How a Retired Clerk Bought a 3BHK Flat

Every house has a story to tell. Every buyer is an integral part of that story. Vinod Gupta recently retired from one of the biggest airlines company of India after 35 years of stellar service. On retiring, he received Rs 8 lakh as a part of his gratuity and provident fund. Though a native of Delhi, he used the money to purchase a house outside the city.

“I lived in an ancestral property in Old Delhi. I have five brothers who live in other cities and rarely used to visit me. I naturally didn’t have a sole right on the property. Being the youngest, I decided to divide the property and use my share of money to invest elsewhere. I was also tired of living in a congested city in a locality which has more commercial feel rather than residential one. Most of our neighbours have moved out of the locality to the city’s NCR nodes. Better lifestyle was the prime reason behind the move. I remained here, as I couldn’t afford one.”

A few years ago, Gupta married off his daughter. The lump sum money received on retiring and the money which he along with his brothers received by selling the ancestral home was used to invest elsewhere.

The ancestral property was sold off for Rs 4 crore. Out of which he got his 50 per cent share as he was the one paying property taxes and justified his part to be a major one as he also got the property vacated from tenants through legal process, which cost him over 6 lakh including lawyers’ fees, etc.

The major task was to search for a new home and in a city where his medical and spiritual needs were met. He wanted to stay close to his daughter settled in Mumbai and in a locality where he could contribute in community building activities.

Other than this, he looked for a project which had a gated community along with recreational area. Since the couple was aging, a property on ground floor was their priority. The ground floor in their chosen society gave them a small kitchen garden which was a bonus as the couple is interested in gardening.

When it comes to neighbourhood, availability of restaurants and proximity to shopping mall was also on his list. “Today we are fit and able to travel to other places but as the years go by we will need to have everyday amenities close by. Also, I have always been a movie buff but never got the chance to enjoy it. Now when I am retired, I would like to indulge.” says Gupta.

“I was confused about the entire property search process. I didn’t trust brokers and wasn’t tech savvy. My daughter suggested me online research. She showed me Magicbricks’ advice section. ‘Find what your money can buy’ section on advice.magicbricks.com was really helpful. I actually almost shortlisted my property through Magicbricks’ only,” shares Gupta.

Gupta chose Nashik as it was close to Pune, Mumbai and Shirdi, one of the famous religious towns of India. He finally bought a ready-to-move-in 3BHK flat for Rs 50 lakh, excluding stamp duty, registry charges, PLC and other extra charges which isn’t included in base price. This made him save over a crore rupees. Nashik is a small city where monthly expenditure is lesser than Delhi and where even commuting was expensive. This way I bought #MyFirstHome at the age of 70.

“Since relocation management would prove tough from Delhi to Nashik, I chose to buy a fully furnished flat and sell off the old furniture to generate extra cash. The amount collected from selling off old furniture nearly covered the extra expenditure of a furnished flat.” says Gupta.

This is one of the million stories related to property purchase floating in the real estate market. If you have bought a house and have a story to share, then do tell. We are listening!

TO BUY PROPERTY IN THANE OR KNOW MORE ABOUT BUILDERS AND DEVELOPERS IN THANE CONTACT US AT 022 2580 6868

Source: magicbricks.com

Home Loan Norms Demystified

A look at the factors that determine eligibility and aspects to keep in mind

What are the factors based on which home loan eligibility is calculated? What is the typical ratio of income to loan amount considered by lending institutions?
The ratio may vary, but a general thumb-rule is to consider 60% of the net take-home monthly income and then 60 times this amount to calculate overall home loan eligibility. With a FlexiEMI scheme, using a step-up plan, one can stretch this amount further too.

How does a reduction in home loan interest rates affect the repayment and eligibility amount of new applicants?
A reduction in interest rates will in turn reduce the monthly interest component in the EMI. For example, on a 15 year loan, for every 25 basis-points reduction in interest rate, the EMI will come down by Rs15 per lakh per month.

If someone is applying for a home loan now when rates are reducing, what are the aspects to keep in mind to maximize eligibility amount?
Customers should opt for a flexible rate of interest, which will allows the EMI, and the interest component within it, to move in tandem with interest rates. Additionally, customers can avail of FlexiEMI schemes, specifically the step-up model, through which they can maximize their eligibility. Through step-up, a customer can pay smaller EMIs at the start and gradually increase the amount with time.

With subvention schemes, the EMI begins only after taking possession. How does this work and what are the aspects that home buyers need to keep in mind?
Customers should evaluate the project in a comprehensive manner to see if it will get completed in the stated time frame. In most cases the ‘payment holiday’ is given via the builder. Customers should check whether the builder is bearing the interest only or the principal as well, during this period. They should also check whether the interest rate on the home loan is fixed or flexible at the time of initiating the loan.

What is the importance of a credit score from a banker’s perspective while deciding loan eligibility? What should be done to ensure a good credit score?
A general thumb-rule is to take a CIBIL score of 700 and above as a good score. Customers can achieve a good credit score by maintaining a good repayment track record, not defaulting on loans or delaying loan EMIs and even credit card payments, which are factored in to most credit scores.

TO BUY PROPERTY IN THANE OR KNOW MORE ABOUT BUILDERS AND DEVELOPERS IN THANE CONTACT US AT 022 2580 6868

Source: epaper.dnaindia.com

Property Insurance Demystified

Our society has done insurance for the building for a certain amount. What are the aspects that the insurance of a building typically covers and why?

