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| HAPPY TOWNCOMING |
| 02.28.09 (2:55 am) [edit] |
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SEAMLESS URBANISATION KEY TO ECONOMIC PROSPERITY
Mohanjodaro and Harapa were large cities with covered drains, paved roads and town planning. That was 4,500 years ago. Today's Indian cities lack these ancient virtues and are most notable for accommodating an agonizingly large proportion of the population in slums amidst filth, crime and amazing ingenuity that prevents the human spirit from succumbing to utter degradation in these environs. This situation is poised to become worse, much worse, unless we take action to build new towns, and build altogether new kinds of towns.
The challenge is straightforward. Fast growing India has to urbanize equally fast. The share of agriculture is down to 18% in total output, already. This will go down further, as agriculture grows at sub-4% rates, even as industry and services surge ahead at double that rate, year after year.. The share of the population living off primary activities also will come down. Services and industry grow, preponderantly, in urban settings. The share of the urban population, a mere 28% according to the 2001 Census, will go up, and much faster than it has so far.
If we assume that 15 yeas from now, half of India's population, projected to reach 136 crore by then, would be urban, that would mean an additional 32 crore people living in towns (this assumes that the present level of urbanization has already moved up from the 28% of 2001 to around 32% of 113 crore).
Can we imagine the stet of affairs if these 32 crore people descend on the existing towns and cities? It is inevitable that we build new towns to accommodate the new residents of towns. And assuming a very high population density of 12,000 people per sq km, we will require additional urban space of 27,000 sq km. Make that 18 cities each the size of Delhi.
Building new towns is the key to raising productivity of the Indian economy as well. Right now, artificial shortage of urban land has put a premium on the cost of real estate. Office rentals, hotel accommodation, land for factories, all these cost the earth and add o the cost of the goods and services emerging from these expensive sites of production. Expensive real estate makes education and health care costly as well. Hospitals and schools in urban areas will find that upwards of 50% of their capital cost is accounted for by real estate. This jacks up the cost of quality healthcare and education, and these higher costs feed into business costs, affecting India's competitiveness in the global marketplace. Another consequence of asking up the cost of healthcare and education is to make these unaffordable for the majority and to waste resources, even if these are made available through public financing of health insurance. The simpler alternative is to remove the shortage of urban land and bring down the capital cost of providing these services drastically.
The way to remove the shortage of urban land, of course, is to increase the supply of urban land. This essentially means building more towns, converting rural land into urban land.
Such change in land use already happens. When a new highway is built, small shops cluster on either side and grow into small towns in no time. But these are haphazard structure, devoid of even rudimentary planning, infrastructure like sewerage, parking or public places. We need planned urbanization instead of mushrooming of shanty towns.
India and China are coming under increasing pressure from the rest of the world to reduce their emissions of greenhouse gases. While these emissions are tiny in per capita tars, in the aggregate, they make these developing giants some of the biggest contributors of climate change. New cities that cut down on energy consumption by up to 50%, as compared to conventional towns, can become symbols of India's commitment to mitigating climate change.
How can new towns cut down on emissions? Through better planning and adoption of better technology. The largest claim on energy in a city is transport. By going vertical, and by allowing mixed land use, it is possible to ensure that people live close to where they work. Building tall buildings, however, calls for opts of planning to provide for parking facilities and open spaces where residents of these tall structures can take in nature. The advantage of building a new town from scratch is that public transport through multiple modes such as buses, underground and overhead rail and tram can be built into the structure of the town.
Green buildings can reduce energy consumption for heating/cooling and lighting. The use of the right building materials, paints, designs that maximize the use of natural lighting, tapping the temperature differential blow and above the ground, light emitting diodes that yield double the units of light per watt as compared to compact fluorescent lamps — all these can reduce energy consumption substantially.
Proper town planning and sensible laws on rents that understand that liberal supply of housing rather than regulation is the best guarantor of cheap rentals can prevent the growth of slums.
Low cost tenements should be planned alongside posh residential blocks so that service providers live in regular housing rather than become illegal squatters on land not intended to accommodate them.
Municipal laws and governance structures must allow such new towns to be run efficiently. Cities must have sufficient taxation powers to be able to issue municipal bonds to carry out developmental work. They must have enough administrative powers and staff under their control to perform the services expected of them.
Courtesy:- ET dtd:- 19-02-09
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| PLANNING TO AVERT URBAN DISASTERS |
| 02.28.09 (2:55 am) [edit] |
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All this calls for a bold new agenda of urbanization. The Jawaharlal Nehru Urban Renewal Mission is a good beginning, but does not address the creation of new towns. This calls for political innovation and boldness.
To take on the challenge of releasing land for urbanization, to begin with. Ousting villagers or fobbing them off with paltry compensation is not a viable option in democratic India. The solution is to convert those who lose land to urban projects into stakeholders in what comes up on their erstwhile land.
There would be no unique one way to achieve this. Political imagination can, however, find a way – provided it is rooted in the welfare of the collective, rather than in the cavalier whimsy of an elite.
Those states that can find the best way to urbanize fast will win the race to prosperity. Happy building!
Courtesy:- ET dtd:- 19-02-09
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| BUT SERVICE TAX CUTS, NOT LOWER DUTY, TO HELP REALTY |
| 02.26.09 (10:50 pm) [edit] |
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The real estate industry is not enthused by the cut in duty on bulk cement from 10% to 8%. However, the cut in service tax rate from 12% to 10% will benefit those who have taken large commercial properties on rent.
Gera Developments CMD Kumar Gera said the reduction of 2% will have no impact at all. “It will make a difference of just Re 1 per square foot on the cost of construction. It is irrelevant and means nothing for the industry,’’ Gera said.
Real estate consultant Ashok Narang too felt that the reduction on bulk cement duty would make no difference on eal estate. “The market will kick start only when banks bring down interest rates to about 7% for a longer period. This cut in duty is just an eyewash. There need to be more incentives for the housing sector.’’
The head of a large real estate company said the cut in service tax will benefit those who are on rent in large commercial complexes. “For example, someone paying Rs 1 crore as rent annually for an office space. Earlier, he would have paid Rs 12 lakh as service tax. Now he would save Rs 2 lakh annually since under the new rate his service tax outgo will be Rs 10 lakh,’’ said the official.
However, industry players feel the government decision could have a positive impact on people’s sentiment. Property redeveloper Pujit Agarwal said that at a time when market sentiments are low, any kind of incentive is helpful, however small. “The duty city will bring down the cost of construction by just 1.5%. It is not much, but nevertheless a breather for the industry. The government wants to show it is being proactive,’’ he said.
South Mumbai developer R C Chaturvedi said a cement bag currently costs Rs 260. “With this reduction the saving per bag will be just 1.2%. This will not make much difference on the cost of construction,’’ he added. Developer Sunil Mantri of Mantri Realty said a cement bag will now be cheaper by Rs 5 to Rs 7. “Its a good step by the government, although a small one,’’ he observed.
Developer Pravin Doshi, who is also the president of the Maharashtra Chamber of Housing Industry, however, observed that this will make a difference on big projects. “It will help a lot. The cost of construction will reduce by at least 7% to 8%. It is a good decision.’’
Courtesy:- TOI dtd:- 25-02-09
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| GOVERNMENT OKAYS ADANI SEZ MERGER |
| 02.26.09 (3:14 am) [edit] |
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The Board of Approval (BOA) on Special Economic Zones (SEZs), the apex decision-making body for such tax-free industrial enclaves, today approved a proposal to amalgamate three separate zones, effectively lifting the 5,000-hectre limit on such zone that the government imposed in 2007.
The combined zone, which is promoted by the Adani group, will create India’s largest SEZ with an area of 6,100 hectares in Mundra, Gujarat, making it the first zone to exceed the 5,000-hectare limit.
These three zones, which have been notified and were situated next to each other, include two multi-product SEZs and a power-based zone. The clearance to consolidate the zones was given today at the last meeting of the BoA under the present government.
“The amalgamated zone is likely to see investments of over Rs 1,00,000 crore and employ over 500,000 people in the next 10 years,” said a government official.
The Board, which will meet again only in June after a new government is elected, also formally approved nine SEZs, including one being developed by a company promoted by Anand Jain, a close associate of Mukesh Ambani, chairman and managing director of Inda’s largest private sector firm Reliance Industries Ltd.
Adani had cited reduction in operating costs as one of the reasons for consolidation.
The three SEZs wer notified separately because the developer bought the land in separate trenches. A public utility road runs between the two multi-product zones, which prevented the consolidation of the SEZs. This road will now have brides connecting the two zones.
The power-based SEZ will have to produce 2,300 Mw of electricity. “The first unit of 300 Mw will start producing power next month,” the official said.
The merged SEZ was allowed to exceed the 5,000-hectare limit after an Empowered Group of Ministers headed by External Affairs Minister Pranab Mukherjee, in October 2008, permitted zones to be amalgamated. There was, however, a condition that each zone could not be more than 5,000 hectares.
Significantly, the same group of ministers had capped the maximum size of SEZs at 5,000 hectares in April, 2007, against the backdrop of public outrage against the zone.
The board also cleared Essar’s steel-based SEZ to export its products to an adjacent steel plant of the same company through a conveyor belt. “There were some apprehensions that some goods from the SEZ were being diverted to the domestic tariff area next to it, but on inquiry it was found that there was no such case,” the official said.
