Ravi Karandeekar's Pune Real Estate Market News Blog: Indian Bailout Package

Showing posts with label Indian Bailout Package. Show all posts

Saturday, January 3, 2009

Economists see robust growth in FY09

"This is a crisis that has been thrust upon us not because of internal developments, but because of truly exceptional circumstances in the world economy.
I think it’s also clear the crisis is not going to end in the current year.
We should expect from all the global projections that next year is going to be a very difficult one for the global economy, the year 2009."

That was Planning Commission deputy chairman Montek Singh Ahluwalia, announcing the second instalment of the government’s fiscal stimulus.

However, opinions vary on the subject; some other economists expect growth to be more robust next fiscal.

This is the final stimulus package, said Mr Ahluwalia. So the next package, if any, will have to wait for a new government to be installed at the Centre — by June 2009, that is.

The moot point is whether the growth momentum set off by the fiscal and monetary policies announced so far would sustain and build on itself.

Suresh Tendulkar, chairman, Prime Minister's Economic Advisory Council:

"If the government succeeds in pushing implementation of infrastructure projects,
cash-rich corporates, though bottom lines of some are hit, they are still cash-rich, keep the flow of services and goods moving and
economic agents (banks, investors and borrowers) take objective decisions,
the economy can grow at a rate of at least 7.5% in next financial year."

To read more, please, visit - The Economic Times

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Monday, December 15, 2008

Details of the incentives for home loan borrowers up to Rs 20 lakh likely to be made public today

A slew of measures to provide relief to home loan borrowers up to Rs 5 lakh and in the Rs 5-20 lakh bracket are on the cards, including cuts in interest rates and exemption from processing fees.

The bankers are understood to have received an assurance from the policy makers to relax norms related to risk-weights and margin requirements for home loans, which would enable banks to lend more in these categories.
To read more, please, visit - The Hindu Business Line

No pre-payment penalty:

Presently a pre payment penalty is charged from the borrower who decides to pre pay his loan before the stipulated tenure. Generally banks charge somewhere between 1% and 3% of the outstanding loan amount as a pre payment penalty.

"We are considering a proposal to either completely waive the pre-payment penalty or reduce it significantly," said a Chairman with a PSU bank.
To read more, please, visit - RupeeTimes

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Thursday, December 11, 2008

Real estate developers brace themselves for the worst

The last time when there was a crash in property prices (in 1996),
it took four years for real estate prices to bottom out.
This time, while property prices have fallen 25% rather sharply,
the bottoming out is expected to take at least another year.
So, evidently, the real estate sector could experience either a sharp downturn,
or a slow prolonged one.
To read more, please, visit - RN Bhaskar - livemint.com

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Wednesday, December 10, 2008

2008/09 will be a difficult year, 2009/10 will also be a difficult year, perhaps more difficult - RBI chief Duvvuri Subbarao

India's growth projections for the current financial year ending in March 2009 may be revised downwards and 2009/10 may be a "more difficult year", the central bank chief Duvvuri Subbarao said on Wednesday.

Speaking to reporters, he said though the central bank and the government had taken steps to shield the economy from the effects of the global crisis, there would be a period of painful adjustment.
To read more, please, visit - Growth forecasts may be revised lower - RBI| Reuters

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Tuesday, December 9, 2008

Home loan interest rate at 9.5 per cent!

The government seems to have shelved its plan to extend an interest subsidy of 2.5 per cent aimed at fixing home loan interest rate at 9.5 per cent.

According to reports, the government was considering an interest rate subvention on new home loans which would, in turn, provide the stimulus to the housing and construction-related sectors such as steel and cement. The subsidy was being considered on home loans below Rs 25 lakh. To read more, please, visit - Priyadarshi Siddhanta & Gunjan Pradhan Sinha - IndianExpress

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Housing feels left home alone

Real estate prices should come down:

The 4 per cent Cenvat reduction on all non-petroleum products will bring down steel prices by Rs 1,000 to Rs 1,500 which in turn may lower prices in the real-estate sector where steel is a basic input.

No!
But real-estate industry today vehemently said that the stimulus would not lead to that.

Home Loans Interest rate cut will be a normal consequence of repo rate cut!

