Saturday, April 25, 2009

Builder body opposes hike in cement prices

The builder lobby wants the government to appoint a regulator to oversee the cement industry. This should get the award for the world's smallest violin. "The increase in prices of cement is directly affecting the affordable housing projects.” Now we know why housing is so expensive in Mumbai. Its the cement stupid!!!

The Builders' Association of India (BAI) has strongly opposed the continuing hike in cement prices that is hitting the construction industry hard. They have also demanded setting up of a strict regulatory authority on the lines of SEBI that will ensure that unfair trade practices are not permitted from the cement industry.
The association has called for a total ban on the exports of cement. According to the BAI, the existing Monopolies and Restrictive Trade Practices Commission (MRTPC) does not have penalising clauses to check the malpractices of cement companies. Anand Gupta, secretary, BAI, said that though the government has reduced the excise duty from 12% to 8%, exempted VAT, allowed free import, reduced rail fares, approved the use of fly ash, prices of cement have not reduced. And hence there is a need for a strict law to put a check on these.
While price reductions have been seen all around with a view to stimulate demand, cement manufacturers have resorted to a threefold increase in price (from Rs.15 to Rs. 30 per bag across the country) starting from February 2009. Sunil Mantri, president elect, MCHI, said, "The increase in prices of cement is directly affecting the affordable housing projects.”

9 comments:

@di said...

ROTFL :))

Anonymous said...

Raju's device churned out fixed deposit papers: CBI

shailesh said...

Realtors slash new project rates by 30% to woo buyers“While there has definitely been a correction in prices, it is patchy and not yet complete in many cases. Most of the correction is around the 10-15 % mark with some projects having corrected by almost 30%.

A large amount of correction seems to have taken place in and around Mumbai in areas like Thane, Mulund, Virar and Mira Road, adds the report. Over the last one month or so, several developers launched new projects at lower prices which were adjacent to their ongoing projects.

A case in point is that of Nirmal Lifestyle. The company launched new projects in Mulund and Kalyan at special prices and now claims to have sold over 700 flats. “While the price in November was Rs 7000 per square foot, the flats in the new project in Mulund are being offered at Rs 4800 per square foot,” said Nirmal’s MD, Dharmesh Jain. Several other developers like Akruti in Mira Road has sold 300 flats within days of its launch. HDIL, another builder, has offered properties in Mumbai’s suburbs like Andheri and Kurla for which the response is said to be good.

shailesh said...

Dubai News,

House Prices Could Plunge by 70pc: UBS DUBAI - House prices in Dubai could plunge by as much as 70 per cent this year from their peak levels in 2008, as most investors do not see headwinds easing, UBS Bank said.

UBS said that the housing sector in Dubai will face a substantial glut next year, while demand will continue to be weak, as many of the expatriates who drove the property boom in recent years are losing their jobs and are returning home.

"In our view, we are still in relatively early stages of the property downcycle in UAE, and we believe risk-reward profits are not yet compelling for investors to consider market re-entry, hence, continued price declines are expected," said UBS.

UBS said that the average house prices in Dubai will likely drop to about Dh500 per square foot this year, compared to its peak of Dh1,850 in the fourth quarter of 2008. Prices have already fallen by 25 per cent to about Dh1,400 per square foot.

Further adding to the property market woes of Dubai is the projected further decline in expatriate population, which will fall by 8 per cent this year and two per cent in 2010, said UBS.

"We would not be surprised to find Dubai residential vacancy rates reach between 25 per cent to 30 per cent by end of 2010."

UBS said Abu Dhabi is faring better than Dubai because of its better fundamentals but that it is also facing ?weak demand.

shailesh said...

City witnesses major spurt in affordable housing projects

shailesh said...

Govt to set up panel to script model realty billMUMBAI: Property buyers can heave a sigh of relief, with the government proposing to set up a 10-member committee to give final shape to a bill
for regulating the real estate sector. The government has been toying with the idea of regulating the real estate sector to give some relief to consumers so far at the mercy of developers and real estate agents.

According to a notification issued by the Union government, the ministry of housing and urban poverty alleviation has decided to set up a committee to discuss various provisions of the bill to tweak it to meet the needs of the current market trends.

As per the ministry notification, the committee consists of 10 members that include, secretary, ministry of housing and urban poverty alleviation, joint secretary of housing, joint secretary of urban development, chairman of Council of Architecture, chairman, National Real Estate Development Council, chairman CREDAI, OP Mathur National Institute of Public Finance and Policy and director housing.

