Luxury houses tempt buyers with lower tags

LONDON: Luxury homes became more affordable last year, as the financial crisis eroded prices from Monaco to Barbados, according to Knight Frank. 

Prime real-estate values at 56 locations declined by an average of 5.5%, the London-based property broker said in a report published on Tuesday. Monaco was the most expensive market for the second year in a row, followed by London and Paris. 

Wealthy individuals put off making purchases in 2009 because of concern about the economy, Knight Frank said. 

Prices of properties in the countryside, coastal locations and ski resorts, often bought as second homes, fell by at least 12%. The biggest declines were in Dubai, in the western part of Portugal’s Algarve, in Palma on the Spanish island of Mallorca and in Dublin. Values in each of those markets fell at least 22%. 

“Cities tend to perform better because they are necessity driven, whereas resorts and country pads are more discretionary purchases,” said Liam Bailey, Knight Frank’s head of residential research. 

Luxury apartments and houses in cities appreciated by an average of 0.4%, led by a jump in values in China, Hong Kong, Singapore and Jakarta, the broker said. 

“Boosted by China’s quick recovery from the global recession, the price of prime properties in Shanghai, Beijing and Hong Kong rose at a phenomenal rate last year,” Bailey said. Shanghai Booms Shanghai had the biggest increases, with property prices averaging $500 to $700 a square foot, or 52% more than a year earlier, the survey showed. It was the 13th most expensive luxury-home location among cities. There were 8,438 properties sold there last year for more than $735,000, making it China’s largest prime residential market. 

Luxury-home prices in Beijing rose 47%. Hong Kong values increased 41% to average $2,000 to $2,500 a square foot, making it the fourth most-expensive city in the study. China is already taking steps to rein in the real-estate market as price increases accelerate. The government in January reimposed a sales tax on homes sold within five years of their purchase and the People’s Bank of China raised the proportion of deposits banks must set aside as reserves to reduce lending. 

Property prices in China rose 10.7% in February, the most in almost two years, prompting the World Bank to urge the central bank to lift interest rates to prevent a bubble. While government measures may damp demand, “strong economic growth and limited stock should keep prices stable” this year, said Xavier Wong, Knight Frank’s head of research for greater China and Hong Kong. 

In Monaco, where residents include Formula One champion Jenson Button and billionaire Philip Green, prices fell by about 15% last year. The average cost of a luxury apartment or house in the low-tax state on the Riviera ranged from $4,300 to $5,900 a square foot at the end of 2009, Knight Frank said. 

L ondon’s luxury-homes market was the best performer in Europe as the pound’s weakness and a yearlong slump in values encouraged investors to

compete for a shrinking number of homes for sale. In the US and Canada, luxury home values fell by an average 7.7%, led by San Francisco, while in the Caribbean they decreased 13%. 

Knight Frank’s report was accompanied by a survey on Citigroup Inc’s private bank, which showed that 91% of its customers expect their net wealth to be either unchanged or to increase “slightly” this year. Half of the respondents in the Citi Private Bank survey said they expected better returns from residential real estate this year than from other types of property. Real estate accounted for about a third of the assets owned by the bank’s clients, more than stocks and other investments. 

Property is expected to be the third-best performing asset class in 2010, after stocks and hedge funds, the survey showed. “Although relatively few respondents were planning to purchase a new primary residence this year, a significant proportion do see buying opportunities in the current market,” said David Poole, head of the UK arm of Citi Private Bank. Source: ET

Not many takers for APHB's much-hyped housing scheme

Koride Mahesh, TNN, Mar 14, 2010, 04.10am IST;
HYDERABAD: The much-hyped Andhra Pradesh Housing Board (APHB) venture-2 at Kukatpally has received lukewarm response from people. Slump in the real estate sector and price tag of flats (single and double bedroom) seem to have cast their spell on the venture. On the other hand, private firms are offering flats at a price less than the board’s rates.

Though the board planned toconstruct 1,500 flats for low income group (LIG) families, only about 460 applicants have paid 10 per cent of the flat cost and expressed their willingness to pay the remaining amount. Now, the officials have decided to wait till the end of March and go ahead with construction of flats whose owners have paid
10 per cent advance.

APHB has proposed to construct two bedroom flats (580 square feet) and single bedroom flats (460 sft) in over eight acres of land at venture-2 in Kukatpally Housing Board (KPHB) phase-IV. While the cost of a 2-bedroom flat is about Rs 8.5 lakh, a single bedroom flat has been pegged at Rs 6.75 lakh, which works to about Rs 1,500 per sft.

