Loan rates cut . Expect more cuts in the near future

With the Federal Reserve cutting rates by 1.25% over the past 3 weeks, RBI will be forced to follow suit and cut by atleast 0.5 to 0.75. I expect the loans rates to go down to 9.75 floating in the near future. Its best for borrowers to wait few more months for the RBI to cut rates before jumping the gun. Housing supply is abundant so the builders are in no hurry to raise prices, rather one can negotiate upto 10-15% and I think they will oblige if you are willing to write a check the right next moment

Times has the article on HDFC cutting loans

MUMBAI: Finally there is good news for people who have taken a loan with a floating interest rate to buy their dream homes. HDFC, the leader in the home finance business, has decided to cut interest rates on floating rate home loans for all its existing customers by 25 basis points. With the leader cutting rates, the market expects it will be only a matter of time before other players follow.

On Thursday, HDFC said it would cut its retail prime lending rate (RPLR) — the rate to which all its interest rates are benchmarked — by 25 basis points to 13.75% per annum from the 14% earlier. The cut is effective from February 1. It has, however, kept its floating rate for new customers unchanged at 10.25%.

This means all HDFC floating rate customers will see a cut in rates by a quarter of a percentage point. However, the effective date for each will vary. "The advantage of a cut in RPLR will accrue to all the existing floating rate customers over the next three months based on their respective reset dates," HDFC said in a release.

The other major players in the sector are ICICI Bank and SBI. ICICI Bank is still to take a decision on revising its housing loan rates. A top ICICI Bank official said its decisions on home loan rates were based on its cost of funds. "We will continue to watch the market closely." Till Thursday evening, SBI had not taken any decision on home loan rates.

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GST in chennai is the new destination

Hot property: Property developers are focussing on the area adjoining GST Road as infrastructure is much better and connectivity to the city by road and rail is of good quality.

The population influx towards GST Road is set to touch several lakhs, property developers predict.

The new residential projects follow on the heels of announcements of several Special Economic Zones (SEZs) in the area.

Among the new Special Economic Zones are one proposed for Information Technology companies and one for renewable energy generation equipment.
Despite complaints that infrastructure within the Maraimalai Nagar township, proposed as a satellite city to the metropolis, is not up to the mark, property continues to be bought and sold in and around the area.

Annai Builders, dealing with property in Maraimalai Nagar, had bought 50 acres in the township. Some 560 plots have been sold, representatives of the company said.
Another 560 plots would be coming up in the area. Most of these would be residential, while some land could be put to commercial use, they speculated.

Property development in the area is significantly on the increase. Land prices are currently Rs. 200 per square foot and are set to increase, they add. Information Technology companies are also moving to the locations around GST Road since it possesses excellent connectivity and more affordable housing and office space, builders say.

The new Information Technology Special Economic Zone coming up at Madurantakam, for instance, would bring in at least 30,000 new people, believes P. Suresh, Managing Director, L&T Arun Excello Realty. The Mahindra World City already houses several Information Technology companies including Infosys and Accenture, points out Hari Nagaswaran, Executive Vice Chairman, Hallmark Infrastructure.

They have also launched an integrated township project at Vallanchery with housing units priced upwards of Rs. 55 lakh.
There are about 650 apartments in the first phase and more than half have been booked, Mr. Suresh says.
The integrated township would be offering several facilities, including a Vidya Mandir School that would prioritise admission of residents in the township.
“We were initially unsure what the response to an integrated township would be,” he recalls, adding the response has been very good with people expressing a preference for easy access to all facilities at walking distance.
The township would include hotels, landscaping, a water body and green surroundings, he promises.
There is plenty of room for more players in the area, Mr. Suresh believes. The Special Economic Zones are likely to act as an engine of growth in the area, bringing in more infrastructure and housing projects. The Old Mahabalipuram Road boom is over, says Mr. Nagaswaran confidently.
The region is too crowded and property prices are dropping. A lot of office space in the corridor is vacant, he finds. While government officials believe that the Old Mahabalipuram Road would see a lot of activity once the remaining phases of work are completed, property developers with special interests in the GST Road feel otherwise.
There is an increasing focus on GST Road area as infrastructure is much better and connectivity to the city through road and rail of good quality, he believes. Mr. Suresh echoes the belief. Suburban trains ensure that commuters can reach, say, Parry’s Corner in 50 minutes, while the same journey by road would take up to two hours, he says. This makes the location ideal for those with a spouse who might have to commute into the city, while their place of work is nearby
.

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Insane housing prices in Mumbai

I came across the table of values from the site http://www.narains.com/rates.htm and its astounding to see prices in Mumbai keep on escalating over the past few years. Certain areas like Santacruz have seen in prices triple in the past 3 years. I'm not able to figure out how many transactions take place at these prices. At these rates a 2 bed room apt measuring 1000 sq/ft could go for over 15M to 30M rupees in an A grade building. With 40 rupees to a dollar we are taking about 400-900$ per sq/ft. With these prices I could very well purchase in New York ..., not speak of other places in the US

Location

'A' Grade Bldg.

