As real estate prices shoot up and interest rates, the outlook for the sector does not look too bright. In its year-end report, Knight Frank has stated that new home sales in India have fallen by 25 per cent due to soaring prices. With the Reserve Bank of India tightening lending norms to developers and raising interest rates, the property market is likely to plumb new lows in 2011 as buyers disappear.
India’s growth story has many facets; one of the integral parts of growth – and arguably the most important one – is urbanization. In fast-growing economies, cities are significant investment and employment generators, which in turn carry the growth momentum forward. The sustainability and livability of any city depends largely on the quality of its infrastructure and real estate stocks. Needless to say, cities also require large sums of money to create urban asset stocks, including buildings and infrastructure.
It is single women and not the married ones who are the real demand drivers of the housing market in India. Contrary to the general perception that marriage is a catalyst for women to look up to house ownership, it is the single women across the cities of India that are more attracted to the property. The choices of single women are as much goaded by the safety of their own roof over head as with the investment horizon.
Bottom Line: There will be property revaluation in India post…
There had suddenly been a deafening silence when the RBI Governor Dr Raghuram Rajan recently asked the real estate developers to reduce the home prices. However, the economist in Rajan was not making a faux pass. He could rather see a supply side of bubble in the making. Therefore, he came harsh on the sector.
Track2Realty: Kolte-Patil Developers Ltd. has reported a jump of 115% in its net profit to Rs.26.40 crore for the first quarter ended June 30, 2013, compared to Rs.12.26 crore for the first quarter last fiscal. During the same period its revenue increased by 112% to Rs.219.43 crore from Rs.103.29 crore.
SRG Housing Finance Limited, a growing housing finance company with registered office atUdaipur in Rajasthan, proposes to enter the capital markets on 22nd August 2012 with a public issue of 35,04,000 of Rs 10 each. The Issue price for this IPO to be listed on SME platform of BSE has been fixed at Rs 20 per equity share of Rs 10 each. The Issue closes on 24th August 2012.
If the removal of indexation benefits with Long Term Capital…
As the Finance Minister Ms Nirmala Sitharaman announced to lower the LTCG (Long Term Capital Gains) from 20% to 12.5%, the stock market took a hit. The analysts across the financial spectrum immediately swung into analysis that the LTCG hike would adversely affect the stock market in the short term but big pocket investors won’t be affected as much as presumed. A section of financial wizards who understand the nuances of personal finance across the asset classes had even bigger a worry – Real Estate. Prima facie what looked like the LTCG being lowered from 20% to now at 12.5%, has in fact hurt the property market the most. Reason: the indexation benefit under Section 48 that is presently available for property, gold, and other unlisted assets have been now proposed to be removed.
The stock market in general and banks, realty stocks & shares of infrastructure finance companies in particular reacted sharply to the draft proposal of the Reserve Bank of India (RBI) that suggested tighter project financing norms of banks to project financing. The Indian real estate projects already weathering headwinds to attract project finance immediately swung into cost & benefit analysis. Though most of the leading developers were cautious in giving critical reactions, privately they all maintained that the RBI should have rather looked into the funding gap of the viable under construction real estate projects with cash receivables in the pipeline. A Track2Realty analysis.