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The supply of high-value flats in the city will outstrip demand from March. At present, there is an approximate supply of a million sq ft for the top-end residential market in the metropolis
High-value flats, starting with a price tag of Rs5 crore (for a luxurious two, three or four bedroom, hall and kitchen) had vanished from the market between 2007-2008. The slowdown saw the affordable housing segment growing. However, during the second quarter of the current fiscal, the high-value flats segment also reported sales. Seeing the movement in this segment, a number of developers again started developing high-value flats around Mahalaxmi, Lower Parel, Prabhadevi and Worli in Mumbai. There is a huge amount of supply of approximately a million sq ft in the market for this segment. But what about the future demand scenario?
“There will be a slowdown in the tempo—which you saw in the past few months—for high-value flats from March in terms of both buying and construction. That is because there is too much supply in Mumbai for this segment. But I don’t see the demand coming in so fast and easy,” said Pranay Vakil, chairman, Knight Frank India Pvt Ltd.
The price of these projects starts from Rs32,000 per sq ft. A few projects in this segment are from the Lodha Group (Bellissimo in Mahalaxmi ); Godrej Properties (Planet Godrej near Mahalaxmi Racecourse); DB Realty (Orchid Turf View in Mahalaxmi and Orchid Crown in Prabhadevi) and K Raheja Corp (Vivarea in Mahalaxmi).
During the festival season, especially Diwali, this segment saw a lot of movement because buyers had realised that prices are not going to fall any more and reasoned that it was the correct time to buy. This buying was a release of the pent-up demand which had accumulated over a period of time.
From November 2009 till the beginning of this month, there was a lot of demand from Non Resident Indians (NRIs), because of the Dubai realty crash. These NRIs also decided to bank on Indian property because debt instruments abroad were fetching poor returns. Around 30%- 40% of the demand for these high-value flats were coming in from NRIs. “This time NRIs bought with a little more vengeance than before, because they feared that the rupee would become stronger soon and they may have to pay more dollars to buy these properties. Property-buying was being diverted to India from Dubai,” said Mr Vakil.
However, demand slowed down during the first half of January as Indians consider this period to be an inauspicious time to buy new homes. After February, most NRIs will go back to their host countries, which will lead to a dip in the pent-up demand. Again, there will be greater clarity on the long-term value of the rupee. It remains to be seen how developers will push sales for this high-value segment.
“You will see some (buying) resistance from March in this segment unless the stock market reaches new highs. If this doesn’t happen, I don’t see the same tempo continuing,” said Mr Vakil.
Despite a more-than-expected hike in the Cash Reserve Ratio (CRR), banks today ruled out any immediate hike in lending rates
Retail and corporate borrowers can breathe easy as bankers today said that an immediate hike in lending rates is unlikely even as the RBI tightened money supply by raising the CRR by 75 basis points, reports PTI.
"There may not be an immediate hike in the lending rates as liquidity at the moment is sufficient. We need to see how the liquidity conditions pan out. Going forward, as the credit off-take picks up, there may be an increase in rates," State Bank of India’s chief financial officer S S Ranjan told PTI.
IDBI Bank director Sushil Munhot echoed his sentiments. "I doubt if there would be a hike in interest rates immediately as there is enough liquidity in the system,” he said.
According to Corporation Bank executive director Asit Pal, there would not be any change in prime lending rate as there is sufficient liquidity in the system and credit off-take is also muted at this point of time. However, Mr Pal said that there could be some spike in inter-bank call rate.
Shubhada Rao, chief economist at Yes Bank, said that rate hikes would depend on the overall growth dynamics. "Rate hikes are unlikely in the immediate horizon as economic growth is still on the agenda. I don't see banks upping their interest rates—at least, not yet," Mr Rao said, adding that liquidity was comfortable and would remain comfortable even after the two-tranche CRR hike announced today.
In its third quarter monetary policy review, the RBI raised CRR by 75 basis points to 5.75% to mop up Rs36,000 crore from the system. However, the apex bank retained short-term lending and borrowing rates at 4.75% and 3.25%, respectively.
With a view to achieve generation capacity of 75,000MW by 2017, NTPC has undertaken 17 projects across the country
State-run utility NTPC has undertaken 17 projects across the country for capacity addition of 17,930MW of power in the roadmap to achieve 75,000MW generation capacity by 2017, a top company official told reporters.
"In a roadmap to growth, we have 17 under-construction projects spread across India for generation of 17,930MW of power, out of which 14 projects are of NTPC and four (are) through joint ventures, which are in different stages," NTPC’s deputy general manager (finance) Sulochana Muralidharan told reporters yesterday. “At present, NTPC generates 30,644MW (of) power, but our target is to reach 75,000MW capacity generation by 2017,” she added.
"Land, water, fuel supply and power purchase agreements all are in place for these projects, which are expected to come up progressively in the next two-three years under the 11th or early 12th Year plan," she said.
She also said that the company had invited bids for 9,632MW of capacity, spread over 11 projects, and that NTPC expects the contracts to be awarded within a period of six months to one year.
She added that feasibility reports for 4,245MW capacity projects are ready and that these projects are very soon going to be awarded.