Quotes from his speech.
And if the policy responses are not coordinated and cohesive, the recession could well be L-shaped in nature and the pain could be protracted. The slowdown in emerging economies like China, Korea and India has conclusively proved that the decoupling theory is humbug. The world today is connected by trade, capital and financial channels. This is evident from the slowdown of both the capital and trade flows in these emerging economies. No wonder, their growth has declined from 7 per cent to 3 per cent; these countries have hard-landed already.
7 comments:
Freeze after the frenzy
In Pune, despite property prices dropping 15-30 per cent and developers offering attractive schemes, buyers are not signing on the dotted line.
Gera Developments’ GreensVille project at Kharadi, Pune
Alka Kshirsagar
The dramatic turnaround in the housing market — from a buying frenzy to a virtual buying freeze — has upturned the scales that were overtly tipped in favour of the builder till not so long ago. A variety of factors, with recession related job insecurity leading the pack, have put the brakes on the business.
No takers
After months of smiling through the turbulence, the builder community in Pune is finally admitting that not a single sale has happened during the October-December quarter.
This was despite a series of attractive offers, ranging from a kilogram of gold to luxury sedans, for signing on the dotted line. No surprises that the going rate for residential properties has taken a southward turn as builders make corrections consistent with market demand.
According to Rohit Gera, joint managing director, Gera Developments, and vice-president Pune Builders and Promoters Association, the price cut is location specific and ranges from 15 per cent to 30 per cent.
While no one in the field is willing to assert that the residential property market has “bottomed out”, Gera feels that serious enquiries during the first two months of this year suggest that a reversal in builders’ fortunes is imminent.
Lending credence to the sentiment is the fact that during a property exhibition last week, IDBI sanctioned housing loans of Rs 30 crore in the first two days itself, many on the spot, O. V. Bundellu, Deputy Managing Director, IDBI Ltd reveals.
Further downside likely
Pune, Gera points out, is lucky to have multi-centric drivers for housing demand, such as IT, engineering industry and education, and the average age of the buyer is 35 years. “Though on a gross population level, demand remains the same, most buyers believe that a further downside is possible. So instead of taking the decision, they prefer to wait it out,” he says.
Manish Kaneria, Director, Mont Vert Homes, echoes that opinion. Elaborating on the scene, he says, “Western Pune always enjoyed special interest due to proximity to both the Hinjewadi IT Park and Mumbai. “Hinjewadi alone has speculative development of more than 20 million sq.ft,” according to Hashim Khanyari of Urban Link Consultancy.
With the meltdown hitting the IT sector substantially, naturally the impact here and in regions along the Mumbai-Pune expressway is the maximum. says Jayant Kaneria, MD, Mont Vert Homes. “Areas like Pashan, Baner and Wakad have seen correction of 15-25 per cent from recent peak prices, and are now attractive at new lows,” he adds.
Price trends
In the region, the going rate today for Gera Developments’ Emerald City project at Baner is a flat Rs 3,800 per sq.ft, down from the Rs 4,500 for the lower floors, and increasing progressively upwards, a few months ago.
Mont Vert’s project Tropez at Wakad is going at Rs 2,900 per sq.ft, while Mont Vert Grande (Pashan) and Biarritz (Baner link road) are pegged at Rs 3,100 and Rs 3,200 respectively. “This is around 20 per cent down from peak price,” says Kaneria.
Elsewhere, in the same region, Shraddha Associates and SK Enterprises are pricing their two and three BHK apartments at Rs 3,350 per sq.ft. Lotus Properties is all set to open bookings for Lotus Aroma (2BHK) and Lotus Siddhi (1BHK) at the base price of Rs 4,500 per sq.ft and Rs 4,200 per sq.ft respectively.
Thanks to the prevailing downside in the housing sector, several builders have deferred their projects.
“For the last few years, every year around 35,000-38,000 new homes came into the market, and with around 35,000 buyers annually, the demand-supply equation remained balanced. Now, since developers have deferred projects, at the end of 2009-10, I estimate the supply will drop to 25,000 units,” says Gera.
At this point in time, there will be two sets of buyers: the first comprising those who had put on hold their purchase decisions and the second, new buyers.
