Myshopdeal

GST Effect Relief for home buyers, as Real Estate to be taxed less

2017-06-19T09:00:00.000+05:30

A great relief to home buyers, real estate will bear lesser tax load under the new indirect tax regime, Goods and Service Tax (GST), coming into effect from July 1.

Construction of flats, complexes and buildings will have a lower incidence of GST as compared to a plethora of central and state indirect taxes, suffered by them under the existing regime. Thus, buyers will get rid of making higher payments for their already booked properties even after July 1.

Central Board of Excise and Customs (CBEC) as well as the states had received several complaints regarding people, who already have booked flats and made part payments, being asked to make the entire payment before 1 July 2017 or to face higher tax incidence for payment made after that, in view of the work contract service tax rate under the GST at 12 per cent for under construction buildings.

CBEC however, in an official communication said that this was against the GST law and clarified that central excise duty is payable on most construction material at 12.5 per cent, higher in case of cement. In addition to that VAT is also applicable to construction material at 12.5 per cent to 14.5 per cent in most of the states, it added.

Also, construction material presently suffers ‘entry tax’ levied by the states and input tax credit of the above taxes is not currently allowed for payment of service tax. Credit of these taxes is also not available for payment of VAT on construction of flats under composition scheme. Thus, there is cascading of input taxes on constructed flats and buildings.

As a result, incidence of central excise duty, VAT and entry tax on construction material is also currently borne by the builders, which they pass on to the customers as part of the price charged from them. This remains invisible to the customer as it forms a part of the money charged for the flat.

Customer fails to see embedded taxes :

The current headline rate of service tax on construction of flats, residences, offices and other structures is 4.5 per cent. Over and above this, 1 per cent VAT under composition scheme is also charged. The buyer only looks at the headline rate of 5.5 per cent. In other cities or states, where VAT is levied under the composition scheme at 2 per cent or above, the headline rate visible to the customer is above 6.5 per cent. What the customer does not see is the embedded taxes on account of cascading and sticking of input taxes in the cost of the flat. This will change under GST.

Input taxes excluded from building cost :

Under GST, full input credit would be available for offsetting the headline rate of 12 per cent. As a result, the input taxes embedded in the flat will not (and should not) form a part of the cost of the flat. The input credits should take care of the headline rate of 12 per cent and it is for this reason that refund of overflow of input tax credits to the builder has been disallowed.

Builders must pass on benefits to buyers :

The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices and installments. It is, therefore, advised to all builders and construction companies that in the flats under construction, they should not ask customers to pay higher tax rate on installments, to be received after imposition of GST.

Real estate sector will have lower tax rates under GST regime, compared to the taxes levied by the central and state governments at present. If any builder demands higher payments from buyers citing GST, the same can be considered as profiteering under section 171 of GST law.

By :– Sudeep Gupta

Deputy Commissioner, Commercial Tax Department

Dwarka e-way Rail Overbridge Opens To Traffic

2017-06-18T17:23:00.000+05:30

GURUGRAM: After much delay, the railway overbridge at Basai on Dwarka expressway was inaugurated by chief minister Manohar Lal Khattar on Saturday.

The RoB which is located at the junction of Sector 100 and 37-D at Basai village will fill a crucial connectivity gap on the 18-km-long Dwarka Expressway. The construction work on RoB was completed by the end of May and a few days back it was open to traffic for trial.

"We feel proud to announce the completion of Basai RoB, one of the landmark infrastructure projects of Dwarka Expressway. This will connect several new sectors on either side of the road and improve connectivity between Gurgaon and the international airport, after completion of e-way," said PWD minister of Haryana Rao Narbir Singh, adding that RoB will save the travel time for commuters.

Huda administrator Yashpal Yadav said, "Now only 1.4 km stretch of Northern Peripheral Road is to be completed, out of 18 kms. We will try to complete the project by this year."

Griha pravesh tips for your new house, this festive season

2017-03-31T15:00:00.000+05:30

When it comes to a property investment, home owners are generally particular about auspicious days and performing a griha pravesh, before moving in. We examine the significance of this ceremony and the points to consider

Indians are generally particular about shubh muhurats, when it comes to buying a property or shifting to a new house. They believe that performing a griha pravesh ceremony on an auspicious day, will bring them good fortune.

A griha pravesh ceremony is performed, when one enters a new home for the first time. “It is important, not just for the owner but also for the entire family,” says Mumbai-based Jayshree Dhamani, a Vastu Shastra and astrology expert. According to Vastu, a house is made up of five elements – the sun, earth, water, fire and wind and the proper alignment of these elements in a house, brings happiness, good health and prosperity.

“It is believed that entering a home during an auspicious time, makes life easy and there will be minimum struggle for the family, after moving into the new house. Days that are most favourable for such muhurats are Vasant Panchami, Akshaya Tritiya, Gudi Padwa, Dussehra (also known as Vijayadashmi), while days like Uttarayana, Holi, Adhikmas and Shraddha Paksha are to be avoided,” adds Dhamani.

A house warming performed on Dussehra does not even require an auspicious time, as every moment of this day is considered auspicious. Before the griha pravesh, a kalash pooja is usually performed.

For this ritual, a copper pot is filled with water and nine types of grains and a coin are placed in it. A coconut is placed on the pot and one enters the house with it, accompanied by the chanting of mantras by a priest.

Dos and don’ts for performing a griha pravesh

The griha pravesh should be done, only when the new house is ready for the family to shift into it and reside. “The house should be fully done up. It should be freshly painted and the roof should be ready (if it is an independent house). The doors, windows and other fittings too, should be complete,” says Nitien Parmar, a Vastu consultant of Vastu Plus.

“The Vastu Purush and other deities are worshipped.

“The main door, which is the entry point for prosperity and good vibes into the house, has to be decorated with auspicious symbols like a swastika and Laxmi feet, drawn on the threshold. A toran (originating from the Sanskrit word ‘torana’, meaning the sacred gateway), which is made of fresh mango leaves and marigold flowers, should be hung on the doorway. The temple in the house should be in the north-east zone and should be fixed on day of the house warming,” advises Parmar.

The griha pravesh ceremony can be simple or elaborate, depending upon the home owner. Usually, a havan is conducted, to purify the space cleanse it of negative forces. A Ganesh puja, Navagraha Shanti, which means worship of the nine planets and a Vastu puja, are generally performed. One should also serve food to the priests and family and friends, who are invited on this day. Once the house warming ceremony has been performed, the owners can then move into the new house.

Tips for the griha pravesh of your new home

Always do the griha pravesh on an auspicious day. The idols should be placed in an east-facing direction of the house.
Thoroughly clean the house before the puja. Mop the floor with salt, to cleanse and purify the place.
While entering the house, always put your right foot first.
The main door should be decorated, as it is called as Simha Dwara and is the face of the Vastu Purush. Decorate the door with mango leaves and fresh flowers.
Adorn the floor with rangoli made of rice flour or vibrant colours. Rangolis on the floor are believed to invite goddesses Laxmi.
A havan (herbs and wood put in fire), is said to purify the space cleanse the surroundings.

GST Bill passed in Lok Sabha: How will it impact the real estate sector?

