Outlook money article on the real estate meltdown

A comprehensive article on the state of the real estate industry vindicates what people on this blog have been saying all along. Prices have to fall in line with affordability for buyers to bite. Those who leverage beyond their means will get wiped out. Speculate and Die is the mantra of real estate. Right now the black money operators have been swindeled by the construction companies who have promised astronomical profits but now are facing wipeouts. Unfortunately no one will shed tears for these undeserving and corrupt hooligans.
Wait! Real Estate Meltdown Ahead

“Do deewane shehar mein, raat mein yaa dopahar mein,

Aabodana dhoondhte hain, ek aashiyana dhoondhte hain...”

These lines from the 1977 classic Hindi film Gharonda would, in brief, encapsulate the struggles that most people go through while buying a home, especially so in the last 2-3 years. Residential property prices crashed in the mid-1990s, and it took till 2002-03 for them to start rising again. When they did, however, the progress was rapid. Within a short span of time, the prices had risen so much that the budget buyer, who comprises the bulk of the market, was left out in the cold.

This would possibly have continued had real estate developers not been overtaken by international events of a scale that they could not anticipate. The US sub-prime crisis triggered recessionary forces globally. That, in turn, crashed volumes in the Indian property market to a trickle. “Going forward, the market will remain slow and transaction volumes will remain low,” says Anshuman Magazine, chairman and managing director, CB Richard Ellis South Asia, a realty consulting firm.

For homebuyers though, things are getting better. A correction in property prices is already underway. In the following pages, we try to figure out what you should do if you are in the market to buy or sell, and how to arrive at a reasonable price, give or take a bit, at which to strike a deal.

Builders ask govt to buy unsold flats

Yet another dumb, foolish, stupid, retarded, moronic, idiotic, asinine, (your favorite adjective) idea to prop the realty market. Trust nitwits like realtors to come up with these pearls of wisdom.

Indian express reports
New Delhi: In the first of its kind bailout demand, real-estate companies are planning to ask the Government to buy out their unsold flats at current market prices and sell these at a later date. The proposal floated by one of the big Delhi-headquartered and listed real-estate companies is one of the many ideas to be hard sold at the Planning Commission tomorrow.

A real estate company’s chairman and managing director who did not wish to be quoted told The

Indian Express, “We will discuss this tomorrow with Planning Commission Deputy Chairman Montek Singh Ahluwalia.” He, however, did not disclose the inventory position of the large firms in India.

According to Jaskirat Singh, owner of Delhi-based real estate broking firm Grand Real Estates, about 30-45 per cent of properties worth Rs 50 lakh and above launched over the last six months remain unsold for DLF and Unitech. In the case of Omaxe, it is 25-30 per cent, he said. These companies do not disclose their ready but unsold assets.

When contacted, a promoter of another leading Delhi-based and listed developer said this was not the only proposal on the table to bail out the sector. “We want states to enter into joint ventures with big real-estate players by offering land as equity. State-owned banks must also be directed to start disbursing home loans now that they do not have a problem of funds,” he said.

To boost consumer demand and give a fresh stimulus to the sector, the companies are also seeking a further cut in interest rates on home loans. “It should be slashed to 6 per cent for loans up to Rs 5 lakh and to 7-7.5 per cent for loans up to Rs 30 lakh. What the public sector banks have done is grossly inadequate,” a developer said. Tax incentives to home buyers must be enhanced and rental income be made tax-free to incentivise purchases, he added.

Stung by the liquidity crisis, real estate companies also want the Reserve Bank of India to refinance the cash gap in existing projects. Most companies are borrowing at rates over 20-22 per cent to complete ongoing projects. “But, now, loans from banks have virtually dried up,” a promoter said.

How India Avoided a Crisis

NYTimes article on what could have been a super inflated bubble in real estate. The article reproter fails to mention that black money and corruption was responsible for the spike in prices. Reddy left the private equity folks, hedge funds and "Black Money" to take the risk of escalating land prices. These folks are the sub-prime of India. Not the bank.

