Small houses back in trend

Owing to sky-rocketing property prices, luxury apartments are losing their charm among the middle classes and small houses are gaining popularity again. Due to the massive slump in real estate market since the last couple of years, developers are now reducing the size of houses instead of decreasing the prices.

Top developers like Hiranandani, Kalpataru, Radius, Sai developers and Prajapati developers are coming up with projects having a large number of small apartments, industry observers report.

Pankaj Kapoor, MD at Liases Foras, a property research firm said, “The small size of flats gives dual benefit to the developers;  first , it helps them get tax benefit as developers constructing 30 sqm houses in non-metro locations are eligible for certain exemptions as per tax laws. Besides, the price of these apartments fits in the buyers’ budget.”

“There is a huge demand for smaller affordable houses. In a property exhibition held in Navi Mumbai recently, we received very good response from home buyers. We have to meet the demands of the people to survive and succeed in this kind of market,” said Harnam Singh of the Sawan Group.

Real estate agents are also disconcerted with the fact that people come to see the properties & make site visits, but once they start calculating, deals get aborted.

Further, vice-president of the Maharashtra Chamber of the Housing Industry (MCHI), Navi Mumbai, Manohar Shroff says that the demand for huge luxury apartments has fallen. Builders now have to construct houses in accordance with buyers’ demand. While many young couples prefer buying small houses in the beginning, most bachelors desirous of investing in property also find small houses the best option.

The significance of Akshay Tritiya for realty sector this year

The third day of the first half of the month Vaishakh as per the Hindu calendar is Akshay Tritiya, a day symbolizing prosperity. It is also believed to be one of the most auspicious days during which people invest in property or other valuables.

”In India, home buying has always been favoured by the concept of auspicious occasions. And Akshay Tritiya is one of the most favoured days for investing in a property. People believe that if you invest money on this day, the value of the property ought to appreciate,” says Nayan Bheda, director of a city-based real estate company.

“Property prices have stagnated since the last several quarters and developers are offering decent discounts and freebies to attract home buyers,” added bheda on speaking why this is a good time to invest in a property.

Today’s is a consumer driven market, favourable for home buyers. Besides a slump in the demand, there is also a huge stock of unsold inventory. “The buyer today has a lot of options. Since the demand is very low, real estate agents have a lot of time in hand. They do not rush buyers allowing them the time to make a choice peacefully,” explains Yashwant Dalal, president of the Estate Agents Association of India.

Banks and other financial institutions are also offering home loans at attractive rates to lure customers into purchasing a property. Moreover, women borrowers are offered preferential rate of interest.

The depreciating Value of the Rupee, which has been hovering over 67 – 68 per USD, has influenced a lot of non-resident Indians to invest in the country’s real estate.

Considering the piling unsold inventory, a fall in demand, decrease in the rate of interest on home loans and a fast approaching auspicious day, we hope that Akshay tritiya helps boost sales and brings some optimism to the sector.

Actress Lauren Gottlieb

Actress Lauren Gottlieb is struggling to find a house on rent in Mumbai after being rejected for the fifteenth time over the last two months. The experience has a sense of déjà vu for the young dancer-actress as she had a similar one three years back.

Reminiscing her harrowing days, she says, “Three years ago, I came here as a contestant of dance reality show Jhalak Dikhhla Jaa, and I was pretty much homeless. I stayed at a friend’s house for the first six months and then moving in and out of my friends’ flats in Lokhandwala and other parts of Andheri. I was a top contestant on one of the biggest shows, but I wasn’t even given a home in this country. I checked out many places in Andheri, Juhu and Bandra — 37, to be precise. But I was not given a flat because I am a foreigner, an actor, and young and single.”

