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Indian Real Estate Sector

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Sicanta
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Re: Indian Real Estate Sector

Postby Sicanta » 12 Aug 2017 08:04

NCLT declares jaypee infratech insolvent : Here's what homebuyers should do

http://www.moneycontrol.com/news/busine ... 57269.html

CalvinH
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Re: Indian Real Estate Sector

Postby CalvinH » 12 Aug 2017 12:59

Sicanta wrote:NCLT declares jaypee infratech insolvent : Here's what homebuyers should do

http://www.moneycontrol.com/news/busine ... 57269.html

They are the largest land holders in Noida/GN/Yamuna Expressway region. Were a mid-sized (1000 Cr) EPC company in early 2000s before they started the debt fueled bing to branch out in Infrastructure sector and thermal power generation.

CalvinH
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Re: Indian Real Estate Sector

Postby CalvinH » 12 Aug 2017 13:06

Overall the RE sector in Noida/Greater Noida has been stagnant for past 2-3 years. If you bought property in GN 2009 onward the chances are that will be making a loss vis-a-vis a normal financial instrument such as a FD. If the scenario doesn't improve then it will just get worse.

Family own couple of GN Authority issued plots in prime sectors of GN and in a year the returns will start turning negative on those properties.

RE in these market is not showing huge downward trend because of lack of transparent information /data and use of partial cash in the transactions.

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Re: Indian Real Estate Sector

Postby disha » 13 Aug 2017 05:06

Sachin wrote:x-posted from Nukkad
Sachin wrote:Was just scanning through the real estate advertisements (usually comes by truck loads on Sundays). In Bengaluru, the new trend seems to be not reducing the price, but offering "freebies" like Kitchen wood work, LCD TVs etc. etc. Is this an indication of the prices coming down?


Exactly. A good indication on where things are headed.

Was looking into this thread to see effects of DeMo and GST and the above information proves my point. Thanks.

Coming to the above., what it indicates is that the interest for purchase is flagging., and with flagging interest there is lesser price competition and hence instead of placing a floor on the sale price - a flagging interest puts a ceiling on the sale price. From this point, the sale price is going to drop only. So the developer is throwing in goodies to increase the foot traffic and hopefully translating it into a sale and using that as a rising interest in purchase try to make the buyers compete and hence go into a positive cycle.

However something fundamental has changed in Indian Economy. There is a tight squeeze on slush funds. Anything above 1 Cr. shows up on the IT radar easily.

Given that the builders are resorting to freebies like kitchen wood work and LCD TVs now - and given that some of them are depreciating assets themselves (like LCDs) it means that the buyer interest will continue to flag and the builders have not yet come to terms with reality yet. They will continue to offer more and more freebies - better bathrooms or better elevators.

Now all of RE is location, location and location and in India's case - amenities, utilities and safety. So smart buyers can do some things., for ideal location instead of negotiating on price, negotiate on better amenities, utilities and safety if possible otherwise start negotiations on price.

I think the RE will be in slump for the next 2 years or so and will pick up., but again will pick up for reputed builders and for quality projects.

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Re: Indian Real Estate Sector

Postby srin » 13 Aug 2017 08:24

^^ 100% agree on ideal location. Many RE projects have bad/narrow approach roads, in a dumpy area with no nearby amenities (schools, hospitals etc).

What I've seen is that RE prices haven't come down, but they have stayed constant, so taking into account the inflation, they have come down in real terms. And going with decreasing interest rates and some regulatory cover in RERA, it will be a good thing to buy sometime in near future.
But, I still don't see the point of buying for sake of investments (as opposed to living in it). The rental yield is very low and price appreciation is getting iffy (for all above reasons).

Singha
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Re: Indian Real Estate Sector

Postby Singha » 13 Aug 2017 11:42

Builders short of cash flow tend to pay off their large suppliers and agents with flats. There are 10 flats in my complex with no traceable owners from day1 in 2010 now. All their dues are pending and nobody has ever lived there. These are benami dark pool properties in the hands of these friends and associates

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Re: Indian Real Estate Sector

Postby prahaar » 13 Aug 2017 13:48

I met an Ola driver who owns multiple taxis. His uncle was paid for with flats in lieu of a piece of land + some cash which was acquired by Nanded city Pune. He was provided 10 flats at 2500 Rs/sqft. That price is approximately the BOM to construct the high-rise tower.

putnanja
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Re: Indian Real Estate Sector

Postby putnanja » 13 Aug 2017 18:26

prahaar wrote:I met an Ola driver who owns multiple taxis. His uncle was paid for with flats in lieu of a piece of land + some cash which was acquired by Nanded city Pune. He was provided 10 flats at 2500 Rs/sqft. That price is approximately the BOM to construct the high-rise tower.


