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.

Mumbai’s UHNI count to more than double by 2025

The tribe of super-rich individuals has increased in Mumbai over the last decade and according to a Knight Frank report, the strength is further expected to increase.

In the 2016 wealth Report by Knight Frank, Mumbai has witnessed the fastest growth in a list of 25 global cities that were tracked between 2005 and 2015.

The international real estate consulting firm also notes in the report that the number of UHNIs in Mumbai grew 357 percent to 1,100 individuals and in the next ten years their number is slated to rise by 105 percent to 2,255 individuals. New York has the highest number of UHNIs at 5,600 followed by London at 4,900.

Let us look at the factors that have contributed to Mumbai’s count of UNHIs. Firstly, the city has benefitted from its fast-growing GDP, which has risen by 11 percent annually over the last decade resulting in a growth of nearly 15% in capital markets and the real estate market. Interestingly, the bulk of the assets of these UNHIs are invested in capital markets and real estate.

In view of the fact that India still has the highest GDP growth, it won’t be surprising to see the country’s ultra rich grow their wealth in the next 10 years!

Common mistakes of home sellers

Until now, we’ve heard that buying a house is a tiresome process, and do not realize that selling a property is an equally tedious task as well. First time sellers typically make certain mistakes and in the haste of selling off their house, end up cracking a bad deal. We have made an attempt to enlist some of the common mistakes that one can avoid while putting up a house on the block.

Excluding a real estate agent:

Most home sellers avoid signing up for real estate agent because of the commission involved, but this is a penny-wise, pound-foolish decision. Hiring a real estate agent is important because it reduces your hassle and halves your work. Moreover, with a good broker, you won’t have to worry about people constantly visiting the house and being a disturbance.

Besides an agent, Real estate companies are also useful because they have experts who have good knowledge not only of taxes & duties but also of the market prices. Their extensive experience helps you with decision making and getting you the right people who may end up buying your house.

Overlooking defects that seem insignificant:

Generally, Home sellers put their house up for sale neglecting minor defects and issues. A good and experienced real estate agent will advise you to fix all such flaws pronto. To put forward a good deal to the buyer, it is desirable to repair pipes, fix leakages, painting wherever required, etc.

Below are a few tips that will surely help you sell your house faster.

Marketing your house:

When you are selling your house, knowing the market is very important. Selling the property may be an emotional decision for you but the idea is to make it emotional for the buyer as well. Market your house like a dream and sell it for the value and not as a transaction.

When you sell your house online, Redecorate the space in your house, put in some bright lights and market it for the joy and lifestyle that comes with it. Remember to write a few affable lines about this space that impresses the buyer.

Set realistic expectations:

An owner of the house has attached some emotional value to his house and sometimes can be very unrealistic about his monitory expectations. Therefore, it is important to look at real estate listings and consult real estate agents to understand the actual value of the property in the market.

Choosing the right season for the sale:

Real estate market is constantly fluctuating and it is imperative for sellers to understand the trend, because a falling economy will see a drop in prices while a booming economy coupled with a festive season will fetch great prices on sale.

Clean and clear your house before sale:

In some cases sellers begin the hunt for a buyer while still living in the house. Remember, if all parts of the home are not available to view at all times, a buyer feels distant from his potential home. The best idea is to renovate the house and get it ready for sale before putting up advertisements on real estate websites.

Sell the neighbourhood:

Home sellers mostly talk about the house and the rooms, furnishings etc., but forget the neighbourhood that comes with it. Sellers should advertise the supermarkets, schools, hospitals and malls in the vicinity of the property to add utility to the house. With mini-city styled apartments becoming the trend in the country, selling the neighbourhood rather than just the house is imperative for a good sale.

RMZ Group

The country’s office space market is experiencing a major boom with commercial real estate transactions of nearly $3 billion recorded during the last calendar year. In a series of high profile office space deals of large global investors like Blackstone, GIC of Singapore, Brookfield Asset Management, Canadian Pension Plan Investment Board and Middle East sovereign funds have chased down transaction opportunities. The latest is Bangaluru based RMZ group which has acquired Essar’s Equinox biz Park in Bandra-Kurla Complex in Mumbai.