2017-03-31T08:00:00.000+05:30

With the GST Bill being passed in the Lok Sabha on March 29, 2017, it seems certain that it will meet its July 1, 2017 deadline for implementation. We analyse how the latest version of the Bill will impact the real estate sector

With 4 crucial bills on GST being passed in the Lok Sabha on March 29, 2017, it’s now a certainty that the GST would be implemented from July 1, 2017. The GST is being touted as the game changer as it would replace several taxes, cesses and surcharges at one go. The realty market is expecting to benefit from the GST rollout, in a major way. Incidentally, the real estate sector will come under the GST ambit within one year of its roll-out

Anshuman Magazine, chairman, India and South East Asia, CBRE explained that “With the passage of India’s biggest tax reform in decades, we will become a unified market, with one tax for all goods and Services. Once implemented, GST will significantly ease the ambiguity around our taxation system, promote ease of doing business, encourage more Foreign Direct Investment and stimulate overall growth of the economy.”

Positive impact on the taxes

Experts believe that in the present tax system, there are a lot of different taxes that one has to pay, like the VAT, octroi or the local body taxes. GST will subsume all these taxes into it. Diipesh Bhagtani, Chairman-Exhibition, CREDAI-MCHI, explains how “Instead of paying various taxes, at various states and cities, we would soon have just one tax, that is going to benefit us. So, in this process, a lot of labour will be saved, along with large sums of money. Also, we look at taxes to be in line with the standard of the absorption of the industry. We as an industry, who have been suffering from excess of taxes, which in sum, amounts to 40%; if all that can be reduced then it’s a big advantage to all of us.”

Ambiguity on how will GST impact real estate industry

According to experts, there still exists some ambiguity about to the overall impact of the GST on real estate, as per the recent announcements based on the legislations introduced for approval in the Lok Sabha March 29, 2017.

While questioning the new setup, Shubikha Bilkha, Business Head at The Real Estate Management Institute (REMI) says, “The overall impact is still to be assessed and a few questions come to mind. As the government promotes a cashless economy that encourages the purchase of properties using institutional/bank finance, how then does the GST on EMIs for under-construction impact the home-buyer? Furthermore, with REITs slated to bring the much-required additional liquidity into the real estate sector, how does the GST on leasing/renting within a REIT impact the overall ROI for investors.”

Will homes cost more for home buyers post GST?

The latest version of the GST bill states that the leasing of a building, in part or whole which includes a residential and commercial building, would be considered as service rendered as per the GST bill. At present, service tax is only levied on the commercial and industrial units which are rented out but the residential unit is exempt from such taxes. “Service tax and VAT will be replaced by the Central GST and State GST whereas, stamp duty will remain unchanged as it is out of the purview of GST. Two aspects that will define the impact of GST on the sector, is the rate and abatement for land value in total agreement value of residential and under- construction homes” points out Amit Wadhwani, director, Sai Estate Consultants.

Experts believe that lowering costs on account of input credit allowance could lower prices, if developers are willing to pass on the benefits to the end-users, resulting in a saving of up to 20% for the home buyer. Overall, with the implementation of the GST, the consumers may need to bear slightly higher taxes but they could still pay lower prices for the property if the developers pass the benefits of input credits, to their customers.

GST’s impact on the realty sector

Under-construction homes to attract GST.
Leasing and renting of land and building would invite GST.
GST to be levied on EMI of under-construction property.
Tenancy and leasing would be considered as rendering the service under the GST bill.
Real estate to come under the GST ambit within one year of roll-out, which means stamp duties will continue to be levied till then.

A quick guide to investing in commercial property

2017-03-25T18:23:00.000+05:30

While an investment in a commercial property may offer greater liquidity, the funds required to make the investment will invariably be far higher than those required in a residential property

A person, who is buying a property, has to analyse numerous factors before making the investment. Moreover, these factors will also vary, depending upon whether the investment is made in a commercial property or a residential one. While first-time investors prefer to opt for residential properties, the commercial segment tends to attract investors who have a greater understanding of the realty market.

In terms of the fundamental differences, commercial spaces offer greater liquidity in the investment, as compared to residential properties. However, the funds required to invest in a commercial property, are relatively higher than those required for a residential space.

A good deal

There are many elements that one needs to consider, while making an investment in a commercial unit during a slowdown, cautions Sulekha Mandahar, head – sales and marketing, AMB Group. “Buyers should evaluate the price movement, infrastructure development (including social infrastructure), the presence of industries and employment opportunities, connectivity with other parts of the city and sustainable practices, to ensure that they get the best possible deal,” suggests Mandahar.

Elaborating on the commercial real estate segment in India, Anshuman Magazine, chairman, India and South East Asia, CBRE, says that the office market in India has witnessed a recovery, on the back of improvements in the domestic and US economies. “The country’s realty sector has remained a preferred destination for the corporate occupiers in the IT-business process management industry and the growing e-commerce segment. For most global corporate office occupiers, setting up a business base in the country and taking up space, will be tied in with their overall corporate strategies, as they continue to offshore and send knowledge/product-based work to India. India will continue to attract multi-national corporate firms owing to its talent pool, scalability and cost effectiveness,” he explains.

Growth prospects

Magazine feels that it will become imperative for development firms, to enter into strategic public-private partnerships with states, for attracting overseas investments into India’s urban centres. “Going forward, businesses will evaluate cities on the basis of sustainable infrastructure and state governments’ policies. The growth and development of transit hubs, will be vital for the long-term growth of commercial realty in the country,” he points out.

From a buyer’s perspective, one should also consider the growth prospects in rental income, while investing in commercial space. Experts point out that higher rental prospects, entail a higher property price. Other factors that make a commercial property attractive for investment, include access to metro rail services, good road connectivity, the presence of business establishments and proximity to residential areas. Experts suggest that big units may be better for long-term investments, emphasising on the adage ‘go big or go home’. Investing in a pre-leased asset may also be a good option, as it can start generating revenue immediately.

Investors also stand to benefit from periodic increase in rentals, as per the terms defined in the lease agreements.

Running a business from home? Here’s what you should know

2017-03-25T15:00:00.000+05:30

While running a business from a home may help a firm to save on costs, those who plan to expand their business in the future, should weigh their options before making this choice

For many start-ups and small businesses, other than the operational cost, the real estate cost proves to be a major impediment in the intended growth. Thus, a number of small businesses are often run from residential areas. Consultants, advocates, doctors, etc., run their work from their homes. While converting a house premise into an office can help one to save on real estate cost, there are other permissions and expenses that one incurs while doing so.

What does ‘commercial’ mean?

Legally, consultants, advocates and doctors can run their business from their house.

In a case filed under the Karnataka Shops and Commercial Establishments Act, 1961, the court had clarified that home offices run by chartered accountants, lawyers and doctors, will not be considered as a commercial activity as the work involves intellectual exercise and not physical labour. Running yoga classes or tuition classes from home, will also not be counted as a commercial activity, because the services rendered by the said professionals will not be categorised under sale and purchase of goods.

However, there is a difference between running an office from your residential premise and running a commercial business from your home. “The said practice of running an office from a residential apartment is widely accepted in different parts of the country. In Mumbai, an area of 220 sq ft in a residential apartment can be used for commercial activities. This set-up has also become popular in Delhi, owing to the increase in practice of ‘intellectual’ professions – for example, doctors, lawyers, tuition centres, etc.,” explains Ekank Mehra, a New Delhi-based lawyer practicing in the Supreme Court.

If you are in any profession, other than the ones mentioned above, you can still run your office, adds Mehra. “However, when there is a movement of goods from the residential premise, or if the premise is being used as a godown, the activity turns into a commercial one. This would require approvals/ licences from local municipal offices and other related authorities, such as the fire department and the local police station,” he elaborates.

How can you convert your home into an office?

You need to first inform your residents’ welfare association (RWA). This is a must if the business involves movement of goods and storage. In case you are put up in a rented accommodation, you will need to seek permission from your landlord in addition to the RWA.

