It is boom time for clarivoyants as Indian's turn to fortune tellers to know their future.
Saturday, March 21, 2009
Friday, March 20, 2009
Phenomenal fall in real estate prices
From here
Real estate market in India is trapped in a vicious cycle of plunging prices. With the bottom nowhere in sight, potential buyers do not want to try and catch a falling knife, says Pranay Vakil, chairman, Knight Frank India, a property consultancy firm. "They are expecting a further cut in prices, while developers themselves have been dropping prices, anticipating an increase in sales volumes." Rajneesh Chhabra, a property broker based in south Delhi, says asking rates are down 30% from their peak, but it's still almost impossible to find a buyer. "Financiers have disappeared from the market and those dependent on bank loans do not buy property in south Delhi," he says, adding that deal volumes have shrunk by more than 95% from their peaks about a year ago.
With the financial year drawing to a close this month, cash-strapped real estate developers have already cut prices by an average 40% in all their upcoming projects. "I expect prices will soon come back to the 2003-04 levels, when rates were hovering between Rs 12,000 and Rs 17,000 in upmarket areas like Malabar Hill," says Mumbai Estate Agents Association president Yashwant Dalal. In Malabar Hill, the most expensive home address in India, prices have fallen by a fourth to Rs 25,000-45,000 per sq ft, depending on the age of the building and amenities. Ten months ago, actor Vinod Khanna offered to pay Rs 1.25 lakh per sq ft for a 2,500 sq ft apartment in the ultra-luxury El Plazo housing society in the Hanging Gardens area of Malabar Hill. "Now the rates are in that area (Hanging Gardens) are around Rs 70,000 to Rs 75,000 per sq ft. Similarly, in Pedder Road, rates are around Rs 45,000 per sq ft," Mr Dalal says.
A London-based Indian national acquired a 3,475 sq ft property at NCPA Apartments in the Nariman Point area at Rs 97,842 per sq ft nearly six months ago, but rates there are almost half that now, says a south Mumbai property dealer. In central Mumbai's Worli and Lower Parel areas, rates are down to Rs 12,000-18,000 per sq ft, while in Bandra they have fallen by more than a fifth to Rs 15,000-25,000. Where price drops have been of the order of 50%, buyers appear to be showing interest. "We are quoting Rs 16,000 per sq ft for our new project in Lower Parel and the initial response has been positive," says Orbit Corporation finance director Ram Yadav. A year ago, property prices in this area were over Rs 35,000 per sq ft.
Properties in the heart of the national capital on Prithviraj Road, Aurangzeb Road, Amrita Shergill Marg, Jor Bagh and Golf Links, which have seen deals involving industrialists such as LN Mittal, Naveen Jindal and GM Rao as well as film star Shah Rukh Khan, are now struggling to find buyers. A 11,250 sq ft home in Golf Links, which was purchased for Rs 70 crore, is now available for Rs 50 crore, but there are few takers. "Earlier, financiers used to buy homes. Now, they neither have money nor the hope that they will be able to sell it at a higher rate and so have just withdrawn from the market. End-users are rare and they only negotiate, but don't buy in the expectation that prices will fall further," says Neeraj Chopra, a Dwarka-based property broker.
In India's technology capital Bangalore, prices have fallen by up to 25% in some areas, a recent Morgan Stanley report says. DLF, India's biggest real estate company, cut rates by about 30% at its upcoming project and the company sees prices falling further. Irshad Ahmed, president of Irshads Property Matters, says that in suburbs such as Whitefield, Outer Ring Road and Sarjapur Road hard bargaining can result in final prices, which are 30% lower than card rates. Property dealers and builders are also lining up an array of discounts and freebies to try and clinch deals. The Gateway project by developer Brigade in Malleshwaram, one of the oldest localities in town, is quoting at Rs 5,090 per sq ft against Rs 5,790 per sq ft last year.
But there is scope for negotiations, depending on which flat is chosen and the mode of payment, says an official of the marketing team. Second-sale rates at Gateway are Rs 4,700-4,800 per sq ft, according to a property dealer.
In Bangalore's downtown area, the Mantri group's upmarket Altius complex, which has only one apartment to a floor with a current market price of around Rs 14 crore, there aren't many units available for a second sale. A city broker says that since there are no other projects that open up to views of the city's lung space, Cubbon Park, the price will hold. But the number of people showing interest in buying has dropped, he adds. However, in the upmarket areas of Chennai there have been no considerable price drops. In Chennai's Arcot Road, Purasawakkam, Thiruvanmiyur and Valasaravakkam areas, rates still hover between Rs 4,700 and Rs 6,600, about the same a year ago, a dealer says, but prices have fallen by 20-30% in the suburbs.
