Govt Asks Real Estate Sector to Construct Affordable Houses for Urban Poor

Seeking viable solutions to make India slum-free, Government on Monday invited banks, other financial institutions and the real estate sector to use its interest subsidy scheme for construction of affordable houses for urban poor . “There is a need for credit enhancement through appropriate fiscal, legal and institutional mechanism to ensure the flow of capital to realise the vision of slum free India,” Housing and Urban Poverty Alleviation Minister Kumari Selja said here on the occasion of World Habitat Day.

“I invite all the stakeholders particularly the banks, financing institutions and the real estate sector to come forward to make use of the opportunities offered by our schemes such as Interest Subsidy Scheme for Housing the Urban Poor and the Scheme for Affordable Housing in Partnership and to work hand-in-hand to find viable solutions which make a positive lasting impact on our cities,” she said. Urban population is expected to increase manifold in the next two decades. In the absence of proper homes, people are forced to reside in inhabitable and often unsafe places. According to the ministry, the total urban housing shortage was 24.71 lakh as on 2007.

Seeking ways to deal with housing shortage, she said, “the housing deficit cannot be addressed only by government programmes. A strategy is required which converts the housing shortage into a market opportunity and mobilises private investments.” Lamenting that urban poor face financial exclusion, she said, “financial institutions are reluctant to lend to the lower income segments in view of perceived credit risks, lack of credit history and difficulties in foreclosure of loans. This outlook requires a change.”

Source : www.indianrealtynews.com

Mahindra Group’s Real Estate Arm buys Plots in Suburban Mumbai

Mahindra Lifespaces Developers Ltd, the real estate and infrastructure arm of the Mahindra Group, has bought two plots in suburban Mumbai from group companies to build homes. The firm bought 150,000 sq. ft of land in Kandivali previously used as a warehouse by the group’s tractor factory. In Ghatkopar West, it bought 225,000 sq. ft of land.

“We will keep looking at such opportunities whenever they are available,” managing director and chief executive Anita Arjundas said, without disclosing the purchase prices. Property analysts peg the estimated revenue from the properties at around Rs.338 crore, based on an average market price of Rs.9,000 per sq. ft. They estimated the land cost of the two parcels at Rs.4,300 per sq. ft.

Internal land purchases such as these benefit both the buyer and the parent firm. Groups such as Mahindra and Godrej have land assets that can be monetized through real estate developments. The realty arms get easy access to land at competitive rates. Godrej Properties Ltd, a unit of Godrej Industries Ltd, has monetized land that belonged to Godrej Agrovet Ltd and Godrej and Boyce Manufacturing Co. Ltd through joint ventures.

In June, Mahindra Lifespaces bought 23 acres in Pimpri, Pune, from Mahindra Engineering and Chemical Products Ltd at an estimated Rs.100 crore for a residential project. Mahindra Engineering’s manufacturing facility at the site will be shifted out. “Internal land buys like these from group companies need to make business sense and fit the profile of the developer though they may not necessarily be cheaper land available,” said Gulam Zia, national director-research and advisory services, Knight Frank India Pvt. Ltd, a property advisory.

Mahindra Lifespaces has followed an expansive land acquisition policy across locations, typically looking at large format projects under its Mahindra World City concept. The company is in an aggressive land buying mode and is in the process of acquiring around 3,000 acres in Pune and 1,000 acres in Chennai for two special economic zones. To strike a balance, it is also developing smaller, more niche residential projects in cities such as Mumbai. It is already developing residential projects in Goregaon and Bhandup in suburban Mumbai.

Source : www.indianrealtynews.com

Actor/Producer Ajay Devgan Plans to Develop 2 Real Estate Projects in Mumbai

Actor-turned-producer Ajay Devgan has now ventured into real estate and plans to develop a residential and commercial complex in the metropolis. Devgan has allied with the Roha Group , which has been in the sector for the last seven years, for its expertise in the segment. “I am a regular investor in this space. I felt there is a huge scope for coming up with branded products and was waiting for the right associates. Roha Infrastructure (a group company) brings in seven-years of experience in realty sector and so the alliance came into place,” Devagn told reporters on the sidelines of a real estate event here.