Courtesy:- BS dtd:- 24-02-09
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| IF YOU'VE GOT IT, FLAUNT IT! |
| 02.26.09 (3:13 am) [edit] |
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Never mind political correctness, rich homes will boast of bespoke furniture, bigger accessories, mirrors and a sens of drama this year, predicts Abhilasha Ojha.
I it’s been less than 72 hours since Nikhil and Payal Sen returned from Ambient, the annual trade fair in Frankfurt that focus on trends in interiors around the world and has lure companies, brands and consultants from all over participating. “What we saw there,” says Payal, “is what you’ll find in selective homes in India. ” As an afterthought, she adds, “You’ll also find variations of these trends to suit different pockets.” Husband and fellow interior designer Nikhil explains, “We create even a product like candle in keeping with current trends. That’s what we mean by variation,” he says.
But really, what are the design trends in interiors if one is looking at doing up homes for the rich and the exclusive — for members of the billionaires club? Giorgio Armani, who, besides dressing up those who can afford his couture, also breathes in his sense of style into individual homes through Armani/Casa, his home furnishings company, recently mentioned in a newspaper interview that “exaggerated fours and patterns and eccentric shapes have to be done away with in not just fashion but also in the domestic landscape”.
Reflecting this emerging mindset is a limited edition furniture line at Casa, UAE, for instance. Though the designer himself is likely to tell you that he doesn’t adhere to any particular theme, the pieces, reflecting a “Jazz era theme”, boast of simple geometric patterns, precious finishing and a fascinating contrast between refined and rough materials.
Among other things, the UAE store showcased Antoinette, a slinky, mirrored, retro-themed dressing-table in what Ambani’s office calls “a pale shade of Champagne”, with mother-of-pearl details, and Adelchi, a sleek desk with a surface of shiny metal tiles.
But how much of these international trends in design and interiors are reflected in exclusive homes in India? “They are reflected cent per cent,” says Payal. “Global trends do have n impact on the Indian consumer,” she adds.
Though she doesn’t disagree completely, Anjalika Kriplani of Renaissance Homes, a high-end furniture store, sys, “International trends reach Indians — and we’re talking only rich and famous here — at least a year later. So, for instance, if the global trend in nod they always like to look at everything very closely and then decide on what they’d like to include in their homes. On our part,” she adds, “We prefer to give them as many options as possible.” In her view, current trends include emphasis on white furniture, on “bigger” pieces and lots of mirrors in different areas of the home. “Mark my words, by next year, the emphasis in interiors will be on a classic Victorian look,” she says. Payal, in fact, predicts that in terms of colors — on the walls, for example — the emphasis will be on creating a sense of drama through warmer tones. (“Black, fuchsia and yellow tones age very much in.”)
At Casa Forma, a one-stop property services outfit for the ber rich, CEO Faiza Seth is already culling out finer details former discerning clients. With a focus on the luxury market, Seth says that “bespoke furniture is a growing trend”. She adds, “Clients want their home to be unique. There’s an increasing demand for customization and we find clients wanting the perfect balance between having designer statement pieces alongside bespoke furniture pieces to create a scheme based on their personal tastes, interests and lifestyles.”
Casa Forma, for example, is designing bespoke wardrobes to house a client’s collection of shoes, bags, jewelary and building walk-in wardrobes built around a client’s height, as well as designing a dining suite with inlay motifs to match the decor of the dining room.
That apart, experts like Seth are agreeing on how the rich have a newfound love for clean and white streamlined surfaces. “White is also an amazing and versatile neutral that can be used with a wide array of other accents and colors to make the design of the furniture Stan out,” explains Seth. She makes another interesting point. “Global influences are mixing with traditional influences to create a fusion of styles that includes the best of different worlds.” The English Country look, for example, can be mixed with Eastern influences, African safari prints or Asian patterns.
Interior architect Raseel Gujral, who has designed some of the finest homes in India, agrees that “one’s own influences are coming forth and reflecting in homes.” She says she feels relieved that “Our own traditional influences, our heritage is finally finding a lot of prominence in homes. ” The love affair with labels, according to Gujral, has, thankfully, reduced. Instead, the emphasis is on “a jeweled look with more than a hint of Indian heritage”. Gujral is sticking to neutral colors for walls even though “cinnamon and ochre tones” are finding a lot of takers. She is offering, in furniture for instance, lacquer on wood, semi-precious embellishments, metal-embossed motifs and what have you. “We find the rich lot preferring the use of old design objects even in contemporary settings,” says Gaelle Lunven of Sia Home Fashion.
Renowned designer of luxury yachts Patrick Knowles, says, “Trends in mega yacht interiors are a good indicator of what the rich are seeking in interior design, whether on lad or at sea. We are increasingly creating vintage Italian villa themes in yachts too.”
Back home, however, designer Rajeev Kanwar of Window Passions laughs, “The rich lot is getting dictated with apartment culture. Design in apartments (no matter how big) will look rich, but understated.” He says that it’s in the villas that opulence is reflected. “The classic modern look in homes continues to do well and yes, I do see a lot of emphasis on bigger pieces that dot homes,” he says.
What the Sens saw in Frankfurt, in fact, is a reflection of Kanwar’s statement. Candelabras reaching out to nearly touch chandeliers, the merging of materials in furniture, jade and metal, chrome and wicker, tall lamps, big pieces of blown-glass vases and other accessories, the element of bigness and the drama of colors is what’ll dominate homes in the coming year. We have it from our experts.
Courtesy:- BS dtd:- 21-02-09
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| LOAN AGAINST PROPERTY |
| 02.25.09 (4:35 am) [edit] |
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You can raise funds by mortgaging your property
Are you in urgent need of money? Perhaps a loan against property can bail you out of crisis. This is a loan disbursed against the mortgage of your property. Personal loans come with a high interest rate tag and short loan tenure. When you take a loan against property, it works to be cheaper than a personal loan. This is because the lender has a security in the form of mortgaged property, which does not exist in a personal loan.
With a long repayment period, usually 10 years, you can get a loan against your house. You may need the money for your child's education, marriage or other exigency. Like in the case of personal loans, the lender does not ask how you intend to spend the money.
Some banks extend the loan against property facility to residential as well as commercial properties, for loan amounts ranging from Rs 10 lakhs to Rs 3 crores (varies from lender to lender). From funding existing business to debt consolidation, emergencies and education, these come as a big relief in times of need. Some banks even throw in freebies like free personal accident insurance cover.
To qualify for a loan against property, you must be above 21 years of age and less than 60 years, if salaried. The maximum age limit for self-employed individuals is 65 years. Salaried applicants are expected to be employed continuously for at least three years. The eligibility criteria are the same as that for a home loan.
Documents required include proof of identity (passport, driving license etc), proof of residence address (passport, electricity bill etc), and proof of age(birth certificate, school leaving certificate, passport etc). Salaried individuals must submit their latest acknowledged IT returns or bank statements for the last three months. Self employed individuals can submit computation of income for the last two years certified by a charted accountant.
Some lenders allow this loan to be taken as an overdraft. The advantage of taking a loan using the overdraft option is that you have to pay interest only on the money you withdraw, till the time you repay it. Otherwise, if you seek a normal loan, you will have to pay the interest on the entire amount throughout the tenure of the loan.
When choosing a lender, there are other factors that you must consider like fees and penalties. Processing fees is the amount charged by banks to cover the cost of processing your loan. This amount varies from bank to bank. The fee is usually between 0.25 to two percent. Prepayment penalty is paid by the borrower for foreclosing the loan before the actual tenure. This is levied as a percentage of the outstanding principal of the loan amount by some lenders. Understand these penalties, charges and fine prints before you select a lender.
Courtesy:- Times Property dtd:- 21-02-09
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| REALTORS PLEAD FOR PICK-ME-UP DOSE |
| 02.25.09 (4:34 am) [edit] |
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"We are disappointed. We executed much more from the government to kick start the economy," said Niranjan Hiranandani, managing director, Hiranandani Constructions.
Though the stimulus packages announced in recent months did benefit the real estate sector, the industry was expecting more relief after a humbling year in which the sector which rarely saw anything but a boom saw a slump in demand, oversupply and stagnating, if not falling, prices.
"Shining India" with high economic growth had resulted in industry borrowing huge sums of money to build malls, apartments, IT parks and offices. Now, the industry is looking for tax incentives for small homes and easier loans for home buyers, as affordable homes look more real than other things.
Industrialists believe the real estate sector needs help because stimulating this sector is a worldwide practice during slump conditions.
"By definitions, an interim budget has its limitations. We had nevertheless hoped that it would factor in the overall languid state of the real estate sector and provide measure that will assist in energizing it," said Anuj Puri, Chairman & Country Head, Jones Lang LaSalle Meghraj.
The sector got prominence from 2004 when home lone interest rates crashed to 7.5 per cent enabling many home lone seekers to own houses. Soon after there was a bull run in this sector which grew by over 100 per cent year on year till the bubble burst in 2008.
The industry is now licking the wounds caused by acquisition of high-cost land, high borrowings, overpricing and irrational exuberance on demand.
