Real Estate industry is talking on correction period all over India. Brokers, especially, are absolutely convinced that the market is set to fall. In many areas the property rates have already started falling. Accordingly, Goregaon, Malad, Mira Road, Vasai and Virar on western suburbs and Mulund, Bhandup, Kurla, Chembur and Govandi on central side have started stagnating the level of property prices.

Pune, Nashik, Noida, Jaipur, Bangalore, Chennai and Hyderabad are also feeling the cold wave in the property market. Reason for the same is related with hike in housing finance interest rates and unaffordable property rates.

Investors are, now, not buying and have stopped going in for more investments. Commercial stock is in the market for anything above the cost of investment. Practically, when no one buys, rates are stagnated at some particular point. That is what is happening today. The sale price has stopped further climbing up since there are no takers. Malls are worst hit. The recession started with them, while the exhibiting rates were much less then the actual investments made. Cash and Cheque portion of mall space deals are known to everyone in the trade. The market for commercial properties has already been started to correct its baseless pricing.

It may be a recess. For the time being, investors want market to show its actual colour. And after they sell off certain non moving stock, buying spree may start again afresh. It is also linked with the liquidity crunch in the economy and falling stock exchanges in the country. A lobby of investors does not want share market money to go easily from the real estate market. People who have invested in real estate from earning of share market wants an exit to pay off the liabilities created by them in the share market. Player in real estate market wants the rates to stop climbing up for some time so that they can capitalize on such panic sale. Big game plan is on the hands of few groups of individuals and few finance companies that have entered recently in the trade.

Builders, today, have already started to reduce its price everywhere in the country. Ready stock is still not available as the builders have already sold 30 to 50 % of his stock during under construction to investors. As the Investors want handsome returns on the finished stock while they do not sale in the open market but through the builder only. That stock again sold by the builders to the actual buyers by mounting another profit margin. Hence when the actual user buys the property, he has to pay investor´s hidden margins which change hands five times during the time of construction.

It is nothing but a recess for the players. The rates may go up by the second quarter of the next year 2009. Builders have holding capacity since the project is financed by venture fund people and Mutual funds are searching for the projects. The sale price will be certainly include the interest rates or Return on investment money (22% to 25% of total project). Land and FSI cost is higher and purchasing is already finished for the second rally of property market boom.

As in current market, liquidity has reduced and the funding by the PE firms or Mutual funds has mostly stopped and hence, the construction & launching of the project has just held up or been delayed by one to two quarters some time a year as well.

So in view of current market scenario, we can easily understand that the Real Estate market has effected very much with the recession of Economy.

Parsvnath Developers Ltd announced the launch of a group housing project, Parsvnath Pratishtha, at Pimpri Chinchwad, Pune. "Presence of educational institutes, universities, IT and major automobile companies has resulted in an influx of population Pune. This increase in population has lead to burgeoning demand for qualitative residential properties in close vicinity of their work places," ,” said Mr. Pradeep Jain, Chairman, Parsvnath Developers. The project, Parsvnath Pratishtha is spread over 11, 000 sq mt area and built up area of 1.23 lakh sq ft. It is scheduled to be completed by 2010.

HCC Real Estate Ltd (HCCREL) is foraying into large size land deals. The plots, aggregating 1,550 acres in various parts of India, will be used to develop townships. The company is planning to invest Rs 1,000 crore in the initial phase of the project this financial year. These funds will be raised through HCCREL's forthcoming IPO, Mr. Rajgopal Nogja, its president said. He added, "We are acquiring 1,000 acres of land in Nashik apart from 300 acres in Thane in Mumbai and about 250 acres in Pune. Plans are on the anvil to enter into land deals in markets such as Panvel, Kolhapur and Nagpur as well." Besides this, the company is also planning an 80 acre slum rehabilitation scheme in Vikhroli East in Mumbai. As far as the future plans of the company are concerned, Mr. Noja said, “In the next three years. We will have a pan India presence. We will venture into new markets and set up townships and SEZs in Gujarat and Goa."

Real estate developers, the Salarpuria Group is planning to invest about Rs 3,000 crore in 12-14 projects across the country. These projects will be a mix of residential, commercial, retail and hospitality located in Bangalore, Hyderabad, Pune, Kochi, Jaipur, Kolkata and Visakhapatnam. About 13 million sq ft are under construction currently, said Mr Mahesh Khaitan, Director, Salarpuria Group.