Typically, a society takes the insurance of building for standard fire and special perils, which covers perils such as fire, lightning, explosion, aircraft damage, riot, strike, malicious damage, storm, tempest, flood and inundation, impact damage, subsidence and landslide/rockslide, bursting and/or overflowing of water tanks, apparatus and pipes, missile testing, leakage from automatic sprinkler installations and bush fire. Earthquake and terrorism are add-on covers, which can be opted for by paying an additional premium.

As cooperative housing societies are entrusted with managing administration as per guidelines of cooperative housing societies act and insurance is part of society administration, the societies have to take insurance.

What would normally not be covered?
The policy does not cover consequential losses, losses on account of delay, warlike perils etc., losses caused by pollution or contamination, bullion or unset precious stones, any curios or works of art for an amount exceeding Rs.10000 or currency unless expressly stated in the policy.

Is a comprehensive policy available that covers the structure as well as contents of individual flats?
Yes, individual flat owner can opt for comprehensive policy such as the home package policy, which includes the coverage for building and contents against the risks of fire and other allied perils as detailed above. Home insurance policy also offers other covers as burglary for contents, electronic equipment insurance for electronic items, machinery breakdown insurance for household electrical / mechanical items such as air conditioner, washing machine, refrigerator etc., personal accident insurance, workman insurance for domestic servants, all risk insurance of jewellery and valuables and laptop etc.

In case of a calamity, what happens if individuals have insured their flats but the building itself is not insured?
Claim will be payable to individual owners only for the assessed loss not exceeding the sum insured under the policy.

What type of insurance policy should housing societies and their members ideally opt for?
Housing societies can opt for fire insurance including flood and earthquake for the building. They may also take insurance covering their other exposures. Burglary, money insurance, workmen insurance, public liability, machinery breakdown for DG set/ pump house etc., are some of the other policies, which they can consider taking. Individual flat owners can opt for fire insurance including flood and earthquake for contents, burglary for contents, electronic equipment insurance for electronic items, machinery breakdown insurance for household electrical/ mechanical items such as air conditioner, washing machine, refrigerator etc., personal accident insurance, worksman insurance for domestic servants, all risk insurance of jewellery and valuables and laptop etc.

Is any tax deduction or rebate available?
As of now, there is no such provision available for any tax savings.

How can one make an 'apples to apples' comparison of property insurance options?
All insurers use the same wording for standard fire and special perils policies and add on covers like earthquake, terrorism thereof. However, companies have customised home insurance covers. Even here, the wording for fire insurance cover conforms to the standard fire and special perils policies wording.

Generally, the additional covers like burglary for contents, all risks for valuables, breakdown cover for gadgets etc., are comparable across products sold by various companies.

Ideally, the customer should take an insurance policy which adequately covers his requirements. All that the insured has to do is to prepare a list of assets he has at home and map them against the various insurance covers available under the home insurance policy.

TO BUY PROPERTY IN THANE OR KNOW MORE ABOUT BUILDERS AND DEVELOPERS IN THANE CONTACT US AT 022 2580 6868

Source: DNA Newspaper

Have a let-out property and need money? Take a loan against rentals

A loan against rental, allows home owners to borrow money from financing institutions, against future rental income. We examine the eligibility and process for obtaining such a loan

 

Almost all the public sector and private banks, offer loans against future rentals. With this facility, home owners can avail of a line of credit, on the basis of future rentals for their house property which is let-out.

Who can avail of the loan against rentals?

 

 A loan against rental, allows home owners to borrow money from financing institutions, against future rental income. We examine the eligibility and process for obtaining such a loan

 

Almost all the public sector and private banks, offer loans against future rentals. With this facility, home owners can avail of a line of credit, on the basis of future rentals for their house property which is let-out.

Who can avail of the loan against rentals?

 

Any person, who is the owner of a commercial or residential property, can avail of this facility. The property can have a single owner or be owned jointly. In case of joint ownership, all the owners will have to become applicants for the loan. This line of credit is available, for properties that have already been let-out or those, for which a lease agreement has been entered into.

Purpose of the loan against rentals

 

The money raised through the loan against future rents, can be utilised for any purpose – from buying a house or expanding your business, to marriage or education of your children. You can also use the money for repairing or renovating the property. Lenders even allow you to use the money so raised, to repay an existing loan.

Properties eligible for loan against rentals

 

 You can avail of this loan, with respect to a commercial property, which has been let-out or leased to a reputed lessee, like a government undertaking, bank, insurance company or large retail house. The lenders normally have a preapproved list of such organisations.

You can avail of this facility, even for a residential house that is let-out, provided that you have an agreement for a period that at least covers the repayment of the loan against rentals. Moreover, before the bank sanctions the loan against future rentals, it may insist that you have the lease/rental agreement duly registered.

Documents required

 

The bank will ask you to provide the basic KYC (know your customer) documents, such as address proof and identity proof, in addition to the duly filled in application form. The lender will also insist for proof, to establish your repayment capacity. For salaried people, Form No 16 will be sufficient, in case the income tax return (ITR) is not available. However, self-employed applicants need to submit audited accounts and if the accounts are not audited, you will need to submit the ITR form, for the last two or three years. Although the money is given against future rentals, lenders want to assure themselves about your repayment capacity, in case something happens to the lease.

Security

 

The loan is secured by way of a charge, on the property that is leased out. Consequently, if you already have an existing home loan, it will be difficult for you to get this loan from any other lender, as they will not be willing to take a second charge on the money advanced. In such a situation, you can offer any other property as security for the rental loan, subject to fulfilment of the margin requirements of the lender.