“What has taken a number of us by surprise is the lack of adequate supervision and regulation,” Rana Kapoor was saying the other day. “This was despite the fact that Enron had happened and you passed Sarbanes-Oxley. We don’t understand it. Maybe it’s because we sit in a more controlled economy but ....” He smiled sweetly as his voice trailed off, as if to take the sting off his comments. But they stung nonetheless.

Mr. Kapoor is an Indian banker, a former longtime Bank of America executive with a Rutgers M.B.A. who, along with his business partner and brother-in-law, Ashok Kapur, was granted government permission four years ago to start a private bank, which they called Yes Bank. In the United States, Yes Bank is the kind of name a go-go banker might give to, say, a high-flying mortgage lender in the middle of a bubble. (You can even imagine the slogan: “Yes is part of our name!”) But Yes Bank is not exactly the Washington Mutual of India. One news release it hands out to reporters who come calling is an excerpt from a 2007 survey by The Financial Express: “#1 on Credit Quality amongst 56 Banks in India,” reads the headline.

I arrived in Mumbai three weeks after the terrorist attacks that killed 200 people — including, tragically, Yes Bank’s co-founder Mr. Kapur, who had served as the company’s nonexecutive chairman and was gunned down while having dinner at the Oberoi Hotel. (His wife and two dinner companions miraculously escaped.)

My hope in traveling to Mumbai was to learn about the current state of Indian business in the wake of both the credit crisis and the attacks. But in my first few days in this grand, sprawling, chaotic city, what I mainly heard, especially talking to bankers, was about America, not India. How could we have brought so much trouble on ourselves, and the rest of the world, by acting in such an obviously foolhardy manner? Didn’t we understand that you can’t lend money to people who lack the means to pay it back? The questions were asked with a sense of bewilderment — and an occasional hint of scorn. Like most Americans, I didn’t have any good answers. It was a bubble, I would respond with a sheepish shrug, as if that were an adequate explanation. It isn’t, of course.

“In India, we never had anything close to the subprime loan,” said Chandra Kochhar, the chief financial officer of India’s largest private bank, Icici. (A few days after I spoke to her, Ms. Kochhar was named the bank’s new chief executive, in a move that had long been anticipated.) “All lending to individuals is based on their income. That is a big difference between your banking system and ours.” She continued: “Indian banks are not levered like American banks. Capital ratios are 12 and 13 percent, instead of 7 or 8 percent. All those exotic structures like C.D.O. and securitizations are a very tiny part of our banking system. So a lot of the temptations didn’t exist.”

And when I went to see Deepak Parekh, the chief executive of HDFC, which was founded in 1977 as the country’s first specialized mortgage bank, practically the first words out of his mouth were these: “We don’t do interest-only or subprime loans. When the bubble was going on, we did not change any of our policies. We did not change any of our systems. We did not change our thought process. We never gave more money to a borrower because the value of the house had gone up. Citibank has a few home equity loans, but most banks in India don’t make those kinds of loans. Our nonperforming loans are less than 1 percent.”

Get Real : Times of India editorial

The newspaper which prints "Property Times" and subtly promotes real estate bulders through carefully planted advertorials is now playing to the public sentiment. Alas we know TOI is the wolf in the lamb's clothing. As soon as prices drop 10% they will be back with articles promoting how people are lapping up properties by the dozens. Whether it is in god-forsaken places is another matter. What they care about is advertisements from builders. In a city of 20 Million like Mumbai, if 200 people buy an apt in Khandeshwar, Karjat or Panvel, far flung exhurbs in Mumbai it makes front page news. So much for the grand old lady of the Bori Bunder.

Real estate is one boom-gone-bust that's proving hard to tackle. At the government's prodding, public sector banks recently offered concessional
interest rates on new home loans up to Rs 5 lakh and between Rs 5 lakh and Rs 20 lakh. This was welcome, save that discretionary lending could still thwart loan aspirants. Also, the rates weren't retrospective, giving existing borrowers cause to grumble. As a palliative, the government appealed for lower floating interest rates. Its efforts paid off. State Bank of India, the country's largest bank, is to offer cheaper loans. Earlier, HDFC, India's largest private mortgage player, announced cuts in home loan rates for both new and existing borrowers. ICICI also hinted at reductions. So the soft rate trend is emerging in major private loan disbursing institutions as well. Reportedly, other realty-boosters under the government's consideration are an external commercial borrowing window, a service tax cut and rationalisation of stamp duty on property deals.