Courtesy:- HT dtd:- 17-02-09
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| RIGHT TIME OR RIGHT PRICE |
| 02.24.09 (1:28 am) [edit] |
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The big wait is on. Buyers are all waiting for the lowest point in the real estate cycle where prices bottom out, enabling them to get an attractive deal. Namrata Kohli reports
To buy or not to buy has been the question. There are genuine buyers in the waiting but they are playing a cautious wit-and-watch game, hoping prices will rationalize themselves.
Gagan Gulati, a housewife, says: We have wanted to buy for the last eight to nine months. First, the values were prohibitive as the flat where we are staying on rent in Dwarka was a 3+1 unit, up for sale for Rs 92 lakh. However, the same flat is now available for Rs 86 lakh. We are hopeful that the values will correct further and it should be an affordable proposition for us to buy them within Delhi. We are quite fed up of waiting but as every penny counts, sanity lies in waiting, for the time being.
There was a time when it was an investors market and the end users had got elbowed out of the market what with values reaching unrealistic levels. Now, with market dynamics changing, developers have started lowering prices but values still haven’t reached attractive levels for end users. Hence, further reductions are needed in the interest of completing projects which are in various stages of construction.
The values have dipped but the buying activity has not picked up as popular perception is that values will fall further. There has been sufficient competition in the market amongst developers, with respect to pricing, says S C Jaisimha, Managing Director of Asia Pac International India. Everyday, we have been witnessing developers dropping prices in their ongoing projects and new project launch being launched at corrected price levels. There are new sectors which have come up on account of the new master lanes (in many Tier I cities), which has increased the availability. Jaisimha adds that supply has overtaken demand by almost 200%. Today's mantra for developers is liquidity and cash flows for early and timely completion of projects with reasonable margins, rather than looking at a long horizon for better margins So, in many pockets, we have already witnessed prices generally dropping in the region of 25-30% and in some exceptional cases, close to 50%. With this, we believe the prices have dropped to reasonable levels, which has prompted some genuine buyers to scout for properties of their choice and budgets. Having said this, there is still a perception in the market that the pricing has not bottomed out. So for the time being, it is a wait-and-watch scenario for most of them.
There has been a significant drop in transaction volumes with high interest cost on loans, which has been prevailing free over a year now, also being a reason. But slowly and steadily, this is also coming down, which would generate demand in the medium to long term.
So, what has been the drop in transaction volumes? According to Vivek Dahiya, director of occupational and development markets at DTZ: There was a significant drop in transaction volume in Q4 of CY 2008. Some brokerage firms focusing on residential transactions oly saw volumes come down by 50%-70%.
Today, ready-to-move-in apartments are really selling, albeit with low premiums compared to projects under constriction. The new projects with realistic pricing have attracted genuine buyers.
Significantly, the direction in which demand is moving and the supply is following suit, suits the mid-end housing. Jaisimha says: The hot market today is the middlemen or the affordable housing in a budget range of Rs 20 to 30 lakhs for a decent 2-bedroom accommodation. Some developers visualized the importance of this and have already made inroads into this category. So, today you see various leading builders like DLF and Unitech announcing schemes for affordable housing. The recent response to allotment of flats by DDA is a classic example of genuine buyers waiting to buy at reasonable and realistic pricing nearly 8 lakh applications for just 5000 flats says everything.
The big question is when will real estate prices actually bottom out. Dahiya says: Reduction in rates will carry on through 2009 and in some micro-markets or product types even till 2010. Essentially, markets or segments that witnessed the steepest resin the 24 month during 2006-07 will continue to get rationalized over the next 4 quarters. Transaction activity is beginning to pick up, but only marginally, and in select locations and projects depending on attractiveness of rates.
However, developers would have us believe that whatever correction was possible has already happened and the properties are today available at best prices. Brijesh Bhanote, vice president sales and marketing at Vipul Limited, says: I think the real estate values have already gone through a big correction and the only way now for it is to go up. The margins at which developers are operating today are any way so low that sustenance can become an issue with many who have not regulated their finances.
Rohtaz Goel adds that the residential real estate is offering best deals to its buyers in current scenario. Most developers have already squeezed their margins to the minimum level, and hence we don't see any further price correction in the real estate. The projects are therefore available at the best price to both end users and investors.
At the same time, they recognize that the demand for affordable and mid-income housing is constant. They feel optimistic that the recent cuts in repo rates and CRR rates will further help in softening the interest rates in the coming months and bring the customers back to the market.
Courtesy:- Times Property dtd:- 21-02-09
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| PROPERTY INVESTMENT: HEDGE AGAINST INFLATION |
| 02.24.09 (1:27 am) [edit] |
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This is a good time to make property a part of your investment portfolio, says Kavita Sriram
The markets follow a cyclic pattern. Around eight months ago, it was a seller's market. Real estate prices had peaked and were unaffordable to many. Today, it is a buyer's market. Developers are wooing customers with bargain deals and innovative offers. Is it time to clinch a great deal and own that dream house?
Investors dread the inflation monster that erodes hard-earned money. Buying a property is a wise decision for those who are prepared to stay invested for a long term. Real estate has yielded a compounded return of over 20 percent per annum over a long term. In cases even more. Perhaps that's the reason why it is considered an effective tool to beat inflation.
People paying a huge rent month after month must contemplate buying their own home. By paying EMIs to the lender instead of rent, you can own the house in the next 20 years. Interest rates are sliding to single digits making borrowing a less painful experience.
Investment in property calls for tremendous caution. The property's title needs thorough investigation. Location of the property is another vital issue. You can buy a larger house for the same money on the outsets of the city, than in the heart of the city. However, a location far away from city may lack in the amenities you need. A property located in a prime residential area appreciates faster and has greater resale value. Factor in condition of the building, parking, neighborhood, safety and water quality.
Bargain deals from developers are the best bait that prospective home buyers must consider. Unheard of deals an offer are on the platter.
The situation is quite contrary to what it was a few months back. Inflation had pulled up the cost of construction. Interest rates on home loans had crossed double digits and land prices had sky rocketed. The mood in the realty sector is upbeat. People who ad procrastinated on their decision to invest in property are reconsidering their decision. With ever-increasing population and ever mounting demand for housing and office space, property values are set to appreciate.
Bear in mind a long tem investment perspective. Add realty to your portfolio and beat the inflation monster.
Courtesy:- Times Property dtd:- 21-02-09
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| Toxic buildings can make you sick |
| 02.23.09 (1:50 am) [edit] |
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The sick building syndrome is increasingly
Affecting people around the world as
They spend more and more time indoors.
Shopping malls-cum-multiplexes are sprouting like mushrooms everywhere. These are centrally air-conditioned buildings, created for leisure and pleasure- movies, eating out, splurging on top retail brands. As we adapt to this new life style of living indoor for lone durations in air-conditioned environments, we are facing a new kind of hazard… the ‘sick
Building Syndrome.
It covers a range of symptoms, which occur when an individual spends time in a particular building. How does one find out if one’s suffering from it? There should be a group of people suffering from the same symptoms (fatigue, aches and pains, Itchiness, rashes, nasal allergy) that occur when they are in the building and absent when they are not.
What’s building- related illness then?
There is a difference between sick building syndrome and building-related illness. Where the latter is concerned, the signs and symptoms of illness are readily identifiable and can be attributed directly to specific airborne pollutants in the building-for example, hypersensitivity pneumonitis. In contrast, the causes of symptoms in cases of sick building syndrome are difficult to pin down. These could be difficulty in concentrating, dizziness. There may be a range of factors that may contribute to the situation. Although the problem of sick building syndrome has been recognized, statistics regarding the prevalence of the problem are limited. A world health organization (WHO) report from 1984 suggested that up to 30 percent of new and renovated buildings worldwide may generate excessive complaints related to the syndrome.
Symptoms
According to the United States Environmental Protection Agency (EPA), Sick Building Syndrome is suspected when the following occurs:
• Symptoms are temporally related to time spent in a particular building or part of a building.
• Symptoms resolve when the individual is not in the building
• Symptoms recur seasonally (heating, cooling)
• Co-workers, peers have noted similar complaints
Though the exact mechanism by which a building, or substances in the building, causes occupants to become ill remains unknown, the problem areas can be identified and corrective actions initiated. The ventilation system specifically is generally found to be at the heart of the problem. Poor interior design usually supplements it. The illness gets worse due to extremely low levels of specific pollutants such as volatile Organic Carbon (VOCs).
Chemicals such as formaldehyde, which is a component of the particle board being extensively used in modern buildings as well as in furniture causes irritation in eyes, nose and throat. It is also a carcinogen. These VOCs evaporate at ambient temperatures within a building. Other sources of VOCs are carpeting, paints and varnishes where these are added as solvents or binders. In addition, cleaning products used in the buildings contain a range of VOCs. Marker pent’s are a concentrated source of VOCs. Their chemical constituents include methy1 ethy1 ketone (MEK), toluene and formaldehyde-all carcinogens. The ink cartridged and toners also contain VOCs although at less concentrated levels than marker pens.
Other then chemicals, uncleaned air-conditioning systems and ducts are a breeding ground for micro-organisms and biological contaminants that cause various allergies. Other than viruses and bacteria, mold is reported to be one of the leading causes of sick building syndrome. It grows in air-conditioned ducts that provide a warm and damp climate for its rapid growth.
Building such as multiplexes are visited by large number of people with different levels of hygiene. Persons not washing their hands after using the toilet can be a big problem. Poor sanitary and cleaning practices further aggravate the problem.