'B' Grade Bldg.

'C' Grade Bldg.

Cuffe Parade / Colaba	Rs.35,000 - 60,000*	Rs. 22,000 - 30,000	Rs. 15,000 - 18,000
Marine Drive / Nariman Point	Rs. 40,000 - 50,000 (NCPA Only)	Rs. 20,000 - 25,000	Rs. 15,000 - 18,000
Malabar / Cumballa Hill	Rs. 35,000 - 60,000*	Rs. 22,000 - 30,000	Rs. 15,000 - 18,000
Napean Sea / Warden Rd.	Rs. 35,000 - 60,000*	Rs. 22,000 -30,000	Rs. 15,000 - 20,000
Worli	Rs. 30,000 - 40,000*	Rs 16,000 - 22,000	Rs.12,000 - 16,000
Prabhadevi	Rs. 18,000 - 22,000	Rs. 13,000 - 18,000	Rs. 10,000 - 12,000
Bandra	Rs. 18,000 - 30,000	Rs. 13,000 - 18,000	Rs. 11,000 - 12,000
Khar / Santacruz	Rs. 16,000 - 18,000	Rs. 12,000 - 16,000	Rs. 8,500 - 10,000
Juhu	Rs. 16,000 - 20,000 (Sea facing)	Rs. 9,000 - 11,000	Rs. 8,000 - 9,000
Lokhandwala / Versova	Rs. 9,000 - 14,000	Rs. 6,500 - 9,000	Rs. 5,000 - 5,500
Powai	Rs. 9,000 -11,000	Rs. 6,000 - 8,000	Rs. 4,500 - 5,500

Mumbai Property rates per sq.ft. Updated as on 5th Jan 2008

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Township craze in Chennai

Realty vendors have unleashed their marketing hounds to make a killing in selling township dreams in this southern city. Capitalizing on the IT boom on Old Mahabalipuram road (OMR as its called inspite of the new name Rajiv Gandhi IT highway) leading players like DLF, L&T and Hiranandani have launched super-sized projects of over 2000 apartments each in the vicinity of OMR. The results have been spectacular as people are rushing in to buy apartments in case the miss out on the launch price specially with DLF and L&T. The other existing players of Chennai like Jains, Arihant too seemed to have launched projects there though the hype made by the national developers is going to drive national attention to a place known for its temples and saltpans. The developments around OMR too merit some attention with IT bigwigs making a bee-line to setup their captive centers on both sides of the road. With TCS/Infosys/Wipro and others having commissioned big campuses, its a matter of time that this place is buzzing with activity. One hopes the road is fixed up and becomes a true national highway. For what its worth the prices are below. Beware prices change faster then you can say "Sarvana Bhavan"

1) Hiranandani Upscale – 800 increased. – Rate 4100/sqft - Apr 07 - 3600 - went upto 4400
2)Purava Swan Lake - 650 increased. Rate 3600/sqft - Rs.2950
3)Purava Windermere - Rate 2790/sqft Not launched yet
4)L&T South City – Is it new? Is this the start rate? - Rate 3600/sqft
5)L&T Estancia - 550 increased. Rate 3500/sqft - rs 2950 Apr 2007
6)Mantri Synergy - Rate 3700/sqft
7)Chettinad Enclave (villa) - Too much - Rate 4250/sqft - Rs.1975 in Oct 2005
8)DLF Township - 400 increased. Rate 3200 / sqft- Rs2800 2 weeks ago..
9) Lancor in clasic - 1300 increased. Rate 4100, year ago Rs 2800/sqft
10) Akshya
11) Olympia Opaline
12) City Square
13) Aharihant Heirloom
14) Jain Iselin - ??? starting price rs.2900 in Apr 07

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Bangalore builders set to ruin Chennai outskirts

Rising prices in the real estate sector in Bangalore, the IT capital of the country has turned the attention of several realtors to Chennai, a city which is slowly but surely set to beat Bangalore in the real estate space.
Experts point out that Bangalore is becoming crowded and there is hardly any space for new construction. Moreover due to the demand and supply mismatch, a large number of apartments are lying vacant.
Realtors point out that there were plans to slash the prices of the apartments, but they realised that it was not a feasible option as huge amounts of money had been invested. Builders however may reduce the prices marginally to ensure that the apartments are sold.
Keeping this scenario in mind, several builders are shifting base to Chennai. There is plenty of land available in the outskirts of the city and there is no mismatch in the demand and supply in Chennai, realtors point out.


Builders also have in mind the fact that several IT and automobile giants are shifting base to Chennai. Thanks to this, there would be more demand for apartments in the city, realtors point out.
Builders say that they have been assured of more infrastructure in Chennai compared to Bangalore. In Bangalore, people are scared to invest in certain areas such as Hosur road and Koramangala due to the chaotic traffic. On working days, one would have a three-hour battle with the traffic to reach home.


