Buying Property? You Have to Pay More Now......

PersonalFN
If you are among the many home buyers looking for a property to purchase right now, there is a recent RBI directive that you should be aware of, that will impact your cash flows management.
As per one of the latest notifications by the RBI to banks, stamp duty, registration charges and taxes such as VAT and Service Tax are to be excluded from property value when considering how much of a loan to give the consumer.
Let's see what this means:
What is Stamp Duty?

New realty launches could trigger price fall

Jan 2012 sales registrations are down 13% YoY and 25% MoM to 4,427. Post the spike witnessed in December, sales registration have reverted this month to ~4000-4500 levels seen in Jun-Nov 2011.
The city's realty scenario is interestingly poised post the conclusion of the BMC elections and clarity on new DCR rules emerging in the last two months. A number of projects which were stuck up at the approval stage in the last year are likely to be cleared, paving way for a large number of launches hitting the market. At a time when new launches during the festive season received a tepid response as affordability issues continue, a large stock of new supply could act as the trigger for the much anticipated price reduction that buyers have been waiting for in the Mumbai realty market.

Office Traction in January 2012 at a glance

Market Review - Bangalore
Known for its vibrant office space market, Bangalore has consistently topped the absorption charts in the past few years. The IT/ ITeS industry which dominates and drives demand in the market continues to thrive and grow, albeit at a slower pace in the face of a global economic slowdown. The fact that the city is home to over 2000 STPI registered companies and employs over 0.5 million people has evidently proven that Bangalore is a preferred IT destination for setting up of a new unit or expansion of existing operations of IT/ITeS companies. Besides, the government has also taken up several proactive industry friendly policies to promote IT and considers the industry as one of the five top priorities by constituting a national task force on IT and software development.

At a glance: Economy & realty in January 2012

During 2011, high inflation remained the focal point of concern, debate and policy decision making. Year 2012 has begun with high interest rate being the agenda of debate and as it appears today most of the actions this year would center on it. The first signal came as the RBI announced a 50 basis points (bps) reduction in Cash Reserve Ratio (CRR) fuelling expectations of easing interest rate scenario.
For the interest rate sensitive real estate industry high stakes are involved when leveraged balance sheet and high home loan rate coincides with economic slowdown. At regular intervals, the industry has been raising its voice for reduction in interest rate on the premise of providing respite to the house buyers. However, it is noteworthy to debate who would be the real beneficiary if interest rates come down and whether reduction in interest rate is sufficient to boost housing demand.

Indian Real Estate's Expectations From Union Budget 2012-13

Commercial Office Real Estate
� The implementation of the revised DTC will have strong implications on SEZs. The industry requires clarity on the issues that may emerge, and how businesses would be promoted in Special Economic Zones.
� Taking cues from the healthy growth of IT/ITES in Tier I cities and its effect on the growth of employment, the Government should actively roll out an incentive-based IT policy (such as STPI) for Tier 2 and Tier 3 towns as well
Residential Real Estate
� Last year, a 1% interest rate subsidy was provided for loans towards affordable housing. The scope of this subsidy should be amplified and broadened to include a wider price band of budget housing to benefit home buyers, especially in lower income groups
� More funds should be allocated to the Rajiv Awas Yojana (RAY) for urban housing targeted at the EWS and the LIG sections
� Enact provisions for Special Residential Zones (SRZs) to incentivise the growth of housing stock at targeted locations

Malls, Malls Everywhere And Nowhere To Go

The last few months have seen a lot of mid-sized office and mixed-use buildings in Mumbai going under the hammer. Not very surprising, considering the wave of real estate redevelopment that has swept the city. What is so unusual about these buildings is the fact that they are going to be redeveloped into stand-alone retail formats. The plots are just perfect - located inside dense residential areas with abutting sub-arterial roads, and of sizes suitable for constructing hundred thousand square foot spreads on three levels.
This new trend is not confined to Mumbai - almost all cities in India are witnessing it. The reason? Substantial mall space is being built, but only half of it is worth a second glance from retailers. We are still stuck with the mistakes we made three or four years ago - jumping on the bandwagon and creating too many malls without reason. Few understood that building and running malls is a science, and that factors like catchment viability, location, supply benchmarking and mall management matter in their success.

Property investment guideposts for 2012

Investment into residential projects is currently the preferred route for investors, since the demand for homes in the metros and Tier II cities is virtually limitless. Commercial and retail spaces also present potentially lucrative investment propositions, especially in the larger cities.
The returns in the residential sector are significantly lower (4-6%) than those in commercial spaces (10-12%). Residential space investment is comparatively low risk/low return options, while retail is a moderate risk/returns option. However, capital values are higher in commercial and retail spaces, so they represent larger investments. Moreover, it is more difficult to exit in the case of commercial spaces.

Choices available for home buyers!

