Housing prices begin to fall as slowdown bites

NEW DELHI: The rising interest rates, liquidity tightening in the banking system and slowing down of economy have badly affected the real estate sector. As the demand for residential real estate has softened, its prices across the markets in India have started showing a declining trend.

According to National Housing Bank residential index, the prices have shown a declining trend in 22 out of 26 cities in the April-June 2013 quarter compared to the January-March quarter. Real estate prices have softened in major cities like Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune. (see chart)

Real Estate Price Fall Index
Real Estate Price Fall Index in Major Cities

R V Verma, CMD of NHB, said rising interest rates have adversely affected the demand from end-users, which led to rise in the inventory of unsold property. As builders have to meet the loan repayment liability as well as complete the already started projects, they find it more prudent to cut prices to sell the units and generate cash.

Sanjay Dutt, joint MD at Cushman and Wakefield, a property consultancy, said the decline in prices is not sufficient enough to attract the buyers. But, the good thing is that a beginning has happened. He felt if the economic conditions do not change, the trend will continue and it will provide a good opportunity to the end-users to buy a house. Dutt said as the sentiment is subdued the investors are also absent from the market.

Verma too argued that the declining trend in the real estate prices is good for both builders as well as end-users. As the cost of money has gone up and the chances of making money in the short-term are not very bright, the investors are absent. This will be a positive for end-users to buy house.

Verma added that if prices come down, transactions will increase, which would improve the cash flow in the sector. In 2008 and 2009, when the entire country was reeling under the global financial crisis, real estate came out of it unscathed mainly because of its strategy to cut prices and increase turnover.

Source: The Times of India

City of Joy, Kolkata – where to purchase Real Estate Property

The ‘City of Joy’ – Kolkata, has continued been hailed as the cultural capital of the country. Now, Kolkata is making news for its infrastructural growth and redevelopment. The city has all of a sudden awake to bigger growth and this is smashing the property affairs of the city. Capital amount for land and rental costs are 50 to 80 percent affordable in Kolkata as compared to added metros like Mumbai and Delhi. Excellent residential adaptation is easily accessible in the city. As the property rates are accomplished for localities like Alipore, Ballygunge and Centre City about Park Street. These are aswell the hub of the city’s nightlife and are near to all the excellent arcade areas in Kolkata. Added adorable residential options are broadly accessible in urban and suburban areas.

The appeal of real estate Kolkata is nourished by the advancement of the Information Technology Enabled Services and Information Technology sectors. Affordable housing facilities are easily accessible in the Salt Lake area. Incidentally, all Information Technology accompanying activities are settled in the New Kolkata Township of Rajarhat that is being developed adjoining to Salt Lake. More Information Technology accompanying developments are advancing up in the colonies forth closeby Eastern Metropolitan Bypass and VIP Road.

The costs of Real Estate Property in Kolkata have apparent an abrupt advancement graph. As the land value have increased appreciably in localities of central and south Kolkata. The factors abaft such an abrupt acceleration in selected localities are the bound availability of realty options, acknowledged retail and industrial projects and excellent connectivity with roads. Different areas that are observing bang are the Eastern Metropolitan Bypass area and the new Rajarhat township. The flow of Foreign Direct Investment has aswell led to an acknowledgment of the all-embracing superior of realty projects. Movement in real estate market has accustomed advance to hospitality industry too.

North Kolkata Real Estate is becoming expensive due to scarcity of land here. A lot of of the North Kolkata residents who have been staying there for decades do not wish to leave this place as said by one of the advisors. Abounding of the North Kolkatans’ children have migrated and are located overseas but the rest wishes to stay back. Due to less availability of excellent land and the fact that inhabitant still wish to stay here, North Kolkata’s property values have registered a hike. As per one of the renowned property portal value chart, the apartment capital value at an archetypal North Kolkata locality of Baghbazar has observed approx 6% acceleration in values in the previous three months from Rs 2500 to Rs 3000/ sq. ft in Jan. 2008 to Rs 2700 to Rs 3100/ sq ft in March, 2008.

North Kolkata is over crowded and accordingly the costs of the property have also gone up. One can’t even widen the roads here as there is no scope for broaden it. The abode abounds in small builders having up to 3 to 4 kathas of real estate and they have been architecture structures of G+3/4 storey buildings. There are no accustomed or big real estate builders in here unlike South Kolkata and the market is basically composed by small local builders. Some of the realty Developers in Kolkata, anticipating appeal in the closeby approaching have combined industrial land at the adjacent Jessore road, in the hope that it will be convinced from residential to commercial in the future and then they will be able to acquire returns.

