Interest from international real estate investors in Indian real estate has been limited in 2012. India has witnessed 6% q-o-q growth in direct commercial real estate in Q1 2012, as compared to China which has seen negative growth of -45%, however China performed better in Q2 2012 on the back of one mega deal. In Brazil, investment volumes seem to be reaching a more ‘normalised’, sustainable pace following the supercharged 2010-2011 period.
Seeking to fight the vexed VAT issue on flats in Maharashtra, a consumer group called FORAM–Flat Owners’ Rights protection Action committee in Maharashtra – has been formed with consumer interest groups coming together.
Price rationalisation has always been a tricky issue in real estate business where demand and supply dynamics drive the market more than any other parameter. The fact that real estate is not a perishable commodity and mostly a business of deep pockets, holding of inventory many a time makes more sense than hard sell keeping in mind the pipeline visibility.
Chennai is known for its conservative mind-set, which reflects visibly on its residential property market trends, as well. For instance, home buyers in Chennai have historically been driven by location over and above most other considerations, and this had put definite limits on the demand and potential for community living in the city.
The RBI, on Tuesday, July 31, kept the repo rate or the rate at which banks borrow from RBI unchanged at 8% and also the reverse repo rate at which, the banks lend to RBI unchanged at 7%. However, it has lowered the statutory liquidity ratio (SLR) to 23% from 24% earlier. The realty sector, reeling under liquidity pressure and low demand due to high interest rate, has reacted sharply over this status quo.
Emaar Properties has reported a 44.35% jump in net operating profit of $332 million for the first six months of this year. The company had posted an operating profit of $230 million in the January-June period of last fiscal. However, total income for the first six months of 2012 remained flat at $1.068 billion, Emaar Properties said in a statement.
Despite buyers’ expectations of a likely fall in city property prices, this possibility seems limited as developers continue to hold on to their prices across sub-markets on the back of the DCR amendment. This policy, along with the increase in construction costs, has led to greater pressure on developers’ margins. Post the new DCR, the saleable areas are expected to reduce and carpet areas are likely to increase. It is interesting to note that while there have, in fact, been marginal price increases across many projects in MMR, registration data reflects that absorption levels have also increased.
Red Fort Capital Advisors, a real estate private equity fund that manages more than $1 billion of Indian assets, plans to raise $500 million next year to invest in homes and offices in Asia’s third-largest economy.
Godrej Properties Ltd. (GPL) has signed a Memorandum of Understanding (MOU) with Axis Bank to offer a special scheme to customer of all GPL projects which have been approved by Axis Bank for home loan purposes.
Anticipating a significant rate cut by the RBI, disappointed real estate community has ring alarm bells and forecast more slump due to the high interest rate regime. Pointing out that the capital and labour intensive sector plays a key role in employment generation and accelerating growth, industry body CREDAI says the government has also been losers of revenue due to neglect of the sector and risks attributed to real estate and the RBI advisories against lending to real estate have only harmed the sector and made housing costlier for consumers, apart from affecting the economy.