Maybe it is time for a blog on the stock market bubble. All Indian indexes are fluctuating like pendulums and noone seem to know the direction of the market. Just few months ago, every commentator on CNBC India was forecasting doom and gloom. Now everyone is cheering the market rise and predicting the moon. Its time for a bottom up analysis of the situation and try to gauge the market commentary from the trenches of our desks. We might not be on Dalal Street, however let them not insult our intelligence by propunding gibberish market analysis. The blog is at indiastockmarketbbubble.blogspot.com. Hope to see some of you folks there.
Thursday, 30 July 2009
Wednesday, 29 July 2009
Bangalore periphery realty prices slip below guidance value
Economic Times reports.
If Whitefied with all the IT parks can drop 30% offically, what about Devanhalli which has nothing but Greenfields :). In fact I know of deals in Shantiniketan taking place at below 3000 so the drop of 40% is not unheard of. Maybe a drop by 70% in Devanhalli is not a bad idea to start with.
BANGALORE: Bangalore’s realty market has thrown up a queer problem with property prices in peripheral areas falling below the guidance value set
by the government.
While buyers pick up property at prevailing (lower) market rates, they are having to cough up higher stamp duty for registration. This is because stamp duty is calculated on the guidance value set for each area/property.
“There could be strong case for downward revision of guidance value in peripheral areas,” says K R Niranjan, inspector general of registration and commissioner of stamps in Karnataka. Typically, the government conducts a valuation exercise around October every year and issues fresh guidance values based on property price trends.
If prices continue to be south-bound, the state will have to look at aligning the value to prevailing rates and this could well be the first downward revision in Bangalore. Instead of an annual revision, B S Shankaranarayanan, a legal expert in the realty sector, suggests timely and periodic revision of guidance values based on property price movements.
“This will help the public in cases where there is a price decline and enable the government to mop up more when prices go up,” he adds. And, like a builder in the Yelahanka suburb says, this is as good a time as any to bring about a correction in guidance value.
In a particular instance relating to Devanahalli, which witnessed a steep spurt in prices, given its proximity to the new airport, the value was revised during the year, a state government official says.
Requests seeking downward revision have started trickling in with buyers of the Prestige Shantiniketan project in Whitefield and builder ETA (for The Gardens project on Magadi Road) approaching the department.
The guidance value of Prestige Shantiniketan project is 3,200 per sq feet while it is Rs 4,200 per sq feet for ETA and hence, stamp duty would be calculated on these rates. But, realty sources quote the prevailing basic market rate for ETA at Rs 3,400 per sq feet while prices in Whitefield, where Shantiniketan is located, have suffered a very sharp decline of even up to 30%.
Typically, the guidance value is pegged approximately 20% to 40% below market prices to allow for escalation during the year. In the last three revisions, there has only been an upward revision of the guidance value. In fact, in April 2007, the revision was in the range of 100% to 300%, mirroring the realty boom. But, a builder says, the government hiked the rates when the market had already peaked out, marking the beginning of the downward curve.
If Whitefied with all the IT parks can drop 30% offically, what about Devanhalli which has nothing but Greenfields :). In fact I know of deals in Shantiniketan taking place at below 3000 so the drop of 40% is not unheard of. Maybe a drop by 70% in Devanhalli is not a bad idea to start with.
BANGALORE: Bangalore’s realty market has thrown up a queer problem with property prices in peripheral areas falling below the guidance value set
by the government.
While buyers pick up property at prevailing (lower) market rates, they are having to cough up higher stamp duty for registration. This is because stamp duty is calculated on the guidance value set for each area/property.
“There could be strong case for downward revision of guidance value in peripheral areas,” says K R Niranjan, inspector general of registration and commissioner of stamps in Karnataka. Typically, the government conducts a valuation exercise around October every year and issues fresh guidance values based on property price trends.
If prices continue to be south-bound, the state will have to look at aligning the value to prevailing rates and this could well be the first downward revision in Bangalore. Instead of an annual revision, B S Shankaranarayanan, a legal expert in the realty sector, suggests timely and periodic revision of guidance values based on property price movements.
“This will help the public in cases where there is a price decline and enable the government to mop up more when prices go up,” he adds. And, like a builder in the Yelahanka suburb says, this is as good a time as any to bring about a correction in guidance value.