Realtors must accept that their big margin-driven boom-time is over for now. Much of their woes are their own doing. They overbuilt assets, riding on a bubble. With depressed demand, they continued to expect unrealistic profit margins. And now they're resisting top-end price corrections. Inflated asset prices are such that even the moneyed are sweating over purchases in tier-I and tier-II cities. Shifting gear from luxury and high-end to mid-level and affordable housing is required. Demand for low-cost housing is massively unmet; the potential for investment here goes beyond the context of today's economic downturn. India's young demographic profile, rapid urbanisation and high savings rate can keep propping up the property market. But housing prices in some segments need to fall by as much as 30 per cent to match affordability.

However, difficult bank financing can hobble low-cost housing projects. Banks need to ease lending, for which they may have to lower deposit rates. Further rate cuts from the RBI would help. Also, apart from builders' pricing, the issue of artificial land shortage keeping prices up needs addressing. Some of realty's demands converting short-term bank loans to long term and rate cuts on home loans of all categories have grounds. Others are mad-hatter expectations, such as wanting a government buyout of unsold assets at current market rates. Realtors have sensibly refrained from formally soliciting any such morally hazardous bailout.

The health of real estate has strong macroeconomic multiplier effects, both in terms of contribution to GDP and employment generation. The more the sector is stimulated, the faster India's economic turnaround will be. The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favour.

Bangalore: Builders Gasp while Buyers Wait with Bated Breath

Bangalore: Builders Gasp while Buyers Wait with Bated Breath
Sharath S. Srivatsa / The Hindu

* Discounts and freebies fail to work for the real estate sector which finds itself grounded by the economic downturn
* Developers are removing extra amenities to bring down the project cost
* Cancellation of bookings has gone up drastically in the recent months

BANGALORE, Dec 17: The real estate sector in Bangalore, affected by the recession, is in a dreadful situation.

A sector that was riding high on the economic boom till recently finds itself grounded by the economic slump.

This has left a large number of developers in the lurch even as customers wait with bated breath for the completion of projects.

The sudden downturn in the last three months has not only forced developers to postpone the launch of new projects, but also delay those under construction. The gap between demand and supply has widened as sales have come down in the last six months, and especially so from September.

“Let alone new launches, it will take a long time for the developers to clear the glut in the market. It will take a minimum of one year for the industry to overcome the slowdown even after measures have been initiated by the Reserve Bank of India (RBI) and Union Government,” an industry insider said.

Removing extras


In an effort to attract buyers, the developers are re-positioning the price by removing extra amenities to bring down the project cost. Though developers are offering discounts up to 10 per cent on the projects, some big companies, burdened with huge overheads, are struggling to bring down the rate.

A few developers are also offering plots along with a housing unit, an unusual move in an industry that has become price-sensitive.

Though figures on the number of unsold flats are hard to come by as no surveys have been taken up by the industry, sources estimate they run in tens of thousands. When the IT sector was bullish, the north-east, east and south-east parts of the city witnessed large-scale development — residential, office and retail — especially in K.R. Puram, Marathahalli and Sarjapur, as well as Bannerghatta Road, Kanakapura Road, J.P. Nagar and Jayanagar.

While the tightening money flow has hit the industry badly, analysts say the downward trend started with the Reserve Bank of India’s (RBI) increasing the risk weightage for the real estate sector a few months ago.

“The high risk weightage to real estate sector essentially meant cut-down on lending to the sector — both to developers and buyers, by the lending agencies,” said T. Venkatesh Babu, Senior Manager-Market Research at Nitesh Estates.

“Funds to the sector are choked as both developer and buyer found it difficult to secure loans. Several families have also postponed purchases due to the uncertain future. This has contributed to reduced sales, affecting project funding.”