The venture notification was issued in 2005 and over 1,000 applications were received from citizens. However, APHB did not take up the project as the developer did not come forward saying the rates were not viable for them. The board kept quiet for some time due to recession and slow down in real estate activity.

After several suggestions from people and builders, the board increased the plinth area of the double bedroom flat from 400 sft to 580 sft and single bedroom one to 460 sft from the proposed 300 sft.

In October last, the board had called for Request for Proposal from developer for construction of 756 two bedroom and 756 single bedroom flats under G+9 floors scheme, including development of amenities and infrastructure facilities at the site. Bids were finalised a month ago.

Though the APHB managed to overcome the hurdle, the board is now worried over poor response from people. Since January 2010, intimation letters were being sent to the applicants,but some were returned undeliveredand some did not show interest to pay the money.

Sources said private builders were offering flats at the rate of Rs 1,000 to Rs 1,200 per sft in that area, but APHB had pegged the price of its flats at Rs 1,500 per sft, that too as tentative cost.

“Some private builders are offering ready-to-occupy flats at low price, while our project will be completed only
in June 2011. But APHB assures quality of construction with all facilitiesand amenities,” an executive engineer of the board said.

Board officials said another 400 applicants have responded to intimation letters and sought some time to pay 10 per cent of the proposed cost of the flat. They would be given time till March 31, he added. Source: TOI

Demand for housing gaining ground

Atanu Kumar Das / New Delhi March 13, 2010, 0:38 IST

Demand for housing is picking up at all price levels, and is almost back to pre-slowdown levels, if realtors’ sales figures in the first few months of this year are anything to go by. 

Projects are being sold within days of launch. Earlier this week, Emaar MGF sold 650 flats, priced Rs 48-80 lakhs, in its Palm Hills project in Gurgaon within a day of its launch. “This is incredible.... to sell 650 flats in a day,” said a senior company official on the condition of anonymity.

Last month, the country’s largest real estate developer, DLF, announced that they sold out 1,200 units of independent floors, priced Rs 30-60 lakhs, in its Panchkula Valley housing project near Chandigarh within a week of launch. “The demand for housing segment is definitely picking up, and we are witnessing record sales in properties which are well located and priced well. This is primarily because of the economic recovery. Residential is the first segment which witnesses growth. I believe if the economic growth sustains, we will witness the same demand in the office space as well as retail sector,” said Rajeev Talwar, executive director, DLF.

Noida-based Logix Group also sold out 800 flats in its Blossom County project within a month of its launch. “The demand that we are witnessing is phenomenal and we are now back at the stage of pre-slowdown time. I expect this growth to continue further,” said Shakti Nath, chairman and managing director of Logix Group.

Supertech Ltd, another Noida-based company, sold 500 flats in its Eco Village project in Noida Extension in three days. Though the foundation stone of the project is yet to be laid, the the company has already sold one-third part of the first phase project.

“We have sold 500 flats in last three days, and we expect to sell many more units in the next 10 days, as we will be offering inaugural discount of two per cent to the customers. Most of the houses that are sold are two-bedroom (795 sq ft) flats, priced around Rs 16 lakh. The one-bedroom (550 sq. ft) flats, priced Rs 9.85 lakh, have also seen good demand,” said R K Arora, chairman and managing director, Supertech Ltd.

 

RECORD HOME SALES IN 2010
Developer	Sale value (in Rs lakh)	Units	Launch  date	Sold in (days)
Emaar MGF	48-80	650	10-Mar	1
Supertech	Oct-50	500	8-Mar	3
DLF	30-60	1,200	19-Feb	7
TDI Infrastructure	21-34	700	11-Feb	15
Logix Group	24-150	800	10-Feb	30
Omaxe	32-190	594 (plots)	30-Jan	5
Jaypee Greens	54-220	700 (plots)	15-Jan	4
Source: Companies

Realty consultants believe the demand is sustainable at all price points, if the economy continues on the recovery path.

According to Anshuman Magazine, chairman and managing director, CB Richard Ellis, “There has certainly been a rise in demand across the segment because the market sentiments have improved. There have been salary increases for most employees and this has a direct impact on the real estate segment. I believe the National Capital Region and Mumbai have the highest demand, followed by Bangalore, Chennai, Kolkata and Pune. Most of the projects that are doing well are located in a decent area and priced very competitively.”