The company, Ajay Devgan Infrastructure (ADi), will be developing two projects — one residential and other commercial under the brand of ADi in Mumbai. The residential complex — ADi West Coast — would come up at Versova while the commercial building — ADi EGO — will be constructed at Vile Parle (East) on the Western Express Highway.
While the residential complex is spread across 60,000- 70,000 square feet of area, the commercial complex would be set up over 20,000 square feet, a company source said.
ADi West Coast will have a ground, five podiums and 12 floors. “The residential complex will cater to the luxury segment. Each floor will have only one flat of around 5,000 square feet,” he said, adding that the flats would be sold only by invitation.

Source : www.indianrealtynews.com

Banks and Realtors Collaborate to make India a ‘Slum Free Country’

Seeking viable solutions to make India slum-free, Government on Monday invited banks, other financial institutions and the real estate sector to use its interest subsidy scheme for construction of affordable houses for urban poor. “There is a need for credit enhancement through appropriate fiscal, legal and institutional mechanism to ensure the flow of capital to realise the vision of slum free India,” Housing and Urban Poverty Alleviation Minister Kumari Selja said here on the occasion of World Habitat Day.

“I invite all the stakeholders particularly the banks, financing institutions and the real estate sector to come forward to make use of the opportunities offered by our schemes such as Interest Subsidy Scheme for Housing the Urban Poor and the Scheme for Affordable Housing in Partnership and to work hand-in-hand to find viable solutions which make a positive lasting impact on our cities,” she said.

Urban population is expected to increase manifold in the next two decades. In the absence of proper homes, people are forced to reside in inhabitable and often unsafe places. According to the ministry, the total urban housing shortage was 24.71 lakh as on 2007.

Seeking ways to deal with housing shortage, she said, “the housing deficit cannot be addressed only by government programmes. A strategy is required which converts the housing shortage into a market opportunity and mobilises private investments.” Lamenting that urban poor face financial exclusion, she said, “financial institutions are reluctant to lend to the lower income segments in view of perceived credit risks, lack of credit history and difficulties in foreclosure of loans. This outlook requires a change.”

Source : www.indianrealtynews.com

Office Rental Shoots amidst High Demand

Rentals for office space in top Indian cities are firming up due to increased demand, as per an industry study that suggests revival in one of the few real estate segments yet to come out of a slowdown. There has been moderate quarterly rise in office rentals across Grade A projects in the central business districts of Delhi (4%), Mumbai (3%), Bangalore (3%) and Pune (4%) with Kolkata clocking the highest increase (10%), according to a report by commercial real estate services firm CB Richard Ellis India.

The study for the three months ended September that covered top office space rentals across Delhi NCR , Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata found rentals in Chennai and Hyderabad remained static compared with the quarter ended June. “A large number of companies are reviving their expansion plans, while demand is also increasing for SEZ office space. This is indicative enough of a revival of demand and substantial improvement in the market activity across the country,” stated the report.

There has been considerable increase in the transaction volume in almost most metros, including Pune and Kolkata. Hyderabad is expected to witness higher rentals because of increased demand for commercial office space by year end, added the report. Anshuman Magazine, managing director at CB Richards Ellis said, “Rental increase will remain in check in the medium term due to the ongoing supply.”

In the top cities, occupiers and companies look to shift to secondary markets and alternate locations for several reasons such as location advantage, metro connectivity, quality construction and infrastructure, more efficient buildings and competitive rentals. “It is imperative for developers to take a cautious approach towards rental expectations during this rising yet fragile market,” the report added.

Source : www.indianrealtynews.com

LF Runs into Controversy Over Punjab Land

Real estate developer DLF has run into a controversy in Punjab for seeking common village panchayat lands to develop parks and buildings. However, the panchayat is adamant and has said the villagers would not part with the land. Residents of Chahar Majra village, about 5 kilometres from Chandigarh, have no land to cremate their dead. Villagers have been requesting the government to allow them to use the common panchayat land, but the government has not responded. And the reason behind this denial is that private developer DLF has proposed to come up with a mega industrial park.