In a particular instance relating to Devanahalli, which witnessed a steep spurt in prices, given its proximity to the new airport, the value was revised during the year, a state government official says.
Requests seeking downward revision have started trickling in with buyers of the Prestige Shantiniketan project in Whitefield and builder ETA (for The Gardens project on Magadi Road) approaching the department.
The guidance value of Prestige Shantiniketan project is 3,200 per sq feet while it is Rs 4,200 per sq feet for ETA and hence, stamp duty would be calculated on these rates. But, realty sources quote the prevailing basic market rate for ETA at Rs 3,400 per sq feet while prices in Whitefield, where Shantiniketan is located, have suffered a very sharp decline of even up to 30%.
Typically, the guidance value is pegged approximately 20% to 40% below market prices to allow for escalation during the year. In the last three revisions, there has only been an upward revision of the guidance value. In fact, in April 2007, the revision was in the range of 100% to 300%, mirroring the realty boom. But, a builder says, the government hiked the rates when the market had already peaked out, marking the beginning of the downward curve.
Saturday, 25 July 2009
Global warming, high tides and Mumbai sea-facing property prices
Yesterday I was one of the curious onlookers witnessing the ferocious waves as they lashed upon the sea-walls. My parents have lived their whole life in Mumbai and they havn't seen this phenomenon ever. Flooding in Bacchan's Juhu house due to rains has become a norm, now the sea water has started entering his house due to tides. All areas within the vicinity of the beach are flooded. This set me thinking that maybe this is a game changer for all these sea facing mumbai properties. Global warming is real, the tides are higher then ever, the rains are more then ever and this combination is lethal. I love the sea, except when it enters my house and destroys my car and all my possessions. I think its time to rethink prices on Mumbai's sea-front. We are witnessing a game changer here. What do you guys think ?
Thursday, 23 July 2009
Price rise is realtor strategy, not indication of market lift: report
Price rise is realtor strategy, not indication of market lift: report
A July 2009 report by HDFC Securities notes that over the last three months, there has been an average price rise of 3 to 8 per cent in Mumbai. “We believe this increase, by a few hundred rupees per sq ft, is being used as a tool to sway potential buyers to close deals,” it states. It notes that banks providing home loans have reported a significant increase in home purchases and approvals in disbursements have been peaked in the central suburbs.
Between May and July, Kalpataru has increased rates for its projects in Thane, Ghatkopar and Kandivli in the range of 5 to 8 per cent, Nahar for its Chandivli project by 7 per cent, RNA Corp for its Kandivli project by 10 per cent. A few like HDIL and Lodha, which had launched projects at relatively low rates, have hiked prices now, HDIL by 23 per cent at its Kurla and Versova projects and Lodha by 20 per cent at Dombivli.
Saturday, 18 July 2009
Registration of Power of Attorney to become compulsory
Hindu reports.
The government of Tamil Nadu has proposed amendments to the Registration Act to prevent fraudulent transactions, evasion of taxes and stamp duty , writes R.L.Narayanan
Photo: M. Srinath
Changes underway: Rules relating to registration of Power of Attorney will be changed.
Recently, the Government of Tamil Nadu has proposed that the rules relating to registration of Power of Attorney will be changed and the registration of instruments of power of attorney will be made compulsory.
Further, it is proposed that the registration of these instruments shall be made only in the office of the Registrar of Assurances concerned having jurisdiction in respect of the property dealt with under the Power of Attorney is situated. Necessary a mendments to the Registration Act, 1908, are likely to be made shortly and date of notification for implementation announced.
The immediate concern for the proposed amendment is the large-scale prevalence of a system known as “Power of Attorney Sales”.
The Supreme Court has considered this terminology and the practice covered by the term in a case pending before it.
Gained acceptance
Broadly speaking, Power of Attorney Sales is the practice of registering Sale Agreement, Power of Attorney with or without Will instead of one Sale Deed or other deed of conveyance on payment of full sale consideration.
The practice has also been to register only one of the three documents mentioned above. This practice has gained acceptance in the market and also before various authorities.
