Tuesday, February 23, 2010

Telangana stir worsens outlook for realty sector in Hyderabad

Where are all the morons who said that the Satyam/Maytas fiasco and now the Telangana agitation will have no impact on business and residential real estate ? 100 storey buildings in a city where land is abundant was the signal that Dubai and Hyderabad are no different when it comes to greed.

Hyderabad: Dotted with the sprawling campuses of information technology (IT) firms such as Microsoft Corp. and Wipro Ltd, Hyderabad’s fast-moving growth corridor—the Gachibowli area—looks skeletal with half-done buildings, yellow construction cranes and giant billboards that promise delivery of homes on time.

Skeletal buildings: One of the many incomplete realty projects in Hyderabad’s Gachibowli area. Bangalore is gaining from Hyderabad’s loss. Many real estate investors consider the Karnataka capital a safer bet. Madhurima Nandy / Mint


Hyderabad was hailed some years ago as one of India’s hottest property destinations, with firms such as US-based Tishman Speyer Properties and Malaysia’s Sunway City Bhd coming in to launch their maiden projects in the country.

In its present condition, Andhra Pradesh’s capital city remains the lone realty victim of the slowdown.

“Other cities are already on the recovery route. But Hyderabad has been in the news for all the wrong reasons,” said George Johnson, city head (firm management), Jones Lang LaSalle Meghraj, a property advisory.

The downturn perhaps shook Hyderabad more than it did other large cities due to certain disturbing events.

The first was the unravelling of a multi-crore accounting fraud at Hyderabad-headquartered Satyam Computer Services Ltd last January, followed by the death of chief minister Y.S. Rajasekhara Reddy in a helicopter crash in September.

And just as the sector was beginning to recover, the struggle for a separate Telangana state that includes Hyderabad, intensified.

“Whether the market bounces back depends on if they can control the Telangana agitation,” said N.R. Aluri, managing director, NCC Urban Infrastructure Ltd. “The residential segment particularly looks uncertain though we are expecting some demand in the budget category.”

City-based NCC Urban, a subsidiary of Nagarjuna Construction Co. Ltd, has moved its focus to Bangalore, where it is building four projects, compared with one in Hyderabad.

Read more at Livemint.com

39 comments:

Sivaram said...

Hyderabad is history, so will be Bangalore. Telangana issue is never going to end unless the new state is formed. The whole scam is planned by the rascal chiddu whose aim is to take the investments to his home state TamilNadu. Looks like that he is succeeding.
Now no salaried person can afford a roof on his head unless he is part of corrupt government. Inflation continues unabated. At this rate, I wonder when will our disgruntled educated youth start joining reactionary forces like naxals. The climate is ripe for this sort of thing to happen and once it starts, we won't see a end to it.

This is a country where greedy people suck the blood of innocents and thrive on it

Shivaram said...

Bangalore is more Tamil than Kannada. Spoken language is Tamil, majority population is Tamil and culture is Tamil. If chiddu fails to move the businesses from bangalore to tamilnadu, then the days are not far off for a boundary dispute to start. Ultimately Bangalore will be amalgamated into Tamilnadu as a sister city to Housur. Chiddu is the brain behind everything what is happening in India. Be it naxalism, Shivasena, Rajthakre or laloo's demise.

Anonymous said...

NEW YORK: US home prices unexpectedly slipped in December but the annual rate of decline slowed, reinforcing the housing market's rocky road to Where has US bailout money gone?

The S&P composite index of home prices in 20 metropolitan areas declined 0.2 per cent in December, matching the dip in November, for a 3.1 per cent annual drop.

A survey had forecast that prices would be unchanged for the month and down 3.2 per cent annually following a 5.3 per cent annual drop in November.

The S&P/Case-Shiller US national home price index, which covers all nine census divisions, fell 2.5 per cent in the fourth quarter from the same time a year earlier. This measure, like the 20-city and 10-city indexes, have seen smaller annual declines all through 2009.

The national price measure had been down 19 per cent annually in the first quarter, 14.7 per cent in the second quarter and 8.7 per cent in the third quarter.

On a seasonally adjusted monthly basis, the 20-city index rose 0.3 per cent in December, S&P said, matching the November increase.

Despite this steady improvement, much of it on the back of government incentive programs that will end this spring, prices in December reflected the hurdles still facing US housing.

Unemployment hovers just under 10 per cent, foreclosures are running at a record pace and banks still own a massive amount of repossessed properties yet to be placed on the market.

