Housing prices continue to rise

Graphic by Sandeep Bhatnagar/Mint

For all the talk of an economic slowdown and sluggishness in consumer spending, housing prices continue to rise. Barring Kolkata, home prices have continued to rise in most big Indian cities in the past seven quarters. Prices have increased although absorption of residential property declined by 16 percent in the first half of the year to March from the preceding fiscal and absorption of commercial real estate by 29 percent in the same period, according to Citigroup Inc. “This is attributed to the slowdown in economy, rising interest rates and affordability issues,” Citigroup economists said in their latest macro survey. The net result is likely to be an inventory build-up, which could potentially lead to a further construction slowdown or a rise in bad loans for banks.

Read more: Live Mint

Buying a home to get cheaper as RBI says no to restructuring of real estate loans

The Reserve Bank has turned down banks’ demand for restructuring stressed real estate loans without providing for potential losses, a move that could mount pressure on builders to lower prices as banks push to recover loans.

The central bankBSE 1.01 % believes that if banks are permitted to restructure the loans without providing for losses, they will lose the urge to insist on prompt payments from builders, who in turn would continue to hold onto prices even if sales are slack, two bankers familiar with the discussions said.

Builders will get the benefit of paying the same loan over a longer period without feeling the pinch to repay, RBI Deputy Governor KC Chakrabarty is supposed to have told bankers in a recent meeting, said the two bankers who did not want to be identified.

Banks will be at ease once the loan is prevented from becoming a sub-standard asset, Chakrabarty said. Real estate prices have been rising steadily since the government prodded the central bank to give a one-time benefit for restructuring of real estate loans during the credit crisis in 2008.

Read more: The Economic Times

Convention on affordable housing

imed at giving a fillip to affordable housing in the country, NAREDCO is organising a convention to highlight the need of the sector.

The eleventh national convention on ‘Sustainable Housing for Masses’ is being organised with the support of Ministry of HUPA and Ministry of Urban Development. The two-day convention beginning December 7th will be inaugurated by President Pranab Mukherjee.

Major issues which would be discussed will include redefining old working systems, streamlining of procedures and processes, providing final shape to affordable housing policy, Real Estate Regulatory Act among others.

Urban housing shortage is estimated at 18.78 million with 95 per cent in LIG and EWS categories. This, as per experts, may go up to 38 million by 2030 if the rate of supply remains as it is today.

Read more: Business Line

Lack of international standards in real estate may drive away global investors: RICS global CEO

The Indian real-estate market, despite its opportunities, has seen a sharp drop in foreign investments over the past two years and, in future , global investors may be more cautious investing in markets that lack international standards, says Sean Tompkins, global chief executive officer of UK-based Royal Institution of Chartered Surveyors (RICS), a professional qualification and standard setting body for land, property and construction sectors .

The country’s real estate sector saw close to $20 billion in investment between 2006 and 2009 but only about $2-3 billion of that has seen an exit yet, after over six years of investment. India, he says, hasn’t really delivered since 2005 on the promise that it held as an investment destination and today most of the capital finding its way into Indian real estate is really domestic capital. Investors of all types are a bit wary and cautious because of the global slowdown, and it’s critical to create the right conditions to make an investor more comfortable.

“There will be an expectation that standards would rise and I believe that those countries that are able to provide safe and high standard environment in real estate will benefit from significant investment flows,” says Tompkins. For a number of private equity investors who invested between 2006 and 2009, returns have been sub-par from what they had hoped and been promised. Many expect to lose money because many projects have not taken off and many others are stuck in litigation with their investee companies. Tompkins says India needs to change its mindset and look at real estate and construction as a proper profession like it is in the West, if it has to rise to global standards.

Read more: The Economic Times

Are warranties offered by property developers worth the premium?

Many of the top property developers in metro cities like Mumbai and Delhi have come out with a new marketing strategy to lure potential buyers. They are offering warranties on the houses they sell, similar to those offered by manufacturers of electronic appliances like TVs and refrigerators. The warranty period ranges from 1-3 years on all electronic appliances in a fully-furnished apartment, to as high as 10 years for waterproofing of flats.

The Maharashtra Chamber of Housing and Industry claims that nearly 80% of its members are offering such guarantees across the country. However, is this warranty a convincing reason to buy a flat at a premium? Most real estate experts don’t believe so. Here’s why.

