Delhi may soon see a flurry of real estate activities. A path-breaking policy, which has been incorporated in Delhi Master Plan-2021, will make available around 21,000 hectares of land for residential purposes and around 2,073 hectare for commercial activities in the periphery of the existing city.
Global consultancy firm, CB Richard Ellis (CBRE), says in a report: “Such a large-scale expansion in the urban limits of the city is expected to stabilize property prices, particularly in suburbs, and also spur infrastructural development in these largely peripheral zones.”
According to the projections in the master plan, nearly 4 million residential units are required for an estimated 23 million people by 2021. According to the paper, the scale of development in the city outlayed in MPD-2021 has by all standards outweighed the planning proposals of the 1962 and 1981 plan documents and has created need for an ever evolving and dynamic urban planning approach.
The paper said the MPD-2021 has identified transformation of Delhi as a ‘Global Metropolis’ as an underlying theme for most of its planning proposals.
In a marked departure from previous master plans, the 2021 document proposes that the planning and development of the city not be entirely led by the public sector, and that the private sector, too, must get involved. This covers various facets of development like land assembly, construction, infrastructure creation, capacity building, and provision of essential services. The latest master plan has significant implications for the real estate market of Delhi, CBRE says in the paper. According to one estimate, the prices in these zones, which will be part of Delhi, will be around Rs 6,000 per sq feet.
Read more: Magic Bricks
Home loans: RBI bars upfront payments to developers
The Reserve Bank of India (RBI) on Tuesday made it mandatory for disbursements of housing loans by banks to be linked to the stages of completion of the property and not paid upfront to the builder. This will deal a blow to so-called 80:20 or 75:25 schemes floated by builders across Indian cities. Under these popular schemes, a home buyer pays 20-25% of the price while the builders arrange the rest from banks at the time of the launch of a project.
Such loans involve a tripartite agreement among the builder, the lending bank and the buyer. The buyers make the payment upfront while the rest is provided by the banks on which the builder pays interest till the property is handed over to the buyer. At the time of possession, the loan is transferred to the buyer.
“Such housing loan products are likely to expose the banks as well as their home loan borrowers to additional risks,” an RBI notification said. Since the loan is in the name of the buyer of the house, any delayed payment of interest by the builder harms the credit score of the buyer instead of the developer, RBI said.
These schemes have been popular in recent times as the liquidity-strapped developers use it for propelling sales.
Read more: Mint
Goldman Sachs cuts India GDP forecast to 4%; sees rupee at 72/USD
Goldman Sachs has lowered India’s growth forecast for the current financial year to 4 per cent from 6 per cent earlier and is expecting the rupee to touch 72 against the US dollar in the next 6 months.
According to the global brokerage firm, India and most of the Southeast Asian countries are likely to see “difficult external funding conditions” as markets are anticipating US Fed tapering and eventual exit from unconventional monetary policies.
“For India, we have cut our FY’14 GDP growth forecast to 4.0 per cent, from 6.0 per cent earlier, and our FY’15 forecast to 5.4 per cent, from 6.8 per cent previously,” Goldman Sachs said in a research note.
In the near term, Goldman Sachs sees risks as the economy is likely to need an adjustment in the current account and fiscal balances, and says it “may require below-potential growth for several more quarters to reduce inflation, before we can see an economic recovery“.
The report further added that not only has data come in worse-than-expected in Q2 2013, the external funding pressure since early May was the major driving factor behind the GDP downgrade.
According to official figures, the country’s economic growth in the April-June quarter slid to 4.4 per cent, the lowest in the past several years, pulled down by drop in mining and manufacturing output.
Read more: Business Line
NRIs wait for further fall to invest in realty
Even as the nation is worried over the sliding value of rupee, Non-Resident Indians (NRIs) are waiting for the value to drop further to make investments in real estate back home. With the NRIs holding back for now, transactions in the real estate market in coastal districts have turned sluggish.
