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Stamp duty lowered by government to 6 percent

Friday, May 22nd, 2009

You can see there a rush for registration of new flats in June as government cuts stamp duty to 6% for first-sale flats. Earlier first-sale flats continue to pay 7.5% for stamp duty on registration of new apartment. If you have already registered your apartment, you are lucky as government may give refund of difference amount.

The government which announced the reduction in stamp duty to 6% from this fiscal did not apply the same to the first sale of flats and such transactions continue to pay the earlier 7.5%. Law department has approved the amendment in Act and reduces the stamp duty to 6%. Notification can be expected by the completion of election process in states.

Links to follow:

Stamp duty lowered by government.

Stamp duty cut to 6% for first-sale flats too

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Villas in Demand

Monday, April 27th, 2009

There is a high demand for apartments in CBD areas in Bangalore. In recent month there is rise in demand for villas in peripheral and suburban areas which is surprising. According to Realtors, there has been mild response to a few projects which drew a lukewarm response when it was launched last year. Property developers are upbeat over the sudden spurt in demand. They attribute the response to the considerable improvement made for the operation of the international airport coming up in the vicinity.

Developers of villa projects have already notched up robust sales of over 50–75 per cent in each project. The unit cost varies depending on the size, built-up area, builder, specification, number of units in the project and other features. Cost range from Rs 1 crore to Rs 5 crore.

Developers of villa projects have already notched up robust sales of over 50–75 per cent in each project. These projects are under construction and due for completion three years from now. With the connectivity level to the international airport improving and peripheral ring road project on, leasing prospects for the villas in and around the area appear good, say realtors. This is yet another reason for the sudden surge in demand for villas.

Among others, the developers who have villa projects under various stages of implementation are Sobha Developers, Chaithanya Projects, Prestige group and Nitesh Estates. Sobha Lifestyle coming up near the international airport did not evince interest initially last year when it was launched. But this year, in the last two months alone, there has been a sudden surge in demand for such units. Chaithanya Projects, confined to real estate development within Whitefield, has launched Smaran, yet another villa project close to Saibaba Ashram. The project coming up on 32 acres of land will have 120 villas. Each 4-bedroom villa will have a built-up area of 4,800 sq. ft., and the unit price ranges from Rs3.4-3.5 crore depending on the size of the unit. The response to the project due for completion by August 2010 has been overwhelming. According to company sources, 75 per cent of the units have already been sold.

Yet another villa project has been launched by Prestige group in Doddaballapur in north Bangalore. In all, 182 villas are coming up on 33.5 acres of land area with amenities ranging from gymnasium, club house, swimming pool, provision for convenience store, indoor badminton/squash, tennis court, outdoor Jacuzzi, landscaping to children’s play area. A few developers are holding on to adequate land parcels, waiting for an appropriate moment to launch the villa project. With a number of companies shifting their operations to north Bangalore, realtors are confident of getting an average rental yield of 10-12 per cent per annum. But a section of industry experts feel that such a yield may not be possible in the initial stages given the quantum of investment involved per unit.

Links to follow:

Raheja Prices Villas At Rs 6 Crore

Buying a Luxury Villa in India

Demand for villas

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Home Loans getting lower

Wednesday, April 22nd, 2009

Lowered Home loan rates

The Union government is pushing state-owned banks to offer interest rates on housing loans up to Rs 20 lakh at pre-2004 levels. Now consumer can get home loan at low interest.This means consumers could get home loans at 7 to 8 per cent, 2 or 3 percentage points lower than the current market rate of 9.5 to 10.5 per cent. Public sector bankers indicated that they have received signals to lower pricing of home loans up to Rs 20 lakh.

Finance Secretary Arun Ramanathan is likely to meet some public sector bank chiefs for an action plan. The contours of the package are likely to be ready early next week. Apart from taking a direct hit in the form of an interest subsidy, the government is looking at bridging the cost of this scheme, the difference between the rate at which the loan is offered and the market rate, through refinancing from the Reserve Bank of India (RBI). By this move, home loans up to Rs 5 lakh may attract interest of around 7 per cent and those above Rs 5 lakh and up to Rs 20 lakh around 8 per cent, sources said. With interest subvention, the actual interest realization for banks may be around 10 per cent. So far, state-owned banks have reduced interest rates from as high as 11 to 12 per cent to 9.5 to 10 per cent. Deposit rates may fall further after RBI’s recent rate cuts. The average cost of funds for banks is 6 per cent now.

