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Showing posts with label Real Estate Database. Show all posts
Showing posts with label Real Estate Database. Show all posts
Sunday, 29 December 2013
Saturday, 14 December 2013
Investor community has entered Chennai real estate
There are enough people looking to buy a home – at least 1,034 wannabe buyers trawl Indiaproperty.com
at any given time. But searches are not getting converted into
purchases because location, price and social infrastructure seldom
converge for today’s homebuyer. Ganesh Vasudevan, Chief Executive
Officer, India Property Online Pvt. Ltd, says where there is demand,
there are not enough homes.
Do you see an uptick in the demand for luxury homes in Chennai? How does this trend compare with other metros?
In
terms of absolute numbers, luxury homes constitute a small portion. But
yes, there is demand for well-appointed homes in Chennai, no matter how
highly they are priced. Similar to how BMW, AUDI and Mercedes Benz are
selling at a brisk pace despite an overall slump in sales in the
automobile sector, luxury homes are still comfortably in demand. From a
national perspective, however, Rs 15 crore is not an eye-popping sum for
a home. In Mumbai, it is not really remarkable. There is a growing
number of NRIs coming back to India, may be for their children’s
education, to reconnect with their roots, or to live with their parents.
This has spawned a crop of luxury homes, and some are right at the
centre of the city. The trend in the South started in Bangalore and
Hyderabad, and now is in Chennai. But uptake of luxury homes does not
represent a true picture of the demand.
In which range of prices do you see the majority of homebuying?
Between
Rs 50 and 60 lakh – about 65 per cent of sales fall in that segment.
Unfortunately, people have to go the suburbs for a Rs 50-lakh home and
the infrastructure is still in the works. On Old Mahabalipuram Road, the
roads have been laid, but pipe water from reservoirs does not reach
every area, and the sewage system is not proper. Not many cinemas or
quality restaurants. Similar is the case if you go down the Grand
Southern Trunk Road or near Sriperambudur. Even in Bangalore, acres
beyond the Electronic City are being sold, but the social infrastructure
there is not much to speak of. In the National Capital Region, real
estate is speculative.
Do you see the investment-for-profit culture taking off in Chennai as well?
For
the last three years, we are seeing Chennai real estate being
considered from an investor’s perspective. The city’s obvious advantages
are robust demand, safe to dwell, and there is a definite upside from
where prices stand today. Roughly, about 15 per cent of the transactions
are speculative in nature. They come in at pre-launch, wait for
development, and at the time of delivery offload it in the secondary
market. It happens particularly on OMR. The sweet spot is Rs 40-50 lakh.
How
are the developers protecting their margins in such times of rising
investor interest, high inflation and growing demand for homes?
They
are building smaller homes to guard profit margins. A
three-bedroom-hall-kitchen flat used to measure 1,800-1,900 sq. ft in
2006. Now, we are talking 1,200 sq. ft or even smaller. Through this,
builders are making sure the cost per sq. ft does not move closer to the
yield per sq, ft, which has moved up in tandem with the continuous rise
in land prices. The other sea-change is what goes into a luxury homes
nowadays. Earlier, luxury meant a gated community with a gym and a
swimming pool. Now, it’s bespoke bath fittings and furniture, concierge
services, swanky spas, twin car parks, plunge pool in each apartment,
and private elevators. We get all the works for prices from Rs 5 crore
to as high as Rs 24 crore. As for the high pricing, it’s as aspirational
as utility-serving and they are getting sold at a decent pace. However,
developers are stuck with unsold homes in Rs 70-80 lakh segment.
Should developers not look at discounting homes to cut inventory?
They
should, But all I see are bundled offers such as more parking space or
an apartment with modular kitchen. Some developers have taken leaps of
faith by building homes in areas where you have walk miles to reach a
school, or a hospital. The rise in land prices following the
announcement of a second airport near Sriperambudur is an example.
Within a year of two, these homes will sell, of course. Homebuyers
should buy now, ahead of a possible price rise due to compliance
requirements imposed on the developers by the Real Estate Bill 2013.
Builders are expected to meet quality standards in construction, deliver
in time, and get approval from a State-level body before beginning
construction.
Thursday, 12 December 2013
Home price rise to slow down in top cities
Thu, 12 Dec 2013 12:07:34 -0700
The survey of 11 property market analysts showed expectations that house prices in Indian cities will rise 7.8 per cent next year, well below the current rate of consumer inflation of around 10 per cent.
Home sales in India slowed this year and unsold inventory with builders has increased as economic growth in the broader economy has decelerated quickly to half the 10 percent rate it was running at before 2008.
