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Dec 2011 sees spurt in realty registrations

December 2011 was a pleasant surprise for developers and real estate investors with 5,891 property registrations.

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Despite the slow-moving real estate market, December 2011 was a pleasant surprise for developers and real estate investors with 5,891 property registrations.

According to Prabhudas Lilladher Pvt Ltd, the research analyst-institutional equities, there were fewer launches last festive season and higher secondary market transactions.

This could have caused an unexpected spurt in the December 2011 sales which registered a 45% rise in sales in month to month and only a 9% decline in year to year.

“December 2011 has seen only 9% decline in property registration because people prefer to shift to new houses on New Year. So, they complete all purchase formalities before the year ends. I think it is the yearly accumulated stock in December 2011 and that caused more property registration. January 2012 will show a different picture,” said Atual Nemad, a real estate expert. 

But, the report by Prabhudas Lilladher stated that private equity funds are coming to rescue the developer in the times of liquidity crunch. The lease registration has increased marginally by 1%. “It is the positive trend, but is unlikely to continue,” said the report.

However, the anecdotal evidence continues to suggest a continued tough time faced by the developers. “We would wait for data in the coming months to ascertain if this is a reversal in trend or just a monthly blip,” said the report.

The liquidity has started flowing in the real estate market resulting rise in sale. Recently IL&FS has invested Rs200 crore in the 8.3 acre Bharat Mills project of Indiabulls Real Estate, pegging the land parcel’s value at a substantial premium to Rs1580 crore which Indiabulls had paid in the NTC Mills auction in November 2010.

The premium looks extremely high, given the oversupply in central Mumbai micro market, coupled with the fact that parking FSI rules have also been modified post the auction.

Paras Gundecha, president of the Maharashtra Chamber of Housing Industry, said it is good sign the market is moving.

“But, I am not sure it will continue. Presently, the market is standstill. There are several changes happening at the government level. Each day, there is a new rule contradicting the old one.”

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