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Avoid Gold, Real Estate; Buy Equities, Says Shankar Sharma

Fears of a sharp slowdown in China and an imminent rate hike in the US have led to a sharp selloff in domestic equities. The BSE Sensex hit a 15-month closing low on Monday after which markets regained some lost ground on Tuesday and Wednesday.

On Thursday, the BSE Sensex and Nifty came under renewed selling pressure; the Sensex shed over 400 points, while the Nifty traded below 7,800 in morning trade.

Market veteran Shankar Sharma, the vice chairman and joint managing director of First Global brokerage, says domestic stock markets can offer 10 per cent return from current levels in a year.

"It is a very troubled environment locally and globally that we are in. Within that to expect India's GDP to grow 8 or 9 per cent is going to be difficult. We can't be outliers," he said.

According to Mr Sharma, the slowdown in China - a major trading partner with most of the developed as well as emerging economies - will affect the growth of India as well.

The upcoming assembly elections in Bihar, UP and other smaller states will put pressure on the government's ability "to work in the favour of corporate India," he added.

Mr Sharma expects continued pressure on corporate earnings, which struggled in FY15, and registered a lower single digit growth in the first quarter of FY16.

"To expect corporate India's earnings to revive looks a long shot," he said.

The huge selloff by foreign investors has also hit sentiments in domestic equities; after putting in nearly Rs 1 lakh crore in India in 2014, foreign investors have sold cash shares worth over Rs 30,000 crore in last four months.

Mr Sharma says India's relative outperformance compared to other emerging markets have led to FIIs taking money out of India to all those emerging markets that have not done well.

"It is human psychology that you sell your winners and keep your losers. In times of panic people are not always prudent and that includes fund managers as well," he added.

But foreign investors will start coming back to India, once the dust of global turmoil settles, Mr Sharma said.

"They will definitely come back, I don't see that (current FII selling) as a permanent loss," he added.

Advice for retail investors

Mr Sharma said gold and real estate are not good investment bets at the current juncture. So the only investable opportunities available for retail investors are debt and equity, he added.

"Fixed income is a very good opportunity in India. The yield that government bonds are offering is very good and people should lock in that," said Mr Sharma.

He advised retail investors to put their money in equity and debt in the ratio of 3:2 which according to him is a prudent allocation.

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Realty Trends

Home prices near most-affordable levels in over 30 years: HDFC

Home prices may have been on an upward spiral for many years, but the cost of owning a house in India remains near the most affordable level in over three decades, shows data compiled by mortgage giant HDFC Ltd.

The average price of a home, purchased with a housing loan, rose to over Rs. 45 lakh in the 2012-13 fiscal year -- marking the fourth consecutive year of uptrend from about Rs. 25 lakh in the year 2008-09, HDFC has said in a presentation.

However, factors like an even greater surge in the personal income levels, tax incentives and lower interest rates, have resulted into houses becoming more affordable to purchase, it said.



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India Property Investment Gyan

Major schemes for affordable housing to be modified: Girija Vyas

NEW DELHI: Major schemes meant for providing affordable housing to urban poor will soon be modified to make them more people-friendly, the government said today and invited the private sector to contribute more actively in this area. 

Speaking to reporters here, Housing and Urban Poverty Alleviation (HUPA) ministerGirija Vyas today said her ministry is modifying all the major schemes including the Rajiv Awas Yojana (RAY), Rajiv Rinn Yojana and the, Affordable Housing in Partnership scheme and added enormous budgetary support has been earmarked during the current plan period. 

Secretary HUPA Arun Kumar Misra told reporters that a fund of Rs 35,000 crore had been allocated to the ministry for the implementation of three major schemes, including RAY, which was being run in as a pilot project earlier under 12th five- year plan. 

He said the ministry would require approval from the cabinet for the implementation of these schemes and efforts would be made that through these funds 2 million affordable houses are encouraged. 

He said that in addition to the central government funds, banks and credit institutions would be providing funds for construction of affordable houses. 

Vyas said that with urbanisation, the number of urban homeless and area under slums had grown. 

Vyas said there was a need for private developers to develop economic models to foster affordable housing for economically weaker sections and lower income group households in urban areas as government efforts in this direction needed to be supplemented. 

Vyas also said a technical group, set up by her ministry, had shown that out of 18.78 million housing shortage in the country, 96 percent shortage is in EWS and LIG category and for this huge investments and private sector participation were required. 

Misra said the group set up by the ministry has suggested incentives for the affordable housing sector included concessions to development-related charges and service taxexemptions. 

It also sought direct tax rebates for affordable housing projects and inclusion of the sector in the 'infrastructure facility' he said and added the task force had felt that governments need to still provide direct capital grant support to affordable housing projects. 

Misra said that in the symposium held today where states, experts and private sector representatives were present, there was unanimity on many of the suggestions.

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Green Property- Eco Homes

Reclaim your city space: Projects in Delhi, Mumbai and Kolkata aim to transform lives

Three projects in three cities aim to transform the lives of people who live close by. The one in Mumbai hopes to transform a congested area into a green precinct; the one in Delhi converted an open drain into a walkway, while Kolkata hopes to bring the crowds back...