Private lenders


With an estimated Rs. 2,000 crore locked up in the Bangalore market, many developers are scrambling to service their debts even as lending institutions have started recovering the loans. “Already some developers have defaulted on their loans; many have borrowed from private money lenders at exorbitant rates ranging between 24 and 36 per cent as they were unable to get institutional loan,” said M. Ramesh, Secretary of Builders’ Association of India –Karnataka.

He said that the plight of developers is so bad many of them have not only pledged their projects but also their residences to ensure completion of projects.

“An industry that believes time as the essence of any contract, schedules are not being adhered to even by big players,” Mr. Ramesh added.

Buyers too


While the builders found it extremely difficult to secure funding for their projects, many prospective buyers have failed to secure funding from the financial institutions and banks. “Cancellation of bookings has gone up drastically in the recent months.

These are mainly due to the fact that the buyer, who had already booked the flat by paying 10 per cent advance, does not get the desired funding from the banks,” confirmed a marketing executive of another leading real estate company.

In many cases, the executive said, the delay in completion of projects has caused anxiety among the customers.

“This is the case, especially among those who have bought flats from small builders, and are not sure when the project would be completed.”

According to secretary of Confederation of Real Estate Developers Association of India (CREDAI) - Karnataka S. Suresh Hari, “Genuine buyers have been affected by lack of availability of loans. The high taxation rate in Karnataka — close to 34 per cent — has also become a deterrent.”

The industry is hoping that the measures implemented by the RBI and Union Government will improve their fortunes by March.

If the sector does not begin to look up by then, the consequences may be disastrous.

Top city builders meet to discuss slashing prices

This meeting by the builders smacks of an oligopoly where these moneybags decide to raise or drop rates by consensus. The SEBI and other organizations should look into this meeting for price fixing and prosecute the ceo's of these companies. Imagine a meeting between Airtel , Vodafone and Reliance to decide on per minute rates. This is a cartel and should be accountable for monoplistic practices. The biggest irony of this article is the shedding of crocodile tears for the poor laborer who has seen his daily wages drop to 50rs from 150 rs. If these builders who prices apts for 50,000 per sq/ft , they can sure pay a half decent wage to someone who toils in the heat and sun, while these neo-rich bozos sip drinks in the comfort of a 5 star hotel

The 2nd bigger irony is blowing the trumpet of the Times of India, that they were the first to report on the price drops. While they reported price drops, they also reported why prices are going to go up and how 40,000 per sq/ft is real steal for a crappy apt in Bandra. Such irresponsible journalism has made the times of India, the toilet paper of India.


Nauzer Bharucha | TIMES NEWS NETWORK

Mumbai: At least half a dozen of the city’s top builders met at a prominent five star hotel in central Mumbai on Friday night to brainstorm about the one thing that has been worrying them for the past several months—how to kickstart the virtually stagnant apartment sales following the downturn in the real estate market.
Among the several issues discussed was the possibility of reducing prices of flats if it helps sales to pick up. According to industry sources, the Maharashtra Chamber of Housing Industry (MCHI), which has leading developers as its members, is expected to explore this possibility at its meeting on Tuesday, although the matter is not on its agenda. Already, some builders have informally reduced their prices between 12% to 20% in their projects in the suburbs.
However, Mohan Deshmukh, one of the developers present at the dinner meet, denied that builders can ever take an unanimous decision to cut prices. “Every developer has his own priorities and it is up to him to decide on a price cut. The MCHI cannot take a decision on their behalf,’’ he said.
Although the property market began to flatten out about 18 months ago, Mumbai’s builders, by and large, have managed to hold on to their prices. Between 2004-2007, home rates shot up between 100% to 300% on an average, going up to 500% in certain high-end projects. Builders may move Centre to plead their case
Mumbai: Top city builders, who were peeling the pinch after global meltdown, participated in the brainstorming session to decide price cut on Saturday. The meeting commenced at 7.30 pm and wound up only at around 11 pm, sources said.
It is learnt that among some of the leading builders who were present at the meeting included Rajni Ajmera of Ajmera Builders, Dharmesh Jain of Nirmal Lifestyle, MCHI chairman Pravin Doshi (Acme Group) and Deshmukh, who is CEO of Deshmukh Builders and past chairman of MCHI.
There was complete unanimity among the participants that the industry is passing through an “unprecendented’’ crisis. This has affected not only the developers, but a host of ancillary industries, including a large army of unskilled labourers working at the project sites.
“A labourer who used to earn Rs 150 a day is today struggling to barely eke out Rs 50 a day because many projects have come to a standstill,’’ a leading developer told TOI recently. Virtually every Mumbai-based developer is on a cost-cutting drive including retrenching employees across departments.
The Mumbai developers are also thinking of representing their case to the Centre to increase the priority sector lending to home buyers from Rs 20 lakh to Rs 40 lakh. Early this month, the RBI had allowed banks to classify housing loans up to Rs 20 lakh as priority sector advance. The interest rate on such home loans is 1.5% lower than the normal rate of interest.
The downward trend in the property market began in January 2007 when banks began hiking their interest rates, and since then, bookings have continued to drop with every rate hike announced. The crisis worsened after the global economic meltdown affected the Indian market since the past few months.