Home buyers are always looking for the best home they can buy with the resources and time available with them. Now, more than ever, real estate prices are subdued and buyers are again active in the market.
Buying a home is the most exciting and at the same time, tedious task for people. While the excitement of owning your own home pushes you harder to expedite the process, the tedious task of going through enormous amount of details frustrates you. Going through the process is a necessity. Though the process is tedious and demanding, any negligence on the due diligence can cost us big in the future.
In this article, we will take a look at some options that home buyers have and how they can choose the best one based on their requirement.
Buying an under-construction home

Building your own house - Points to Remember.....

Building your own independent home is a dream that many of us want to do. The thrill of owning your own piece of land, building a structure as per your requirements, and helping design the architecture with your architecture friend sounds very attractive.
Of course it goes without saying that a lot of painstaking work needs to be accomplished to make this dream a reality. Building your dream home consists of two major steps. The first is acquiring the land in a good locality and second is getting the contractor and building the house. Both steps require due diligence on exhaustive details and careful planning.

Are you looking to buy a home?

The year 2011 witnessed a high interest rate scenario, shrinking profit margins and soaring input costs for property developers in India. The economic slowdown added problems for property dealers, as the number of customers dwindled in 2011. Most of the developers had to put their expansion plans on hold, and their existing projects also faced a setback due to slow sales, resulting in a piling inventory.
In 2012 the realty market is expected to consolidate, and most of the developers are likely to focus on generating liquidity for better cash flow by selling their existing projects at a lower rate to tackle the stagnation in sales. The first priority for every developer would be to complete their existing projects to cut the capital involved for projects in progress. This situation would wash out players who just exist in a market to create competition against the genuine developers.

2012 Outlook- Indian real estate sector: Fitch Ratings

Fitch Ratings has come out with its report on Indian real estate sector.
Negative Outlook: Fitch Ratings' outlook for 2012 for the Indian real estate sector is negative due to weak overall demand and higher construction costs, which are likely to continue to squeeze margins.
Sluggish Demand to Continue: High Equated Monthly Instalments (EMIs), resulting from significantly higher interest rates, lower household surplus due to high inflation and high residential unit prices have reduced the affordability of homes. Purchases slowed significantly during H1 FY12 and are likely to continue at these new levels during the first half of 2012.

What you pay for when you pay for home

Buying a home is unlike buying any other item. First, this is possibly the most expensive purchase for us and secondly, the pricing structure includes many components thus making it complex to understand. Most of the time, home buyers take a loan to purchase a home and pay EMI for the next 10-20 years. Essentially buying a home can cost a major part of the savings for middle class.
Hence it is important to know what we are paying for. If home buyers are going to spend 30-60 lakhs within a few weeks on home search, selection, and purchase, they should know the pricing structure of their dream home. This will help them understand the cost structure better as well as set the right expectation on future investments. There are three types of cost that home buyers pay. Let��s look at them in detail.

Buying property ? Keep your eyes open for hidden costs & Charges.......

When I was seeking to purchase my first property, I was excited. It was directly from a developer and the building was under construction. We discussed the rate per square foot: it seemed reasonable. My wife decided to pull out her measuring tape to see if the area matched, and the marketing executive watched us patiently as we went from room to room. When we finished the exercise, there was a shortage. "Ah," said the executive, nonchalantly. "What you were measuring is the carpet area, but what you are paying for is the built up area." That included the walls inside the flat. I realized later that I was fortunate as compared to my friends in Mumbai who paid a rate for the super built up area: that included the common areas such as stairways and lift.

Group buying: A better way to buy your dream home?

Utopia Builders is a real estate company. The company has just built a housing complex comprising of 55 flats. Since the real estate market is down, Utopia could not sell all the flats and is left with 25 flats still up for sale! Utopia is ready to give heavy discounts if someone can buy in bulk, say 5 flats. Quite a few builders are in a similar situation as Utopia. In spite of the heavy discount for a bulk purchase offer, there were no takers as why would anyone want to purchase 5 flats in one go?
Ramesh, Shan, and Sayeed are software engineers at Pune, Mumbai, and Bangalore respectively. They know that the market is down and want to make the most of this situation to buy a home. However, they are not able to find a good property deal with attractive discounts in such a subdued market.
How can Utopia Builders and potential home buyers like Ramesh, Sayeed, and Shan get in touch with each other? It seems obvious that if these potential buyers and Utopia Builders got together, a mutually beneficial arrangement can be worked out!

Planning to invest in real estate Market in india ?

The promise of real estate in India
Property Investments in India have normally been a gold mine for most investors. The growth and development of cities across the country have added fuel to the rise in prices across the country. According to a survey conducted by ASSOCHAM, 65% of working individuals prefer real estate as a mode of long term investment.
Property prices in India have increased by 16.5% in the last year according to a study by Makaan.com. The question now for investors is how best to benefit from investments in realty; whether to look at investments directly in property or route the investments to real estate companies that are listed on the stock markets.