India’s large grade-A office buildings, riding on a robust services economy, have returned stable yields to investors in an otherwise volatile real estate market.

In a latest, Southern real estate major RMZ Corp has acquired Equinox Business Park, owned by billionaire brothers Shashi and Ravi Ruia of Essar, in Mumbai for Rs 2400 crore. RMZ, in which Qatar Investment Authority is an investor, is said to have paid Rs 19,000 per sq ft for the deal.

RMZ has a target of acquiring 80 million sq ft of rent-yielding office space in the next five years across India’s top cities. This puts RMZ and Qatar combine in direct race with cross-town rival Embassy Office Parks to emerge as the country’s top office landlord. Private equity giant Blackstone Group owns 50% stake in Embassy Office Parks.

The biggest acquisition in Indian office space market is for Rs. 2,050 crore by Brookfield for the majority control in six parks in Unitech Corporate Parks, NCR and Kolkata.  It also paid an undisclosed amount to buy Unitech’s 40% holdings.

Embassy Office Parks acquired Vrindavan Tech Village in Bangalore for Rs 1,950 crore, which is also counted among the other big deals in the commercial space market.

Axis Bank purchases land worth 320 cr in Mumbai

Commercial real estate markets in Mumbai are picking up since the last year especially after pharmaceutical major Abbott bought 435,000 sq ft in the Godrej BKC at the Bandra Kurla Complex, from Godrej Properties for Rs 1,479 crore. Moreover, in one of the biggest office property transactions in the city, Axis Bank recently bought 200,000 sq ft of space at The Ruby office complex in Dadar West for Rs 320 crore, according to sources.

Ruby Mills developed the property, a one million sq ft commercial project, in partnership with Rohan Lifescapes and sold it to Axis Bank for 16,000 per sq ft in the last quarter. According to Property experts, it is a profitable deal for Axis as prices in the nearby buildings on Senapati Bapat Marg range anywhere between Rs 17,500 and Rs 18,500 a sq ft. So, the bank is getting an eight to 10 per cent discount.

“The office spaces market of Mumbai has started showing strong fundamentals, evident from the revived occupier demand. With a new state government and positive vibes from the Centre in terms of favourable policies for real estate and major infrastructure projects, 2016 looks promising for the sector,” said Colliers International, a multinational real estate services entity.

Bandra to Worli – celebs’ fav belt

In the glam world of Mumbai, your stature is determined by your address. If you are a business tycoon and inherit huge money, then Malabar Hill is your where your home is. If you are a top notch lawyer, an eminent executive or a high-ranking banker, then you ought to have a house in Peddar Road. And if you are an A-list Bollywood actor, then Bandra is the exclusive destination for your dream home.

The Goa like lanes and feel, abundance of sea-view apartments and more importantly a central location, has made good old Bandra the most preferred residential destination from Rajesh Khanna to the King Khan. Besides, Bandra is close to Film city in Goregaon and most film studios where these stars travel for shootings. Celebs like Ranbhir Kapoor, Aamir Khan, Salman Khan, Katrina Kaif, Jacqueline Fernandez and Nargis Fakhri own properties in bandra.

There are other stars that chose to stay even closer to Film city by purchasing houses in Andheri. In addition to TV actors who prefer to live in Goregaon and Kandivli, biggies like John Abraham, Pariniti Chopra and Anushka Sharma have apartments in Andheri.

As times passed, stars have shifted their choice to the exotic and the costliest area of Mumbai – Worli.  This was evident when Deepika Padukone bought her first home in worli 5 years ago with a home loan. In 2013, cricketer Yuvraj Singh purchased a pad in a luxurious tower in Worli for Rs. 60 crore while Abhishek Bachchan booked an apartment for Rs. 41 crore and Akshay Kumar for Rs. 28 crore in the famous Skylark Towers.

The real estate market, which is going through a dull phase, was cheered by some big ticket purchases by Hindi movie superstars during the last couple of years. So why Worli?

According to experts in the property markets, a number of upcoming luxury spaces in the Worli area give these celebrities the ease of customizing their living to their taste. Apart from the aesthetically designed interiors, the apartments in Worli offer a breathtaking view of the Arabian Sea.

