Real estate in india

With prices of newly launched apartments coming within the reach of end users, the realty sector has started looking up.

After witnessing an acute slowdown during the third and fourth quarter of 2008, the
real estate sector has shown some recovery in the first quarter of 2009 ending March 31. If trends of absorption for the period January-March 2009 are any indication, a report prepared by Prop Equity Research suggested there has been a surge in absorption in majority of the cities. A recent study conducted by Prop Equity across Mumbai, Bangalore, Chennai, Hyderabad, and Gurgaon in NCR reveals that absorption has been high among the residential new launches in the first quarter of 2009 in Mumbai, Chennai and Gurgaon. The study attributes the success rate in absorption to the price correction and reduction in unit sizes introduced by developers in these cities. However, Bangalore and Hyderabad, which witnessed fewer new launches during the period, experienced a low absorption.

The real estate sector experienced one of the worst kinds of slowdown in demand because of rise in the interest rates in the January-March 2008, by almost 2 percentage points, to 12%. At the same time, the prevailing prices of residential apartments in most of the cities made them unaffordable for most buyers. The situation further worsened after global financial markets got affected due to the failure of banks and brokering houses in the US and Europe. This also affected Indian real estate market very badly and demand plummeted. According to the report, While October-December 2008 saw the nadir with absorption of only 1,113 units in Mumbai, the first quarter of 2009 witnessed the launch of over 14,478 residential apartment units and a corresponding absorption of 5,746 units. As against this, during October-December 2008, 3,096 units were launched, the report said. Similarly, in Gurgaon, during January-March 2009, 815 units were sold while 4,490 units were launched. As against this, in October-December 2008 quarter, only 587 units were sold from 3,708 units launched. Hence, both the absorption and launch figure showed sign of recovery.

The report says the main reason for increase in absorption of the new launched products is drop in the per sq ft rate and the reduction in the size of the units, which brought their prices within the affordable range of buyers. The report says most of these units were launched at a price almost 40% lower than the average pricing of apartments that were available in the first quarter of 2008. The average unit size of these apartments was also lower by almost 35%.

According to Samir Jasuja, founder & CEO of Prop Equity, "The increase in this high absorption trend can be attributed to price correction and reduction in unit sizes adopted by developers. This encouraging trend is indicative that the markets are poised for a recovery if proactive measures are adopted by
the real estate community to offer the right product at the right price to the consumers."

This trend continued in Gurgaon and Chennai where the new launches have witnessed high absorption after the unit sizes were reduced and average prices corrected by almost 15% to 25%. As anticipated, 61% of the total absorption in Gurgaon and 58% of the total absorption in Chennai in the first quarter of 2009 was constituted by the newly launched residential apartment units.

Courtesy:- ET dt:- 08-05-09

REALTY BYTE

STRUGGLING BUILDERS PLAN TO SELL OFF THEIR NON-CORE LAND HOLDINGS

In a bid to raise money for their ongoing projects and survive the downturn, many builders are planning to sell off their non-core land holdings. In a booming property market, several builders had built land banks. Often, land was purchased even in markets where they had a comparatively low presence. With the market situation having changed, and other routes of raising funds - bank loans, private equity and going public - proving to be difficult, builders have resorted to selling their land, even at a discount. Ostensibly, the builders are not getting the price they had paid earlier. In some cases, say industry sources, builders are willing to settle for a drop in 30% over what they paid.

Courtesy:- ET dt:- 15-05-09

The prime lending rate (PLR) maes a

difference to home laon borrowers. Here is how it works to lower your home loan

interest rate

What is PLR?

It is a benchmark rate of interest at which banks lend to their creditworthy

customers. This rate is used as a yardstick to compute inerest rates for other

borrowers.

When does PLR change?

Apart from the bank's ownpolicy, PLR is also dependent on how the Reserve Bank of

India (RBI) toggles its key rates like the cash reserve ratio (CRR) and repo rate.

When the PLR is increased or decreased by the lender, it translates into more or less

outflow for the borrowers

Relation between PLR and home loan

interest rates

PLR is a benchmark that varies from lender to lender. The rate of interest charged by

a bank could be half a percent more tha the benchmark PLR. A cut in the bank's PLR

will reduce the interest burden for borrowers.

Impact of key policy rates on PLR

The RBI toggles its key policy rates to bring certain volatile situations under

control. For instance, the RBI may take measures to draw out excess money from the

system, rein in inflation, invigorate a slumped economy, infuse liquidity or control a

spiraling price rise.

