Knight Frank India have announced the launch of their database product “eyestate” in India with some shocking stats coming from it on the state of the market.

28% of homes with the R’s3.5M band
Its shows that 28% of the properties under construction within the 7 urban centres cater to households looking for homes within the INR. 3.5 mn. category. This product caters to the needs of approximately 80% of urban households. Contemporary market belief would lead us to assume that all or most of this product would be absorbed as it is within the affordability criteria, but this is not the case. An astonishingly high 44% of these housing units are unsold today.

If you are a resident of Salt Lake and cursing your municipality for not waiving property tax like the Kolkata Municipal Corporation (KMC) did for city dwellers, breathe easy.

The Trinamool Congress government has finally decided to introduce a tax waiver scheme for Bidhannagar Municipality. State urban development minister Firhad Hakim on Tuesday said the government was working on the process of implementing the waiver scheme.

“Similar to the KMC, we are working on the process of implementing the tax waiver scheme for Bidhannagar Municipality,” Hakim said at Writers’ Buildings on Tuesday.

The Trinamool-led Bidhannagar Municipality had long been mulling introduction of a tax waiver scheme for the residents of the township. Ever since Supreme Court had scrapped the municipality’s property tax structure in 2007, declaring it as arbitrary, the civic body has been suffering a severe fund crunch. It could not collect property tax that is a major source of revenue generation. The previous Left-run civic body had set a target to collect an annual property tax of Rs 12 crore after preparing a new tax structure.

Bidhannagar Municipality chairperson Krisna Chakraborty said the civic body is ready to collect property tax once the waiver scheme gets introduced. “We are ready. Introduction of the tax waiver scheme will benefit us,” she said.

Civic officials said the residents of the township will be benefitted with the introduction of the waiver as most have not paid tax since 2007, following the Court verdict. Till now, tax arrears run into crores. With the introduction of the scheme, most of the residents will likely be required to clear the principal due.

However, the Bidhannagar Welfare Association that has been continuously fighting on this disputed property tax issue, wanted to know about what the government was exactly planning on. “We have not been informed as to what amount of tax the residents have to pay, so where does the question of having a tax waiver scheme comes from?” association general secretary Kumar Shankar Sadhu said.

The civic body had also decided to make fresh assessments of tax and was to send self-assessment forms to the residents. The welfare association had been repeatedly saying that the civic body had no bar in collecting tax following the old tax structure.There is finally some good news for the residents of Salt Lake. The Mamata Banerjee government has decided to introduce a tax waiver scheme for the Bidhannagar municipality.

State urban development minister Firhad Hakim said that the government was working on the process to implement the waiver scheme soon. “Similar to KMC, we are working on the process to implement the tax waiver scheme for Bidhannagar municipality,” Hakim said at Writers Buildings on Tuesday.

The Trinamool led Bidhannagar municipality had been mulling on to introduce a tax waiver scheme for the residents of the township. Ever since the Supreme Court had scrapped the Bidhannagar Municipality’s property tax structure back in 2007, declaring it as arbitrary, unconstitutional and violative of Article 14 of the Constitution. The civic body has been badly suffering a fund crunch, as they could not collect property tax which is a major source of revenue generation. The previous Left run civic body had set a target to collect an annual property tax amount of Rs 12 crore after preparing a new tax structure.

Non-Resident Indians (NRIs) have started taking keen interest in the Indian real estate sector following significant appreciation of the dollar v’s the rupee, a top official of housing finance company said today.

“NRIs have started taking keen interest due to the appreciation of the dollar. They have started converting the dollar into rupee”, Director and CEO of LIC Housing Finance Ltd, Vijay Kumar Sharma said.

Bangalore metro rail project
The Bangalore metro rail project would transform the Bangalore real estate sector in this city in three years, similar to what happened in Delhi.

Second phase of Bangalore metro project
Karnataka government has given the green signal to take up second phase of Bangalore metro project at an investment of about Rs 27,000 crore which should boost house and real estate prices in Bangalore

Karnataka State Highway Improvement Project
Cabinet also gave the go-ahead for improving 831 km of 11 roads under the Karnataka State Highway Improvement Project (KSHIP), second stage, first phase, with a USD 351 million loan assistance from the World Bank.

These positive movements will boost prices in Bangalore but some investors are banking profits and selling property in Bangalore after good recent gains.

While real estate prices in the volatile Mumbai and the New Delhi are experiencing a sharp decline, Bangalore’s property prices, however, remain unfazed.

Being an end-user market, property prices in the past have not corrected beyond 10-15%, even during the major economic crisis in 2009.

“Mumbai and Delhi are investors’ markets. There is a lot of speculation, hence investors tend to offload their stock in the market,” said KS Girish, local director, Jones Lang LaSalle India.

This, in turn, leads to a sudden burst of unsold inventory, as a result of which developers have to offer their products at more attractive prices to rejuvenate sales, as is being witnessed of late.

In 2011 the Indian real estate  sector  had to grapple with a loss of reputation with its alleged link to the 2G scam, but also dwindling sales and funding constraints.

Huge Drop in Sales
A huge drop in sales due to mounting interest rates which hurt both, cash flows and customer demand, and launches came to a grinding halt. Mumbai real estate was the worst affected. Other markets like Bangalore real estate and NCR continued to see sporadic sales. But even here, the trend was definitely downward.

Priyanka Ghosh of CNBC-TV18 wraps up 2011.

Hundreds of Noida Extension flat buyers today held a protest rally demanding early approval of the construction projects from the National Capital Region Planning Board.