Read more: The Economic Times

Interest On Home Loans Can Be Added To House Cost

In an order that is likely to be challenged by the tax department, the Income Tax Apellate Tribunal in Chennai has allowed taxpayers to include interest paid on home loans as acquisition costs while computing capital gains.

The order appears to have far reaching implications given the large number of borrowers with home loans. But tax experts are skeptical about the order being considered as a ground for taking similar benefits by others. “The order may get challenged in court. The present order opens a different perspective on how benefits under home loans can be claimed first as an expense item and later as a capital item,” said Surya Bhatia, promoter of Asset Managers.

Tax experts say that although there are parts in the income tax norms where double deduction is allowed these are being gradually taken off. Also, given that there are provisions which say that expenditure for which deduction has been claimed cannot be added to the cost of the asset, they do not recommend individuals claiming capital gains benefit.

The recent order pertains to an IT appeal in the case filed by Assistant Commissioner of Income-tax versus C Ramabrhmam in the Chennai bench of the Income Tax Appellate Tribunal. The assessee had purchased a house property in Chennai in 2003 for Rs 32.64 lakh. In addition to this he paid Rs 4 lakh toward registration and Rs 39,926 as cost of improvement. In the enclosures with the return, the assessee had added an amount of Rs 4,82,042 as interest on housing loan taken in 2003 for purchasing the property. The assessing officer was of the opinion that since the interest on home loan, had already been claimed as deduction under section 24(b) of IT Act in assessment years 2004-05 to 2006-07, the same could not be taken into consideration for computation under section 48 of the “Act”

Read more: Realty Plus

Going the green way

Engineering a ‘green’ building is primarily the challenge of structuring sustainable structures – and it all ties in with structural stability, says Shilpa Pandya Engineering a green building is a holistic thought process, where one tries to ensure that the construction does not damage the environment, neither during the construction stage, nor in the years when it is used by humans. Ancient Indian architecture was in sync with Mother Nature, which can be codified with what we today refer to as ‘Vaastu’, says architect Amish Mistry. “Engineering a green building largely is all about reinforcing eco-friendly methods of construction. It needs structural, civil, electrical, mechanical and hydraulic engineering to work in harmony, and create eco-friendly structures which are truly sustainable – and structurally safe,” he adds. Sohan Thakur, director, Saptashree Developers says engineering green buildings is primarily the aspect of environment friendly construction. And, it needs structural stability, he adds.

Read more: The Economic Times

Design excellence and structurally safe structures

As the Indian economic scenario changes to ‘success story’ mode, construction and infrastructure are the defining aspects of the new heights being reached. “From global design and architecture being incorporated in the Indian context to building world-class structures, structural engineering has taken centre stage,” says architect Amish Mistry. “If the design aspect is all about architecture, making the designs a reality is the structural engineer’s task. It includes all issues related to the design of infrastructure and buildings; one may term it a branch of engineering that is close to architecture,” says developer Vinod Mishra. Mishra represents the newage technocrat-businessman: an academic background in engineering and a infrastructure/ real estate developer, Mishra represents the ‘new wave’ businessmen who are academically qualified in the line they do business in.

Read more: The Economic Times

Indian realty must turn professional: Tompkins

Indian real estate market, despite its opportunities, has seen a sharp drop in foreign investments over the past two years, and in future, global investors may be more cautious investing in markets that lack international standards, says Sean Tompkins, global chief executive officer of UK-based Royal Institution of Chartered Surveyors (RICS), a professional qualification and standard setting body for land, property and construction sectors. The country’s real estate sector saw close to $20 billion in investment between 2006 and 2009 but only about $2-3 billion of that has seen an exit yet, after over six years of investment. India, he says, hasn’t really delivered since 2005 on the promise that it held as an investment destination and today most of the capital finding its way into Indian real estate is really domestic capital. Investors of all types are a bit wary and cautious because of the global slowdown, and it’s critical to create the right conditions to make an investor more comfortable. “There will be an expectation that standards would rise and I believe that those countries that are able to provide safe and high standard environment in real estate will benefit from significant investment flows,” says Tompkins.

