Tuesday, 8 December 2015

Expat NewsBurst: Cidco launches Navi Mumbai smart city project

Maharashtra will have its first smart city spread across 120 sq km in Navi Mumbai by 2019. The state-run City and Industrial Development Corporation (CIDCO) on Friday launched the Navi Mumbai (south) smart city project with an initial outlay of Rs 2,033 crore. Ten 10 smart city projects, including Navi Mumbai, have been proposed in the state.

Besides Cidco, a nodal agency for the proposed Navi Mumbai International Airport, has proposed an investment of about Rs 32,744 crore for the construction of affordable housing, construction of metro rail, development of port city, and provision of basic infrastructure. The total investment for Navi Mumbai (south) Smart City and other projects is Rs 34,777 crore.

Cidco vice-chairman and managing director Sanjay Bhatia told Business Standard: “The Navi Mumbai (south) smart city and other projects will be totally financed by Cidco and it won’t need funds from the state government. These projects will be completed by 2019. Cidco has deposits worth Rs 7,000 crore and huge land parcels. When required, Cidco will sell part of these plots and proceeds will be utilised to complete the projects.”

READ MORE: http://bit.ly/1IvFfpe
Source: Business Standard

Expat NewsBurst: Farmers pool in 9,000 acres to develop smart city near Mumbai

Farmers in the outskirts of Mumbai have pooled in 9,000 acres of land to build a smart city.
Thousands of farmer families in 11 villages in Raigad’s Khalapur taluka have pitched in with their ancestral farmland. The pooled land will be converted into a non-agriculture zone, after which a special purpose vehicle (SPV) will be promoted to build a smart city with the right mix of commercial, residential and environmental features.
The model envisages farmers owning shares in the SPV in proportion to the value of their land. Besides getting plush homes, they will earn dividends on shares they hold and income from contractual work for the SPV and the commercial units that are expected to invest in the township.


READ MORE: http://bit.ly/1NSW144
Source: Indian Express

How Rs. 2000 per month can save above 7.5 lakhs !


Tuesday, 24 November 2015

Expat NewsBurst: Maha Cabinet withdraws ban on fragmentation of non-agri lands; move to boost townships



The state cabinet on Tuesday withdrew its ban on the fragmentation of non-agri cultural lands measuring 2,000 sq m (20 gunthas) or less into smaller plots. Such lands are mostly located in and around urban areas.

The cabinet's decision is expected to breathe new life into the real estate world: de mand and developments may rise manifold, substantially bringing down rates and the de mand of properties in prime lo calities of cities.

Lifting the ban means that issues of titles, mutations and non-agricultural conversions will be dealt with, to the relief of over 50 lakh people in various cities across the state, whose co lonies are labelled as `unautho rised layouts'. Such layouts are presently on the blacklist of pro perty buyers and do not attract civic developments such as roads and streetlights.

Indirectly , the move is ex pected to improve the state's `ea se of doing business' index and attract private townships of in dustrial and corporate giants as the state government will enco urage multipurpose develop ment of non-agriculture land in urban areas by granting them various permissions wit hout much red-tape.

Lakhs of people in the state have either bought such plots or constructed homes on land wit hout clear titling and appro vals. This has resulted in stalled property transactions in these areas, with no civic control on their development.

The decision will have far reaching impact on the real es tate market as people will prefer moving towards distant urban pockets than buying costly pro perties in the heart of a city . But for the changes to take effect the cabinet decision has to be promulgated into an act of law during the winter session of the assembly.

READ MORE: http://bit.ly/1Xnwxea
Source: ETRealty.com

Tuesday, 10 November 2015

A Home Away From Home

Few words bring us as much short term comfort to the majority of professional, employed individuals as the word ‘weekend’ does. These two days signify the time to catch up on those things important in life that our work get’s in the way of. This is the time you get to sharpen the proverbial ‘axe’ before you take on professional challenges head-on for another 5 days. Each of us has our prized weekend rituals, be it sleeping in, spending time with the family or getting your fill of your entertainment quota.
When do weekends start to lose their charm? Senior professionals amongst our readers will definitely have more of a say in this matter. Should your career growth, additional workplace responsibility and accountability always come as a double edged sword, meaning less time to enjoy the fruits of your hard work? Work even gets in the way of a well planned, annual, extended break where you find yourself glued to your laptop or stuck on unending conference calls with colleagues halfway around the world. Maintaining a balanced work-life equation has therefore become one of the biggest professional challenges across the globe today.
What if there was an option to combine the comfort which comes naturally associated with weekends, your home and the company of your loved ones? This option could provide you with a short but effective furlough from the rigmarole of the office, in the comfort of your family and friends without having to travel hours on a cramped flight or rickety bus. You can avoid the unpredictability of hotel comforts and accessibility while using this as a source to supplement your income. These are some of the prime reasons why the concept of ‘Weekend Homes’ is latching on in India.
The ever expanding middle-class with high disposable incomes is finding it very hard to treat every weekend with the due importance it plays in getting the family together. Imagine a place a short drive away from the grime and grind of dense urban areas, in the lap of nature. These countryside homes can afford you peace and solace which is rare to find in cities or a sprawling urban annexure. Add in a mountain valley or a scenic beach and the value of such places goes up many folds, not only from the perceived comfort value but also its real economic value.
Typically, a well planned weekend home is a high growth location near a city, with sound infrastructure and development which enhances its value many times over its acquisition cost. You can also avail tax benefits on your weekend home; if you have purchased the property through a bank loan, then the interest paid on the mortgage is allowed as a deduction for tax purposes. You can also deduct expenses like property taxes and municipal overheads that you paid from the rental income.
Realistically, you may opine, it would be impossible for you to visit this perfect getaway each week of the year. Also, it is highly cumbersome to maintain the home in your absence, or so you would think. This is where the role of a good developer comes into the picture. Taking into consideration that many customers find these as challenging aspects while deciding whether or not to invest into a weekend home; developers have responded with solutions of their own. Hospitality and maintenance options let you lease out your property to fellow holiday makers during those weeks of the year when the house lies vacant. This can prove to be a second source of income. The same maintenance crew ensures that your home is in proper shape when you arrive to spend your weekend rather than you having to waste precious time.
Developers have seen a spurt in demand for weekend homes from Indian expats, who are keen to go to newer destinations during their holidays back in India. They are also keen to retire in India and scenic and peaceful destinations in the vicinity of big urban cities. We have also encountered a boost in the concept of weekend home from the upper middle class families. This boost has managed to bust the myth around weekend home affordability and up-keep. Weekend homes were always seen as the investment restricted to the upper classes, but this stereotype has begun to fade away.
Choosing the right weekend home comes with a certain set of challenges but answering some key questions can assist you in taking the correct decision. Let’s begin with the most important one which is location. While not all cities have options for your consideration in each direction, you would do well which has the best accessibility and growth potential in the future. While current infrastructure availability is important, look out for areas that might show exponential growth in the near future due to external factors. Karjat (Pune-Mumbai), Dharmapuri, (Bangalore-Chennai) and Lepakshi (Andhra Pradesh) are some great areas in India to invest currently.
Weekend homes can be villas, duplex homes or even chalets depending on your preferences of privacy, space requirements and budgets. Remember to ask you’re the developer you are considering for a full range of facilities being planned as part of the project for all age groups like relaxation zones, nature trails, landscaped gardens, swimming pool, campsite, and sports facilities. The more thoughtful developers will amplify the natural resources at hand and add man-made features to give customers the best value for their money.