CRR is the portion of funds tat banks have to retain with the RBI. Repo rate is the

rate at which banks borrow money from the RBI. If the RBI reduces the repo rae, it

will be cheaper for banks to borrow money. Lowering the CRR and repo rate will infuse

more liquidity into the system . This could translate into a less expensive cost of

borrowing

Courtesy:- FT dtd:- 29-03-09

Factor in expenses and related costs while drawing up a
budget to buy your dream home. This way the repayment will be comfortable

Despite the gloom of job cuts and possibility of more recession, some people are busy realising their dream home. The mix of lower home loan rates and fall in property prices is infusing life into the real estate market.

Why are home loan rates falling?

The Reserve Bank of India (RBI) toggles key rates to infuse liquidity into the system, drain out excessive liquidity, control forces of inflation, increase economic activity and so on. A few months ago the inflation rate was at its peak. To rein in the soaring inflation umbers, the central bank hiked the cash reserve ratio (CRR) and repo rate. The CRR is the portion of deposits banks must keep aside with the RBI and the repo rate is the rate at which the RBI lends money to banks. Banks in turn hiked the rates and made loans for housing, cars and personal purposes dearer.

However, with the inflation numbers rubbing shoulders with the possibility of deflation, the RBI recently reversed its policy. It has pulled down the key rates to infse liquidity into the system and make borrowing cheaper.

How should you make a budget for a home?

A home is one of the most expensive purchases. And a home loan is a huge debt that the borrower is burdened with for 15 to 20 yeas. Hence, it is critical that you budget for it. Do not indulge in extravagant purchases that you may find hard to repay for. Borrow as little as you possibly can. It is not necessary to take 90 percent of the money from the lender when you can afford to raise some money from other sources. Make arrangements for the required margin money.

After paying your monthly EMIs, you must have sufficient funds to meet your regular monthly expenses, make small savings, set aside emergency funds and plan for long-term expenses. Unless imperative, avoid acquiring new debts.

Floating rate borrowers must keep rate fluctuations in mind before they borrow funds. Borrowing to the brink of your repayment capacity will put you in financial trouble, if rates go up. Keep a cushion that doesn't make your life miserable in case rates go upwards.

How does EMI work?

Equated monthly installments are used to pay both interest and principal each month. At the end of a specified number of years, the loan is repaid in fll. EMI comprises of two components - principal or the actual money borrowed and the interest towards it.

During the initial years of the loan repayment, a bigger chunk goes towards the interest component while the principal amount repaid is much less. Towards the end of the repayment tenure, mostly the principal component gets repaid.

In case of a pure fixed loan, the EMI due to the lender remains constant. In case of a floating rate loan, the EMI moves up or down depending on the bank's benchmark lending rate. When a lender increases the interest rate, either the tenure of the loan is increased (and EMI kpt constant) or EMI is increased (and tenure kept constant).

Planning for other expenses

Apart from making arrangements for down payment of 10 to 15 percent, home buyers incur additional expenses. This includes registration expenses, association funds, maintenance deposits, taxes due to the government, furnishing and woodwork etc.

Planning well ahead keeps you out of financial trouble.

Courtesy:- FT dt:- 05-04-09

INDIABULS Launched a Best Project CENTRUM PARK in best and beautiful location Sec- 103, Dwarka Gurgaon Expressway, Gurgaon.It’s Residential apartment. It’s suitable for each and every investor or buyer for investment.

Overview:-

Gurgaon, once one of the satellite cities of Delhi/NCR, has emerged as an inseparable extension of the capital itself and has witnessed tremendous growth in terms of roads, transportation, housing and entertainment due to unbound investments by domestic and foreign investors. Minutes away from International & Domestic Airport, Centrum Park is located near the major upcoming developments like 150m Dwarka-Gurgaon Expressway & Medicity. It’s a licensed project with 2BHK, 2BHK + Study, 3BHK, 3BHK + Study, 4BHK & Penthouse equipped with lush green gardens, ample parking space, playground for kids, club facility, 24X7 water supply, power back-up, medical support & daily needs store. The affordable option is coming with no preferential location charges for early movers & minimal usage area wastage in the project.


Facilities and Features:-

? Affordable Prices
? Excellent connectivity
10 M- Airports
25 M- CP
30 M – Railway Station
? Metro connectivity
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? Beautifully and immensely landscaped
? Excellent Location
? Very lower price.


Scheme: -

First 200 bookings has no plc charges & inaugural discount of 150/- per sq.ft


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