Ready Reckoner Rates hiked by 7%

The state revenue minister, Eknath Khadse made an announcement in the state assembly that the Ready Reckoner (RR) rates have been increased to 7% with Effect from April 1, 2016. In rural areas the rates have been hiked by 8%, 7% in influential areas, 7% in municipal council and nagar panchayat limits and 5% in municipal corporations. On an average at the State level, the increase comes to around a moderate 7% for 2016-17.

RR is an annual statement of rates on which the stamps and registration department collects the stamp duty from property buyers. With this revision, the government hopes to mop up about Rs 15,000 crore.

Maharashtra government had amended the Bombay Stamp Act and rules last year to introduce RR revision from April 1 instead of January 1 every year. RR rates were increased by an average 15% in 2015, 22% in 2014, 27% in 2013, 18% in 2012, 17% in 2011 and 14% in 2010.

“The government took a conscious decision not to increase RR rates steeply considering the slump in the economy, especially the sluggish mood in the real estate sector,” Khadse said.

Byaaj Mukt Awaas Yojana

One of the top real estate consultant, Investors Clinic Infratech, is offering their latest scheme i.e. Byaaj Mukt Awaas Yojana, that will bring down the cost for prospective home buyers. By partnering with builders and financial institutions, the clinic offers interest free loans under the scheme for buyers towards purchase of flats.

In comparison to the conventional home loans or similar support based loans, the buyer is only required to pay half the amount by just providing the principal amount in 100 equal instalments. The company in its official statement said,” Now the cost of the flats will be completely interest-free, resulting in nearly 50 per cent lesser payout as compared to traditional home loans or prevalent subvention loan schemes cost,”

Elaborating about the scheme, CEO of Investors Clinic Infratech Pvt Ltd, Mr.Honey Katiyal said, “This is a very unique scheme for India and people all over the world. We have tied up with major names in real estate sector and financial sector to make it happen for the people of India. The best part is that you not only get interest free loan but also it has nothing to do with fluctuating interest rates. “The scheme has huge benefits on the cost saving part as a property of Rs 50 lakh will cost over 1crore after paying almost 100-120 per cent interest amount under the current popular schemes, whereas this scheme will let the buyer pay the amount equal to the cost of the property in 100 easy & EPRs (Equal Principal Repayment)”.

In the views of Mr.Sunny Katiyal, Director, Investors Clinic Infratech Pvt Ltd, the scheme is a landmark day for prospective  home buyers and will go a long way in meeting the Hon’ble PM’s vision of Housing for All 2022. With this intention, the company is planning to sell over 60,000 units in the coming year. Prominent developers from the builders fraternity such as Aditya, H&S, Supertech, Ajnara, Lotus Greens, Jaypee Group and ABA Corp have partnered with Clinic under the scheme with India Bulls being roped in as the financial partner.

Best real estate destinations in India

Today, we look into five cities that are emerging as few of India’s best real estate destination.

1) Hyderabad

The creation of Telangana as the latest state in the country has led to the emergence of Hyderabad as a top real estate market in the country. With its increasing developments in the residential and commercial projects, complimented further by the moderate prices, the city of Hyderabad is soon going to be the prime investment location for real estate.

Hyderabad Commercial Area

2)  Bangalore

Bangalore has become an important player in the real estate arena of the country. With leading technological companies finding a place in the city, Bangalore is witnessing a large number of people from all across the globe relocating to the Garden City in search of better opportunities. The city offers an eclectic mix of affordable and high-end housing as well as rented accommodation which are cheaper in comparison to cities such as Mumbai and Delhi. Also, with its emergence as a start up hub in the country, office space is also available at competitive rates. So if one plans to initiate a business in the country or is keen on investing in real estate, there is no better place than Bangalore.

Bangalore Commercial City

3) Bhiwadi

In the outskirts of Delhi, a not so widely known place named Bhiwadi is fast becoming the favoured destination for real estate investment as prices skyrocket in Delhi.