Property consultants said even existing loan account holders are finding it tough to hang on as EMIs threaten to upset their monthly budgets. Last year, TOI was the first to report that several builders, dealing on a one-to-one basis with home buyers, had begun offering freebies like not charging for parking slots, not charging a premium for a floor rise and, in some cases, even offering to pay the stamp duty.

GOING, GOING, GONE

DNAIndia reports from Bangalore.

As techies default on EMIs, banks are reclaiming their homes

N Raghuraman. Bangalore
If you are a code jock or call centre employee, watch out. Your dream home is about to become a nightmare. Worried about your ability to repay, banks are in overdrive to repossess your property if you have not been paying your equated monthly instalments (EMIs) for more than three months.

Over the last few days, nationalised and private sector banks have issued a rash of repossession notices in newspapers to recover properties from borrowers who have been defaulting on EMIs. Industry insiders say that one out of every 10 homes bought with loans is in default in Bangalore city, most of it from the technology and BPO sectors. The houses being reposssessed are spread out across the city, from HAL Stage III to Kumara Swamy Layout and from Vignana Nagar to RT Nagar.

"The IT sector is one of the main contributing factors for the repossession drive that banks are undertaking in Bangalore. Several IT companies have laid off employees and the bonuses of several others have been cut, which has resulted in defaults in home loans," admits BR Bhat, general manager, Corporation Bank. The bank has a Rs 1,000 crore home loan portfolio in the city and the share of IT staffers is nearly half of that.
According to banking industry insiders, almost all banks in the city have registered a 20% increase in loan defaults, and thousands of properties are being recovered under a stringent law called Sarfaesi – or the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002.

The Act empowers banks and housing finance companies to recover their dues in case of defaults within a specified timeframe. Earlier, banks had to file civil suits against defaulters, which could take more than 20 years to settle cases.

In the first half of this month alone, the recovery process has been initiated on various flats and independent houses worth Rs 80.23 crore. The number will surely bloat as this is only the tip of the iceberg, and banks are worried about the impact of these defaults on their bottomlines.
"It would be foolish to live in denial that there will be no impact of the (global) slowdown on our books. This will be reflected in our books in the coming quarters. In Bangalore, there might be more home loan defaults under the current circumstances. But things are not out of control," says Syndicate Bank chairman and MD George Joseph.

At least 15 nationalised and old private sector banks have initiated recovery proceedings and they are in various stages of execution. The list includes Vijaya Bank, Andhra Bank, Syndicate Bank, SBI, State Bank of Mysore, the Bangalore City Cooperative Bank, Corporation Bank, Canara Bank, Federal Bank, Bank of India, Karnataka Bank, Karnataka State Financial Corporation, Citibank and Indian Bank.

If one goes by the printed notices, Canara Bank, Vijaya Bank and State Bank of Mysore seem to be worst affected with their non-performing assets (or bad loans) contributing 80% of the dues which are under process.

