Tag: Properties in New Delhi

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

Bank of India to buy Standard Chartered’s office space in Delhi’s Connaught Place for Rs 125 crore

NEW DELHI: Bank of India is buying 36,000 sq ft of office space in the upmarket Connaught Place of Delhi from Standard Chartered Bank for about Rs 125 crore, according to people close to the deal.

Bank of India’s bid was the highest from among a clutch of public sector banks and high networth individuals. The property stands on the outer circle of Connaught Place, the most sought after business address in the capital.

According to property consultancy CBRE, Connaught Place is ranked the fifth most expensive office market in the world, much ahead of Mumbai’s Bandra Kurla Complex (ranked 11th) and Nariman Point (26th). The bid process was managed by property consultancy Jones Lang LaSalle. Standard Chartered declined comment on the transaction. Bank of India did not respond to an email sent by ET.

The property in the H-block of Connaught Place was originally taken by Standard Chartered Bank several years ago on a perpetual lease. While selling, however, the Bank has applied for conversion into freehold, which would improve its value.

The property also fetched a premium because of the fact that it is not part of a large office building where usually there is wastage of 25-30% space between super and covered areas, for which the buyer has to pay.

Source: The Economic Times

Environment Ministry limits ambit of clearances for realty projects

NEW DELHI: The environment ministry, under pressure from real estate and builder lobbies, and state governments, has limited the ambit of clearances for projects in this sector. Now, local civic authorities will lay down the norms relating to building control and safety in line with the relevant master plan.

The real estate sector has consistently demanded that environmental clearance procedures be simplified and shortened. The urban development ministry too has been advocating single window clearance for real estate and housing projects, arguing that this would help contain escalating housing costs. Given its function as a regulator, the environment ministry had made it clear that it could not be part of a single window clearance system.

However, in response to the overwhelming demands, the environment ministry set up a committee headed by Planning Commission member K Kasturirangan to review the environment clearance process for the sector. The committee recommended that the local authorities decide on the norms, and the environment clearance authorities focus on environmental impact, waste water treatment, air quality and such issues.

Source: The Economic Times

Relief to builders, Centre relaxes green norms for high-rises

NEW DELHI: In what will be a big relief to builders in tightly-packed cities such as Mumbai, the environment ministry has done away with green clearances for high-rise buildings based on the width of the roads that they fall by the side of and the distance from fire-stations. It has left it to the state government to makes rules as they deem fit.

The move comes after several state governments — and Maharashtra in particular — had pleaded with the Union government to remove the regulations that the builders had strongly opposed.

The relaxation is expected to allow builders to put up higher multi-storey buildings on smaller roads and lanes in cities.

The rules required buildings above 60 metres can secure an environment clearance if they were on roads at least 30 metre wide. Such buildings had to be located within 2km of a fire station. Buildings between 45 and 60 metres needed to have an approach road that is at least 24 metres wide and at not more than 5km from a fire station. Buildings between 30 and 45 metres had to be located on roads at least 18 metres wide with fire stations not more than 10km away. Buildings between 15 and 30 metres required a 15-metre wide approach road, but no restriction linked to presence of fire stations was placed. The February 2012 regulations also required a no objection certificate (NOC) from the state fire department and the national or state disaster management authorities.

The provisions had been brought in considering safety measures for high rise buildings and increase in traffic in cities.

But after a lot of criticism that found support in the PMO, the environment ministry set up a committee under Planning Commission member K Kasturirangan to review these norms and other clearance conditions applicable to roads, SEZs and the real estate sector. The panel recommended doing away with the regulations and leaving it to the state governments to regulate the safety codes.

Source: The Economic Times