GLOBAL ADVISORS Monthly News LETTER REAL ESTATE January 31, 2011 Intraday Graph of REALTY Market Cap for REALTY As on Value (Rs. in (%) 31 January 2011 Crores) BSE Mkt. Cap 6,595,278.77 100 Index Full Mkt. 86,690.55 1.31 Cap Cap Adj. Market 31,539.36 -- Cap • RBI’s Decision to Hike Policy Rates May Affect Real Estate Sector- JLL • SBI to Continue its Teaser Home Loan Scheme • Husing Prices can Appreciate in 2011 RBI’s Decision to Hike Policy Rates May Affect Real Estate Sector- JLL Real estate developers and consultants on Tuesday said RBI’s decision to hike policy rates by 25 basis points will affect the sentiment of the property market, but they do not foresee any major impact on housing demand and prices. “The hike in repo and reverse repo rates by 25 basis points will have a sentimental impact on demand, but it may not slowdown the demand in its actuality,” Jones Lang LaSalle India Chairman and Country Head Anuj Puri said. Home buyers might delay their decision to own property, which would prolong the completion of the transaction, Puri pointed out. On housing prices, Puri said it would remain stable in the metro cities. Commenting on the RBI’s policy, DLF Group executive director Rajeev Talwar said: “The growth of economy is strong, so we do not expect any negative impact on the property demand and prices”. Talwar said he did not forsee any rise in interest rates. Parsvnath Developer chairman Pradeep Jain said that there could be a short-term impact because of rate hikes but would not have major affect on demand, which is directly related to growth in the economy which is firm. SBI to Continue its Teaser Home QUICK UPDATES Loan Scheme For someone who has built a Cautious NRI’s Investigating reputation of standing up to the Before Investing into Indian Real regulator, State Bank of India Estate chairman Om Prakash Bhatt is Non-resident Indians (NRIs) and people unlikely to let his image change as he of Indian origin (PIO) investing in prepares to step down in March after a five-year term as the head of the premium real estate projects have country’s largest lender. Despite the become cautious and are doing a regulator going public with its thorough check before investing, say concerns on the so-called teaser rate home loans, SBI is likely to continue senior executives in real estate firms. with the scheme, where rates are ‘‘The mood is to verify and ensure it is a fixed during the initial few years good property, land and approvals are in before turning flexible. “Every quarter we look at the data. It is data-based. If place, the location is good, and the it’s good, then I would extend it,” said project conforms to the master plan,’’ Bhatt, the longest serving chairman in recent years. “The NPAs on my loans said Kunal Banerji, president, M3M India, are the lowest and I also have the after a road show in Abu Dhabi last collateral of the customer’s house.” week. ‘‘Gone are the days of euphoric With nearly 80% of his home loans being under Rs 10 lakh, Bhatt said the buying. Today, people are doing real beneficiary was the aam aadmi. calculated buying. They are doing “About 2.92 lakh people have got thorough due diligence, checking out the loans. Where is the tease in the product? There is no risk and there is location,’’ said Banerji, who met over 150 no opacity. There is no dilution of loan prospective investors in Dubai and Abu appraisal norms or documentation. Dhabi over the weekend. M3M, which is selling 3-bedroom and 4- Husing Prices can Appreciate in bedroom apartments and penthouses at 2011 its Golf Estate project, Gurgaon, for Rs I People in India will have to shell out 3.6-10 crore each, plans to sell a quarter more money to buy a house this year of these homes to NRIs and PIOs. due to increasing input costs and huge demand and supply gap, a Niranjan Hiranandani, chairman, report said today. “About 70 per cent Hiranandani Group, says there’s a of the home seekers are pretty convinced that they will have to shell resurgence of NRI investment in India as more money to buy a house in 2011, opportunities have dried up in West Asia. as compared to last few years,” ‘‘NRIs are more interested today; Track2Realty, a real estate market enquiries and conversions from them tracker, said in its report. The survey have gone up,’’ he said. But there’s a was conducted in 10 major Indian cities including Delhi, Chandigarh, difference. ‘‘Earlier, the NRI investor was Mumbai, Pune, Kolkata, Chenai and euphoric – they would cut a cheque, Allahabad. thinking how much one would earn in Majority of the brokers and property agents said that the property prices three months. That exuberance is gone. would remain bullish in 2011 mainly Today, the NRI investor is taking a on account of “huge demand and medium to long-term call on the supply gap and ever increasing input cost”. The report also said that those property,’’ said Ashish Jerath, vice- planning to sell houses this year president (sales), Emaar MGF. would get higher returns. About 72 per cent believe that if they missed the chance to buy a house now, “they may not be able to but it ever”, Global Advisors Limited (‘GAL’) is a management consulting firm operating in the corporate finance, management advisory and research space in India and provides a range of custom research and business intelligence services, including research outsourcing solutions. Pallavi Goyal / Piyush Mathur Global Advisors Limited pallavigoyal@g piyushm thur@globala email@example.com / firstname.lastname@example.org If you do not want this mail, in future please click and respond to the mail Unsubscribe The information given in this document has been compiled from data, which is already available in publicly accessible media and is meant for information purposes only. Global Advisors Limited has not independently verified all the information given in this document. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information contained in this document.
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