In Kolkata, prices have fallen from their peaks touched in mid-2008 and hover around levels seen at the beginning of the year. In areas such as Ballygunge Circular Road, Sunny Park and Queens Park rates, which were Rs 8,500-10,000 per sq ft in January 2008 jumped to Rs 13,000-14,000 in June-July before dropping to Rs 9,000-11,000.
"Prices in the city's posh areas, including Ballygunge Circular Road and Queens Park, had surged because of limited supply, but they have been hit now. Areas like Prince Anwar Shah Road, Behala and Lake Town remain unaffected, as real estate prices in these areas never reached unrealistic levels," says Jitendra Khaitan, CEO of real estate consultancy Pioneer Property Management. Sumit Dabriwala, managing director of property developer Hiland Group, says high-end residential properties, which were being sold at Rs 12,000-15,000 per sq ft last year, are averaging Rs 9,000-10,000 per sq ft now. "On an average, properties in upmarket areas have seen a 10-15 % price reduction in the premium category," he says. A few banks have cut home loan rates in recent weeks, sparking hope that sales will pick up in the quarter beginning April, rescuing the property market from its downward spiral. This could be a crucial period, as the impact of the ongoing financial crunch is expected to peak by then.
Real estate market in India is trapped in a vicious cycle of plunging prices. With the bottom nowhere in sight, potential buyers do not want to try and catch a falling knife, says Pranay Vakil, chairman, Knight Frank India, a property consultancy firm. "They are expecting a further cut in prices, while developers themselves have been dropping prices, anticipating an increase in sales volumes." Rajneesh Chhabra, a property broker based in south Delhi, says asking rates are down 30% from their peak, but it's still almost impossible to find a buyer. "Financiers have disappeared from the market and those dependent on bank loans do not buy property in south Delhi," he says, adding that deal volumes have shrunk by more than 95% from their peaks about a year ago.
With the financial year drawing to a close this month, cash-strapped real estate developers have already cut prices by an average 40% in all their upcoming projects. "I expect prices will soon come back to the 2003-04 levels, when rates were hovering between Rs 12,000 and Rs 17,000 in upmarket areas like Malabar Hill," says Mumbai Estate Agents Association president Yashwant Dalal. In Malabar Hill, the most expensive home address in India, prices have fallen by a fourth to Rs 25,000-45,000 per sq ft, depending on the age of the building and amenities. Ten months ago, actor Vinod Khanna offered to pay Rs 1.25 lakh per sq ft for a 2,500 sq ft apartment in the ultra-luxury El Plazo housing society in the Hanging Gardens area of Malabar Hill. "Now the rates are in that area (Hanging Gardens) are around Rs 70,000 to Rs 75,000 per sq ft. Similarly, in Pedder Road, rates are around Rs 45,000 per sq ft," Mr Dalal says.
A London-based Indian national acquired a 3,475 sq ft property at NCPA Apartments in the Nariman Point area at Rs 97,842 per sq ft nearly six months ago, but rates there are almost half that now, says a south Mumbai property dealer. In central Mumbai's Worli and Lower Parel areas, rates are down to Rs 12,000-18,000 per sq ft, while in Bandra they have fallen by more than a fifth to Rs 15,000-25,000. Where price drops have been of the order of 50%, buyers appear to be showing interest. "We are quoting Rs 16,000 per sq ft for our new project in Lower Parel and the initial response has been positive," says Orbit Corporation finance director Ram Yadav. A year ago, property prices in this area were over Rs 35,000 per sq ft.
Properties in the heart of the national capital on Prithviraj Road, Aurangzeb Road, Amrita Shergill Marg, Jor Bagh and Golf Links, which have seen deals involving industrialists such as LN Mittal, Naveen Jindal and GM Rao as well as film star Shah Rukh Khan, are now struggling to find buyers. A 11,250 sq ft home in Golf Links, which was purchased for Rs 70 crore, is now available for Rs 50 crore, but there are few takers. "Earlier, financiers used to buy homes. Now, they neither have money nor the hope that they will be able to sell it at a higher rate and so have just withdrawn from the market. End-users are rare and they only negotiate, but don't buy in the expectation that prices will fall further," says Neeraj Chopra, a Dwarka-based property broker.