While working from your own office is more cost-effective, the work may happen at a relaxed pace. On the flipside, a house address may not be very convenient for a client meeting. Other disadvantages of having an office in a residential premises, may include the absence of outlets that serve food, sitting area, and other basic infrastructure. “Issues with vehicular movement and parking may also pose hurdles,” points out Manisha Singh, an independent Delhi-based company secretary, who started a small consulting business around three years ago. Singh took written permissions from the RWA, to open her office at home and for an extra designated parking.

Any change of address at a later stage, may also involve documentary and regulatory procedures.

Moreover, in case the activity is deemed commercial, your house will incur a property tax applicable on commercial properties. Even the water and electricity charges will be levied on the basis of a commercial property.

There may also be associated renovation costs that you will incur, to give your house an office environment.

How can I transfer my home loan?

2017-03-25T12:00:00.000+05:30

A borrower who wishes to transfer his/her home loan, should keep a watch on the interest rates that one is paying, as well as periodical offers made by banks, from time to time

A borrower can shift the home loan to any other lender, who is willing to offer better interest rates. At times, a home loan applicant may also want to increase the loan’s tenure, due to various reasons. A customer may also want to transfer the loan, if s/he wants a top-up loan on the existing loan and the present lender is not willing to offer the same.

What is the process for transferring a home loan?

To transfer a home loan, the existing lender needs to be paid first, before it releases the original documents of the property. However, the new lender will not issue a cheque, unless it receives the original property documents. So, how does one resolve this catch-22 situation? A borrower can request his/her existing lender, to issue a letter to the prospective lender. This letter should mention the list of documents related to the property lying with the present lender, the outstanding loan amount, and an undertaking that the bank will hand over the property documents to the prospective lender, on payment of the outstanding amount.

The new lender will also carry out a due diligence check on the property and the customer, to assess the title of the property and the repayment capabilities and track record of the borrower.

The new lender may not be willing to transfer the loan, unless you have a good repayment history and your credit report is also good.

What are the charges involved for transferring a home loan?

For shifting your home loan from one lender to another, you may have to pay charges to both lenders.

The existing bank may levy prepayment charges on the loan. Banks and housing finance companies are not allowed to levy any prepayment charges on floating rate home loans. Even in case of fixed rate home loans, housing finance companies cannot levy this penalty, if the borrower prepays the loan out of one’s own funds, other than by borrowing from any financial institution.

The borrower may also have to pay the processing charges to the new lender. This may vary from 0.2% to 0.75%, from one lender to another and also depends on the applicant’s profile. At times, banks may waive the transfer fee or charge a nominal amount. In February 2014, SBI offered a flat processing fee of Rs 1,000 for balance transfer.

Applicants should remember that the processing fee payable to the bank is negotiable and consequently, they should bargain to minimise the amount or for a waiver of the transfer processing fee.

Although the new lender may not charge you anything for processing of your balance transfer application, you may still have to pay the stamp duty and registration charges for the mortgage. One may also have to pay the valuation charges, in case the bank decides to go for a fresh valuation of the property, either for top-up loans or where the property is not approved by the lender.

(The author is a taxation and home finance expert, with years’ experience)

Dos and don’ts for investing in later phases of a project

2017-03-24T13:27:00.006+05:30

We examine the risks and advantages, associated with investing in phase 2, phase 3 or phase 4 of a project

A well-known developer in Gurgaon, who launched a township project in early 2008, announced the second phase of the project in the same township, in the beginning of 2016. As the project was from a reputed developer, it caught the frenzy of investors and prospective buyers, even though the second phase was delayed, owing to the uncertain economic scenario.

Impact of the 2008 global financial crisis

“There are various projects, which now offer properties in their recent launches, under phase 2, 3 or 4. However, not all of these may be good investment options,” says Atul Dhir, a Delhi-based property consultant.

The global financial crisis of 2008, impacted the pace of launches and sales in the Indian real estate market, which witnessed a downward movement, thereafter. Several projects were either stalled or put on hold. While there was some recovery in 2014, paucity of funds and economic uncertainty remain. In such a scenario, investing in the second phase of an existing project might have its own problems and merits.

Factors that favour investment in new phases of projects

Sale and delivery may not be not an issue

“A developer displays his capability to complete projects in several ways. One such way, is the successful completion of the first phase of large multi-phase projects,” points out Santhosh Kumar, CEO – operations and international director, JLL India. Based on this good track record, the subsequent phases of such projects are likely to witness greater interest from buyers than other newly-launched projects in the region.

Consequently, the sales stream and thus, the revenue stream of the developer, are likely to be in a healthy state, on account of the delivery of the first phase. A healthy revenue stream in the current scenario would also mean faster and timely delivery of projects.

The ability to make an informed decision

“Buyers and investors also have the opportunity to inspect the initial stages and the finished product and to make an informed decision on the project’s specifications, amenities and overall look and feel. Feedback from the market and from existing occupants in the first phase, can provide further guidance for a final decision,” adds Kumar.

Banks lend easily

Obtaining a home loan is also easier in projects, where the first phase has been completed and delivered. “Such projects, most likely, will already be on the cleared/sanctioned list of banks. Thus, buyers in subsequent phases do not have much problem in borrowing,” explains Aksh Vashishta, a senior-level bank executive at a public sector bank in Bhopal.

Full occupancy

Often, new projects are not fully occupied by residents. Therefore, the maintenance costs may be shared between a few residents. However, in projects where older phases have been completed, there are high chances that the finished project will have full occupancy and hence, lower maintenance costs.

Factors that do not favour investment in new phases of projects

The subsequent phases in a project, often come at a premium. In comparison to buyers in the earlier phase, you may have to pay a higher amount for a similar-sized apartment. High cost of the property, may also mean lower chances of appreciation in the initial years of your ownership.

What you should do?

Buyers should study the previous phase of such projects and speak to the buyers from the first phase. Ask them relevant questions about the ease of transaction process and the disclosures made by the developer. Ascertain the hidden charges and the possession details. If the developer has been professional with buyers in the first phase, it is likely that you are entering a good deal. A project with an incomplete initial phase and delays, may have problems at a later stage of the project too.

Important ruling on the property rights of successors versus nominees

2017-01-08T23:48:00.000+05:30

Upon the death of an owner, will the rights in the property be transferred to a nominee or the successor to the property? We examine what the current legal standing on the issue is, after a landmark judgement from the Bombay High Court

A legal question that has been put to test time and again before various courts, is whether the rights of nominees prevail over those of successors, in respect of various subjects of nomination, such as financial instruments, shares in a cooperative society, etc.

A division bench (two-judge bench) of the Bombay High Court, comprising of Justice Oak and Justice Sayed, recently upheld the rights of successors over nominees. The court stated that the nominees are appointed, to ensure that the subject matter of the nomination is protected, until the legal heirs or legal representatives of the deceased take appropriate steps, such as obtaining probate of the will of the deceased or letters of administration of the estate of the deceased, to claim their rights over it.

Conflicting decisions on the rights of nominees and successors

There have been some contradictory observations in the past. In one such case (Harsha Nitin Kokate v The Saraswat Cooperative Bank Limited, also known as the ‘Kokate Case’), a single judge of the Bombay High Court had ruled that the rights of the nominee prevail over that of the successors, in case of shares held in a company. Finding this decision per incuriam, another single judge of the Bombay High Court subsequently upheld the contrary, i.e., in favour of the successors. However, the competency of a single judge to review the findings of another single judge created a controversy, which was questioned in this matter before the two-judge bench of the Bombay High Court.

