Will General Budget Fuel the Realty Growth?
Feb23

Will General Budget Fuel the Realty Growth?

The year 2014 did not see an exponential growth in the Indian Real Estate market. However, with the formation of the new and stable government at the center, the sentiments have revived. The new government has laid emphasis on key factors controlling this industry and announced numerous short and long term measures to boost revival in this sector. What the homebuyers and investors will experience in 2015 is affordable housing, increase in tax rebate on interest repayment of home loan, lenient FDI norms, an increased income tax exemption slab and development of 100 Smart Cities. According to a survey conducted by the Industry Experts, the year 2015 will experience a sharp, positive growth trend from the previous years, which will stabilize the property market to a great extent. The survey reveals 39% homebuyers want to buy a property for self use as they are currently staying in rented accommodations. An additional 1/3rd portion of the homebuyers want to purchase property to meet the mounting family needs. Whereas, only 14% buyers want to purchase an asset for long-term investment, and 5% consider their asset as a short term investment tool, for a period of 2-3 years. These statistics indicate the positive and hopeful mood of the investors, which the new government is eager to build upon with its governance and strategies. The Central Bank predicts a 6.5% GDP growth in the FY2015-16, which puts Corporate India in the fast lane. It has made apparent that a steep raise in jobs and incomes will be witnessed all round the year. And, this indicates that the Indian Realty sector will boom as the demand for both residential and commercial properties will skyrocket. In 2015, Construction companies will be more transparent in their offerings on property sizes and the prices. This year, smaller, yet energy-efficient designed homes will rule the residential real estate market. A correction on over-priced cities will help in quickly clearing the stagnating inventory, paving way for new and better residential spaces. Townships will become widespread, and a moderate in increase in the construction of luxury homes will be seen, with emphasis on affordable housing for all. Affordable Housing: The new government at the center is expected not resort to “mindless populism” in the FY2015-16 Union Budget. This implies that the new government will not burden the Indian population with high inflation and will take stringent measures to improve employments and incomes. The economic revival in 2015 will positively affect the Indian Realty sector- with affordable housing being the motto and buyers and investors having a greater purchasing power. The new government has strongly indicated that good governance, better planning...

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Real Estate India: What To Expect In 2015?
Feb14

Real Estate India: What To Expect In 2015?

The real estate market of India has seen a lot of improvement in the past years, especially along the areas of Bangalore and Delhi. This growth has been due to many Non-Resident Indians (NRIs) making investments in the Indian Real Estate market. They have seized the opportunity and NRIs from Malaysia and Middle East countries have stormed the metropolitan cities of India, especially in the residential segment.  In 2014 Bangalore and Chennai witnessed the highest demands, with NRIs investing heavily in these real estate markets. Bangalore has been well known for its development in the field of IT and Infrastructure and it continues to prove as the leader in the country. Chennai also saw its fair share of real estate market profits with new projects launching and getting sold very quickly. The market may not have boomed as much as Bangalore, but it was second in terms of the entire country. However, there have been newer project launches towards the end of 2014, which was true in case of every metropolitan city. There is also a backlog of property from 2014 as we head into the New Year 2015. The year 2014 had witnessed delays in projects clearance and funding. Many projects which should have started in the middle of the year were forced to start near the year’s end because the important paperwork was not approved in time. However, there were a significant amount of profits which came from the real estate market in 2014. How important is Real Estate in India? In India Real Estate plays an important role and it is not just because of housing needs, even commercial spaces are in huge demands, with foreign companies launching their offices. Here are some of the reasons why the Realty sector will move forward in the New Year. The Economic Survey of 2012-2014 period indicated that housing generates the maximum amount of employment after agriculture in India. This is a vital reason why real estate is given a heavy-duty importance in the country. The cities of Bangalore and Delhi are witnessing the growth of IT & Corporate sectors, and subsequently the need for robust residential and commercial infrastructure has become the need of the hour, for the companies to launch their business here. The building material for construction both residential and commercial complexes are provided by the country’s steel, cement, brick industries. These markets are simultaneously booming because of the infrastructural growth. India has been known to have real estate as the third best industry in the country; its effect on other industries also grows extensively when it comes to employment and revenue generation. The real estate...

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Real Estate Market of Delhi & NCR
Dec25

Real Estate Market of Delhi & NCR

According to market research reports, the real estate market of Delhi & NCR is all set to grow by approximately 50% when it comes to investments in Private Equity (PE). A stable Central government has infused a new life in a sluggish sector with real estate in NCR receiving INR 2000 crore in 2014, which is double the PE amount from 2013. Affordability of property prices is one of the biggest factors, which is driving the developers and the investors alike. Improved bank funding with attractive valuations is yet another reason for this colossal growth. The Indian real estate market has attracted INR 80 crore PE investments in the first quarter of 2014, which is a staggering 28% increase as compared to last quarter of 2013. So, what are the critical factors controlling the property market in Delhi-NCR? Here’s a look. Delhi With property prices steeply rising in Delhi, investors and buyers are now shifting towards its southern fringes where development is still going on. Subsequently, people can purchase luxury and mid-segment properties for the same or lesser price in this region. One such popular location is Dwarka, towards the south-west of Delhi. The largest suburb in Asia, it boasts of sound infrastructure, immaculate planning, proximity to business hubs and offices, besides offering affordable houses and commercial space to the buyers. Work on Dwarka-Gurgaon Expressway is going strong and it is nearing completion in many stretches. This factored along with proximity to the IGI Airport is padding on the real estate growth. A number of luxury and premium projects are in the pipeline, which is expected for delivery by the year 2017. Prices for semi-luxury properties are capped at INR 8000 per sq. ft. and those belonging to the luxury category are priced between INR 11,000 – INR 12,000 per sq. ft. Even the mid-range housing prices have jumped from INR 3350per sq. ft. in 2013 to INR 7000 by the mid of 2014. NOIDA Fast-paced infrastructural development in NOIDA along with its proximity to Delhi, Faridabad and Gurgaon are the reasons behind its rapid growth. Proposed City Center Dwarka-NOIDA extension is to complete by the year 2021, and it will provide direct connections to numerous Delhi-NCR areas. NOIDA Metro Rail Corporation (NMRC) recently received the state government’s approval for a 29-km Greater NOIDA-NOIDA Metro link. Also in the offing is the uninterrupted supply of power through the Greater NOIDA Industrial Development Authority (GNIDA) power plant. This surely boosts the infrastructure developments here. While affordable housing is the star in this region, super luxury 3 to 5 BHK choices of, 2000 sq ft – 4000 sq ft are available...