Whether it is to maximize your precious family moments, to make a style statement or supplement your income, weekend homes form the perfect asset sub-class in your real estate portfolio. Happy weekends are a short drive away!

Publication: Property Weekly
Author:  Lansel D`souza, Senior Vice President, Expat group

Value Engineering

Concept
Value engineering as the name suggests, is a systematic approach to reduce the construction cost while ensuring superior quality of the product for the end user. It primarily focuses on promising low cost construction without compromising on the quality. In this kind of development the costs related to the construction, designs, maintenance and replacements are considered.  The rationale behind value engineering is to avoid utilising higher-grade components in order to cut down the unnecessary cost of the construction process. However, this process does not involve compromising on the value and quality of the end product.
Value engineering will enable the players to develop new methods and techniques along with increasing productivity, cost reduction, better performance, high quality, simple design (civil, structural, mechanical, etc.) and optimum project duration without affecting the function of project or service. It is a creative approach which has been proved effective in the construction scenario, and should be implemented at all levels of the project management worldwide.

Scope of Construction Industry
India's construction sector is assessed at Rs.4000 billion or $100 billion. India is ranked number one among the top ten spending nations on the construction sector in the world. Production of cement is more than about 250 million tons in India. A report on "Global Construction 2025", estimates that China, India and US (United States) will account for almost 60% of global growth of the construction sector. Government of India is spending 9% of the GDP on various infrastructure projects. According to the Future Market Insights in the report titled, “Construction Chemical Market: India Industry Analysis and Opportunity Assessment 2014 - 2020”, the Indian construction chemical market will exhibit a CAGR of 17.2%. The market is projected to reach US$ 1,890 million by 2020.

Decoding Value Engineering
Value engineering is an effective way of cutting down the cost and adopts different techniques in order to achieve far greater results. The starting point for value engineering is to isolate the cause behind high cost which helps in devising effective strategies and analysing the ways for cost management. It is commonly seen that around 15% to 25% of the budget could be saved by adopting this initial step. In the construction industry, value engineering is a systematic way which is implemented during the stages of planning, design and construction.
Value engineering has the potential to be used in various projects and has proved beneficial, especially in more complex and higher value projects. Experts have observed that the cost can be significantly reduced in the initial stage of design. If the Value concepts are implemented in the concept stage, the savings will be higher. Strategy and planning are emphasised in the early stage because the scope of cutting down cost will keep decreasing as the project progresses.
It will be beneficial to analyse various value engineering techniques, like:

1. Various types of formworks that provide us benefit over the conventional formwork, where we save on time, cost (in the long run) and ensure high quality.
2.  Different kinds of industrialized housing construction technologies, which have huge benefits over conventional construction techniques.

Conclusion

Investment in the construction sector and ongoing infrastructural developments in India have made this a crucial industry segment.  Apart from the huge investment associated, construction sector also has variety of construction projects involving stakeholders, materials, construction management techniques, etc. All of these sectors widen the scope of application of value engineering. Considering the attributes and scope of the Indian construction industry, it will be beneficial to have more value engineering studies. This will allow players in the sector and other industry players to identify and overcome various loopholes faced during the construction process and overcome the same through adopting creative alternatives. Value engineering will enable the players to develop new methods and techniques along with increasing productivity, cost reduction, better performance, high quality, simple design (civil, structural, mechanical, etc.) and optimum project duration without affecting the function of project or service.

Spokesperson: Mr. Arvind Gowda, CEO, Expat Engineering India Ltd (EEIL)

What makes Bengaluru attractive investment destination?


Background
According to a recent study by real estate and property service provider Jones Lang LaSalle (JLL), Bengaluru has been ranked among top 20 technology-rich cities. With the rise in Namma Metro project, better connectivity through public transport, prominent startup culture and high growth potential, Bengaluru is emerging as a paradise for property investment.
According to property consultants Knight Frank India, Bengaluru has emerged as the second largest property market in terms of the growth in apartment sales, surpassing bigger markets like National Capital Region in the first half of 2015. Bengaluru sold 22,234 residential units as compared to 14,250 units in NCR, 15,524 apartments in Pune and 9,091 units in Chennai.  The city has witnessed highest new launches as compared to the top eight cities in the country with 21,400 units launched in the first half of 2015.

Potential
Bengaluru is also known as the Silicon Valley of India, the name the city acquired after the IT (Information technology) revolution. The city emerged as the IT hub in 1990s, with setting up of various technologies and multinational firms. Bengaluru has aided India’s debut on the ‘City Momentum Index’ (CMI) Top 20 list - an annual survey carried out by Jones Lang LaSalle (JLL) globally. It reinforced the city’s status of being one of India’s premier technology centres.  A United Nations report titled ‘State of the World’s Cities’ praised Bengaluru’s IT revolution. It is also interesting to note the development and transformation this city has witnessed over the years.
Biotechnology is currently a rapidly expanding field in the city. The startup culture has become a distinctive feature of the city.  Bengaluru has been the focal ground for various successful startups. This has widened the scope of employment opportunities and led to the development of multi-cultural population with sound infrastructure.
As one of the fastest growing cities, Bengaluru is emerging as an ideal location for education and research as well. Every year Bengaluru attracts a sizeable student population from pan-India. The city is also a home to several International education institutes. Bengaluru has more than 125 R&D centres in the field of core engineering, information technology, basic and applied sciences, etc. The city is one of the top choices for engineering students and aspirants. Many Indian and foreign IT and manufacturing companies have their R&D centres here. Bengaluru is also known as a centre for health tourism. Bengaluru is, thus, full of opportunities for everyone.
As compared to other metropolitans across India, real estate is doing fairly well in Bengaluru. The city’s real estate sector is one of the desirable markets across India. A recent report by Bank of America (BofA) Merrill Lynch showcases that Bengaluru’s housing is attractive due to its affordability. The outskirts are potential market to tap into. The prime emphasis is on the outskirts, due to the profitability and growth of the area. Bengaluru will continue to hold potential for developing affordable housing projects in the future as there is huge demand, especially from the low-mid level income groups.
Bengaluru’s real estate scene can be defined as an end user market. The sector in the city is not dominated by the speculative market influences as compared to others. Professionals with disposable income have recognised the potential of real estate investment which have higher returns as compared to other asset class. Bengaluru developers have a wide range of offerings from luxury apartment to mid-range apartments. Land investment is another eye-catching real estate segment. In Bengaluru the potential in the outskirts is much higher than the already developed area. The rate at which people are migrating to Bengaluru has increased significantly due to rise in employment opportunities. This will eventually lead to expansion of city limits and investment in the outskirts.  Profitability from investment in outskirts is bound to be high due to the development in and around city limits. Investing a small portion of your savings in outskirts can yield you significantly higher returns over a period of time.  

