SBI sells 130 properties

Country’s largest lender, State Bank of India could sell only about 130 properties in its e-auction of 300 assets to release just about Rs 100 crore.

As per the senior official of SBI, “we sold around 130 properties, largely residential through the e-auction process to release just Rs 100 crore: The more he added that SBI may sell all of the 100 residential properties it had put on the block. According to data, SBI had put on block around 300 properties with the worth Rs 1,200 crore including shops, factory buildings, offices and residential apartments which are spread across 25 cities including four major metro cities through an e-auction last Saturday, as they had put out a public notice on Thursday.

Due to heavy traffic one of the real estate portal which was assigned to carry out the auction, SBI had extended the time for auctions by an hour. This was one of the best innovative ways by any lender that has been fighting a long battle to contain bad loans, to dispose of distressed properties through an e-auction.

According to statement of PK Malhotra, who is Deputy Managing Director of SBI, “Due to heavy traffic on assigned real state portal for e-auction, the site has become slow and we don’t want anyone to miss the chance. Earlier, the bidding time was till 5 pm and we are now going to extend it by an hour” The process was conducted by e-procurement solutions providers C1 India and Auction Tiger.

Delhi-Mumbai Industrial Corridor Development Corporation

Now finally work is going to start on building the smart cities at Delhi-Mumbai Industrial Corridor, and for that central government has moved the conceptualization stage and now after five years they finally sought bids for building core infrastructure on Delhi-Mumbai Corridor.

On last Thursday, DMICDC (Delhi-Mumbai Industrial Corridor Development Corporation) invited the bids for trunk infrastructure and setting the stage for construction of core infrastructure projects in the proposed of green-field city for the Pithampur-DharMhow Investment Region, which is in Madhya Pradesh. According to authentic sources the estimated cost for the initial projects can be worth of Rs 300 crore. Later on Friday evening, the Trust of Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) cleared three smart city projects for a second city in Dholera, which is in Gujarat and it will include the administrative building, water treatment plant and roads and utilities in the first stage. Along with all development and as well as with sewerage treatment plants and common effluent, it is expected that these will be of worth Rs 2,650 crore. After getting the green light from the trust, now DMICDC is planning to seek bids later this month. In next step there will be more bids for similar infrastructure facilities in Shendra, which is in Maharashtra and it will be the third city on which bids are expected to be sought by the end of the financial year.

As per the officials, the work on Integrated Industrial Township in Greater Noida is in progress and for some of the work bids will be invited by the end of March. The fifth project is the Global City near Gurgaon and for that master plan is about to complete. Now DMICDC is too keen for the trunk infrastructure in these three cities as they are ready over in next three years so that work on commercial projects, residential properties and factories can commence. Central government is hoping that the private sector will take over once the core infrastructure is in place. Apart from these five smart cities central government is targeting 100 smart cities, in which most of them will be the upgrading of existing ones, while proposed cities along with the industrial corridor are green-field projects. We all know that in India, only a handful of new cities have been built after the independence.

Greater demand for dwelling units by 2018

Demand for housing in Mumbai is going to outstrip supply in next four years. The commercial capital of the country is going to witness an extra demand of around 231,000 housing units across all segments by 2018-end while the supply is likely to be around 203,000 units.

Of the total demand, majority (46%) is likely to arise in the Middle income group (MIG), followed by 33% in the Lower income group (LIG) and 21% in the Higher income group (HIG), said a Cushman & Wakefield report carried by the newspapers.

The supply seems extremely skewed towards the HIG (63%), and likely to exceed demand significantly. As a result, due to excess supply in one segment, the overall demand-supply gap seems reduced but a large portion of the MIG and LIG demand will remain unaddressed,” said the report.

Paucity of land in the island city has led to residential housing developments in the suburbs and peripheral locations of Mumbai. With increasing demand, land costs have risen sharply and the developers are finding it difficult to launch the LIG and MIG projects at many locations.

Though the developers have launched projects targeting the MIG in far-off and peripheral locations, the overall physical and social infrastructure at these places has not supported these residential developments and the demand has remained subdued, the report says, highlighting how poor infrastructure is a hurdle in expansion of realty sector in the metropolitan region.

Total new demand for urban housing in India is expected to be nearly 13 million units by the end of 2018 on account of the burgeoning population in urban centres. This is addition to the already existing unmet demand. Of the total additional demand, the top eight cities are likely to constitut

Buy, Rent and Sell property

Do you want to buy it because you want to live in it with your family or do you look for an extra income that the house will bring in the form of rent? Or, are you simply buying it for long-term value leverage?