However if the value of the property has appreciated substantially, after disbursal of the initial home loan, your existing home loan lender may consider your rental loan favourably.

Interest, charges and tenure of loan against rentals

 

Lenders normally charge a processing fee of up to 1% of the loan amount. The interest varies, depending on the profile of the borrower and across lenders.

The current rate of interest is between 10% and 13% per annum. The loan against rental is given for a maximum period of 10 years.

However, the tenure of the loan cannot exceed the residual period of the lease agreement. Additionally, for availing any credit facility, including the loan against rentals, your credit history has to be good. Otherwise, it may be difficult for you to get the loan.

Read all such Property News at CREDAI MCHI – Thane Unit website.

 

 

 

 

 

 

 

71 years of independent India: The real estate milestones

As the country completes seven decades of independence, it is worthwhile to remember the milestones that have had a lasting impact on India’s real estate industry

 

Often, how a particular industry shapes up, depends on the government’s initiatives and interventions – largely done through new, sector-specific policies, as well as tweaking older ones. While the government’s role is important, it is the market conditions, geopolitical events, socio-economic changes in population and the element of time itself that are fundamental in the evolution of industrial sectors. Given that real estate is a major industry across the world, there has been a constant focus in many countries, to have more transparency in the sector through regulations and technology. India too, has seen many policies in recent years but certain milestones are spread over decades.

• The new capital cities of Chandigarh and Gandhinagar were formed in 1952 and 1960, respectively. These were the first and rare occasions of planning entirely new cities in the country.

 

• The Maharashtra Regional and Town Planning Act, 1966, first incorporated the practice of development plans and town planning. The Planning Commission also issued its first guidelines for district planning in 1969, which led to many states to formulate district plans. However, except for a few examples, these initiatives didn’t yield positive results.
   

• The Urban Land (Ceiling and Regulation) Act was enacted in 1976, to curb speculative hikes in land prices in urban areas and to provide low-income housing. However, because of poor implementation, it ended up worsening the situation of availability of land for social housing and social infrastructure in urban areas and was eventually repealed in all states except West Bengal and Kerala.

• The government started setting up institutions, such as the Housing and Urban Development Company in 1970, City and Industrial Development Corporation in 1971, the Mumbai Metropolitan Region Development Authority in 1975, National Housing Bank in 1988 and the Housing Development Finance Corporation in 1994, to strengthen the residential real estate industry.

 

• In the backdrop of a looming fiscal deficit crisis, the economy was liberalised in 1991 through reforms, which set in motion its modernisation process. This created newer job opportunities and gave a big market of consumers, access to many products and services for the first time. This led to the entry of multi-national corporations into India in a big way and brought a new type of demand – contemporary, world-class office space.

• The phase of 1994-99 marked the completion of India’s first property cycle as the market, which was opened up, saw property prices go up for the first time, thanks to NRIs and foreign capital. However, the realty market tapered off after 1995, due to inherent inefficiencies. With the advent of the Asian Financial Crisis in 1997-98, foreign capital was wiped out and growth in capital values came to a halt altogether.

 

• The idea of commercialisation of the space above transit routes, was first introduced at Vashi station in Navi Mumbai, in 1992. Other stations, such as Sanpada, Juinagar, Nerul and CBD Belapur on the same railway line followed in Vashi’s footsteps but met with lesser degrees of success. However, the latest transformation of Seawoods-Darave railway station has met with phenomenal success.

 

•  India received global recognition as a force in the software world, thanks to the Y2K bug, which also proved to be another turning point for the real estate industry. More foreign companies started setting up offices in cities like Hyderabad and Bengaluru, which led to growth in these cities’ commercial and residential real estate.

 

• Foreign direct investment (FDI) in real estate was first allowed in the year 2005, which opened up newer ways of funding and led to a maturing of the industry, in terms of business practices and product offerings. The FDI regime has been further liberalised in recent years, leading to record private equity inflows and entry of foreign developers. 

 

• Just before the turn of the millennium, Indians were introduced to the concept of organised retail through the first mall: Spencer Plaza in Chennai, followed by Crossword in Mumbai and Ansal Plaza in Delhi. From the early 2000s, there has been a spurt of mall developments across the country.

• The government approved the restructuring and modernisation of brownfield airports, such as Mumbai and Delhi, as well as greenfield airports at Bengaluru and Hyderabad, through the public-private partnership model in 2006. This led to the introduction of the concept of airport cities and airport precinct real estate. 

• The collapse of Lehman Brothers in 2008 triggered a panic, along with the sub-prime crisis, leading investors to scout for rationality in investments across asset classes. The ensuing economic slowdown and risk of job losses, made it difficult for investors to exit from their stakes in Indian real estate. The global financial crisis, however, had a big impact on commercial realty in India and a limited impact on residential realty in the country. The price fall led to quick sales and India’s residential market bounced back sooner than most expected.

• The Real Estate (Regulation and Development) Act (RERA), aimed at protecting home buyers, came into effect from May 1, 2017. This landmark Act will make home buyers confident, empowered with information and well-protected and make the non-serious players disappear from the highly-fragmented residential real estate market.

• Real Estate Investment Trusts (REITs) were first opened up in 2014 and the first REIT is due for launch soon. This will allow small-ticket investments in commercial real estate of the country. Given the expanding universe of Grade-A office properties in Indian cities, as well as rising rentals across their micro-markets, REITs offer an attractive way for investors to trade in prime commercial real estate.
  