Agrees Santosh Kumar, chief executive, operations, Jones Lang LeSalle Meghraj (JLLM): “Once the buyers see value in pricing, they immediately want to own that property. That’s why we are witnessing so many flats being booked within a few days from the announcement of the project.”

Gujarat Govt to facilitate sale of small land holdings

13 Mar 2010 12:58 AM PST; Gandhinagar

Gujarat government is all set to follow Karnataka, Madhya Pradesh and Maharashtra model to allow further fragmentation of small land holdings owned by poor farmers. What’s more, it will also allow farmers to sell away the fragmented land holdings without permission from the district officialdom.

Well-placed sources said, the government is considering a proposal to do away with the current law, which does not allow division of a consolidated land holding beyond a fixed limit.We are planning an amendment seeking changes in the current Bombay Prevention of Fragmentation and Consolidation of Holdings Act,1947.

“This will help end the current impasse in transfer of small land holdings of two acre in case of non-irrigated land and half acre in case of irrigated land to the legal inheritors,” a senior official said, adding,”The change will require a government of India nod. Hence, it may take some time before the amendment comes through.”

An internal note, obtained says that the government is simultaneously in the process of dropping a clause in the Act, under which the district collectors permission is needed for selling away the fragment of a consolidated land holding. Currently, legal action is taken against those who violate the provision, the note says, adding, “The government has decided to do away with Section 31 of the Act,so that no permission would need to be taken.”

Part of major changes planned in the states land laws, Gujarat government has already decided to allow a farmer who becomes land-less to buy up land anywhere in Gujarat without hassle. Till now, it was necessary for the farmer who is rendered land-less because of family distribution of land holding to seek the district collectors permission to buy up land,as he ceases to be a farmer. We have already done away with the provision, the minister told the Gujarat state assembly.

Calling it pro-poor step,the minister also told the House answering a question by Banaskantha MLA Liladhar Vaghela on future land reforms that a high-level committee was formed in 2006 to suggest changes in the law prohibiting fragmentation of land holdings or allowing farmers to sell them. The committee gave nine recommendations. We have implemented four, which include showing leniency towards farmers who violate the law. Other suggestions are also being implemented, she said. Source: MagicBrick

Earth Hour back: Lights off on March 27

 13 Mar 2010 11:43 PM PST; New Delhi

On March 27, between 8.30pm and 9.30pm, Bollywood icon Abhishek Bachchan will probably be enjoying a candlelight dinner with his wife.

And thousands of others will be spending the hour organizing gatherings, marches and participating in Earth Hour events.

The global event, when millions across the globe will join hands in switching off lights for one hour to pledge their support for the planet, is back and India, specially Delhi, will be playing a major role in making the event a success.

This year, more than a billion people across 6,000 cities and towns will be participating in the event. Delhi government has promised to contribute its bit by ensuring that all government buildings in the city will turn off all non-essential lights during the Earth Hour. We will come out with a campaign,along with WWF the official organizers of the event in India. All ASI buildings,government buildings, shopping areas, etc, will be part of the initiative. Hotels can specially organize candlelight dinners on this day. While the move is purely symbolic, it is extremely important for conservation of the environment, said chief minister Sheila Dikshit.

Earth Hour is a concept that took shape in Australia in 2007 when about 2.2 million residents of Sydney turned their lights off for one hour. This was a symbolic gesture by the city to join in the fight against climate change. A year later,the movement spread to other parts of the world, with over 50 million people from 35 countries joining hands to take it forward. India formally joined the programme in 2009 when over 64 countries took part.

Despite the initiative being completely voluntary, India saw an overwhelming response to the WWF-organized event. Delhi, Mumbai and Bangalore were the official partners though by the end of it, several cities across the country pledged their support, including Hyderabad, Kochi, Thiruvananthapuram, Amritsar and Chandigarh. In Delhi, several corporates and resident welfare associations joined hands to make the event a success during which 700MW of power was also saved.

Abhishek Bachchan this years brand ambassador for Earth Hour said the movement had become necessary and we should strive for a day when we don’t need an Earth Hour. He said: “Circumstances call for a slightly more aggressive stand and now we cannot just appeal to people to save the environment.I will request the film industry and producers organization to ensure any shootings,events,etc,scheduled during the Earth Hour should also observe lights-out.” Source: MagicBrick

CFL lamps to prune MCD’s electricity bill

13 Mar 2010 11:35 PM PST; New Delhi

The Municipal Corporation of Delhi (MCD), which spends Rs 30 crore over electricity bills every year, is planning to adopt energy efficiency measures. It will be replacing the 40W bulbs with retrofit type T5 bulbs and CFL lamps in hospital buildings, office buildings, dispensary and health centres.