Real estate developers SRK Group is planning to invest Rs 5,000 crore in developing residential and commercial projects in India. The group will undertake work in various cities like Delhi, Gurgaon Ahmedabad, Pune and Chennai over the next five years with plans to expand to new cities. The group has identified many projects in south India and other parts of the country to pump in about Rs 5,000 crore in the next five years in developing residential as well as commercial projects.According to the sources, SRK group plans to invest about Rs 2,000 crore in Kerala in five years. It is also likely to launch 3-4 residential projects in the state within the next six months. Apart from Delhi, where SRK Group plans to develop only commercial projects, in all the other cities it will develop both residential and commercial properties.The group, which is currently developing 20 projects in south India, is also planning to construct 100 housing units for Adivasis and poor people in Kerala free of cost.They will also be launching healthcare facilities and ambulance services in rural Kerala.

A buoyant real estate market last year saw several realty firms foray into the hospitality sector. But with slowdown hitting real estate and choking cashflow, several small realty firms have been forced to put at least half a dozen hotel projects on the block. A developer has put on the block a 200-room hotel project in Ahmedabad that has a management tie-up with a reputed international hotel brand. Work on the project is around 60% complete. Similarly, two mid-size hotel projects in Bangalore, which are in the early stages of construction, and one each in Pune, Chandigarh and NCR have been put on the block. Almost all the projects are mid-size. Some developers are looking at completely exiting the hotel projects while others are looking at stake sale. Till six months back when the going was good, several realty developers, who had parcels of land at strategic locations, were trying to get into the glamourous hotel business. With hotel room shortage taking room revenue to new levels, the hospitality business looked very attractive. And with foreign hotel chains looking to aggressively expand in India, even small developers could easily tie up with them for a management contract.

The present time is not ideal for the realty market. The decelerated pace has affected the sector. The leading banks have increased the interest rates of home loans and the inflation level is also rising. Therefore, putting together, the probable property buyers are feeling dejected. But perhaps there may be a silver lining. The prospective buyers are delaying their home-buying decision to buy properties because of a widespread conjecture of probable price reduction in times to come. How long one should wait and watch is however not known. Anuj Puri, the chairman and country head of the operations of the international real estate consultancy Jones Lang LaSalle Meghraj (JLLM) in India, says that the correction will take 4 to 6 months depending on the local trend of the market and the holding power of the developers operating in that location. JLLM also makes a forecast of 5 to 15% probable price reduction in different hyped micro markets of Pune, Bangalore, Gurgaon, Noida, and other such locations. The real estate India appears to be going through a rocky period. The real estate markets of South Mumbai, several other places in Mumbai suburbs, and some locations in New Delhi may experience a price reduction of even up to 10%. These areas already have seen unreasonable price trends. As per Mr. Puri, the problems for the developers to finish the existing projects as well as initiate new projects will escalate which will result in reduced incoming supply. This will also increase the consumption time needed for the existing supplies. The prospective buyer of India property will reschedule the decision of purchasing property because of his or her limited disposable income. Sonepat and Ghaziabad property market however has been quite stable and has attracted a lot of investors.

Milestone Capital Advisors, a management venture fund house has decided to invest up to Rs.1,000 crore in real estate projects in Maharashtra. Of the total investments, around Rs.300 crore will be invested in commercial projects in Pune and Rs.300 crore will be invested in affordable housing projects in other cities such as Nagpur, Nashik, Pune and suburban towns/districts of Mumbai. In addition, Milestone is also actively considering a few investment proposals from Nashik. The company has earmarked Rs.200 crore for development of logistics parks across Maharashtra and will also invest over Rs.200 crore in warehousing in Mumbai.

Axis Bank (formerly UTI Bank) has invested Rs 250 crore ($59 million) in Lavasa Corporation, a real estate subsidiary of Hindustan Construction Company (HCC). The bank will get in return about 2.5 per cent stake in the form of convertible preference shares and convertible debentures. The deal pegs the valuation of Lavasa at Rs 10,000 crore. Lavasa is developing a 12,500-acre hill city near Pune. Axis Bank is not known to making direct private equity investments such as this. The bank also has a private equity arm called Axis PE, which is focused on infrastructure sector. It recently raised $150 million in its first closing.

It’s not just fancy roads and buildings that make a city livable. There’s a lot more by way of amenities that add life to it. By focusing on infrastructure that enhances quality of living, like parks, play grounds and thoroughfares, a city makes the grade. A city is more about the people that live in it. And while planning a city, it’s the people that should be thought of first, then the infrastructure needs to be developed. Similarly, the relatively new areas of Gurgaon, New Mumbai, Pune and Bangalore may have witnessed a deluge of real estate investment over the last decade, but they have failed to create livable urban spaces that really work. Gurgaon, a flashy boom town that has emerged almost overnight with shopping malls, condominiums and swank office towers, despite it being touted as ‘planned’ development, is hardly people-friendly. This is because it neither has a meaningful municipal waste disposal system nor a proper public transport network. As a result, the city, still half-built, already suffers from serious traffic snarls, power shortages and water-supply constraints.