Source: Articles Bud

Residential real estate scenario looks promising for Kolkata in 2013

Kolkata is the commercial, cultural and educational capital of east India. It is a city that has many faces and has the oldest working port in the country. This is the city that served as the gateway for the East India Company in the early 17th century. One of the most important political centers of power in the colonial times, Kolkata was the capital of the country till 1912 and also the seat of the Supreme Court. It is located on the banks of river Hooghly and has a geographical spread of 185 km. The population is around 5 million, which makes the city one of the densest cities of the country in terms of number of people per square kilometers This urban conglomeration includes a whopping 72 cities and 527 towns governed by three municipal corporations and 39 local municipalities. It is growing metropolitan city well supported by an efficient public transport system, infrastructure like an extensive network of roads and bridges, an international airport, a river port and multiple railway stations.

Current Trends in Residential Real Estate
There is a heavy demand of apartments for the mediam income level group where the pricing is in the range of INR 25 lakhs to 30 lakhs. It is a heavily user end driven market where the end user presence is approximately 65 percent. Rajarahat is the current center of attention due to its potential IT growth in the future. The political turmoil in the state is keeping the realtors in wait and watch stance. New entrants in the realty sector are more inclined towards smaller realty projects owing to the quick entry option it provides. Lack of interest in developing bigger projects can also be owed to the small sections of land and regulatory clearances issues.

Kolkata Residential Real Estate for the year Ahead (2013)
Keeping with the trends of the previous year the real estate market in Kolkata is looking forward to an even better 2013. The state government is taking new initiatives to fasten the clearances process which has ignited hopes for a good year ahead in real estate developers and builders. According to estimates the market is going to expand by 10 to 15 percent in 2013. The residential segment will witness less of the volatility that was prevalent in the previous year. Further, the commercial space will also have a good take off and lower interest rates will drive the consumer confidence to greater levels. Property in Kolkata do not expect to show a speculative price movement and the actually buyers will dominate the market. With rising inflation, raw material will be more expensive and consequently the cost of construction will also rise. The situation was similar in 2012, where a 30 percent of increase in the input costs reflected in the form of 10 to 15 percent price movement in the residential housing segment.

The average rates across the urban areas of city will be in Rs. 3,000-4,500 per square feet range while on the peripheries this rate will be between Rs 2500 and 3,500. Price rise in the residential segment will also be due to supply constraints as there will be limited supply of new housing units. The biggest realty developers active in the city blame government for slowdown in the new project launches. However, these developers promise to come up with new projects in the coming year. Ambuja Realty and Pasari Group will launch two of the biggest residential projects in 2013. The main focus of realty developers would be on areas like Behala, Rajarhat Diamond Harbour Road and EM Bypass. Areas with metro connectivity will remain a major draw for real estate developers.

Source: Article Ratings

No solution yet to Joka Metro land row

KOLKATA: Ongoing Metro projects in Kolkata have run into rough weather, thanks to the hands-off attitude of the very person who initiated them in the first place – Mamata Banerjee. Subodh Jain, member engineering and member staff, Railway Board, who inspected the Joka-BBD Bag stretch on Saturday morning, admitted that it has run into trouble as land is not readily available.

“We are having trouble acquiring land for the car-shed in Joka. We have also not yet received clearance from the ministries of finance and defence for use of their land. We will also require some land belonging to the Kolkata Port Trust for completion of the project. However, work is continuing on the remaining stretch at a good pace,” Jain said during his visit.

While the Rail Vikas Nigam Ltd is in charge of implementation of the project, Metro Railway will have to acquire nearly 25 hectares for the car-shed. A notification was issued for acquisition of 24.47 hectares in the Sakharipota, Rasapunja, Bonogram, Kalagachhia and Hanspukuria mouzas in South 24-Parganas. The land is nearly 1.5 km from the Behala tram depot along the alignment of the Churial canal. While people have refused to part with their land in these mouzas, officials don’t want to make use of The Metro Railways (Construction of Works) Act, 1978, that allows it to acquire any land, building, street, road or passage.

“This act allows Metro Railway to acquire any land that it may require for a project.

The owners can’t refuse to hand over the land, but can only claim compensation. If they are not satisfied with the compensation granted by Metro, they can seek a hearing. This is when a judicial officer can ask the Metro to increase the sum. However, in no case can the Metro be asked not to acquire land. It is unfortunate that officials don’t want to make use of this act. It is possible that they don’t want a confrontation with the state government which has made clear that forcible acquisition will not be allowed,” a highly placed source said.

Mamata Banerjee, when she was railway minister, had got then President Pratibha Patil to lay the foundation stone of the Joka-BBD Bag stretch. Mamata had then said that the project is of national importance and wouldn’t face any hurdles. After she took over as chief minister, it was expected that the going would be smooth. However, things changed once she quit the UPA. She announced that no land can be acquired by force, even if it is occupied by squatters.