Khwaja Khan, village head said, “We do not want to give our land for work that is not in the benefit of the village.” Mohammad Sadiq, a villager said, “We do not want that anyone should take possession of our land.” Meanwhile, the government has washed off its hands over the controversy on land whose current value is almost Rs 1.5 to 2 crores an acre.

Punjab Chief Minister Prakash Singh Badal said, “We will take a decision only after forming a committee of the district DC and villagers.” Caught in between the government and the villagers, DLF has run into trouble not only in this village but also in Gurgaon Cyber City where the Punjab and Haryana High Court has quashed the Haryana government’s acquisition of more than 19 acres of land to be handed over to DLF.

Source : www.indianrealtynews.com

Things to Keep in Mind Before Buying a Home

Of all the dreams that a person dreams in his lifetime, the most desired is the one for owning a house. It is much more than just a real estate purchase or an investment opportunity. Every individual aspires to have a private space that he can call as home. People spend lots of time and money in making this dream of theirs come true. However, it is advisable to give proper thought and planning before making a decision to buy a new home. After all, we buy a home just once.

When you opt for a property, you should also consider the amenities like space, neighbourhood, transport, proximity to schools, hospitals, markets etc. Visit the site and cross verify that the actual amenities are in compliance with what is mentioned in the advert. Make sure the basic infrastructure like water, electricity etc. are in place. Try to find valued add-ons that will further save you on cost, e.g. a furnished plot or automatic admission in the township.

An important point to consider is that if the property to be bought is a part of some registered society. You should check the society norms for selling or renting out the property, parking space etc.

Proper verification of documents like solicitor’s title report, title certificate, Municipal Corporation approvals, No Objection Certificates, terms and conditions, relevant title certificate, IOD, CC list, copy of plan etc., is mandatory. Make sure that the agreement of sale is drafted as per the state’s Municipal Corporation.

Keep you eyes open for any hidden costs and document the entire transaction. The total actual cost should be calculated by including stamp duty, registration charges etc.

Always keep a margin of few months, in case the possession gets delayed. It is a good idea if you already are staying at a rented place. To ensure good quality, service and possession on time; go for a developer that has carved out a niche in the real estate market. Some with a well established reputation in the market. Also, get the property checked by a lawyer and engineer to avoid any legal hassles at a later point of time.

The selection of the perfect home loan provider should be done after a thorough market research. Go for the one that offers best cost, prepayments, interest rates etc. Before zeroing on the loan amount, consider your savings and your income. Don’t spend more than you can afford.

Craft a proper financial plan that would help you save enough and spend wisely. A home loan will be a huge fiscal responsibility and its better to get rid of it as soon as possible. So it would be a better idea to clear off your other debts before opting for a home loan. Assess your expenditures properly, prioritize them and save prudently. The more you save, the bigger is your down payment and repayment will be easier. Any major financial decisions, e.g., buying a car etc., should be kept on hold till the time you completely repay your loan.

Some terms related with housing finance:

EMI: EMI means Equated Monthly Installment. This is the installment payable to the housing finance company and remains constant over the tenure of the loan. The EMI you pay depends upon the rate of interest, the tenure of the loan and the amount of loan you take. For example, when ICICI Home Finance says EMI of Rs 982 per lac for a 20 year Home Loan, it means that if you take a loan of Rs 1 lac for 20 years at the existing rate of 10.25% you will have to pay Rs 982 every month for the next 20 years.

LTV: LTV stands for Loan To Value ratio. It signifies the loan amount that a person is eligible for a Home Loan on the total cost of property. So an LTV of 85% means that you can get a loan of maximum of up to 85% of the value of the property.

FOIR: FOIR is Fixed Income Obligation Ratio. It is used to calculate your eligibility in terms of the EMI, in which the housing finance institution takes into account all the fixed obligations that you pay every month like of all the loans previously availed before you take your Home Loan and arrive upon the maximum EMI that you can pay. The loan amount you get is derived on the basis of the EMI that you can pay. It is usually expressed as a percentage.