The current turmoil in the global economy has driven high net worth individuals (HNWIs) to invest in prime real estate in safe heavens, which has led to rise in prices of prime properties in cities like London, New York, Paris, Shanghai, Guangzhou, Dubai and Sydney among others.
In India, too, the property prices in Tier I cities like Mumbai, Delhi, and Bangalore have risen sharply in the last one year.
Prime residential and commercial properties in relatively risk-free locations have always attracted investors in times of economic and political turbulence, Knight Frank said in a report. There is something comforting about tangible assets that, barring natural disasters, will retain their inherent value over time, even if prices dip in the short term.
This flight to safety continues around the world and is helping drive prices in the most sought-after locations; so much so that certain governments are desperately trying to cool their housing markets down. But wealthy investors are also starting to buy into recovery, breathing new life into previously moribund markets like Dubai and Dublin.
Read more: The Times of India
Demand for office space to reach 30 million sq ft this year: DTZ
The demand for office space is likely to increase to 30.5 million sq ft this year, global real estate advisor DTZ said.
“Fears of downside risks for the global economy have started to fade, which combined with local economic policy amendments including the opening of 51 per cent FDI in multi- brand retail, climb-down of repo rates by the Reserve Bank of India (RBI) and stronger economic outlook, have resulted in improved market sentiment,” DTZ India CEO Anshul Jain said.
These emerging positive indicators are expected to help stimulate the real estate sector.
“Consequently, demand for office space is expected to increase and reach to around 30.5 million sq ft this year, representing an increase of nearly 12 per cent year-on-year,” he said.
Further, companies which had stalled their expansion plans due to poor market sentiment, are expected to recommence the process in the near future as they move out of the ‘wait-and-see’ phase observed over the past year, he said.
Read more: The Economic Times
Changing profile of the home loan buyer
A home will always have a deep connection with every individual and buying one’s own home is fondest dream of almost every Indian. The housing industry in India has been growing at a robust 14-15 per cent and is projected to continue to grow for the next few years.
There is an estimated shortage of around 22 million houses by 2014, and the government and apex bodies like the National Housing Bank (NHB) are playing a vital role in trying to fill this gap. The growth in this sector as well as the changing profile and consumption behaviour of the upwardly mobile population have also brought about a sea change in many aspects of the industry, and most notably the profile of today’s home loan buyer.
One of the most evident changes is the decreasing age of the home loan buyer. There has been a trend of reduction in the average age of the home loan buyer from the mid-40s to the mid-30s over the last two decades. There is also a growing segment of under-30 year olds who are buying homes and taking loans for the same.
The rising income levels of this segment coupled with growing aspirations have been major causes of this change in profile. Another major contributor to this phenomenon is the easier access to credit fuelled by banks and housing finance companies (HFCs). Most loan providers view home loans as a high growth product and have been diverting focus to it in the last few years.
Read more: Indian Express
Loans for affordable homes set to get easier to disburse
Housing finance institutions and banks will soon find it easier to extend loans to small borrowers and the affordable housing segment. The National Housing Bank has adopted a multi-pronged approach to supporting small loans, according to its Chairman and Managing Director R.V. Verma.
As the apex bank, regulator and refinance institution for the housing finance sector, NHB has in the pipeline a range of support schemes, including the ongoing credit risk guarantee fund trust for low income housing for loans up to Rs 5 lakh and the expanded Rural Housing Fund which, in the current year, will be Rs 6,000 crore compared with Rs 4,000 crore in 2012-13.
Verma, who was in Chennai to finalise agreements with a number of housing finance institutions to participate in the Credit Risk Guarantee Fund Trust for Low Income Housing, said housing loans up to Rs 5 lakh account for about 8 per cent of the total housing loan portfolio of Rs 1.10 lakh crore.
Housing fund soon
He said the Rs 2,000-crore Urban Housing Fund announced in the Union Budget will ‘very soon’ be in place to help home loan institutions lend to the affordable housing segment, particularly in small towns and cities.