When should you buy a property?

Often we are confused about choosing the right time for buying a property, but the ‘right’ time for purchasing a house is completely depends on you in other words, whenever you yourself are ready for all the responsibilities that come alongside purchasing a house. It is equally important to think through the purposes of purchasing a house. Do you know why you need that house? What is motivating you to buy that house? The more focused your search will be, the better result you will get that meets your requirements.

What makes more sense — Rent or Buy?

There are several key points to consider which making your choice between buying and renting.

Prefer buying it if you find a house of your choice, that is near to your workplace or easily reachable from there. As it is obvious that banks don’t provide 100 % loan amount and you have to shell out at least 10-15% of cost, make sure that the Equated Monthly Installment (EMI) which you have to pay against your investment should not exceed 40 per cent of your monthly income, otherwise it would be difficult for you to repay the loan amount. Moreover, if you are already paying a monthly rent that is almost over 75 per cent of your applicable EMI, consider buying a house.

What to buy?

Once you decided to buy a property, next decision in line is what you should buy – Apartments, residential plot, independent houses, single floors, and multistorey flats. Each type of property has its own advantages and disadvantages based on the location.

Plot Vs. Multistorey?

In India, though there is a huge demand of plots rather than apartments, multistorey apartments are also gaining popularity slowly especially in established urban areas. The reason is affordability of land and the convenience and security offered by apartments. Also, increasing trend of nuclear family is pushing the need of selling large plots for smaller more compact apartments with centrally managed facilities.

What you need Independent plot or apartment in a gated community?

Gated Community is today’s form of residential complex, covered by high walls and fences. It has provision of surveillance based entrances to keep watch on those entering the community, cleaning amenities and surroundings. These gated communities provide the freedom of hassles-free life by taking care of everyday civic problems. An apartment in a gated community is generally a safe bet. An independent house, on the other hand, can be customized as per buyer’s need. An independent house provides plenty open space and clutter-free living.

Whatever you decide, always make sure that you are going to take care of the common facilities such as water, roads, and power supply and back-ups etc. Still there are certain developers who offer villas or townhouses within the gated complex with all the facilities that generally come with apartments. Though these options are little more heavy on your pocket but much safer and hassle free. However, you should be ready to pay maintenance charges for using these facilities.

A big raise of Rs. 750 crore for real estate sector by IDFC Alternatives Ltd, a private equity fund managed by India’s IDFC is raising eyebrows!  As per IDFC, this is their maiden real estate funding focused on residential sector in India. This fund called IDFC Real Estate Yield Fund is an indication of a precautious return of risk capital to the country’s anxious real estate market.

We all know that real estate sector is going through a rough phase, reduced home sales and high interest rates are causing too much pressure on debt-laden developers who are trying to raise funds for recapitalizing existing bank loans and investing in future projects.

Around 60 to 80 crores will be invest by IDFC with gross target of 22 per cent returns. The four year (extendable by one year) close-ended private equity fund will invest in on-going residential projects in prime locations across six major cities in India including Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune. Because of secured nature of underlying investments, this funding will pose a lower risk.

The IDFC Real Estate Yield Fund will capitalize on the opportunities by focusing on debt deals that generate high yields, while ensuring downside protection and adequate security cover.

IDFC claims that this fund has some unique differences – it is a more focused and investor-friendly debt fund that aims an even distribution of income to investors. The goal of the fund is to make a superior-quality portfolio by concentrating on reputable developers and brown field residential projects, which will help generate higher returns for the investors of the fund by engaging a balanced risk-return strategy.

Ghodbunder a realty zone

Ghodbunder road is the most lucrative and well-established zone in Thane. It has maximum office supply absorption and maximum potential for capital appreciation and growth for investors with a 5-7 years investment horizon.

Today, this prime residential and commercial area is offering the likes of Mulund, Ghatkopar and even Andheri stiff competition for attracting office space investments. The stabilized residential and commercial environment in the area has instilled the confidence that is needed to revive Thane’s real estate fortunes. With the real estate picking up pace in Thane, Ghodbunder road are has emerged as destinations for IT and ITES players. Ghodbunder’s superior infrastructure, affordability and cosmopolitan ethos could have helped it score over many other areas which lack these attributes. However, the builders feel that the city is still caught in a slump caused by the slow official machinery. The bureaucratic machinery is still trying to sort out various issues, and proactive decision-making is visibly lacking.