But the main problem, in a country where almost one-quarter of the population earns less than 50 cents a day, is the price.
"In some of the key markets in the country property prices are sky high," said Sachin Sandhir, managing director at RICS South Asia.
"Due to uncertainty about the economy, high interest rates and rising inflation, developers are holding on to their prices, making some locations unaffordable."
Indeed, a 2,000 sq.ft (185.8 sq.metre) apartment in the posh South Mumbai neighbourhood of Malabar Hill costs more than $2 million. That is not far from the average three-bedroom unit in Manhattan, New York City, which costs around $2.6 million.
Although the majority of homes in Indian cities are nowhere near that expensive, it shows how far real estate values in India's financial capital have risen. And dwindling incomes have put low-cost homes out of reach for many people.
Most of the urban price rises are expected to take place in the southern coastal city of Chennai, followed by New Delhi and its suburbs and Bangalore, while already high prices in Mumbai will likely stagnate.
Analysts gave property in Mumbai and Delhi, India's two biggest cities, an overall rating of 9 on a 10-point scale where 1 is extremely undervalued, and 10 is highly overvalued.
That is a much higher rating than in similar Reuters polls conducted around the world. Prices in the UK, which have re-touched record highs by some measures and are soaring in London, were rated 6, while those in Canada were rated 6.3.
Mumbai and Bangalore realty market have slipped as lucrative investment destinations in the Asia Pacific region as sales in these cities declined due to investors shying away, resulting in correction of prices.
The two cities have slipped to the 23rd and 20th positions, respectively, in the list of investment destinations covered by the ‘Emerging trends in real estate Asia Pacific 2014’ and published jointly by Urban Land Institute and PricewaterhouseCoopers (PwC).
There is a negative impact of economic uncertainty, regulatory and political risk that continues to result in a general sense of nervousness along with negative sentiment resulting in the foreign investors shying away from the Indian real estate market.While on the other, the undoubted potential continues to keep interest levels going in certain parcels of the Indian market, experts said.
Gautam Mehra, executive director, PwC India, said, “The general slippage of Indian cities in the rankings, coupled with the retention in the top-25 list, tells the story. On one hand, there is the negative impact of the combination of market, currency, regulatory and political risk, which continues to result in a general sense of nervousness and the tendency of foreign investors to stay on the sidelines, while on the other, the undoubted potential continues to keep interest levels going. The new entrant (Chennai) gives another positive twist to the story. In the backdrop of the outlook emanating from the report, a more conducive and transparent environment will set the ball rolling for attracting greater levels of investment, both foreign and domestic.”
However, Indian cities have managed to retain a position in the top 25 real estate destinations of the Asia Pacific region. Delhi was placed at the 21st position, while Chennai has made an entry for the first time at the 22nd position.
In the previous report of 2013, Mumbai was placed at 20th and Bangalore 19th position from where they have slipped to the 23rd and 20th positions, respectively.
These low ratings are attributed to the ongoing economic problems, an uncertain currency outlook following a mid-year plunge in the value of the rupee, and an investment environment widely perceived to be unfriendly to international investors. Still, interest in Indian markets remains high. With national elections looming and reports on the ground suggesting that the tide may be turning in receptivity to foreign investment, many foreign funds are waiting on the sidelines to see what happens, the report added.
The report said that overall for Asia, the real estate fundamentals are expected to remain strong in markets in 2014, with stiff competition for conventional assets in prime markets boosting the popularity of niche property sectors and secondary markets for investments.
“While Asia’s robust market has been accompanied by higher prices and lower yields for core products, investors have reacted not by pulling away from real estate in Asia, but by finding new ways to make the numbers work, including a focus on specialised property types such as senior care or logistics, and on opportunities in emerging markets,” said ULI north Asia chairman Raymond Chow.
Investors, however, have found out a new way to enhance returns and are trying to enter at the development level. There is an increasing number of co-invested development deals that are now being struck.
“Several large institutional players that have opened offices in Asia in order to gain access to direct deals have opted to co-invest in development sites as a means of securing core assets that would otherwise be unavailable or be too expensive. This is something of a departure from normal practice at institutional funds, but is being driven mainly by necessity,” said KK So, the Asia Pacific real estate tax leader at PwC Hong Kong.
The Emerging Trends report is based on the opinions of more than 250 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
Home sales in India slowed this year and unsold inventory with builders has increased
After years of double-digit growth, house price rises in major Indian
cities are expected to slow to just under 8 per cent next year as a
cooling economy and rising interest rates deter new buyers, a survey
showed.The survey of 11 property market analysts showed expectations that house prices in Indian cities will rise 7.8 per cent next year, well below the current rate of consumer inflation of around 10 per cent.
