Residential market holds promise for strong recovery in 2013: JP Morgan

Ireo Victory Valley, Gurgaon

Ireo Victory Valley, Gurgaon

Foreign brokerage JP Morgan expects Indian real estate market to witness a strong recovery in 2013 as launch activity picks up going into the year accompanied with some price discounting and lower mortgage rates.

Residential markets have entered the year on an encouraging note with strong off-take seen in new launches across key markets. Pace of new launches has picked up at the margin and the trend is likely to sustain over the next few quarters, the brokerage said in a recent report.

“Mumbai remains the key candidate for a turnaround in CY13, after a muted CY12. Pick up in pace of new launches along with some price discounting, lower unit sizes and lower mortgage rates, could lead to sharp recovery in volumes coming off a very low base,” the report said.

The brokerage also added that it has noted some anecdotal evidence of price softening in new launches in select micro markets of Mumbai; while property prices in other markets have been stable to increasing.

“Further, mortgage rates have also started to come down (by 25-75bps) and the trend will continue in CY13 given easing system liquidity and expected cuts in policy rates ahead. A combination of price discounting, rate cuts and lower unit sizes bode well for affordability levels going into CY13,” JP Morgan said.

In terms of markets, Mumbai was among the worst affected markets with 30% year on year lower absorption in 2012 and has potential to bounce back sharply, if launches pick up on better policy environment.

Source: The Economic Times

Luxury Homes Catch Market’s Fancy

Luxury homes have caught the market’s fancy with nearly $2 billion (over . 10,000 crore) worth of such houses launched across the country last year, this at a time when there’s a general slowdown in the housing segment.

According to estimates, close to 5,000 homes priced above . 3 crore (above . 5 crore in Mumbai) were launched across major metros during the year as absorption beat supply in these markets. “Luxury real estate usually does well during recession or sluggish environment as we are seeing even now. In a highly uncertain environment, the super-rich clientele prefers to put their money into these hard assets than any intangible service or instruments,” says Sanjay Dutt, executive managing director — South Asia, Cushman & Wakefield. Sales of luxury homes across big cities such as Mumbai, Bangalore, Gurgaon, Chennai and Pune have been moving up along with 6-23% year-on-year price rise in this segment, reaffirming the upward movement. Mumbai, for instance, sold 789 units against 652 new launches; Gurgaon sold 792 compared with new launches of 726 units, while Chennai saw sales overtaking new launches by 17%.

Read more: The Times of India

Panel suggests single-window approval for realty projects, green ministry abstains

A panel set up to streamline the approvals procedure for real estate projects has recommended the single-window clearance model in a report that does not have any inputs from the ministry of environment.

Large real estate projects require clearances from the Airports Authority of India (AAI) and also the environment ministry, which is a time-consuming procedure that often leads to project delays and cost escalation.

According to a senior official, representatives of the environment & forests ministry have stayed away from every meeting of the panel, which was set up last year under former Competition Commission of India chairman Dhanendra Kumar.

“We will write to the ministry of environment and forests to come on board of this committee and give their inputs for a single-window clearance mechanism,” said Ajay Maken, minister for housing and urban poverty alleviation. “This is a matter of concern.”

The committee, which made a presentation to Maken last week, is expected to submit its final report by the end of the month.

All real estate projects with over 2,00,000 sq ft of built-up space need environment clearance from state governments. These state government departments follow norms laid down by the central ministry for environment and forests.

Read more: The Economic Times

Investment

India seeks Kuwaiti investment in infrastructure sector

India today impressed upon Kuwait which has Sovereign Wealth Fund of $ 300 billion to look at huge investment opportunity in the infrastructure sector.

The issue was raised by Commerce and Industry Minister Anand Sharma during his meeting with Kuwaiti Minister for Amiri Dewan Affairs Sheikh Nasser Sabah Al-Ahmad Al-Jaber Al Sabah, an official said.

Kuwait has a Sovereign Fund of over $ 300 billion which is growing by $ 15-25 billion every year. The fund is managed by Kuwait Investment Authority (KIA).

Sharma informed him that during the 12th Five-Year plan (2012-2017), India plans to spend around $ 1 trillion on infrastructure.

“We would therefore be very happy to welcome Kuwaiti investments,” the official added.

Kuwaiti investments in India stood at around $ 1 billion in sectors like power, automobile, construction development and telecommunication.

India has sought investments in sectors like petrochemicals, fertilisers, DMIC, education and Civil Aviation.

Sharma also sought Kuwait’s help in reenergizing the negotiations for the India-GCC (Gulf Cooperation Council) FTA talks that have been stalled for a while.

The bilateral trade between the countries stood at $ 18.8 billion in 2012.

Source: The Economic Times

Czech Republic to invest US $ 2 billion in India by 2015

Czech Republic to invest US $ 2 billion in India in the next two years. Czech Companies like Bonatrans Group, Vítkovice Machinery Group, Škoda Power , Skoda Auto, Eldis (radar systems), Conteg (manufacturers of data and telecommunication racks) and Linet etc are some of the companies that have plans to invest heavily in India, it is estimated that in Maharashtra alone there would be investments of 400 million Euros in the next two years.

Speaking on the investments in India Jana Peterková, Economical & Political Affairs Embassy of the Czech Republic said “India ranks amongst the top 12 priority countries for promotion of mutual commercial, investment and other economic activities. The interest of Czech companies to invest in India is growing and Czech companies are emerging as major investors in automobile, energy, infrastructure and large industrial projects in India”

Adding further Peterková, said “Czech Republic is one of the “sweet spots of Europe” that has low cost highly efficient economy adding to this advantage we are also offering incentives to corporations working in the area of development and research and strategic services (such as software development), in a form of discounted tax rate extended from the current five to ten years. Many Indian Companies such as Infosys Arcelor Mittal Alok Industries, Spentex Industries Glenmark Pharmaceuticals Ashok Leyland, and Motherson Sumi Systems etc have already invested in Czech Republic and the investment opportunities are only improving, we strongly believe that other Indian companies will also follow”.

Read more: IIFL

Employment

India Inc cautiously optimistic about hiring plans in Apr-Jun

Indian employers are cautiously optimistic about their hiring plans for the next three months, and job seekers will have to be prepared for a more rigorous selection process. (Photo: K Murali Kumar)Indian employers are cautiously optimistic about their hiring plans for the next three months, and job seekers will have to be prepared for a more rigorous selection process, staffing services firm Manpower said today.

According to the Manpower Employment Outlook Survey, about 27 per cent of Indian employers said they would expand the work-force in the April-June quarter, primarily driven by ITeS and IT sectors where employer hiring intentions appears to be improving.

The net employment outlook of 27 per cent for the second quarter this year indicates an improvement of 2 percentage point, compared to the January-March quarter, but reported a 19 percentage point decline compared to the year ago period when it stood at 45 per cent.

“In spite of the market down-turn and the uncertainty around the economic and political environment in India, employer hiring intentions remain positive in all seven sectors,” ManpowerGroup India Managing Director A G Rao said.

He cautioned, however, that job seekers have to be prepared for a more rigorous selection process. “They can expect additional aptitude tests and extra rounds of interviews.”

Read more: Business Line

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