In another recent judgment in the case of Indrani Wahi v Registrar of Cooperative Societies and Others (‘Indrani Wahi Case’), the Supreme Court considered the provisions of nomination under the West Bengal Cooperative Societies Act, 1983 (‘West Bengal Act’), wherein, the cooperative society is required to transfer the shares and interest of such member in the name of the nominee. The conclusion drawn by the apex court, was that a cooperative society under the West Bengal Act, was bound by the nomination made by the member. Therefore, in case of a nomination, the society has no option but to transfer the shares in the name of the nominee, after the death of the member.

The Bombay High Court’s ruling on nominees’ rights

The two-judge bench of the Bombay High Court took into account the laws governing the nomination of shares under the Companies Act, 1956, (1956 Act), the succession laws governing the estate of a deceased in case of intestate (without making a will) or testate succession (estate bequeathed under a will) as per the Indian Succession Act, 1925 and the byelaws under the Depositories Act, 1996, and concluded that the provisions relating to nomination do not override the law in relation to testamentary or intestate succession. Like the 1956 Act, similar provisions are also laid down in the Companies Act, 2013 (2013 Act) and therefore, this judgment will squarely apply to all the future cases arising under the 2013 Act.

The judgment also draws references to precedents of the supreme court and various high courts, relating to the rights of the nominee vis-à-vis the rights of the successors, in case of shares held in a company, shares held in a cooperative society, investments made in financial instruments such as Employee Provident Fund, Government Savings Certificate and the right of nominees with respect to various accounts held with banks. The Bombay High Court observed that in all these cases, the provisions relating to nominations have been consistently interpreted as only giving a temporary controlling right to the nominees, for interim management of the affairs relating to such instrument.

Even in the Indrani Wahi Case, the court pointed out that the requirement for transfer of shares in favour of the nominee, is stipulated only for societies registered under the West Bengal Act and at no point had the supreme court decided that the rights of the nominees will prevail over that of the successors. In the Indrani Wahi Case, the apex court had observed that it would be open for other members of the family of the deceased, to pursue their case of succession or inheritance. Therefore, those who are claiming their rights under inheritance, will be entitled to claim the title to the shares in the society on the basis of inheritance.

Laws on nomination and succession/inheritance

There are no general laws on nomination, unlike in case of succession where special laws exist, based on religious affinity and bequests under wills of the deceased. Therefore, the rights of the nominee are determined in accordance with the laws governing the subject matter of nomination, whereas, succession rights are determined based on the personal law applicable to the deceased. Nomination, hence, is only a means and not an end.

It is a temporary arrangement, so that the shares of the deceased do not remain ownerless, during the period that succession issues are resolved.

(The writer is an associate at Juris Corp)

How can home buyers protect their interests…

2017-01-08T23:31:00.003+05:30

The long term growth of the real estate market, depends a lot on how the home buyers are empowered to take decisions and given a platform to fight for their rights. Legal recourse is normally the last option for any home buyer, when something goes wrong. Nevertheless, there are several measures that buyers can take, to empower themselves.

Home buyers also need to be proactive in their decision making, by using various new-age analytical tools available in the market.

“Customers, today, are already taking informed decisions and making comparisons over digital and mobile platforms,” says Sumit Jain, national director – residential services, at Colliers International. Marketing that focuses on enhancing customers’ experience, is likely to become a key enabler and make easier for customers to evaluate purchases, adds Jain.

Proactive steps required

Home buyers should make regular visits to the project site, to verify that the construction is progressing as per schedule. “The installments paid by the home buyers, are linked to the progress of the work carried out by the developer. Hence, site visits and follow-ups are a must,” maintains Ameet P Hariani, managing partner, Hariani & Co. Payments should be made, only after verifying the progress on the site. “These are necessary precautions that must be taken, to stay apprised of one’s investment and to avoid nasty surprises, in case of delays, default or fraud. It is also prudent to engage an attorney / lawyer and architect, to review a project before investing in it,” suggests Hariani.

Experts point out that the time frame, within which the possession of the flat needs to be given to the purchaser, is governed by the agreement entered into with the developer. However, if a builder fails to commence the project even after considerable period has elapsed after entering into the agreement, appropriate legal steps can be initiated.

Home buyers more empowered now than in the past

The recently enacted Real Estate Regulation Act, provides for registration of projects and uploading of sanctioned plans on its official website, for easy access to flat purchasers and to boost transparency in such transactions. The Act also provides measures, to ensure that builders do not divert funds from one project to another.

“In the long run, this will benefit the real estate sector at large. As buyers turn proactive and their concerns are addressed, there will be renewed accountability and transparency. This will bring efficiency in the market,” opines Pankaj Kapoor, founder and MD of Liases Foras, a real estate ratings and research agency.

The Indian real estate market is a cyclical one, just like other realty markets across the world. Buyers and investors need to understand these cycles, as well as the specific dynamics driving the real estate markets in their part of the country.

“Thanks to rapid internet penetration and consumer awareness, people now have access to a lot of information, which was out of reach in previous years. This allows them to make more informed investment decisions,” says Santhosh Kumar, CEO – operations and international director, JLL India.
Experts also cite several recent cases, related to delayed possessions that have been decided in favour of the home buyers. The first step towards customers’ empowerment, according to experts, begins with home buyers becoming aware, alert and proactive.

What do home buyers want in 2017?

2017-01-03T08:40:00.001+05:30

With numerous policy changes being announced in 2016, will the property market become more buyer friendly? We look at what home buyers expect in 2017 and whether developers can address these concerns, without any extra burden

A majority of home buyers (as many as 82%), believe that the wide trust deficit between the builders and the buyers, can be bridged to a considerable extent, if the developers genuinely come forward for a dialogue to understand the home buyers’ point of view, according to a survey by real estate think-tank group, Track2Realty.

More than seven out of 10 (72%), maintain that the buyer must have access to communicate with the builder throughout the project’s lifecycle. Nearly as many (68%) feel this will address conflicts, even if there are changes in the layout of the project. More than half of the home buyers feel that if the developer starts collaborating with the buyers, then, the buyers will also understand his point of view, in case of any delay, policy paralysis, or other force majeure.

What home buyers want from developers in 2017
Title assurance and the right to see all approvals in place.
Rates based on carpet area.
Right to a full refund, within 30 days of booking.
Equal penalty for delay in completion.
No change in area bought.
No hidden charges or escalation charges.
Separate escrow account mechanism.
Free first transfer.
Fair agreements with indemnities for delays, poor workmanship, etc.
Open and transparent communication throughout the project period.

Track2Realty conducted this survey in ten cities – Delhi-NCR, Mumbai, Pune, Bengaluru, Kolkata, Chennai, Ahmedabad, Lucknow, Coimbatore and Hyderabad. A total number of 2,000 home buyers were interviewed. The respondents were a mix of seasoned home buyers, with experience in more than one property purchase and first-timers who were on a house hunt. The survey had a mix of open-ended and close-ended questions, to understand the concerns of the home buyers.

Home buyers expect honest dialogue, on issues like hidden charges and penalties

A majority of the respondents (66%) felt that issues like hidden charges, escalation clauses or penalties, could be settled, if the developer was honest and came forward for discussions. “Open and honest dialogue, can take care of a majority of the issues, as home buyers do understand the concerns and legitimate problems of the developers. Similarly, most of our concerns will not cost the developer a fortune. The real issue, is the lack of trust,” says Pramod Gupta, a home buyer in Gurgaon.

Devang Trivedi, managing director of the Progressive Group, however, feels that arm-twisting and bullying by home buyers is also a reality today, if they are involved in a project right from its beginning.