Planning Commission deputy chairman Montek Singh Ahluwalia, however, said that public sector banks might individually work out a package for home owners as the liquidity situation improves with cut in repo rate and reverse repo rate.

“With the RBI bringing down the cash reserve ratio (the amount banks need to keep with the RBI) the liquidity situation will improve. Interest rate cut will be a normal consequence of repo rate cut,” finance secretary Arun Ramanathan said on Sunday rejecting the idea of an interest loan subsidy.

Banks not in a hurry to cut rates

75 per cent of the housing loan requirements have an average size of Rs 7.5 lakh!

According to government data, only 20-25 per cent of all over housing loan requirements are met by banks. The rest of the money is provided by finance companies. Moreover, the government continues to maintain that 75 per cent of the housing loan requirements have an average size of Rs 7.5 lakh despite the rise in prices over the last two years and the special package being considered by banks for up to Rs 20 lakh will help boost demand. To read more, please, visit - Priyadarshi Siddhanta & Gunjan Pradhan Sinha - IndianExpress

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Do not Bail Out Real Estate Companies - Avinash MKB

After yesterday's stimulus package announcement for the Real Esate companies , I read an articke in the Economic Times about real estate companies claiming that the stimulus package was not enough and that they need more.

CEO # 1 says : 'They could have done more …. should have cut the steel prices mores …...'

CEO # 2 says: 'Package should be annouced for loans of upto 30 lakhs and not 20 lakhs , this is not enough.'"
To read more, please, visit - Eclectic Investor

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(They can’t get no) Satisfaction

Should we call it policymaking by inertia — to do nothing until external conditions force a reaction? Or policymaking by habit — the wait-and-watch, one-step-at-a-time method in the ongoing economic madness?

But when it comes to the absurdly high margins in a competitive sector like real estate, which on Sunday got a boost for low-income housing, the reactions were muted.

For an industry whose net profit margins are 50 per cent — of the Rs 50 lakh house you bought, Rs 25 lakh went to the builder as net profit after taxes — we didn't hear one word about low-cost housing or price cuts. Instead, between DLF, Unitech and Parsvnath, the best reaction was ‘a good first step’.

I’m no votary for controlled pricing. But when I see my taxes go towards supporting the high margins of real estate firms while I continue to be houseless, it offends my sense of economic justice.
To read more, please, visit - - Hindustan Times

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Banks not in a hurry to cut rates

A likely cut in lending rates by banks may fall short of borrowers’ expectations. While some banks may do a token rate cut this week, and lower the rates for small-ticket home loans (up to 20 lakh!), many banks will take a call on bringing down rates across the board after the advance tax outflow, which takes out the liquidity from the system.

Most banks are expected to bring down interest rates by end-December. Rates on home, auto and consumer loans may come down less than the one percentage point cut in key policy rates announced by RBI on Saturday.

Till now, only ICICI Bank has announced a cut for a category of home loans. While the interest rate has been lowered by as much as 1.5 percentage point, the lower rate is only for new borrowers taking loans up to Rs 20 lakh. Most banks are not in a hurry to lower lending rates for retail customers considering that delinquencies on retail, SME and corporate loans are rising.

The unwillingness of some of the private and foreign banks to rush through a rate cut may be partly attributed to the fact that they had not passed on the steep rise in borrowing costs in the past several months. HDFC will take a final view in the coming weeks. HDFC vice-chairman and MD Keki Mistry said, “The repo rate cut and reduction in deposit rates will reduce the cost of funds. Once they come down, we will pass on the benefit to borrowers.” To read more, please, visit -The Economic Times

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Recent rate cuts and extra spending announced by the government are not enough to spur demand - real estate developers

Amid a global slowdown and slumping economy, the federal government said it would seek approval for extra spending worth $4 billion in the remainder of the fiscal year, while the Reserve Bank of India (RBI) slashed key interest rates over the weekend.

On Sunday, India said state-run banks are to announce a package for borrowers of home loans up to 2 million rupees - Rs. 20 lakh!

"This is unlikely to stir demand unless it is being followed by at least 20-25 percent price cuts by developers," brokerage UBS Securities India Pvt Ltd said in a report on Monday.

Real-estate companies said the loans would help raise demand for homes in small towns and cities as well as for lower-income housing, but were too small to boost demand in India's metros.

