Taking a View: Real Estate in India
SBI's Teaser Home Loans To Continue In The New Year As Well
India's largest lender, SBI is planning to extend its special home loan scheme, or the so-called 'teaser' loans that carry lower interest rates in the first couple of years, beyond December 31. But this time the loan will come at a higher interest as the bank is planning an upward revision of their base rate from January.
29 Dec 2010 DNA
Investors Selling Flats At Discounted Prices
Anticipating realty rates to plunge soon, individual investors have started selling their properties at discounted rates. Property brokers are being flooded with calls from investors offering rebates of 10 to 30% on their properties. Investors have played a major role in the real estate market in the last three years because they have cornered more than 50% of the properties booked during the period. Unlike end users, who pay in instalments, investors book flats in the pre-launch stage by paying 50% to 100% of the cost thus providing capital to builders. They plan to resell the property and make profits. These days, investors are trying to sell their properties so that they can make profits while the rates are still high even if they sell at rates lower than the market price.
28 Dec 2010 Hindustan Times
New Rules To Control Speculation, Tame Realty Prices: NHB
The recent guidelines on loan-to-value ratio and higher provisioning is expected to curb speculation in the property markets and even result in easing of prices, National Housing Bank Chairman and Managing Director Mr R V Verma said. "Possibly, it may help in bringing down home prices but immediately it (norms) may result in transfer of costs in the system," Mr Verma said. "In fact, the cost of providing or issuing capital may get factored into the price by the lending stations and if the cost goes up it can impact the flow of demand. If the demand comes down then prices may also come down or may be corrected from current levels." He said the norms had been essential as across housing categories, there was “too much of funds†coming into the housing sector and if construction did not happen then it could lead to overheating and make the sector unstable. "The norms were in order to bring uniformity and the competition does not drive housing finance companies to an edge of lending 100 per cent of loan to value, which can be invariably very risky," he added. He pointed out that if property value fell, then the default in such a case would be very high.
30 Dec 2010 Business Standard
China Realty Market Limps Into 2011
Chinese housing prices are back on track to dip in 2011, with tighter monetary policy and rising inventories combining to take some air out of a market that some fear could yet swell into a bubble. The government of China launched a campaign late last year to stop soaring property inflation, with the top-end sector in wealthy cities especially frothy. It succeeded for a while in stabilising prices, but there have been signs of a pick-up in recent months. Acutely aware of public anger over costly housing, Beijing will not stand for that. It will use higher interest rates, lending curbs and a battery of direct controls, from thwarting land speculators to levying a property tax, to deflate the real estate market. "The first half of next year will be a hard time for the property sector," said Mr Chen Dongqi, deputy chief of the Macroeconomic Research Institute under the National Development and Reform Commission, China's economic planning agency.
29 Dec 2010 DNA
DDA Flat Dream Likely To Turn True For More People
If you have applied in the latest housing scheme of the Delhi Development Authority (DDA), you have a good chance of really owning a flat this time. The DDA has received about seven lakh applications for the 16,000 flats it is coming up with across the city. This means for each flat, there are about 43 applicants. More than 14 lakh forms were sold through various banks between November 25, 2010 and December 24, 2010. The number of applicants this time was expected to be high considering so many flats were on offer, but the turnout has been quite low.
29 Dec 2010 Hindustan Times
Adarsh Society Could Not File Reply To Showcause Notice
Scam-hit Mumbai's Adarsh Housing Society has failed to file its reply to the show-cause notice served by the Union Environment Ministry asking why its 31-storey building at Colaba should not be demolished for allegedly violating green laws. "They have not filed the reply," a senior Ministry official said adding the hearing of the case has, however, been scheduled for December 29. The Ministry had in its order on December 15 asked the Society to file its reply by December 24 and made it clear that no further extension of time for filing the reply would be given.
27 Dec 2010 Indian Express
Builders Using Higher FSI Illegally
Some realtors, who made agreements for redevelopment of the colonies of the Mumbai board of the Maharashtra Housing and Area Development Authority (MHADA) as early as five years ago, are extracting excessive benefits of higher Floor Space Index (FSI). Ironically, though the FSI in 2005 was just one, these developers seem to be using a higher FSI of 2.5 since their construction began after the announcement of a higher FSI. Highly placed sources in the authority revealed that the authority officials are simply neglecting the fact that a section of developers is minting the higher FSI of 2.5, which was increased recently. "Though this lobby of developers is entitled to only one FSI, they are taking benefit of the change in regulation of the authority giving permissions for higher FSI. What is even worse is that the authority— in spite of taking a decision to create more and more housing stock - is not getting a single square feet's benefit out of these redevelopment proposals," according to a senior MHADA official.
1 Jan 2010 DNA
Citizens Demand Public Hearing On Property Tax
Representatives of over 50 citizens' groups have asked for a public hearing on the civic body's move to impose the new capital-value based property tax system. The Hindustan Times has been reporting how citizens have expressed dissatisfaction over the new system, terming the civic body's action 'arbitrary'. The new property tax will be calculated on the basis of the current market value of the property based on five factors - price, area, age, and type of property. At present, citizens are charged as per the rental value of their property. Criticising the Brihanmumbai Municipal Corporation (BMC) for not taking public views into account, except inviting token suggestions, these groups will be writing letters to all 227 corporators in the city, asking them to raise the issue at the civic general body meeting.
1 Jan 2011 Hindustan Times
Low-Cost Homes Catch On!