It was noticed that where restrictions such as compulsory permission from the Authority concerned and where such permission was granted on the basis of payments to be made were imposed on transfer of flats, a hybrid system with a Power of Attorney Sale was effected by the allottee / holder of the Flat to avoid the procedures and fees to be paid.
Full article here
The government of Tamil Nadu has proposed amendments to the Registration Act to prevent fraudulent transactions, evasion of taxes and stamp duty , writes R.L.Narayanan
Photo: M. Srinath
Changes underway: Rules relating to registration of Power of Attorney will be changed.
Recently, the Government of Tamil Nadu has proposed that the rules relating to registration of Power of Attorney will be changed and the registration of instruments of power of attorney will be made compulsory.
Further, it is proposed that the registration of these instruments shall be made only in the office of the Registrar of Assurances concerned having jurisdiction in respect of the property dealt with under the Power of Attorney is situated. Necessary a mendments to the Registration Act, 1908, are likely to be made shortly and date of notification for implementation announced.
The immediate concern for the proposed amendment is the large-scale prevalence of a system known as “Power of Attorney Sales”.
The Supreme Court has considered this terminology and the practice covered by the term in a case pending before it.
Gained acceptance
Broadly speaking, Power of Attorney Sales is the practice of registering Sale Agreement, Power of Attorney with or without Will instead of one Sale Deed or other deed of conveyance on payment of full sale consideration.
The practice has also been to register only one of the three documents mentioned above. This practice has gained acceptance in the market and also before various authorities.
It was noticed that where restrictions such as compulsory permission from the Authority concerned and where such permission was granted on the basis of payments to be made were imposed on transfer of flats, a hybrid system with a Power of Attorney Sale was effected by the allottee / holder of the Flat to avoid the procedures and fees to be paid.
Full article here
Wednesday, 15 July 2009
Group buying using Twitter
I'm not sure but am wondering if we have use Twitter to post information on group purchases.
For e.g a post can be
Buy : Pune : 3 Bed : Kalyani Nagar : 50L
or
Sell : Bangalore : 2 Bed : Jayanagar : 60L
I guess we can gain some traction if there are people and maybe go for group purchases.
I've created a twitter page IndiaBubbleApt
For e.g a post can be
Buy : Pune : 3 Bed : Kalyani Nagar : 50L
or
Sell : Bangalore : 2 Bed : Jayanagar : 60L
I guess we can gain some traction if there are people and maybe go for group purchases.
I've created a twitter page IndiaBubbleApt
Sunday, 12 July 2009
Dharna by Maytas Hill County residents
Maytas hill county residents of Hyderbad staged a dharna in front of the house of their scamster promoter Mr Ramalinga Raju. The Satyam fiasco has caused Maytas to collapse under its own weight. The project work has stopped and investors and house owners are losing their hard earned money to bank loans. This is a very stark reminder to the state of financing in the real estate construction business. Maytas Hill county was supposed to have been completed by mid 2009. Now with the stopped construction, there seems to be no light at the end of the tunnel. These residents have to push their battle to the media like the Jet employees. Just a weekend protest is not going to help.
A friend of mine helped me translate the 2nd video.
The NRI mom is lamenting the lack of security for investments for NRIs. Her son is in London and got lured by the promises of Maytas. He has been paying EMI for 3 years now with no sign of completion in sight. She believed the builders promises but now nothing is happening. The bank is not reducing the interest rate and the government is not doing anything and not taking action against Maytas.
A friend of mine helped me translate the 2nd video.
The NRI mom is lamenting the lack of security for investments for NRIs. Her son is in London and got lured by the promises of Maytas. He has been paying EMI for 3 years now with no sign of completion in sight. She believed the builders promises but now nothing is happening. The bank is not reducing the interest rate and the government is not doing anything and not taking action against Maytas.
Friday, 10 July 2009
Beware of taking a home loan from ICICI Bank: Consumer court levies 1 Lakh penalty
From an article in Times of India:
Excerpt:
"After completing all formalities needed to avail a loan, Goyal entered into an agreement with a home finance company and the bank. A loan of Rs 37 lakh, which was to be paid in 180 instalments in a period of 15 years, was sanctioned and he started paying the instalments from March 2005 onwards on a regular basis. However, a letter took him by surprise in August 2008. The letter allegedly stated that the repayment schedule through EMIs was being revised to increase the repayment time from 180 to 502 months. He immediately approached the bank's local branch and requested cancellation of the payment rescheduling but to no avail. "
Read the full article here:
http://timesofindia.indiatimes.com/Chandigarh/Bank-to-pay-Rs-1-lakh-for-overhauling-loan-account/articleshow/4750737.cms
This means that first ICICI bank agreed to give a loan for 15 years (180 / 12). Then using some obscure terms and conditions (who reads those anyway?), they hiked the tenure to 42 years (502 / 12).