All could test prices anew. "Many of the secondary markets, which were away from the center of the initial problem, are starting to feel the effects of the crisis," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

"While affordability has improved, confidence about the outlook has not, so there's hesitancy to move on purchases," he said.

Fifteen of the 20 metro areas saw price declines in December compared with November.

Three of the markets, Charlotte, Seattle and Tampa, posted new low index levels as measured by the past four years, erasing any gains seen in the past few months, S&P said.

Tivrekar said...

@Anonymus Bhai,

Please don't paste articles about new york etc. We are here to discuss about Indian real eastate. People here are trying to find out about indian real esate trends so that they can decide when is right moment to buy. To hell with new york.

Please dont feel bad and this is not a insult to you

Anonymous said...

Anon above:
Here is something from Wikipedia:

The origins of Indian Property Market Bubble can be traced to the interest rate reductions made by the NDA coalition government in the years following 2001. Home Loan Rates fell to a (then) historical lows of 7.5% in early 2004. This prepared the basis for the massive increase in real estate property prices across India. Low interest rates triggered huge interest in individuals to borrow to own their own homes and this triggered an increase in demand for real estate across India.

The Indian Property Market has been growing fast since March 2005, when the current UPA government decided to open FDI in Real Estate. The market has been growing at a dizzying rate of 100%+,and further[citation needed]

Real estate in Indian metropolises such as Mumbai, Gurgaon and Chennai has sky rocketed to levels comparable with international cities like London.

One remarkable point is the real-estate boom in Chennai and its suburbs, leading to high prices in decent housing and then finally prices dropped. For example, an apartment of 1500 square foot in a Chennai suburb will cost around USD 200,000, whereas in Europe similar size costs about USD 450,000. In a class A suburb of New York you can buy a large house for around same amount (450K). Per capita ratio is around 50:1 ($50,000 to $1100); this suggests the presence of a bubble.

However, speculations aside housing prices depend a lot on various factors such as the age of the property, facilities, surrounding area etc. Hence, the property bubble will burst for the places bought over priced with no stronghold value to it.

Anonymous said...

Lack of efficient signals to market participants means that there will be periods of mismatch between suppliers and buyers hence leading to cycles of booms and busts.

As of May 1st 2008, the Indian housing market has already started declining. Prices have started to drop to some extent in few major cities.

A many websites have also come up where you can get the latest updates. In India due to high salaries in some sectors esp IT sectors and demand from NRIs housing prices are inflated.Even a high earning professional is finding it difficult to get a house in decent localities in the metros.

Anonymous said...

Indian economy is on steroids. Once the medicine is withdrawn, it could get back to normal.

Feb. 24 (Bloomberg) -- India’s 10-year bonds fell, snapping a two-day gain, on speculation government borrowings will rise in the new financial year starting April 1.

Asia’s third-largest nation will borrow a record 4.6 trillion rupees ($99.3 billion) in the next fiscal year as debt payments double, according to a Bloomberg Survey of 13 economists and investors before the Feb. 26 budget announcement.

“Bond yields have risen because there is uncertainty before the budget,” said Krish Ramkumar, who manages the equivalent of $1 billion of debt at Sundaram BNP Paribas Asset Management Co. in Mumbai. “Bonds have probably rallied too far in the past two days and some investors are possibly unwinding their long positions.”

The yield on the 6.35 percent note due January 2020 rose one basis point to 7.80 percent as of the 5:30 p.m. close in Mumbai, according to the central bank’s trading system. Earlier, it reached 7.75 percent, the lowest rate since Feb. 2. The price fell 0.09, or 9 paise per 100 rupee face amount, to 90.13.

Earlier, bonds rose on speculation the government will target a reduction in its fiscal deficit from a 16-year high in this week’s budget.

Junior Finance Minister Namo Narain Meena said yesterday an “expansionary fiscal stance” was a short-term measure to support economic growth.

Anonymous said...

Feb. 24 (Bloomberg) -- DB Realty Ltd., India’s first developer to sell shares this year, declined in its trading debut in Mumbai, mirroring losses in real estate stocks.

The stock dropped 2.5 percent to 456.2 rupees at the close of trading in Mumbai. It earlier declined as much as 12 percent. The Bombay Stock Exchange Realty Index has fallen 7 percent since the shares were sold at 468 rupees apiece in an offer that closed Feb. 2.