Though Allahabad High court has given relief by ordering hiked compensation and other benefits for farmers the clause of mandatory approval from NCRPB before start of construction activity in the area has been holding up the projects.

The rally started from Sector 15 Metro station and ended at Sector 16 Metro Station near Rajni Gandha underpass.

“The Flat Owners’ Association decided if their demands are not met before January 5, they will protest at NCRPB’s Lodhi Colony Office”, said Shweta Bharti, general secretary Noida Extension Flat Owners and Members Association (NEFOMA)

“Now, we will meet Rama Raman (CEO Greater Noida) again and find out what the authority has done since our last meeting about a month back”, said Bharti.

She said the Association is also planning ‘Jail Bharo’ agitation in January 2012.

global economic turmoil means the Indian real estate sector is bound to be affected in the short to medium term. Will this offer good opportunities to those who are flush with cash to invest in the property in India? Some Industry experts give there views.

Cushman & Wakefield
Executive director of global realty consultancy firm, Cushman & Wakefield, Kaustuv Roy said that 2012 will have to be year for the real estate sector due to some factors which will have a far reaching impact.

Tight liquidity
The developers’ tight liquidity position will cause stress not only to the consumers, but also to the banking sector as their exposure is huge. Because of the tight liquidity condition, developers may find it difficult to deliver on time to the buyers.

Uncertainties in the job markets
At the same time, because of the turmoil in the economy, there will be uncertainties in the job markets too. This may discourage the young buyers, who play an important role in the residential realty market. Therefore, Roy said, in the residential sector, there will be high dependency on the Indian corporate performance, and if the economy is slowing down, demand may dry up, which is likely to lead to residential prices softening.

Jones Lang LaSalle India
These developments will not only dry up the future demand but also lead to tightening of liquidity in the sector. In that case, developers will not go for fresh launches. “The absorption rate – meaning the ratio of sales over inventory in the market – is likely to be low, and the incidence of new launches will decline,” said head, Research & Real Estate Intelligence Service, Jones Lang LaSalle India, Ashutosh Limaye.

Further interest rate hikes by the RBI
“Because of the prevailing uncertainties in the global market and the likelihood of further interest rate hikes by the RBI in the early part of 2012, sentiments in the residential market will remain cautious over the short term,” said Limaye.

Cautious optimism
Roy also said that overall, 2012 will be a year of cautious optimism with the hope that the Indian economy is suitably insulated from the western economies. However, he felt, for the sector 2011 has turned out to be a mixed year. The first half of the year was extremely good, but by August, the market sentiment underwent a change, depicting more caution in the air.

Uncertainties on the global market and the likelihood of further interest rate hikes by the RBI in the early part of 2012, sentiments on the Indian residential property market will remain cautious over the short term according to Jones Lang LaSalle India.

Low absorption rates
The absorption rate – meaning the ratio of sales over inventory in the market – is likely to be low, and the incidence of new launches will decline. Rise in capital values will be marginal because of low sales.

Affordable Indian housing will appreciate
Project-specific price increases can be expected across all sub-markets – this pertains specially to projects that are being delivered or are nearing completion. The mid-end and affordable housing segments will record healthy appreciation in capital values in the short term from a low base. We expect these trends to continue during 4Q11 and 1H12.

Investor sentiment cautious
Overall macro-economic conditions will keep investor sentiments at cautious levels, both in terms of FDI and FII. FDI inflows, which are currently muted because of the slowdown of India’s GDP growth rate, will probably remain sluggish over the short term. However, as the Indian economy continues to show its resilience in 2012, foreign investors will gain in confidence and India will become attractive among competing investment destinations.

Indian property developers face liquidity crunch
Meanwhile, Indain residential developers will continue to tackle the current liquidity crunch due to high interest rates and slow sales. We will see a slowdown in construction activity for the time being. However, as demand improves, improving sales will benefit Indian property developers who will focus on execution of their on-going project portfolios.

Thousands of non-resident Indians (NRIs) who are poised to take advantage of the Indian currency’s record falls by buying property according to The National.

The rupee is down by 16%
The rupee has depreciated by more than 16 per cent against the dollar since July, and with the currency hitting an all-time low last week, plunging to 52.50 against the greenback. Before the slide began the rupee was trading at about 44.

Substantial increase of NRI property buyers
“Developers are reporting a substantial increase of NRI property buyers across the country. Around 40 per cent of buyers are now non-resident, in comparison to the normal figure of about 10 per cent,” says PMA Razak, the president of the Mangalore Chapter of the Confederation of Real Estate Developers’ Associations of India.

Homes in India cheaper in dollar terms
The rupee’s fall has made homes in India increasingly cheaper in dollar terms, creating opportunities for those living and earning overseas, particularly in the Gulf where currencies are pegged to the dollar.

Navyroof.com the Indian property portal has seen an 50% increase in taffic year on year from NRI buyers. This comes from both NRI’s and developers looking to advertise and sell Indian property online and also NRI’s buying property in India online.

Chennai property 11% year-on-year rise
The property market offers a mixed bag in the country with some property in Chennai recording an 11 per cent year-on-year rise, whereas other areas of the southern parts of the country have seen prices slump by more than 20 per cent, according to NHB Residex, an index that tracks housing prices in 15 cities.

Big cities v’s Satellite
Big cities such as property in Delhi and property in Mumbai are still offering good returns but smaller, satellite cities such as Pune, Gurgaon and Noida have emerged as key destinations for investments, Sumansa says.