Realty – Page 10 – FindMyProperty

Delhi-NCR is likely to have the highest demand in LIG, MIG and HIG segments in the period 2016-2020. Delhi/NCR continues to save the highest ratio of demand of 24 percent at around 1 million units by the end of 2020.
LIG housing is the most under-serviced segment, below Rs 15 lakhs. While the LIG is probable to generate demand of about 1.98 million units by 2020, supply by private developers is going to be just 25,000 units.

Similarly, though the MIG (Rs 15-70 lakh) accounts for 63% of the total housing supply across eight cities between 2016 and 2020 at 647,000 units, the demand is likely to be a much higher at 14,57,000 units. Lack of funds and high land and development costs are the primary reason for developers not choosing for smaller sized units closer to city centres as profitability radically reduces.

There is a considerable ratio of unsold inventory in the MIG and HIG types, which are not engaged as these properties are unable to demonstrate value for their buyers. Such units fall out of preference either on account of higher-than-expected prices or due to locations.

Delhi-NCR is expected to have the highest demand in all the three segments in the period 2016-2020. However, a majority of the supply is likely to cater to the HIG, followed by the MIG and LIG.

Reserve bank of India directly moves to soak up liquidity from banks, hike in the cash reserve ratio (CRR) and how it would stabilise markets. These men know that a dip in growth and surge in deposits would force the central bank to lower interest rates sooner than later, pushes up bond rates and soften bond yields.

“A rate cut now is not conflict with cash reserve ratio (CRR) hike since this hike will be ultimately rolled back. The economy is at a stop now, so we should expect a cut. We were always expecting a 25-basis-point (bps) cut in December and another 25 bps later in the monetary, and we are sticking to our prediction” said Indranil Sengupta, chief India economist at Bank of America-Merrill Lynch (BofA-ML). It expects a total of 75 bps cut by September 2017.
Most economists believe a 25-bps rate cut to be a certainty next week as the central bank needs to support small and medium enterprises (SMEs) which have been hit by demonetisation of high-value notes.

CRR Hike an Incredible steps

The CRR hike announced a few days prior was just an extraordinary liquidity-absorbing measure rather than policy rate decision.

There is a widely shared perception that RBI may turn to more sophisticated policy tools to wipe up liquidity rather than impounding incremental deposits as CRR. Despite the fact that many may be hoping for a more aggressive rate cut by RBI in Wednesday’s monetary policy, chances are that the central bank may hold back ammunition for the future as the full impact of demonetisation unfolds by end March.

On 26 November, RBI asked banks to keep all incremental deposits garnered between September 16 and November 11 with the central bank to absorb the avalanche of liquidity in the banking sector after demonetisation was announced on November 8. RBI will survey these measures on 9 December.
Bond yields, which shot up 17-18 basis points soon after the CRR hike, have fallen almost 10 basis points since then.