Home Loans to be locked in for 5 years at 9.5%

It looks like Indian bankers are yet to learn from the wave of option ARM defaults hitting the US home-owner. If the text of the press release is to be believed the bankers will be lending upto 20L for 9.5% for a period of 5 years until the loan resets to the market rate. In today's enviroment the publicly listed builders need the middle income earning to buy housing and the only way they can get that to happen is to pressurize banks to lower lending rates.

As expected builders will now price homes at 25L white and everything above as black. If one things this will bring relief to the common home buyer they are in for a rude shock. Another trick the builders do is build jodi flats, i.e. flats which meet the middle income criteria but are adjacent to each other so that they can be combined by the high income purchaser.

Livemint.com reports
Mumbai: Public sector banks (PSBs) are set to offer home loans of up to Rs20 lakh at a concessional rate of 9.5% for a period of five years as part of the government’s fiscal stimulus package announced on Sunday to spur spending and bolster sagging economic growth.
All new home loans advanced by state-owned banks until 30 June will come at the 9.5% rate, which will be reset five years later depending on the prevailing trend, according to two senior bankers involved in devising the package who didn’t want to be named.
A formal announcement of the scheme will be made soon by public sector banks. Two officials at two different ministries, who also didn’t want to be named, confirmed the plan.
Housing is one of the key areas on which the government is focusing to lift economic growth that’s slowing from an average annual pace of 8.9% in the past four years. Lower interest rates prop up the demand for homes, which in turn, creates demand for steel and cement and generates jobs in the construction sector.
Banks and housing finance firms are now charging between 12% and 14% for fixed-rate home loans and offering floating-rate mortgages at between 9.5% and 11.75%.
Because the cost of funds for banks currently is higher than the rate at which they will offer loans under the new scheme, the government may work out an arrangement to compensate the lenders, analysts say.
It is not clear what will be the nature of the arrangement but “certainly not subvention”, said one banker. The government offers 3% subvention—or interest subsidy—on small agricultural loans, which are given at a concessional rate of 7%.
The Reserve Bank of India’s (RBI) decision on Saturday to include home loans of up to Rs20 lakh in so-called priority sector lending—targeted at segments such as agriculture, small industry and education—will come in handy for banks to offer mortgages at a concessional rate.
Under banking industry guidelines, 40% of advances are meant to be channelled to the priority sector. Banks that are not able to meet the target are required to park the shortfall with the National Bank for Agriculture and Rural Development at a low interest rate. The money is used for rural infrastructure projects. Analysts say the five-year fixed rate of 9.5% will dent banks’ profitability if the government doesn’t offer a support plan for lenders in case interest rates remain at this level or rise further. But if interest rates drop, consumers will lose out on the benefit of falling rates.
“If interest rates fall and home loan rates come down below 9.5%, we will have to watch what exit options this package would provide. Many questions of potential borrowers might have to be answered before they go ahead and avail of such loans,” said Ravi Sankar, a banking analyst at Antique Stock Broking Ltd, a Mumbai-based brokerage.
The asset quality of banks might be compromised if they try to push the scheme aggressively, Sankar said.
“This rate is quite attractive for borrowers at the moment,” said Hatim Brochwala, an analyst at Khandwala Securities Ltd, another domestic brokerage. “However, if interest rates fall and home loan rates become cheaper, borrowers might start complaining. So, the banks will have to chalk out an exit plan. Converting fixed rate into floating rate (loans) may not be a good option as the penalty is heavy.”
Analysts are betting that interest rates will come down by 300 basis points in two years and home loan rates will be cheaper than 9.5%. One basis point is one-hundredth of a percentage point.

On Saturday, the RBI announced a special refinancing package of Rs4,000 crore to the National Housing Bank, which regulates housing finance firms, to help prop up the home loan market. Analysts say the refinancing facility is too small.
Housing Development Finance Corp. Ltd (HDFC), India’s oldest mortgage firm, has a disbursal target of about Rs45,000 crore this year. While HDFC accounts for at least 40% of the housing loan market, public sector banks make up about 20%, limiting the scope of the stimulus package, analysts say. ICICI Bank Ltd, India’s largest private sector bank, is a prominent lender in the mortgage market.

Delhi flat owners re-sell in down mood

Gaurav Jha, Hindustan Times reports

With property values falling, frenzied property owners in Delhi NCR (National Capital Region) now seem to be in a selling wave, fearing further fall in the prices of their property.