A resolution on this was passed in the standing committee meeting. While MCD will spend Rs 2.5 crore in changing its bulbs under phase-I, it said the amount will be recovered in about one year.

According to officials, this will help cut down power consumption by 25-30 %. In terms of power, it will save 3.74 lakh per unit per month and in terms of money it will help save Rs 18 lakh per month and Rs 2.25 crore per year.

Said an MCD official: “We will start by replacing bulbs in hospitals like Hindu Rao and Kasturba Hospital, etc, and the 12 zonal offices. We are taking this step in order to cut down on the amount spent on electricity bills. A survey was done by companies to see where the maximum power was consumed by the agency and since hospitals were one of the major areas where power was being consumed, we decided to start from there.”

According to officials, MCD is also going to write to the World Bank to get carbon credits against this. We have the plan ready and will write to World Bank and Clinton Foundation. According to MCD,all together there are around 2,500 MCD buildings where bulbs will be replaced to save energy besides taking other steps.

Added the official: “The stormwater pumping stations are another area where a lot of power is consumed.Since the pumps installed in these stations are very old we will replace them with new energy efficient pumps.”

MCD launched a new system of remote monitoring and operating streetlights by which sunrise and sunset timings will coincide with switching on and off of streetlights.This will not only conserve energy but will also reduce the amount of carbon dioxide emission in the city. Source: Magic Brick

Higher demand lures cement cos to build presence in eastern India

March 10, 2010 – 11:42 am; Mumbai

Lured by a higher demand in the country’s eastern region, leading cement players in India’s other parts such as ACC, Dalmia and Binani
Cements are expanding their presence in West Bengal, Jharkhand, Bihar, Chhattisgarh and Orissa.

India’s eastern markets have recorded a 24% growth in demand in April-December, more than double of the national average of 11%. This spurt in demand may pull up cement prices in the region, while other parts of the country are expected to face over-supply this year, said sectoral analysts.

In fact, cement prices have gone up by an unprecedented Rs 13 a bag, post the Budget on February 26, in eastern India.

“While cement prices in eastern India will remain stable, it would fall in most other places,” said RP Gupta, chairman and managing director of Orissa-based Shiva Cements.

“We are expecting a 15% jump in revenues in the current quarter due to the boom in infrastructure and real estate projects in the east, especially in Kolkata,” said Ashok Gutgutia, managing director of Burnpur Cement.

ACC, India’s largest cement maker, has added one million tonne capacity at Bargarh plant in Orissa. The expansion, which was completed three months ago, raised the production capacity to 2.1 million tonne. ACC has also acquired a 14% stake in a coal block in West Bengal, to supply fuel to this unit.

Dalmia Cement (Bharat), second-largest player in south, has increased its stake in OCL last month to 45.4% “to get an access to the high growth in eastern market”, the company’s managing director Puneet Dalmia. “With this strategic investment, the company’s profitability is likely to improve,” he added. Mumbai-based Binani Cement, which mainly supplies to Rajasthan, Gujarat and Delhi, is planning to set up a plant in eastern region.

The companies based in the eastern region are also scaling up their capacity. For example, Asansol-based Burnpur Cement is setting up a plant in Bihar, while Shiva Cements is quadrupling capacity to 2.3 million tonne.

The total installed capacity of the Indian cement industry, the world’s second-fastest growing market after China, is 240 million tonne. The cement industry is growing at 9-11% for the past few years. It is widely-believed that the growth would be around 9% over next few years. China is growing at over 14% annually.

Deepak Parekh to head panel on Rajiv Awas Yojana

09 Mar 2010 11:45 PM PST; New Delhi


The government constituted an expert committee under the chairmanship of Deepak Parekh to examine the draft of Rajiv Awas Yojana, the flagship scheme of the ministry of housing and urban poverty alleviation.
The committee will look at the draft in detail and will make suggestions for the proper implementation of the scheme.
The committee will frame a strategy for a smoother working of the programme and will also lay down solutions on the issues of funding.
The eight-member committee will submit its recommendations within one month of its first meeting.

Teaser loans out for HDFC, ICICI

HT Correspondent, Hindustan Times

In a move that marks the end of teaser rates on home loans and the beginning of hardening of home loan rates, housing finance companies (HFCs), HDFC and ICICI Bank on Friday rolled back their two-year fixed home loan offering at 8.25 per cent, effective March 1.

