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After the down turn in 2008-09, Real estate saw a sky rocket trend between 2010-2011 first Quarter. Now again it is moving southwards. Adding to the speculations, Today country's Biggest Software Exporter TCS CEO Chandrashekharan openly said, Chances of Salary Hike in 2012 is NIL, Final decision will be taken in February 2012 Board Meeting. All these days the same CEO was singing different Tunes while their competitors were giving Cautious statement on IT Road map in their Quarterly meetings. This is in spite of Rupees worst ever performance and depreciation to Rs.53+(Which gives huge profit for IT companies upon converting US Dollar to Rupees).

In spite of virtual push up in medias like TOI about launch of new projects, Highest number of new projects launched in Bangalore in 2011, Right Time to invest...blah blah etc about Real Estate, it is clearly visible in the last two quarters the down trend of real estate transaction across the country as per the Quarterly report of the Listed Real Estate Developers Balance Sheets. Even the Bank loan disbursement have severely affected Month on month. On TOI Wednesdays' ASCENT Pages, its very hard to find any IT & High profile Job advertisements in the last 2-3 months. Already IBM, Nokia Siemens, HP,HSBC Bank, Citibank, Philips....etc have announced their Corporate Restructuring Plans (nothing but Layoff's). Several 100s of NOKIA Employees are counting their February 2012 deadline(including 2 months of extended Bench Time). Many companies have already freezed their Fresher/Lateral hiring Plans. Infy has forced their employees to work on few saturdays in the last two months to recover their investment cost.

No need to say about the bleeding condition of the automobile Sector, where companies are unable to sell the Petrol Variant 4 Wheelers, piling up of inventories, not much inquiries even after the announcing their year end grand discounts. On the other side recall of Several Branded Cars due to Quality Issues & Replacements adding burden. Many of the Stock Brokerage Houses have seen drastic reduction in the Retail investor trading activity and subsequently reducing their head counts.

All these instances will have cascading effect on the economic scenario, especially the stability and security of the job and new job creations in direct or indirect ways. So definitely Real Estate Sector is heading for another round of consolidation phase in the coming days.

well said...I too feel exactly the same...the chances of a down turn in 2012 is very high and within my firm, I can feel people being very cautious in team/company changes. I feel if it hits badly, 2012 will be much worse a year than 2008 , economically , to India...

Hi ,

http://in.finance.yahoo.com/news/2012-p ... 00370.html

Click on the link for macro indian picture on indian real estate.

coming to Bangalore specific, 2012 will see lots of deals happening within outer ring road (i mean commercial, retail along metro routes, etc..)and consolidating outside outer ring road (not great infrastructure, no cauvery water, Akrama-Sakrama, B khatha, Bank Loan problems etc...)

http://bdabangalore.org/pdf/RMP-2015.zip

Click on the link which will show list of roads, road width in mtrs, road length, village survey nos, etc

lets see when BDA is goint to call tenders and execute ...(should be before 2015), even if main roads(100mtrs...peripheral roads and other main roads ) get 25% executed in 2012, we can see considerable activity in bangalore real estate.

even in BMRDA limits, lots of layouts are developed and lots are coming up.

especially in hosur road, bannerghatta road, one can see lots of BMRDA approved layouts--functional and lot more coming up, even apartments are launched

dlf

http://dlf.in/dlf/wcm/connect/Residenti ... +bengaluru

Surya city (multiple phases) on chandapura road, now near attibele(yadavanahalli).

Villas, apartments near Wipro hq to sarjapura.

kr puram to hosakote and beyond are seeing lots of developments and fresh stock added up

same with yelahanka--devanahalli, and dodballapur road. Kengeri--uttarahalli

i presume these BMRDA, BIAAPA areas will see consolidation IN 2012 and once infra improves, rates will move upwards.

Regards,
Ravindra Kumar hg

I think Purvankara is one of the first to accept that they are not doing good...Read in today ET...

http://economictimes.indiatimes.com/mar ... 264982.cms

Ravi

The Development you are projecting is very nice to hear and see on medias. But you need to look at the Balance sheet of the major Real Estate Companies Like DLF, Purvankara, Prestige, Nitesh Estates, Unitech, Shobha Developers,....etc quarter on quarter in 2011 and monitor their debt level rising linearly. Another things to be watched is why they are selling their Land banks and their non-residential plots and hospitality/commercial projects, Insurance arms month on month.

More than the development works, it depends on the affordability of individuals and the market volatility based on the social & political factors.

For Ex. From last two years BBMP Commissioner H Siddaiah was an considered as an efficient officer in the eyes of public. He proactively disclosed the 1500+ crores scam happened in just 3 BBMP Zones and asked for a probe from the BMTF. Recently he was thrown out of BBMP. But today his house was raided by the Lokayukta and made him the Scapegoat as revenge from the ruling party. In these kind of scenarios how many Real Estate Developers have confidence to do business here. How many Governement moved urban infrastructure Developmental projects really gets implemented(Not just on papers and Bill Clearance).?

Hi msn,

i do agree that most listed companies are not doing well and their balance sheet do reflect it. am also saying that infrastrucutre in BMRDA, BIAAPA etc is poor, and rates in these areas do consolidate in 2012. Inspite of poor infra, areas like hosur road, sarjapur road, jigani are slowly progressing.

if BDA implements PRR(atleast 25% , from tumkur road to sarjapur--phase-1) , we will see some considerable activity

"More than the development works, it depends on the affordability of individuals and the market volatility based on the social & political factors. "

its 100% sure.

lets see how RBI tightens or smoothens credit flow into market in 2012.

regards,
ravindra kumar hg

If you observe the current real estate rates in every part of Bengaluru, it is unbelievably high. And this exponential jump has been taken from last one year and specially in last 6 months. From past one year, I have observed almost 100% jump in sites especially, which is not at all justifiable. All these rates will take a correction in this slowdown. I agree with MSN that none of these rates are affordable for a common man. And I believe it can't grow further as there wont be a buyer who can afford it. There must be few investors who wants to buy now and sell @ higher rates but for them also it will be difficult to find customers. Any time, market should have a balanced buyers and sellers in order to maintain a healthy growth. But current trend is not a healthy one and this IT slow down will definitely correct the market in terms of rates etc. You can observe the speeches of most of the leading IT company CEO's that they are hinting that there won't be any hike in salary for this year. This almost hints that people will not take risk in investing BIG amount. Hence less number of buyers in market will push the rates to down for desperate sellers .

In today's edition of Economic TImes I found this article

Jittery investors selling flats below market rate

http://economictimes.indiatimes.com/mar ... 275674.cms

Correct. Even if you see one of the BIG layout in Bannergatta Road approved by BMRDA, where developers quote 1100-1200 Rs/psft and resellers are quoting 800 to 900 Rs/psf. This trend is always seen when there is an imbalance in the market .

Mohan,

May I know which layout you are talking about ?

Thanks,
Yash