Given the prolonged uncertainty over the last few years, it is hoped that with the installation of a new state government the official machinery would move faster and would usher a stable policy regime. It is evident that the kind of clarity that is needed to fully revive sentiments is still to come. However, it is not practical to expect overnight results -the revision of administrative machinery takes time. It makes no sense to harbour unrealistic expectations and come to any premature conclusions at this point.

On the plus side, the there are some serious officials who are very conversant and involved with the ground realities. Even the MMRDA and TMC are determined to make Ghodbunder road a crown jewel for Thane in terms of new initiatives and developments. This involves building confidence, providing stability – and, obviously, attracting investments. If this determination is followed through upon, it is not unlikely that Ghodbunder will once again offer direct competition to other key IT destinations in early 2015. The Thane Municipal Corporation’s budget is expected to provide more clarity on new initiatives and the status of many infrastructure related developments. Corporates currently invested in the real estate in the area are looking forward to this clarity, which will help them take decisions on their expansion plans and investments into the city over the coming months.

If you are planning to buy home through bank loan, or your savings than make sure you are fully aware about the extra costs, which also known as hidden costs. These extra costs can be bit heavy on your budget and can increase the overall cost of property. If first time you are going to buy home, than you should research on these extra costs, as on the time of final deal you need to pay many other un-advertised and hidden costs.

In India, buying a home is not an easy task, as we all don’t want to bear an extra cost and on the same time we want to make smart deal, no matters its one-time fixed payment or ongoing payment plan even after possession. So, if you know the fact of extra cost, than there might be chances that you are prepare to hit your dream deal. First, you should know the basic selling price of property, which will be computed on the basis of size of the apartments. For Example: – If size of apartment is 1000sq ft and price is Rs 5,000 per sq ft then actual property cost will be 50lac, which means the Basic selling price is 50lac.

Some additional cost charge by developers/builders is below mentioned

Club Membership:

Nowadays every society in metro cities is coming-up with a club inside the residential complex, which provides the extra recreational facilities and few other activities. But what if you are professional and working from 9AM to 7PM, it means you will be not able to take utilize the club facilities and it’s clear that your family don’t need any of these facilities, but there is chances that still you need to pay the club membership fee because it’s not an optional in many of the cases.

External Electrification Charges (EEC):

When real estate developers charge the cost for wires and cables than in most of the cases it linked from the electricity meter of the apartment. These charges can include steel lighting, pumps, equipment, cables, common area lighting and installation of electronic meter.

Preferential Location Cost:

If you wish to buy an apartment on first five floors or on main road or pool facing, than you might have to pay an extra cost, rather than normal cost. Every builder normally charge an extra cost for preferred location

Un-finished Units:

In few apartments builder provides room with plug points, wires and other equipment, but no lighting, space for wardrobe they left but there will be no wooden doors for that, even in some cases builder provides sink but not modular kitchen furniture. So it’s recommended to check the credibility of developer and verify that they are providing these facilities or not and what is furnishing status of an apartment before an investment. 

Car Parking Space:

In society, developer offers the two types of parking, first open and second covered parking. According to the guidelines of Supreme Court in 2012, open to sky areas or covered parking (stilted) spaces cannot be sold by the developer or builder. Some of the buyers are still aware about these norms and facts as; developers are still charging an extra cost for parking space. If first time you are buying the apartment, so be careful about parking policy.

So, if you are going to buy the property than firstly check the cost sheet with the developer or an agent, which includes all other charges according to the choice apartment size.

Now residents of Chembur and Andheri East can look forward because of revised property tax system of the BMC (Brihanmumbai Municipal Corporation). Some other localities in Mumbai such as; Goregaon East, Malad West, Andheri West and Kandivali East are in the other areas, which are getting benefit because of revised property tax system. Availability of large size properties in Mumbai will keep the profits towards lower end. Earlier, BMC was cleared the new property tax system in 2013, all the housing societies in all over the Mumbai, recently received the revised property tax system, which is appears to be paid for the year 2010 to 2013. According to new tax guidelines, now property tax will be calculates on the property’s capital value, rather than the rental value of the property.

The area’s which have low plot value and high rental value will get the benefit because of new tax system. Properties in Chembur and Andheri East hold high rental value and low property value and here the built-up area is less in comparison of other areas of the western localities, so these areas will get the benefit. But it can vary from property to property because tax system consider several other factors such as; the age of construction. According to recent reports and data the capital value of properties in Andheri East region range from Rs 12,000 to 19,000 per sq ft, while the premium areas such as; in western area the value of property range from Rs 20,000 to 40,000 per sq ft, and in Chembur property rates are in the range of Rs 14,000 to 19,000 per sq ft. Whereas the rental value of these localities ranges Rs 35, 000 to 55, 000 per sq ft. Local realtors are not so happy with the new form of property tax as it depends on Area, Age, Price and type of property. These factors play an important role in assessing the cost of land.

