Few flats under Rs 50 lakh...

Skyrocketing property prices over the last few months have taken housing beyond the reach of the salaried class, with barely six per cent of the total new housing stock in Mumbai priced under Rs 50 lakh. On the other hand, a staggering 46 per cent of these flats cost over Rs 1 crore.

Figures compiled by real estate research agency Liases Foras show that of the 8,000-odd flats that make up the unsold housing stock, hardly 500 are priced below Rs 50 lakh.

Article Link

Analysts say these rates are the result not only of increasing prices and sizes of new flats but also of the heavy loading by developers. Most new flats come with frills such as flowerbeds, viewing decks and amenities like clubhouses and swimming pools that are included while calculating the super-built-up area on which flats are sold. This notional loading is as high as 50 to 80 per cent of actual carpet area.

“In case of one-bedroom flats, builders can’t justify a loading of 80 per cent on a flat with a carpet area of 300 sq ft to a buyer who is already hard-pressed for money. It is easier to cover up the discrepancy between actual size and loading in larger flats which is the reason why most developers today are constructing only two to four bedroom flats,” said Sandeep Sadh, CEO of Mumbai Property Exchange.com. The trend is catching on outside Mumbai, too, with developers like Lodha launching Rs 1-crore-plus flats in Dombivli.

Read More

1 bed room flat - 4 crores in Khar(w) Mumbai

Crazy days are here again. Thumbs up :). Good for the residents of this building who can make merry at the expense of the black money of the builders and politicians. However these folks have no other choice but to buy another apt in Mumbai from another building at an exorbitant price. These folks will now drive prices of the neighboring buildings assuming they like to stay in the same area. The music is playing on so keep on dancing :)

MUMBAI: In a bonanza for residents of a Khar housing society, a builder has been buying off their mid-sized flats, paying each family between Rs 4 crore and Rs 5.5 crore.

Mumbai-based Parinee Developers claims to have shelled out between Rs 4 crore to Rs 4.5 crore for a one-BHK flat and Rs 5 crore to Rs 5.5 crore for a twoand-a-half-BHK in the three-decade-old Bharatiya Bhavan Cooperative Housing Society, which is located at the corner of 17th Road in Khar (west). Parinee plans to demolish the buildings and set up a high-end residential tower.

However, there is a word of caution from real estate experts. They warn these huge amounts may send wrong signals in the redevelopment market, unnecessarily create hype and raise expectations of other housing societies in the area. However, Parinee said it is paying this astronomical price only because the society has utilised barely 40% of its floor space index (FSI).

The developer has already bought out 20 of the 37 flats in the society and said it is negotiating with the remaining flat owners. “We are finalising the purchase of the remaining 17 flats. Our acquisition cost for all the flats is around Rs 200 crore,’’ said a spokesperson for the developer.

The society comprising six buildings, each ground plus two floors, is spread over an area of 5,570 square yards (over an acre) with ample open spaces and car parking. The one-BHKs have a carpet area of between 580 to 625 sq ft while the two BHKs are between 800 to 900 sq ft in size.

Tip from expert: Don’t be greedy

The Bharatiya Bhavan CGHS in Khar (West) has been on the block for the past four years. In 2007, TOI was the first to report that the society had invited sealed bids from various developers and that a Navi Mumbai-based builder, APA, had offered Rs 180 crore to the society. There were several other leading builders in the fray, including Tata Housing, Wadhwa Group, Naman Developers and Acme.

However, the builder subsequently withdrew the offer due to recession and also because of infighting between two groups of flat owners. Some residents thought that APA’s offer was not enough. The fight culminated in a legal battle — Parinee Developer now claims it has helped resolve the issue between the two groups.

In 2006-07 , a slew of housing societies in the suburbs had received phenomenal offers from developers if they agreed to redevelop their properties. While some builders wanted flat owners to move out permanently by paying them off handsomely, others agreed to rehouse them in new and larger flats in the redeveloped property.