Read more: Business Line
Relief for Delhi: New 3-lane flyover to clear RTR traffic mess
The Rao Tularam Marg (RTR) bottleneck on Outer Ring Road, on the way to IGI Airport, will finally be removed with Delhi government deciding to construct an additional three-lane flyover parallel to the existing flyover. The much-awaited approval for the project was received from the lieutenant-governor on Friday at a meeting of the apex planning body, UTTIPEC. Along with it, an underpass will also be built on Benito Juarez Marg for traffic to cross over to Ring Road.
Since December 2010, TOI has been campaigning for a viable solution to this mess of a half-flyover built by PWD. In a series of articles, this newspaper had proposed various solutions, including a six-lane flyover.
The RTR nuisance is a story of bad planning and the consequence of giving in to pressure groups. Constructed as part of the Commonwealth Games projects at a cost of Rs 59.60 crore, it was originally planned as a normal two-way flyover but then reduced to a three-lane one-way flyover because of a series of objections. What followed was quite predictable: regular traffic snarls.
Read more: The Times of India
Banyan Tree eyeing 20 properties in India in 6 years
Singapore-based Banyan Tree Holdings, which manages and develops premium resorts, hotels and spas, is eyeing around 20 properties in the country in the next six years, a top company executive has said.
“We are planning 15-20 properties in India under our brands, Banyan Tree Hotels and Resorts and Angsana Hotels and Resorts, mostly constituting about 150-100 rooms each. We have recently announced the launch of our first 60-room property under our flagship brand Banyan Tree Hotels and Resorts in Kerala,” Banyan Tree Hotels and Resorts Chief Executive Officer Abid Butt told PTI here.
Angsana Hotels and Resorts is the sister brand of Banyan Tree launched in 2000.
While Banyan Tree Hotels and Resorts offer a retreat experience featuring rejuvenation, Angsana Hotels and Resorts have a more trendy and spirited personality.
Besides its Kerala property, the company has three properties in pipeline in Goa, Bangalore and Ludhiana (Punjab) under both its brands, he said.
Read more: The Economic Times
Slowdown no deterrent, retail loans on the rise
An economic slowdown didn’t stop Indian households from borrowing more last financial year to fund their property, vehicle and credit card purchases compared with the same period a year ago.
This is what data from the RBI on the sectoral deployment of credit for the latest fiscal show.
According to the latest data, retail credit card outstandings grew by nearly 24 per cent in 2012-13, doubling from 11 per cent last year. Auto loans were up by 21 per cent, up from 18 per cent. Housing loans also saw faster growth at 14 per cent from 11 per cent in 2011-12. Interestingly, consumer durable loans shrank, reflecting sluggish sales in the segment. All these segments outpaced the overall growth in banks’ lending that slowed to 14.4 per cent in the year ended February 2013, against 15.4 per cent last year.
Industry in a crunch
While retail borrowers took more loans, industry cut back. Credit to industry rose only by 14.7 per cent against 19 per cent the previous year.
Mid-sized businesses bore the brunt of this, with credit to them shrinking by a tenth.
Notably, this very segment grew faster than the overall loan growth, for the past two years. The services industry, too, was not buoyant, with credit to the sector growing at 12.7 per cent against 14.7 per cent achieved in 2011-12. Within the services space, credit to shipping shrank by almost a third. Retail trade was the most buoyant segment within services, with a growth of about 30 per cent.
Read more: Business Line
Gurgaon Inc steps on pollution-free fuels
The millennium city is slowly but steady adopting alternate fuels for running vehicles and gensets. A handful of companies have sprouted in the city to help buyers willing to use alternative fuel to power their machinery. This marks a departure from the heavy dependence on conventional use of petrol and diesel, which have been becoming dearer almost every month.
At present, vehicles have been using compressed natural gas (CNG), while some resort to LPG. Apart from this, bio-diesel is foraying into the market. The new-age fuel providers are setting up refitting and refuelling centres across the city. Although at a nascent stage the initiative envisages to spread across the nation with a prominent presence.
With rising prices of diesel and petrol, industry players are optimistic about their growth prospects. “The increase in demand (for alternative fuel) has created opportunities for companies providing green fuel solutions in Gurgaon and other parts of the country,” said Sandeep Mahatekar, director of Logican Alternate Fuels Private Limited (LAFPL).