DB Realty, builder of luxury homes priced at as much as $10 million, leads developers planning to raise as much as 164 billion rupees ($3.5 billion) in initial public offerings to build homes and offices. The Bombay Stock Exchange’s realty index touched a seven-month low on Feb. 22 amid concern India’s central bank may raise borrowing costs, making it more expensive to own homes.

Anonymous said...

HONG KONG, Feb 24 (Reuters) - The Reserve Bank of India seems stuck between a rock and a hard place before another big government budget announcement.

The government will likely be able to claim "fiscal consolidation," only because economic growth has been revised higher and it is using what are widely seen as optimistic growth forecasts to estimate debt-to-GDP.

Just the same, the gross borrowing figure for the fiscal year starting in April is expected to top last year's record 4.51 trillion rupee ($98 billion) amount that forced the central bank to come up with creative ways to help manage the debt sales, as is part of its mandate.

This time around, the central bank will have less room for manoeuvre to manage the wave of new debt given that it would also like to get on with tightening monetary policy, including by raising interest rates.

There is little monetary policy can do to deal with flaring food inflation. But the central bank will have to take this into consideration because the sharp rise in food prices is becoming a broader inflation threat.

The RBI has tried to badger the government into winding down stimulus, and perhaps the biggest surprise in Friday's budget will be if the government throws a bone to the central bank by trimming gross bond issuance -- the main worry for the bond market.

Anonymous said...

India's headline inflation in January accelerated to its fastest pace in more than a year, putting more pressure on the Reserve Bank to raise borrowing rates to check rising price pressures after it already raised banks' reserve requirements in January.

But analysts said that the Reserve Bank's next move is expected only after the February 26th 2010 federal budget and could depend if the government starts to roll back its stimulus measures.

The wholesale price index rose 8.56% in January from a year earlier, its highest since November 2008 and accelerating from a 7.3% gain in December. The rise was driven by a 17.4% jump in food prices, which rose on weak monsoon rains and flooding from last year.

Inflation in manufacturing picked up to 6.55% from about 5% in December, a sign that inflationary pressures were spreading to other sectors of the economy.

The Reserve Bank of India is widely expected to raise borrowing rates at its April review after it surprised markets with a stronger than expected rise in banks' cash reserve requirements in January. A higher than expected government borrowing in the budget might hold off the RBI from raising rates as it would push up borrowing costs.

Mr D Subbarao Governor of RBI also said that over the weekend the large government borrowing influences monetary policy.

SabbalSeshu said...

It is amusing to read the various theory s floated regarding the bubble and what will happen when it bursts. This bubble theory may be valid in non corrupt country but absolutely has no meaning in India. Govt says that the population growth is 1.8% per year but statistics compiled by some NGO puts it at 2.5%. Does the housing needs meet the population growth ? No, it doesn't. Same situation applies to all major metropolitan cities and where the population growth is at least 10% per year. The moneyed people scramble to get the ready apartments first that gives rise to increase in prices. This isn't a bubble.
Don't get swayed by the doomsday prophets. Prices aren't going to go down. Buy now and you will not regret

Anonymous said...

Sabbaleeshu,
You are right that the population is increasing, but would you or your dad provide money for them to buy a house in this highly inflated market??

Go and ask the people who you pimp for, would they provide money??

Go and ask in your near family and relatives who have mediocre incomes, do they have guts to buy in this high priced market??

You are nothing but a paid moron like BB. You will regret when this all goes down. At that point you would wish you had gone to collge and learned some basic economics.

Anonymous said...

Sabb...

Why do people like you have to act like they know everything?

Anyone think there is any truth to this?

Frustrated said...

I neither agree or disagree with sabal whoever he is. One thing is certain that the prices have been climbing and no ordinary person can afford a home. I just wonder where people get money to buy such pricey homes. Few days back a neighbour of mine bought a place in mumbai suburb for 85 lakhs. This guy is a muncipal clerk so I assume he is getting hefty hafta. He must have registerd the home in someone else's name. It would take 100 years to earn 85 lakhs . Now I am thinking of trying for a job in municipality or some other govt dept even if it is class 3.

As the days pass, owning a home is becoming like a distant dream

Anonymous said...

This could be India's Future:

ATHENS, Greece – Police fired tear gas and clashed with demonstrators in central Athens on Wednesday as violence broke out after a large protest march against government austerity measures intended to fix the country’s debt crisis.

Riot police confronted scores of violent protesters who hurled rocks, red paint and plastic bottles near parliament, in sporadic clashes that caused little initial damage.