Links to follow:

Govt banks lower home loan rates

Urban development ministry seeks lower home loan rates

Easy Bank Loan

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A Second Homes Wave in India

Sunday, April 19th, 2009

India is a country where the young are reaching higher, dreaming bigger and demanding more. It is a country that is challenging the limits of aspirations, ambitions and possibilities everyday. It wakes up every morning a little younger and infinitely more ambitious in spirit, determined to seek solutions to its problems, and hustling its way to growth.

The trend of owning second homes emerged post the liberalization of the Indian economy, and gained steam in the mid-1990s as the country went through its first real estate upswing

If there is one sector, that reflects the changing aspirations and growing needs of this new India, it is the residential sector. Owning a home was a result of a lifetime’s savings. But Strong economic growth has led to rising incomes, better availability of attractive home loan options, wide range of supply and growing aspirations. In fact, in the metropolitan cities, it is not uncommon to see young professionals aspiring to own more residences than one. There is thus a ‘Second Homes Wave’ in the country.

Owning of second homes in India is a relatively new phenomenon emerged post to the liberalization of the Indian economy, and gained steam in the mid-1990s as the country went through its first real estate upswing. No single factor can be attributed as the driver of the second home wave. It was a combination of a host of converging factors that led Indian home buyers to explore the option of second home purchases. Some of these factors include:

Macro

· Strong economic growth

· Emergence of an upwardly mobile consumer class

· Rising aspirations

Sectoral

· Real estate as an attractive investment option

· Improved real estate transparency levels

· Wider options to choose from

· Availability of high-quality residential formats

· Competitive home loan rates

· Flexible loan financing – EMI holiday by developers

· Increased NRI buyer interest

All of these factors have led to the initial wave of second homes in India. Consumers started looking beyond their first home. When the real estate sector went into a consolidation mode during the closing years of the 1990s, the interest for second homes slackened a bit. However, a subsequent wave of second homes in the country has come about. This has been driven by the resurgence of the economy in the new millennium and the emergence of end-user demand for homes, on the back of attractive mortgage rates as well as rationalized home prices. This trend has remained consistent ever since and has manifested itself in varied typology and geographies across India. Now it is not a dream but a reality that you can owe a second home.

Links you can refer:

Second homes wave across the country

Meltdown gain: Rich hunts for properties abroad

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Rising Property Prices

Monday, April 13th, 2009

Rising Property Prices

The structural adjustment program of the early 1990s initiated the liberalization of the Indian economy. We find the roots of the high appreciation rates in India’s property market in the reduction of interest rates that the NDA Government instituted after 2001. In early 2004, home loan rates sank to a record low of 7.5% and this paved the way for the alarming spiking that typified the country’s property rates in many Indian cities. This encouraged most of home buyers to owe a own property as the borrowing rates is amenable by buyers.

According to Raminder Grover, CEO, Homebay Residential, Jones Lang LaSalle Meghraj, this resulted in a huge demand for quality real estate all over the country post 2003. After March 2005, Indian real estate rates displayed a seemingly unstoppable upward curve. This is directly related to the opening up of FDI in real estate. The market then proceeded to expand at an unbelievable rate of more than 100 per cent, right until the current slowdown, which is bringing many a location and its overenthusiastic rates to their knees. Many overheated pockets have seen corrections of between 12-25%, and it is still too early to exhale yet. Many smaller investors, small in stakes but large in numbers, are pulling out as fast as they can offload their holdings. Those with broader vision and capital bases are hanging on, hoping to see some glimmer of the erstwhile glory associated to Indian real estate.