When Smart Value Homes, a 100% subsidiary of Tata Housing that focuses on affordable housing- launched its project in November, the company had to opt for "lucky draw" as the number of buyers was much more than the supply. This made one thing very clear: affordable housing was blooming. The Tata houses are sold between R6 lakh and to R8 lakh in the outskirts of Mumbai. According to industry experts, the trend is likely to continue in 2011 and the segment will see the least price movements in 2011. Affordable housing was coming up only in the peripheries of cities and not where it was actually needed, experts said. "The affordable variety is not happening where it is needed the most - in the central regions of cities like Mumbai where properties are overpriced. Nevertheless, this is causing newer locations to be developed in suburbs, so the residential market is expanding," said Mr Anuj Puri, chairman, Jones Lang LaSalle India, a real estate consultant.
31 Dec 2010 Hindustan Times
Mumbai Ready For Residential Boom With New Law
Redevelopment projects in Mumbai that were stuck because of strict coastal regulatory zone (CRZ) rules will get a push soon. Union minister of environment and forests, Mr Jairam Ramesh, is likely to soon announce new coastal regulatory zone (CRZ) rules that will give Mumbai 'special status' and allow unique CRZ norms to be framed for it. "We expect an announcement from the Centre soon," chief minister Mr Prithviraj Chavan said. An experts' committee under agriculture scientist, Mr MS Swaminathan, formed to review the draft Coastal Management Zone notification of 2008, had said Mumbai needs to be treated as a special case because the 45-km coastline is suffering damage due to haphazard construction. Mumbai-specific CRZ rules will allow cluster development of more than 16,000 old and dilapidated buildings located in CRZ areas in the densely populated island city. Cluster development, proposed in areas such as Girgaum, Worli Koliwada, Lamington Road, Chira Bazaar, Mazgaon and Vikhroli, aims at integrated development of an entire area with basic facilities. However, the rules do not make cluster development compulsory.
27 Dec 2010 Hindustan Times
BMC Laxity Likely To Cost Mumbai Its Open Spaces
Over the last 20 years, the Brihanmumbai Municipal Corporation (BMC) has acquired only 217 of the 1,586 plots reserved for open spaces in the Mumbai's Development Plan (DP) drafted in 1991. These figures were revealed in a two-year study of civic data undertaken by the Mumbai Vikas Samiti, a group of retired civic officials and city experts. The DP, which is an urban development blueprint, is being revised in 2014. This means that unless the BMC acquires the remaining plots in the next three years, the city could lose them to private and other development. The BMC blamed state agencies. "The BMC controls only 50% of the land; 40% is controlled by state and Central agencies, which refuse to part with," said civic Standing Committee Chairman Mr Rahul Shewale. The BMC has acquired only three of the 41 earmarked for parks (defined as large green spaces). Likewise, only 58 of the 620 plots earmarked for recreation grounds (open spaces used mainly for sporting activities) have been acquired.
28 Dec 2010 Hindustan Times
8/10 Home Buyers Are Not Happy With What They Have Bought: Survey
Only two out of 10 home buyers, both first-time as well as second-time, are satisfied with the homes they purchased as a large majority, numbering a huge 80 per cent, are dissatisfied with the dream homes they bought, according to a survey conducted among nearly 2,000 middle and upper middleclass buyers. A still larger portion (92 per cent) of the respondents is highly dissatisfied with the private developers and would prefer government housing, says the survey. What is more interesting is that in the absence of any effective regulatory mechanism in the realty sector, 74 per cent of these people would not mind investing in shares of the same realty developer they are dissatisfied with, says the survey. The main complaint against the developers include poor construction quality (92 per cent), poor facility management provided by the developers (69 per cent) and 67 per cent are sulking over the hidden costs. Other complaints include delayed possession, and short-changing on the floor area and carpet area among other issues. Within those dissatisfied lot, as many as 62 per cent are the first-time buyers while 38 per cent are second time buyers. On a scale of 1000, the customer satisfaction is a dismal 212.
2 Jan 2011 Indian Express
Branded Residency Is In Vogue
As new luxury-branded properties are ready to beautify Mumbai skyline, the old ones continue to attract those smitten by Mumbai's real estate. But it’s the branded residency which is brazing itself for tough competition. Mr Vikas Oberoi-promoted realty company is in talks with Ritz Carlton to put up its hotel and branded residency at its Worli plot near the passport office. "We are doing a branded residency and once the operator is in place, we are envisaging a project launch in February-April next year. Branded residency’s like Madarin in Hyde Park, Ritz Carlton, St. Ridges, put up and adhere to them and provide you with services," said Mr Vikas Oberoi, managing director, Oberoi Group. The tallest residential tower being built by Lodha Group is set to bring Armani Residences to India, says a banker close to the project, "Armani is definitely coming for the project." The old property, like the NCPA, and other old towers aren’t far from offering themselves.
1 Jan 2011 DNA
Don't Accept New Proposals Of High-Rise Buildings, Committee Tells BMC
The high-rise committee, appointed by the state government to approve proposals for skyscrapers in the city, has asked the civic body not to accept any new proposals till the committee frames guidelines for these buildings. The committee also decided to frame guidelines for the submission of proposals. The committee will decide the format for submitting proposals. Every developer will have to submit his proposal in the particular format along with a soft copy of the details of the proposal. "The committee discussed the 14 proposals that were on the agenda. After discussion, the committee asked the developers to comply with the queries that were raised. The committee will decide on the proposals in the next meting," according to civic sources.
30 Dec 2010 DNA