The passing year witnessed insipid growth in the residential property market, with buyers turning cautious and hoping for a price correction and lower home loan interest rates. The developers managed to hold on to the ticket prices of their projects, but were forced to offer discounts to generate sales. High inflation continued to play spoilsport as it prevented any substantial cut in home loan rates and left little investible surplus with buyers.
On the policy front, the RBI asked banks to exclude stamp duty, registration and other documentation charges from the total value of the home for calculating the eligible loan amount. It also restricted banks from lending more than 80% for houses worth over 20 lakh. This means you will have to save more to buy your dream home.
The developers came up with new gimmicks to sell their projects. Instead of bringing down the price, they altered the meaning of affordability. If projects under 30 lakh were touted as affordable two years ago, even the ones with a 60 lakh tag were termed affordable in 2012. It’s another matter that incomes did not keep pace to justify this ‘affordability’.
The NRI buyers benefited during the year due to the depreciation of rupee against the dollar. “In places like Bangalore and Pune, the NRI investment helped the overall volumes,” says Pankaj Kapoor, managing director of Mumbaibased Liases Foras.
Read more: Times of India
Better deal awaits home buyer
Rajesh Singh and his wife Reshmi have been scouting for a house in the city for the past couple of years. But they were forced to postpone their decision due to high interest rates for housing loans, ever-increasing property prices and uncertain economic environment.
The 36-year-old executive in an IT firm, says, “Interest rates on housing loans remained high in 2012 and so were property prices, which were expected to decline, but didn’t correct much. We expect interest rates of housing loans to decline in the coming year and hopefully property prices won’t increase in the immediate future and remain stagnant over the next few months.”
With high inflation, household expenses have increased. Salaries have not increased in line with the cost escalation, so it is very difficult to pay high interest rates on loans, Singh added.
They are, however, bullish about the coming year and confident of buying their dream home soon. “We are expecting the economy to improve in 2013 and housing loan rates to decline. At the same time, with stable property prices, we hope to buy the home we have been craving for several years.”
Read more: My Digital FC
Want to invest in real estate? Try India’s emerging cities
For those looking to tap into India’s real estate market, the emerging cities across the nation certainly are making ripples through the industry. From the traditional approach to Delhi and Mumbai, other cities and metropolises are merging as places where one could get sizeable returns on investments, mainly owing to the increased supply of new working talent, and a consequent supply of real estate space. Bangalore, Hyderabad, Chennai, Pune, and Gurgaon have taken lead positions in attracting new talent, fuelling business growth in the cities, which in turn have pushed up the demand and prices for new real estate.
Read more: Daily Bhaskar
New Year may bring in up to 10 lakh jobs, 10-15% pay hikes
The New Year may usher in loads of cheers for job seekers, as companies are likely to hire up to 10 lakh employees and dole out pay hikes in the range of 10-15 per cent to high-performers, say experts.
As per the estimates of human resource consultants, hiring will definitely see an uptrend in 2013, as compared to 2012, as most economies are coming out of slowdown and the demand from domestic as well as international markets would create many job opportunities.
According to industry estimates, India saw nearly 7 lakh jobs being created in 2012, despite economic uncertainties, and the projections for the New Year vary between a minimum of 5-6 lank to more than 10 lakh.
“The New Year would be good for job seekers with expected 1 million plus jobs in the country. 2012 was not good either for job seekers or for employers due to several issues, including economic conditions,” MyHiringClub.com CEO Rajesh Kumar said.
After remaining mostly stagnant in 2012 due to global economic slowdown, Indian job market is expected to grow only at a modest pace next year, although still better than other countries.
“It is expected that more than 5-6 lakh new job creation will happen across the industry verticals including retail, infrastructure, healthcare, power and energy, banking, logistics will be the major contributors,” executive search company GlobalHunt India Managing Director Sunil Goel said.
Read more: The Economic Times
Phew! India Inc breathes easy, finally
Year 2012 started for India Inc with around Rs 60,000 crore worth of orders pending to be awarded in the infrastructure sector alone. Government dereliction and lack of initiatives forced companies to run into losses with order books declining and companies finding it hard to achieve financial closures for major projects. The entire system got paralysed with officials refusing to clear projects fearing corruption charges and macroeconomic factors such as inflation and interest rates compounding the problems further. Things, however, showed some promise at the fag end of the year after government realised the shortcomings and introduced policy changes to revive the fast failing economy. India Inc believes that the government has created a platform that would start to show positive results with a lag effect in 2013.
Some of the important judgments by India’s apex court are also expected to tame the fast dropping morale of Indians with respect to corruption that has been eating into India’s resources and creating an imbalance between the haves and have-nots. The Supreme Court cancelled 122 2G licences exactly a year after the former telecom minister A Raja accused of India’s biggest telecom scam was arrested. SC exempted Vodafone the British telecom giant of a tax liability on purchase of Hutchison in India that experts believe has improved India’s overall foreign investment sentiment. The court banned the export of iron ore in Karnataka and Goa to control the illegal export when there is shortage in the country.
Read more: My Digital FC
Plan panel no to early exit in road projects
he road ministry’s proposal to allow companies engaged in road projects to exit immediately after the expiry of the commercial operations date (COD) has found stiff opposition from the Planning Commission and sections of the finance ministry.
Under the norms in place since November 2009, developers must hold at least 26% of equity up to two years after the COD. Moreover, developers of build-operate-transfer (BOT) projects awarded before 2009 do not have the option to exit completely.
While the move is intended to clear ground for new investors in the funds-starved sector, the departments of economic affairs and expenditure of the finance ministry feel that non-serious investors wanting to make quick capital gains could misuse the proposed facility. Sources said this view has also been endorsed by the Planning Commission.
However, sources also said the department of financial services shares the same view as the road ministry.
The proposal was initiated after several banks raised the issue of capital getting stuck in projects. DK Mittal, secretary, department of financial services, then urged the ministry of roads and highways to explore exit opportunities, the official added.
The National Highway Authority of India (NHAI) had seconded the proposal.
Read more: Financial Express
Slowdown? Luxury cars rule Gurgaon roads
Even in a year of slowdown, one of India’s showpiece cities, Gurgaon, has managed to add to its glitz with a 38% hike in registration of top-end cars in 2012 — from 1,021 to 1,416. What’s more, there’s a twist in the tale. The number of two-wheeler vehicles registered with the city authorities has dropped during the year by nearly a thousand units, indicating a significant change in the city’s and its residents’ fortunes.
“Gurgaon’s population is soaring and people are earning well. There is a demand for style and top brands too,” said Dr Ankit Gupta, who owns a Mercedes F Class, a BMW 7 series and an Audi Q7. He recently purchased an SUV Hummer and will register it with the Gurgaon authorities soon.
With the city’s high net-worth migrant population increasing rapidly, the Audi population doubled from 278 to 566 during the year.
Not only that, Gurgaon boasts of six Porsche cars, most of which cost Rs. 1crore-plus, in 2012 against only one in the previous year. Likewise, the number of Volvo cars went up from five to 26 and the Rage Rover from 12 to 39. The number of Mercedes and BMW cars, too, looked up.
Gurgaon’s vehicle population was 38,786 in 2012 against 36,144 in 2011, with a daily rise of 106 cars.
Read more: Hindustan Times