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Economics Economics Presentation Transcript

  • REAL ESTATE INDUSTRY  PRESENTED BY  ANUPAM SWAIN  MANISH JAISWAL  CHIRAG BACHANI  ANUJ MISHRA  AMIT KUMAR
  • M ONOPOLISTIC OR I MPERFECT C OMPETITION Where the conditions of perfect competition do not hold, ‘imperfect competition’ will exist Varying degrees of imperfection give rise to varying market structures Entry and exit from the industry is relatively easy – few barriers to entry and exit Consumer and producer knowledge imperfect
  • M ONOPOLISTIC OR I MPERFECT C OMPETITION Implications for the diagram: Since the additional MC revenue received from each unit sold falls, theCost/Revenue MR curve liescurve facing The demand under the AR firm will be downward the curve. AC sloping and represents the AR earned from sales.£1.00 We assume that the firm produces where MR = MC If(profit maximising output). the firm produces Q1 and Abnormal Profit sells each unit for £1.00 on At this output level, AR>AC average with the cost (on and the firm makes£0.60 average) for each unit being abnormal profit (the grey 60p, the firm will make 40p x shaded area). Q1 in abnormal profit. This is a short run equilibrium position for a firm in and Marginal Cost a monopolistic marketwill be the Average Cost structure. shape. same MR D (AR) However, because the products are differentiated in some Q1 Output / Sales way, the firm will only be able to sell extra output by lowering price.
  • REAL ESTATE INDUSTRY Real Estate Industry in India witnessed a historic boom during 2002 to 2007. Real Estate Developers in India grew multifold very fast. Land and property prices skyrocketed. Many developers went for public issue of shares at very high valuations. Attracted by liberalization of foreign investment regulations, International investors invested billions of dollars in Indian real estate sector. A number of real estate companies went for IPOs between 2006 and 2008
  • Real Estate SpecialCommercial Residential Hospitality Retail Space Economic ZonesOffice Space Space Space (SEZs) • The current contribution of Real Estate to India’s GDP is about 5% • FDI inflows worth more than $2.8 billion between 2000 and 2009 • Market size is $50 billion • Expected to be $180 billion by 2020
  • C OMMERCIAL O FFICE S PACE Growth Drivers Multinational companies (MNCs) and the growth of the services sector. Significant growth in FDI Market Structure Pan India presence International players Outlook• Growth in services —telecom, financial services, IT &ITeS, etc.,
  • Commercial Office Space Absorption 10% 14% 8% Mumbai NCR Hyderbad 11% 23% Banglore Chennai Kolkata Pune 26% 8%
  • C OMPANIES WISE TRENDS IN SALES I NDUSTRIAL Crore 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09Larsen & 5600 9636.53 10392.03 12622.50 18410.05 27456.22TurboBharat Heavy 1881.06 2743.71 2885.23 3803.77 3975.01 5261.15ElectricalsPunj Lloyd 1459.16 1380.72 1328.37 2180.98 4421.17 6734.56ABB 603.56 1044.87 1422.88 2154.03 3295.49 3580.52TOTAL Larsen & Turbo 30.82% Bharat Punj Lloyd 51.69% ABB 5.91% Others 7.56% 4.02%
  • R ESIDENTIAL S PACE Growth Drivers Urban population estimated to reach 590 million by 2030 Number of nuclear families estimated to cross 300 million 16 to 64 age group—almost 64% of the total population Growing demand for affordable housing Easier access to loans Market Structure Unorganized Regional players are expanding to achieve a pan-India presence
  • C OMPANIES WISE TRENDS IN SALES H OUSING Crore 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 (157) (129) (105) (104) (92) (84)DLF 442.52 411.77 983.94 1124.15 5516.39 2705.42EmaarMGF 1026.90 926.22Sobha 211.37 453.06 28.61 1056.52 1242.01 809.51Ansal 149.45 184.32 319.08 718.25 823.02 631.70TOTAL 3841.09 3909.79 5770.01 9428.56 16351.95 13986.87 2008-09 19.34% DLF EmmarMGF 6.62% Sobha 5.79% Ansal 63.73% 4.52% Others
  • R ETAIL S PACE Growth Drivers Growth in organized retailing Entry of international retailers Segmentation Organized retail contribution to the retail industry grew from 2% in 2003 to 5.5% in 2009 International retailers are growing through the franchisee route
  • Absorption of Organized Retail Space Total 6% 4% 9% NCR Mumbai 43% Banglore12% Kolkata Pune Chennai 5% Hyderbad 21%
  • H OSPITALITY S PACE Growth Drivers Increase in tourism, including both business and leisure travel Medical tourism destination International events Market Structure Existing hotel operators are scaling up their operations. Budget hotels and service apartments Increasing presence of International players
  • S PECIAL E CONOMIC Z ONES (SEZ S )  . Industry - Wise classification of formally approved SEZs Electronics 11% Hardware, IT/ITES/ 4% Biotechnology 5% 2% Engineering 5% 4% Others 69% Gems & Jewellery PharmaceuticalsSource: Edeliwiss, E&Y Research, ET 7 September
  • Major Countries investing in Indian Real Estate 2%4% Dubai 10% Indonesia Singapore 25% 59% Malaysia Others Source: Industry sources, E&Y Research
  • MAJOR INTERNATIONAL & DOMESTIC PLAYERS
  • PREFERANCE AREAS IN MUMBAI Outside Mumbai 1% 3% Western Suburbs 3% 3% 5% Thane 29% Central Mumbai12% Navi Mumbai Kalyan / Dombivali 15% South Mumbai 29% Western Suburbs beyond Dahisar
  • COMPARING PRICE BETWEEN MUMBAI AND KOLKATA MAJOR PLAYERS IN REAL ESTATE COMMERCIAL MARKET COMPANY MUMBAI KOLKATA DLF 15000 11000 K RAHEJA Corp 14500 9000 EMAAR 18000 14000 SOBHA 10000 7000 UNITECH 12500 9500 GREENFIELD 16000 11000PRESTIGE GROUP 11000 6500
  • COMPARING PRICE BETWEEN MUMBAI AND KOLKATA RESIDENTIAL MARKET COMPANY MUMBAI KOLKATA DLF 10000 6500 KUMAR DEV. 9500 5000Omaxe Builders 9000 6000 UNITECH 11000 6000 PARSVANATH 9000 6000
  • CONCLUSIONS Though the economic meltdown has tremendously affected this cosmopolitan city It has made some good for the property investors, because the properties which were once sold at sky rocketing tags has come down immensely, making it people-affordable purchase. With the market slowly picking up, and job opportunities steadily moving up, most top real estate players in commercial and residential stream like Hiranandani, Adarsh, Brigade,Prestige, and DLF group have once again commenced their new projects in Mumbai. This time the target has been the middle and lower income group. Thus with the new avenues slowly opening up in the economic front, and with the real estate initiating new projects at affordable cost, it is the ideal time for investors to make the right move on housing decision
  • REFRENCES www.99acres.com www.indiahousing.com www.ey.com http://www.wikipedia.org