How to minimize Sick Building Syndrome
• Proper ventilation and building design
• Minimal use of carcinogen chemicals like formaldehyde in the building materials
• Regular maintenance and cleaning of air-conditioning systems and ducts
• Efficient and effective monitoring of guidelines on indoor pollutants
Courtesy HT dtd:18/02/09;
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| Take a good, hard look at ‘affordable’ |
| 02.23.09 (1:50 am) [edit] |
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Given the immense opportunity that lies in the affordable housing segment, it’s time it is given importance by the government and the private sector alike, says Anshuman Magazine
The ongoing economic scenario has compelled real estate developers and stakeholders to look at optimizing their resources and employing befitting strategies to tide over the current times. In line with the fast transforming external conditions, some structural changes are underway in the residential sector as well. The combination of current slowdown in demand in the sector and the oversupply or the concentration of premium category supply has pushed developers to redefine their product portfolios with affordable or mid-end housing becoming the new mantra.
A high demand and volumes game
Temporarily reduced buying power due to high residential prices, rising inflation rates combined with a hike in interest rates, have impacted the demand for high-end residences. As such, venturing into affordable or mid-priced housing seems to be the appropriate recourse and this segment has become the most talked about asset class of the recent times. Developers today realize that this segment offers maximum opportunity and prospects on account of two key factors.
First, according to the 11th five-year Plan (2007-2012), of the total estimated shortage of 26.53 million dwelling units, the maximum shortage is in the mid and low segment for which the demand is relatively in flexible. Second, this segment will entail a volume game rather than value, and will serve to boost the top line in the long run. Hence, even though the margins in this segment may be lower, the inherent demand and higher volumes will make up for fall in margins.
No doubt then that this sector is being much talked about and several leading developers have evinced interest. However, little ground has been covered till date and the actual activity in this segment has been rather limited. Given the apprehensions regarding the low profit margins and the fact that this product offering has not been catered to by most developers until now, several uncertainties need to be cleared in order to pave the way for the success of this new asset class.
The best approach
The right approach would be to focus on cost minimization and by developing a value-chain oriented strategy by virtue of backward integration. More than 80 per cent of the total residential demand in India today is in the affordable and the mid-end housing segment and hence the real estate players will stand to cash from volume-driven profitability and economies of scale. Of course, the other key factors will be identifying the right markets, using alternate materials, low-cost housing techniques and incorporating global best practices in developing similar product.
With the builder fraternity moving in to fill in the existing gap in affordable housing, some constructive steps need to be (or are being) taken by the government to facilitate this movement these would primarily include introducing progressive reforms like repealing the Urban Land Ceiling Regulation Act (ULCRA) and increasing floor space Index (FSI), micro financing, etc. A shot in the arm has been the recent policy move granting ‘priority’ status for housing loans of up to Rs. 2 million and for loans given by banks to Housing Finance Companies (HFCs) for on-lending to individuals for purchase or construction of homes of up to Rs. 2 million. Apart from these, mobilizing funds from various agencies, encouraging private-public partnership, public housing agencies such as the state housing boards, various government welfare housing organist ions, etc. to take lead, subsidization of construction inputs and above all developing land and providing infrastructure facilities in locations feasible for affordable housing projects, will give it the required impetus
Courtesy HT dtd: 18-02-09
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| Get your lender to woo you again |
| 02.20.09 (3:32 am) [edit] |
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If you are a lender’s long-time customer and he’s not giving you loan rate cuts offered to new customers, you should start making a noise about it, says Harsh Vardhan Roongta
“ SBI drops home loan rate to 8 per cent. Rate war expected,” screamed a Sunday morning headline. The detailed interview also mentioned that unlike the 9.25 per cent package announced in December 2008, home loans at this rate would be available to existing home loan customers of other banks shifting their loans to SBI. “After all they are new customers as far as we are concerned,” said the SBI chairman. What about SBI’s
Own home loan customers? Well, they will have to be satisfied getting a new loan (which they may not need at all or may not need at all or may not be eligible for) equivalent to 10 per cent of their existing loan amount at the new rates though-on their existing loans-they will continue to pay the old high rates which are just a tad lower than the all time highs reached in August 2008.
Clearly the wife (existing loan consumer) syndrome is alive and kicking even for
Public sector banks. This is not to suggest that SBI or other public sector banks are the worst offenders in this respect. They clearly are not. In fact, there are quite a few private sector home loan lenders who continue to charge their existing consumers at 13 per cent or higher even while they have dropped rates to single digit (or low double digits) percentage for new consumers. This disregard for existing consumers is all-pervasive and not a single player (whether public sector) can claim to have treated its existing consumers fairly whenever they have dropped interest rates for new consumers. In fact, whenever this issue is taken up by the media none of the lenders bother to defend the practice, given its completely indefensible nature.
So why does this keep happening? It’s because the consumers allow it to continue. Only a very few consumers take the trouble of researching the market (see the comparator for banks offering transfer of home loans) and look at alternative offers for taking over their home loan. They then call their existing lenders for a letter giving details of the loan amount outstanding and the amount required to be paid for making a full and final settlement of the same to enable them to shift it. If the consumer has been regular in paying his EMIs he is a prime customer and no bank likes to lose his business. In many cases, therefore, his existing lender would agree to match the interest rates the new lender is giving him. Even if the existing lender does not do so the consumer still benefits by shifting his loan.
We get a lot of queries on this subject from existing home loan consumers asking us for the legal options available to them to compel the existing lenders to pass on the benefit of lower rates to them. Our answer is always the same. Economics can always trump law. Stop expecting the “mai-baap” sarkar to do everything for you. Vote with your feet. Go to the cheapest provider on your own. You do not need any legal help for this. If enough consumers do it the lenders will stop treating you like the proverbial “wife”.
Having said that RBI can also do a lot to ensure more transparency in this regard. All the suggestions given below do not require any changes in the law and will introduce a level of transparency in this rather opaque market.
• They can make it mandatory for the lenders to disclose on their websites all the reference rates used by the lenders for pricing floating rate loans, including history of movement of such reference rates in the past as well as the spreads (from minimum to maximum) from such reference rates charged from quarter to quarter after taking into account all loans sanctioned in that quarter. This will make it easier for the consumers to decide on the past history of the lender in passing on the benefit of rate cuts to its existing consumers.
• Make it mandatory for the lender to specify the basis of fixation of the floating rate. This means that eh lender will have to specify which reference rate is being used and the spread from that rate. Surprisingly, there are quite a few home loan agreements. Where the interest rates are just mentioned as floating without mentioning the basis.
• A slightly more controversial suggestion is to force the lenders to use publicly determined reference rates such as the yield on GSecs of certain maturity instead of an opaque internally determined reference rate.
• In fact the window to make this market more transparent in not a large one. Some smart politician is going to pick up this issue to make far more stringent rules as law. After all lenders don’t have votes, the loan consumers do. And now the loan consumers have reached a mass that justifies reached a mass that justifies taking up of such issues by the politicians.
• While the regulator (or a politico) takes up this issue the consumer should stop behaving like a martyr wife and threaten to become the girlfriend of another. That’s the only thing that will make their husbands (existing lenders) behave well towards them.
• Harsh Roongta is CEO Apna Loan, a price comparison site that allows consumers in India the ability to compare the EMI, interest rates and other fees for home loans, car loans, personal loans, business loans and credit cards
Courtesy dtd HT 14-02-09
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| A Large number of residential projects on NH 1 |
| 02.20.09 (3:31 am) [edit] |
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A Large number of residential projects are being developed in Sonepat along with Kundli and Panipat on Natioanl Highway 1. Kundli is projected to become the largest logistics hub of north India once the KMP becomes fully operational.
“Kundli is fast emerging as the next ‘new’ Delhi due to its close proximity to west and north Delhi. In the next three five years, we see a very bright future for Kundli as by that time the entire TDI City will be completely developed and inhabited,” says Kamal Taneja, MD, TDI.
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| Housing left to stand on its own |
| 02.20.09 (3:31 am) [edit] |
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In spite of all the talk of helping the aam aadmi, the outlay under the Indira Aawas yojana (IAY) for the rural poor in 2009-10 is more or less the same as in 2008-09 (revised estimate). While the central plan outlay, in 2008-09 was Rs, 7,919 crore, the amount budgeted for 2009-10 is Rs 7,920 crore.
Contrary to expectations, Finance Minister pranab mukherjee did not announce any sop for urban housing. The total outlay for rural housing in 2009-10 is estimated at Rs 8,880 crore, which includes Rs 880 crore for sikkim and the North-East.
IYA is the flagship scheme of the central government and provides financial help for construction of dwelling units and upgrade of existing unserviceable house for scheduled castes/scheduled tribes and non-scheduled castes/scheduled tribe’s rural families living the poverty line.
The assistance provided under the scheme is Rs 35,000 per house in plain areas and Rs 38,500 in hilly or difficult areas. In addition, Rs 15,000 is provided for upgrades. Under the credit-cum-subsidy scheme, household with annual income of not more than Rs 32,000 are provided a subsidy of Rs 12,500.
After the two recent rounds of stimulus packages, real estate developers and bankers were expecting fresh measures to bolster demand.” It was a waste of opportunity for the government,” said Niranjan Hirandani, chairman of the Hirco group.