In India's technology capital Bangalore, prices have fallen by up to 25% in some areas, a recent Morgan Stanley report says. DLF, India's biggest real estate company, cut rates by about 30% at its upcoming project and the company sees prices falling further. Irshad Ahmed, president of Irshads Property Matters, says that in suburbs such as Whitefield, Outer Ring Road and Sarjapur Road hard bargaining can result in final prices, which are 30% lower than card rates. Property dealers and builders are also lining up an array of discounts and freebies to try and clinch deals. The Gateway project by developer Brigade in Malleshwaram, one of the oldest localities in town, is quoting at Rs 5,090 per sq ft against Rs 5,790 per sq ft last year.
But there is scope for negotiations, depending on which flat is chosen and the mode of payment, says an official of the marketing team. Second-sale rates at Gateway are Rs 4,700-4,800 per sq ft, according to a property dealer.
In Bangalore's downtown area, the Mantri group's upmarket Altius complex, which has only one apartment to a floor with a current market price of around Rs 14 crore, there aren't many units available for a second sale. A city broker says that since there are no other projects that open up to views of the city's lung space, Cubbon Park, the price will hold. But the number of people showing interest in buying has dropped, he adds. However, in the upmarket areas of Chennai there have been no considerable price drops. In Chennai's Arcot Road, Purasawakkam, Thiruvanmiyur and Valasaravakkam areas, rates still hover between Rs 4,700 and Rs 6,600, about the same a year ago, a dealer says, but prices have fallen by 20-30% in the suburbs.
In Kolkata, prices have fallen from their peaks touched in mid-2008 and hover around levels seen at the beginning of the year. In areas such as Ballygunge Circular Road, Sunny Park and Queens Park rates, which were Rs 8,500-10,000 per sq ft in January 2008 jumped to Rs 13,000-14,000 in June-July before dropping to Rs 9,000-11,000.
"Prices in the city's posh areas, including Ballygunge Circular Road and Queens Park, had surged because of limited supply, but they have been hit now. Areas like Prince Anwar Shah Road, Behala and Lake Town remain unaffected, as real estate prices in these areas never reached unrealistic levels," says Jitendra Khaitan, CEO of real estate consultancy Pioneer Property Management. Sumit Dabriwala, managing director of property developer Hiland Group, says high-end residential properties, which were being sold at Rs 12,000-15,000 per sq ft last year, are averaging Rs 9,000-10,000 per sq ft now. "On an average, properties in upmarket areas have seen a 10-15 % price reduction in the premium category," he says. A few banks have cut home loan rates in recent weeks, sparking hope that sales will pick up in the quarter beginning April, rescuing the property market from its downward spiral. This could be a crucial period, as the impact of the ongoing financial crunch is expected to peak by then.
Sunday, March 15, 2009
Hardships hit Singapore expats
As the expat ranks swelled and foreigners put down roots, the city's tonier districts filled up. Prices for apartments in Western enclaves like Tanglin and Orchard doubled in value from 2004 to 2008 as buyers snapped them up. Waiting lists for coveted spots at international schools like the Singapore American School or United World College of South East Asia were so long that expats were encouraged to register their children at birth in order to gain admission four or five years later. The cost of joining the Singapore Island Country Club and the American Club soared as transferable memberships were bought and sold on the open market like hot stocks. (See 10 things to do in Singapore.)
Today, as beleaguered investment banks shutter offices and commodity prices and trade flows plunge, Credit Suisse estimates that hundreds of thousands of expat jobs are disappearing from Singapore. Property prices, particularly of high-end homes, are expected to fall some 50% as the recession gathers force.
But in a departure from previous downturns, some expats are electing not to return to banking centers such as New York City and London. This recession is global, and the implosion of the financial-services industry means job prospects back home are even bleaker. American Marc Rudajev, a 37-year-old ex–hedge fund manager whose $350 million fund dissolved in the middle of 2008 as global stock markets swooned, is one of the Singapore expats not hurrying home. "This economic crisis is affecting every country," he says wearily. "But if there is a glimmer of hope anywhere, it's here rather than in the U.S. or U.K."
A Canadian sales executive for a global media company, who requested anonymity because he is negotiating a severance package with his former employer, is another expat who has been living parsimoniously since being laid off. In the boom years, he occupied a spacious sea-view apartment near downtown Singapore that rented for $5,000 a month. Today he occupies more modest digs, paying about $700 a month for an apartment he shares with a friend. "I'm interested in creature comforts like hot water, but I can do without joining a country club or driving a Lamborghini," he says.
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