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Real Estate Market Improved After Easing of FDI
Dec06

Real Estate Market Improved After Easing of FDI

The Union Cabinet, on October 2014, relaxed rules for Foreign Direct Investment in India’s real estate sector, making it easier for investors to enter the property market, bring major developments in the industry, and help the cash-starved property developers to have an incredible amount of foreign funds to build new projects and complete the existing ones. According to the new rules, it has now become easier for foreign investors to invest in India’s real estate sector, while several projects will be qualified for Foreign Direct Investment through automatic route. Opening up the construction sector to attract foreign investments is expected to achieve Prime Minister Narendra Modi’s dream to create 100 “Smart Cities” in India by the year 2020, and this isn’t possible without huge financial support from foreign investors. According to new government guidelines, following are the norm for FDI in real estate sector: Minimum capital investment by foreign companies has been reduced to $5 million from $10 million The minimum built area for real estate projects in which FDI will be allowed has been reduced to 20, 000 square meters from 50, 000 square meters The norm for providing 30% affordable housing projects has been removed Earlier the lock-in period during which investment cannot be repatriated was 3 years. After the relaxation of norms, foreign investors will be allowed to expatriate investments on completion of the project or 3 years after a final investment has been made Flow of Funds in the Hands of Property Developers Though India’s real estate is considered to be one of the most promising sectors today, it is still plagued by traditional inhibitions, market uncertainty, and financial crunch. It is majorly characterized by small players having a local presence, and that too under high levels of debt that forces them to stop construction projects midway. Currently, poor demand and falling property prices in some areas of Delhi and NCR has further elevated the scenario. With the government’s decision to relax FDI norms in real estate sector, property developers will now have a flow of money in hand to fund their construction projects. As a result, the industry will see a greater number of construction projects, especially residential, in years to come. This is of utmost importance because the huge population influx in Delhi and NCR will drive demand in future, and property developers should have the potential to supply the same. Improved Liquidity of Builders Easing of FDI rules in India’s real estate industry is expected to improve liquidity of developers as well as boost supply in the property market. The minimum foreign investment threshold has been lowered from $10 million to $5...

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Smart Things You Need to Know About REITs
Nov25

Smart Things You Need to Know About REITs

After a tedious 7 years wait, the Securities and Exchange Board of India (SEBI) approved establishment of the Real Estate Investment Trusts (REITs) on August 10, 2014. So, what it is REITs? A Real Estate Investment Trust (REIT) is a trust-like organization or company that owns, and often operates, income-generating real estate assets, wherein most of the earnings are regularly distributed to the shareholders as dividends. Typically, REITs deal in commercial real estate assets particularly, including residential and commercial apartments and buildings, office buildings, shopping complexes and malls, hospitals, multiplex and cinema halls, hotels and resorts, timberlands, warehouses, etc. It is a special investment company where money from investors is directly invested in real estate, either via mortgages or properties. Investors receive income from rent generated from underlying properties as well as capital gains when such real estate assets are sold. This long-awaited move by the SEBI is expected to offer greater stability to the real estate sector in India. The REITs are listed on stock exchange for trading, and therefore, attracts investment that is expected to substantially boost accountability, growth and transparency in the real estate sector in India. Enlistment of REIT on the stock market will encourage development of high-end institutional-grade buildings and will also give property developers a steady outlet for development projects. REITs are required to pay out 90% of the income from assets to investors, wherein only 20% of its assets can be invested in development projects and remaining 80% must be invested in income-generating properties. Investment in REITs If you wish to invest in REIT that is listed on the stock market, it is just like investing in mutual fund. The fund raises money from a pool of investors and utilizes it to buy income-generating real estate assets, and to draw rental and capital gains from such properties on a regular basis. About 90% of the gains will be distributed to investors or shareholders of the REIT in the form of dividends. So, if you are planning to invest in Real Estate Investment Trust, it’s one the best ways to acquire a diverse portfolio of real estate assets or get easy liquidity for completed real estate projects in a more tax-efficient way. Since 90% of income generated from real estate assets is distributed among investors, the REITs are perfect investment options since they are relatively low risk and also spin off cash on a regular basis. REITs make relatively high-yield investment instruments. The returns on investment are based on dividends plus a price appreciation. However, most of the returns are generated from dividends rather than price appreciation, unlike small-cap stocks. To serve best...

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