Fiscal incentives such as restoring Section 80 (i) of the Income Tax Act for affordable housing that was withdrawn in 2007-08 would have helped created huge demand and generated huge employment, he said adding that nearly 1.5 million people in this sector had lost their jobs due to decline in demand. Real estate developers are facing a huge meltdown in demand for houses.
Courtesy: ht dtd 16-02-09:
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| Real estate on shifting sands |
| 02.19.09 (3:17 am) [edit] |
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The Indian economy has been growing at an average rate of 8.8% in the last four fiscal years, with the 2006-07 growth rates clocking an impressive 9.6%. The financial reforms of 1991 have been complemented by favorable policy changes and significant increase in investment on physical infrastructure. The country has also emerged as the fourth largest economy (in Purchasing Power Parity ‘PPP’ terms) in the world, led by economic liberalization and broad-based growth across various sectors. This stellar growth, augmented by unmatched fundamentals that the country enjoys, had given strong impetus to the real estate sector in Indian which registered an annual growth rate or about 25% between 2003 and 2007.
Information technology revolution and MNCs-led demand for quality office space resulted in modern buildings springing up in new suburban locations of key Indian cities. Salaries in India have been rising at the rate of 10-15% per annum and the per capita disposable income that increased several fold in the past decade is expected to further grow by 8-13% in the next five years.
The current phase of real estate
sector will separate ‘short-term’
players from the ‘long-term’ players
and despite momentary slowdown,
the long-term outlook for
the sector is positive and encouraging ,
Thus improved affordability in conjugation with increased penetration of housing mortgage finance led to an unprecedented housing acquisition drive by end users as well as investors. This, together with the fact that the average household size in India is fast decreasing, has fostered residential demand in recent times. Moreover, the change in attitude and spending habits of the consumers has led to an increase in consumption and demand for retail malls and has transformed Indian from a ‘saving’ to a ‘consuming’ economy.
Over the last 2-3 years, the capital markets have seen an increased presence of the real estate sector. In a bid to raise their capital base and fund future projects, real estate companies have approached domestic stock markets and close to 20-25 real estate and construction companies opted for IPOs and stock exchange listing between 2007 and 2008. Another trend that found favor with Indian real estate developers was listing on the offshore exchanges like AIM, Singapore listed REIT, Singapore Stock Exchange and Dubai International financial Exchange in order to raise overseas capital.
Post partial relaxation of FDI in the real estate markets in the country reinforces the fact the real estate sector is a cyclical sector influenced by several variables. In the long term, current churn and shakeout in the sector is expected to lead to market consolidation and make it more attractive for investment as the valuations will be more realistic. The current phase of the industry will separate ‘short-term’ players and despite the momentary slowdown, the long term outlook for the sector is positive and encouraging.
With strong economic and demographic fundamentals that the country has, real estate will remain a long-term attractive proposition. Though revival to the sector will depend on recovery of the domestic economy, it is likely to be earlier than in many other countries across the globe.
Courtesy dtd times property 14-02-09:
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| Real estate on shifting sands |
| 02.19.09 (3:16 am) [edit] |
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The Indian economy has been growing at an average rate of 8.8% in the last four fiscal years, with the 2006-07 growth rates clocking an impressive 9.6%. The financial reforms of 1991 have been complemented by favorable policy changes and significant increase in investment on physical infrastructure. The country has also emerged as the fourth largest economy (in Purchasing Power Parity ‘PPP’ terms) in the world, led by economic liberalization and broad-based growth across various sectors. This stellar growth, augmented by unmatched fundamentals that the country enjoys, had given strong impetus to the real estate sector in Indian which registered an annual growth rate or about 25% between 2003 and 2007.
Information technology revolution and MNCs-led demand for quality office space resulted in modern buildings springing up in new suburban locations of key Indian cities. Salaries in India have been rising at the rate of 10-15% per annum and the per capita disposable income that increased several fold in the past decade is expected to further grow by 8-13% in the next five years.
The current phase of real estate
sector will separate ‘short-term’
players from the ‘long-term’ players
and despite momentary slowdown,
the long-term outlook for
the sector is positive and encouraging ,
Thus improved affordability in conjugation with increased penetration of housing mortgage finance led to an unprecedented housing acquisition drive by end users as well as investors. This, together with the fact that the average household size in India is fast decreasing, has fostered residential demand in recent times. Moreover, the change in attitude and spending habits of the consumers has led to an increase in consumption and demand for retail malls and has transformed Indian from a ‘saving’ to a ‘consuming’ economy.
Over the last 2-3 years, the capital markets have seen an increased presence of the real estate sector. In a bid to raise their capital base and fund future projects, real estate companies have approached domestic stock markets and close to 20-25 real estate and construction companies opted for IPOs and stock exchange listing between 2007 and 2008. Another trend that found favor with Indian real estate developers was listing on the offshore exchanges like AIM, Singapore listed REIT, Singapore Stock Exchange and Dubai International financial Exchange in order to raise overseas capital.
Post partial relaxation of FDI in the real estate sector in 2005, significant amount of global capital has been chasing Indian real estate market, and interest in the sector has been boosted by increase participation from private equity real estate funds, cross border real estate investors and foreign commercial banks. Relaxing of the foreign Direct Investment (FDI) regulations for real estate sector opened the floodgates for foreign capital inflow into the sector and close to 20% of the total FDI coming into the country in 2007-08 was directed to the real estate sector.
The much-required capital in the last few years has facilitated widespread development of residential, office, retail and hotel space in the country. In has also been instrumental in organizing the market to a large extent and bringing it closer to the real estate markets in other developing countries around the world.
However, after a dream run of close to 36 months, the real estate sector in the country has been exhibiting signs of slowing down in the last few quarters. This slowdown came after the onset of recession in several large economies in the world and is reflective of the financial crisis and economic turmoil facing the Reserve Bank of India’s measures to control credit growth and liquidity in the economy, interest rates on home loans were increased by several basis points in the last one year.
This came at a junction when the rising residential values and compounding inflation started to negatively impact affordability of many end users. On the other hand, developers have been facing a cash crunch on account of diminishing sales and scarcity of bank credit due to increase in risk weight for real estate sector.
Poor stock market performance, where share prices of premium real estate players in the country fell by over 80% during 2008, has also blocked raising of money from primary market by way of IPOs. Real estate sector has been the major recipient of the total private equity placement in the Indian market since mid-2007. However, the volatility in the global capital markets and bearish sentiments has led to drying up of private equity funding. Even the off shore exchanges like the Alternate Investment Market (AIM), Singapore Stock Exchange, Dubai International Financial Exchange, etc have been impacted by the global financial crisis and have thereby affected capital raising capacity of a number of domestic developers who were looking at international listings.
As a result of liquidity crunch in the market, increasing input costs and weakening global economic conditions, new project launches in the country have been put on hold and under-construction projects are facing delays.
The transactions volumes across asset classes hit an all time low in mid-2008 and resulted in about 1020% correction in prices. However, notwithstanding this fact, buyers are still in a wait-and-watch mode and there has been an erosion of confidence amongst buyers due to weakening business sentiments, reigning job insecurity and pay-cuts.
On the other hand, developers who have been trying ot hold back their prices so far are reconciling to the current market conditions and are readying themselves for a downward revision in price points. In order to ease liquidity situation and boost demand, the government since October 2008. Exhibiting its commitment to encourage consumer spending and to keep up the pace of economic growth and investment in the country, the government announced two financial stimulus packages within a month of each other.
While the stimulus package includes speeding up infrastructure projects, introduction of export incentives, and cut in various categories of value-added tax to encourage consumer spending, the RBI’s staggered downward revision in Cash Reserve Ratio (CRR) and repo rates to a low of 5.5% (from a high of 9% in September 2008) is aimed to wards reduction in cost of capital and infusion of liquidity in the economy including the real estate sector. Besides, developers have been allowed to explore the External commercial Borrowings (ECB) rout for the development of integrated townships.
Even though the recent policy measures to increase liquidity and ease credit for real estate sector were much desired, real liquidity may take some time to get back in the system and credit disbursal may remain sluggish. According to reports, despite the sharp cut in CRR, repo rate and reverse repo rate by RBI, bank credit declined sharply in Dec`08 by levels not seen in the past 10 years. Going forward, the markets are expected to remain slow in the near future on the back of low consumer sentiments due to global macro weakness.
Looking ahead, the revival of the real estate markets in India would depend substantially on the improvement of the economic sentiments, which is likely to take some more time, as such sentiments amongst occupiers, buyers and investors will remain subdued in the short to medium term. In the residential segment, the prospective buyers are expected to come back when there is renewal of confidence that the prices have stabilized and the mortgage rates are conducive for investing in property once again. However, an overriding concern and a key variable influencing the purchase decision will be the outlook for the Indian economy and its future growth prospects.
The office segment is currently undergoing a demand compression as most of the space occupiers are large MNCs who have put their expansion plans on hold for the time being. However, India is an established information technology and outsourcing destination and has unparalleled capacity in the sector. Hence, with the revival of the global economy in the near future there will be restoration of outsourcing demand, thereby bringing baked the space demand in office sector.
Most importantly, the current churn in the real estates sector will result in increased focus on ‘neo-as set’ classed like development and infrastructure initiatives based on public-private partnership (ppp0 models. Besides being the need of the hour, these asset classes will help developers spread risks and hence will find place in developers’ future portfolios.