  
  
  Read all such Property News at CREDAI MCHI – Thane Unit website.
   
   

  

Home financing options for NRI buyers

Besides regulations for the type of properties that NRIs can purchase in India, legal provisions also exist on the mode through which these purchases can be financed

When a non-resident Indian (NRI) opts to purchase a property in India, there are several regulations that govern how such a purchase can be financed.

Sources, for financing a real estate investment in India

The money for purchasing a property in India, has to come through banking channels only. Consequently, the payment cannot be tendered in the form of traveller’s cheque or foreign currency. An NRI can also use the money in his/her credit, in non-resident external (NRE) rupee or non-resident ordinary (NRO) or foreign currency non-resident (FCNR) account, maintained in India.

NRIs are allowed to purchase property in India, by availing home loans in Indian rupees, from banks or housing finance companies. The home loan can also be granted by the Indian employer of the NRI employee, for the purpose of financing of the property.

Obtaining a home loan

As NRI investment in Indian real estate is only allowed in residential or commercial properties, banks too, can finance only these properties. Almost all banks offer home loans to NRIs for buying a house or constructing one. One can also get a loan, for purchase of land (non-agricultural), for constructing a house in India.

The application for the home loan can be made online, as well as offline. The nature of documents that need to be submitted, will depend on whether the NRI is a salaried employee or whether s/he is self-employed. It will also vary, depending on the NRI’s country of residence. Nevertheless, copies of one’s passport and visa, passport-sized photographs and proof of residence in the foreign county, will be required in all cases.

Depending on whether the NRI is salaried or self-employed, s/he also has to fulfil a minimum period of stay in the country of present residence, to avail of the home loan. Banks may also insist on an acceptable co-applicant, or an NRI guarantor. The NRI guarantor too, has to submit documents pertaining to identity proof, address proof and income proof.

Servicing the home loan

EMIs on the home loan can be paid through remittances from outside India, through a proper banking channel, or by debiting the NRE, or NRO, or FCNR account. In case the property is let-out, the rental yields can be used for servicing the NRI home loan. Money transferred to the NRO account from close relatives, can also be used for servicing the home loans. In case the property is purchased for self-occupancy, the NRI can avail of a loan against the FCNR or NRE account deposits, of up to Rs 1 crore, for servicing the home loan.

Remittances out of India

An NRI is allowed to repatriate some of the funds, in case the property so acquired is sold.  However, the number of properties (whether purchased or inherited), for which s/he can remit or send money to India, is restricted to two. Moreover, the amount that can be repatriated, cannot exceed the amount (denominated in foreign currency) received as remittances from outside India, either for purchase or servicing of the NRI home loan. Under normal circumstances, an NRI is allowed to remit an amount of USD 1 million in a year, out of India, from his NRE, NRO, or FCNR accounts, which includes the amount remitted for sale of a house.

Read all such Property News at CREDAI MCHI – Thane Unit website.

 

 

 

 

 

The resale advantage!

Investing in a resale property has its own share of advantages. We highlight some of the benefits.

Why should you invest in a resale property? Well, the reasons are aplenty but we list down top five reasons for you:

Tested property:

A resale property is already a 'tested' one and the buyer can further investigate various aspects from the neighbours and people living in the same locality. The buyer needs to focus on the quality of construction and the property price while buying a resale property. "A resale property ensures on-time delivery with no unpleasant surprises," says Rohini Sarkar, a resident of Andheri (E).

Less chances of fraud:

People sometimes get cheated when they buy an under construction property.

Though a developer may seem to be financially sound, it is most likely not possible for a property buyer to evaluate his balance sheet and therefore, the chances of a fraud increases in case of under-construction properties. The resale properties are mostly ready-to-move-in ones; thus, the buyer just needs to verify the authenticity of the property and its papers.

Immediate possession:

Dharti Kothari, a resident of Borivali (W) says, "A resale property gives you the option to move into your new home immediately. Also, the need to spend extra money on the rented accommodation is ruled out. Immediate possession keeps the buyer safe from construction delays and you know how your property looks like and what all would you get along with it."

Bank loan easily available:

As a resale property comes with the ready-to-move-in advantage; banks are not hesitant to approve loans for such properties. The bank's due diligence takes very less time and you don't need to wait for the loan disbursement (that takes more time incase of an under-construction property).

Government clearances in hand:

It has been noted that in the last few years, the work on an under-construction property project is usually halted due to legal disputes, a lack of environmental clearances, etc. When you buy a resale property, you know the exact number of clearances you need.

Read all such Property News at CREDAI MCHI – Thane Unit website.

What is the right age to buy a home?

Considering that the age of an individual plays an important role in obtaining a home loan, we look at whether there is any ideal age, at which one should consider buying a property – for investment as well as self-use

 

In India, the current belief is that property investment is ideal, only for those with upcoming or established careers. However, is this true? How do banks, lenders and the property sector at large, view investors who do not fall in that age bracket anymore? Can one be too old to put money into property and would one have missed the chance to grow their wealth through real estate at some point?

Of course, it is true that banks are willing to lend to a person only for so long. When a prospective borrower is nearing retirement, the concept of giving them a long-term home loan does not make much sense to them. Let us examine this a little more closely.

Eligibility for home loans, on the basis of age

When a person is in his or her 30s, they have around 30 years of active professional life ahead of them. Naturally, this gives them abundant time to develop a large property portfolio. However, even when they are in their 40s, they are far from being too old to successfully invest in property. They still have 20 years ahead as income-generating citizens and even more, if one is successfully self-employed or runs a business.

