India to grow at 7.4 per cent in Financial Year 2015-2016, More Rate Cuts in Pipeline..

India is likely to grow at 7.4 per cent this fiscal, slightly lower than the earlier estimate of 7.6 per cent, a DBS report said today adding the Reserve Bank may go for 50 bps more rate cuts amid slower growth and faster than expected pullback in inflation.According to the global financial services major, upturn in growth for the Indian economy would be more gradual, with the consumption and investment turnaround likely to be slower than anticipated.”We revise down our FY15/16 growth estimate to 7.4 per cent (as against 7.6 per cent earlier), inching up to 8 per cent in FY16/17 (as against 8.3 per cent earlier),” DBS said in a research note.

India’s GDP growth rate slipped to 7 per cent in the April-June quarter of 2015-16, from 7.5 per cent in the preceding quarter.”Against the backdrop of slower growth and faster-than -expected pullback in inflation, we revise our rate call to include 50 bps more rate cuts in this fiscal, first of which is likely this month,” the report added.According to DBS, inflationary expectations will stay “tempered” amidst soft commodity prices. It expects the September-December CPI inflation to average around 5 per cent, still below the January 2016 CPI target of 6 per cent.RBI, which has lowered the benchmark rate by a combined 75 basis points so far this year in three instalments, will hold its next bi-monthly monetary policy meet on September 29.

Rate cuts by the central bank will be influenced by the US Fed rate decision and China-linked volatility.”Assuming stable market conditions in the run-up to the September review and fading US hike risks, the RBI is on course to lower rates ,” it said.It further added that if the US hikes interest rates in September, “the RBI will sit on its hands for the time being to allow markets to stabilise and price in further rate increases, before pushing domestic rates lower.”

7 Real Estate Trends To Watch Out For This Year..

Residential plots to rule the roost  

Unlike conventional market trends, residential plots are gaining prominence amid property buyers. Buyers prefer to buy plots for attractive returns in the mid-to-long term horizon.  

This can further be justified by the fact that they are now considering upcoming smart cities, where apartment culture is yet to catch pace. Also, for the development of these smart cities, smaller areas in the peripheries are being identified.  

As this concept is yet to take off in most areas, plots tend to have become a strong investment option.

Industrial corridors to boost infra growth in hinterland  

Cities falling along the major industrial corridors are expected to see immense growth in the coming years. As each corridor passes through various existing industrial clusters, towns and cities, these are likely to become investment hubs.

Thus, once completed, the real estate growth at India’s hinterlands, connected via these corridors, will be exponential. 

Affordable Housing wil be the buzzword  

Affordable housing has become the talk of town ever since BJP, in their manifesto, promised ‘housing for all’ by 2022. Post the budget, that opened a jackpot for affordable housing with a mammoth budget of Rs 4,000 crore (Rs 40 billion) and tax incentives for home loans, the mission got another facelift.  

In July 2014, RBI also tweaked the definition of affordable houses. As per the changed norms, home loans up to Rs 50,00,000 in metropolitan cities and Rs 40,00,000 in non-metro cities will now come under the purview of affordable housing.  

Small is beautiful

Smaller property sizes are now taking precedence over larger units across the metros. Large swanky homes that are huge on maintenance are no longer an attraction for several metropolitan buyers.  This was also validated by our recent survey where maximum people preferred property sized 800-1,200 sq. ft.

‘Smart City’ tag to boost realty prospects

‘Smart Cities’ is the latest buzzword that has created a wave in the country.

Thus, a lot of development will be seen in and around these cities. Survey findings indicates the ignited interest of buyers towards these potential cities.

It is interesting to note that about 32 per cent respondents showed interest in upcoming smart cities for investment.

While several cities have been proposed, few areas within the cities have also been identified.

Investors back on realty Map

With FDI in construction becoming a reality, the year 2015 will see the return of real estate investors.With no three-year lock-in period, the major hurdle for the overseas investors is removed. Thus, now an investor can exit once the project is completed or after the complete trunk infrastructure development.

Bangalore & NCR: High Demand for Ready-to-Move-in properties

Increased demand for ready-to-move-in properties is another major trend that was noticed in 2014 and is likely to continue in 2015 as well. Inordinate construction delay has pushed demand for ready-to-move-in projects significantly, primarily due to the increasing pressure of EMI plus rental values. 

Sarjapur - A good place for Investments.....

Good connectivity, worthy properties, fine location – you name it, Sarjapur has it, Know more about this popular residential hub.

