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Business turnover across Mumbai region has fallen in June quarter but improved sales suggest that cheaper homes that are available at extended suburbs are the major contributors
With fewer buyers interested in purchasing homes, monthly inventory levels, which denote the months required to clear the stock at existing absorption pace, in Hyderabad, Mumbai Metropolitan Region (MMR) and National Capital Region (NCR/Delhi) has gone over four times that of a healthy market, said real estate research agency Liases Foras, in a report.
According to the report, for the quarter to end-June, on an average, monthly inventory level across six cities is at 25, while a healthy market maintains eight months of inventory. Inventory level for Hyderabad is the highest at 39 months, followed by MMR and NCR at 37 and 32 months, respectively. It is followed by Chennai at 24 months, Pune at 15 and Bengaluru at 10 months.
During the June quarter, Bengaluru emerged as topper with 140% increase in sales at 16.48 million sq ft compared with 6.87 million sq ft, same period last year. MMR region was at second position in sales at 9.79 million sq ft, an increase of 19% over last year. NCR sold maximum homes, with 21.33 million sq ft, but the sales was down 2% compared with sales of 21.85 million sq ft it recorded during April-June 2011.
Pankaj Kapoor, founder, Liases Foras, said, "Although the sales in MMR has improved in number of units, but the business turnover (value of the stock sold) has come down suggesting that cheaper properties available at extended suburbs were major contributor of this improvement. Overall market in the Greater Mumbai (municipal limit of Mumbai) was saddled."
Despite huge levels of inventory, home prices in MMR continue to remain very high. During the first quarter, MMR recorded sales of 9.79 million sq ft at an price of Rs7,106 crore. This means, in MMR region homes were sold at an average price of Rs11,154 per sq ft or at Rs1.12 crore per flat of an average size of 1,092 sq ft. This average price for a sq ft is three times more than the rest of the cities.
Pune followed MMR in terms of average price with Rs4,269 per sq ft, while Hyderabad was the 'cheapest' among the six cities at Rs3,222 per sq ft. Bengaluru at an average price of Rs4,195, Chennai at Rs4,038, NCR at Rs3,729 per sq ft were at third, fourth and fifth position, respectively.
According to the report, new supply across all the cities has come down. The wt average all India Price of new supply is 17% lower than the wt average price of existing supply as of Q4 11-12, it said.
If the load despatch centres had isolated the states which overdrew power, from the grid, this mess would not have happened. It is amazing that this was not done
The terrible and torturous Tuesday that some 700 million people experienced, apart from the lakhs of crores of rupees that the nation lost in industrial production, is not one of its kind. It may sound ominous, but others are likely to follow if checks and measures are strictly not enforced.
It is no laughing matter for the new kid on the block in the power ministry, Sushil Kumar Shinde, to say to say that it took USA four days to overcome the power outage as against the eight hours that India took to restore power supply.
As more detailed information is now emerging from the mess as a result of the grid collapse, it is apparent that both Northern Regional Local Despatch Centre and the State Load Despatch Centres were fully aware that three states—UP, Punjab and Haryana—were, in fact, indulging in massive overdrawing of power. They simply passed the buck by filing petitions with the Central Electricity Regulatory Commission (CERC) instead of preventing the collapse by isolating the concerned states in the system.
On the political front, BSP and BJP walked out of the Assembly in Lucknow over the power crisis; chief minister Akilesh Yadav slammed the UPA government at the Centre for denying coal linkage to state’s power plants and he attacked the Congress party for not being supportive.
But, according to a senior official in the power ministry, the states were expected to follow the grid discipline by not overdrawing power and also set up automatic demand management schemes including UFRs—Under Frequency Relays. The states simply did not comply with this essential requirement for smooth running of the system. Now a time frame should be set for this imperative necessity and no excuses should be accepted.
The control rooms of these load despatch centres were fully aware that simultaneous overdrawing would lead to the grid collapse, but they failed to isolate the states from the grid, which is why it collapsed. Why was this issue not taken up when they had pointed out this anomaly earlier?
The question that would arise under these difficult circumstances is how are these centres manned? Can there be a nexus between the posted personnel and the party in power? Or that they were simply careless and assumed that ‘nothing’ would happen on such a massive scale causing the grid to collapse, as such lapses have ‘happened’ before? It is difficult to say, but worth a serious investigation.
If and when the power ministry or the PMO (Prime Minister’s Office) decides on such a national issue and set up an independent competent authority to carry out an investigation, those who are currently holding the positions, when this collapse occurred, should be suspended till the work is complete and findings are submitted to the government.
We cannot afford to have such a national disaster again and the guilty must be punished and steps should be in place so that this does not recur.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)