Locations

Few of the top areas to invest in Bengaluru are:
Chandapura
Chandapura is 6 km away from Electronic city and is easily accessible. Phase II of Bengaluru Metro will be completed by 2020 in the area and Chandapura circle is already included in the rail network. The location has multiple renowned educational institutions like IFIM Business School (IFIM), IHMR - Institute of Health Management Research, amongst others.
Hennur
Hennur is situated in North Bengaluru and has good road network connectivity. Hennur is a perfect location for music and food lovers. It is 12 km away from M. G. Road and 17 km from Koramangala.  Hennur is one of the prime locations with on-going development projects in and around the area.
Whitefield
The location recorded boom in the residential construction in the latter half of 1990s. Whitefield is easily accessible as it has extensive city bus connectivity. Namma Metro project is expected to cover this location under its second phase. The area has various shopping malls like The Forum Value, Phoenix Market City, Park Square mall and Inorbit Mall. These features widen the scope of investment in the area.
Devanahalli
Devanahalli is located close to the Bengaluru International Airport, the second largest airport in India. The area has witnessed significant development due to Devanahalli Business Park. With two more IT Parks coming up adjoining to the airport, this area would continue to be a business hub. An Aerospace Park, Science Park and a Financial City are also planned around Devanahalli. This makes it one of the most preferred locations on the outskirts of Bengaluru.

As compared to the other states and cities across India, Bengaluru has emerged as one of the best options for real estate investment. Bengaluru is one of the fastest growing metropolitans in India and has a wide range of offering in the real estate segment. With various on-going development projects, especially in the outskirts. The segments in the outskirts hold significant potential for investment and growth.



Publication: Deccan Herald
Author: Lansel D`souza, Senior Vice President, Expat Projects and Development Pvt. Ltd.

Tuesday, 3 November 2015

Expat NewsBurst: Home Buying, How To Pick The Best Payment Plan.

When Arun Kumar Pathak booked a flat in Noida four years ago, the builder promised possession in 18 months. He offered a 9% discount if Pathak paid the entire amount up front. Pathak opted for a smaller 2% discount and paid 30% of the price. "The rest is payable when I get possession," he says. The project is still not finished and there is no sign of getting possession. Not everyone is as lucky. Housing project delays are common. Faced with a slowdown in sales, real estate developers are luring prospective buyers with innovative payment options and freebies. We examine the arithmetic behind each and tell you which suits you best.

Construction-linked plan

In this option, the first 2-3 instalments are calendar based and subsequent payments are linked to progress in construction. You may pay 5-10% at the time of booking, another 5-10% within three months and 20% in six months. The remaining 60-70% is paid when the construction reaches predetermined milestones. Pranshu Gupta (see picture) opted for a construction-linked plan when he booked a 3-BHK in Gurgaon in 2013. Till date, Gupta has paid only 30% of the price. The rest will be paid in tranches of 10% when the construction reaches specific milestones. "Construction was supposed to start from the 13th month, but two years on, even the digging has not started," he says. He didn't opt to pay the entire amount up front by taking a loan. The delay would have pinched him more if he was also paying a hefty EMI.

Who should go for it

Construction-linked plans suit buyers who are not in a position to make a huge financial commitment. Banks usually give two kinds of loans for such plans. First, the loan is for the initial contributions and only pre-EMIs are charged. The loan increases with each instalment to the builder and the pre-EMI amount goes up. Regular EMIs start only after the final disbursement has been made. Since the pre-EMI pain is lesser in earlier years, this suits buyers who expect their income to rise in the next few years. They can also use the pre-EMI period to repay loans taken for the downpayment. In the second type, EMIs are based on the entire loan amount sanctioned even though only a portion is disbursed. The interest is very small in initial years and a bigger sum goes into repaying the principal.

30:70 Subvention plan

Much like a construction-linked plan because the buyer makes a small downpayment of 10-30% at the time of booking. The difference is that he also takes a loan for the remaining amount, though the builder pays the EMIs till possession. The lender pays the builder construction-linked payments on behalf of the buyer. For the buyer, EMIs start either on possession or after a specific period. Such schemes are not all that great. The interest cost absorbed by the builder during the subvention period is passed on to the customer by way of higher prices. The price per sq. ft under this option is higher than what you would pay under construction linked plan.

Who should go for it

Just like construction-linked plans, these suit buyers who don't have too much surplus cash. However, don't get enticed by offers of small downpayment. If construction gets stuck, there is a high chance that the builder will default on interest payment to the bank.

Subvention without loan

Here, instead of the bank, the builder funds the purchase. While the absence of the EMI might seem like an advantage, this option has its shortcomings. When you take a loan from a bank, it does its due diligence. The buyer benefits from this research. Buyers also need to make sure that all approvals are in place and work is going on smoothly.

Who should go for it

This suits HNI buyers who don't need loans. If you have cash and can make a larger downpayment, builders would be willing to offer higher discounts.

Interest waiver on home loan

These schemes are for projects that are ready for possession or nearing completion. The waiver could be for 1-3 years. For instance, though home loan rates are close to 9.5%, some builders have tied up with lenders to offer loans at 7.5% for three years. Most of the tie-ups are with NBFCs.

Who should go for it

Since interest rates are expected to come down, instead of opting for such schemes, bargain with the builder to lower the price of the property.

Assured rentals

Another innovation is the assured rent offered by builders to a buyer who makes the full payment. This can be for a fixed term of 2-3 years or till possession. The rent is usually 1% of the price of the property. If you buy a property worth `50 lakh, the builder will give you 36 post-dated cheques of `50,000 each. This means a return of 12% on investment. After all, you are paying 9.5% on a housing loan. By the time you get possession, the price of the property would appreciate by at least 15-20% to `58-60 lakh. The catch is the builder has effectively taken a loan at 12% through the buyer. Here, the liability of timely repayment rests with the buyer, not the builder. If the buyer misses an EMI, the bank will come after him. If the builder reneges on the agreement, the buyer can take him to court. The reality is that if the cheques bouncing, there is littleyou can to do to recover dues.

Who should go for it

This option is useful because it takes care of the EMI for 2-3 years. However, be sure about the builder's credentials before you sign on the dotted line.

Freebies & discounts

Indians like the freebies that come with purchases. This is why some builders are luring them with gold coins, furniture and even foreign holidays. Be extra careful when you see such offers.

Who should go for it

These freebie offers and add-ons are marketing gimmicks. Don't let an investment of `50-60 lakh be influenced by the offer of a free AC worth `20,000

SOURCE: ETRealty.com
For exciting Investment Opportunities Click here: www.expat-properties.com

Friday, 18 September 2015

The Expat Group has acquired hotel management institute Ecole Hoteliere at Lavasa, a part of the Ecole hôtelière de Lausanne in Switzerland.

Global real estate company The Expat Group has acquired hotel management institute Ecole Hoteliere at Lavasa, a part of the Ecole hôtelière de Lausanne in Switzerland, for an undisclosed amount, the company said on Tuesday.

Through this deal, Expat Group has entered into the education domain.