Read more: The Economic Times

Infrastructure/Transportation

Why Dwarka Expressway has given a boost to Gurgaon`s realty

In addition to the availability of good infrastructure and basic facilities in the vicinity, connectivity today is a major deciding factor while buying a property. Road connectivity has a massive impact on real estate development and prices. It comes as a little surprise that Dwarka Expressway is poised to become the New Shangrila and centre of Gurgaon. It has become a significant real estate investment destination owing to its vast potential for robust growth and expansion in the coming years. It provides an immaculate blend of strategic location, varied residential options, world-class amenities and easy accessibility via infrastructure development in the area.

The eight lanes, 150 meter wide and 18 km long Dwarka Expressway will be a boon to commuters travelling from Delhi to Gurgaon and Manesar providing them a congestion free travel especially when the Delhi- Gurgaon Expressway has witnessed higher-than-expected traffic volume growth. Due to its proximity to Delhi and unparalleled connectivity with Gurgaon and Manesar, the real estate development in the area has seen an upsurge. The infrastructural development in and around the area has played an instrumental role in its growth. It is likely to evolve into a seamlessly connected real estate destination.

Read more: Money Control

NCR channel will help meet water needs of residents

The availability of water in Gurgaon will be enhanced by almost four times with completion of the NCR channel which has a capacity of 800 cusecs. This would help in supplying adequate quantity of water for the growing population of the Haryana industrial town, an official spokesman saidhere on Wednesday.

He said that the state government has spent R322 crore on construction of the channel.

“At present Gurgaon is getting 175 cusecs of water through Gurgaon Water Supply Channel (GWC). The residents of Gurgaon can hope to have more water to use during summer as compared to the last season,” he said. The 71-km-long NCR channel originates from village Kakroi in district Sonipat culminating at village Chandu Budhera of district Gurgaon.

Read more: Hindustan Times

Power

Combating power shortage: Solar product makers rise & shine in Gurgaon

To combat power shortage and frequent power cuts, people in the Millennium City are opting for alternative renewable sources of energy. Solar-powered products are a hot favourite. No wonder, Gurgaon’s sunshine sector (read solar products manufacturers and dealers) is beaming happily.

“Although solar energy has been around for well over four decades, it has now started picking up and the demand has really picked up in the past one year. The reason for this is probably the fact that this technology is now relatively cheaper than it was earlier. In some cases, solar energy now can compete with diesel generators,” said Sanjay Dhawan director and promoter, Punchline Energy, which deals in solar water pumps (for farming/irrigation purposes), solar power packs, mini/micro grids, solar lighting, as well as high-end LED streetlights.

Dhawan added that their solar pumps and solar power packs along with solar powered streetlights are the most popular solar items.

There are a lot of people in Gurgaon offering solar solutions. They range from manufacturers to importers. There are many people, who simply import products from China and flip it for a neat margin and on the other hand, there are companies who have developed several solutions in-house and cater to medium-large scale installations.

Read more: The Economic Times

Education

Higher education sector to push real estate demand: DTZ report

The country’s higher education sector will create real estate demand of around 900 million sq ft by 2020 to maintain the current gross student enrolment ratio of 12 per cent, according to a report by property consultant DTZ.

Although India is aiming to increase its higher education gross enrolment ratio (GER) to 30 per cent by 2020, it is unlikely to achieve the target before 2036 at the current pace, the report said. GER indicates the percentage of students enrolled for an education grade against the number of students who qualify for the programme.

“To achieve a GER of 30 per cent by 2020, Indian higher education system will need to augment its capacity by additional 37 million seats,” DTZ said. It took the higher education sector over 60 years to achieve a GER of 12 per cent.

While reforms in regulatory policies and usage of new technologies are expected to facilitate growth and dissemination of higher education, it is unlikely to be a substitute to creation of physical infrastructure, the report said.

See article: The Economic Times

Gurgaon emerging as an education and career hub

With hundreds of MNCs, best of schools, b-schools, professional colleges, Gurgaon offers several career options and job opportunities. The Millennium City is fast emerging into an educational/ career hub.

“Gurgaon is like a microcosm of the universe today, everything is here. It is a self-sustained and self-contained city both in terms of industry and education. I would say the city offers career opportunities which perhaps even Delhi does not give you. You don’t need to go out of the city for anything,” said Pervin Malhotra, career counselor.