The two command a 55 per cent marketshare of the home loans market with leader HDFC controlling a 35 per cent share and ICICI Bank 20 per cent (SBI has a 22 per cent share), according to industry sources.

But the hardening is not on home loans alone. On the auto loans front, ICICI Bank and Kotak Mahindra Bank raised rates by 50 basis points (100 basis points make 1 percentage point) and 50-75 basis points, respectively.

HDFC Bank has hinted at following suit.
While Kotak’s auto loans hike will be effective March 6, it had raised its home loan rate by 50 basis points on February 18.

With rollbacks in place, the entry rate for home loans from ICICI Bank and HDFC stands at 8.75 per cent for loans up to Rs 30 lakh and Kotak offers 8.5 per cent.

“Clearly, there is an upward bias but it will depend on how the market moves on deposit front,” said K.V.S. Manian, group head (liabilities and branch banking), Kotak.

LIC Housing Finance is also looking at its cost of funds. “There is an upward bias but as of now we are continuing with the current rates,” the company’s CEO R.R. Nair said. “If we see an upward movement in rates, we will revise our rates.”

Not all agree. “Rates may go up but not in the short-term as there is ample liquidity of about Rs 350,000 crore in the system,” said Keki Mistry, vice chairman and managing director, HDFC.
Barely a month of Reserve Bank of India raising concerns on teaser rates, the two leading private sector HFCs have withdrawn their offerings.

“ICICI Bank has discontinued the 2-year fixed rate home loan scheme with effect from March 1, 2010,” an ICICI Bank statement said.

While ICICI Bank raised the auto loan rate by 25-50 basis points from Friday, HDFC Bank may follow. “There is a possibility of a revision in auto loan rates by 50 basis points,” an HDFC Bank official on conditions of anonymity said.

Public sector banks, however, are likely to stick to their special schemes till the end of this month. “We are still offering the special rates and will continue till March 31,” a Punjab National Bank official on conditions of anonymity said.

Real estate cos concentrating on affordable housing: Selja

6 Mar 2010, 2202 hrs IST, PTI

PANAJI: After the prick in real estate boom, the industry is now looking at construction of affordable housing as the next alternative, Union Minister for Housing and Urban Poverty Alleviation and Tourism Kumari Selja said today. 

"The real estate boom saw the private players to go in for construction of high income housing facilities. Now the market realities have forced these people to look at affordable housing construction facilities," Selja said. 

On the sidelines of a tourism event, the minister told reporters that the ministry has always laid emphasis on affordable housing. "We have been urging states and private sector to conceive models providing affordable housing," she said. 

The Minister said that the recent CREDAI national convention also had 'affordable housing' as its theme. Source: Economic Times

Affordable housing complexes from NBCC stable

Atanu Kumar Das / New Delhi February 19, 2010, 13:47 IST

State-owned National Buildings Construction Corporation Ltd (NBCC) is coming up with affordable housing complexes in Uttar Pradesh, Gurgaon, Kolkata, Kochi and Patna.

The Mini Ratna PSU under the urban development ministry plans to build 7,000 houses each in Delhi-Saharanpur Highway, UP and Gurgaon. While the minimum price of a two-bedroom house will be Rs 7 lakh, the maximum can go up to Rs 14 to Rs 15 lakh.

NBCC has allotted 448 affordable houses in Rajarhat, Kolkata, where the price of a two-bedroom flat is Rs 14 lakh and a three-bedroom flat costs Rs 18 lakh. It will allot another 352 houses in the next phase of the project.

While the projects in Kochi and Patna are likely to be started in the next six months, the Gurgaon and UP projects are expected to be completed in the next two years.

“Affordable housing is the need of the day and the prices at which we are providing houses are very lucrative. We have sold apartments in Kolkata at Rs 1,325 per sqft and that is half the current rates of the market,” said Arup Roy Choudhury, Chairman and Managing Director, NBCC.

The company hopes to grow its turnover to Rs 3,000 crore this fiscal, compared to Rs 2044 crore in the previous financial year.

Apart from building residential projects, NBCC is also working on numerous power projects of BHEL, NTPC and others. “We do a lot of power projects, which account for 15-to-20 per cent of our revenue. Our primary profitability comes from these projects,” said Choudhury.

The company is also constructing 500 ministerial bunglows in New Moti Bagh, Delhi, with an area comprising of 123 acres of land. Source: Business Standard