"We believe this partnership will provide a real fillip to young, talented individuals looking to build a career in the hospitality industry by providing facilities and education that compares favourably with global standards but within the reach of Indian students,” said Nathan Andrews, director – projects, Expat Group and director, Ecole Hoteliere at Lavasa.

Ecole Hoteliere at Lavasa offers students a combination of real world learning opportunities, including multiple star hotels, restaurants, convention center, club and outdoor catering all within immediate access to the campus.

It is located at Lavasa, a market city development in west India. Promoted by public listed construction firm HCC, Lavasa is in the queue to float its initial public offer (IPO).

"Ecole Hoteliere at Lavasa is a premier hospitality institute with a modern approach towards hospitality management and is a perfect match for our vision for the education segment. The experience gained by the students will make them thorough professionals with an in-depth understanding of the business," said Santosh Shetty, CMD, Expat Group.

Incepted in 1994, Expat Group is into real estate related business including transaction and investment advisory besides being a developer and owner of projects itself. Headquartered in Bangalore, it also has a significant presence in the Middle East besides the US, Africa and Southeast Asia.

SOURCE: VC Circle
READ MORE: http://bit.ly/1OauyIV

Thursday, 3 September 2015

Expat NewsBurst: Reliance ADAG Gets 289 Acres in Maharashtra For Defence Subsidiary.

The Maharashtra government on Friday alloted 289-acre land in Mihan SEZ, Nagpur, to Anil Ambani-led Reliance Group. The land has been allotted to Reliance Aerostructure — the defence arm of Reliance ADA Group. This will be the largest greenfield project in the aerospace industry with the capital investment of over Rs 6,500 crore.


On this land, the Reliance ADA Group plans to build world-class Dhirubhai Ambani Aerospace Park (DAAP). Mihan was selected over other sites because of its world-class facilities and infrastructure like Medi city, availability of top-class managers, due to its proximity to IIM, disciplined work culture, Airfield and Air Space for Flight Tests, proximity to international airport, excellent telecommunications connectivity and social infrastructure among others. The park will be developed on the lines of Smart City layout and will offer ‘One Stop Hub’ for all the Aerospace requirement.
In the Dhirubhai Ambani Aerospace Park, Reliance group will set up assembly lines and manufacturing facilities of fixed wing aircrafts, aerostructure for commercial transport aircraft, Helicopters for defence and commercial use.
The ADA group has been picked by the Russian government for a Rs 6,000-crore ($925 million) potential deal to make 197 helicopters for the Indian Army and the Indian Air Force. Under the largest deals under the “Make in India” programme, the 197 `Kamov 226T’ helicopters to replace the Chetak-Cheetah fleet will roll out of DAAP in a few years.

SOURCE: Financial Times
MORE: http://bit.ly/1LWU6d3

Monday, 31 August 2015

Expat NewsBurst: Maharashtra Govt Unlocks Agricultural Land For Industry and Educational Institutes.

The Maharashtra government has amended land laws to unlock agricultural land for industry as well as public educational and medical institutes, to promote the ease of business under its Make in Maharashtra policy.

Under the changed rules, industrial units will be allowed to exploit up to nine times the existing building rights on agricultural land. Medical and educational institutes run by the state or public charitable trusts will be able to build up to four times the existing building rights on these lands.
However, the building rights have been capped at a maximum of 1 FSI which will essentially allow a ground plus one-storey structure, officials said.
The amended rules will be application to areas including the Mumbai Metropolitan Region, Pune, Nagpur, Nasik, Raigad, Aurangabad, Ahmednagar, Nasik, Sangli, Jalgaon and Amravati. Delay clauses
SOURCE: Times Of India

Tuesday, 25 August 2015

Lansel D'Souza, Senior Vice President, Expat Properties, on The Hottest Investment Destinations in India.

Hottest investment destinations in India

If chosen right, these typically off beat options can provide a double benefit of being affordable due to low rates now and would provide a substantial return on investment.



Ever dreamt of owning a property in the uber chic locales of South Mumbai, or maybe the posh Lutyens estates in Delhi or even the residential stronghold of Indiranagar in Bangalore? For most, it remains a pipe dream. It's one thing to have the financial muscle to afford real estate in these localities, but you have to even pull strings, know the 'right' people and have a social standing to be considered a candidate for developers. For the majority of the aspirational middle class who dream of bolstering their financial and personal portfolio, is there then a different approach that could bring them closer to this dream?

One place to begin with is the up and coming localities outside your mainstream metropolitan cities, which could result in substantial returns and also form a good future residential option. But buyers typically display hesitancy towards purchasing land in the outskirts of the cities. The primary reasons for their uncertainty are availability of basic amenities, the scope of economic and business growth, lack of entertainment and community options and the value of the investment.

If chosen right, these typically off beat options can provide a double benefit of being affordable due to low rates now and would provide a substantial return on investment. Most of these locatlities are undiscovered location and have the huge potential for profits. Developers with a keen eye for future development plan projects accordingly and identifying them and choosing your localities well will define the success of your real estate endeavour. Be first to recognise the growth potential of these areas and invest wisely. We try and make it simpler for you through this article on some of the hottest investment destinations across 4 states of India.

1.Lepakshi, Anantapur District, Andhra Pradesh

Lepakshi is a charming area in the Southern state of Andhra Pradesh, 15 km east of Hindupur and 120 km north of Bengaluru. Not only is Lepakshi deep rooted culturally, but it is making a mark economically as well. Due to its proximity to important metros and industrial hubs combined with ease of accessibility, this area has great scope for real estate investment. The area is very close to the national highway, adjacent to the upcoming Lepakshi knowledge hub and only 50 minutes away from Bengaluru international airport. The unique point of this area is the fertility of land, development in nearby sectors and convenience as basic civic amenities are available. Lepakshi knowledge hub, which is a key highlight of the growing economic prowess of this area includes an Aerospace and Defence centre, education and innovation hub, free trade warehouses, health and wellness centres, a media and entertainment city, global village to name a few.

The area is viable second home option for developers who already have projects or land in Lepakshi as it has availability of underground water pipe, electricity lines, fencing and fertile land. The Indian Institute of Science, Hindustan Aeronautics Limited, Bharat Electronics Ltd, DRDL, Bharatiya Agro Industries Foundation and Electronics Corporation India Limited are proposing to set up their units within the Lepakshi Knowledge Hub. Airbus, commercial aircraft manufacturers, also have proposed to set up shop in the area. Anantapur has potential of becoming an industrial hub for aircraft parts and maintenance. The growth rate of the location is promising as the scope of further development is high.

2.Dharmapuri, Tamil Nadu

Dharmapuri is a district situated in the northwest corner of Tamil Nadu, which came into existence in the year 1965. The present Dhramapuri was part of Salem district and even under British rule it was part of Taluks of Salem District. Investing in this location promises high returns, because of several places of interest like Hogenakkal Falls is 46 km away from the district.

The location is currently under the Free Zone until explicit permission is being granted by the government to change it. The unique aspect of this area is the affordable rates. Investing in this area is easier because of clear titles and the land is close to major economic growth zone. Coupling this with the choice of an experienced and trustworthy developer will more or less ensure that the investment will be fruitful due to the massive scope of development.