Formula for property tax calculation:

Capital value = Built-up area* Base value *Type of building* Age factor* Use category* Floor factor

Chembur and Andheri are one of the well established localities of Mumbai, where one can find the building in different age cycle. Andheri West is a prominent residential location, whereas eastern part has some of the old residential and commercial buildings, which has age more than 30 years. Hence, in these areas there will be mixed impact and property tax will be measurable on case to case basis.

In case of re-developed properties, there will be flip side because of increased base value and change in the built-up area. The other positive feature for these localities is the size of residential and commercial units. According to recent reports, approximately 30 per cent properties in these areas have an average size of 300-500 sq ft, it stands for 1BHk and according to old tax system BMC has decided to levy taxes.

Potential investors considering investing in the Mumbai Metropolitan region are in for a shock as the realty market around the MMR is competing with that of California, in the U.S. Added to the existing rush is the proposed metro rail project which is all set to catapult the market price further.

The illogical rise in prices of land — residential and office spaces — may act as a stumbling block for the growth according to the industry bodies and NRIs. Bankers too opine that such a scenario would prove to be counter-productive to the expected industrial eco-system.

The California-based NRI are put off by the mad realty rush. “This is a never-before-price and there is no logic behind it. When I make a realistic comparison, land around California is cheaper than the eastern Mumbai region. Investing here doesn’t make any business sense” they say.

While an acre near Livemore in California costs about Rs. 5.5 crore, the same stretch is priced at Rs.24 crore on the outskirts of Thane.

The Confederation of Indian Industries (CII) is of the opinion that the development is definitely a setback for the potential investors. “Not a happy situation. Industrialists are expected to invest on machinery and other aspects besides land. The break-even period will be delayed significantly which may discourage potential investors,” he felt. On the other hand, the present situation is seen as once-in-a-lifetime opportunity for the small and big real estate firms to make a quick buck. The government has banned conversion of agricultural land and named hundreds of illegal layouts to prevent price rise but it did not yield any result. Market experts say that it’s realty bubble in the making.

“The local people are becoming millionaires overnight, purchasing swanky cars and blowing up money on luxuries. Now you see the bubble bursting as the economy is slowing down and the people have stopped making much inquiries about investing in the region. Illogical rise in prices of land may act as a stumbling block for growth.

When buying a home in a developed complex, look for garbage disposal systems. If the complex scores high on this count, chances are you are buying into a good property. If not, your investment may well stink!

Flashy façade and state of the art amenities are all okay. However, the true utility of the residential complexes lies in how efficient it is in helping dispose off the garbage. Residential complexes in Mumbai and Thane will now be rated on availability of garbage disposal system integrated into the residential building.

How is garbage collected? How is it disposed? These two questions can reveal a lot about a housing block’s cleanliness record. There are many developers who build modern apartments and showcase garbage disposal systems that are designed for healthier living and a greener planet. However, not all follow through on the promise. Mumbai and Thane have seen several modern developments in plush locations, with chutes for wet garbage and dry garbage to facilitate segregation and easier disposal, where the waste is not segregated despite the provision. Worse, in some societies, while residents segregate, the maintenance staff mixes all the waste.

Provisions by builders don’t alone make for waste conscious living. Even the residents should learn some civic sense. They should learn to segregate the wet garbage from dry one. Segregation ensures that a most of the waste is recycled and doesn’t end up in landfills. Besides, unhealthy chemical reactions due to mixing wastes can be avoided. However, in most residential complexes, nobody takes the effort to educate the maintenance staff about this. What’s also often lacking is the initiative by residents to undertake waste segregation and by the resident welfare bodies to ensure this is done.

If the residents exhibit some civic senses and resolve to segregate waste into dry, organic and sanitary waste, much can be attained. Just issue different coloured bins to each household to do this. Any non-compliance should be dealt with through the imposition of a stiff daily penalty. And this will work, say experts.

What’s more interesting is that the disposal of waste is earning the society a hefty sum, much of which is used as to incentivize the garbage collection team, which now realises that there is a direct benefit for ensuring compliance. The conscious effort to implement and efficiently manage the garbage disposal system has improved cleanliness within the residential complex. The staff responsible for garbage disposal ensures that no scraps fall out or get left behind. The efficiency gets reflected in most other areas of maintenance as well. And that’s a big pointer for any home buyer. And this is a tip for building associations.