per cent, it added. 

"House price inflation, as measured by annual growth in RPPI, witnessed its peak during 2012-13 and has declined in the recent period," it said. 

The survey revealed that house price inflation increased gradually from about 4 per cent in first quarter of 2011-12 to almost 28 per cent in third quarter of 2012-13. 

"However, the trend reversed thereafter and it slid below 4 per cent in third quarter of 2014-15," the statement said. 

The annual growth in housing price index and CPI-Housing Rent Index has been fairly similar in the last seven quarters, the central bank said. 

"It is observed that during FY13, house prices had been growing at a higher rate than that of housing rent. However, in the subsequent quarters, house price inflation and housing rent inflation moved hand-in-hand," the release said. 

The survey also observed a decreasing trend in median LTV (Loan-to-Value) over the quarters, indicating increased cautiousness of banks in sanctioning housing loans. 

Loan-to-value ratio is one of the macro-prudential tools used by banks to control their exposure to decline in house prices. 

The RBI has prescribed an upper limit of 80 per cent on LTV for housing loans above Rs 20 lakh and 90 per cent for housing loans up to Rs 20 lakh, respectively, with effect from December 23,2010. 

"Movements in median EMI-to-Income ratio, median House Price-to-Income ratio and median Loan-to-Income ratio, did not indicate any notable variation in housing affordability over the quarters," the survey said. 

The EMI-to-Income ratio measures the affordability of housing loan to the borrower. It is the portion of gross monthly income of the borrower used to pay monthly EMI. 

RBI had initiated an information system on housing prices through this survey.The property price data used in analysis is the valuation price of the property as appraised by the concerned bank/housing finance company (HFC). 

Metropolitan cities Bengaluru,Chennai & hyderabad rise up to 2% on Home sales in fourth quarter of the year

Home sales in the top six cities of India rose 2% sequentially in the quarter to March but were down 8% over the year ago quarter, according to data from property research firm Liases Foras.

According to Liases Foras, new supply in the quarter rose 21% over the previous quarter, and 36% of the new supply came in the cost range of Rs 50 lakh to Rs 1 crore, followed by 29% in the range Rs 25 lakh to Rs 50 lakh. Two bedroom units constituted 36% of the new supply, followed by three bedroom units at 35%. Bengaluru and MMR constituted 31% and 28% of the new supply, respectively. 

On a year-on-year basis, home sales fell 37% in the National Capital Region (NCR), while they were up 8% in Mumbai.

On a quarter-on-quarter basis, sales in Bengaluru were up 31%, while in Chennai and Mumbai they were up 24% and 25%, respectively. Sales in NCR were down 27%.

Hyderabad emerged the best performing market with a 46% year-on-year jump in home sales, followed by Pune, where sales rose 22%. Sales were up 5% in Bengaluru, while they were down 40% in Chennai.

Property prices in Bengaluru, Chennai, Hyderabad, the Mumbai Metropolitan Area, NCR and Pune remained stable both on year-onyear and quarteron-quarter basis.

Unsold housing inventory level in the top six cities rose further to 853.09 million sq ft, or about 650,000 apartments, in the January-March quarter from 832.09 million sq ft in the previous quarter.

Among all markets, NCR had the highest unsold inventory at 321.68 million sq ft, which will take about 71 months to get sold.

MMR was the next with 192.27 million sq ft that will take 46 months to be sold at the current pace of sales. Bengaluru was among the best performing markets among the larger ones with 152.43 million sq ft that will take 27 months to sell.

Prestige Estates projects ltd admit records sales booking at Rs 5,013 Cr for 2014-15 fiscal year

Realty firm Prestige Estates Projects Ltd today reported 13 per cent increase in sales bookings at Rs 5,013 crore for 2014-15 fiscal. 

"The company has for the year ended March 31, 2015, sold 4,058 residential units and 0.81 million sq ft of commercial space, totaling to 7.73 million sq ft, amounting to Rs 5,013.5 crore of sales, up by 13 per cent from that of FY'14," Bengaluru-based developer said in a filing to the BSE. 

Prestige said that its total collections during 2014-15 aggregated to Rs 3,884.3 crore, up by 32 per cent from the previous fiscal. 

The company launched 14.63 million sq ft of developable area during FY 2014-15 and has delivered 8.92 million sq ft of developable area during FY 14-15. 

Prestige Estates said it was able to deliver 8.92 million sq ft out of the targeted 10-12 million sq ft.

Realty regulator bill deferred once again for the consultancy of all parties

The introduction of the real estate regulator bill was deferred once again on Tuesday as the government said it was consulting all parties and would consider the demand by some Rajya Sabha MPs to send it to a select committee. This would mean that the establishment of the regulator for protecting home buyers would get delayed further. 

Samajwadi Party MP Naresh Agarwal asked why the bill was listed on Tuesday even as it was deferred last week. "Why is the bill included in the list of business?" he asked, adding that the government had not consulted any other political party although it had assured the House of the same. 

He also demanded that the bill cannot be referred to a joint committee since it is a property of the upper House. Leader of opposition in the Rajya Sabha Ghulam Nabi Azad said he and JD(U) functionary Sharad Yadav had also given a notice for constituting a select committee on the bill and that it should not be referred to a joint committee. 

Parliamentary affairs minister M Venkaiah Naidu said the bill was listed as it was pending from the previous day's business. "I am not pursuing the bill. I would like to consult political parties before taking a final view whether to refer it to the select committee or to do something else."