Of course, it goes without saying that the sooner one invests, the higher will be the ultimate gains because profits from property compound over time. Generally, it is assumed that one must have the ability to service home loans for 25-30 years, to finance one’s property portfolio.

Investment strategy for individuals nearing retirement

However, many banks in India have now understood that people can and do work past the conventional ‘retirement age’ of 65 these days. Moreover, once one has secured a good portfolio of assets, one has additional clout and credibility with banks, since these properties can act as collateral for fresh loans even at the age of 50 or above. Definitely, the time to experiment with ‘speculative’ investment should be over by this time, as one should justifiably have a healthy aversion to risk by age 55.

By this age, the ideal strategy should be to boost the value of one’s existing assets, via proven value-boosting routes, such as renovations. A person who wants to keep investing in property in India, at age 60 or above, needs to have a very clear understanding of the market, as well as a great deal of confidence in one’s personal finances.

While it is now technically possible – under certain circumstances – to raise a home loan for property investment even after retirement, the question of whether one would want to is, of course, a personal one and would depend on a variety of circumstances – most related to one’s financial soundness and appetite for such activities.

Ideal age for buying a home for self-use

 

What about those looking at buying a home for personal use? This is where it gets a lot simpler because there is no ‘ideal’ age for home ownership.

If one has been living in rented homes all along, buying a home even at 65 makes perfect sense. In the first place, it is the perfect retirement gambit, as it provides freedom from the recurring expense of monthly rent. Secondly, it secures a sound asset which gives unmatched financial security and can be used to raise funds in emergencies. Thirdly, a property is the perfect bequest to leave behind for one’s children.

The bottom line is that there is definitely such a thing as an ‘ideal age bracket’ for property investment, although this age bracket is flexible, depending on various factors. However, there is no ‘ideal age’ to buy a home for personal use. The latter is especially true, if one sees a self-owned home more as an abode and sanctuary of financial freedom and security, than as an investment instrument.

Read all such Property News at CREDAI MCHI – Thane Unit website.

 

 

 

Indian real estate likely to attract $7 billion investments in 2017: Report

Rising institutional investor confidence and appetite for Indian real estate on the back of attractive asset valuations and a favourable regulatory environment is expected to push investments into the sector to $7 billion in 2017 from $6 billion in 2016, showed a report.

The sector had witnessed $0.8 billion investment in 2008, $1.2 billion in 2010, $3.2 billion in 2012 and $4 billion in 2014.

While office and residential are expected to remain traditional drivers for the industry; alternate sectors such as retail and warehousing will also come to the forefront in 2017.

The sector is witnessing unprecedented interest from offshore equity investors, large Indian corporates and high net worth individuals (HNIs) as investors believe that the sector now offers a level playing field with attractive returns, said a CREDAI-CBRE report.

“The above sentiment is further endorsed by a cyclical decline in interest rates in 2016. This has drastically reduced the cost of doing business for all investor classes. Even ‘structured debt’ has evolved from being a “high-cost source of funding” to being a very viable source of funding with successive interest rate cuts,” said the report.

The combination of measures including Real Estate (Regulation & Development) Act, 2016 (RERA), Goods & Services Tax, Real Estate Investment Trusts (REITs), easing of FDI norms, Demonetization are likely to help in catalysing ease of doing business in the country while supporting corporate entities entering or expanding their footprint in India.

“Government’s aggressive push to formalize, regulate and encourage investment to the sector with a slew of measures like RERA, REITs is consolidating India’s position on global map. We believe that these disruptions and encouraging trends will definitely manifest a more exciting future which will be full of possibilities and opportunities for Indian real-estate,” said Jaxay Shah, President, CREDAI National.

These policy moves are expected to improve transparency in the sector, increase the share of organized segment and enhance the overall investor sentiment. The breakthrough disruptions in four cornerstones of regulations, finance, customers and technology are likely to have positive insinuations on the sector and will facilitate a new ecosystem that will be more conducive.

“Real estate in India continues to be in a dynamic phase and the pace at which the four cornerstones–Regulation, Finance, Customers and Technology are evolving, a more than incremental transformation in the sector is expected in the coming years,” said Anshuman Magazine, Chairman, India & South East Asia, CBRE.

While majority of the focus in 2017 will remain on leased and completed assets, one can expect an increased appetite amongst developers/investors for development equity. Land transactions are expected to remain high, as new funds and institutional investors, foreign developers likely to pick up assets, even as corporates, smaller developers will be keen to monetize assets and retire debt.

The report also highlighted the changing disruption in customer preferences in office, retail, residential and warehousing space. The dynamics in office spaces are being disrupted with the entry of Millennials–over two-thirds of the Indian Millennials feel quality of ‘Office design’ impacts their productivity to large extent. While in warehousing segment - entry of international players is ensuring that better and larger warehouses emerge in key markets; in residential segment - customers will have a say in operations with effective grievance redressal.

Read all such Property News at CREDAI MCHI – Thane Unit website.

Shift Percentages in Your Favour

It is a dream for every Indian to own a home of his own and in order to fulfil this dream one needs to know the eligibility criteria before applying for a home loan. While home loans are offered based on various factors, the interest rate may differ based on the specifications and requirements provided by the customer. This is where the credit scores play an important role while applying for a home loan.

While not every home loan seeker looks closely into the credit scores offered by CIBIL and other agencies, it is extremely important as these scores have the capacity to help vary interest rates as much as a full percentage point.