42 years means your children (and maybe your grandchildren) will still be paying EMIs!!!
It is not humanely possible to read terms of conditions for each financial product, and clearly it is the banks fiduciary duty to adhere to the spirit of the agreement. I think any bank which shows such tendencies to violate fiduciary duty will exploit its customers.
Another issue is that of charging higher interest rates to existing home loan customers, and lower interest rates to attract new customers, but that merits a blog post of its own!
Can we share our experiences of taking home loans with different banks.?I have two home loans, one from HDFC and one from LIC housing finance, and the experience has been good so far (for the past 2 years).
Thanks to Ravi Karandeekar for blogging about the article.
Excerpt:
"After completing all formalities needed to avail a loan, Goyal entered into an agreement with a home finance company and the bank. A loan of Rs 37 lakh, which was to be paid in 180 instalments in a period of 15 years, was sanctioned and he started paying the instalments from March 2005 onwards on a regular basis. However, a letter took him by surprise in August 2008. The letter allegedly stated that the repayment schedule through EMIs was being revised to increase the repayment time from 180 to 502 months. He immediately approached the bank's local branch and requested cancellation of the payment rescheduling but to no avail. "
Read the full article here:
http://timesofindia.indiatimes.com/Chandigarh/Bank-to-pay-Rs-1-lakh-for-overhauling-loan-account/articleshow/4750737.cms
This means that first ICICI bank agreed to give a loan for 15 years (180 / 12). Then using some obscure terms and conditions (who reads those anyway?), they hiked the tenure to 42 years (502 / 12).
42 years means your children (and maybe your grandchildren) will still be paying EMIs!!!
It is not humanely possible to read terms of conditions for each financial product, and clearly it is the banks fiduciary duty to adhere to the spirit of the agreement. I think any bank which shows such tendencies to violate fiduciary duty will exploit its customers.
Another issue is that of charging higher interest rates to existing home loan customers, and lower interest rates to attract new customers, but that merits a blog post of its own!
Can we share our experiences of taking home loans with different banks.?I have two home loans, one from HDFC and one from LIC housing finance, and the experience has been good so far (for the past 2 years).
Thanks to Ravi Karandeekar for blogging about the article.
Tuesday, 7 July 2009
Ackruti City's Q4 results worst amongst listed realty companies
Mumbai-based real estate developer Ackruti City’s fourth quarter results were the worst amongst the pack of listed realty companies. Due to negative sales, its net profit for the quarter ended March ‘09 took a big hit. Despite a slight improvement in the sentiment for the sector, Ackruti could not register any sales. In fact, it had to write off close to Rs 105 crore worth of FSI sold in the previous year. The company reported a 300% drop in net sales in its fourth quarter and its net profit turned red. It fell to a negative Rs 123 crore from Rs 22 crore earned in the December ‘08 quarter.
Sunday, 5 July 2009
Sea link hits Worli property prices
This is commonsense for everyone to see. If a calm area is invaded by 5000 cars an hour, think about the impact. Tough luck for the residents and lovers on Worli seaface. Maybe it is time to commercialize this area too.
DNA Reports
According to real-estate experts, increasing traffic and the consequent noise and air pollution are bound to have a negative impact on property prices along the promenade.
"Individuals who may have wanted to shift to Worli Sea Face will be put off," said Anuj Puri, managing director, Jones Lang LaSalle Meghraj, a real-estate consultancy firm. "There are many issues like pollution, easy access to buildings, and security of children due to the increase in vehicular traffic."
Residents are already complaining that noise levels and air pollution have gone up. Moreover, the exit of the sea link has created a bottleneck, ruining the peace of the locality. The press of the National School for the Blind is on this road which, interestingly, is designated a silence zone.