The ongoing slowdown in the Indian property market following the crisis, is bringing many a location and its overenthusiastic rates to their knees

Is the joy-ride over? For now, it would certainly seem to be. Nevertheless, in India as of today, the dominant trend is still a huge demand-supply mismatch in the housing sector. This would indicate that property prices will rise again in the foreseeable future. However, the finance ministry will first have to finish stabilizing the market artificially – until then, interest rates and negative cash flows will certainly put downward pressure on property prices, says Grover.

However, the roller coaster ride will never have the same exhilarating twists and turns again. The onus from now on will be on affordable housing in the residential sector, and sustainable buildings in the office sector. The present market vagaries have force-fed transparency into Indian real estate. The sector is gaining maturity. Increasing transparency via the introduction of sector regulators, professionalism and international best practices in real estate can be seen over the next decade. Unethical practices will be phased out, and smaller operators will merge into larger, more sustainable entities. All this will be to the benefit of the consumer.

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Apartment Market in Bangalore

Saturday, April 11th, 2009

Residential Market in Bangalore

When the going gets tough, the tough get going. So goes the adage. The city is on the verge of strong supply and shrinking demand. Developers are experimenting new ideas and concepts in the construction to develop a niche for residential projects. Recent survey conducted by property consultant on city residential market reports that market witness new experiments in terms of project designs, distinctive concepts and facilities among others.

Lucrative offers such as no pre-EMI option till the completion of the project is nothing new. But they have never been aggressively implemented before. Resorting to cutting edge competition among competing developers is concept or technique to lure the end users who are unable to bear the interest burden till the completion of the project. The city recently witnessed the launch of an eco-friendly project which is unique in the country’s residential segment. There are some who are planning to club health care services in their projects.

With a need to lure the end users unable to bear the interest burden till the completion of the project, competing developers are resorting to cutting edge competition among themselves through incorporation of new concepts

The residential market continues to remain stable in both capital and rental values in the sub markets like Palace Orchard and Yelahanka among others due to supply levels exceeding demand. In some areas, prices are under pressure with developers willing to negotiate marginally owing to a slowdown in demand. Affordable homes are now coming up in areas like Whitefield and Yelahanka. While capital values are hovering in the range of Rs 2,350 to Rs 3,000 per sq.ft., rental levels are in the region of Rs 12 to Rs 13 per sq. ft. per month.

Gross yield on residential prime properties in city areas are hovering in the range of 5 to 8 per cent. Residential areas like Koramangala, Indira Nagar and Palace Orchard among others are fetching 7-8 per cent. It is a clear indication of the growing demand for leasing options in the sought after locations. While the supply level is 2 per cent in central locations, it is 4 per cent in Cooke town, 33 per cent in Whitefield and 61 per cent in other locations. The city has augmented a supply level of over 2.4 million sq. ft. in the prime areas of the city.

Three mega low-cost housing projects were launched in the city recently by Shri ram Properties, Golden Gate Properties and the much-publicized subsidiary of Puravankara group’s Provident Housing and Infrastructure

The bear hug has also necessitated leading developers to offer low-cost housing below Rs 30 lakh. Three mega low-cost housing projects were launched in the city recently by Shri ram Properties, Golden Gate Properties and the much publicized subsidiary of Puravankara group’s Provident Housing and Infrastructure. Affordable housing project have been opted by leading developers considering the current market condition.It is also because over 2 lakh pending applications are lying with the state housing board department for development of homes below Rs 30 lakh. The housing finance companies and banks report that there has been a surge in demand for home loans for affordable homes priced between Rs 15 lakh and Rs 30 lakh.

Some Interesting Links to follow:
http://ezinearticles.com/?Why-Apartment-is-Better-Choice-in-Bangalore&id=2060399

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Buying an Apartment in Bangalore

Friday, April 10th, 2009

Apartment buying is not only meeting an immediate requirement but also investing for a better future for your family. You need to plan and select best apartment which suits all your needs. While buying an apartment you need to take care of following things:

1. Area where you want to buy.
2. Builder Information
3. Apartment Specification: Size of apartment, Built-up area, Amenities, Cost, Premiums.
4. Legal Information about the project.

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