However, many of these deals failed to take off because either residents became too greedy and kept on demanding more from the developers or the builders themselves backtracked when the property market slowed down two years ago. Sprawling housing colonies like Nutan Nagar near the Bandra (W) station and Khira Nagar in Santa Cruz got stuck after getting offers running into hundreds of crores. In 2007, Khira Nagar housing society entered into agreement with the Pune-based Kumar Developers for a reported Rs 900 crore for the 640 flats in 16 buildings. But the project never took off.

Read More

Where the rich live ?

Soft marketing article by the WSJ to pump up real estate in India. Mostly sponsored by the builders. The question to ask is where do the rich get the money , and how much tax do they pay and have paid over the past few years. I dare WSJ to carry out an article on this topic.

Super-luxury apartments are back in vogue and they are bigger and better than ever before.

As India's economy has gained momentum over the past several months, super-wealthy corporate professionals and businessmen are once again ready to pay $1 million or more for their dream homes. That can buy apartments with five bedrooms or more spread over 5,000 to 10,000 square feet and with amenities like personal lap pools and jogging parks in the sky.

From gold tiled bathtubs to sky-high verandas, luxury living is back. Following a market lull in 2008, India's wealthy class is again dishing out top dollar for luxury apartments. WSJ's Shefali Anand reports.

Home builders are rushing to meet this demand. At least a dozen super-luxury apartment complexes are being built across India right now, mostly in the major metro cities of Mumbai, Delhi and Bangalore.

The recent flurry of activity is a sharp reversal from early 2009, when the luxury housing segment was all but abandoned as the Indian economy's growth slowed. Developers had to slash apartment prices by 30% to 40% in February and March 2009, in order to find buyers, says Sanjay Dutt, chief executive officer for business at Jones Lang LaSalle Meghraj, a real-estate services firm. Developers are trying to outdo each other in breaking fresh ground in luxury.

Some market experts are now getting worried about prices, which they say have reached near peak-2007 levels. Given that, and the huge upcoming supply, there could be downward price pressure on these apartments over the next few months, says Poonam Mahtani, national director of Colliers International (India) Property Services Pvt. Ltd., a real-estate-services firm.

In south Mumbai's Lower Parel neighborhood, for instance, around 10 million square feet of area is likely to be freed up for building high-end apartment buildings, according to an estimate by Religare Capital Markets Ltd. To create enough demand for these apartments, prices need to drop by 20% to 25%, says Suhas Harinarayan, managing director and co-head of research at Religare Capital Markets.

View Slideshow

S.D. Corporation Pvt. Ltd.

While real-estate prices are tough to predict, buyers might benefit by waiting for a few more months. When many of these apartments come to market at the same time, they can get better prices, say consultants.

Buyers who don't want to wait are still getting a better deal than they were before the downturn, because developers are providing more value for the same price.

"Up till now, we didn't have properties which were fully fitted out in terms of closets and woodwork," says Shveta Jain, director, residential services, Cushman & Wakefield India Pvt. Now, however, these fittings are commonplace.

Read More

Pune : More registrations, less permissions

Pune mirror has an article which is bullish on Pune real estate. 21,000 registrations in 2010. It appears the the trend is strong and barring an unforeseen event of great magnitude, volumes will continue to be healthy. Once inventory vanishes I think prices will start rising. I was just checking with some builders and they are not negotiating. In the past they used to say get the checkbook and they will discount the price, now it appears they are not in a mood to bring their price down. Other buyers, end-users or sellers can post their experiences in this thread.

In the past I have always show my bullish stance for Pune vis-a-vis Mumbai and I think in terms of volume we will see more growth. The other number we need from banks is the NPA (non-performing assets) or loans in default. That could pressurize the market if the trend in that number is rising.


Flat sales show good healt- Link

Here is a win-win situation for the government and builders. After the recession-related slump in property deals, figures at the government registration office here show that, compared to last year, more people are purchasing flats in the city. In fact, the registration department has doubled its revenue as compared to the first quarter of 2009.

In Q1 of 2009, the registration office collected Rs 113.9 crore against registration of 13,033 flats in the city, whereas in 2010, revenue shot up to Rs 294.04 crore - more than double. March is the one of busiest months in the registration office.

This year, 8,900 flats were registered in March. Last year, in the same month, the number was 3,553, which translates into a 2.5 per cent increase. When we spoke to V D Dhansheety, joint district registration officer, he said, “In March, there are a lot of festivals.

