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› Yogin Vora
 The Indian Real Estate Market:
Contribution to the Economy
› Contribution to GDP of about 7%
› Second largest employment generator in the
country
› Real estate growth gives boost to steel and cement
sectors
› Real estate is a growth engine for development of
over 269 allied industries
 Úajor Growth Driver:
› Residential Segment:
DÃncrease in Ãncome level combined with trends
of higher urbanisation and nuclear families.
DBacked by easier availability of housing loan

› ommercial Segment:
DÃndia emerging as global back office for services
like à & à based business, multinational
companies , SEZ¶s.

‡ Retail & Entertainment Segment:

DGiven growing disposable income & emergence of
organised retail, entertainment destinations.
 Ú
RE  S
à E
ÚERÃ BÃG ÚEL D

› merican Banking ollapse is more miniscule
› 1000 times bigger than the mortgage bubble
› RBà examined books of 10 realtors to verify
solvency and assess risk of possible defaults
on loans and deposits
› ompanies Ãdentified ±
DLF,Ãndiabulls,Unitech,DÃL,Úahindra
Lifespace, nsal roperties, hoenix
Úills,kruti iti,hoenix Úills,eninsular
Land
 Effects of Úeltdown on economy
D Fall in stock markets
D Ãncrease in interest rates
D Slowdown in à industry
D Unemployment
D Ãnflation
D Retail & tourism has also suffered
s a result real estate space witnessed pressure from
demand side and become very difficult to sell
projects.
 Ãmpact on Real Estate sector
D Ãncrease in prices of inputs due to inflation effecting
all areas of economy like cement, steel, etc.
D Ãncrease in home loan interest rates resulting into
additional EÚÃ burden on the borrowers.
D Reduction in salaries and layoffs resulting into
reduced demand for Real estate
D Demand-supply imbalance
D Forced correction in prices
 Ãmpact on Real Estate sector (contd.)

D Reduction in ommercial Rentals

D rojects¶ stagnancy

D Slow down in infrastructure projects

D Difficulties to raise fund (Failure of Emaar Ã
)

D Loss of Jobs

D Shortage of skill workers

 rice Reduction in Úajor cities

 
 
 




 



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 rice Reductions
›
verall price cuts of 10-12%
› Ãn Banglore, DLF group reduced prices by 25%
› Ãn hane, Lodha group cut prices by 30%
› Ãn Úumbai(Lower arel)
rbit group cut prices by 20%
 EFFE
 FÃÃLS ± JUE¶09
›
verall 76 % dip in profits & 57 % fall in sales in First
Quarter of FY 09-10 over First Quarter of FY 08-09

› DLF - 79 % decline in profits & 57 % slide in sales

› Unitech ± 63 % decline in profits & 50 % slide in sales

› arsvanath, Ãndia bulls, DÃL, kruti, Shobha,

urvankara have reported decline in profits upto 95 %.
 Úeasures
DReduction of interest rates.

DRBÃ policy for restructuring loans.

DReduction in excise duty on construction material

like cement.

DEncourage property development in ier ÃÃ and

ier ÃÃÃ cities
 Úeasures †(

DUnder the Ãnterest Subvention Scheme Loan upto

Rs. 10 Lakh, & property value is not above Rs. 20
Lakh will get 1% lower interest.

D orporate like ata¶s introduced ano ousing

for Rs. 3.9 Lakhs- Rs. 6.7 Lakh called as Shubh
Griha project.

DSBÃ introduced 8 % housing loan scheme for one

year followed by the other SU & rivate Sector
Bank as well.
 ips to Ãndividual Ãnvestors:
D Determine a budget

D Deal with reputed builders

D
pt for developed properties

D heck out the rates of ³next best options´

D Go for fixed interest rate loans

D Don¶t bite freebies bait

 Question to the udience
Úeltdown in Real Estate a Boon or a Bane ?

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