However, the scene is different in Chennai. The city is better planned and the traffic is well managed. Constructing apartments in a 20-kilometre radius of the city would not be a bad deal as the travel time is negligible thanks to the excellent management of traffic.
Purvankara builders are moving into Chennai in a big way. The firm is constructing 2072 apartments at Pallikarani in Chennai. The builders feel that Chennai is a better bet at the moment thanks to infrastructure available in the city.
In Chennai, builders expect their apartments to be sold off faster compared to Bangalore as there is a huge difference in the prices. In Bangalore, where there is a synthetic pricing, apartments are being sold at Rs 10,000 per square foot, while in central Chennai, the prices are Rs 5000 per square foot.
Builders see Chennai as an emerging market when compared to Bangalore. The prices are affordable in comparison to the unrealistically high prices in Bangalore. With more realtors shifting to Chennai, the city is set to beat Bangalore in the real estate race. But will Chennai go the Bangalore way? Only time would tell.

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Congress blames SEZ lobby for Goa crisis

The SEZ lobby is strong enough to topple governments.

The Congress leadership here on Friday launched hectic efforts to save the Digambar Kamat government in Goa amidst serious charges that the powerful SEZ lobby was attempting to destablise and install an alternate dispensation with the help of three defiant NCP MLAs.

Kamat, who reached here on Friday afternoon with party MLAs, attended meetings convened by Congress president Sonia Gandhi as well as the NCP leadership, who was trying to win back the three errant MLAs. The Goa chief minister had managed to tide over an embarrassing situation in the state Assembly on Thursday, but events took a fresh turn after the three NCP MLAs refused to give their support to him.

"We met Gandhi and briefed her about the political situation in Goa. We discussed the situation. Now we will talk to NCP leaders again and a solution will be found," Kamat told reporters. The AICC had earlier in the day, put the blame squarely on the "SEZ lobby" for the crisis, as party leaders suggested that it would be a miracle if the government could be saved.

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Economic times turns to Astrologers to predict the future

Realty market may see major growth till April '08

NEW DELHI: Circa 2007 may have been an extended joyride for investors, but the stars spell a word of caution during 2008. And the general feeling among the cross-section of astrologers that SundayET spoke to was that while the first half of the year would be good for investors, the next half could be a bit choppy in parts due to unfavourable changes in planetary positions.

The idea behind the interaction with the astrologers was to get a sense of the investment outlook for stocks, real estate and commodities. On the brighter side, the year 2008 would symbolise leadership, dominance and position of authority for the economy. Aura reader S Bhattacharya foresees a positive outlook for the real estate sector. But he doesn’t rule out a few hitches either.

“The sector will continue to be strong till August 17 in Delhi and surrounding areas. But there will be a 18-20% decline post that. Prices are expected to be weak in all other areas, except for Mumbai and Goa, which will continue to remain strong. The bubble burst may happen in February 2009 but there is still room for optimism for real estate in 2008.”

Unlike last year, when the stockmarket threw up surprises with the Sensex touching the magical figure of 20,000, leading numerologist Sanjay B Jumaani predicts that the bourses will take a beating after June next year. “Gold is yellow just like the sun and can have a field year.

Real estate will continue to march upwards though the pace could reduce. In stocks, after August 15, India will enter its 62nd year and 62 adds up to 8 of Saturn. This does not favour stocks but it does favour real estate, farming and steel. One should also be careful about treading in commodities after August 15.”

His logic is that the year 2008 adds up to the number 1, which represents the sun and creative forces that give light and life. It symbolises leadership, dominance and position of authority.

Agrees astrologer Anurag Tripathi, “with the planetary position changing subsequent to June 2008, the financial markets will be hit. The market will end up in the range of 24,000 to 25,000 points in 2008.” According to him, the major astrological implications on the markets will be seen in December 2009 when the position of Saturn will change.

He expects a huge fall in December 2009 onwards and sees the market ending up from where it started its bull run. Leading US-based astrologer Ashok Motiani, however, feels that Sensex will touch the 21,000 mark before April-end 2008.

He anticipates a decline from May onwards, a trend likely to continue for several months. “There will be a major correction during this period. This correction is likely to be caused by liquidity squeeze, not only in India but all over the world.”

Mega IPOs and FIIs may have left the real estate sector smiling in the spotlight during 2007, but Motiani sees possibility of a mild correction next year. “Saturn has been transiting in Leo since July 16, 2007 and will continue to transit till September 10, 2009. During this period, real estate in India is likely to slow down. Prices will stop rising that’s for sure,” he says.

According to yet another astrologer Kewal Anand Joshi, the real estate market will see substantial gains till April 2008. He forecasts a downfall from April 15-July as there will be decline in foreign buying interest. “The market will be normal from September-December but ups and downs will exist,” he feels. For the yellow metal, the upward journey may continue as Joshi foresees it reaching Rs 12,000 in the New Year.

Gold scaled new highs with the price for 10 gms zooming to Rs 10,000 in 2007. Bhattacharya also cautions against a rise in petrol prices in 2008. “Prices will continue to rise in the commodities market. Agricultural items will also be expensive,” he says.

So while punters are dreaming of stronger positions on Dalal Street, it could be the gold-diggers who will have the last laugh on their way to the bank. After all, that’s what the stars have to say.

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