The recent trend by real estate markets in the country reinforces the fact the real estate sector is a cyclical sector influenced by several variables. In the long term, current churn and shakeout in the sector is expected to lead to market consolidation and make it more attractive for investment as the valuations will be more realistic. The current phase of the industry will separate ‘short-term’ players and despite the momentary slowdown, the long term outlook for the sector is positive and encouraging.
With strong economic and demographic fundamentals that the country has, real estate will remain a long-term attractive proposition. Though revival to the sector will depend on recovery of the domestic economy, it is likely to be earlier than in many other countries across the globe.
Courtesy dtd times property 14-02-09:
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| REALTY MAJORS REVEAL SHARE PLEDGING DETAILS |
| 02.18.09 (3:36 am) [edit] |
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Unitech, Parsvnath, Omaxe, Ansal And Sobha Promoters Inform NSE
Real estate developer Unitech declared on Monday that the promoter have pledged 49.48% of their total 64.4% stake in the company. Promoter holding in the company also fell by at least 3% since the beginning of this year to 64.4%. Other realty players, including Parsvnath, Omaxe, Sobha Developers and Ansal Properties and Infrastructure (API) too have informed NSE that promoters have pledged hares ranging from 13% to 64% of their company.
The latest data available with stock exchange confirms market speculation that promoters of realty firms have pledged a large percentage of their take to financial institutions.
Unitech informed the tock exchange that "a very significant portion of the shares have been pledged as additional security for the loans availed by the company". Promoters usually pledge shares as collateral for the secured loans from financial institutions as well as for their personal purposes.
Unitech did not declare the name of the financial institutions with which shares were pledged. But one Unitech executive suggested a large portion of hars have been pledged with IDFC, HDFC and JM Financial, although it couldn't be verified independently.
According to the data made available by Unitch to NSE on Monday, the stake of promoter Ramesh Chandra and family has possibly reduced by 3% since the beginning of this year. The combined shareholding of Chandra's three investment firms—Prakausali Investments, Mayfair Investments and Mayfair Capital—are 3% lower compared to the shareholding as on December 31, '08.
According to market traders, the decline in shareholding could be attributed to financial institutions selling pledged shares following a step decline in share prices.
Delhi-based Parsvnath Developer too has declared that promoters have pledged 63.88% of total shares of the company. The promoters own 80.33% stake in Parsvnath, as on December-end. Also, Delhi-based Omaxe said promoters have pledged 13.19% out of their total 69.63% stake in the company. Ansal Properties and Infrastructure promoters have pledged 29.11% stake out of a total of 64.14%, mainly to IL&FS and HDFC. The promoters of Bangalore-based Sobha Developers, who own 50.06% in the company, have pledged 28.39% stack in the company.
MARKET PRESSURE
Unitech informed stock exchange that 'a very significant portion of the shares have been pledged as additional security for loans availed by company'
A large portion of Unitech shares have been pledged with IDFC, HDFC and JM Financial
Decline in shareholding could be attributed to financial institutions selling pledged shares following a steep decline in share prices
Courtesy:- ET dtd:- 17-02-09
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| EK MAHAL HO SAPNO KA |
| 02.18.09 (3:34 am) [edit] |
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Rules and regulations related to tax benefits on home loans simplified
Saving taxes is on everyone's mind these days. And if you are among those seeking avenues that could save a bit of the outgo in taxes, the avenue may just be right under your nose — your residence itself! Rental or ownership, your dwelling space can provide you a good chunk of tax benefits. Here is a sneak preview.
RENTAL ACCOMMODATION
Cost of living has risen tremendously over the last few years. While the expenses across the board have increased, it is the cost of ranting an accommodation that deals a major blow to the pockets of most individuals. But one can claim tax exemption on the rent paid.
Section 10(13A) of the Income-Tax Act provides for the house rent allowance (HRA) relief. Thus, those residing in rented premises can claim a tax exemption on an amount that is least of the following three options:
(a) HRA actually received from the employer
(b) Rent paid in excess of 10% of salary
(c) 50% of the salary (if residing in a metropolitan) else 40% of the salary.
Let's take the case of an individual who earns a basic salary of Rs 25,000 per month and an additional HRA of Rs 5,000 per month; taking the total salary to Rs 30,000 pr month. Assume that the monthly rental paid for accommodation in the city of Mumbai is Rs 6,000. The income tax exemption would thus be the least of
(a) HRA actually received i.e. Rs 5,000
(b) Rent in excess of 10% of basic salary i.e. Rs 3,500 (Rs 6,000 - 10% of Rs 25,000) (c) 50% of basic salary i.e. 12,500
Since the least of the above is Rs 3,500 (option b); annually, an income to the tune of Rs 42,000 (Rs 3,500 * 12 months) shall be exempt from tax.
This section is meaningful only for those salaried employees who receive HRA as a part of their salary. Thus, in the above scenario, if no HRA is received from the employer i.e. HRA is 'zero', there shall be no income exempt from tax since the least of the three options would then be 'zero'(option a).
OWNERSHIP
Owning a property can be highly beneficial, for tax purposes, provided the same has been purchased through a bank loan. House owners can claim an exemption from tax on not only the interest paid on the house loan but also on the principal amount repaid over a period of time.
INTEREST REPAYMENT
Section 24(b) of the I-T Acts allows interest repayment of up to Rs 1.5 lakh a year to be exempted from tax. As this exemption is available for each individual owning/cowing the house, it makes a good case for buying the property in joint ownership.
Let's assume that the annual interest liability is Rs 4 lakh, and the house is jointly owned by two owners, both the owners can claim an exemption of Rs 1.5 lakh each taking the total income exemption from tax to Rs 3 lakh.
However, it is important to note that tax exemption available to each owner is to the extent of interest actually repaid by the co-owner. The Rs 1.5 lakh limit on interest repayment is applicable in case of a single property that is being used by the owner. However, an individual does not enjoy such exemption from his annual income if he owns more than one house, as there is no such benefit on the repayment of interest on the subsequent houses. This is because the subsequent houses are deemed to be earning rents for the owner. Thus, these properties would attract a notional rental income, which would be taxable in the owner's hands.
Notional rental income is the income that the property would have generated had it been actually let out by the owner. As this income is taxable in the owner's hands, the interest repayment claimed as exempt from tax shall be reduced from the notional rental income so arrived at.
PRINCIPAL REPAYMENT
If housing interest has been taken care of by Section 24(b), the all-time favorite section for tax-planners 80C takes care of the principal repayment. Principal repayment up to Rs 1 lakh can be claimed as exempt from tax by each of the co-owners of the house property provided the loan is taken from a recognized financial institution only. Any housing loan taken from relatives of friends is thus not eligible for the Section 80C deduction.
Courtesy:- ET dtd:- 16-02-09
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| project is around Rs. 200 crore. |
| 02.16.09 (2:54 am) [edit] |
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Vipul Ltd. forays into East India
Vipul Ltd announced the launch of Vipul Gardens, an integrated residential complex in the heart of Bhubaneswar. The approximate realization from the
After expanding footprints in Ludhiana with the launch of Vipul World recently, Vipul Gardens is set to bring a paradigm shift to real estate in Orissa. Sprawled over an area of approx.10 acres, the project is the first high-rise in the city offering ground+14 floors. This state-of-the-art integrated residential complex will have 578 units with choice of living of 2 BD, 3BD and 4BD apartments.
Courtesy:- HT Estate dtd:- 14-02-09
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| Reasons to Get Pre-Approved For a Home Loan |
| 02.13.09 (4:00 am) [edit] |
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There are many steps that are required when purchasing a new home. The most important step is to be pre-approved for a home loan prior to looking for a house.
Keep in mind that a pre-approval is very different than a pre-qualification. A pre-qualification is given when the lender talks with you (usually over the telephone) and takes the information that you tell them and qualifies you off of your word without collecting any documentation from you.
Pre-approval process is a process towards the completion of the work. In this process, the lender will ask you to complete a loan application and return it to them with all the documentation needed to submit to the lender for an approval. These items would include tax returns, bank statements, etc. Once the lender received this information, they would run a credit report and submit the loan for approval. When the lender receives the approval, they will write you a pre-approval letter stating the purchase price and interest rate that you qualify for on a new home loan.
Here are some reasons why you should get pre-approved for a home loan:
Pre-approval gives you the chance to go over the different loan programs available to you with your lender. You will also be able to see what the monthly payment will be on each program.
In today's market it takes time to get a loan approved. Getting a pre-approval puts you ahead of the game by sending all of your paperwork in before you get into the agreement. By having a pre-approval, you may be able to shorten the escrow period needed to close a loan. This can make a big difference to a seller that is looking to close as soon as possible.
Some real estate agents will not start the process of searching for homes until you have a pre-approval.
If by chance you do not qualify for a home loan at the time of the pre-approval, your lender can guide you in the right direction to prepare you to purchase in the near future. Sometimes there are items on the credit report that can be paid off or disputed to help you to qualify. Without sitting down with a lender, you would not have known about these issues until you are in escrow, which would either delay the close of escrow or cause the property to fall out of escrow.
The pre-approval process may sound like you are putting the cart before the horse, but in reality it is ensuring that you are buying within your means and gives you the opportunity to understand the different loan options available to you.