The NH 7 road is also being upgraded which will impact the connectivity and the road will bypass Dhrampuri, Kaveripattanam and Periyampatti on its way to Salem. Tanflora Infrastructure Park promoted by the Tamil Nadu Industrial Development Corporation adds another dimension to Dharmapuri. The venture promotes floriculture near Hosur and Tamil Nadu area, providing infrastructure, post harvest logistics and marketing facilities.

3.Bagepalli Taluka, Chikaballapur District, Karnataka

Bagepalli is a municipal town situated 100 km north of Bangalore and located in Chikballapur district. The destination is perfect for a weekend getaway with rich historical significance. Gummanayakana Palya, 20 km from Bagepalli, is comprised of Bagepalli Taluka portions of Hindupur and Kandukur in the Presidency state of Madras.

Investing in this location will lead to good returns with purchase at low prices. All the basic amenities like water, electricity, medical centre and others along with infrastructure necessities are present in the town. The location is a mere 6 km away from Bengaluru- Hyderabad highway (NH-7) and 75 km away from Bengaluru international airport.

KIADB (Karnataka Industrial Areas Development Board) has already acquired approximately 1000 acres for a major industrial plant in the vicinity which will lead to the rise of a prominent industrial hub in the future. The area has promising investing options for land, residential and vacation homes. Purchasing or investing a project in this area makes sound investment sense as the area is on the verge of industrial and government development. Connect with a developer who has a presence in the area as they can provide more amenities and fencing.

4.Pavlani, Ratnagiri District, Mandangad Taluka, Maharashtra 

Pavlani Village is located in Ratnagiri district of Mandangad Taluka. The area is a popular tourist belt with a rich heritage. One of the favourite attractions is Harihareshwar beach which is surrounded by four hills. The primary rationale behind investing in this location is the threshold of developmental activities going around the area and around Dapoli. With the building of the Mumbai Sawantwadi Expressway going on, the proximity and connectivity will enhance.

Another growth trigger is Dapoli place, which is few hours away from the location. The location of hills gives opportunity for adventurous sports and camping. The amenities are present and the land is suitable for agriculture. It is an ideal investment option, especially for those looking for investments close to Mumbai and Pune cities in Maharashtra.

Dapoli is another town near Pavlani village, which has one of the oldest schools and notable agricultural university, Dr. Balasaheb Sawant Konkan Krishi Vidyapeeth. The area is undergoing development plans by the government and private players. The prices are low and have great potential for profits.

Conclusion
While there are many such hidden real estate gems across India with high growth potential, it takes an experienced eye to identify potential before it becomes mainstream knowledge and reaches saturation point, a feature you may have experienced regularly with suburbs outside the metros. Apart from identifying these locations, it is imperative that you choose a developer who is trustworthy by virtue of experience and past credentials in these locations so they know market movements and trends early on. Choose well on both fronts and there could be a financial windfall coming your way.

Source: ETRealty.com
For exciting Investment Opportunities Click here: www.expat-properties.com

Friday, 21 August 2015

Wednesday, 12 August 2015

Expat NewsBurst: Reliance Group plans $1bn Aerospace Park.

The Anil Ambani-owned Reliance Group has selected Mihan near Nagpur in Maharashtra for developing India's first smart city for the defence sector. Known as Dhirubhai Ambani Aerospace Park (DAAP), the smart city will be developed at a cost of $1 billion to manufacture helicopters for both commercial and military applications.
The project would be the first integrated facility in aerospace structure, engine design and manufacture, fabrication and platform integration in the country.
The move is part of the Reliance Group's aggressive play in defence, seeking to capture a slice of the $100 billion worth of opportunities that the sector would soon throw up as part of the NDA government's 'Make in India' programme to focus on indigenous manufacturing of defence equipment.
Confirming the move, Reliance Group chairman Anil Ambani said, "The group plans to develop DAAP as a centre of excellence in the aerospace segment on the lines of the global centre of ship building at Pipavav in Gujarat." Earlier this year, the Reliance Group added heft in its defence manufacturing by buying out Nikhil Gandhi-promoted Pipavav Defence and Offshore Engineering (PDOE), which houses India's largest dry dock facility to build warships. It subsequently committed investments of Rs 5,000 crore towards indigenization efforts

SOURCE: Times of India

Tuesday, 16 June 2015

Expat NewsBurst: Tips to Calculate Depreciation Of your House.


Ranjani Karthikeyan from Bengaluru asks, “My property is 20-years old and I wish to sell it because I am moving abroad. My problem is that I am unable to calculate the selling price. Since the value of property depreciates with every passing year, what factors should I keep in mind?”
Why is depreciation calculated?
It is for the simple reason that a building like everything else has an age too. Exceptions apart, a very old construction will not be able to gather as much buyer interest or money. Magicbricks reached out to Ajay Sharma, DGM, Valuations and Consulting, HDFC Realty who gives the following insights-
- In case of an independent house, the value of the house is sum of the value of the land and construction cost of the building.
While the value of the land needs to be benchmarked to the market price, the value of the building depends upon its age.

-In case of an independent house, the total useful age is estimated to be about 60 years. Suppose you are selling it after 20 years of construction, selling price of the building minus depreciation is arrived at by this simple formula- Number of years after construction/ Total (useful) age of the building. In Karthikeyan’s case it is 20/60 = 1/3. Therefore, the remainder of the useful age is the price you can ask for the building component.

- To this building price, add the price of land arrived at through market benchmarking to get the total price for the house.
Exceptions to the rule
  • Consider an area where land bank is scarce and is extremely difficult to find a new plot for construction. This happens mostly in established areas which has a premium attached to it. In such a case where prospective buyers’ are willing to pay for the location value, the calculation stands nullified.
  • Value attached to a building depends on many things- construction type, technology, services etc. In this regard, one has to consider the obsolescence factor. Functional obsolescence means your property is either too showy or grand for the locality or below the standard when compared to other properties in the same area. A simple example could be the use of open wiring. This is an old feature and may call for a cut in the selling value of the house
  • A third case would be when a buyer is focused on purchasing the property because of an emotional connect with it. For example, your parents may have lived in Bungalow ABC which had to be sold for some reason. Today, when you have the budget to buy it back, you may even be willing to buy it at a higher price. This constitutes an exception too and cannot be taken as the market benchmark

What should you be careful about?
A seller should price his property rationally.  In many cases, sellers put up an inflated price either because he/she thinks that it is the genuine amount or because they foresee the buyer urging on a bargain. However, you must understand that overpricing may be a deterrent.
The seller knows the average value of property and would be willing to spend -/+ 5 per cent of the market price. Suppose, the price of your property is Rs 100 and a buyer would have to incur an expenditure of Rs 12 to repair/renovate the house, ideally the seller should be selling the house for Rs 88. If you still feel you should ask for Rs 100, that is, the total cost of the property you should be willing to undertake all the repair work before passing it on to the buyer.
SOURCE: MagicBricks

Monday, 27 April 2015

Expat NewsBurst: A Few Surprises in Your Home Loan Agreement

This is a good time for home buyers, with several lending institutions slashing their rates recently. have a tendency to skip through the details of a home loan agreement. That should not be the case. Borrowers need to keep in mind a few key clauses while signing the agreement to avoid unpleasant surprises later.