For a customer seeking a home loan of Rs 10,00,000 with an average simple interest rate of 10% for 10 years, he would be paying an interest of Rs 5.85 lakh. Whereas, a marginal reduction of 50 basis points in the interest rate can let the customer save up to Rs 5.52 lakh.

Home loan providers or financial institutions look at several variables on the credit report, one of them being outstanding debt. The credit score offers a holistic view on the financial ability of a customer and hence forms an important element in the process of a home loan.

Listed below are some of the key pointers to help improve one’s credit score which will in turn have a positive impact on the home loans process.

Current payment management
Pay your bills on time. A delay in any credit card dues or other EMIs can have a major negative impact on your credit scores. Moreover, rebuilding it into a positive score can be a lengthy process. To help you remember when you need to make certain payments, get a system in place and try to incorporate automated payment systems such as ECS facilities. Make sure your current payment patterns are good and reflected in your credit report. One should be aware that paying off a collectable account will not remove it from your credit report and that it will stay there for few years.

Avoid multiple bank accounts
At the initial stage of your financial building exercise, avoid opening multiple bank accounts. Have a maximum of two accounts, which includes your personal and salary account for salaried and current account for business individuals. The reason for the same is that multiple bank accounts lowers one’s average account age which would eventually have a large impact on one’s credit scores. Moreover, multiple bank accounts are a risky practice for a new credit user.

Check your limits
It is important to keep a track of your credit limit. Do not use the entire credit limit at one attempt, space it out over a period of time. One can also raise the credit limit depending on the spending habits as well as the confidence to repay the spent amount.

Check on credit report
This is a good way to evaluate your credit worthiness. Your credit score repair begins with your credit report. Your credit report contains the data used to calculate your score and it may also contain errors hence regular checks should be done to help mitigate errors. Make sure that there are no incorrect payments listed in any of the two accounts. One can get the mistakes corrected by contacting the credit bureau.

Heed payment reminders
As mentioned earlier, making your credit payments on time is one of the biggest contributing factors to your credit scores. Some banks offer payment reminders through their online banking portals that can send you an email or text message reminding you when a payment is due. This is a crucial function which enables you to consider automatic payments from one’s bank account.

Reduce the debt you owe
The first thing one must do is reduce the use of credit cards. Make sure you make a list of all accounts and check recent statements to determine how much is the outstanding balance and the interest rate levied on it. Facilitate a payment schedule/ plan that provides an available budget for debt payments towards priority payments.

Update your credit report
Your credit report is checked a year or so before buying a home. That gives you time to correct errors in the report and change the spending habits to improve your score. Make sure every personal and saving bank account detail is reported correctly and update the same in case of any discrepancies.

If you're buying a home soon, try not to apply for any new credit cards. Though it's not always avoidable, you should try and resist from opening new streams of credit in a short time. Maintaining a good credit score is not a daunting task. Following the steps enlisted can ensure a healthy and secure financial future.

TO BUY PROPERTY IN THANE OR KNOW MORE ABOUT BUILDERS AND DEVELOPERS IN THANE CONTACT US AT 022 2580 6868

Source: DNA Newspaper

Rental homes are a must, to house India’s future

As India gears up for its 71st independence day, and hopes for freedom from its housing woes, our expert makes a case for rental homes, a must in current times

 For decades, independent India peacefully lived with the concept of perpetual leases, inherited from the colonial era. Today, India is a country under construction. However, the governments’ design for housing, has perhaps failed to keep pace with the changing times. From building industrial nodes to smart cities, the mammoth workforce orchestrating this makeover, demands an immediate switch in our housing policy. Much like the current government’s recent focus towards affordable housing, a massive exigency for rental homes stares at the country.

Home ownership: A wise choice?

Today, young professionals often feel the pressure of procuring a residential asset to start a family. This trend became more prevalent since 2002, which saw a mortgage meltdown in India. Home loan rates hit a historical low (ABN Amro offered home loans at 6.75 per cent, the lowest ever). Now, a large section of young India, is unable to afford a house. Many others, have either found themselves engulfed in a debt trap or have become prisoners of the city. In today’s fiercely competitive times, where job cuts are a rampant reality, the ‘wise’ decision to buy a house, might not be the wisest anymore. Residential real estate, purely as an investment vehicle, has also run out of steam. The National Capital Region (NCR) is a case in point, where values have eroded.

Advantages of a rental home over property ownership

 The Economic Survey 2016-17, described India as a country on the move. It refers to the emergence of a free-wheeling generation, averse to build their lives around a permanent fixture called a ‘home’. While the debate, over living in an owned residence over a rental property can be unending, certain benefits of the latter are undeniable. Firstly, you could afford a rental house that is more than 2-3 times the value of a property within your purchasing power. Moreover, this value is not restricted to just the size or quality of the apartment. It also pertains to other crucial yardsticks such as the social infrastructure, the time spent on commute and the difference in the overall quality of life.

Secondly, it could have a huge bearing on one’s career. A person in a rental accommodation is obviously more mobile, as compared to someone tied down by equated monthly installments (EMIs). The advantage assumes huge relevance, considering that a large section of the workforce in our metro cities belong to small towns. However, the acute shortage of rental housing in India and its unorganised structure, continue to be natural pain points.

The market for rental housing in India

Despite the burning demand for rental properties, there is no structure for this kind of accommodation in India. Unlike matured economies such as Singapore and Dubai, our housing policy has failed to consider the housing needs of the large population migrating across the country. This explains the massive slum population infesting our metros today. According to the National Sample Survey of 2012, 71 per cent of the households living on tenanted apartments did not reflect on paper. On the other hand, industry estimates show that approximately 11 million housing units lie vacant in India.