According to market analysts, NRIs are closely monitoring the situation in the hope that the value of rupee against the US dollar may go down further. “Though the current value of rupee at about Rs 68.80 against US dollar is very attractive, they are still holding their dollars back to gain more in the coming weeks,” said Ch Sudhakar of Vijayawada Builders’ Association. Sources said NRIs from Krishna district have asked their family members here to identify some areas to invest in the coming weeks. Even a minor variation in rupee value will make a lot of difference for NRI investors in real estate.
However, the continuous agitations over bifurcation of the state have hit the market as investors are wary of putting their money in the Vijayawada and Guntur markets, where the prices are already touching the sky. Investors fear they may not get returns even if the capital of the new state is located in the vicinity.
Read more: The Economic Times
Remittances by NRIs from Punjab grow up to 10% on weak Rupee
With the rupee witnessing a record fall against the US dollar, the flow of remittances by NRIs from Punjab has risen by up to 10 per cent in the last three months to benefit from the higher exchange rate.
“Yes, there has been an increase in remittances by NRIs (who migrated from Punjab and Chandigarh) in the last three months in the wake of weak rupee against US dollar,” Aruna Singh, handling Inward remittances at Paul Merchants Ltd, told PTI here.
Paul Merchants is a city-based company, having interests in global money transfer and foreign exchange businesses.
She said: “On an average, there has been a growth of 5-6 per cent per month in remittances in the last three months. And when rupee crossed the 68 mark against dollar, the flow went up by 10 per cent.”
Industry insiders revealed that some of NRIs even borrowed funds at a cheap rate and sent back to India to earn more money.
“There have been cases in which some NRIs borrowed funds at a rate of 4-5 per cent in US and then deposited here in NRI account where they will get 8 per cent of return,” another person dealing in inward remittances said.
Read more: The Economic Times
Rapid Metro stations taking shape in Gurgaon
The Rapid Metro stations in the city are finally taking shape and couple of them are absolutely ready for the first commercial train to chug in. While the day trials have been on for several months now, the authorities say the night trials too will commence in the coming days.
“We will soon start trials for over 19 hours every day, including the night trials. Our commercial operations will be around nineteen-and-half hours in a day, on all seven days of the week. Our first train will start around 5am and the last would leave close to midnight,” said a spokesperson.
Since the Rapid Metro train timings have to match with the Delhi Metro timings, its first train will be reach the Sikanderpur interchange station well in time before the DMRC trains reaches this station from HUDA City Center. Likewise, on its last trip of the day, the Rapid Metro train will in all likelihood leave the Sikanderpur station well past midnight as the Delhi Metro train arriving from Jahangirpuri is likely to reach this interchange only around the time.
According to officials, the average time a commuter will take to switch over to the network, by using the 90 metre skywalk at this station will be less than five minutes. Also, the time a Rapid Metro train will take to complete one loop, covering all six stations will be around 13 minutes. The fare though will be similar to DMRC.
Read more: The Times of India
Delhi likely to get first monorail by 2017
Delhi is likely to get its first monorail corridor between Shastri Park and Trilokpuri by 2017 and there is a need to identify more such corridors, Delhi Chief Minister Sheila Dikshit today said.
“A study has already been done for the monorail by DMRC and it started with RITES who did the preliminary study. We have come to the conclusion that we are going to start with 11 kilometres of monorail in the eastern part of Delhi and this will cover areas between Shastri Park and Trilokpuri,” she said.
“I do hope in the next two to three years, we are hoping that by 2017 definitely, we will get the first monorail in Delhi,” she added.
Speaking at a Indo-Japan seminar on monorail and light rail transit, Dikshit said that this first line is just a beginning and there is a need to identify many more corridors.
“We are thinking of a long-term solution because we do think that metro alone will not suffice to cater to the large population that Delhi has as a city,” Dikshit said.
She said there are areas in Delhi where the metro cannot go because they are congested and shorter distances which require public transport.
Read more: Business Line