Looks like then it will be sellers on top again.
Builders’ assistance
The Promoters and Builders Association of Pune (PBAP) has devised an assistance package for customers as an insurance against job loss. In this deal, it has offered to pay a maximum of three equated monthly instalments to the bank/housing finance institution concerned.
Further, the developer will also not charge interest on instalments that are delayed on account of the job loss. The scheme is valid only till possession.
A formal legal agreement would be prepared with all the necessary rules. Those eligible for such assistance will be permanent employees (not part-time or contract workers) and those laid-off/retrenched (not on account of fraud/performance or for those stepping down voluntarily).
“The process for implementation is being worked out. It could be through the PBAP or a separate escrow mechanism,” Mr Lalit Kumar Jain, President, PBAP, and Chairman, Kumar Builders, said.
This assistance is expected to increase the financial load on the builders, but is being offered as it will help both the buyer and the seller, the Association adds.
Luxury residential market sees over 10% dip in prices
Raja Awasthi NEW DELHI
THEluxury and high-end apartment market in the top metros is now feeling the heat of depressed sentiments. The capital values of all high-end residential localities in major cities have witnessed a dip of 10% to 25% in the last three months. The posh markets such as Golf Links, Amrita Shergil Marg,Vasant Vihar, Shanti Niketan,West End in Delhi, Napean Sea Road, Peddar Road, Breach Candy, Malabar Hills in Mumbai and Richmond Town, Lavelle Road, Cunningham Road in Bangalore and Alipore Park Road, Ashoka Road and Belvedere Road in Kolkata have witnessed a major dip in prices.
SundayET along with global real estate consultancy Cushman & Wakefield (C&W) did a study which has revealed that the demand in these micro markets witnessed a serious setback with constrained consumer spending in light of the downturn. Another study had earlier been done of the same markets in January 2009, which had shown a similar trend. In fact, the prices in posh areas of Mumbai, such as Altamount Road, Napean Sea Road, Nariman Point and Churchgate, have gone down by 10% to 15%. But leading the pack is south Delhi which is seeing a major downturn in land values. In a recent transaction in Shanti Niketan, a
800 sq yd plot was sold for Rs 27 crore. Earlier, the same plot could have fetched Rs 40 crore. At another upmarket area in South Delhi, Pansheel Park, a Rs 11 crore luxury apartment was sold at Rs 7.5 crore. Says Shveta Jain, national head (marketing & investments, residential) Cushman & Wakefield India: "The beginning of 2008, saw a strong real estate market with luxury residential projects being launched by both established and new developers. In the last six months, demand witnessed a serious setback across markets in the country.
"Traditionally, these prime locations have been synonymous with superior social or economic status and immensely attractive for the address conscious community. But it seems that the demand in these markets has also witnessed a major slow down." In Bangalore, high-end projects in central locations of Lavelle Road, Off Palace Road, Off Cunnigham Road, Ulsoor Road, Richmond Road as well as Whitefield in the east recorded 15% to 20% drop in capital values. Prices in south central and south west Kolkata (Gurusaday Road, Alipore Park Road, Ashoka Road, Belvedere Road) have also dropped by 8% to 10% for premium projects in the last few months. Says Vikram Sabharwal MD, SAB Infrastructure: "In the last five years, property prices in the posh area in metros increased by three to five times. Now there have been hardly any deals in posh areas in the price range of over Rs 5 crore. This is similar to the correction of 1996-97.”
Desperate Government OR Desperate Builders ?
Now the election season has started & political parties are painting gloomy picture about Indian economy. In this tough economic time instead of providing support & information Govt. is creating chaos. It’s hard for citizens to separate out the economic news or political parties’ agenda.
But market reaction is not in the line with what govt. is talking. This raise the question about economic data provided by govt. & measured by private sector.