On the auspicious day of festivals as well as towards the end of the financial year, people are more eager to buy flats. Therefore, in this month, more registrations happened. In mid-2008, the recession started. After that, the number of flats registered came down considerably.”

Dhansheety added that though banks reduced their home loan interest rates, no one came forward to invest in flats. “In 2009, due to improvement in the market, people started purchasing flats. The number is not a satisfactory one. But, in Q1 of 2010, there was an increase in registration of flats.”

Read More

High court quashes FSI increase in Mumbai

Buillders are anguished at this order since now they will have no other option but to raise rates by 10-15%.

The best thing is to move out of Mumbai into Pune, Bangalore, Hyderbad or Chennai .There is absolutely no point in paying 1.5 crores to live in 2 bed apt when your salary is a fraction of the loan.

The only people who can buy are those with black money or those whose Mumbai projects are going into redevelopment. Every building over 30 years in age is going for redevelopment and all these residents are getting a good package from the builders.

From what I hear the builders offer

18 months of rent
A lumpsum amount
20-25% extra carpet in the new building.

Many times some owners sell the flat to the builder and move into a different location.

I've seen some projects in my area getting sold out in no time and those flats are sold to mostly investors with deep pockets. End users rarely get a chance to participate in this process.

so the best thing for anyone who can, is to move out and get out of this mess. Ive also noticed a tendency of some of the owners to move to Pune. Today's Times of India - Mumbai edition has a 4 page supplement on Pune real estate. That should speak volumes that Pune builders are courting the Mumbai population with the terms 'affordable' in every other sentence. 3000-5000 per sq/ft seems to be a steal when compared to 10,000 per sq ft in the Mumbai suburbs.

Hindustan times article is below.

Buying a flat in the suburbs will now get even more expensive, after the Bombay High Court on Thursday struck down the state’s decision to increase the Floor Space Index (FSI) for suburban constructions to 1.33 from 1.

The FSI determines the maximum amount of construction that’s allowed on a plot of land. An FSI of 1 means that on a 1,000 sq ft plot, construction cannot be more than 1,000 sq ft.

All new projects have to adhere to the ruling, which came after the April 2008 Government Resolution (GR) was challenged by resident Amit Maru.

This means builders will now have to buy more FSI through Transfer of Developmental Rights (TDR) from the open market. The maximum permissible FSI for suburbs is 2 of which 1 is permitted by default, and builders can acquire the additional 1 through TDR.

In the 2008-09 Budget, the state had decided to offer an additional 0.33 FSI on payment of premium, which reduced the amount of FSI builders had to acquire from private parties. This had, to some extent, reined in TDR prices.

Under the GR, the premium to be paid for the additional FSI ranged from Rs 7,000 per sq ft in areas such as Manori to Rs 23,000 in Bandra.

“We have to pay extra money to buy TDR from the open market and will pass this burden to consumers,” said Sunil Mantri, president of Maharashtra Chamber of Housing Industry and owner of a construction firm.

The court struck down the GR saying it’s against the Maharashtra Regional and Town Planning Act, 1966, as it does not have a provision for levying a premium.

Read More

Mumbai setup for redevelopment.

Its about time the old run-down structures are torn down and replaced with new developments. Needless to say here the big winners are the troika of builders, politicians and state government babus. Its hard to fathom the amount of black money which will be generated by 20,000 projects.

With the IPL scandal it has been apparent to everyone that Pawar had a big stake in the development of Amanora Town in Hadapsar, Pune and also he was involved in the Blue Ridge Hinjewadi project.. Every project has the backing of a big politician so now it remains to be seen if those projects are affected if he has to step down.

With DC rules clarified, Mumbai is set for a flurry of redevelopment

Mumbai: Greater clarity in rules and the pressing need for more houses in land-starved cities like Mumbai have builders eyeing opportunities for redevelopment after a two-year market slump and recession.

"Now we have the opportunity to do large redevelopment projects, as the policy on redevelopment has been clarified," Godrej group chairman Adi Godrej said last Friday. "We are hopeful that within the next six months, we will announce a few large redevelopment projects.

