Good morning, if you look up at the sun while you're sipping your chai and reading your favourite email, you'll never know that there's some trouble brewing on its surface - a sunspot.
Fyi, sunspots are black-coloured regions on the otherwise blinding yellow surface of the Sun, which are much colder than the other areas. They emit powerful bursts of radiation too.
Recently, space scientists have broken out into a slight sweat as a gigantic sunspot called AR3038, has doubled in size in the past 24 hours. The fast-growing sunspot's hazardous area faces Earth directly and might send solar flares our way if it bursts.
These flares could damage navigation systems and radio communication networks, disrupting major services.
💡 Notably, no solar flare warnings have been issued as of now, phew.
Back to the business of the day then.
– Rahul Mishra and Anuvab Chattopadhyay
When In Egypt, Just Keep Walking
The Egyptian realty market’s facing some issues lately. These pertain to increases in building material costs clubbed with raw material shortages, leading to a decline in construction activity over the last couple of years.
The sector’s also grappling with liquidity challenges and higher overall costs, putting project completions at risk.
A new model in the works?
Industry titans are proposing new models for revival, with special emphasis on checking runaway land prices, which currently constitute up to 40% of project costs.
Other proposals include direct bank-developer partnerships with funding from day one, after feasibility studies and bank guarantees.
Other industry demands
1️⃣ Better payment facilitation initiatives to boost realty investments.
2️⃣ More bank funding for under-construction units.
3️⃣ Innovative architectural blueprints to enable sustainable, low-cost products.
Silver linings
Experts feel serious and organized players can absorb the current bumps and keep walking towards eventual growth.
Recent Cabinet controls serve to highlight buyer interests, which may be a win-win overall.
💡 The market is stable for now, but a lot still needs to be done - what we call a comprehensive revamp.
Stalled Projects To Get Special MahaRERA Push
In a positive development for affected home buyers, MahaRERA launched its new vertical for stalled projects on 22nd June.
- Projects with registration lapses are covered.
- Also, an independent resolution team shall try and get these projects back on track.
What do the figures say?
😎 36,000 MahaRERA registrations in the last 5 years, valued at INR. 8.69 lakh crore.
😳 Of these, 4,500 projects have seen registration lapses. They are cumulatively valued at INR 78,000 crore.
😅 1,500 of these projects have not received bookings. The same is true for 1.28 lakh housing units out of 3 lakh+ units stuck in various stages.
😬 60% of such projects are located in the MMR region alone.
What the authority’s doing
🔼 Blueprints for project completion and continuation upon the fulfillment of specific conditions. This vertical will focus only on stalled projects, especially those where homebuyers have already deposited money.
🔼 Retired IAS officer Sanjay Deshmukh has been appointed at MahaRERA for taking care of stalled projects. He has confirmed his intentions to enable stalled projects on a war footing.
What developers want (for a change)
Collective collaboration amongst stakeholders for overcoming hurdles and getting 26,000+ stuck projects off the ground. In short, it's all hands on deck.
Basically everyone's agreeing to take the interim hit, while planning to rectify the situation through JVs and other measures.
Interim credit assistance and interest waivers from the State Government could also help, though this remains on the wish list.
Let’s hope it becomes a reality. 🤞
Weekend Conversation Starter
If you think that your arsenal of info on the Fintech-RBI chokehold is gonna be a BFD at the weekend party, think again.
And while you're at it, here's an alternative;
🏆 The winner of the best performing currency in the world is, hold your breath, the Russian ruble. The ruble is up about 35% in 2022, and is at its strongest level vs. the US dollar since 2015.
Analysts who were erstwhile weathermen had predicted its collapse after half the world applied sanctions in response to Russia’s invasion of Ukraine, and initially it did.
But it’s since mounted a comeback mainly due to;
a) continued demand for Russian energy exports, and
b) capital controls intended to prop up demand for the ruble.
Over 168,000 Households Face The Heat In Portland
In a dangerous trend that could hit home across the world, potential homebuyers find themselves priced out of realty markets in Portland.
The chief culprit is reportedly the doubling of mortgage rates over the last six months.
How did we get here?
A whopping 168,000 households now find homes unaffordable in the Portland Metro region.
If you take other cities like Eugene, Salem, Medford, and Bend into account, an additional 69,000 households have already been driven out from December.
💡 This works out to less than 1 out of 5 households in the area, that can afford to buy homes.
How mortgage rates are behaving
Rates have gone up to 6% from 3%, where it was resting till end-2021. Add this to price hikes and you get an increase of 40-50% in mortgage payments overall.
What could happen
📎 Lower affordability = falling demand and higher inventory.
📎 Fence-sitters will wait for rates to improve.
📎 More people could return to the rental markets again. Shortage of units in that space could be a concern, but that’s a story for another day.
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Jumbo Floating Restaurant, a once famed but financially struggling Hong Kong tourist attraction, sank in the South China Sea on Sunday.
It had been taking on water for a while and was being towed to a remote location to be kept on standby. No one was injured.
We will be back in your inbox next week. Let that sink in. 💚
☕ The Crew@Ginger Chai