India looking for deeper engagement to the development of smart cities,industrial corridors & railways with ADB

                                                        New Delhi
Finance Minister Arun Jaitley on Monday sought "deeper engagement" of the Asian Development Bank (ADB) for development of smart cities, industrial corridors and railways as part of flagship initiatives such as 'Make In India' and 'Skill India'.

"India is expected to grow at 7.5-8 per cent in both 2015 and 2016. This only reaffirms India's fascinating growth prospects. In a time span of less than a year, our government has taken a number of steps to revive the economy. Our goal is to place the Indian economy on a high and sustained growth trajectory through focus on infrastructure development, skills development, improving ease of doing business and economic reforms, including comprehensive social safety net and fiscal discipline," he said.

Jaitley was speaking at the First Business Session of the 48th Annual Meeting of the ADB at Baku in Azerbaijan.

The ADB should aim at an annual business of $20 billion by 2020, he said, adding, "Twenty by Twenty should be (ADB's) corporate goal, the mantra ... ADB not only needs to become bigger, it also needs to become better, as a model among the MDBs (multilateral development banks)."

Observing that India is ADB's largest client, Jaitley said the partnership should now move to the next level.

American Real estate franchise coldwell banker planning to appoint 30 franchisees by 2015 in chennai

chennai

Real estate broking company Coldwell Banker India is planning to appoint 30 franchisees by the end of 2015 and take this to 100 by 2018, a senior company official said on Monday.

According to Mona Jalota, vice president for operations and strategy, Coldwell Banker India sees good potential in the Chennai residential market and would have its franchisees in place by September.

"The Indian operations were launched around six months back. We have nine franchisees till now and one master franchisee in Bangalore," Jalota told IANS.

Coldwell Banker India is the Indian master franchisee of the US headquartered Coldwell Banker Real Estate LLC.

According to Jalota, all the major international property consultants (IPC) are focussing majorly on commercial realty sector in Chennai and there are not many focussed on the residential segment.

"We hope to change that equation and promote the residential opportunities that the real estate market in Chennai has to offer to local residents and investors, as well as national and NRI (Non-Resident Indian) investors," Jalota said.

She said real estate prices in Chennai have remained largely stable with marginal increase of 2-5 percent.

Jalota said Chennai's residential market will exhibit steady growth in 2015. Rents and capital values are forecast to remain stable during the year, citing local property consultants.

She said the end users constituting 75-80 per cent of buyers primarily drive Chennai's residential market. This provides a strong foundation for a long-term investment in the city's residential market as it reduces market volatility.

"In the fourth quarter of 2014, Chennai witnessed the launch of 4,984 units compared to 4,175 in the previous quarter. The active vacancy in the market decreased to 56,900 units in Q4 from 57,111 in Q3," Jalota said.

VGN entered luxury segment by launching Rs 500 crore project

Residential property developer VGN Developers Pvt Ltd has entered the luxury apartment space segment by launching its Rs 500-crore VGN Presidency project here. Part of the project financing was from Edelweiss, said Pratish Devadoss, managing director of VGN Developers.

Spread in 1.5 acre in the middle of the city, the project has 72 three-BHK apartments of around 3500-sft space in 15 floors, including a club house.

The company has priced the property for Rs 18,999 an sft initially, and each apartment would cost around Rs 6.9 crore.

"We bought the land (which was with BSNL earlier) in an auction. We have paid Rs 195 crore," said Devadoss.

The company has already received bookings for 15 apartments before the official launch, and is expecting demand from customers in Mumbai and from overseas, including Singapore, Malaysia and the Gulf.

It is also planning to develop a large project in Guindy, with an expected cost of Rs 700 crore.

The company last year raised over Rs 600 crore from Clearwater Capital and Piramal Group, he said.

Relief for foreign investors as government revise MAT

The government provided some relief to foreign investors, clarifying on Thursday that minimum alternate tax (MAT) will not apply to capital gains on the sale of securities, royalty, technical service fees and interest income. This was part of amendments made to the Finance Bill by FM Arun Jaitley.

The relief is available only in those cases where the normal tax rate is below 18.5%, the rate at which MAT is levied, and will be available prospectively from the current fiscal, disappointing investors who were looking to the Finance Bill to roll back demands levied for previous years. The relief is available to all types of investors, corporates and private equity included.

Jaitley also eased MAT rules for real estate investment trusts (REITs) and Infrastructure Investments Trusts (InvITs).

The finance minister lowered the export duty on low-grade iron ore to 10% from 30% to boost exports from Goa and revive mining of the commodity in the state. The Lok Sabha later passed the Finance Bill by a voice vote, marking the end of the Budget process for the year.

The new rules will mean REITs and InvITs will not attract MAT when they are set up, clearing a big hurdle in the way of these instruments pitched as vehicles of big-ticket investment in real estate and infrastructure.

Jaitley also exempted from service tax the insurance component of key social sector initiatives such as the Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Jan Dhan Yojana as well as on general insurance business under the Pradhan Mantri Suraksha Bima Yojana.

Jaitley withdrew certain tax exemptions available to defence public sector units and ordnance factory boards to provide a level playing field to the private sector as part of a wider plan to spur the 'Make in India' manufacturing initiative.

Customs duty on raw silk was cut to 10% to address the duty inversion between silk yarn and fabric but that on natural rubber was raised to 25% from 20% to the protect the domestic industry.