For pre-approval process and other enquiries visit www.zameen-zaidad.com
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| PREMIUM, BUT AFFORDABLE AT GURGAON |
| 02.09.09 (11:38 pm) [edit] |
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Premium, but affordable properties – Brix Research brings lucrative home options in Gurgaon for end users, which are eye catching but still pocket friendly
Gurgaon is the main hub and pioneer in premium housing across the NCR. Availability of space, proximity to the capital city, conducive environment for IT industries and increasing connectivity to all metros has led to a massive construction activity in Gurgaon, Consequently, various corporates moved into Gurgaon and over the years the increasing salary scales of their employees gave a major boost to the demand for premium housing.
Most of the leading developers such as Parsvnath, Raheja, Eldeco, BPTP, and DLF have launched premium housing residential projects to cater to the needs of highprofile people. Premium homes are designed to serve and fulfil every basic and luxury requirement of the end user. These are highly priced properties owing to their construction, specification, amenities, location and facilities.
These projects are ideally designed on a large piece of land following international architectural standards. They are equipped with 100% power and water back up, each integrated with a health club, gym, jogging park, shopping centre, café, swimming pool and provided with wi-fi connections, highalert security systems, fully-furnished andwell decorated interiors with latest technology equipments. All this is done to provide a high level of ease and comfort to end users.
Parsvnath's 'Exotica' located opposite the DLF Golf Course is an example of such high-end premium housing. It is in close proximiy to shopping malls and offers a premium lifestyle. It consists of 3-, 4- and 5-BHK apartments and penthouses equipped with lifestyle amenities. The apartments are priced at Rs 7,000 per sq ft. Similar projects like 'Silverglades', 'Traudhan Valley Golf Resort', Raheja's 'Atlantis', BPTP's 'Freedom Park Life' are highly priced, targeting select end users.
There are several other premium housing projects coming up,which paradoxically fall in the affordable bracket. The AEZ group has launched a premium housing project in Sector 57 Gurgaon, priced at Rs 4,000 per sq ft. BPTP is coming up with 'Park Serene' in Sector 37 D, which offers 2- BHK (1,500 sq ft), 3-BHK (1,800-2,300 sq ft) and 4-BHK (2,500 sq ft) apartments at Rs 2,000 per sq ft.
Another project by PTP, 'Park Prime' in Sector 66 is spread over approximately 11 acre of land. A total of 466 units are available in 2-, 3- and 4-BHK apartment options. The project is approachable from the Golf Course Road and Sohna Road. 'Park Prime' is planned and modelled as 'future homes' with an international appeal. It has all premium feature like a club, a gymnasium, round-the-clock power and water supply, interior designing and so on – yet it is available at an affordable price range of Rs 2,600-3,000 per sq ft.
The newly launched project by Today Homes, 'Blossom 2' in Sector 51 Gurgaon, is another premium housing project that is available at an affordable price of Rs 3,100 per sq ft. Similarly, Raheja's 'Navodaya' spread over 17 acre of land in Sectors 92-95, Gurgaon, aims at providing international quality housing at an affordable price. The apartments are in the range of Rs 2,500-3,000 per sq ft, with all first class facilities.
Some of the premium projects in Gurgaon that are available at an affordable price are listed below:
Premium property in the secondary market is also available in Gurgaon. In the new and developing sectors of Gurgaon, near NH-8, the property values are not so high.
Local property dealers say: "Premium houses such as luxury apartments and independent villas are available in an affordable bracket in far-off sectors and on higher floors." Another property consultant says the market has many affordable options in premium housing if an investor is willing to do some market research and is good at negotiation.
A few of the re-sale premium properties in Gurgaon are mentioned below:
3-BHK apartment (1,285 sq ft) in residntial township at Sohna Road; Rs 30-50 lakh
2-BHK apartment (540 sq ft) at DLF Phase – III; Rs 37 lakh
An independent house (1,175 sq ft) in Sector 49; Rs 37 lakh
3-BHK apartment (2,160 sq ft) on NH-8, in Garden Vista; Rs 46 lakh
2-BHK apartment (1,000 sq ft) at Maple Height; Rs 50 lakh
1-BHK apartment (650 sq ft) in Park View, Palam Vihar; Rs 26 lakh
2-BHK apartment (1,050 sq ft) in Hewo Society, Sector 56; Rs 30 lakh
2-BHK apartment (1175 sq ft) in LD Spire Greens, Sec-37-C on NH-8, is available at Rs 26 lakh
Clearly, Gurgaon has sveral affordable housing options available in all sectors. And with the decreasing home loan interest rates and sharp correction in real estate market, this is a good time to invest in a house for long-term benefits.
Courtesy:- Times property dtd:- 31-01-2009
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| High hopes |
| 02.09.09 (2:22 am) [edit] |
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Affordable housing has held its own even after the global market slowdown impacted property sales in all categories across Delhi-NCR region. Property buyers as well as sellers are banking upon ‘affordable houses’ to sustain and boost sales. Affordable housing or ‘budget housing’ has always been a favourite with end users, as property seekers keep looking for houses that fit into their budget. Now, property developers are also depending on budget houses to keep themselves afloat in this lean season, as this seems to be the only segment attracting customers.
Many small and medium real estate developers have floated affordable housing projects. However, it is for the first time that prominent property developers like DLF Ltd, Ansal properties and Shapoorji Pallonji have shown an interest in this category. In the last six months, these biggies have announced affordable projects in different cities. However, one must consider the buyer sentiment as well. What is the budget of buyers today? What features are they looking for in their dream home? What is the user profile?
A study suggests that most end users look for a 2-BHK house in the price bracket of Rs 5 lakh to Rs 15 lakh. Property seekers are keen on properties in suburban regions of the city as compared to city centers. Understandably so, as city centers are usually choked and command a premium price.
The findings suggest that the definition of “affordable homes” differs across the cross-section of society. The consideration of “budget” varies mostly with the socio-economic factors of property buyers. Survey findings reveal that the “affordable budget” for professionals living in big cities is Rs 25-35 lakh. Whereas, users belonging to smaller cities or even suburban areas of big cities said a house that costs between Rs 5 lakh and 15 lakh is “affordable “ for them. This can be seen from the findings in the given box.
The users were then asked if they were seeking property for self-use or for investment. About 48% of the total respondents said they were looking for current living space. Only 25% of the respondents were seeking property for investment. This indicates the ‘splurge buying sentiment’ has taken a hit. Earlier, many property buyers bought houses either as a second-house option or for investment purposes. Today, buyers are more mature and cautious and purchase property for immediate occupancy.
The survey was conducted online as well as offline. Users from across the country participated in the on-line survey. Most of them belonged to big cities like Mumbai, Delhi-NCR, Chennai and pune. Many users were from small towns like Baltana (near Amritsar), Zirakpur, and even Ladakh. In the offline format, spot surveys were conducted in five cities-Chandigarh, Lucknow, Mumbai, Hyderabad and Coimbatore.
SURVEY FINDINGS
Budget category percentage (%)
Rs 5 – Rs 15 lakh 57.02
Rs 15 – Rs 25 lakh 24.18
Rs 25 – Rs 35 lakh 13.58
Rs 35 – Rs 50 lakh 3.65
Rs 50 – Rs 1 crore 1.01
Rs 1 crore and above 0.54
The respondents were asked if they would consider taking a home loan for “affordable homes”. A majority of respondents said yes. Only 7% users said they could pay the entire amount by themselves.
Others said they would have to seek financial assistance to purchase this dream home. 55% of the latter segment said they would borrow one-fourth of this amount from banks. About 28% admitted they would have to source about half of this amount from banks. Another 10% said they would have to borrow three-fourths of this amount.
The trends indicate that buyer sentiment today is very realistic. They are very sure about their living options and monetary considerations. A reduction in home loan interest rates will definitely help consumers. In a separate survey, it was found that most consumers consider the cut in interest rates for home loans to be beneficial. Users said such announcements prompted them to think positively about bank loans.
Such measures, along with some correction in property prices, may trigger creation and sale of affordable housing in a real sense.
While property developers are doing their bit, the Union government is considering a proposal to buy houses from private developers and then selling them to weaker sections of the society on easy payment terms. At present, this plan is at a conceptual stage and if approved, it will serve two goals-reviving the realty sector and fulfilling the housing demand of the lower income groups.
Courtesy Times Property dtd:-31st jan. 2009
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| REALTORS SET FREE OF SERVICE TAX BURDEN ON SALE OF APARTMENTS |
| 02.06.09 (5:20 am) [edit] |
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PROPERTY developers building residential complexes will not have to pay service tax on sale of apartments now, as the tax department has cleared the ambiguity on taxability of these companies.
The Central Board of Excise and Customs (CBEC) in a circular has said construction service provided by a builder to a person buying the apartment till the execution of sale deed would not attract service tax.
Usually, developers enter into an 'agreement to sell' with the buyer of the property. But the property remains under the ownership of the developer and it is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and ownership of the property transferred to the buyer.
"Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of 'self-service' and consequently will not attract service tax," the circular said.
Also, if the ultimate owner enters into a contract for construction of a residential complex with a builder who himself provides service of design, planning and contraction, and after such construction the owner receives such property for his personal use, then such activity would not be subjected to service tax. It is because this case would fall under the exclusion provided in the definition of 'residential complex'.
However, if services of any person like contractor, designer or a similar service provider are received in both the cases, then these would attract service tax.