With a spate of real estate construction projects under progress alongwith the construction of schools, roads and hospitals, the place is looking to accommodate the increasing number of prospective residents. With prices highly affordable in comparison to Delhi, it looks the perfect time to invest in a property in this location bordering the capital.

Bhiwandi Commercial

4) Thane

Thane might not be Mumbai for a large number of the city dwellers but the city is really becoming a promising investment destination. With residential and commercial properties available for a lower rate in comparison to Mumbai, the city is seeing an increase in number of constructions and investment in real estate. Further, the city also has fair share of basic amenities for anyone looking to invest in real estate.

Thane Commercial area

5) Bhopal

Bhopal has come a far way from being defined as the city of the gas tragedy to being one of the most wanted cities in the real estate sector. With residential flats, villas and luxury apartments on offer at much lower prices in comparison to other cities on the list, Bhopal is emerging as an underdog in the race to be the most sough real estate destinations in the country.

Bhopal commercial area

That’s all folks, if you still have some good amount of spare money left, real estate properties in these five cities look good value for money.

Godrej Properties

In September 2015, Godrej Properties, the real estate arm of the Godrej group, sold 4.35 lakh sq ft office space at Bandra-Kurla Complex in Mumbai for an excellent valuation of Rs.1479 crore. In keeping with this buoyant mood, the realty firm is targeting a sales revenue of Rs.1500 crore this year through monetisation of other commercial assets in Mumbai, Kolkata and Chandigarh.

In this regard, Godrej Properties MD and CEO Pirojsha Godrej was quoted saying “We have commercial assets worth about Rs 1,400-1,500 crore in BKC, Kolkata and Chandigarh. We are targeting to sell these properties this year.”

Further he added that, “the company has completed the construction of its commercial properties at Kolkata and Chandigarh, while the BKC project would be completed in next 3-4 months.”

About 3 lakh sq ft of office space still continues vacant in the BKC project and about a million sq ft of commercial space in Kolkata and Chandigarh for Godrej Properties.

The realty firm has recently entered the Noida market by partnering with local developer Lotus Greens to launch a residential project in the coming fiscal. Under the project, the firm is looking towards constructing about 3000-4000 flats in a phased manner.

Despite the downturn in the market, the company has been able to achieve a sales booking of more than Rs.1200 crore for the third consecutive fiscal of the current quarter. During the nine month fiscal, Godrej properties have improved the sales booking for the corresponding year-ago period by 96% to Rs.4,422 crore.

The company recently reported a 10 per cent increase in its consolidated net profit at Rs 51.99 crore for the December quarter as against Rs 47.24 crore a year ago. Operational income during Q3 declined to Rs 422.27 crore as compared to Rs 519.30 crore in the same period of the previous year.

With an eye on further expansion, the company is developing residential, commercial and township projects spread over 115 million sq ft in 12 cities.

Home buyers lose 85% of tax benefit on delayed possession

 Did you know that a tax deduction of Rs 2 lakh annually is permissible against payment of interest on home loans, if the house is acquired within three years of taking the loan? and, if the possession takes place after three years, the exemption reduces to a mere Rs 30,000 a year — a drop of 85% – that’s like rubbing salt to an injury of delayed possession with absolutely no fault of yours!

Considering the ongoing turmoil in the real estate sector, most builders are committing delivery after four years of booking, so home buyers lose out on a big chunk of the potential tax deduction. Partner and national head of KPMG, Vikas Vasal, said the three-year possession condition was introduced to expedite construction of projects, but it did not pay off due to the market slump.