Sarjapur is a fast-developing part of Bengaluru with good connectivity to key IT cluster areas like Whitefield, Electronic City, Outer Ring Road, Marathahalli and Koramangala. As a micro-market, Sarjapur is booming, thanks to rapid development in terms of commercial and residential spaces.

Plus factor

Sarjapur’s connectivity to IT hubs and its location along the Outer Ring Road (ORR) is what makes it an excellent destination for residential and commercial developments. “There are about two lakh employees working in the Outer Ring Road stretch making Sarjapur Road a busy IT corridor. Home buyers enjoy the convenience of living close to their work place. Another good reason is that real estate prices on Sarjapur Road have been more affordable compared with certain  similar upmarket counterparts.

Sarjapur is emerging as one of the most promising markets for villa projects in Bengaluru. “The density of population in the Sarjapur area is high vis-a-vis other well-developed areas. However, this can also be advantageous, as any investments will lead to sharper price appreciation, spurred by robust demand in the local market.

“The primary advantage of the region is that land is available at a cheaper price and primary work has been done by IT companies already,”adds J C Sharma, vice chairman and managing director, Sobha Limited.

Price talk

Availability of large land parcels for both commercial and residential development makes Sarjapur an attractive proposition. “This location has about eight multi-storey apartment projects, which are actively selling with around 2,400 units and another 1700 units yet to be sold. Residential prices have appreciated by about five to ten per cent in this location, depending upon the type and quality of the projects,” says Trivita Roy, assistant vice president, Research and REIS, JLL India. In addition to this, the residential market in the locality is primarily driven by the end-user demand, especially from the IT sector employees.

“The capital values range between Rs 4,500 and 6,300 per sq ft, and the rental values range between Rs 20,000 and 35,000 for a two-BHK configuration and Rs 30,000 and 45,000 for a three-BHK configuration. This micro-market has witnessed a capital and rental value appreciation of five to seven per cent in the last one year,” avers Sanjay Dutt, executive managing director of Cushman & Wakefield, South Asia.

With significant Grade A office space supply in the pipeline and a rise in affluent employee base in this part of the city, the demand for housing is likely to sustain in the years to come. “A good portion of the demand is expected to drive sales in the mid-segment housing category in this sub-market in the near term. There are more than 40 apartment projects across categories of developers available in this market, with prices ranging from Rs 2500 per sq ft to Rs 7000 per sq ft.p.

Pros & cons

If you look at the growth thrust, it has been towards South and East Bangalore in the recent past and while saturation is being witnessed in other areas, this region is still seeing huge development and new project launches at a rapid pace. This is because of the potential in the area and the ample space available for development.” In last one year, average prices in Sarjapur Road have increased from Rs 4,281 per sq ft to 4,545 per sq ft, thereby registering six per cent annual growth.

Accessibility and availability of social and physical infrastructure are Sarjapur’s strongest attractions. “The Infosys SEZ Tech Park is located in Sarjapur. Also the locality is known for its greenery and Billapura Lake. It is also an educational hub and houses Bangalore Technological Institute, ITM Institute of Hotel Management, Bangalore College of Engineering and Technology.

While the ORR itself is a significant civic infrastructure project that connects Bengaluru laterally, connectivity was further heightened with the signal-free corridor initiative, cutting travel time considerably. Most of the high traffic junctions now have flyovers or underpasses. Kumar A, senior manager - sales & marketing, Soul Space Projects Limited adds, “This area allows the residents to travel to different parts of the city with ease and speed, as this locality provides an easy connectivity to NH-207 (towards Hoskote/Kolar) and NH-4 (towards Hosur), which makes commuting to offices and schools easier.”

Traffic congestions at a few major intersections and poor development of internal roads and issues with water supply are major constraints. The infrastructure in the area has aided in boosting office space demand.

“Despite being such a high-end market, one of the major drawbacks in the area is the lack of traffic management. Given that the area is densely populated with residential and commercial properties, there has to be efficient road network and traffic management that is the need of the hour.

Will 2015 be the year of recovery for real estate market in Bengaluru?

Can 2015 be the year of recovery for real estate market in Bengaluru? 

In fact, a December-2014 Pan Indian real estate survey of Indiaproperty.com in Bengaluru, Delhi NCR, Mumbai, Chennai and Hyderabad says that “Everybody wanted a change and 2014 saw the formation of new the governments. Many impact areas such as real estate, stock markets, fuel and gold prices were buoyed by positive sentiments. These changes paved way for 2015 which is expected to be the year of recovery”.

The survey says that a major buying trend that can be seen in the real estate industry, include high proportion of end-users looking for mid-segment properties, buyers giving importance to infrastructure, presence of public transport and security before deciding the locality. Nearly 64 per cent of prospective buyers who participated in the survey in Bengaluru have expressed an increase in confidence in real estate.