Cross-collateralisation of other loans: Imagine a scenario where you have taken a as well as a home loan from the same institution. Without your knowledge, you could have actually given your home as collateral for the personal loan. Some lending institutions have an 'Indebtedness of the Borrower' clause where the home is automatically made available as a security for all past, present and future borrowings of the with the same institution. Effectively, your personal loan is secured against your home but the rates being charged are at par with an unsecured loan. In such a scenario, a top-up on the existing home loan would have worked out to be far cheaper than your personal loan.

Worse, few institutions cover borrowings from their associates, subsidiaries as well as affiliates under this clause. So, if you have taken a home loan from XYZ Bank Ltd and a car loan from XYZ Car Loans Ltd, a group company, your home could serve as an additional collateral for your car loan. In some cases, the lenders may have an unconditional right to set off any amount paid by the borrower as per the against other borrowings of the borrower with the bank or its affiliates, associates or subsidiaries even without any prior intimation to the borrower. Hence, it is always recommended to have your home loan from an institution with which you do not have any present unsecured obligations.

Schemes where equated monthly instalments (EMIs) are borne by the developer: In a typical 75-25 or 80-20 scheme, the borrower takes a loan and the developer agrees to pay interest till possession or a specified period, say, three years, whichever is earlier. Generally, the developer is paid based on the stage of construction. However, in some cases, there are accelerated disbursements - for instance, when the completion stage is only 60 per cent, 80 per cent of the loan gets disbursed. Since the developer is bearing the interest burden, the borrower may not be too concerned. However, the loan is taken in the name of the buyer, so, if the developer defaults, any delay or default will appear in the Cibil report of the buyer for no fault of his. Further, the buyer will be forced to pay interest once the specified period expires even though the property is still under construction.

The situation becomes even more precarious if the buyer intends to exit the project midway - many developers charge prohibitively high transfer fees ranging from 2-5 per cent of the completed project value, which effectively increases the exit fee percentage in the case of an under-construction property. For example, if someone had purchased a property at Rs 5,000 per sq ft with a 3 per cent exit fee and he exits the project when it is 50 per cent complete, he ends up paying an exit fee of Rs 150 per sq ft (3 per cent of Rs 5,000) on an investment of Rs 2,500 (or 50 per cent of the total cost), amounting to an effective exit fee of 6 per cent.

Further, where accelerated disbursements have been made, it becomes virtually impossible to exit till construction reaches the level of funding. In many cases, buyers are forced to exit at a loss to relieve the burden of the home loan. Hence, the immediate past track record of the developer, management ethos of the promoters and the stage of completion of the project need to be considered before opting for such schemes.

Unconditional right to amend terms and conditions: Few agreements have an open-ended draconian clause which gives the lenders sweeping rights at their discretion, to amend, recall, suspend or terminate the home loan agreement irrespective of whether the borrower had complied with the provisions of the home loan agreement or not. Such lopsided agreements are extremely unjust to the borrower and puts him entirely at the mercy of the lender at all times.

Setting off other balances: Some loan agreements provide for an unconditional right to set off home loan dues against balances in all other accounts of the borrower, including fixed deposit accounts. So in the event of a strain in repayment of EMIs, the banker has the right to dig into to your savings account, recurring deposit or fixed deposit balances to service your EMI without your consent.

Prior approval for any further leverage: Most lending institutions provide that the borrower shall not obtain any further loan or guarantee any further liability without their prior approval. This makes it mandatory for a borrower to approach the lender for a No Objection Certificate (NOC) for any future borrowing.

Prohibition on leaving India: Most of the loan agreements prohibit the borrower from leaving India on long stays for the purpose of employment or business overseas without fully repaying the home loan. Where there is a practical need to leave India, it is advisable to inform your banker and obtain an NOC.

Onus of clear and marketable title: Assuring yourself that your property has a clear and marketable legal title is important. However, few buyers take independent legal opinion on the title of the property as they feel that the home finance institution funding the property would have done their due diligence. While all lending institutions do their legal due diligence, a lot of weightage is given to the profile of the borrower and the institution's relationship with the developer. For a banker, the loan is given to the borrower and the property is only a security for the loan in the event of default. Most agreements provide that the onus of verifying the legal title is entirely on the borrower and not the lending institution.

Every borrower provides a personal guarantee to the banker for repayment of loan, signs a demand promissory note and provides post-dated cheques for the loan value. There have been instances where serious legal issues have been ignored by bankers for various reasons.

SOURCE: Business Standard,
Read More: http://bit.ly/1diGKZw

Wednesday, 15 April 2015

Expat NewsBurst: Home Delayed is Tax Sops Denied

A ROOM SHRUNK:If you don't get possession of your house within 3 years of taking a loan, deduction benefit will be `30k per year, not `2 lakh
Sachin Kala is still waiting to get possession of the flat he booked four years ago. Even though Kala has paid almost 80% of the total price, the project is still not ready to move in.Kala's only solace is that he is not alone. According to real estate analytics firm PropEquity , around 45% of the 3,753 projects in the Mumbai Metropolitan Region offered for possession during 2011-2014 is still not ready . The problem is more acute in Delhi NCR, where a whopping 78% of the 856 projects has got delayed. The same trend is visible in other major cities like Bengaluru, Chennai, Hyderabad, Pune and Kolkata.
The Real Estate Regulatory Bill that has been approved by the Cabinet and will be tabled in Parliament soon has several buyer-friendly clauses. The bill proposes that builders deposit 50% of the amount received from buyers in a separate escrow account. This will prevent diversion of funds and timely execution of a project. Also, a buyer can claim full refund with interest if a builder fails to deliver on time.



STRUGGLING WITH EMIS

The delay in possession can be financially debilitating for both first-time buyers and investors. Many buyers factor a 10-12 month delay into their planning when they book but very few expect the delay to extend beyond two years. However, housing projects across the country have got delayed by 24-36 months. End-buyers like Kala, who expected that EMIs will replace the rent payment, are seeing their monthly budget spiral out of control because they have to fork out money for both. The situation is not any better for investors who bought their second or third house. They had expected that their investment will start earning rental income, which would take care of some portion of the EMI.However, their calculations have gone awry due to the delay . They are paying EMIs but there is no sign of rental income yet.LOSING TAX BENEFITS A delay in getting possession also implies you will not be able to benefit from any kind of tax deduction until the project is completed. Home buyers count on the tax breaks provided to them in the form of deduction up to `1.5 lakh towards principal repayment (included under Section 80C) and a further deduction up to `2 lakh towards interest payment (included under Section 24). However, to get deduction under Section 24, the buyer must get possession of the property within three years of taking the loan. If the three-year deadline is not met, the deduction benefit reduces from `2 lakh to only `30,000 a year. For a buyer who has taken a `50-lakh home loan, a project delay would translate into a tax loss of `10.9 lakh over a 20-year period (see graphic). In case of a joint loan, the tax loss could be even higher.