Businessman Rahul Gupta is in a hurry to sell his three-bedroom flat in the Faridabad area for Rs 32 lakh, Rs. 50,000 below the amount he paid nearly a year ago. In Delhi, it is unsual for a property to be sold at a price less than the purchase price.

“I am in urgent need of money and the prices are crashing. I may not get this amount after a month. I don’t know when the market will revive,” Gupta told Hindustan Times.

“It is just a seller’s market, not buyer’s” said U.K.Bhardwaj, founder-president of the Delhi Property Deaders Association.

Sajoy Mittra, a retired bank employee, has been trying in vain to sell his three-bedroom Gaur Green apartments at Indirapuram across the Delhi border near Ghaziabad (Uttar Pradesh) for Rs. 72 lakh for the past two months.

Unlike Gupta, he is however hopeful. “I feel the laid off employees and NRIs (non-residential Indians) in the West will buy my home after coming back to India”

However, the brokers have a different take. They are not much optimistic of the market.

“There are only sellers in the market, no buyers”, said Pradeep Mishra, a broker who has operations across NCR. “For every single buyer, the market has at least five-six sellers” he added.

“The market has only 10 percent buyers, while 50 percent have disappeared because of the economic slowdown while remaining 40 percent are waiting for the prices to decline,” Mishra said.

“This is happening all over. RBI’s announcement of cuts in repo and reverse repo rate (signal interest rates) is a welcome move. But until we don’t get a rate of 7-8 percent on home loans, buyers will not have confidence in the market,” said Sanchin Sandhir, managing director at property consultancy firm RICS, told Hindustan Times.

Palace property sold for 6,000cr

I always thought the Palace Grounds was owned by the government. Mr Wodeyar should thank his fore-fathers for his golden spoon. Wish is everyone was so lucky :)

Palace property sold for 6,000crBY R. JAYAPRAKASHBENGALURUArticle Rank I Wodeyar has sold prime land in Palace Grounds to a city-based developer I ‘ Many high profile realtors were interested in the deal ‘ but in the end leading developer Dayanand Pai struck the dealIt is disputed land but already been sold for Rs 6,000 crore. In the biggest land deal that Bengaluru has seen so far, some 250 acres of prime land in the heart of the city in Palace Grounds, has been sold to a leading city-based developer Dayanand Pai.The state government and the scion of the Mysore royal family Srikantadatta Narasimharaja Wodeyar are shadow-boxing in the Supreme Court over rights to the property.The deal has been brokered by a godman, who is close to both the politicians and the maharaja.A team of chartered accountants drafted the sale agreement that will be executed after the court case is resolved.Highly placed sources said the Maharaja had received Rs 1,000 crore as advance and the money has been deposited in the Bank of Mauritius in an escrow account. “Mr Wodeyar is earning close to a crore as interest on the advance money. He will receive the balance after the legal hur dles are cleared. Many high profile realtors were interested in the deal but in the end Dayanand Pai struck the deal as he was confident of getting the papers cleared.Of the 250 acres belonging to the Wodeyar family, 50 per cent is for outright sale and the remaining land will be developed on a joint venture basis by Mr Wode yar and the buyer. The plans include developing an IT Park, setting up malls and multiplexes,” sources said.A city-based BJP Cabinet rank minister has offered to resolve the issue.“In 1998, Mr Wodeyar had filed an application to conduct events at the Palace Ground which was turned down by the then state government. Following this, he moved the court and got a stay order on the Bangalore Acquisition and Transfer Act which was moved by the state government in 1997. The minister is working on dropping the case by the government. Another possibility being worked out is to grant the land in lieu of some other property which is also contested by the state and Mr Wodeyar. The high profile minister has resolved many such cases in the past. Looking at his track record, things look positive for the Wodeyars,” sources added.Princesses Meenakshi Devi, Kamakshi Devi, Indirakshi Devi, Vishalakshi Devi and the late Gayatri Devi, have about 28 acres of land each apart from the major chunk of land that belongs to Mr Wodeyar.