For people with annual taxable income of Rs 5 lakh or more falling in the top income tax bracket of 30%, the benefit resulting from this proviso drops from Rs 60,000 to Rs 9,000 per year. For instance, on a home loan of Rs 50 lakh taken at 9% interest for 20 years, the total loss through the entire repayment period will be Rs 8.81 lakh.

real estate sector

The Data from the real estate sector in the early months of 2016 has revealed that property sales in the six major cities of India have increased by nearly 15 percent. Real estate research and consultancy firm Liases Foras has reported that maximum gain in sales has been recorded from Ahmedabad, Bangalore, Mumbai Metropolitan Region (MMR) and Delhi. The highest number of sales were reported for houses that are between the Rs50-lakh to Rs1-crore bracket (31 per cent) followed by those in the Rs25-lakh to Rs-50 lakh bracket.

According to The survey, the weighted average price of apartments in Ahmedabad increased by 11 per cent, while it has declined by 2 per cent in MMR and Delhi. The managing director at Liases Foras, Pankaj Kapoor observes that although the overall Indian real estate sector is going through turbulence, people cannot stop buying property and the survey tells that most of the buying activity is happening in the affordable segments only.

“Even though property sales have picked up, the average cost of flats has decreased. The cost of a 2BHK unit in 2015 is Rs1.31 crore, as against Rs1.32 crore in MMR, while in Greater Mumbai, in 2015, the same house cost Rs2.82 crore as against Rs3.2 crore in 2014. This shows that property prices have declined resulting in the significant increase in property sales,” Kapoor added.

Indian Real Estate becomes attractive for Foreign Investors

Indian real estate market has become increasingly attractive for foreign investors after almost 5 years, as indicated by India-specific fundraisings.

Talking about the improvement in foreign investors’ confidence in real estate market, Shobit Agarwal, Managing Director of Capital Markets at JLL India, said “During the pre-GFC (global financial crisis) phase, 82% of funds got raised in US dollar. This reduced to 57% in post-GFC phase when micro-market understanding was required more than banking on the macro-economy. Interestingly, the contribution, 2014-onwards, has increased considerably to 70% – hinting that the positivity is here to stay for some time.”

The increase in investment gained impetus before the Lok Sabha elections of 2014 and has only increased further as evidenced by funds amounting to $2.2 billion (Rs. 14,860 crore) that has been raised so far in the current investment cycle.

The recent policy measure of easing foreign direct investment rules is also expected to bring more capital in the real estate sector. Encouraged by this, private equity funds are looking to leverage on this rising interest among foreign investors.

According to Rubi Arya, chief executive of Milestone Capital Advisors, “Offshore funds are showing interest in Indian real estate and there is lot of interest from FDI funds back in Indian real estate. We believe this is an opportune time to invest in Indian real estate, with rigorous risk management and strong asset management. We are planning to leverage further on our structured debt and commercial platform to raise money from offshore funds.”

Adding further she said, “FDI funds are looking to invest in pre-leased commercial assets, create strategic-level partnerships with reputed developers mainly through equity deals and make structured debt investments in residential projects”.

The JLL India report says that India-specific cumulative fundraising attained its peak in the pre-GFC period. During this period between 2005 and 2008, there were 50 such funds that raised $16 billion in total. However, post-GFC, only 29 funds got raised in five years, with cumulative fundraising of $3.9 billion.

The current investment period starting in 2014 has witnessed an increase in the volume of investments as well as the average investment size from $ 134 million to $ 184 million.

How to sell your property in a dull market?

The real estate sector has been seeing a rough phase since past 2-3 years. in such times, selling off a property is indeed a struggle. Nonetheless, having a strategy in place to trade off your property proves beneficial in fetching a good price. Read on for some tips on how to go about with the sale.

Good advertising: Remember to publicize the sale of your property through ads on online realty portals available in plenty, use social media like Facebook effectively; you may also consider placing an advertisement in local newspapers. Most online property websites offer their property listing services free of charge but you can also use their paid services which may range from Rs. 700 – Rs. 1500 depending on the duration, number of properties and services availed.

Refurbish – renovate: First impression is the last impression; a house which appeals the eye always sells faster. You can get the property painted, repair furnishings and fittings to enhance the visual appeal. But do not spend too much on it as this does not guarantee a higher price for the property. Keep a list of positives and USPs of your property ready in order to allure prospective buyers.