Another factor is the heavy cash inflow. Hindi cinema is the largest contributor to the revenue of the multi-billion film industry of India. A bollywood film crossing the 100-crore mark is not a novelty anymore and with this, the spending power of celebrities has also shot upwards. Riding on advertisement and event-based earnings, actors are making money at par with industrialists, business houses and top notch bankers.

The Bandra-Worli Sea Link is one more major attraction which is pulling film stars closer to Worli. With the sea link that opened in 2009, celebrities can commute to their workplace sans the traffic as well as enjoy the space and serenity that Worli offers.

Real Estate in Mumbai

It is expected that the total estimate of rental income potential for Grade A commercial properties in top eight cities of India will be about Rs. 51,800 crore or USD 7.9 billion by the end f 2019, as per the reports of Cushman & Wakefield, a global real estate consultancy. However; the title of report is “Real Estate Investment Trusts (REITs): An Opportunity for Investors and Developers” and it was released on last Thursday.

It is expected that the upcoming supply of Grade A office properties of 160 million sq ft will add Rs 16,300 crore or USD 2.5 billion in the rental income between year 2016 and 2019. However; according to report of Cushman & Wakefield India, “The total estimated rental income between years 2015 and 2019 with existing inventory of Grade A office space will provide an opportunity to the REITs to generate the estimated rental income of about Rs 35,500 crore or USD 5.4 billion.

As per the report, it will provide a wide range of options to occupiers with the option of taping in the larger pool of human resource. Apart from that the listing of REITs in India will encourage the mid size development firms as they will be able to consider this avenue because REITs will provide them incentive and exits to develop high-grade buildings. On the time of implementation REITs were offering slew advantages and benefits to the different stakeholders of real estate market such as; investors, real estate firms, real estate developers and rest of real estate industry. REITs can invest in commercial properties in different smaller cities which can help in the rapid development because smaller cities put the pressure on the top few cities in India.

According to Sanjay Dutt, the MD of Cushman & Wakefield India, “It is expected that over all REITs system will provide a level-playing field to increase transparency in the real estate sector”. Mumbai has the potential to generate highest rental income for REITs till next three to four years while in 2016, in Bengaluru will get the potential to generate rental income equal to Delhi and NCR through the supply of Grade A office spaces. Probably this is correct time when real estate developers should stretch their balance sheets. It is expected that in near future REITs will help the real estate developers to resolve their fund-raising issues and allow real estate developers with an option to exit projects.

10 Indian cities having affordable realty markets – JLL

In a recent report by JLL India, Navi Mumbai, Ahmedabad, Pune and Hyderabad have been listed in the 10 affordable property markets of India among other cities like Kochi, Ghaziabad, Jaipur, Nagpur, Surat and Coimbatore. According to the consultancy, these cities offer great low-budget properties between Rs. 30 – 50 lakh.

“These ten cities offer ample choices for investment in real estate with reasonable property price levels as well as opportunities for future capital appreciation and healthy returns,” says Anuj Puri, Chairman and Country Head, JLL India.

On Hyderabad, The report stated that after the end of political turbulence and prolonged slump, the real estate market in this city is all set for an upswing. Puri said Hyderabad is conceivably one of the most affordable cities among all tier 1 cities of India. Even the well-developed residential localities like Manikonda, Kukatpally, Miyapur and Sainikpuri present homes in the budget of Rs 30-50 lakh.

While Mumbai is increasingly becoming unreasonable for the common man, Navi Mumbai still presents affordable choices in similar price range. “The proposed SEZs at Dronagiri, Ulwe and Kalamboli, and the impending international airport at Panvel are expected to generate employment and drive demand for commercial as well as residential real estate,” Puri said.

About Pune, the report said that this Tier II city has documented substantial growth in the affordable housing segment over the last couple of years. These projects offer small 1-2 BHK flats with basic amenities and are located in the periphery of Pune.