The top localities that have generated a lot of interest among buyers in Bengaluru are Sarjapur, Sarjapur road, Kanakapura Road, Electronic City, Whitefield, Marathahalli - ORR Road, Close to 78 per cent of the respondents contacted in Bengaluru during the survey were looking for a property for end-use and 60 per cent of buyers are first time home buyers.

When it comes to purchasing property, apartments continue to be the most popular choice among buyers in Bengaluru and elsewhere. More and more property seekers are also looking for affordable housing. Demand for properties under Rs. 30 lakh has increased in most of the cities across India. Close to 44 per cent of the buyers in Bengaluru prefer properties below Rs. 30 lakh. Only 27 per cent of persons in the survey were looking to invest on land in Bengaluru.

PropEquity Research of Top 10 Cities of India...

http://beta.propequity.in/MonthlyReports/Top_10_cities_~_PropEquity_Research.pdf http://beta.propequity.in/MonthlyReports/Top_10_cities_~_PropEquity_Research.pdf

Despite 30% drop in sales, home prices will not go south in 2015-16. Here's why....

Even an expected pick up in the country’s economic growth in fiscal year 2016, wouldn’t be enough to prod the common man to buy is dream home due to persistently high prices of residential properties, rating agency, India ratings said.

Home prices are unlikely to correct from the current higher levels in 2015-2016 even as inventories are being piled up with investors pumping in money raised through debt and other hybrid instruments, India ratings, formerly known as Fitch India, said.

“Property prices have remained high and unaffordable to end-customers. While economic growth is likely to improve in FY16, property prices might not correct. This could lead to end-customers postponing purchase decisions,” India Ratings said.

Even property consultant CBRE on Tuesday pointed out that  housing  sales fell by about 30 percent last year in seven major cities due to costlier flats and higher interest rate.

The general slackness in residential sales was primarily triggered by the Affordability Index going down in certain cities, CBRE said.

Property consultant Knight Frank added to the gloom on Thursday when it pointed out in a report that residential launches and sales were at a three-year low during the December quarter across the six tier-I cities— NCR, Mumbai, Kolkata, Bangalore, Chennai and Hyderabad.

According to the Knight Frank report, new launches have fallen by 43% in Mumbai, followed by Hyderabad that saw a 30% drop. NCR saw a 24% in the number of project launches in 2014 compared with 2013, Bengaluru 13%, Pune 26% and Chennai 25%.

Consequently, brokerage do not  expect real estate companies to see a revival in home sales. The agency, however, expects a pick-up in demand for both office and retail spaces during fiscal year 2016 “because better economic growth will boost net hiring by IT/ITeS and banking financial services insurance sectors and better customer sentiments will revive the expansion plans of both local and foreign retailers.

According to the assessor, any improvement in demand for houses will depend on “not only a positive change in consumer expectations of economic growth, job and income prospects but also lower property prices”.

On the other hand, even though the demand in the residential space is likely to remain subdued, the companies are likely to continue building up inventory levels using bank funding, the agency said.

Property Guidance Value Set to Rise by Up to 30 Percent From October....

From October, buying property could get costlier as the government has decided to revise its guidance value across the state.

  

Guidance value refers to the minimum value at which a property sale can be registered. The Stamps and Registrations Department has already started the process. Sources said the increase could be to the extent of 30 per cent. In Bengaluru, the hike will naturally be on the higher side, given the astronomical real estate rates. The department has already worked out the revised values and is now in the process of consulting stakeholders. The government has called a meeting of the Bruhat Bangalore Mahanagara Palike (BBMP), Bangalore Development Authority (BDA), Bangalore Metropolitan Rural Developmental Authority (BMRDA) the Confederation of Real Estate Developers’ Associations of India, and others on Friday.

Till 2011, the government used to revise the values once in three or four years. But they are being revised every year since 2012 to bring them up to at least 70 per cent of the market value. The government indicates guidance value to ensure that buyers and sellers do not cheat on payments to the government by undervaluing a property. Leena said the department would soon announce the new rates and call for objections. After due process, the new rates will come into force. However, he refused to give details about the hike. The values were revised last in November 2014. Though the yearly revision can yield income for the state, it is bound to pinch property buyers, particularly those from the middle and lower class, as sellers hike rates by factoring in the amount payable to the government.

For more info on this, check the link: http://www.newindianexpress.com/cities/bengaluru/Property-Guidance-Value-Set-to-Rise-by-Up-to-30-Percent-From-October/2015/09/04/article3009827.ece