The circular comes in the backdrop of various builders' organizations approaching the government seeking clarity over applicability of service tax in a case where a developer enters into an agreement to sell a dwelling unit in a residential complex at any stage of construction. A debate on this was split with a segment of service tax officers who operate on the field arguing that after an agreement of sale between a buyer and a developer, the buyer becomes the owner of the residential unit and subsequent activity of a builder for construction of residential unit was a service of 'construction of residential complex' and hence liable to service tax. However, the opinion was countered by another section of officials.
"The CBEC clarification unambiguously put to rest all conflicting views emerging in case of sale of dwelling unit in a residential complex," Ernst & Young associate director Bipin Sapra said.
Courtesy:- Economics Times dtd:- 03-02-2009
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| Realty hub faridabad |
| 02.04.09 (3:13 am) [edit] |
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Faridabad, the city of about 300 large and 10,000 small-scale industries, has always been under priced in spite of the geographical advantage it offers – its equidistance from Delhi, Gurgaon and Noida – and fairly good connectivity, both by raod as well as rail. But, now, the situation has been transforming with entry of private players. The new flyover over Badarpur Crossing and an expressway linking Palwal, Manesar, Kundli, Faridabad, Noida and Ghaziabad will provide interconnectivity among various satellite towns.
The Metro link between Faridabad and Delhi will also bring the two cities closer in terms of connectivity. Once the Formula one, Taj International Airport and Taj Expressway are built, connectivity between new sectors of Faridabad, Noida and Greater Noida will improve as travel time will decline, and their realty prices will also come closer.
Keeping this in view, HUDA (Haryana Urban Development Authority) is all set to develop another Gurgaon-like cyber city. For this, Haryana State Industrial Infrastructure Development Corporation (HSIIDC) is set to acquire 2,000 acre of land. To improve connectivity, construction of Northeastern and Western Peripheral high way (both will meet in palwal) is in full swing.
Located just 8 km from South Delhi, BPTP’s massive 1,500-acre integrated township is fast coming up in Faridabad’s posh Sectors 14-15. The township offers projects in diverse spheres of real estate development including plots, villas, group-housing projects, retail-cum-office complexes, shopping malls, hospitals, schools etc. In order to provide residents fully functional infrastructure and amenities, the company has developed the sector’s roads, street lights with landscaped gardens, tree plantations, a children’s park, underground and overhead water tanks, storm-water drainage, sewage facility and underground cabling in a record period of two and a half years.
BPTP has recently handed over the possession of over 1,000 residential plots at Parklands with over 2,500 more plots to follow soon. The company has also set up police posts at Parklands in Sector 76 and 81 to ensure the safety and security of residents.
Princess Park and Park Grandeura are two group-housing projects fast approaching completion. The possession of Park Grandeura is likely to start from April 2009 onwards and Princess park possession is likely by December 2009. the construction work of a residential project ‘The Resort’, BPTP villas and two commercial projects ‘The Next Door’ and ‘Park Square’ are in full swing.
Sudhanshu Tripathi, director of BPTP Limited, says: “Faridabad will be the centre of attraction after extension of Delhi metro up to Sector 12. the construction of Badarpur flyover, development of 135-km KMP Expressway, setting up of SEZs, IT and ITes parks and a biotechnology park in Faridabad will only add to its appeal. And the best pat is the realty prices are still affordable and lower than those at Gurgaon or Noida.”
Prices in the NCR, with the exception of Faridabad, have witnessed a correction of up to 25% in recent times. However, land prices in Faridabad are stable. The prices in Faridabad are still lower than in Gurgaon or Noida and current price rise is more towards building parity with them.
Other than BPTP, Triveni, Omaxe, SRS, RPS, Amrapali and EROS group are tapping the potential of Faridabad as an emerging destination.
Sunil Mittal, MD of Triveni Infrastructure Development Company Ltd, says that in matters of security and safety Faridabad is better than Noida and Greater Noida. “Security, good connectivity and affordable price of housing units are key to success of Faridabad’s fast development, along with all modern facilities. Triveni group now has the second biggest land bank in Faridabad, nearly 350 acre. The group is coming up with a mega group-housing projects in Sectors 78,89 and 70. We are committed to providing more than 7,000 by 2010 at very affordable prices. The price of 2-bedroom, 3-bedrooms and 4-bedroom flats will be in the range of Rs 25 lakh to Rs 40 lakh. Compared to South Delhi, the prices are much cheaper. In South Delhi, prices range from Rs 15,000 to Rs 25,000 per sq mt, while rates range between Rs 1,800 to Rs 2,000 per sq m here.”
In addition to residential units, Triveni Group is planning for two IT parks in Sector 78 on 110-acre and 50-acre plots.
According to Rohtas Goyal, MD of Omaxe Group, ‘Omaxe Heights’ is a project with special emphasis on child development. “It is a place that encourages growth of the children in a healthy, pollution free environment. With a separate play area and splash pool, you can watch kids blossoming in full colours,” he says.
The group has also launched ‘SPA Village’ in Sector 78, which is spread over an 11-acre plot. The project is being built adjacent to a commercial hub and is well connected to the capital city and adjoining areas. On offer are apartments and penthouses ranging from 1,600 sq ft to 4,430 sq ft.
Puri Constructions Limited is also developing a project ‘The Pranayam’. The medium to high-rise group housing is located in Sectors 82-85, just half a kilometer from the prime Sector 14, with a five-acre school, a shopping arcade and a two acre clubhouse adjacent to the site. Mohinder Puri, CEO and MD of Puri Constructions, says: “Faridabad is one vast virgin tract that has opened up for development in recent times.”
Courtesy TOI dtd 31-01-09
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| MANESAR: DREAM DESTINATION |
| 02.03.09 (2:51 am) [edit] |
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Manesar offers budget housing options, good infrastructure and appreciation prospects to property seekers. Brix Research studies the upcoming property options
Manesar, located on the fringe of Gurgaon, was once best known as a weekend getaway for Delhi residents. It had a host of private resorts, villas and farmhouses clustered along with industrial units and warehouses. The remaining area was an aggregation of villages. But this was a decade ago. Manesar's strategic location along the national highway has led to development of multiple real estate projects.
Today, Manesar is a blueprint of Gurgaon. The city looks like what Gurgaon used to five years ago. Rapid industrial development has brought about infrastructural changes in the city. Warehouses are soon giving way to manufacturing and production units. Villages are fast transforming into semi-urban neighbourhoods. Vacant plots of land are now carrying tags of prestigious real estate developers. Manesar's development is closely linked to the growth of Gurgaon, which is bustling with real estate activity. As a result, the city's prime areas command very high prices. For corporates and individuals, who cannot afford to buy land in Gurgaon, Manesar offers a lucrative option, with a vast expanse of land at relatively reasonable prices.
Manesar has good infrastructural facilities such as wide roads, good power supply, and relaxed land norms. All these factors have made Manesar a dream destination. Today, all major real estate companies and important industrial and manufacturing houses have bought land banks in Manesar. All of them are cashing in on the city's future prospects and its "affordable property" tag.
Courtesy:- Times Property dtd:- 31st jan 2009
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| Easier FDI rules for real estate likely |
| 02.02.09 (1:44 am) [edit] |
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To ease the flow of foreign direct investment (FDI) into real estate, the government is mulling a proposal the mixed development projects should be exempt from the minimum capitalization and area development norms.
The changes proposed by the ministry of commerce and industry, will be discussed by the committee of secretaries set up for the purpose. A mixed development project can include townships, housing, commercial premises, hotels, multiplexes and recreational facilities.
Current rules allow 100 per cent FDI in such a project, provided it has been capitalized at $10 million (Rs 49 crore) or more ($5 million if it’s a joint venture where funds have to be brought in within six months), has in its possession at least 25 acres and proposes minimum built-up area of 50,000 square feet.
Under the proposed policy, the government is seeking to exempt such projects from the $10 million requirement, reduce the project size to 10 acres and cut the minimum built up area to 10,000 square feet. All FDI brought to these projects will continue to have a lock in of three years after the date of completion of the project.
However, the developers of these projects will have to keep at least 50 per cent of the total built up area for hotel and tourism related activities and ensure the project is regulated by the concerned authority and residential buildings are not misused for non-residential purposes.
Courtesy: ET dtd: 29-01-2009
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| Markets rise on overseas cues, US housing sales |
| 02.02.09 (1:43 am) [edit] |
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Bolstered by overseas cues and rising housing sales in the US, the markets began the week on a positive note. The mid-cap segment was the underperformer of the session, while banking and technology outperformed. The benchmark indices gained over 3 per cent at close. However, the traded volumes were lower compared to the previous session, which is a negative indicator for a Monday. The market breadth was positive as the BSE & NSE combined advance decline ratio was 1,858:,714. the capitalization of the breadth was also positive as the BSE & NSE combined figures were Rs 9,250 crore: Rs 1,901 crore.
The indices have closed in the upper end of the intra-day band and accompanied by mildly positive market internals. These are bullish indicators and can be partly attributed to the pre-expiry short covering. The market breadth indicates a lack of buying conviction on advances. The intra-day range specified at the 2,750/2,600 was overcome.
The coming session is likely to witness a range of 2,835 on advances and 2,700 on declines. The bullish pivot for the session will be at 2,740, above which the bulls will get stronger. Below the 2710, the bears may attempt to push markets downwards.
Courtesy: ET dtd: 29-01-2009
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