"It's not enough. You need to be softening the rate of interest across the board and some other concessions to the consumer who will go buy out properties at this point of time," said Pradeep Jain, chairman of Parsvnath Developers.

"Hardly few properties in tier 2, tier 3 are available." About 35-40 percent of its housing projects are in the 3.5- 4-million-rupee range, he said.

"Unless you are talking of really low-income housing it really does not provide much. Commercial real-estate needs a lot more impetus," said Sarang Wadhawan, managing director, Housing Development & Infrastructure Ltd (HDIL).

It does not offer flats in the 2-million-rupee range.

On Saturday, the RBI said loans by banks to housing finance companies for individuals may be classified under priority sector lending for loans up to 2 million rupees per house, per family.

This, along with Sunday's announcements, would bolster demand for affordable housing, said Ravi Ramu, chief financial officer, Puravankara Projects Ltd. Its unit plans to develop 60 million sq. ft. of such properties across five cities.

31 December 2011? or 31 December 2009 Mr. Jain?

To address the issue of non-performing assets of realty firms, the RBI has extended a regulatory concession to loans disbursed to the sector that are currently dilinquent but can be restructured by June 2009, UBS said.

"The disappointment is they only allowed it up to 30 June. It should be up to 31 December," Parsvnath's Jain said.

Real-estate will continue to be under stress if banks are not asked to start lending again, HDIL's Wadhawan said.

"We maintain that prices have to correct for volumes to revive," the UBS report said.
Reuters

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Saturday, December 6, 2008

Cut in interest rate for both developers and home buyers is the first and strongest demand

Indian Bailout Package - Demands:

1) Cut in interest rate for both developers and home buyers
2) Infusion of liquidity - more credit for the realty
3) Re-schedule loans by at least one year
4) Restore 80 I B of the Income Tax Act
5) Reduce the risk weightage of real estate from 150 to 100
6)Force reluctant banks to lend to real estate sector!
indianrealtynews

Saturday, January 3, 2009

Economists see robust growth in FY09

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Monday, December 15, 2008

Details of the incentives for home loan borrowers up to Rs 20 lakh likely to be made public today

No pre-payment penalty:

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Thursday, December 11, 2008

Real estate developers brace themselves for the worst

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Wednesday, December 10, 2008

2008/09 will be a difficult year, 2009/10 will also be a difficult year, perhaps more difficult - RBI chief Duvvuri Subbarao

Related Stories:

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Tuesday, December 9, 2008

Home loan interest rate at 9.5 per cent!

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Housing feels left home alone

Real estate prices should come down:

Home Loans Interest rate cut will be a normal consequence of repo rate cut!

75 per cent of the housing loan requirements have an average size of Rs 7.5 lakh!

Subscribe for free to receive hot Pune real estate news, views and reviews:

Do not Bail Out Real Estate Companies - Avinash MKB

After yesterday's stimulus package announcement for the Real Esate companies , I read an articke in the Economic Times about real estate companies claiming that the stimulus package was not enough and that they need more.

Subscribe for free to receive hot Pune real estate news, views and reviews:

(They can’t get no) Satisfaction

Should we call it policymaking by inertia — to do nothing until external conditions force a reaction? Or policymaking by habit — the wait-and-watch, one-step-at-a-time method in the ongoing economic madness?

Subscribe for free to receive hot Pune real estate news, views and reviews:

Banks not in a hurry to cut rates

Subscribe for free to receive hot Pune real estate news, views and reviews:

Recent rate cuts and extra spending announced by the government are not enough to spur demand - real estate developers

Amid a global slowdown and slumping economy, the federal government said it would seek approval for extra spending worth $4 billion in the remainder of the fiscal year, while the Reserve Bank of India (RBI) slashed key interest rates over the weekend.

On Sunday, India said state-run banks are to announce a package for borrowers of home loans up to 2 million rupees - Rs. 20 lakh!

Subscribe for free to receive hot Pune real estate news, views and reviews:

Saturday, December 6, 2008

Cut in interest rate for both developers and home buyers is the first and strongest demand

Indian Bailout Package - Demands:

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Pethkar Projects Opens Booking of Phase 2 of Siyona at Punawale