Metro general manager Radhey Shyam, when asked about the problems faced by projects to the north of the city, said that encroachers were posing a problem. “The state government has made it clear that it will do nothing to remove encroachers. The only way to proceed is if the encroachers agree to move by themselves,” he said.

Source: The Times of India

Land sharks taking over farmland in Singur, Govt looks the other way

SINGUR: If an alleged sell-off started a historic revolution in Singur, a sell-out now mocks it. Land sharks allegedly protected by two Trinamool Congress leaders are gobbling up large patches of fertile land near the abandoned Tata Nano site.

Driving down Durgapur Expressway these days, you can see these patches of walled-off land. They tell a story no less coercive than the disputed acquisition during the Left Front government. Only this time, it’s worse because the Mamata Banerjee government claims not to see. And unlike the Nano project, where the government is giving a dole to even land labourers, farmers who are being lured/coerced into selling off their land have no one to turn to.

More than a hundred acres have already changed hands between Dankuni and Singur. And this may just be the tip of the iceberg.

The land sharks are breaking every law in the rulebook — and every resistance on the ground. Farmers who refuse to fall for their offers (that never materialize) suddenly see the plots around their farmland being taken up and walled off. Fly ash is dumped on the other plots, which is washed away by rain to adjoining plots, turning them infertile and leaving the farmer with no option but to accept the offer.

Commerce and industries minister Partha Chatterjee claimed innocence. “I am not aware of any such effort in Singur. However, my department will ascertain whether the land has been purchased for industry. In that case, the government won’t allow conversion of multi-crop land,” he said.

Becharam Manna, once a firebrand leader against the acquisition by the Buddhadeb Bhattacharjee government, now sees good reason in the sale of land by poor farmers “for a better price”. Junior agriculture minister in the Mamata cabinet, Becharam says: “All these plots come under the low mono-crop category, fetching little for the owners. As far as I know they yield boro crop only. This could be a reason for the sellout. No one has complained against the purchase.” He insists he “won’t allow anything illegal.” “Land developers have to take permission from authorities before they use it for infrastructure or industry,” he says.

So what is the price on offer? “It’s Rs 40 lakh an acre,” says Sushil Kharkia, spokesman of Shyam Industrial Park, who admits fencing off 50 acres. But farmers have a different story. Primary schoolteacher-cum-farmer Swaraj Ghosh said: “I had five bighas in the fenced area. They gave me Rs 8 lakh for an acre. I had no choice. The land sharks used to come to our place and dictate prices. When some farmers refused to sell their land they dumped fly ash on their land,” said Ghosh.

Compare this with the offer of the Left Front government for the Singur land that Mamata called “forcible acquisition”: Rs 8.9 lakh-Rs 12 lakh compensation per acre, an add-on 50% of the compensation price, plus a government job to each landloser family.

Primary schoolteacher-cum-farmer Swaraj Ghosh said, “The new buyers also promised a job in the warehouses, godowns and the mineral water plant to come up on our land. That was three months ago. They didn’t keep their word.”

The owners of these plots have not even taken permission for conversion in the nature of the agricultural land, which is a must under the West Bengal Land Reforms Act, 1955.

“This is a blatant violation of the West Bengal Land Reforms Act. How could land developers fence the land without taking permission when the Mamata Banerjee government is opposed to illegal conversion of farmland?” said environment activist Kunal Guha Ray. She complained to the Hooghly land and land reforms officer on July 2 that Shyam Industrial Park and SKM Housing Pvt Ltd have gathered 117 acres in five mouzas under Singur and Chanditala police stations. She has mentioned the dag numbers.

“We won’t allow the conversion in the nature of land,” said Hooghly district magistrate Manmit Nanda. Sushil Kharkia is at a loss. “We gathered the land to set up small and medium industry units that the chief minister is harping on. We have built the boundary wall only after registration. Some farmers are unwilling to part with their land that comes within our project area,” he said.

Alarmed by the complaint, police rounded up two land agents from Dankuni and eight persons from Chanditala. “We are investigating the complaints as and when we are getting them and taking steps immediately,” said SP Tanmoy Roy Chowdhury.

Private buyout of land in Singur-Chanditala

1. Two firms have allegedly purchased 117 acres (350 bighas) of agricultural land and wetland

2. Roads have been constructed by filling up wetland with flyash

3. Permission has not been taken for conversion of land

4. Price on offer: Rs 40 lakh an acre, but farmers say it is Rs 8-10 lakh an acre

Acquisition by the Buddhadeb Bhattacharjee government in Singur

1. 997 acres spread over six mouzas in Singur

2. The purpose was to facilitate the setting up of the Tata Nano unit

3. Compensation: Rs 8.9 lakh-Rs 12 lakh per acre, plus 50% of compensation price and a job to each landloser family

Source: The Times of India