The committee will prepare a model bill to regulate the real estate, consult such other experts and organisation/departments as may be necessary and give a final shape to the model bill for regulating the real estate sector and suggest such other measures as may be deemed necessary by the committee, the government notification said.

It was widely expected that the regulator would begin addressing the grievances of both builders and buyers in 2008. “With real estate prices shooting to record highs and the quality of construction dropping sharply, we had been hoping that a regulator would step in to keep a check on the players,” a Mumbai-based property consultant said.

shailesh said...

Recession rate: Ready-possession flats at 20% discountNothing works like a discount, and housing in projects of all hues--from Runwal Hills at Chembur, Lok Nirman in Andheri or Vardhaman Heights at Byculla--was being put up for ready possession at discounted rates of up to 20% at the property exhibition organised by the Maharashtra Chamber of Housing Industry (MHCI) last week.

Though the fair received a lot of enquires, buyers felt that property prices were still unaffordable. The analysts said that the projects in the sub-Rs40 lakh bracket (which comprised 29% of all projects at the exhibition) were located in far-flung suburbs, which routinely suffer from power and water supply shortages.

Anonymous said...

The zombie scheme of Real Estate Builders has started collapsing. There will be no new buyers to dump their hard earned money.

Guys please don’t go for the ready possession flats at the current higher rates (the prices have not corrected but only the CARPET AREA. In fact we will be paying the same mammoth amount to purchase the cramped flats. Please give it a thought). There is going to be more supply to already glutted market.

Waking up from the denial modeTolerance for non-performance shrinks to zero in IT industry
Bibhu Ranjan Mishra / Bangalore April 24, 2009, 0:30 IST

India’s second-largest IT services company, Infosys, for instance, officially announced putting around 2,100 non-performers under the scanner after the end of its annual performance cycle.

India’s leading IT services company TCS, too, admitted to telling 1,100 employees to pull up their socks or perish.

Now, Bangalore-headquartered Wipro, which derives a majority of its revenue from IT-BPO services, announced that it put close to 7 per cent of its employees in the list of non-performers in FY09 against 2 to 3 per cent in the previous fiscal. This has affected almost 3,000 employees who have already been released from their jobs, said officials.


EXIT OPTIONS
(The Big Four IT firms downsizing plans for 2009-10)

* Infosys puts 3.5% of its employees (excluding trainees and freshers) in the non-performer category, from the earlier 2.3%

* Wipro puts around 7% of its employees (excluding trainees and freshers) in non-performer category, from the earlier 2 to 3%

* TCS puts around 1% under the scannern FY10 may see around 200,000 people exiting, with only 100,000 joining


* The scanner is not restricted to large-cap IT firms. HCL Technologies is a case in point. Although the exact number of people who were asked to leave the company is not known, the company had dismissed about 450 people in Delhi and Bangalore for non-performance.

* Patni Computer Systems, too, is understood to have asked close to 500 people last year to leave.


“Typically, we allow such people to improve,” said S (Kris) Gopalakrishna, CEO and MD of Infosys Technologies, adding: “But owing to the challenges and cost pressures, we cannot afford to let them remain in the company.”

Bharat said...

A lot of this garbage about non-performance etc..is precisely that garbage. The last few lines say it all, in good times the IT companies chase people and keep them on the bench. But in bad times, they cannot "tolerate" non-performance? Very opportunistic isn't it? Not something which will foster long term loyalty or raise the brand image of these companies.

AND, we are talking about the likes of TCS, Infosys and Wipro. HCL was the dregs anyway...I wonder why there are not IT workers union? I mean even the Top-tier companies are fair weather friends..

On the other hand talking about Cement and the cost of housing. Let's see the cost of construction should be around Rs 1000/sft or 1200/sft at the most. Material will comprise about 80% which means 800 rs/sft. Concrete and concrete related material will be about 40-50% of this which means about Rs 400/sft max. Finally the impact of cement in the concrete mix will be about 40% so that implies the cement cost is about Rs 160/sft. If this goes up by about 25%(which would be a humongous price hike)..the cost of construction would go up by to Rs 200/sft..About a Rs 40/sft increase? How does that justify costs of housing go up from 3500-5000 Rs/sft to the sometime back levels of Rs 12,000 - 18,000?

These jokers are scared of coming under the govt. lens and trying to shift focus to someone who has been the pet whipping boy for Chidambaram...Anyways this RE ponzi scheme has also reached critical instability and should collapse very soon.