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

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.


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?

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.

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.  


Few of the top areas to invest in Bengaluru are:
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 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.
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 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
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