While the demand for rental homes might not be enough to offset that number, a strategic government policy could still bridge the demand-supply divide. Worse, the pro-tenant Rent Control Act (RCA) is probably the most draconian regulation of our times. The regulation that prohibits landlords to charge market rates and face long-suffering litigations to evict tenants, played a major role in squeezing out market confidence in rent-yielding developments. However, the addition of the leave and license clause in the RCA, brought some reprieve for landlords. Markets such as the Europe have a flourishing rental management business, thanks to a flexible policy environment to evict defaulters and nurture investors, including pension funds, with healthy returns.

Read all such Property News at CREDAI MCHI – Thane Unit website.

 

 

 

 

 

MMRDA to complete ring route of Metro corridors

Extension of the Metro corridors from Dahisar to Thane is being planned to decongest the road corridor and suburban train corridors as this new connector will provide faster connectivity between the eastern and western suburbs.

Work on three Metro corridors is in progress: Metro III (Colaba-Bandra-Seepz), Metro VII (Dahisar-Andheri via Western Express Highway) and Metro IIB (DN Nagar-Dahisar). Work will soon begin on two more corridors: Metro II (DN Nagar-Bandra-Mankhurd) and Metro IV (Wadala-Ghatkopar-Thane-Kasarvadavli). MMRDA is also planning extension of the Metro corridor in the western suburbs up to Bhayander.

Additional Metropolitan Commissioner Praveen Darade said they plan to link Dahisar to Gaimukh in Thane on Ghodbunder Road. Gaimukh is on the border of Thane Municipal Corporation limits on the west. MMRDA already has plans to extend Metro IV up to Gaimukh from Kasarvadavli.

Construction of this missing link between Dahisar-Gaimukh will ensure a ring of the Metro around Mumbai's neck.

Darade said, "The extension will cost around Rs 1,000-1,500 crore as we plan to use rolling stock of the under-construction Metro corridors. The route will have inter-operatability with other Metro corridors."

A detailed project report will take at least eight months to prepare. MMRDA is proposing an elevated route via Ghodbunder Road. There are some hills but it will not be an impediment in constructing the corridor, officials said.

As of now, those who wish to travel from the eastern suburbs to the western suburbs have to travel to Dadar and then interchange trains from Western Railway to Central Railway and vice versa. The other option is to take the Metro from Andheri or Ghatkopar to travel to the CR or WR lines. The third option is via Ghodbunder Road or JVLR.

Kandivli resident Apoorva Shah said, "I would rather use the Metro that runs via Ghodbunder Road instead of taking a suburban train."

Read all such Property News at CREDAI MCHI – Thane Unit website.

Private developers to tap affordable housing policy push

As India is widely piped to become the world's third largest economy by 2030, the government is giving a strong push to the affordable housing segment as more and more houses dot sleepy towns, Tier 2 cities and metros of the country.

Private developers too are looking to tap the government's policy push and are entering the segment in a big way, offering a wide array of options to end-users. Members of builder's body the Confederation of Real Estate Developer's Association of India or CREDAI – had announced the launch of 375 affordable housing projects across the country with an investment commitment of Rs 70,000 crore.

With the affordable housing segment getting infrastructure status, developers are working overtime to tweak existing projects and convert them into affordable housing projects. The earlier fears of low margins blighting builder's prospects no longer seem to be a factor as the affordable housing segment is expected to drive volumes in the near term. Midlevel housing projects in the price range of Rs 50 lakh to Rs 2 crore are seen as affordable housing units in Tier 1 cities while the threshold is significantly lower in smaller towns and rural India.

Rajesh Krishnan, Founder and CEO, Brick Eagle Group, which is managing affordable housing projects on over 1,000 acres across Maharashtra, Tamil Nadu, Gujarat, Rajasthan and Karnataka, says: "Backed by policies and sops to achieve the government's coveted goal of 'Housing for All' by 2022, affordable housing has shifted the developer's focus from luxury projects. Low-cost housing projects have faster sales velocity since the demand is high. This helps in better cash management. Hence, we are witnessing an increasing interest from even frontline developers who stayed away from this segment due to perceived low margins."

Supported by 20 housing finance companies, Xrbia Developers has also launched the 'No-Income Proof Home Loan Scheme', which enables applicants to apply for finance without submitting income proof documents. "This scheme is a breakthrough for those employed in the informal sector, who have been denied access to housing finance despite a stable income," says Rahul Nahar, Founder & MD, Xrbia Developers. The company, which claims to have maintained a sale rate of approximately 2,000 houses every month in 2017, has supplied 3,776 houses under Rs 20 lakh in 2016 in the Mumbai Metropolitan Region (MMR) and Pune areas.

As the government rolled out the new Goods and Services Tax (GST) regime from July 2017, a major differentiator between markets has been done away with. An integrated national market will help the real estate sector by way of a common indirect tax structure.

"There is no set parameter as to how much cheaper these (affordable housing) units will be. With land being a major cost factor and a subject matter of the concerned states, the price margins will vary from state to state. However, with GST applicable, the cost of construction materials will be more or less similar throughout the nation, eliminating one big disparity amongst the various factors responsible for the uneven cost of property," says Deepak Kapoor, President, CREDAI-Western UP & Director, Gulshan Homz.

With the Real Estate (Regulation & Development) Act (RERA) coming into force from May 1, consumer confidence is expected to rise, which could drive purchases at the lower end of the market. Private real estate developers recognize that they will need to ensure better compliance with delivery schedules and unit specifications.