One possible way out of this situation is by selling the delayed property and buying a ready to move in property . However, real estate transactions cannot be done very quickly . They also have very high entry loads in the form of registration charges and transfer fees. Also, the seller may not get a very good price for the delayed property while the ready flat will demand a premium.

Mercifully , the three-year rule does not apply to property that is to be rented out as the entire interest is deductible even if the construction extends.So, people who have bought real estate as an investment and intend to rent it out can breathe easy . “There would not be any tax-related loss. However, the tax benefit gets deferred till you get posses sion,“ says Sudhir Kaushik, CFO and co-founder, Taxspanner.

Another solution is to delay the home loan by funding the first few instalments out of your savings. The three-year countdown begins not from the time you booked the flat but from the last day of the financial year in which the loan was taken. You can liquidate some of your investments to pay for the initial instalments. However, do consider the opportunity cost of utilising the money versus investing it in some other asset class.

AVOIDING DELAYED PROJECTS

Due diligence can protect consumers against unscrupulous practices by developers. Assess the builder's track record. Ensure the developer has clear titles and necessary permissions. What are the terms of payment? If the builder is asking for most of the cost at an early stage of construction, beware. Even in construction-linked payment plans, you could face problems during the finishing stages. Under these, almost 70-80% of the loan is disbursed by the time the structure is complete and it is at this stage that a cash-starved project will slow down. Even a year's delay will add hugely to your interest cost.Interest-subvention schemes that promise to bear the EMI burden till possession or for a fixed period of onetwo years are also an eye-wash. Some developers may offer plans where a substantial portion of the cost has to be paid after possession. Only such plans are favourable to the buyer.

SOURCE: Times Of India
Read More: http://bit.ly/1cuPF9U

Thursday, 26 March 2015

Lansel D'Souza, Senior Vice President, Expat Properties, on Invest in outskirts of city for supernormal returns



If there were a non-renewable product that commands a fair amount of demand but only has limited supply and cannot be replicated, economic principles would dictate that its value would only appreciate. Of all investment options available in the current day, land checks all the right boxes.

If you’ve made the decision to invest in land, you’re on the right track. You need to ask the right questions to make the best of this opportunity in land investment. There are some indicators to identify the best land options. The key determinant in this equation as in most real estate investments is location.

Land in urban areas is typically scarce and it generally means lack of options for the mid-income buyers. Suburban areas have a relatively better outlook where there are a fair number of choices; options in the nature of land you want to purchase and a diverse pool of developers from which to choose. Most importantly, as an investor, suburban land has potential. Purchasing land in the suburbs is the right choice if you want to reap high returns on low volume of investment. If you’re looking at a low entry investment with high benefits over the long term then areas in the outskirts of cities is the place to be. 

If the plan is to save for your retirement in keeping with the lifestyle you desire, a long term investment in areas that show promise of development would provide ideal returns over approximately a 10-year horizon. It is largely a myth that good land investments are only found in urban areas. The areas outside of cities have shown huge profit margins in the past 10 to 14 years.

From 2000 to 2011, the value of land in suburban areas around major cities such as Kolkata, Bengaluru, Mumbai, Chennai and Delhi has grown by over 1000 percent and more in some cases. The diminishing nature of land puts it in a prime position to gather returns of this nature over a long period.

The Koramangala area of Bengaluru exemplifies this growth. In the 1990s, it was considered the outskirts of Bengaluru and land would have been available at the price of Rs. 300 per sq. ft. Today, the same land owner could charge over Rs. 6,500 per sq. ft. owing to Koramangala becoming one of the central business districts in the city. Areas around modern day Bengaluru such as Chandapura, Bidadi and others today show the same promise.

If you’re willing to do some scouting and research on the upcoming suburban areas or rural sectors, it usually offers a low entry rate and could provide massive returns over the long-term. Of course, all investments do not see growth of 2000 to 4000 percent, but it’s still a safe bet to say that the investment will keep you ahead of the inflation rate and hence, profitable. 

It’s a good idea to avoid ignorance in any aspect of the transaction to ensure that it remains transparent and legal. If you’re unsure of any decisions while deciding to buy land, it is wise to approach an expert. Find a real estate developer or land investment expert you can trust and through them you could get a better idea of where the best scope of investment in land may lie.

The complex nature of investing in land has often been a primary deterrent for investors to shy away from the sector. However, with the benefits of investing in suburban land, doing your due diligence can put you in a great position to reap the dividends. Investing in suburban areas could make for a more robust and diversified portfolio.

Investing in suburban land
Area (Suburb)
City
Why?
Chandapura
Bangalore
Bangalore witnessed notable residential growth in 2014. The outskirts of Bangalore has seen some infrastructural growth and a fair share of realty has popped up in the past few years owing to a growing demand in Chandapura and the areas around it. It is a location that’s easily drivable from industrial areas such as Electronic City and Bommasandra among others and can offer relatively low prices

Karjat
Mumbai/Pune
Mumbai’s rail and road network has greatly expanded beyond Greater Mumbai. This growth has seen the rise in stature of some areas around Mumbai such as Karjat. The proximity to the upcoming International Airport in Panvel is an added dimension of connectivity

Taloja
Mumbai
Properties in central Mumbai have been priced out of reach, Taloja is one of the upcoming suburban areas that can offer properties at a lower price with the social infrastructure and connectivity to go with it. It is also ideally located near a CBD of Navi Mumbai – Kharghar

Ponneri
Chennai
In 2014, Union Finance Minister Arun Jaitley proposed that Ponneri, an area slightly north of Chennai be developed as a smart city for the Chennai-Bangalore corridor. With the government keen on developing the area, infrastructure development and connectivity in and around Ponneri has been stepped up, making it a candidate that has potential to profitably invest in land

SOURCE: MoneyControl

Santosh Shetty, CMD, Expat Group, on Budget 2015 and the affordable housing segment


It is time for another budget. Will it bring good news for the realty sector? asks Bindu Gopal Rao, as she speaks with experts on the need for FDI, tax rebates on loans and an overhaul of the property laws.
Come February and there is a sense of expectation and anxiety in the air, thanks to the impending financial budget. Every year, industries look forward to the same in anticipation of better tidings. The realty industry puts forward its wish list.

Friendly policies
Real estate industry is pinning its hopes high on this year’s budget with the Finance Minister indicating the start of second-generation reforms in the country. 

Recently, the Finance Ministry floated a draft cabinet note to amend the Foreign 
Exchange Management Act (FEMA) to permit overseas funds in Real Estate 
Investment Trusts (REITs). “Easing the REITs norms and making it investor-
friendly by reworking the provision of three-year lock-in period and minimum 
alternate tax (MAT) will benefit the sector largely,” says Sumit Jain, co-founder and CEO, CommonFloor.com. 

With the plan of 100 smart cities in the country, there is promised growth in the real estate sector. For this, it is essential that the government comes clear on REIT 
policies. “Most real estate projects have come to a standstill because of lack of funds.  Through REITS, this will become easy and we should be able to mobilise many projects. This will not only propel growth for the sector, but shall also increase 
employable opportunities,” seconds Susil Dungarwal, chief mall mechanic, Beyond Squarefeet Advisory Pvt. Ltd. 