“The idea is to keep your position safe from vested interests, who pose as guardians of home buyers’ causes. The developers, who were upfront with the buyers, are now evasive because they have already burnt their fingers,” says Trivedi.

Nikhil Hawelia, managing director of the Hawelia Group, maintains that the real problem is the fact that the top management is seldom involved in the execution of the project and communicating with home buyers. This creates a vicious cycle of lack of trust. “If developers communicate properly with their home buyers, they will not only give you some end-user perspectives for project enhancement, but will also be your partner in progress, either through repeat buying or by referring friends and family,” says Hawelia.

Buyers demand transparency in finances and agreements

Nearly everyone (94%) was concerned with the fiscal mismanagement of developers and demanded a separate escrow account – something that will be inevitable, once the real estate regulator is in place, in 2017.

The second most-important issue for buyers, is fair builder-buyer agreements. 88% demanded indemnities for delays, poor workmanship, etc., while 86% wanted homes to be sold only on the basis of carpet area. This again is very much on the cards and the real estate act also provides a defect liability clause.

Home buyers also want builders to provide buy-back offers. While 54% expect a complete refund within 45 days of booking, another 46% said that builders should provide buy-backs, at market price or slightly lesser than market value, anytime during the construction lifecycle.

Additionally, a majority of home buyers (as many as 60%), also want a removal of transfer charges, at least for the first transfer. 22% complained that the transfer charges are too high, while only 18% are okay with it, if the property has appreciated to a considerable extent.

Beyond these expectations, a lot also needs to be done at the government level (proper land titling, title insurance, quick judicial remedies, standardisation of norms, etc.), to instill confidence among home buyers.

(The writer is CEO, Track2Realty)

Projects World Trade Center Association Launched In India 2017

2017-01-02T10:00:00.000+05:30

World Trade Center, which is headquartered at New York, US, has a wide network of offices, spanning 90 countries across the globe with the core objective of promoting trade and investment opportunities. Apart from promoting business, the other striking feature of this organisation is it’s trade centres. Every World Trade Center Association’s project is an iconic structure, reflecting international standards of construction.

WTCA, at present, is working towards strengthening its base in Asia-Pacific with a keen eye on India. It’s rising interest in Indian market is visible in the number of projects that the association is planning to launch and has even launched in the country. Did you know that the first ever WTC in India was launched back in 1970 in Mumbai.

Now, the association has tied up with Viridian Group to promote and develop the projects in the country.

PropGuide lists the major WTC projects in India which were launched in the country recently.

WTC Noida

Strategically located in Greater Noida on the Yamuna Expressway, the fourth largest Information Techonology-Business process outsourcing (IT-BPO) destination. The expansive commercial complex has two towers namely WTC Signature Tower and WTC Spire One. State-of-the-art features available like studio apartments, high-clubs, helipad access and a 360-degree sunset views of the Yamuna floodplains are its unique selling points.

WTC Chandigarh

The project, which was launched in 2015, is situated at Aerocity in Mohali, Chandigarh. Grade A-plus offices, contemporary conference rooms, auditoriums, exhibition zones as well as plush retail spaces are its key features.

WTC Bhubaneswar

Presently in an under-construction stage, the plush complex will hold a 40-storey building with luxury hotels, multipurpose convention hall, mini-convertible meeting halls and much more. A skywalk will provide the required connectivity to access the areas within the gated complex.

WTC Pune

The project, which is located at Kharadi, is operational and sprawls over 1.6 million sq ft area. It is an integrated business park which comprises modern amenities encompassing seminar/meeting rooms, restaurants, etc.

WTC Chennai

Launched in 2013, this prestigious under-construction commercial project in Chennai is located at Perungudi. It houses office spaces spanning 2.5 million-sq-ft floor area, in addition to a gamut of lavish amenities required for seamless business operations.

In addition to the above, the WTCA is planning to launch many more WTC projects in popular cities. The Telangana state government has already proposed for a public-private-partnership for the implementation of WTC Hyderabad. Another southern state, Kerala, too, is expected to have its own World Trade Center, WTC Kochi at Infopark Campus.

Home Décor Style That Will Rule 2017

2017-01-01T14:00:00.000+05:30

Homes tend to reflect our times, with a blend of traditional aspects, modern design and new-age technology. Here’s a look at some of the home décor trends that are likely to dominate the new year

Natural home décor materials will be in demand in 2017

Materials such as stone, colourful granite and terracotta, are making a comeback in the interior designing space. These materials are ideal for minimalistic and contemporary forms of design and can be modified to suit one’s needs, shares architect Ricky Doshi, founder of ARD Studio.

“The durability of these materials, has helped them to make a comeback. For example, crushed pieces of stone, can be moulded together to form any desired shape, while maintaining its traditional properties. Such modifications, also helps give designs a more rustic look. We have seen such décor in restaurants and lounges, in 2016, where a combination of natural materials like stone, brick, bamboo and jute have been used, to create an aesthetic look that is also durable. Such designs also revive our culture, which has gradually been taken over by western designs,” adds Doshi.

Cladding materials like laminates, solid acrylic surfaces and veneers, are also popular choices for interior design. Stucco, a fine plaster that is used for coating wall surfaces in architectural decorations, is another material that would likely be used in the upcoming years. With properties, akin to limestone, it can be designed and moulded and used for interior and exterior purposes, states Doshi.

Using glass to create spacious interiors

Glass gives an illusion of a free-flowing space and adds to the eclectic element. The use of glass is expected to increase in interior décor, in 2017. With spaces becoming smaller, glass can also be used for partitions to save space and for aesthetic purposes. It can be used in multiple applications and this versatility gives it an edge over other synthetic materials.

Flooring trends in 2017

“Patterned tiles are likely to emerge as a popular option, vis-à-vis flooring, as they help to create a bold statement. Also, instead of one colour, the trend now, is to combine two colours like beige and brown or black and white,” says Prashant Chauhan, creative director Zero 9 design firm.

The aesthetic appeal of wooden flooring, among home owners, is likely to remain intact for a long time. However, wooden furniture is likely to become more contemporary and sleek.

Industrial chic

Vibrant colours pep up our space and ethnic and earthy colours and patterns are likely to be in vogue in the new year. The new trend, is to use unexpected colour combinations.

“Industrial chic is the new trend in home design, with home owners preferring the use of natural grey concrete finishes or an industrial copper or earthy brick theme, for their homes,” opines Shezaan Bhojani, CEO, Design Café.

“Quirky wall decor and expressionist lighting will be in vogue, as more people do up their homes in ways that expresses their individuality. Home owners can also experiment with smaller areas, like wall decor or lighting, which they can change over time,” adds Bhojani.

Sustainable homes

The positive trend of recycling and upcycling, will continue to gain popularity in home décor. Bamboo, jute and coir, natural fabrics, re-painted furniture and green plants, are increasingly defining the living space. As awareness on eco-friendly practices and sustainability increases, people are opting for energy-efficient lights and ecologically sustainable materials.

Technology will boost the demand for smart homes

Technology has made a big impact on home décor, as well. Consequently, smart homes are likely to become more popular in the future.

“The trend of automated homes, is catching on. Automation systems that enable home owners to monitor and control appliances remotely, are in demand. Builders too, have started offering homes with smart features, such as integrated security systems, electrical appliances, motorised blinds with remote controls, etc. Smart lighting solutions, wireless sound systems and various hi-tech home solutions, are likely to be in demand in the new year,” concludes Chauhan.