"A fully operational RERA will mean that there will not be any project delays, hence, promoting the sentiment for investments in the market. Infrastructure status to affordable housing will mean REITs playing a big role in the long run for this segment and with over 30 allied industries working in tandem with the sector, uplift of real estate will mean a better scenario for the overall economy," says Rajesh Goyal, Vice-President, CREDAI-NCR & MD, RG Group.

The government's policy push to cheap housing along with falling interest rates are expected to create an enabling environment for the sector.

"Affordable loan rates are not the sole factor driving the home buying sentiment, especially when it comes to first-time buyers. However, it is certainly one of the crucial considerations. Affordable home loan interest rates are particularly important for budget homebuyers since even marginal reductions in EMI burdens can propel their decisions to buy," says Anuj Puri, Chairman, Anarock Property Consultants.

"Needless to add, this customer base is a very important one for the Indian property market, as healthy residential property sector always finds its foundation in strong demand from mid-income and lower middle-income end-users."

Krishnan of Brick Eagle identifies Rajasthan, Gujarat, Uttar Pradesh and Andhra Pradesh as some of the states that have commendable affordable housing policies. "Rajasthan has a model framework which should ideally be replicated across the country. Other states are also seen catching up slowly," he says, adding more needs to be done nationwide.

"Land is an extremely complicated subject with some extremely cumbersome policies. For example, the process of conversion of agricultural land into non-agriculture land is a tedious process; and, the stamp duty and registration processes are expensive, further escalating housing prices," says Krishnan.

Tax breaks, infrastructure status and easier access to bank loans are likely to boost demand for affordable housing further. With private developers stepping in to augment the government's "Housing for All" policy objective, consumers can hope for handsome buying opportunities in the segment.

Read all such Property News at CREDAI MCHI – Thane Unit website.

Unfurnished 1-BHK apartments high on demand for rent, reveals study by Housing.com

When it comes to renting a house, 1-BHK units are the preferred choice for a large number of home seekers, with IT hubs of the country like Bengaluru, Hyderabad, Chennai and Pune, pushing the rental demand, finds a study by Housing.com

 

Housing.com, part of Elara Technologies Pte Ltd, which also owns PropTiger.com and Makaan.com, on August 9, 2017, unveiled its key insights on house renting patterns. According to their research, 1-BHK units are the preferred choice for a majority of rental home seekers in Mumbai, Gurugram, Bengaluru and Pune, while home seekers in Chennai, Kolkata and Hyderabad prefer 2-BHKs.

The research was conducted to understand the home seeker’s disposition towards renting houses, across the top seven cities in India, including Mumbai, Gurugram, Bengaluru, Chennai, Kolkata, Hyderabad and Pune.

A massive part of India’s population resides in rental homes. With increased exposure to global housing standards and frequent movement across cities for employment and education, the Indian rental housing consumer is becoming more demanding, vis-à-vis value. Based on insights drawn from the traffic witnessed on Housing.com, this data reveals various considerations that a home seeker sets out, before renting a property.

Key highlights from the study

Preferred specifications

• 1-BHK rental housing units are the most preferred choice for more than 57 per cent of home seekers in Mumbai, Gurugram, Bengaluru and Pune. However, more than 40 per cent of home seekers prefer 2-BHKs in Chennai, Kolkata and Hyderabad.
•  More than 61 per cent of people prefer renting an apartment to an independent floor or house. Interestingly, in Gurugram and Bengaluru, 30 per cent and 26 per cent of home seekers, respectively, prefer renting an independent floor and 25 per cent of people prefer renting an independent house in Kolkata. 
• Bengaluru, Chennai, Kolkata and Hyderabad have more than 85 per cent of tenants opting to live in unfurnished homes. However, in cities like Gurugram (44 per cent), Mumbai (27 per cent) and Pune (13 per cent), people give preference to furnished homes, as well.
• More than 38 per cent of people in cities like Gurugram, Bengaluru, Kolkata, Hyderabad and Pune, prefer renting a house in a new building (two years old). However, 30 per cent of home seekers in Chennai are comfortable with renting a house, which is five to 10 years old, followed by 28 per cent in Mumbai.

 

 

Top localities and desired price range  

• The top five localities for renting a house in Mumbai include Thane west, Andheri west, Airoli, Andheri west and Goregaon west.

• Sector 24, Sector 43, Sector 47, Sector 48 and Sector 49, are the top five preferred localities for renting in Gurugram.
• In Bengaluru, the preferred localities are Koramangala, JP Nagar, HSR Layout, BTM Layout and Marathahalli.
• Velachery, Mogappair, Perambur, Choolaimedu and Kodambakkam are the top five localities that people prefer, while renting a house in Chennai.
• The top 5 renting localities in Kolkata include New Town, Dum Dum, South Dum Dum, Behala and Garia.
• The preferred localities for renting a house in Hyderabad are Kukatpally, Miyapur, Banjara Hills, Kondapur and Manikonda.
• The preferred localities for rental in Pune include Kothrud, Pimple Gurav, Kharadi, Hadapsar and Baner.
• More than 44 percent people prefer renting a house within Rs 10,000 in Chennai, Kolkata and Hyderabad. However, in Mumbai, Gurugram, Bengaluru and Pune, more than 42 per cent prefer a price range of Rs 10,000 to 20,000 for rent.

 

Read all such Property News at CREDAI MCHI – Thane Unit website.