Police detained at least two protesters.

Earlier, more than 30,000 people took part in a peaceful march, as unions staged held a general strike which grounded flights, shut schools and crippled public services in a show of strength against the government.

The 24-hour walkout comes as Greece is considering tougher austerity measures, including possible deeper salary cuts and extensive reforms of the civil service and pensions system, to pull the debt-ridden country out of financial crisis.

Anonymous said...

India's debt crisis!!

To the sundas bhai's, sabal susoo, and venkat rascal....

So India does not have debt problems?

Secondly, if India has an excess of black money and this is fueling the current price escalation then why has this happened only since 2003? In the last so many years, did India not have excess black money??!!!

I found the reasoning offered by these three morons ludicrous and puerile...

Anonymous said...

Anon above:

Don't waste your energy on BB aka Sabbal types. They are paid pimps and are extremely dependent upon RE going up and up in prices.

They are just working for their own greed and not helping anyone here.

They know that more people buy, more would be the demand and
higher would be the prices.

Ignore them and see what the budget says in India today. Would they try to keep the loose fiscal and monetary policy or have they learned something from Greece.

Anonymous said...

Hyderabad is the capital city of state Andhra Pradesh and the most populous city of the South India. It is known as the "City of Pearls" and the "City of Nizams". There are numbers of Good Schools in Hyderabad City ant also wide number of technical institutes like Engineering Colleges in Hyderabad Andhra Pradesh.

Anonymous said...

FUTURE TRUTH IS
Hyderabad WAS the capital city of state Andhra Pradesh and the most populous city of the South India. It WAS known as the "City of Pearls" and the "City of Nizams". There WERE numbers of Good Schools in Hyderabad City ant also wide number of technical institutes like Engineering Colleges in Hyderabad Andhra Pradesh.

Anonymous said...

HeHe!!

I like the irony in Anonymous's 11:37 post

Anonymous said...

Anon 6:38PM

Teri maaka bhosda. Gand dhoya kya lund fakir?

Anonymous said...

Anon@06:53 am above

Out of the 3 people who could have been hurt - Sundaas Bhai, Susuu or Venkat rascal...

The only one who can talk in Hindi and that crude a vocabulary plus who would genuinely feel hurt is our good old sundaas bhai.

Glad to expose these pimps for what they are - two bit roadside con men ;) and btw, I definitely would know more colorful language than you can even begin to understand ... Ha Ha Ha Ha Ha ...Glad to hurt your sundaasness ...

Bindas Bhai said...

Anon 6:53 & 7:42

People to to what extent they can go to spoil my name. Sorry the forum by now clearly nows who talks filth. I personally feel that 6:53 and 7:42 are the same person.

From talking about shit and piss you have graduated to source pf origin. Frustration clearly showing up. No point in getting personal.

All the best guys use your head and dont get carried away by anyone including me.

Bindas Bhai

Sundaas Bhai said...

Actually, I am Anon 6:53 & 7:42 and Sundaas Bhai.

My brain being sundas, I get mixed up all the time.

If you do get carried by my sundaasness remember you have yourself to blame for believing in sundaas.

Anonymous said...

BB

Learn to ignore SB

Anonymous said...

Media is trying to convince peoples that, India do not have subprime so
don’t expect crash , Indian housing sector is not like US so buy it. The root
cause of the issue is housing bubble not subprime. Subprime was the next
step of bubble. India does have visible inflated bubble.

“China, India stimulus will not halt property slide”

Few days ago only we commented the same thing, now
peoples are accepting the fact.

http://economictimes.indiatimes.com/Markets/
Analysis/China_India_stimulus_will_not_halt
_property_slide/articleshow/4016147.cms

Lot of reader raised question, why a 50% drop in prices,
which model is used. The last word on model is that today
all econometric & financial simulation models has failed. Lot
of companies has stopped relying on model & algorithmic trading
is only incurring losses. So no question about
incorrect input data though it do consider data error.

Our guaranty is pretty much inline with predictions by others.
--“Many investors believe land prices will drop by a half, and shares of the country's biggest developers DLF, Unitech and Indiabulls Real Estate have tumbled by 75-90 percent in the last year”
-- Yogesh Chabria is also suggesting 50% drop in price.

So guys let it fall then only pick up, minimum 50% price cut is guaranty.


Vulture.

Anonymous said...

Hey Vulture,

Welcome back. If you want to see the bad situation of realty, you have to see the situation of the realty players.