Well, lot of articles & govt. prediction about economy based on statistical data has failed to explain the dynamics of macro economy.
http://economictimes.indiatimes.com/
Emerging-market-funds-face-heat/
articleshow/4239941.cms
Who is this anonymous top govt. official?
http://economictimes.indiatimes.com/News/
Economy/Slowdown-in-India-until-Sept-no-deflation-Official/
articleshow/4238961.cms
By spreading the news of price cut, RE has started another ponzi scheme. They are trying to lure the buyers with 2007 price. If one will gather the authentic data about prices in last 2years, it will keep you wondering when the prices went up so high in last two years, which justifies the prices quoted in articles.
http://www.indianexpress.com/news/
now-rental-dip-threatens-sales/431471/0
So guys let it fall then only pick up, minimum 50% price cut is guarantee.
Vulture.
Who is quoting 4500/sq ft rate for Emerald City-Baner? On magic bricks a 1600 sq ft apartment is for sale for 60Lakh since 8 months with no buyer. In Baner 3,200/sq ft rate is there since 2008-April, how come correction happened.
The Baner, Pashan rate will correct to 1800-2400 sq ft.
Its time for Infy to consider this....
TCS likely to lay off 1,300 staffers
8 Mar 2009, 1012 hrs IST, ET Bureau
Print EMail Discuss Share Save Comment Text:
CHENNAI: India’s biggest software exporter by sales, Tata Consultancy Services (TCS), will lay off less than a percent of its global workforce
over the next few months, as these employees failed to meet performance standards, a company spokesperson said.
This roughly works out to 1,300. The company has a total employee count of around 1.3 lakh.
IT companies are adopting stringent appraisal, cost-trimming and productivity-boosting measures as they grapple with the global economic slow down.
TCS employees said on condition of anonymity that lay-offs have started at the company’s development centres in Chennai, where over 200 employees have been asked to leave in the last fortnight .
When contacted, a member of the TCS corporate communication team confirmed the development but did not put a number or place to it.
“This is mostly employees who have been given a second chance to improve and haven’t . They will be sent over a period , in the next few months. This will constitute less than a percent of our global workforce. We had to let go of 500 people last year on performance issues.”
This comes less than a week after the company’s CEO S Ramadorai said the company would review the variable pay component for its employees and also increase the working hours.
Asked about job cuts, he had said the company wasn’t planning to cut jobs immediately but might have to if the situation worsened.
Employee expenses make up at least 53-54 % of the company’s total cost. Going by its analyst presentation for the third quarter ended December 2008, TCS had a total employee count of 1,30,343.
“Real estate magnate Niranajan Hiranandani does not expect property prices, which have corrected by about 25 per cent over the past year, to decline any further.”
http://economictimes.indiatimes.com/Do-not-expect-realty-
rates-to-fall-further-Hiranandani/articleshow/4241517.cms
No one asked them to cut the prices, still Hiranandani is shouting about the price cut[understand the desperation]. They can hold the rate. Longer the hold deeper will be the correction. In US the govt. is stress testing the Banks & economist are warning about deeper & long implications.
Every one is aware of so called “SALE” in Indian. Where the sellers hike up the prices by 100% then offer the generous discount of 50%. Same sale strategy is now builders are playing. Instead of cutting down the prices, just spreading the news of 15-30% correction already happened in past.
Pune real estate is a classic example of this:
“The builders, sitting on a four-fold rise in rates, feel they can wait indefinitely to ride out the present slump. The wannabe buyers say 25 to30% correction has taken place in other cities. Both refuse to blink.”
http://www.indianexpress.com/news/buyerseller-splitsville
-realtors-left-with-empty-homes/430563/0
“In Pune, despite property prices dropping 15-30 per cent and developers offering attractive schemes, buyers are not signing on the dotted line”
http://www.thehindubusinessline.com/iw/2009/
03/08/stories/2009030850841500.htm
How the multi-centric economy of Pune is supporting high prices?
--Manufacturing is already in trouble.
Telco stock went down from 767 to138, 3-4 days working in a week.
Bajaj auto [945->533],
Bharat Forge[317->94],
Thermax[660->158]
--1Lakh migrants from Pimpri-chinchwad returned back home.
--IT-ITes industry started the lay offs & salary cut.
--Students coming for education are not ready to pay the high rentals of 50K per month.
So guys let it fall then only pick up minimum 50% price cut is guarantee.
Vulture.
In a country where even votes are bought what do you expect
Votes Bought In India
Post a Comment