Nearly 60 percent of Indians think that next one month would be a good time to buy real estate with improvement in consumer sentiments following formation of a stable government, according to a survey by global research firm Ipsos.

"Almost six in ten (57 per cent) Indians think the next 30 days will be a good time to buy real estate, such as a house, vacation property or investment property," Ipsos said in a statement.

Founded in France in 1975, Ipsos is an independent market research company controlled and managed by research professionals.

"With the formation of a new stable government at the Centre, the consumer sentiment which was low in the last 2 years has improved significantly. The stock market has already reacted in a positive manner reflecting this change, the real estate prices are expected to go northwards by the end of the year," said Bhasker Canagaradjou, Associate Director, Ipsos Business Consulting.

The realtors reeling under large scale of debt are offering discounts to reduce their inventory levels taking advantage of the new found optimism in the market.

The residential real estate market may see an uptick in the demand and increase in the number of transactions in the near future, he added.

Majority (65 per cent) of people in Russia think next 30 days would be a good time to buy property followed by India (57 per cent), Indonesia (55 per cent), Ireland (51 per cent), Great Britain (47 per cent), Mexico (44 per cent), Australia (42 per cent), Hungary (42 per cent).

"Those rounding out the middle of the pack are from the United States (41 per cent), Germany (40 per cent), Canada (39 per cent), Italy (38 per cent), Argentina (37 per cent), South Africa (37 per cent), Sweden (37 per cent), Poland (35 per cent) and Spain (34 per cent).

The survey was conducted in 26 countries with a total sample of 20,144 adults age 18-64 in the US and Canada, and age 16-64 in all other countries.

Marking the biggest consolidation in the e-commerce space in India, homegrown e-retailer Flipkart has acquired online fashion retailer Myntra in an estimated Rs 2,000 crore deal. 

While the companies did not disclose the deal size, sources suggest the deal could be worth about Rs 2,000 crore. “It is a 100 per cent acquisition and going forward, we have big plans in this segment. 

Flipkart and Myntra are getting together to create one of the largest e-commerce stories and together we will dominate the market,” Flipkart co-founder and CEO Sachin Bansal told reporters here.

Asked about valuation, the companies declined to comment. “We, at Flipkart, believe that we want to be leaders in every segment and fashion is a category of the future, this acquisition will help us become leaders in this category,” he said.

Sachin said Flipkart will invest USD 100 million (around Rs 600 crore) in its fashion business in the near-term. 

Flipkart, which started in 2007 as an online bookstore, sells products across categories, including fashion and electronics. It also sells white goods and furniture. 

 The move is expected to help Flipkart strengthen its apparel portfolio and compete more aggressively with peers like Amazon and Snapdeal. Myntra will continue to operate as a separate entity with its co-founder and CEO Mukesh Bansal joining Flipkart board and heading the fashion business. 

 “It was very essential to keep Myntra a separate entity and preserve its culture. I’m here for the long haul and we will continue to grow in the market,” Mukesh Bansal said.

India’s e-commerce market has seen huge growth in the past few years as more people log on to the Internet to shop. While apparel and electronics are bestsellers for most e-commerce firms, categories such as home decor and household items are also popular. 

The industry, estimated to be worth about USD 3 billion currently, has firms such as Snapdeal, eBay and Amazon which follow the marketplace model. Led by increasing Internet penetration and youngsters shopping online, Flipkart’s annualised sales crossed USD 1 billion (over Rs 6,100 crore) a year ahead of target. It had estimated to reach the billion dollar mark for gross merchandise value by 2015. 

Flipkart, which also operates under the marketplace model allowing retailers to offer products on its platform, has since its inception raised over USD 500 million from investors. 

The Bangalore-based firm, founded by Sachin Bansal and Binny Bansal, counts Naspers, Tiger Global, Accel Partners, Dragoneer, Morgan Stanley, Sofina and Vulcan Capital among its investors.

Source :- The Indian Express

Realty Market awaits Poll Results 

The real estate section is keeping its eyes peeled on the election results. This has put property transactions on hold and pushed both developers and buyers into “wait and watch” mode as they await a positive post-poll scenario.

“The property market is a key election financier, and considerable amounts of unaccounted money are pumped out from the real estate sector to fund elections. Before polls, developers are expected to provide liquidity to politicians so as to finance their campaigns. Many developers who are funding potential candidates are delaying their projects due to lack of liquidity,” said Ramesh Nair, COO, JLL India, a property consultancy firm.

“Undoubtedly, a new stable government will boost businesses and ignite investor confidence. If the incoming government is able to keep interest rates low and employment generation high, it will provide the platform for a far more stable and investment-friendly real estate market.”