5 things to take care in your home agreement

YOU just got news that your home loan has been approved and you are on your way to see an existing model of your future home. Your heart is pounding with excitement, but wait, the tedium of paperwork is not over yet. You need to ensure that your agreement with your builder has no unforeseen loop holes that can plunge you in a legal mess!
Here are five essential steps you need to take to avoid such situations.
Aspect 1: Cost of your dream home
There are various costs attached to the owning your home besides its cost. The cost covers basic utilities like electricity, water, parking space, various taxes and in certain instances the registration charges as well. These may come as part of the deal or may be charged under separate heads. Make sure all these costs are factored into the final price you pay.

Buy your home, NOW!

EVERYONE harbours the dream of buying a home, but there are many hurdles along the way - availability of funds, home loan interest rate, recession, job stability, location, right property. However, now, a few of these hurdles have been eased, especially home loan interest rates.
Interest rates
It's a war out there. Banks are cutting home loan interest rates aggressively. First State Bank of India (SBI) extended it's special 8% home loan scheme to March 2010. Then, HDFC introduced a special home loan scheme at 8.25 per cent fixed up to March 2012.
Now, Kotak Mahindra Bank has announced its new home loan scheme at 8.49 per cent fixed rate on home loans for 30 months from the date of the payout of the loan.
ICICI Bank also came out with a home-loan scheme under which 8.25 per cent interest rate will be fixed for the first two years. The floating rates will apply after 2 years. These rates will be applicable to loans sanctioned between December 2009 and January 2010. Borrowers will have to make sure that the first disbursement takes place before the end of March 2010.
Basically, all banks are competing with each other to lower the interest rate in order to lure more customers into taking a home loan.

Happy home hunting

Buying a house is the most important decision a common man makes in his life and with the coming of low-cost housing he can reach his goal with much more ease. But as it's the most valuable buy of your life you need to be very careful with every step.
Affordable housing has become the new mantra in Indian real estate where builders are luring investors to buy houses which not only come under their budget but also fetch good returns. However, as a consumer you need to be aware of the fine print before you take the plunge as many consumers are very easily fooled by fancy promotional campaigns and hidden charges.
After recession builders have been reeling under pressure of a credit crunch, thus many projects have either been delayed or some compromises have been made with what was promised and later what was delivered as the final product.

India's new residential destinations

According to the 2010 census, Mumbai now houses around 14 million people, which makes it India's most populous city and the world's second-most populous city. It is also India's richest city because it has the highest GDP.
Unfortunately, it also has an extremely complicated and lopsided real estate market. Properties in the island city are notorious for being the most expensive real estate in India. This has caused the city to grow far into the mainland in the north and east directions, and this has resulted in the working population having to commute at least two hours to and from work every day.
To compound it all, there is a massive annual inward migration of aspiring job seekers into Mumbai. The city has been bursting at the seams for quite a while now, and its infrastructure is rocking and reeling.

How to Choose Right Builder?

Investment in Real Estate is generally one of the biggest achievements in any individual's life. But before one can actually settle in, a buyer needs to keep in mind certain things, so as to ensure that they are striking the right deal.
A builder brings credibility and reputation to the project. Choosing the right builder is vital here are some tips that will help you choose the right builder.
Word of mouth: This is the easiest way to get details and knowhow about the reputation of a builder. If any builder has recently done some work for your colleagues, family friends etc then they will surely be in a position to share their experiences with you. This is absolutely unbiased information that no broker can give you.

Desperate to buy a house; but is it the right move now?

Seema could not contain herself after a look around the property and the amenities. She particularly liked the layout of the home and the fact that it was overlooking a waterbody. According to Vastu, it is a good sign. She almost saw herself living in that home.  Rakshit did not share her exuberance. He was calculating the overall price to be paid and the loan they would need to take, to buy this home.
Rakshit was as interested in buying a home as Seema.  Only, that he was being pragmatic.  The couple have been wanting to buy a home since they got married about a year ago. But the prices were way above what they could afford, due to which they postponed the decision. Now, again they were bitten by the bug and here they were...
Seema & Rakshit were both working. Rakshit was earning about Rs.35,000/-pm after deductions and Seema was getting about Rs.21,000/-pm, post deductions.  They did not have any dependants.  After initially looking around, they had given up. They were investing the money so that they could use it for the home, at a future point. They had accumulated about Rs.3.45 Lakhs now. Rakshit can get another Rs.2 Lakhs from his company at low interest rates. That's all they have now. But, this home they have set their sights on, would cost them Rs.57 Lakhs. Now, that is way beyond what they could afford.
They were worried. Everyone around them is telling them that prices of properties will only go up in future, when it will be even more expensive and unaffordable. They were in a state of panic and despondency, when they came to me.