Thats how typically flats are built these days. Was speaking to one of the big RE guys, and typical way the promoters operate is to offer flats for land taken over. It has been more than 10 years since builders started buying land in cash. Typical agreements are made to offer "x" number of flats in the community being built. The land owners then sell these and make money off it. In major cities, the land owners typically offer these flats at 5-10% less than what the builder quotes, though you go through the builder for all formalities. You will still have to pay to builder for things like common ameneties like clubhouse, gym, pool etc if any. But going through land owners, you will many times not pay for floor premium (where they charge more above 5/6th floor etc), view premiums etc that the builder charges, and sometimes parking space is also included.
Last edited by putnanja on 13 Aug 2017 20:31, edited 1 time in total.

Sachin
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Re: Indian Real Estate Sector

Postby Sachin » 13 Aug 2017 20:07

putnanja wrote:
prahaar wrote:I met an Ola driver who owns multiple taxis. His uncle was paid for with flats in lieu of a piece of land + some cash which was acquired by Nanded city Pune. He was provided 10 flats at 2500 Rs/sqft. That price is approximately the BOM to construct the high-rise tower.


Thats how typically flats are built these days. Was speaking to one of the big RE guys, and typical way the promoters operate is to offer flats for land taken over. It has been more than 10 years since builders started buying land in cash. Typical agreements are made to offer "x" number of flats in the community being built. The land owners then sell these and make money off it.

There is this huge complex of villas & duplex flats near Vegetable Oil.Co HQ in Bengaluru. The land owner was a real humble farmer living across the road. His home it seems still is an old one with the basic amenities (+ a cow shed). As part of the deal he was given around 7-10 villas/flats etc. He rents this to "techies" of various companies and takes the rent. On every week end after the 1st of a month, this man its seems used to walk in the typical turn out of a Kannadiga farmer; a shirt (full sleeves)+dark/khakhi shorts (old police style)+a kind of white cloth put on the shoulder. He visited every home, collected the rent by cash and went back :).

Singha
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Re: Indian Real Estate Sector

Postby Singha » 13 Aug 2017 22:32

sunnybrook? right next to the office complex?

atleast he has remained genuine and true to his self, than waste his life on daru, audi q6 and dressing up. i can respect that.

its rare to meet any person unaffected by easy cash flow.

Singha
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Re: Indian Real Estate Sector

Postby Singha » 14 Aug 2017 13:59

NDTV
The Bombay High Court on Monday put Sahara's luxurious Aamby Valley property, near Pune, up for auction. According to notices issued in newspapers, the official liquidator of Bombay High Court has set a reserve price of Rs. 37,392 crore for sale/lease of properties of the Aamby Valley City in Lonavala. The Supreme Court in April had ordered auction of Aamby Valley township after Sahara failed to deposit dues towards refund to investors.

Singha
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Re: Indian Real Estate Sector

Postby Singha » 15 Aug 2017 10:52

http://timesofindia.indiatimes.com/indi ... 067036.cms

NEW DELHI: The Centre may step in to provide relief to thousands of home buyers hit by insolvency proceedings against Jaypee Infratech, including sale of the company's assets to raise money to complete the project.

On August 9, the Allahabad bench of the National Company Law Tribunal (NCLT) ordered the appointment of an insolvency resolution professional (IRP) after IDBI Bank sought initiation of bankruptcy proceedings against the company following a diktat from the Reserve Bank of India.
Apart from the land tracts on which it has already accepted bookings for apartments, villas and plots, Jaypee has a large land bank along the Taj Expressway and possibly along the Noida-Greater Noida Expressway as well.

While the company promoted by the Gaurs has been talking of disposing of land to raise funds, it has repeatedly failed to fulfill its promise.
The Taj Expressway itself is a key asset that can be disposed off, something that banks had been suggesting to the Gaurs. But the promoters have not agreed to the suggestions and have instead raised loans against the expressway.


Sources said the government may explore the possibility of appointing a receiver or state-run agencies for the completion of projects where over 32,000 individuals have booked apartments. Although bookings started as far back as 2008, the company has been running woefully behind schedule, causing hardship to home buyers who have dipped into lifetime savings or taken loans.

The government will discuss with the ministry of corporate affairs (MCA) if the Insolvency and Bankruptcy Code (IBC) provides legal ground for other asset sale to fund incomplete projects. This is the first indication that the Centre will step in to resolve the crisis as the fate of the flats is uncertain.

"We may have to take the legal way through NCLT, which can pass an order to appoint an authority, maybe a state agency, to sell assets of Jayee Infratech and with the money from sale of assets, the pending projects can be completed," said a source, adding that the insolvency proceedings can continue simultaneously.

The law provides for the IRP to work out a resolution plan within 180 days, which can be extended by another 90 days, else go for liquidation. During the 270 days, the promoter or another company can take over the company. The government realises that the Jaypee Infratech case cannot be treated in the same way as a power or steel project.


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