Apartment registrations in the metro fell by 25% in May on a month-on-month basis
In Mumbai, registrations of residential apartments fell 25% in May, on a month-on-month basis, to 5,337. In April, the metropolis reported total transaction of 6,000 apartments.
According to a report by brokerage firm IIFL Research, a major percentage of residential realty sales are contributed by suburban Mumbai (beyond Bandra, in the western suburbs). The entire year-on-year growth in Mumbai's residential apartment registrations in calendar year 2009 was driven by the growth in the suburbs. There is a sharp fall of 26% in residential apartment transactions in the suburbs to 4,300 apartments in May 2010 from more than 6,000 apartments sold in April 2010.
Around 17.7 million sq ft of new projects were launched during the calendar year 2010. For the quarter ended March 2010, prices have gone up further by 15%-20% and sales are down by 25%-30%. The skyrocketing prices of properties are leading to low sales. Earlier, Moneylife had reported (see: http://www.moneylife.in/article/8/6400.html) on how developers have started offering discounts on properties as inventories are piling up. The real-estate market has already shown the first sign of reduction in property prices.
"I don't think prices of properties will rise any more. Developers would either hold on to the prices or reduce them," said Pankaj Kapoor, founder, Liases Foras, a real-estate research firm.
Moneylife has been constantly writing that high prices would affect sales and the registration data portrays the same picture. Given the rate at which real-estate prices are shooting up, buyers are not willing to shell out exorbitant amounts. The weighted average rate of the unsold stock (as of December-end 2009) was 61% higher than the weighted average rate of the properties sold in 2008-09 (in the Mumbai Metropolitan Region), according to a study by Liases Foras. This reflects the inherent inefficiency in the market.
Punjab National Bank said it signed a memorandum of agreement (MoA) with Mauritius-based Principal Financial Group and Vijaya Bank for restructuring of their existing joint ventures.
Both the lenders will continue to support Principal in the asset management company for next three years. PNB and Vijaya Bank will sell their 30% and 5% stake in the distribution joint venture company to Principal.
Similarly, PNB will buy Principal’s 26% stake and Berger Paints’ 25% stake in the insurance broking company. PNB will buy out Principal and UK Paints stake of 26% and 32%, respectively in Principal PNB Life Insurance Co Ltd.
On Wednesday, PNB shares ended 0.4% up at Rs1,050, while Vijaya Bank shares ended 2.6% up at Rs64 on the Bombay Stock Exchange. The benchmark Sensex closed 0.04% up at 17,755 points.
Shree Renuka Sugars Ltd said it completed a revised agreement to acquire a controlling stake in Brazil-based Equipav SA Acucar e Alcool.
As per the new terms, the Renuka Sugars shall invest Rs45 crore in Eqipav leading to a majority, controlling stake of 50.34%. Equipav AA consists of sugar and ethanol mills with integrated co-generation facilities at Sao Paulo in Southeast Brazil. The mills have a combined cane crushing capacity of 10.5 million tons of cane per annum.
On Wednesday, Shree Renuka Sugars ended 1.1% down at Rs68 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.04% up at 17,755 points.