Home sales in India slowed this year and unsold inventory with builders has increased as economic growth in the broader economy has decelerated quickly to half the 10 percent rate it was running at before 2008.
But the main problem, in a country where almost one-quarter of the population earns less than 50 cents a day, is the price.
"In some of the key markets in the country property prices are sky high," said Sachin Sandhir, managing director at RICS South Asia.
"Due to uncertainty about the economy, high interest rates and rising inflation, developers are holding on to their prices, making some locations unaffordable."
Indeed, a 2,000 sq.ft (185.8 sq.metre) apartment in the posh South Mumbai neighbourhood of Malabar Hill costs more than $2 million. That is not far from the average three-bedroom unit in Manhattan, New York City, which costs around $2.6 million.
Although the majority of homes in Indian cities are nowhere near that expensive, it shows how far real estate values in India's financial capital have risen. And dwindling incomes have put low-cost homes out of reach for many people.
Most of the urban price rises are expected to take place in the southern coastal city of Chennai, followed by New Delhi and its suburbs and Bangalore, while already high prices in Mumbai will likely stagnate.
Analysts gave property in Mumbai and Delhi, India's two biggest cities, an overall rating of 9 on a 10-point scale where 1 is extremely undervalued, and 10 is highly overvalued.
That is a much higher rating than in similar Reuters polls conducted around the world. Prices in the UK, which have re-touched record highs by some measures and are soaring in London, were rated 6, while those in Canada were rated 6.3.
Mumbai and Bangalore realty market have slipped as lucrative investment destinations in the Asia Pacific region as sales in these cities declined due to investors shying away, resulting in correction of prices.
The two cities have slipped to the 23rd and 20th positions, respectively, in the list of investment destinations covered by the ‘Emerging trends in real estate Asia Pacific 2014’ and published jointly by Urban Land Institute and PricewaterhouseCoopers (PwC).
There is a negative impact of economic uncertainty, regulatory and political risk that continues to result in a general sense of nervousness along with negative sentiment resulting in the foreign investors shying away from the Indian real estate market.While on the other, the undoubted potential continues to keep interest levels going in certain parcels of the Indian market, experts said.
Gautam Mehra, executive director, PwC India, said, “The general slippage of Indian cities in the rankings, coupled with the retention in the top-25 list, tells the story. On one hand, there is the negative impact of the combination of market, currency, regulatory and political risk, which continues to result in a general sense of nervousness and the tendency of foreign investors to stay on the sidelines, while on the other, the undoubted potential continues to keep interest levels going. The new entrant (Chennai) gives another positive twist to the story. In the backdrop of the outlook emanating from the report, a more conducive and transparent environment will set the ball rolling for attracting greater levels of investment, both foreign and domestic.”
However, Indian cities have managed to retain a position in the top 25 real estate destinations of the Asia Pacific region. Delhi was placed at the 21st position, while Chennai has made an entry for the first time at the 22nd position.
In the previous report of 2013, Mumbai was placed at 20th and Bangalore 19th position from where they have slipped to the 23rd and 20th positions, respectively.
These low ratings are attributed to the ongoing economic problems, an uncertain currency outlook following a mid-year plunge in the value of the rupee, and an investment environment widely perceived to be unfriendly to international investors. Still, interest in Indian markets remains high. With national elections looming and reports on the ground suggesting that the tide may be turning in receptivity to foreign investment, many foreign funds are waiting on the sidelines to see what happens, the report added.
The report said that overall for Asia, the real estate fundamentals are expected to remain strong in markets in 2014, with stiff competition for conventional assets in prime markets boosting the popularity of niche property sectors and secondary markets for investments.
“While Asia’s robust market has been accompanied by higher prices and lower yields for core products, investors have reacted not by pulling away from real estate in Asia, but by finding new ways to make the numbers work, including a focus on specialised property types such as senior care or logistics, and on opportunities in emerging markets,” said ULI north Asia chairman Raymond Chow.
Investors, however, have found out a new way to enhance returns and are trying to enter at the development level. There is an increasing number of co-invested development deals that are now being struck.
“Several large institutional players that have opened offices in Asia in order to gain access to direct deals have opted to co-invest in development sites as a means of securing core assets that would otherwise be unavailable or be too expensive. This is something of a departure from normal practice at institutional funds, but is being driven mainly by necessity,” said KK So, the Asia Pacific real estate tax leader at PwC Hong Kong.
The Emerging Trends report is based on the opinions of more than 250 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
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