Elpro International’s real estate arm Elpro Estates plans to invest around Rs 300 crore in developing a mall and a housing project in Pune. A part of the investment will be through internal accruals and a part through debt. The mall would be known as Elpro Mall. It would be of seven and half lakh sq ft and be operational by the first quarter of 2009. The mall will be developed on 1, 50,000 sq ft of land and will have more than 50 brands apart from a multiplex and a food court. The housing project of the company, 'Metropolitan' will be developed on an area of five lakh sq ft. In the phase I, there will be around 350 apartments. Later, they may come up with similar projects in the area. The projects have been planned keeping in mind that there is an IT park nearby and hence there would be ready buyers for the apartments.

Peninsula Land Ltd, the Ashok Piramal-backed real estate company, is diversifying into integrated townships and information technology parks in Pune, Nashik and Hyderabad. It also plans to enter Ahmedabad, Chennai, Mysore, Bangalore and Coimbatore by next year. Peninsula is developing five projects, which includes one residential and one township project in Nashik, and integrated townships and IT Parks in Pune and Hyderabad. The company is taking a very risky decision by putting up five huge projects during the same time, because looking at the present conditions it is unsure whether it will be able to sell the residential units. Secondly, these are IT Parks not special economic zones where IT companies would rarely tread as the tax benefit scheme will get over by March 2009 even before the project is ready.

Real estate developer Nirmal Lifestyle Ltd plans to build five integrated townships costing about $5 billion (Rs20, 300 crore) in 10 years. The firm, which has developed a township, and residential and retail projects in the city, said three of the townships will be in Mumbai, and one each in Pune and Indore. Each of the projects will include an IT special economic zone, and will have about 20 million sq. ft each. The company is finalizing the land acquisition for these projects. They plan to fund the land acquisition through internal accruals. For each city, they will also look at partners but that will only be on maturity of the project. They also plan to go public in the next 12-18 months. Nirmal is currently developing a 3 million sq. ft shopping mall in Mumbai and a 1,080-room hotel project, jointly with France’s Accor SA. Real estate developers in India have rushed to set up industrial zones and townships in the last few years due to easier investment rules and rising demand for homes and offices.

Red Fort Capital, an international private equity fund, is planning to invest Rs 3,500 crore in the country’s real estate sector during the next one year. The money will be invested in real estate projects — commercial, residential and retail — as well as land acquisitions. It has also launched a domestic fund few weeks back through which it plans to raise Rs 1,000 crore. The proceeds would be deployed into non-foreign direct investment projects. Construction has begun for Prestige’s project in Bangalore, Indu project in Hyderabad, Chennai and NCR, Delhi. The company is looking at property investments in about 15 other cities that have high income and employment growth and cheaper land. The company will target the middle income groups, earning between Rs 6 lakh and Rs 11 lakh per annum. Red Fort will develop the low-cost houses in partnership with the Bangalore-based Prestige Group and Hyderabad-based Indu Project and will have around 40-80 per cent stake in the projects. Red Fort is in the final stages of discussion for investing in budget hotel chains. It plans to capitalize on its existing land bank of over 1,000 acres pan India. It has land in North Mumbai, Kolkata, Pune, Chennai, Hyderabad and Delhi.

It’s a known fact that India Real Estate sector is booming and it has provided innumerable opportunities for investment throughout the country. All throughout the country, whether it is the metropolitans or the two or three tier cities are exploding with commercial high rises, residential townships, industrial parks and shopping malls.
Where should we invest ? Everywhere this question is being asked. Flying high on the wings of booming real estate, property in India has become a dream for every potential investor looking forward to dig profits.
Investing in Pune for the medium-to-long term makes the most sense in today’s real estate scenario. For the perfect portfolio, one should concentrate on the more developing areas that still feature competitive rates. The safest and most potential laden investment opportunities in Pune today lie in its townships, as they provide highly saleable property with the right mix of basic amenities and add-ons. The hottest investment destinations in Pune for modest-to-medium budgets in Pune are currently Supreme Palms , Mahindra Royale, Kumar Sansar
Kondhwa , These new real estate properties of Pune flaunt modern lifestyle with amenities like clubhouse, swimming pool, community hall, manicured gardens making these ideal as home.