Sunday, January 31, 2010

Your home, car loan rates won't rise till March

Commercial banks are unlikely to raise their prime lending rates — offered to the best customers — or deposits rates at least till the end of March but large companies borrowing short-term money at sub-PLR rates may have to cough up more.

This was indicated by CEOs of several commercial banks soon after RBI announced a 75-basis point hike in the cash reserve ratio, or the proportion of deposits that banks have to park with RBI.

However, car loan rates are unlikely to rise due to increased competition among banks in this segment.

To read more, please, visit The Economic Times

Friday, January 29, 2010

Nothing matters as the real estate market in India is getting hotter

The unstructured real estate industry, high home loan rates, forged land titles, the possibility of corruption, high taxes...nothing matters....!

Indian real estate has witnessed a phenomenal development in the last couple of years due to its flexible nature and its value appreciation over time. The limits of people's aspirations, concept of good living, contemporary working style and recreation, their risk appetite, and money they can commit for high quality construction and smartly done up space has led to the revolution in the real estate industry in the country.

Path breaking policies like relaxation in FDI policies by the Government of India have also paved the path for the transformation of Indian real estate. The combination of factors like strong economic growth, reforms and policies have lured global investors, easy terms of repayment of home loans, rise in income levels and urbanization.

A change of attitude amongst the generation X from that of 'save and buy' to 'buy and gain' has also boosted the housing demand in the country. India's economic performance has provided momentum to the real estate sector that has been seeing enhanced activity in the recent years.

Investment in infrastructure and swift and speedy urbanization has boosted the growth trajectory of real estate sector in the country which is evident with urban centers such as Delhi, Mumbai and Bangalore attaining global character and recognition.

To read more, please, visit Industry Today

Fitch: Real estate sector stabilising but risk remain

Fitch Ratings has today said in a just published Special Report that its 2010 Outlook for the Indian real estate sector remains Negative; however, the sector could exhibit signs of stability by the second half of the year.
Fitch notes that the fundamentals of India's real estate sector are improving, as seen by better liquidity and improved demand in the residential segment. The agency expects growth in 2010 to be driven by government support, especially for the affordable housing segment, improved access to debt and capital markets, and the recovery of real estate demand.

Yet, there are concerns that the government may roll out moderately adverse policies to keep property prices in check when economic conditions become more stabilized.

In addition, the government may also find it politically difficult to provide a supportive environment if developers continue to increase real estate prices.

The full report, "Indian Real Estate 2010: On the road to Recovery", is available on the Fitch Ratings' website: ''.

To read more, please, visit Reuters

Monday, January 25, 2010

Assets versus bubbles in real estate

The finance ministry has reportedly turned down a proposal by the Department of Policy and Promotion (DIPP) that had suggested doing away with the mandatory three-year lock-in period for FDI in the real estate sector.
The ministry’s point of view is that a lock-in acts as a deterrent, checking speculation and protecting the sector from the sudden flight of capital. This could be particularly true at times of an unprecedented crisis, such as the global meltdown in 2008, when foreign institutional investors pulled out nearly $5 billion worth of equity investments between September and October 2008.

For sure, there is a big difference between portfolio investments or hedge fund money coming into the stock market and money that is being channelled into the development of projects that by nature are of a much longer gestation.

However, the ministry’s contention is that despite the correction after the meltdown, real estate prices were not eroded to the extent that values of some other asset classes were, largely because the lock-in prevented investors from sending their money back home.

To read more, please, visit Shobhana Subramanian -Financial Express

Sunday, January 24, 2010

Indian real estate to see fresh investments to the tune of $1.5 billion in the financial year 2010-11

3 times more than 2008-09:

The Rs 70,000-crore Indian real estate sector is expected to see fresh investments to the tune of $1.5 billion in residential deals by exclusive real estate funds in the financial year 2010-11, three times more than the total quantum that such funds invested in FY 2008-09.

These funds include Sun Apollo, HDFC India Real Estate Fund, RedFort Capital, ICICI Prudential Infrastructure Fund and Xander Real Estate Partners. The investments will be both in the metros as well as Tier II cities in India and signal a rebound in realty fund activity in the country after a lull in the last 12 months.

Top 10 most attractive cities to invest:

The residential projects are largely centered in Mumbai, Thane, Panvel, Pune, Ahmedabad, Gurgaon, Noida, Ghaziabad, Faridabad, Bangalore, Chennai, Kolkata and Lucknow. These are prime residential centres in India which form the radar for most fund houses.

As per the recent rankings based on Knight Frank research, the top 10 most attractive cities to invest in include Delhi, Mumbai, Surat, Bengaluru, Kolkata, Ahmedabad, Jaipur, Chennai, Pune and Lucknow.

To read more, please, visit Financial Express

Kotak Realty Fund to invest Rs270 crore in several projects

Kotak Realty Fund, an $800 million (Rs3,672 crore) real estate private equity (PE) fund from Kotak Mahindra Group, will invest Rs270 crore to acquire stakes in a Mumbai-based realty firm and a slum rehabilitation project and a Bangalore-based developer, chief executive S. Sriniwasan said.
The fund will spend Rs100 crore to acquire a 60% stake in Star Light Developers Pvt. Ltd and another Rs100 crore for 50% of the slum rehabilitation project undertaken by Ackruti City Ltd near Mumbai’s international airport, Sriniwasan said. It will spend Rs70 crore to purchase a 60% stake in Bangalore-based Lalith Gangadhar Constructions Pvt. Ltd.

Kotak Realty has in the past acquired a 9.5% stake for Rs130 crore in Lemon Tree Hotels, which operates 11 hotels and is building nine more, an 11% stake in Pune-based Pride Hotels for Rs50 crore, and invested Rs250 crore in IVRCL Infrastructure and Project Ltd’s Rs2,000 crore, 500-acre township project in Sriperumbudur near Chennai.

To read more, please, visit