DLF, HDIL, Unitech and Indiabulls are the 4 major pillars of the realty index.

FII's have withdrawn money from DLF, who has a -ve cash flow and steep inventory accumulation. Banks have also stated that their realty NPA's have gone up to 3-4% now...unable to raise money these realty jokers have taken to the IPO route.

DLF - stock prices have fallen from 400 levels to 290 levels and are still in downward trend. Technicals say the next stop for DLF might be at 150 levels.

HDIL - same story 390 levels to 300 levels with trend picking up. Next stop should be around 188 and in all probability it will slide to 60-70 rs levels.

Unitech - rs 110 levels to rs 70 levels and most probably it will head to rs 30 levels. I think unitech will in all likelihood go bankrupt.

Indiabulls - rs 280 levels to rs 150 levels; headed to rs 80 levels. Another candidate for bankruptcy...

Banks do not want to lend money to real estate. They are also withdrawing teaser rates soon...another immoral practice by banks which has created 100's of 1000's of middle class suckers who might commit suicide when their interest rates will get raised to 15% or even more...

Vultures usually arrive at the right time to watch creatures lie and die...

SabbalSeshu said...

Cash is flowing like water from Switzerland. Families who have been hoarding money are getting jittery as they have started doubting Switzerland's secrecy ethics. Guess how SRK got 5cr for 1 minute performance. Money laundering is the biggest business now. What is more attractive in this climate than real estate.

Guys dont be fooled by economic times. It is a free for all to grab the best. From now to Diwali, prices are going to increase by 15% and from then on increases will be as per the market trend.

Now is the opportune time to buy in Mumbai

Anonymous said...

@Shivarm.
I couldn't agree more. I am searching for a house (rental) and have seen a lot of houses and apartments. Barring a few, most of them are owned by non kannadigas. (Mainly Tamil and Malayalees). In some of the small apartment complexes that i saw, not a single kannadiga family. This is even more surprising. While I dint like any of the house/flats, i wouldn't have taken it for rent even if liked it. Not because they are from outside, but somehow i don't like living with someone who we cant talk to in our local language.
(Disclaimer: I am not saying outsiders shouldn't have been here nor am i starting a language war here. But i dint expect such a low local number)

Anonymous said...

Sab Boil Susuu -

What a advice!! Buy an illiquid asset you might not be able to sell.

Why? Because even though prices are spectacularly high, you "might" get 15% profit (which will become less than 10% after taxes and registration/stamp/parking etc...) by diwali!!!

Chance of this might be 5-10% and it might be safer to put your money in FD for equivalent return. On the other hand if you invest in RE, there is a probability of more than 90% that you will make a loss of maybe 20-30% by diwali....

Susuu is a pimp and a conman...be careful of such Mo Fos

Anonymous said...

Anon above:

Your nickname for Sabbalseshu as "Sussu" is funny.

Let's call him by this name now on.

Anonymous said...

I heard from some people that a lot of foreigners are going to go short on emerging markets soon. Even a lot of NRIs are wanting to sell the flats they bought in India in the past 4-5 years. Some of them have been duped and for a lot of them the construction has not even started. Their downpayment seems to be eaten up by builders and what they get is just a new story everytime.

Anonymous said...

Vulture is gone crazy, idiot is posting one year old link

Anonymous said...

Problems for Real Estate Sector

1) Price Rise for Cement, Steel
2) Price Rise for Petrol, Diesel resulting in increased transportation costs
3) 10.3% Service Tax on the payments made for Under Construction flats. (Before the completion certificate of the Flat.)

All these factors would make Flats more and more unaffordable for buyers.

Also, the RBI and Banks will not be able to continue restructuring the loans forever, which are given to Builders and Real Estate Companies.

Seeing this high unaffordability, Indian Real Estate would start crashing in coming months.

Buyers, do not buy and do not get trapped.

Anonymous said...

Andhra the most corrupt state of India. You will be astonished if you see the kind of businessmen and Politician corruption nexus which goes on in Andhra. Majority of the politicians have a stake in one of the infra or real estate compnaies in the state. Top Maoist leader Kishenji(Koteshwar Rao )is also a andhrite.

Remember satyam and Maytas scam which was all about real estate.

Rama Mohan said...

Visit for telangana favor sites.
http://lifestyle-india.blogspot.com/2010/03/top-telangana-favor-sites.html

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rajni sharma said...
This comment has been removed by the author.
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