Anand Gupta, housing expert and senior office bearer, Builders’ association of India (BAI), said, “Tune of sale, proposals for approval, inquiries to builders’ offices had gone down by 30-35 per cent even before election dates were announced. This government has disappointed both builders and buyers, and everyone wants new housing policies simplifying taxation issues, speedy approval of projects and housing loans etc. The day the new government takes this decision, the housing industry will get revitalised and property prices will also go down.”

An official from the stamp duty department on condition of anonymity said, “The volume of stamp duty paid and numbers of registration have gone down by 35 per cent in the first quarter of this calendar year as compared to the last calendar year.”

Meanwhile, Yashwant Dalal, president, Estate Agent Association of India (EAAI), said, “Only those transactions are taking place that were due since long or where builders or sellers have reduced the rates by one fourth. I had a client who had earlier struck a deal for `16 crore, but he backed out saying the rates were astronomical. Now, the builder has agreed to sell the same commercial premises for `12 crore.”

- by Anand Mishra for The Asian Age

Investor sentiment in the Indian real estate sector is becoming increasingly positive with the prospects getting brighter for the formation of a stable government in New Delhi in the post-poll scenario.

“A change of government in New Delhi after 10 years of rule by the United Progressive Alliance led by the Congress looks almost a certainty and we hope the next government’s economic policies will be key drivers to reviving the growth in the real estate sector,” said D.K. Aggarwal, chairman of SMC Real Estate Advisors, a leading financial services provider in India.

Aggarwal, who was in Dubai to take part in the Indian Property Show organised by Magicbricks.com, said the last three years have been a period of sluggish growth across all sectors in India. The drastic slowdown in economic growth rate from a high of nine per cent to below five per cent, the fall in the value of Indian rupee, and above all the policy paralyses of the government, have had a negative impact in the inflow of foreign institutional investments, or FIIs, and foreign direct investment, or FDI, which in turn had adversely affected all asset classes in the real estate sector.
Aggarwal said there is a new sense of hope among developers. Leading players are optimistic of a government under BJP strongman Narendra Modi in post-poll scenario. All the delayed tax reforms, including the goods and services tax, India’s ambitious indirect tax reform plan, will be enforced, and this would certainly have a major positive impact.

Correspondingly, the much-awaited Real Estate Investment Trust, or Reit, regime is also now closer to becoming a reality, with the banking regulator keen on approving changes to attract foreign investments. Reit, which is a single company or group that owns and manages real estate properties on behalf of investors, much like shareholding in a company, will also open the door to foreign and as well domestic retail investors.

“I believe, while 2012 and 2013 were not the best years for the Indian realty market as the slowdown impacted all asset classes, the coming years would see dramatic revival in the real estate. However, I think things will start looking up only in the second half of 2014, after the general elections, when a new stable government is hopefully in power to revive the stalled reforms and woo back FIIs and FDIs,” said Aggarwal.

According to most real estate experts, the year 2013 was a drag for the Indian economy, with poor macroeconomic conditions. Slowing income growth, sustained weakness in the rupee, sky-rocketing inflation and high borrowing rates combined to make consumers vary of spending.

Realty consultant Jones Lang LaSalle India (JLL) said consumer confidence is expected to remain subdued in first two quarters of 2014 due to uncertainties surrounding general elections and macro-conditions.

“However, after the elections, fence-sitting investors are likely to become active. The increase in absorption of residential units will help reduce the currently large inventory holdings of developers,” said Anuj Puri, chairman and country head of JLL. Residential prices are expected to raise 10-12 per cent during 2014.

Experts are of the view that with a new regime in saddle, a clearer vision on infrastructure would help make the market more buoyant as any such development initiative will certainly drive up the value of real estate assets in the immediate vicinity.

“The key factors currently at play on the Indian real estate are unsold inventory, absorption and interest rates. It is unlikely that these factors will change immediately post polls, regardless of which party wins. Over the longer term, what will matter most to the real estate sector are a hard re-look at FDI in housing, Reit legislations and the effective implementation of the Real Estate [Regulation and Development] Bill,” wrote a property expert.

Shishir Baijal, chairman and managing director at Knight Frank India, was quoted as saying: “We expect residential to experience traction in terms of sales volume and launches at the start of the second half of 2014 and there would be an upward pressure on prices. The office segment is driven more by economic rationale and as a result, the uptick is likely to take place with a quarter lag.”

The real estate sector is likely to see an improvement in demand and absorption over the next one to three years as economic conditions in the US and Western Europe show signs of stabilising.
“Improved economic conditions in the West will spur the revival of outsourcing business that will result in improved performance of the office sector,” experts argue.


Source: Khaleej Times