Companies & Sectors
Realty Blues
Unsold flats, incomplete projects but still a lack of sensible pricing and clear regulation
 
There is no sign of achche din for India’s middle-class home-buyers. Property prices have spiralled so high that few have been able to afford an apartment within a reasonable commute to work, in the past two years. Consequently, you see empty towers (fully completed) looming over major metros, while thousands of buyers complain that under-construction projects are not being completed. And, yet, property prices are not cracking, as much as they should, to make homes affordable again for those who desperately want to own them. Developers have moved from offering incentives and freebies, like gold coins and iPhones, to serious price discounts, concessional loans and modular kitchens and air-conditioners thrown in with apartments. But the discounts are not deep enough to kick-start a buying cycle. It is probably because benevolent (or beholden?) bankers are not pushing hard enough for debt-recovery from over-extended realty giants. 
 
A Reuters report puts the unsold inventory of only the leading Mumbai developers at Rs5,340 crore. Ironically, it also says that property prices have more than doubled between 2009 and 2012. This means that, while the world was dealing with a global financial crisis, a bailout facilitated by the Reserve Bank of India through the banking system was allowing developers to push up prices while holding on to unsold inventories.
 
In Bengaluru, The Economic Times reports that unsold residential inventory is at an all-time high of over one lakh units valued at over Rs85,000 crore. In Delhi, or the National Capital Region, Knight Frank India, a leading realty brokerage firm, had put the unsold stock of residential homes at 192,568, in January this year. It also says that property sales and new project launches have dropped in all six leading metros of India. It is only the small market for super-luxury housing that remains relatively unaffected. 
 
So all eyes are now on whether banks and other lenders will force some re-rating of property prices in a bid their recover debt. Realty industry sources say that the pressure on developers is, indeed, mounting. This is evident in reports of leading property owners beginning to sell off small parts of their land banks to reduce their debt burden. The Housing Development and Infrastructure Ltd (HDIL) plans to raise Rs750 crore though the sale of non-core assets and land to reduce its debt which stands at over Rs3,000 crore. Omaxe Limited plans to raise Rs50 crore from land sales. The Royal Orchid Hotels is selling a plot of land to reduce debt. 
 
More recently, Tata Capital won a winding up petition against Hiranandani Palace Gardens after it defaulted on a loan; predictably the single judge’s order has been challenged before a divisional bench. This is just one of the many petitions filed against the Hiranandani group. DLF Ltd, which has run into problems with the capital market regulator and the Competition Commission, has been offering deep discounts on properties in 16 cities, to push sales. Then there is the expectation that a massive sale of real estate assets by the beleaguered Sahara group, in order to comply with the Supreme Court order may be in the offing too. 
 
Unfortunately, the sum total of these sales is unlikely to see the property market picking up in a hurry. And this does not even begun to address the problem of incomplete projects that have been held up for failure to obtain appropriate clearances or because actual construction was not in accordance with municipal sanctions. Or, the massive shopping malls dotting our cities which have turned into white elephants and are emptying out. Industry sources privately admit that things are looking bleak; but nobody is willing to admit that sensible pricing, clear regulation and good governance may be the way forward for developers and customers.

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COMMENTS

manoharlalsharma

2 years ago

Realty Blues./What is basis of land cost this the only commodity what can not produced in any kind of factory , can not Imported or stressed any extant only more & more F.S.I. can be introduced in vertical so only available land be utilized and shared present occupants do not leave without any profit.

Shyam Singh

2 years ago

There is a very comfortable cushion of black money to support builders and developers... that's why they are sustaining this dull market..otherwise they should have gone bankrupt a long time ago.

Vaibhav Dhoka

2 years ago

Balanced pricing is need of time.There should be NGO like organisation to look into fair pricing of flats in area.

Rajasthan to hold roadshows to attract investment
Rajasthan chief secretary CS Rajan said the embassies and the high commissioners of different countries where roadshows are proposed have been contacted and the final programme of the roadshows would be prepared soon
 
With an aim to bring investment in the state, the Rajasthan government plans to hold 11 international and nine national roadshows in the coming months, officials said.
 
"These roadshows will be held prior to Resurgent Rajasthan summit that is to be held in November this year," a state government official told IANS.
 
The decision to conduct these shows was taken at a meeting held here on Monday to discuss preparations of the summit. Rajasthan Chief Minister Vasundhara Raje presided over the meeting.
 
Raje, while addressing the meeting, said all the state government departments should prepare practical proposals which were in the interest of the state and could attract investors.
 
She asked her cabinet ministers to coordinate with their respective ministries in the central government to bring in more investment. She also asked her colleagues to hold meetings and discussions with the union ministers in order to seek support for the summit.
 
Rajasthan chief secretary CS Rajan, during the meeting, said the embassies and the high commissioners of different countries where roadshows are proposed have been contacted and the final programme of the roadshows would be prepared soon.
 
He also informed about the progress of the proposed drafts of various new policies.
 
Resurgent Rajasthan Partnership Summit is scheduled to be held in Jaipur on November 19-20, 2015 and it will have strategic conferences, panel discussions, round-table deliberations, presentations and one-on-one business meetings.
 
The summit will bring together investors from all over the world for interacting with policy makers, including the political leadership, government officials and, local business leaders on the investment environment and opportunities in Rajasthan.
 
First of all, the roadshows will be organised in Japan and Germany in the month of April.
 
"Besides these two countries, international level roadshows are being planned in the UK, South Korea, USA, Malaysia, Brazil, UAE, Israel, China and Netherlands as well," an official said.
 
Nationally, the roadshows will be organised in Pune, Kolkata, Chennai, Ludhiana, Hyderabad, Delhi, Gurgaon, Bengaluru, Mumbai and Indore.
 

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Indian wines sparkled at Italian show
The range of products included several awarded wines from Maharashtra's Nashik Valley and from the Solapur area such as Sauvignon Blanc, Viognier, Riesling, Chenin Blanc, Sangiovese White, Cabernet Sauvignon, Sangiovese, Zinfandel Rose and Sula Dindori Shiraz
 
A selection of the best Sula Wines and Indivine by Fratelli Wines from India were on view at the just-concluded Vinitaly 2015 international wine exposition at this northern Italian town.
 
"Never in the past has such a broad range of wines from India has been made available in Italy and this allowed visitors and connoisseurs to get an understanding of Indian terroir (a French term that literally translated means earth or soil) and its characteristic flavours," the organisers said.
 
The range of products included several awarded wines from Maharashtra's Nashik Valley and from the Solapur area such as Sauvignon Blanc, Viognier, Riesling, Chenin Blanc, Sangiovese White, Cabernet Sauvignon, Sangiovese, Zinfandel Rose and Sula Dindori Shiraz.
 
In addition, there was the Sula Sparkling Seco and Sula Brut, the only Indian "Methode traditionelle" available
 
Vinitaly had a strong focus on business this year, including meetings with delegations and calendar of b2n event, professional seminars and tastings sure to provide effective answers useful for business strategies in the wine sector (www.vinitaly.com ), a statement said .
 
Overall, the wine sector is worth more than 10 billion euros, of which more than 5.1 billion euros is generated by exports.
 

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