Current street expectations of high volume growth along with high prices of real estate are unlikely to pan out. Expect prices of residential property to correct to the tune of 10% over the next few months.
The slowdown in home loan disbursements, among other factors, underpins our view that
the residential real estate market has slowed down considerably.On the pricing front, we forecast a correction of 10% from current prices in the next 12 months but do not rule out steeper correction.
Kotak is not very bullish on the sector. Uday Kotak @ India Incredible at 60 in New York said that Equity is the best asset class for Indian investor to be in today.
Unitech's residential division has the largest volumes under development amongst Indian listed real estate companies with more than 25 mn sq. ft under construction in National Capital Region and Kolkata. Unitech has access to a low-cost land bank of 480 mn sq. ft across 14 cities.
NAV estimate for Sobha and DLF for a 10% reduction in selling price in the next 12 months. New fair price for Sobha Developers, based on March 2009 NAV, is Rs870/share and the rating is changed to In-Line (Outperform previously). Revised target price for DLF is Rs750/share (Rs705 previously) based on a 15% premium (5% earlier) to March 2009-based NAV of Rs646.
Showing posts with label India Real Estate. Show all posts
Showing posts with label India Real Estate. Show all posts
Friday, September 28, 2007
Tuesday, April 03, 2007
Rising Rates - Droping Realty Stocks
The increase in CRR by RBI has severely hit the Realty Stocks listed on BSE. Most realty stocks have crashed by over 10% in just two trading sessions. These stocks have already drpped by 50% from their yearly Highs in Jan-2007.
Home Loans have got expensive while Realtors are still arrogant about home prices. Industry insiders claim that many big ticket deals that have happened in the past couple of months will see their construction projects becoming unviable and finally going bankrupt.
Home Loans will become more expensive as the 1% cess on Housing finance companies (HFCs) and commercial banks of their annual incremental home loans will be effective from April;-1st 2007.
The 1% cess is contributed to a new “safety fund” proposed to be created under the National Housing and Habitat Policy. Major banks and HFCs will pass this cess to consumers in order to protect their bottomline.
Home Loans have got expensive while Realtors are still arrogant about home prices. Industry insiders claim that many big ticket deals that have happened in the past couple of months will see their construction projects becoming unviable and finally going bankrupt.
Home Loans will become more expensive as the 1% cess on Housing finance companies (HFCs) and commercial banks of their annual incremental home loans will be effective from April;-1st 2007.
The 1% cess is contributed to a new “safety fund” proposed to be created under the National Housing and Habitat Policy. Major banks and HFCs will pass this cess to consumers in order to protect their bottomline.
Friday, February 16, 2007
Ambani - Kothari pick up Chennai Property
Mukesh Ambani's brother in law, the Kothari family has picked up Boat Club Property in Chennai for a new land record price of Rs 175 crore taking the price per SFT to a record level of Rs 17,000. Boat Club is the upper crest residential area of Chennai and till now no commercial construction has taken place in the area.
The 43 ground property belonged to IDBI and was on sale by an e-auction. Kothari's outbid the Bengalooru based Prestige Constructions and Chennai based Sanmar group in the final round. International realty firm, Jones Lang Lasalle was the broker for the deal.
Since November 2005, Boat Club area has witnessed a constant rise in land prices. In Nov-2005, HSBC auction fetched Rs 14,800 / sft. Later in June-2006, the prices on the Boat Club Road were Rs 15,400 / sft when CB Rrichard Ellis auctioned a property beloning to the TVS group.
Here is a recent Survey on Chennai's Real Estate prices.
The 43 ground property belonged to IDBI and was on sale by an e-auction. Kothari's outbid the Bengalooru based Prestige Constructions and Chennai based Sanmar group in the final round. International realty firm, Jones Lang Lasalle was the broker for the deal.
Since November 2005, Boat Club area has witnessed a constant rise in land prices. In Nov-2005, HSBC auction fetched Rs 14,800 / sft. Later in June-2006, the prices on the Boat Club Road were Rs 15,400 / sft when CB Rrichard Ellis auctioned a property beloning to the TVS group.
Here is a recent Survey on Chennai's Real Estate prices.
Friday, February 09, 2007
RBI cautious about Real Estate Lending
RBI which was strongly opposing the flawed SEZ policy in India had raised interest rates for the Real Estate Sector. RBI has also asked Banks to do higher provisions for their exposure to Real Estate loans. Greedy property developers are passing the loan burden on to consumers. However, with banks raising interest rates on home loans as well, Real Estate Property developers may have been trapped.
Observing the recent trend in realty stocks in India, it makes me wonder if a larger correction has begun. This shakeout will last longer and weak players will be eliminated. If you are planning to BUY a house, just hold with your cash for 3 more months and you will get it 20% cheaper :-)
Observing the recent trend in realty stocks in India, it makes me wonder if a larger correction has begun. This shakeout will last longer and weak players will be eliminated. If you are planning to BUY a house, just hold with your cash for 3 more months and you will get it 20% cheaper :-)
Wednesday, January 31, 2007
Home Loan Borrowers in India
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Monday, January 29, 2007
Bangalore Residential Property Prices
Our team conducted a survey with various builders and real estate developers and here are the average residential prices in different parts of Dirty & Polluted Bangalore / Bengalooru.South Bangalore / Bengalooru :
HSR Layout - Rs 2,500 - 3,000 / sft
J P Nagar, 6th Phase Rs 4,500 / sft
Sarjapur Outer Ring Road Rs 2,600 - Rs 3,500 / sft
Kanakapura Road Rs2,400 - Rs 2,600 / sft
Bannerghatta Road Rs 4,000 / sft
North Bangalore / Bengalooru:
Hebbal Outer Ring Road - Rs 2,650 - Rs 3,000 / sft
Yelahanka - Rs 2,500 - Rs 2,600 / sft
Banswadi Rs 2,650 / sft
Dodaballapur Road RS 2,400 /sft
HRBR Layout Rs 2,400 - RS 2,600 /sft
Tumkur Road - Rs 1,900 - Rs 2,300 / sft
Nelamangala - Rs 2,600 / sft
East Bangalore / Bengalooru:
Marathalli Rs 2,600 - Rs 2,800 / sft
Brookefields - Rs 3,000 - RS 5,000 for Independent Houses
Hoodi - Rs 2,600 - Rs 3,000 / sft
Old Madras Road - Rs 2,500 / sft
Malleshwaram - Rs 4,800 / sft
Whitefield Rs 2,600 - Rs 3,200 / sft
$10 Billion Foreign Money into Indian Realty
More than 35 big ticket foreign investors have already poured Billions of dollars into Indian realty. Insiders in the Indian Real Estate market estimate upto $10 Billion inflow into various real estate projects in the first 6 months of 2007.
- Signature Group planning to launch several real estate funds for investments in UAE and India, totalling over $650 Million
- 20 More funds are seeking entry into India
- Foreign investors interest is at an all time high with 80% of the investors being first time investors.
- FIIs from Israel, Malaysia, UK, and Singapore are aggressively chasing the space.
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