The actress who featured in Remo D’Souza’s ABCD and its sequel was able to find a rented flat with the help of the movie’s production unit and her involvement in the community helped her become friends with the landlord and broker. She says, “My landlord and broker have become friends with me because I got involved with the community here. The landlord appreciates that I did up the flat, changed the water heater and wall colours. So, they know that it doesn’t make sense to not let out flats to foreigners,”

However, when the time came for her to move to a much bigger and quieter place, she has found it extremely difficult to find one due to her nationality (Lauren hails from Arizona) and profession. Till date, at least 15 landlords have rejected her under the perceived notion renting her the flat would create a hassle for them. Lauren says, “Here, it gets really noisy due to traffic and road construction. So, I want to move out. I have seen 12-15 houses in various localities of Bandra and Khar, but in vain. Landlords have the perception that I am an actress, so I might throw late night parties and disturb them. But I never host parties at house. The fact that I am a foreigner and a single woman is also a problem. It is shocking since Mumbai is a global metro, not a small town. But it’s the general mentality of landlords that creates trouble. That needs to change,”

Upon enquiring as to what is the reason for single women to find a house, real estate agent Prakash G Rohira says,” There is no gender bias; unmarried men and women face same problems. They are mostly told that since they are single, the landlords are skeptical that they might return home late or throw parties and create nuisance. But the bigger reason is that landlords know that the housing society will not allow bachelors on rent. Eighty per cent of the problem is created by the society and the rest by the landlords themselves

Concurring with his fellow professional, Siddhanth Gupta, a broker from Bandra, explains “If she were married, it would have been easier for her to find an apartment because societies prefer families. Besides, it is more difficult for single foreigners, and the problem is not just restricted to Andheri or Bandra, but almost every corner of the city. More than landlords, the societies object,” he explains.

While the sentiments of the landlords are understandable but for Lauren its becoming an uphill task to find a shelter for herself.

favours for home buyers

The Real Estate Bill which was passed in the Rajya Sabha on Thursday largely seeks to protect the interest of home buyers, at the same time aims to bring more transparency, accountability and efficiency in a sector which has hitherto been fundamentally unregulated and unorganised.

Delays in project delivery by developers, zero accountability on builders and opacity in project details and payment structures has blemished the credibility of the real estate sector for a long time resulting in lack of trust of buyers, which this bill aims to set right.

Moving ‘The Real Estate (Regulation and Development) Bill, 2015′ for consideration and passage, Urban Development Minister M Venkaiah Naidu said, it will not only bring transparency but also help in regulating generation of black money, to which the real estate sector contributes the largest in the country.

Here are things home buyers need to know and how the bill speaks in favour of them –

• Timely completion of projects: the bill ensures the completion and delivery of flats on time as stringent regulations are imposed on developers for any violations of the Appellate Tribunals or monetary penalties or both.
• Carpet area to be defined: The bill defines carpet area as net usable area of an apartment which means now a home buyer will be charged only for the carpet area. This comes as a huge relief to home buyers as developers now-a-days quote on super built up area or sellable area which is nearly 30-40% more than the usable area.
• Punish developers, real estate agents: as per a provision of The Bill, imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both can be awarded. Besides, Misleading advertisements will be punishable offence where first-time offenders will be fined 10% of project cost and repeat offenders could face a jail term.
• All clearances before project launch: the Construction of a project can start only after getting statutory clearances. Prior to the launch of the project, developers will have to get all the clearances necessary to go ahead with the development.
• Part of home buyer’s money to be kept till project completion: A minimum of 70% collections from buyers should be deposited in separate escrow account to cover the cost of construction and land. The bill prohibits unaccounted money from being pumped into the sector; 70% of the money has to be deposited in bank accounts through cheques.
• Registration of projects with Regulatory Authority: The Bill provides for registration of all real estate projects with Regulatory Authorities to be set up, which will require developers to disclose project information as well as details of the promoter, project, lay-out plan, land status, status of approvals, and agreements along with details of real estate agents, contractors, architects and structural engineers.
• Developers to provide after sales services: The Bill has increased the period from 2 to 5 years for developers to be accountable for any structural defects arising within 5 years of project construction. Developers cannot change architectural plans without the consent of two-thirds of home buyers.
• Speedy redressal of complaints: Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days.
• Delays to attract interest: Both builders as well as home buyers will have to pay the same interest rate for any delays on their part.
• Insurance on land title: to benefit consumers in cases where the land titles are found to be defective, The Bill provides for an insurance of the land title.