Anil Mithas, CMD, Unnati Fortune Group, adds, “Even the long-term capital gains should also be exempted for sponsors of REITs. Even for people who avail home loans, this will be a noteworthy effort for the sector.”

Bank on it

Apart from REIT policies, the recent cut in repo rate is being hailed as a good beginning. “What is needed is a roll back of all liquidity-tightening measures and easing the situation to make cost of funding for both, home buyers and developers cheaper than what it is today. A reduction of 200 basis points (reduction of interest rate by two per cent) within short span is needed. And if the RBI doesn’t act, the government must take appropriate steps to ease fund restrictions for realty,” opines Lalit Kumar Jain, CREDAI chairman and CMD of Kumar Urban Development Pvt. Ltd. 

Anil Kothuri, president and head, Retail Finance, Edelweiss, adds, “The 
housing finance industry (HFI) should be given infrastructure status. HFIs can issue 
infrastructure bonds which qualify for tax benefits. Further, they can raise funds in the overseas markets through the External Commercial Borrowing (ECB) route. Funds raised in these ways will be cheaper, even after factoring the cost of hedging, thus leading to lower lending rates.” 

Another rate cut by RBI can invoke positive sentiment in the investor and 
buyer community. “Foreign Direct Investment (FD) in the real estate sector should be pushed harder since it will not just infuse liquidity in the system, but also bring along technological expertise and global standards in business practices,” says Ramesh Nambiar, cCo-founder and managing director of Nambiar Builders. 

According to Srinivasan Gopalan, CEO, Ozone Group, “Developers should be able to get contractors from abroad, to help speedy construction, using modern 
technology and processes. External commercial borrowings should be allowed for residential projects.” 

The loan factor 
Currently, the real estate sector is struggling with low-demand and hence it is imperative to stimulate the home buyers to make positive decisions. “If more tax benefits are given to the prospective home buyers, they will definitely flock to the 
market in large numbers. And the developers, on the other hand, have been delaying their future expansion plans due to low business sentiments in the market, that has emerged out of the policy uncertainties,” says Manoj Kumar Singh, chairman, Mangalya Group. 

Vikas Arora, director, sales and marketing, Runwal Group, explains, “We expect that the exemption for home loan interest payments should be increased from the current limit to at least five lakh rupees per annum.” Inventory level tells that the customers are postponing buying decisions for two reasons – one, little elbow room because of low savings and second, high interest rates. “If government announces tax rebate on home loan interest and increases tax slab, it will ultimately promote saving. And, when the people make savings, they will buy properties,” says Aman Nagar, director, Paras Buildtech.

“Further, the government could also extend additional benefits to the affordable housing segment. By bringing in clarity on the issue of taxation in case of JDAs, rationalisation in applicability of service tax and VAT on construction contracts, they can open many doors,” says Santosh Shetty, chairman and managing director, Expat Group.

According to Arjunpreet Singh Sahni, executive director, Solitairian Group, “If the provision of remarkable tax incentives for the development of affordable housing projects in this budget is given, more and more developers would be encouraged to develop housing for the masses and they will be instrumental in supporting the 
government’s vision of providing housing for all by 2020.”

There is also a need to reintroduce the interest subvention for affordable housing, which was one per cent on housing loans of up to Rs 25 lakhs for houses that were 
valued at up to Rs 40 lakhs. “The Government should provide tax benefits for green 
developments like solar installations, water recycling and energy-friendly installations. This will spur new development and will also lead to a greener future,” opines Sandeep Ahuja, CEO, Richa Realtors. 

Administrative reforms

A long-pending issue in this sector is single-window clearance. Currently, the approval process is very lengthy and takes around one-and-a-half to two years. The cost of delay in approval adds further to customers’ spending by 25-40 per cent. Says Suresh Hari, secretary, CREDAI, Bengaluru, “This sector is covered under innumerable labour laws, some of which are repetitive and also archaic. A 
comprehensive law to govern the industry with clear rules to avoid misinterpretation would be welcome.” 

There is also a need to demolish the cost of borrowing as capital has always been a matter of concern in real estate. “Cost of building material should be 
standardised as fluctuation in the cost of materials lead to rise in property rates. There should be fast project approvals as it will help bring the prices down,” says Deepak Mittal, director, Pushpanjali Realms and Infratech Pvt. Ltd. 

The long-pending Real Estate 
Regulatory Bill needs to be settled upon and implemented at the earliest. “Another major concern is making more land available to the developers; revised and re-revised version of LARR Act has been a big disappointment in this regard,” says Prashant Tiwari, chairman, Prateek Group and vice president, CREDAI NCR, 
Western UP Division. 

The country needs to boost low-cost or affordable homes to fulfill the dream of 
housing for all. “For this, government can bring easy land acquisition steps to avoid disputes and allow deduction in compensation, too. Another major provision should be cost of building materials that hugely affects projects offering home for common people,” says Shivakshi Gogia, CEO, Ascent Buildtech.

Tax woes
Currently, housing sector pays about 36-37 per cent of sale prices to the Centre, State and local municipal bodies by way of direct and indirect taxes. There is a strong need for the government to reconsider the decision to impose levies such as MAT and Dividend Distribution Tax (DDT) in SEZs. “Introduce uniform tax regime Direct Tax Code (DTC) and Goods and Services Tax (GST) and rationalise stamp duty across states so that there is a higher degree of standardisation,” says Sanjay Dutt,executive managing director, South Asia, Cushman & Wakefield. 

Kumar Bharat, director, BCC Infrastructures Pvt. Ltd. says, “The government also needs to focus in the direction of scraping the service tax for under-construction 
projects and higher tax exemption limits on repayments for home buyers in affordable housing projects. Providing tax holiday benefits for affordable housing projects will put impetus on this segment and ease the burden of the home buyers.” 

The need of the hour is to ensure that the customer is not burdened. “The 
government should also give some relaxation in the existing structure of service tax, at least for MIG and affordable housing, which will send a signal to the states also, to reduce VAT, stamp duty, making housing more affordable,” says Kailash Advani, CEO, Vaswani Group. 

Developers were allowed IT exemptions on their profit made between 2007 till 2012 in the process of developing housing units up to 1000 sq ft and 1500 sq ft under Sec 80IB (10) so as to mitigate housing shortage. “This has propelled large scale production of housing stock during that period resulting in reducing the shortage of housing to some extent. This exemption should be reintroduced and the benefit should be available for units starting from 250 sq ft to 1500 sq ft so that 23 million sq ft shortage of housing in affordable segment can be erased in the shortest time possible,” says A Balakrishna Hegde, managing director, Chartered Housing. 

Bijay Agarwal, managing director, Salarpuria Sattva Group, adds, “Many 
developers have planned projects based upon few schemes like 80IA, which has not been notified by the government later on. They should notify such schemes at the earliest, so that development on such projects can start immediately.”

Here’s hoping that the impending budget will bring good tidings for all the real estate players and make housing for everyone a reality.

SOURCE: Deccan Herald
http://bit.ly/1FJ7L2T