Pick a competent broker:   to ensure a smooth process of sale, it is very critical to select a broker who is well-versed with the local area, has knowledge of the markets as well as possesses substantial experience in the job. Beware of unprofessional people who just claim to be brokers. Instead, approach a professional agency which has a track record of successful deals.

Up-to-date paperwork: keeping the property papers up-to-date gives confidence to the buyer that he is transacting with a genuine seller. In order to close the deal quickly, you must keep all the property-related documents like previous sales deed, occupancy certificate, possession certificate, completion certificate, no-dues certificate and approved layout ready.

Allow flexible payment conditions:   Buying a property involves huge money and organizing it may take some time. If you offer flexibility in the terms of making payments as a seller, it might work in your favour. Being rigid and demanding for hefty down payment is not advisable in a buyers’ market. Flexibility in terms & conditions and allowing extended payment plans stand you the chance of fetching better price for your property.

Buy dream home in india

Having a house of one’s own is on everybody’s wish list, but while you are at it, ensure that it is not a hurried decision. Buying a property is a huge investment and involves a great deal of financial planning and strategy. If you are thinking of purchasing that dream home for yourself in 2016, we’ll help you make a smart choice.

Experts in the real estate industry believe that the government initiatives for enhancing infrastructure announced in 2015 will give a boost to the sector and restore investor confidence. The realty segment will certainly record an increase in sales thereby aiding reduction in unsold inventories across regions.

Promotion of 100 Smart Cities, AMRUT (Atal Mission for Rejuvenation and Urban Transformation), Housing for All by 2022 and infrastructure development projects are some of the steps that will benefit Indian economy. Moreover, reforms like easing of FDI policy, the apparent implementation of the Real Estate Bill and and the introduction of REITs(real estate investment trust) is set to bring in the much-needed  transparency into the real estate sector thus improving  investor confidence.

“The year 2016 is likely to begin on a positive note on the back of these reforms and increased investor confidence. Overall, the next few years may witness building of some strategic partnerships with select developers, private equity investors also looking at liquidating assets. Consolidation through joint ventures in development would unlock the potential of major cities,” opines Sanjay Dutt, Managing Director, Cushman & Wakefield.

If you are looking to buy a property in 2016, you need to be very careful with legal documents of the shortlisted projects as there are innumerable enticing deals in the market. We advise you to not get tempted with freebies and discounts rather conduct a detailed scrutiny on the project, the builder type, locality, etc to list a few.

We have attempted to enumerate some of the cities which may give you a good return on investment in the next five years.

 Thane:

This neighbourhood of India’s commercial capital is emerging as an attractive region for investment in the Mumbai Metropolitan Region in 2015 because of abundant options available here. The rapid growth in infrastructure such as the proposed extension of Mumbai metro is making Thane city a sought after residential destination.  Thane west saw considerable movement due to good connectivity and proximity to important commercial and industrial areas in the vicinity.

In terms of affordable areas, the Kalyan and Dombivli region ruled the roost. With the selection of Kalyan and Dombivli as smart cities, significant commercial as well as residential activity in these areas is anticipated.

 Mumbai:

Madh–Marve has been branded as a destination with an expected price appreciation of 94 per cent, emerging as a potential asset class for the next five years. Ulwe, scores second, with a 70 per cent price appreciation by 2020, while Majiwada– Kasarvadavali may experience an appreciation of 59 per cent during the same time period.

Ghaziabad:

With significant real estate activity seen across three prominent markets including NH -24, Raj

Nagar Extension and Krishna Vihar, Gaziabad has emerged as the dark horse of NCR. The Centre’s nod for road widening of NH -24 towards Ghaziabad coupled with the location advantage of the highway and the direct link with Delhi, Noida and other areas of Ghaziabad have driven growth here. The realty prospects in 2016 in this region look promising.