Real Estate Faces New Reality As Big Bang Reforms Kick In, Finally

2017-01-01T00:00:00.002+05:30

The next year various states will finalise and set up regulator for the sector and developers are expected to focus more on deliveries than new launches to reduce inventory levels.

BENGALURU | MUMBAI : The year 2016 was an inflection point for the real estate sector and with Real Estate Regulatory Act (RERA) becoming a reality, rising consumer activism and highvalue currency demonetisation that hit cash transaction oriented sector hard is easily a watershed year.

All of these factors have contributed in laying foundation to take realty , which laying foundation to take realty, which has so far remained saddled with unethical practices, towards much-needed transparency and providing comfort and legal cushion to homebuyers.

The next year various states will finalise and set up regulator for the sector and developers are expected to focus more on deliveries than new launches to reduce inventory levels. Home buyers will benefit immensely with affordability set to increase and home loan rates trending downwards.

“Each of these bring with them positives, which will enhance Indian real estate. April 2017 is when we expect to see market movement get back to normal. The property market will witness fast growth across segments and micro-markets in Indian real estate,“ said Niranjan Hiranandani, cofounder & CMD, Hiranandani Group.

If 2016 was a landmark for real estate from a policy perspective, with Benami Property Transaction Prohibition Act, RERA and GST as also the long term impact of demonetisation, it also redefined the way Indian real estate in the future does business from now onwards.

Demonetising created a dent in residential property sector, pulling back the last quarter trend of residential sales substantially across the cities; consequently sales are at a historical low with 2016 worsening what was a bad in 2015.

“The year isn't expected to end on a healthy note. The writing's clearly on the wall -2016 will go down as a wa tershed year in the history of Indian real estate. A major factor for this could be attributed to the policy developments by the government which in the short term have led to an unpredictable disruption, but in the long run, are projected to augur well for the industry as a whole,“ said Shishir Baijal, chairman, Knight Frank India.

According to Knight Frank India, the residential property market witnessed improved sales in the first six months of 2016. Barring Delhi-NCR, other markets did well in the first half of this year compared to previous years. Mumbai and Bangalore led the way .

“Even as the inventory overhang reduces, the three biggest markets in terms of volumes of unsold units (including under-construction) are NCR, Mumbai and Bangalore. By volume, NCR stands 37%, which is more than a third of India's unsold (including under-construction) residential inventory ,“ said Anuj Puri Chairman, JLL India.

Another imminent change that will impact the sector in the days to come is the implementation of RERA that will increase transparency, which in turn will bring back buyer confidence.

“With RERA becoming a reality, we will see not-so-serious and fly-by-night operators moving out of the system.Consolidation will take place now and will provide consumers better choice as developers who are in for long-term play would not like to cheat homebuyers. Consumer activism will get strengthened with RERA batting for affected consumers,“ said Anil Agarwal, a leading lawyer, who has represented homebuyers in such cases in Bombay High Court.

Developers, on the other hand, will have to adjust to the new environment and more specifically , they have to change their business model whilst adhering to stricter compliance norms.However, as of date, only Maharashtra and Delhi have come up with and notified the draft rules for RERA.

“RERA will change the way business is being conducted in the real estate sector. This is expected to empower customers immensely; there may be some misuse also. Approving authorities should give the approvals on time to make RERA a reality,“ said J C Sharma, vice chairman, Sobha.

Real estate - 2016 round up and outlook for 2017

2016-12-31T23:43:00.001+05:30

The year 2016 has come and gone so fast! For the Indian real estate sector, it was a big year of news and policy level changes. As we, all are preparing for 2017; let us take a look at the major milestones and trends that defined the past 12 months and will have a significant bearing on prospects of the market as well.

1. Various policy reforms jiggled the market, but everyone agreed over their long-term positive implications:

The year started with hope and optimism with the union budget announcement that seeks to set in place the foundations for a robust economy in the longer term by prudent fiscal management. While the whole economy was going through the policy reform, real estate sector remained in headlines due to many policy level changes. Real Estate (Regulation and Development) Act 2016 (RERA), Benami Transaction Prohibition (Amendment) Act 2016, amendments in Real Estate Investment Trusts (REITs) regulations, Goods and Services Tax (GST) and Demonetisation, were the ones that were considered to have the potential to change the way real estate sector work. Besides these, a couple of announcements seemed to be made in the passing but is extremely crucial to this sector. These were the intent to digitise land records, change in arbitration norms for construction industry and setting up of a government committee to look into the strategic sale of government assets that include land and manufacturing units. All these changes are perceived to be the game changers for the industry in coming years.

2. Office market done well in 2016 and prospects are bright for 2017:

Interestingly, commercial sector remained un-impacted from all the changes and done well this year with about little less than 40 million sq ft of office absorption. Technology industry driven markets in South has done extremely well this year especially Hyderabad that managed to attract major IT giants. Apple, Google, Amazon committed large investments plans. Bengaluru continued to be its growth trajectory and maintained its number one status among all the key cities. New supply was not able to cope up this sprawling demand and resulted in an increase in office rents in most of the micro markets. In the technology driven markets like Hyderabad, Bangalore, Pune and Chennai Demand-supply gap is likely to remain a concern in coming quarters. While a few grade A office buildings are likely to see completion towards the end of 2017, we expect upward pressure on rents at least in the first half of the year.

3.Institutional Investors looked for Grade A stock fiercely – REITs listings can be a realty soon:

Institutional investors have been active over the last 12 months. There started by the was high demand for Grade A income yielding leased commercial assets. The trend started with large funds like Blackstone that invested heavily in commercial assets over five years. Following suit, some other funds such as Canada Pension Plan Investment Board (CPPIB), Maple Tree, Tishman Speyer and Morgan Stanley were also looking for leased assets investment aggressively in India. Besides these, couple of domestic players is also pursuing the suit. Looking the way institutional investors accumulating commercial grade A stock REITs does not look like a distant dream now.

4. Residential sales dwindled and ready to move in inventory was the flavour of the year – Trend to continue at least in short term:

For the residential sector, 2016 was not one of the best years as prevailing caution affected investors as well as end-users in the real estate market, due to the predominant economic risks. Despite huge demand, transaction volumes remained low in 2016. Pressures of increasing unsold inventory and a liquidity crunch resulted in fewer project launches in most of the cities. There was an increase in the incentives being offered to sell the property, such as innovative payment plans, discounts, and gifts with bookings. However, such incentives have not proved to be much of a booster and ready to move in apartment remain the most preferred one among end-users. Instead of green field level, the overseas investor community also preferred to invest in under construction residential projects looking for funds to complete their projects. This was primarily because of the ease of exit through capital inflows and residential sector being in the less-recession-prone asset class. The focus has now shifted to less capital-intensive projects having small ticket size investment with a 3 to 5-year project cycle.

5. Co-working spaces made their presence felt in the market:

With the technology startup boom that has started in 2015, co-working space and hot desking trends are revolutionizing the office real estate. The co-working spaces were not only pioneered by start-ups, entrepreneurs and free lancers to fulfill their need to work in a suitable cost effective environment, large occupiers are using them for their transitional offices requirement. With over 100 operators already started their operation in Indian market, this is one trend that is likely to catch up further in 2017.