“You have the biggest MNCs here. The city has schools, which are far better than the old world schools in Delhi, where people struggle to get admissions. With many companies in the city, it is easier for schools to connect with them and invite people from that field to address their children to help them know about that field,” she added.

Malhotra said that higher education is also all set to pick up in the city. “The city has money, it has land available and the government is also willing to help out. So it has tremendous potential in terms of education,” she said adding that already there are several linkages, exchange programmes and academic partnerships happening in the city.

Read more: The Economic Times

Economy

India, Israel to triple trade

Despite the ongoing geopolitical tensions surrounding it, Israel is confident of more than tripling its trade with India in the next two years. India’s bilateral trade with Israel — that stands at over $5 billion presently — will more than triple with the two nations expected to sign a Free Trade Agreement (FTA) by end of next year (2013-14), Eli Belotsercovsky, director in the ministry of foreign affairs said.

“The negotiations between India and Israel have progressed well and while we wanted to sign the FTA in this year itself, the chances are that this will now happen by next year only,” Belotsercovsky said. He said that once the FTA is in place, “the trade between the two nations would skyrocket, the growth opportunities being in pharmaceutical, agriculture, energy, water management besides existing sectors including defence, textiles and so on.”

While Belotsercovsky did not elaborate on the reasons, officials said this could be due to the forthcoming elections in Israel in early 2013.

The two countries were targeting to complete the agreement by 2012-13 as the year marks the 20th year of diplomatic relations between India and Israel.

Read more: Hindustan Times

Goldman Sachs upgrades India to ‘overweight’

The investment bank pegged December 2013 Nifty target at 6,600 points. “Reform initiatives and changes in government leadership this fall have created a sense of optimism among the domestic investor base for the first time in over a year, and the risk of policy missteps in 2013 has been lowered,” said Goldman Sachs in a report.

The investment bank added that MSCI India’s valuation was well below the 5-year average of 14.9 times, affording an attractive entry point into one of the stronger structural growth markets in the region. Nifty ended 1.62 percent up at 5,727.45 points on Tuesday.

Read more: Reuters

FDI in retail: good, bad and not so bad

Brokers trade on their computer terminals at a stock brokerage firm in Mumbai May 4, 2009. Credit: Reuters/Punit Paranjpe/Files

A fractured parliament over permitting foreign direct investment (FDI) in retail has the entire opposition gunning for the government; allies are not sure about its political fallout whereas the Manmohan Singh government is firm on going ahead midst all the controversy surrounding it.

It was on 14 September 2012, that the union government cleared the proposal to allow 51 and 100 percent Foreign Direct Investment (FDI) in multi-brand and single-brand, respectively. The government’s move gave a sudden lease of life to retails stocks that touched a new stressing that the government has allowed FDI in retail with proper regulations. Interests of of farmers and local kiryana shops in the country had been kept in mind he said.

Read more: Hill Post

Summer placements suggest it will be happy new jobs year

The recently concluded summer placements at Jamnalal Bajaj Institute of Management Studies (JBIMS) set the tone for final placements next year. Despite an uncertain economy, the average stipend went up from Rs 89,000 in 2011 to Rs 91,000, while the highest was Rs 2 lakh, same as last year. In 2010, average and highest stipends were Rs 72,000 and Rs 1.5 lakh. Last year, banking, financial services and insurance (BFSI) and investment banking emerged the front-runners, with 33 percent of the batch opting for the sectors. FMCG and pharma sectors, at 28 percent, were second favourites, followed by consulting and IT (18 percent) and conglomerates (16 percent). The recruiters included J P Morgan Chase, HSBC, Avista Advisory, ICICI Prudential AMC, Singhi Advisors, Medtronic, Novartis, Knowledge Faber, Michael Page International, Standard Chartered Bank, Indian Angel Network, L&T Finance, Procter & Gamble, ITC, GSK Consumer Healthcare, KPMG, Tata Consultancy Services, Capgemini, Raymond, Mahindra & Mahindra, Cummins, Bajaj Auto and Skoda. A mix of profiles such as consumer market knowledge, marketing research, sales and marketing was offered in FMCG and pharma sectors, while real estate and HR consulting were some of niche profiles on offer in consulting and IT sectors.

Read more: The Financial Express

Ireo Skyon, Gurgaon

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s