"Another reason [for redevelopment] is the scarcity of land for development in Mumbai," Godrej said, adding that some of the buildings in the island city are "very old, built during the British era".

Besides Godrej's realty unit, Godrej Properties, Housing Development and Infrastructure, DB Realty, Ackruti City and the unlisted Shapoorji Pallonji & Co and Kumar Urban Developers are among the big builders chasingre development contracts.

More here

Read More

Will Property Prices Fall

Moneylife article

Housing prices are again reaching for the skies; demand is stagnating. How much should prices fall for the market to be reasonably valued? When can that come about? Moneylife reporters and analysts offer some answers.

If the current trend continues, it is likely that Mumbai will soon see stagnation in property sales; so will Bengaluru, Delhi-NCR and other metros. Teaser home-loan rates notwithstanding, buyers are showing no eagerness towards committing to their cherished new homes. If prices continue to spiral northwards, will buyers be eventually priced out of the market? Will we witness the bursting of yet another bubble or would that be just a temporary phenomenon?

Pankaj Kapoor believes that the government is actively fuelling a property price bubble in Mumbai. “The Mumbai Metropolitan Region Development Authority (MMRDA), in its own plans, says that increasing the valuation of the land sold is one of the key objectives. It is the government which is creating the bubble,” he asserts.

This is where the problem lies. Inflation is now touching almost 10%, prompting the government to gradually roll back the earlier monetary stimulus measures. Interest rates are expected to go up further. It is worth noting that every 0.5% increase in interest rate reduces home loan eligibility by approximately 7% (by making home loans costlier and also by reducing the eligibility of the lower-income segment).

In this scenario, what should home-seekers be doing? Many of you would be looking out for that cherished new home that you have wanted for so long. Does it make sense to take a plunge at these prices? Not if you are smart. Many buyers have postponed their home purchase decisions in view of the steep appreciation in property rates. Wait a bit for prices to cool down and then make a move for that dream house.

Read More

Decoupling, local demand driven economy, green shoots

Here we have the Sensex down another 300 points and it gets blamed on the Euro Zone problems.

Indian stock market brokers have taken the Indian investor for a long ride and articles like this in the Economic Times only vindicate my position that the media in India is very biased and will not report the full truth. They will hype up the good news and play down the bad stories.

There is no independent reporting anymore and everyone including the TV channels are biased. The media knows that if the market sentiment is not propped up, they will lose viewers/readers and hence their sources of advertising revenue.

Investors have to tread very treacherous waters in India so they better be very skeptical of these bozo's in the media.

Every article is written with the intent of enticing investors into the market. This is the Ekam-Sat (Ultimate Truth) of Indian markets. Be very careful with your hard earned money and if you have to invest go with diversified low cost mutual funds with minimal expense ratios. I hate to see people lose sleep and their life's savings and hand them over to these sharks

Economic times reports

MUMBAI: The Indian markets fell on Tuesday, halting its four-day rally as concerns about the European economies turned investors jittery again. During the day, the BSE sensex fell 373 points, or 2.2%, to close at 16,572 while on the NSE, nifty closed at 4,970, down 116 points or 2.3%.

The day's selling was again led by foreign funds while buying by domestic funds cushioned the fall to some extent. BSE data showed FIIs were net sellers at Rs 527 crore while DIIs were net buyers at Rs 211 crore. Dealers said other than global concerns, speculation that the RBI could soon hike interest rates to stem inflation also prompted Dalal Street investors to book profit. The day's slide left investors poorer by Rs 90,000 crore with BSE's market capitalisation now at Rs 59.7 lakh crore.

During the day, most global markets also ended in the red as euro slipped to a four-year low level against the US dollar. Reports on slow growth of Chinese manufacturing sector, and its after effects on the eurozone and the global economy in general, also made the investors jittery.

In the the Asian region, Shanghai fell by nearly 1%, while Nikkei in Japan was down 0.6% and Hang Seng in Hong-Kong closed 0.4% off. In Europe, FTSE in London recovered much of its earlier losses and ended 0.6% down, while in Germany, DAX ended marginally higher and CAC in France ended marginally lower. In early trade, Dow Jones was flat, having recovered most of its earlier losses of nearly 1%.

Read More