6. Overall Long-term outlook is positive!

Although it’s hard to forecast the real estate market that is highly sentiment driven in India, several factors will drive the future trend. Recent demonetisation that became the front-page news and a most debatable topic of the year is one of the major factors that may drive the short-term trends. While everybody agreed that the measure would help the economy in the long term, the short-term consequences were harsh for the residential real estate sector as the overall transaction volume come to a halt. The commercial market which is so far un-impacted by the demonetisation drive may also see an impact in the form of shortage of supply and increase in rents. Transaction volume in the residential sector will remain constrained, but the current oversupply in the market will be mitigated in the coming quarters, as very limited new projects are being launched. Yet, things are looking up in the coming year, with end users may start looking the market again. Having said that, I am a firm believer of the positive impact of all these reforms and believe that these are just small hurdles and the overall property markets should come on the edge of recovery shortly.

Vatika raises Rs 1,700 crore in a week!

2016-12-31T04:28:00.001+05:30

Firm to use proceeds to buy back 20% stake sold to Goldman in 2014, expand hospitality business.

Despite the added uncertainty in the realty market after Demonetisation, Vatika Group, one of the largest non-listed companies in the segment in the north, has managed to raise close to Rs 1,700 crore in less than 10 days from various investors.

The company plans to buy back (in 2017) the 20 per cent stake it sold to Goldman Sachs in 2014, said Mr. Gaurav Bhalla, Managing Director of Vatika Hotels, the group's hospitality arm.

In the latest round, Vatika Hotels raised Rs 495 crore from Axis Bank to finance its aggressive growth plans. The company has a major expansion on the anvil in 2017, in commercial real estate, hotels, hospitality and a new quick service restaurant (QSR) venture, which it aims to take abroad as well.

Within a week, Vatika Group sealed three major investment deals, while the rest of the market is fighting the effects of demonetisation. On Tuesday, Piramal Fund Management, the realty investment arm of Piramal Enterprises, extended Rs 425 crore as construction finance to Vatika Group's One on One commercial project in Gurgaon. Last Friday, it secured Rs 700 crore of funding from Altico Capital and closed the first tranche of Rs 475 crore.

"For us, business is normal and these investments reinforce the belief of the investor community in our company. This investment would be used in the next 36 months. In 2017, we have major expansion plans," said Bhalla.

The association with Axis Bank would help in implementation and delivery of around three million sq ft of housing, retail and office space, Bhalla said, adding that there was potential to add another million sq ft in the future.

"We have raised these funds essentially for the aggressive growth plans for Vatika Hotels, which includes construction of additional towers at the Westin Gurgaon and more villas at the Westin Resort and Spa," he said.

The company plans to expand its QSR venture. "We are planning to open around 25 outlets of our restaurant chain, Nukkadwala, across Delhi, Noida, Greater Noida, Faridabad and Bengaluru by the end of 2017. Next year, we will add another 35 across the country and open around 20 outlets in New York and London," Bhalla added.

After buying back the stake sold to Goldman Sachs, "If we need more funds, we might again talk to investors," he said.

They also plan to set up a chain of co-working spaces in Hyderabad, Bengaluru, Pune, Chennai, Delhi, Noida and Gurgaon. Presently, they have 15 Vatika Business Centres.

He said their Vatika India Next project, 623 acres in Sectors 82 to 85 in Gurgaon, an integrated township, had already developed social infrastructure such as school, retail spaces and hospitals, with a little over 3,000 families having moved in.

2016-12-25T23:02:00.000+05:30

Impact of Demonetisation on Land Prices

Following the government’s Demonetisation drive, land prices in the fringe areas around metros and tier-2 and tier-3 are likely to plummet in the coming years. This may bode well for home seekers looking for affordable housing

Post-demonetisation, the affordable housing segment, which is confined to the fringe areas of metros, is expected to get a boost as land prices will plummet in the next few years, especially in far-flung areas around Indian metros, and the tier-2 and tier-3 cities. Most agricultural land transactions, involve a cash component, which has been affected after prime minister Narendra Modi’s announcement on the evening of November 8, 2016.

Rs 500 and Rs 1,000 notes ceased to exist as legal tender from November 9. Land dealings involving a cash component, therefore, will no longer be carried out in the old ways. Those dealing in cash, will be unable to pay in the old currency notes and those with undeclared sources of income, would fear paying entirely in white, as it will risk attracting the IT department’s scrutiny.

While the areas within metropolitan limits will be saved from land devaluation, due to their high demand and low supply scenario, their poorer cousins – the fringe areas – will see an impact after a year or so. As land prices ease in these areas, the sizes of apartments will also come down. This should help bring house prices closer to the affordability of many salaried home buyers and spur real estate demand.

Consequently, it will be driven largely by end-users and not speculative investors.

Can NRI's rely solely on the internet for their property purchase in India?

2016-11-13T03:58:00.001+05:30

While the online medium may be a good place for an NRI to begin his property search, one cannot completely rely on such information alone. We examine the other factors that NRI buyers should consider, before finalising a deal

Non-resident Indians (NRIs) may often find it impractical to physically come and see a property, while scouting for one, even if they have a keen interest in the Indian property market. Hence, developers are now increasing their online presence. From digital advertising and other connected platforms, to offering virtual tours of the property, developers are leaving no stone unturned, to attract NRIs.

Several facts suggest that the trend of online property search and buying, has grown significantly among the NRIs.

A majority of the NRI buyers, connect to developers directly through online ads.
Underscoring the importance of online sales to NRIs and HNIs, Tata Housing has said that it has sold a villa worth Rs 5.5 crore, online.
Google’s Great Online Shopping Festival also attracted many NRIs buyers.

These facts seem to indicate that the digital medium is an ideal source for NRIs, to connect with the Indian property market and buy homes online. However, the extent to which the online medium helps NRIs to communicate successfully and result in sales, remains debatable.

NRIs rely heavily on the online medium for home buying

Manju Yagnik, vice-chairperson of the Nahar Group, maintains that online communication is crucial, as the NRI community relies heavily on this space, for their home buying in India. It is not physically possible for them to inspect the property, considering they are based abroad. Consequently, they use the internet as a medium to check the property and connect with the developer. Developers also utilise this medium, to connect with Indians living abroad.

“The internet offers a very cost-effective way, of creating awareness about your projects and reaching out to a wider global audience. It also enables developers to provide a complete insight of their projects, to customers across international markets, through virtual reality and augmented reality tours,” elaborates Yagnik.

xplaining the process, Kaizad Hateria, brand custodian and chief customer delight officer at Rustomjee Group, says that NRIs first search online, to understand the Indian property market and find contacts of various property development companies and channel partners. “Once they register their interest on any website, they start to learn about different locations, developments, companies, etc., through phone calls and meetings with property advisors and consultants in different countries and regions. Even after closing a transaction, they rely on online searches, local property advisors and consultants, to follow up on the investments made,” says Hateria.

Online medium needs to be complemented by offline services

Nikhil Hawelia, managing director of the Hawelia Group, argues that online exposure is effective, only for communicating and connecting with NRIs and cannot influence a property purchase.

“For NRI buyers, online leads will get translated into sales, only if there are friends, family or peer groups, to endorse the project and the developer. Online advertising or online reputation management, is not enough to freeze the deal. Once they finalise the deal, they also need a local agent for hand-holding,” says Hawelia.

With the sudden growth in the penetration of the internet and social media, in particular, developers are doing everything possible, to boost their online presence and manage their reputation in the cyber world. Nevertheless, NRIs still need a local partner, who can advise them on the past performance of the developer, the specifications of the project that is delivered, as compared to what is advertised on the digital platforms, the property options available according to one’s budget and the infrastructure and connectivity in and around the project.

Online media and its role in NRIs’ home buying process

For NRIs, an online search is the starting point, to communicate and connect with others in their home buying process.
Developers are using online ads, virtual property tours and augmented reality and resorting to online reputation management and sponsored games, to connect with NRI buyers.
NRIs tend to cross check online leads with local contacts, friends and family and peer groups.
A local agent is needed, to guide the NRIs and for cross-verification.

