Jittered over the fate of sagging exports and dismal state of exporters, the commerce ministry has speeded up efforts to reduce procedural time taken for developing Special Economic Zones (SEZs) and to simplify procedures to get the tax-free industrial enclaves after the new government is formally sworn in.
In order to boost the tax-free industrial enclaves on a fast track basis for increasing overseas sales of Indian goods and services, the ministry will enable developers to get their land classified as an SEZ at the initial stage of approval by only submitting legal documents that prove land ownership, instead of a numerous processes earlier including a non-encumbrance certificate.
The move by the commerce ministry would ensure increased and speedy investment flows in the SEZs apart from increasing employment in the region.
Thursday, May 21, 2009
Tuesday, May 12, 2009
Price Correction In Central Mumbai
After sharp 30-40% price cuts in several new launches in suburban Mumbai (Thane, Chembur, Andheri, Kurla etc) over the last 2-3 months, we note price cuts in prestigious South-Central Mumbai (20 mins from CBD, Nariman Point) projects. Lodha Developers launched Primero (at Apollo Mills, NM Joshi Marg) at Rs15,000 psf BSP (Rs100 psf floor rise & car park extra), implying 20% discount to neighborhood. This is a 52-storey tower with roughly 200 apartments.
Several ongoing and partially (60-80%) sold projects in Central-South Mumbai, too, have officially reduced selling prices (10-30%). For instance – Bellisemo (now at Rs 21,000 psf for 32nd storey onwards apts, NM Joshi Marg), Ashok Garden (Rs15,000 psf, Sewri), Orbit Eternia (Rs17000-18000 psf, Lower Parel) and Orbit Arya (Rs40,000-50,000 psf, Napean Sea Road).
Overall, contrary to the market's view, our channel checks suggest lukewarm customer response to several projects.
Several ongoing and partially (60-80%) sold projects in Central-South Mumbai, too, have officially reduced selling prices (10-30%). For instance – Bellisemo (now at Rs 21,000 psf for 32nd storey onwards apts, NM Joshi Marg), Ashok Garden (Rs15,000 psf, Sewri), Orbit Eternia (Rs17000-18000 psf, Lower Parel) and Orbit Arya (Rs40,000-50,000 psf, Napean Sea Road).
Overall, contrary to the market's view, our channel checks suggest lukewarm customer response to several projects.
Thursday, May 07, 2009
Bangalore Developers vs DLF - Cold War
The Bruhat Bangalore Mahangar Palike - BBMP [Government authority to approve buildings in Bangalore] - has issued a full page advertisement against DLF Homes which is developing WestEnd Heights at Banerghatta Road Bangalore.
DLF has claimed that it has received approval from BBMP for construction upto 4 floors. BBMP has clarified that DLF has not obtained any approval or sanction. The scanned copy of the Paper Advertisement from BBMP is attached below.
This practice is nothing new as Realty Developers raise booking amount from customers prior to all paper work formalities. We suspect rival builders in the vicinity[Banerghatta Road] who are holding on to inflated prices to loot customers having a hand in this BBMP advertisement as until now BBMP has never issued any such paper advertisements though such practices are so common. Rival Builders want to keep DLF out of Bangalore and hence the cold war :-)
DLF has claimed that it has received approval from BBMP for construction upto 4 floors. BBMP has clarified that DLF has not obtained any approval or sanction. The scanned copy of the Paper Advertisement from BBMP is attached below.
This practice is nothing new as Realty Developers raise booking amount from customers prior to all paper work formalities. We suspect rival builders in the vicinity[Banerghatta Road] who are holding on to inflated prices to loot customers having a hand in this BBMP advertisement as until now BBMP has never issued any such paper advertisements though such practices are so common. Rival Builders want to keep DLF out of Bangalore and hence the cold war :-)
Mumbai - Registrations + Pricing Data
New property registrations for March 2009 in Mumbai rose 30% MoM (down 33% YoY), possibly the first real MoM increase since October 2008. In FY09, total registrations were 45,580, 30% less than in FY08.
The sales pick-up has come in earlier than our forecast of Q3/Q409 though we did expect the stocks to re-rate earlier. We still think existing inventory will be cleared only by Q3/Q409 if price cuts continue.
Property prices in Mumbai between 2003 and 2009 is as follows,
The sales pick-up has come in earlier than our forecast of Q3/Q409 though we did expect the stocks to re-rate earlier. We still think existing inventory will be cleared only by Q3/Q409 if price cuts continue.Property prices in Mumbai between 2003 and 2009 is as follows,
Wednesday, May 06, 2009
Gurgaon - Registration + Pricing
In Gurgaon, 1,879 properties were registered in March 2009, up 19% MoM. For FY09, registration of properties declined 5%YoY to 29,012 as the base area was higher under the new Gurgaon Master Plan. Here is how Properties were registered in Gurgaon in FY07 to FY09.
Historical Property Prices in Gurgaon and Noida between 2003 and March-09.
We believe the large vacancy levels will result in significant price cuts as developers churn portfolio to meet cash flow demands. Also, the quarterly sales account for less than 10% of the vacant apartments during the quarter. In our view, there will be further price cuts to increase the absorption levels and flush out the inventory.
Historical Property Prices in Gurgaon and Noida between 2003 and March-09.
We believe the large vacancy levels will result in significant price cuts as developers churn portfolio to meet cash flow demands. Also, the quarterly sales account for less than 10% of the vacant apartments during the quarter. In our view, there will be further price cuts to increase the absorption levels and flush out the inventory.
Saturday, May 02, 2009
Residential demand yet to recover meaningfully
RBI data suggests outstanding home loan portfolio of banks grew a modest 8% YoY in 4QFY09, down substantially from 16% seen in 4QFY08. Also growth has slowed during the year from 14% in 2QFY09 to 10% in 3QFY09 and 8% in 4QFY09.
Demand for homes has been muted in FY09 on account of low affordability caused by high interest rates and property prices. It is only since Oct 2008 that RBI took the initiative to lower the repo rate by 425bps from 9% to 4.75% currently. Additionally, in Dec 2008 the government capped interest rates on home loans by PSU banks at 8.5%, for loans up to Rs0.5m, and 9.25% for loans up to Rs2m. House prices have also declined substantially in 2HCY08.
With the decline in interest rates and property prices, affordability has improved. However, this has not yet translated into higher loan growth given that the weak macroeconomic environment and resulting job insecurity, and low income visibility, have adversely impacted buyer sentiment.
Moreover, there is a section of buyers who are waiting on the sidelines expecting further reduction in property prices and interest rates.
Demand for homes has been muted in FY09 on account of low affordability caused by high interest rates and property prices. It is only since Oct 2008 that RBI took the initiative to lower the repo rate by 425bps from 9% to 4.75% currently. Additionally, in Dec 2008 the government capped interest rates on home loans by PSU banks at 8.5%, for loans up to Rs0.5m, and 9.25% for loans up to Rs2m. House prices have also declined substantially in 2HCY08.
With the decline in interest rates and property prices, affordability has improved. However, this has not yet translated into higher loan growth given that the weak macroeconomic environment and resulting job insecurity, and low income visibility, have adversely impacted buyer sentiment.
Moreover, there is a section of buyers who are waiting on the sidelines expecting further reduction in property prices and interest rates.
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