South and East Bangalore:

Abundant new supply and affordable prices, high consumer demand and wide range of options across segments have boosted buyers’ interest in these areas of Karnataka. Good connectivity and reasonable property prices will drive growth in areas like Whitefield, Panathur, Electronic City Phase 1, Begur Road, Kanakpura Road and Bannerghatta Road in 2016.

Bhiwadi:

An emerging industrial and real estate hub bordering Gurgaon, Bhiwadi is well connected with highways such as NH-8 and NH-71B. It falls along the Delhi-Mumbai Industrial Corridor, making it a potential destination for property investment. The proposed Neemrana airport in the vicinity is also expected to boost demand in the real estate sector.

 Hyderabad:

Low ticket prices and buoyant office space activity has boosted the realty prospects in the city in recent times. Post clearing of the political clout and division of the state, Hyderabad has emerged as one of the promising realty markets of India.

Knight Frank ((based on its report on Residential Investment Advisory 2016, has identified select locations in major Indian cities which will give good returns – New Airport Road in Viman Nagar and  Vishrantwadi in Pune, Thanisandra and Panathur in Bangaluru, Golf Course Extension Road and New Gurgaon in Delhi-NCR and Puppalaguda– Narsingi cluster  in Hyderabad. According to JLL India, Noida and Greater Noida (NCR), Thane, Navi Mumbai – MMR, Whitefield in Bangalore, Viman Nagar and Nagar Road in Pune and Kochi Are among top investment options in 2016.

Real Estate Sector

Real estate experts believe that the 2016 will start with the positive note for real estate sector and in coming year it may witness pickup in the sales with improvement in the number of unsold inventories. In simple words we can say that year 2015 was little bit good for realty sector as it has witness some  regulatory changes, which will do the big impact in year 2016 as regulatory changes have relaxed the foreign direct investment laws, after the direct approval of Union Cabinet and it was much awaited Real Estate Bill. On Real Estate Bill there were mixed reactions from real estate experts, but broadly everyone sees it as a positive move as currently real estate sector is in sluggish mood.

As per real estate experts, In September the rate cut of 50 basis points by the RBI under monetary policy review will also increase the demand and supply in the real estate sector as well as government panel is also planning to bring seventh pay commission. As per the reports of Financial Express, “Investment in the real estate sector in 2015 was about $ 8 billion or Rs 53,000 crore and it was even year high even when the sector is not in a good shape. However; BSE Real Estate index also plunged by more than 16 percent on a year to date basis at the December 18. According to reports of Cushman and Wakefield private equity players have invested about $ 2.8 billion or Rs 18,700 crore in the real estate market till end September 2015. Add to that estimation $ 4.5 billion, or Rs 30,500 crore was of NCDs till the end of November 2015 and due to that the overall tally was up by 74 percent in comparison of last year which was about Rs 17,600 crore.

As per the statement of Anuj Puri, Chairman and Country Head of JLL India, “In past two years the real estate market is seeing some improvement and it has been adjusted to new trends in terms of aligning supply for relevant demand. The more he added that now real estate developers are paying more attention to the requirements of buyers and they are developing more property as per need of middle class which is in the price range of Rs 75 lakhs to Rs 90 lakhs in tier-I cities”.  According to Vikas Malpani, co-founder and Head of CommonFloor Groups, “The real estate bill approval is positive sign for real sector, which along with other trends could shape the real estate sector in 2016”. There are many experts, who are giving thumps up to the recently approved Real Estate Regulatory Bill as it can be helpful to clear the unsold inventory. We all know that whenever any new bill or law comes in the existence, the real estate developers tend to adopt a wait and watch approach. And due to that in present, the completions of existing projects are the prime focus of developers for some more months.

On the other side at the positive note the developers are focusing more on completing their existing projects as well as clearing the inventories and according to JLL India listed that following regions as the best bet for real estate sector in 2016; Noida & Greater Noida, Thane – Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Nagar Road – Pune, Whitefield – Bangalore, Navi Mumbai – Mumbai Metropolitan Region ( MMR), Viman Nagar and Kochi.