(The writer is CEO, Track2Realty)

Greater Noida West Is An Ultimate Location For Investors...

2016-10-05T10:36:00.000+05:30

Greater Noida West Is An Ultimate Location For Investors and a promising real estate hub in Delhi-National Capital Region (NCR). Property prices in Greater Noida West are currently low, and this is expected rise in the coming years. The connectivity that Greater Noida West offers is an important reason why large numbers of residential and commercial projects are coming up in the locality. The central government is seriously considering including Greater Noida in the list of smart cities and make it a part of the ‘100 smart cities’ mission. This will further give boost to construction of new apartments in Greater Noida West.

Greater Noida West an investor friendly locality:

Godrej Golf Course Villas - The best future investment project

Godrej properties leading builder again revealing its sterling residential project "Godrej Villas" 100 acres project in a dream location near Pari Chowk Greater Noida- this living realm serves you right mixture of villas, plots and luxurious apartments and all of them are framed according to the requirement that makes a perfect balance between comfort and luxury to enjoy the next level of living with family.

Great Locality for Middle-Income Group

Greater Noida West is the best place for buying affordable homes. The locality is a great option for middle class income group looking for a home in Delhi. The average price of an apartment in Greater Noida West is Rs 2,800 sq ft. As prices are affordable, there has been a rise in the demand for apartments in Greater Noida West.

Upcoming Infrastructural Projects

Upcoming roads and metro line will connect Greater Noida West to Ghaziabad, Delhi, Faridabad and other nearby cities of NCR. The Noida-Greater Noida link road, Ghaziabad link road and Proposed FNG Corridor are a boost to the overall connectivity. The upcoming 7 kilometre long metro line will branch out from the proposed Sector-62 line at Sector-71. This line will extend till Greater Noida West. Two stations will come up along the Greater Noida West line. This has led to greater demand for apartments and plots in Greater Noida West. The proposed International Airport at Jewar, 21 kilometres from Jaypee Formula 1 track, is another factor that attracts the attention of investors.

Jaypee Formula 1

The Jaypee Formula 1 track, a great landmark in Greater Noida, is another reason why demand for apartments in Greater Noida West is rising. The Jaypee sports city, next to Jaypee Formula 1 track, is a mixed-use project along with an international cricket stadium.

Finest Reality Brands in Greater Noida West

The growing number of corporate offices and the proposed metro project makes Greater Noida West investor friendly. This has led to more apartments in Greater Noida West. Some of the prominent developers in Greater Noida West are Amrapali, Nirala India Group, Shri Group, SKA, Exotica, AFOWO, Aaradhyam Group, Satyam Real Build, Rise Projects and VPA Infratech.

For best deal in Greater Noida property Click Here

HUDA's Infra Focus To Drive Realty In New Gurgaon Sectors, Target Sales

2016-10-05T01:51:00.003+05:30

The Haryana Urban Development Authority (HUDA) is planning to acquire 300 acres in six new sectors of Gurgaon -- sectors 75 to 80 -- to build infrastructure. The piece of news comes as a relief to both home buyers and developers, as lack of roads was causing much discomfort to residents of these upcoming areas, and making it difficult for developers to sell their projects.

The Haryana government seems to be leaving no stone unturned to revive the real estate in Gurgaon. Last month, the state reduced circle rates across segments by 15 per cent, making properties cheaper in a city where real estate had become rather expensive. However, overpriced properties were not the only reason why Gurgaon real estate had been going through a rough phase for a couple of years. While developers kept launching new projects along Gurgaon’s new sectors, expecting high returns on investment, most of them were not able to sell their premium property in Gurgaon in the absence of infrastructure in these upcoming areas.

The HUDA plan

The HUDA will purchase 300 acres of land from Naurangpur, Kherki Daula, Sikohpur and Begampur Khatola villages at an estimated cost of Rs 2,546 crore. These land parcels will be used to develop infrastructure which will not only make lives easier for the present residents the new sectors of Gurgaon but will also make real estate in these areas of Gurgaon more attractive for prospective buyers. The civic infrastructure projects to be undertaken will be widening of roads, and streamlining of sewerage and water lines. These projects had been constrained in these new sectors due to delays in land acquisition.

The likely beneficiaries

At Sector 76, under-construction projects that are likely to see more buyers’ interest include Ninex group’s City, Corona’ Gracieux and Verona Hills. At Sector 77, the value of units at the Palm Hills project, a ready-to-move-in residential establishment by Emaar MGF, will see a rise. The Winter Hills, an under-construction project by Umang Realtech, is expected to see more units being booked.

Gurgaon Sector 78 has premium projects like Monsoon Breeze, Monsoon Breeze Phase-2 (both by Umang Realtech) and Revanta (by Raheja), which would offer home buyers better returns on their investments.

Under-constructions projects at Sector 79, which include Araville, Basera, Defence Floors and Neeladri Floors (by Supertech), Aria and 101 (by Godrej), Ayana Residences (by Raheja) and Mount Ville by Mapsko could be buyers’ choice for making fresh investments in Gurgaon.

At Sector 80, projects like Frontier, Karma Lakelands, Raaga and Mercado would also see price appreciation.

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The financial benefits

2016-09-19T00:19:00.001+05:30

The financial benefits of buying a ready-to-move property vs an under construction one

In the current market scenario, we explain the financial benefits of investing in a ready house as opposed to an under-construction property.

Due to the options of staggered payments and lower rates, many people opt for an under-construction property without realizing its financial risks. Here are some of the benefits of a ready-to-move property as compared to an under-construction house.

Benefits

The adage, ‘One bird in hand is better two in a bush’ very aptly sums up the decision of choosing to invest in a ready-to-move-in house. The news frequently reports the instances of delay and default in construction and possession of the property as per schedule.

Data from all over the country has pegged delays in projects between 12 months, going up to 24 months. A look at the real estate in the redevelopment sector too will show that unprofessional builders, who have taken on projects without adequate financial resources, have also been responsible for project delays. Largely, this is the cause of delay in projects.

However, sometimes the delay may not be caused due to the lack of financial resources but by litigation related with the property though in the case of an under-construction property, the disbursements are generally linked to the stage of completion of the construction. Also, the EMI payments generally start after completion of the construction. However, in case of delay for any reason, your EMIs will start once the entire House loan has been disbursed. In case you are staying in a rented house, your expenses on rentals continue while you have to pay your EMI. In some situations, the home buyer has to cancel the property booking of the under-construction house due to severe financial strain of a monthly rent and the EMI simultaneously.

In the case of a ready-to-move-in property, you either save rental if you move in or earn rental if you let it out and thus, save/earn money to supplement your EMI payments. People who opt for an under-construction house, should be aware that they are going to pay higher rates of interest and bear higher risks of delay and default. In the case of reputed builders, even if there is no risk of default in giving possession, you always carry the risk of delay due to reasons beyond the control of the developer.

The present situation of the real estate sector being what it is, the prospects are risky, with higher a probability of default in the future than what we have witnessed so far. There have also been reported instances where the developers have allotted the same property to more than one buyer.

Also, an under-construction property is not as liquid as a ready flat. So, it is not easy to sell this as soon as you want and at the price you want. This property cannot be sold without the consent of the builder, along with his own commission deducted from the sale. Both cases will result in you getting a lower net price. Finally and most importantly, the ready property ensures that you get instant gratification for the money you pay.

2016-07-30T13:31:00.000+05:30

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