Good morning, with a large segment of the population vaccinated and an increasing local stock build up of doses, India will soon resume exporting COVID-19 vaccines to other countries.
Chinese export headlines have taken a backseat though, as the country's real estate market is playing dominos, and an easy game-breaker is not in sight.
That, and other interesting reads lie ahead in today's Chai.
P:S: There will be no issue of your favourite daily real estate newsletter tomorrow. See you all next on Monday, 18.10.
Lightning Fast Transfers
Present;
As per standard procedure, it takes a minimum of 20 years of time for the transfer of land ownership from the state to an industrial entity.
Near Future;
This timeframe is going to be significantly reduced in Kerala.
What Have I Missed?
Kerala industries minister's recent announcement in the state assembly, saying that the state government would soon be enacting a new land policy to provide land for setting up manufacturing units at the industrial parks owned by the government.
What's New?
First, the policy will simplify an ancient procedure by speeding up transfer of land ownership to the industrial units.
Second, the present policy is based on identifying 25 acres of land in rural and 15 acres of land in urban areas, for setting up industrial parks.
Such large areas are a major challenge to put together and the new policy will thus explore setting up industrial parks in smaller land sizes.
Third, industries minister P. Rajeeve feels that there are several outdated laws concerning the industrial sector which have to be either abolished or revised.
A bill for this is under consideration of the present session of the state legislative assembly.
Chinese Checkers
China's real estate sector is facing a bit of a which-fire-to-put-out-first dilemma.
It all started one September morning with Evergrande rattling global markets by warning it could default on its huge debts.
Since that ill fated day, more Chinese builders have made similar public confessions, shaking up investors and fanning fears of contagion across the entire sector.
Any Checks In Place Yet?
Per Chinese state media, an internal meeting will be held by the China Real Estate Association on Friday, October 15, in the capital city of Beijing to evaluate challenges faced by real estate companies.
This emergency huddle will bring together high-level executives from housing companies to probe the problems in China's housing market and address the turbulence.
Can They Fix It?
To be honest, it's too early to say how the crisis will be resolved but there are a few lines of thought worth paying attention to.
📌 The stressed companies could try to restructure their debts and work things out with their lenders.
📌 They could also plead with the Chinese government for a bailout, but so far Beijing is mum on the issue besides promising to protect homebuyers.
📌 The last and probably the worst option would be to let the truth have its day and witness a disorderly series of defaults, which would send tsunamis across China's economy, and perhaps beyond.
As top executives finalise their wardrobes for the oncoming meeting this week, China's property crisis has ensnared three more large developers.
🤞
Half A Cup Extra
- India's Cement production is expected to be up 12% this fiscal, owing to pent-up demand, rural housing demand and an uptick in infrastructure activity.
- India is suffering its worst power shortage this October since March 2016 due to a crippling coal shortage, a Reuters analysis of data from federal grid regulator POSOCO shows.
- Shriram Housing Finance gets INR 300 crore equity capital from parent firm.
Key Performance Indicators
If you're wondering why that once-in-a-lifetime discount from the builder hasn't come through as you had predicted to the spouse one night, blame it on sustained demand for housing.
Yeah? Is The Market Recovering?
No two ways about that. Per Knight Frank's estimates, housing sales across India's top 8 cities have almost risen 92% YoY in the quarter ending September 2021 and these numbers are already ahead of the 2019 quarterly average.
Most of this demand for housing has been driven by end-users, and with key demand levers (low mortgage rates, high affordability) staying on the crease, sustainability in sales is going to hold.
Also, there are fewer sad builders this time as the demand recovery has occurred across all three housing segments - affordable, mid income and luxury.
Critical Points of Note?
1️⃣ Housing demand is broad-based and sustainable across markets, aided by high affordability and the need for equity creation in the last five years or so.
2️⃣ Housing prices are at their lowest and any sharp price increases are unlikely in the next 4-5 quarters, as new supply will likely match demand across segments.
3️⃣ The best part of all? While consolidation among players has enabled large listed players to expand outside their origin markets, competition from local developers is expected to bounce back as buyer sentiment improves further.
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Lawyers shouldn't create products for doctors. So why should you settle for real estate updates written by non industry generalists?
We will be back with more real estate swag next week.
Have an awesome extra long weekend. 💙
☕ The Crew@Ginger Chai