“Well connected via metro and roads to the job markets of Delhi-NCR, Gaziabad mainly gratifies the mid-segment home buyers. With a very good supply of ready-to-move-in apartments offered by reputed developers in the affordable range of 30 – 50 lakh, the city is emerging as a residential neighbourhood of Delhi,” Jll said in the report.

On Kochi, the report observed that the residential real estate market of the city is dominated by affordable housing segment, which accounts to about 60 per cent of the total housing projects.

Real estate management Start-ups turn to NRIs

If you are a Non-Resident Indian and away from your property, you now don’t need to worry about managing your assets from overseas. Realty start-ups are offering property management services at your fingertips at a nominal fee.

While NRIs invest in domestic real estate market to channelize their funds, it becomes difficult for them to deal with day-to-day transactions with regards to their property. One such startup PropCare, aims to be a point of contact for all property related services like leasing/renting, maintenance and legal documentations at just 2 per cent of annual rental or Rs 25,000.

Prop Care presently offers these services only in Gurgaon but plans to expand its operations to Bengaluru, other parts of Delhi NCR, Mumbai and Pune covering all the main real estate hubs  in the first phase of growth, company’s founder and CEO  Amit K Lalit has announced.

“Our focus is NRI property management. We manage negotiations between tenants and landlord, renting agreements, payment of all utility bills, interiors as well as legal documentation and rent collection/deposit to client’s accounts,” Lalit said.

According to experts, this space has a huge potential and will witness good amount of action in the coming years. such property management companies become a vital coordination platform for Non-Resident Indians as all their asset management needs are taken care of, while they are back home.

Buy Property in Mumbai

If you are looking for the best time to buy property and you are looking for the indicators in real estate market such as; price and sales, so you can say that in many cities property market could be head for a revival. As per the reports of RBI, the average prices of residential units have increased by 13.7 percent in 10 major cities of the country in the period of July to September 2015. If we will see the brokers sales reports, so we can easily say that sales in real estate market have got a boost too.

According to one of the most reputed developer, “We are going for the pre-launch of our project because buyers are lined up outside of the office to book a flat. And at this point of movement we are expecting some good sales and price in near future”. According to statement of Sanjay Dutt, MD of Cushman & Wakefield, India, “It doesn’t mean that in near future real estate market will witness a turnaround, but it is expected that the trend will sustain for the next 6 to 8 months and we can call it revival”. The more he added that there are contradictions in the data as there are many launches in real estate market where buyers and investors are frenzy to buy. In past few months office and commercial demand has picked up, which means city is creating new job opportunities and if it will sustain for next few months so there will be a turning point for the industry.

Why it’s good time to buy property?

According to real estate experts, if you are end user, so it’s good time to buy residential property. As per the statement of A S Sivaramakrishnan, Head of Residential Services at CBRE South Asia, “These days smart buyers are already scouting for a property, as these days realtors are still flexible with the demand of buyers”. In Mumbai there are more than 77,000 apartments are in the inventory, as per reports of JLL India and it is expected that it will take 11 to 12 quarters to clear off that inventory against a healthy expected cycle of 5 to 6 quarters, as per the statement of Ashwinder Raj Singh, CEO of Residential Services at JLL India. The more he added that there are chances that developers will not raise up their prices if the sales pick up because it can make buyers uncomfortable.

Apart from that there are some developers in city which are offering flexible payment option with attractive interest rates, but they are aiming to sell houses at little higher price than the rates prevailing in those regions. Ashutosh Limaye, Head of Research at JLL India, Don’t just go by the quoted rate of the flat because developers might offer little lower priced with some additional charges such as; club fee, and fee for other amenities. Apart from checking the track record¸ titles and approvals, its recommended to check the discounts, offers and schemes for different real estate developers before making any kind of purchase, as per the statement of Mudassir Zaidi, National Director of Residential Agency at Knight Frank.

If you are looking for the under-construction flats, so its recommended to take some time and evaluate the projects and ideally buyers should take 30 to 60 days to visit the site and check if the construction is happening as per schedule or not. If there is any kind of deficit, then better to stay away from that project. However; buyers can find the good deal for old flats, which was constructed 5 to 10 years ago. Apart from that if you are at real estate investor, so better to wait and watch for the trends and developments for next two to three quarters.