Posts Tagged ‘Second homes’

Will the 1BHK concept satisfy the urge for a comfortable home?

Monday, December 21st, 2009

The home buyer is normally a person who wants to set up a family or one who looks around for investment options. With the tax exemptions allowed by the government for repayment of loans and interest paid on loans for purchase of house property/construction of houses, investment in property received a shot in the arm.

As for the one who wants to set up a family, his needs depend normally on the number of members in the family, price quoted for the house and available surplus for repayment of loan. Location and distance from work place, possibility of future expansion and the like come next.

In India, promotion of housing initially came from the government. For the middle and upper middle class, affordability is the key. The increase in income of people during the last 10-15 years due to higher industrial growth, proliferation of software firms etc enabled property buyers to go in for larger and luxurious houses. The global meltdown turned the table upside down and investment in house property has been hit badly. This has led to shift in demand from large or fairly large accommodation to lesser floor space. Another reason might have been the wait for locating accommodation in the city center area.

Improvement in transportation facilities, construction of ring road and peripheral ring road, metro rail etc also factored in. The development of townships in and around the peripheries of cities also shifted the demand from one location to the other. There was a time when small apartments went a begging in Yelahanka, Kengeri, Whitefield and Bannerghatta Road. After the economic slowdown, salaries took a downslide and people thought of various methods to beat the recession.

One major approach has been to go in for lower floor area houses. The city is becoming larger and people need to either move out from the central area or go in for smaller accommodation. In this background, the one-bedroom tenement is perhaps the solution.

Reference:

The Hindu

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Posted in Bangalore, News | No Comments »

Will the tax benefits reach the end user?

Monday, August 31st, 2009

Our Union Finance Minister recently announced that profits from housing projects, qualified under section 80IB(10) of the Income Tax Act and approved by a local authority between April 1, 2007 and March 31, 2008 will be tax free, if they are completed before March 31, 2012. The Minister has urged the builders to pass on the benefit to consumers.

As the profits made from residential projects depend on so many parameters which vary from one place to another.An expert committee comprising Valuers and Chartered Accountants should be appointed to arrive at the profit for each project. The cost of the committee report should be recovered from the builder/developer.

It is also to be observed that the profit range in constructing small houses is much less and hence the genuine builder, who is also helping the noble cause of providing affordable houses, should be compensated properly.It is suggested that instead of asking the builder to pass on the entire tax saving to the purchasers, the builder should be awarded 30 per cent of the tax saved and 70 per cent passed on the home purchaser. It is necessary to single out builders who might be pocketing the tax savings and encourage the genuine builders.

The Finance Ministry and all concerned should evolve a proper control mechanism to ensure that the incentive meant for home buyers reaches them and not the pockets of a few builders.Associations such as CREDAI (Confederation of Real Estate Developers Associations of India) and Builders Association of India (BAI) should help in this regard.

Reference:

Tax benefits must reach the buyer

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The Future of Affordable Housing is Indeed Bright

Thursday, August 20th, 2009

Real estate sector always come up with innovative way to secure your investment. Buying a home is dream of common man and affordable housing has made dream come true. “Affordable housing” is a term used to describe dwelling units whose total housing costs are deemed “affordable” to those that have a median income.

Affordable housing denotes the basic human need for a comfortable home that offers value for money and cost is relative to the amount that the buyer can afford. Experts here suggest that homes costing no more than five times the buyer’s annual income can be considered affordable.

According to a Planning Commission Report, the urban housing shortage as in March 2007 was around 24.71 million and it will increase to 26.5 million by 2012. Ninety-nine per cent of this shortfall in housing is with regard to Economically Weaker Sections (EWS) and Low-Income Groups (LIG) which contributes to squatting and slum formation. Apart from the existing shortfall, the increasing urban population, which is expected to reach 576 million in 2030 from the current figure of 328 million, will add to the affordable housing demand.

Some developers have either shifted to affordable home projects or made some change in project to make their existing project fit for affordable home. If you already own a house, investing in a second property may not be a bad idea. You can get tax benefit on your second home. Buy a second house that meets your needs, available finances and lifestyle.  The economic slowdown is proving to be a blessing in disguise for the common man, especially as far as housing is concerned.

Lower interest rate, construction cost and easy home loan makes investing or buying affordable home easy.The future of affordable housing for the next few years to come is indeed bright. Energies of all stakeholders are focused in the right direction to meet a common goal. Public-private partnerships will be a vital tool and the way forward to address affordable housing.

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Posted in Apartment Buying | 1 Comment »

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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