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Union Budget 2011-12 – “Give Indian real estate the break it deserves”

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Anuj Puri, JLLM, Jones Lang LaSalle Meghraj, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comThrough a hailstorm of bouquets, brickbats, controversies and triumphs, the Indian real estate sector has always been one of the mainstays of the country’s economy. At some level, every Indian is connected with it; in some way or the other, it affects every citizen of this country.

The same could be said for the stock market, since a telling segment of the population is either trading or indirectly invested in it via insurance policies and mutual funds. However, the real estate sector has a direct bearing on every Indian’s life – be it from the point of view of housing, workplace, business premises, shopping or investment.

It is time that the Government takes practical cognizance of the vitally important role the real estate sector plays in the Indian economy. The Union Budget rolls around every year, and every year it presents the Government with an opportunity to iron out the more glaring inconsistencies and introduce the most obviously called-for reforms, and thereby either consolidate or strengthen its stance as a champion of economic growth and progress. Every year, the spokespersons for the Indian real estate sector petition for reforms that will give the sector the required forward momentum.

While we realize the limitations, reservations and uncertainties that have been following the wake of the property market, we know that the fundamentals that drive this industry in India are time-tested, resilient and extremely robust. Encouraged, as always, by our continued optimism, we once again hope that the Union Budget for 2011-2012 will give Indian Real Estate the break it  deserves. In tangible terms, the reforms that would have the most beneficial effect would include:

More sops for affordable housing under ‘Housing For All’

Last year, housing loans under INR 10 lakh were given an interest rate cut of 1%. We need similar measures in the new budget. Special Residential Zones (SRZs) should be taken off the drawing board and finally implemented, and developers who focus on ultra-low-cost housing, either through SRZs or otherwise, should be given more sops. Also, we ask for an increase in the cap on tax deduction available on housing loans.

More relaxations for FDI in retail

Provide for 100% FDI in multi-brand retailing. This would ensure substantial growth in the food processing and textile sectors via the resultant linkage effects of a modernized, globalized retail trade. The employment generation for Indian youth would be enormous, and Indian retail will benefit from juxtaposition with market-savvy international retail corporations, and would learn to adopt their best management practices.

Simplify Taxation in the Real Estate sector

Introduce Goods and Services Tax (GST) and include the Real Estate sector under the ambit of this single tax regime. This will simplify transaction costs (which currently include stamp duty) and give developers a set-off or credit on the taxes paid on construction material and services. Also, create a nation-wide, unified taxation system, which currently differs between states

Increase forward momentum towards REMFs and REITs

The commercial office market seems to have bottomed out and now presents excellent options for investing into yield assets. This factor should logically catalyze the formation of REITs.

Relax the deadlines proposed under Revised DTC for Special Economic Zones (SEZs)

Under the revised DTC, SEZs have to be notified before March 2012 and become operational before March 2014 to be able to avail of the tax benefits. The Union Budget should consider a relaxation of this requirement to provide greater impetus to the demand for commercial real estate from the IT and manufacturing industries.

Create ‘Real Estate Regulatory Authority (RERA)’ for bringing more transparency. Enact the Model Real Estate (Regulations of Development) Act.

RBI Credit Policy Lending Rates – Real Estate Impact

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Sanjay Dutt, Jones Lang LaSalle Meghraj, Track2Media, Track2Realty, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comAn increase in lending rates is almost inevitable, considering the high need to curb inflation. On its own, an increase in lending rates would probably not have a very significant effect on the market. However, the fact is that there are already a number of negatives such as overpricing at play in the residential real estate sectors of large cities like Mumbai and Delhi.

Also, while there is a high projected supply, there is a distinct dearth of appropriately priced projects in the low-to-mid income segments.

The RBI’s raising its lending rates will add to the stress already building up, and hasten the inevitable correction of at least 15-20% in the pricing of residential properties in the overheated central areas of these cities. This correction was previously expected to happen in 6-8 months.

Home buying tips: when should you take the plunge?

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Mohammed Aslam, Jones Lang LaSalle India, Pune Real Estate, Indiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.comIndiabulls real estate, BSE, Bombay Stock Exchange, Mumbai Real Estate, India Property, Track2Media, Track2Realty, ravi sinha, india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, KP Singh, DLF, Unitech, Emaar MGF, ndtv.com, ndtv, aajtak, zee news, india news, property news, real estate news, 99acres.com, 99 acres, indianrealtynews.com, indianrealestateforum.com

There is a school of thought that states that you should buy a home as soon as you can afford it, or as soon as your home loan application is approved. In fact, the only question one tends to ask in context with home buying is whether property prices and interest rates are amenable at that point in time or not. On the surface, this makes sense. However, not all surfaces are reliable mirrors.

From an investment point of view, buying a house is often likened to buying gold and putting it in the bank. That is true to some extent. Investments in real estate, historically, have given very good returns, if held for a long period. In other words, buying property today does make a certain amount of financial sense.

Buying a house means security, and security is important to any family of any generation. It is one of the few long-term investments with practical utility – after all, you’re not going to put the flat in a bank while it appreciates in value. You’re going to live in it. But the fact that investment in property needs time to pay off good returns should be kept in mind.

Before utilising your loan or putting your own money down, calibrate the options well to judge whether your investments today will yield desired results before you plan to sell off. With the social structure in India decaying slowly, there are a host of factors that need to be kept in mind before making such a huge investment.

Work Profile

The reason why a home loan company digs so deep into the nature and situation of a client’s job is that they need to gauge how reliable a risk he is. There are certain classes of jobs that inspire more confidence due to the stability they offer to the employee.

This stability is not judged by the take-home income but by potential consistency. Therefore, if you are applying for a home loan, it would be best to make a personal evaluation. If you are a frequent job-hopper, suffer from poor health or have a long history of dismissals, you would do well to set your career situation in order before applying.

Even if your application is accepted, how well are you equipped to pay the EMIs (equated monthly instalments)? With the loan granted, you could avail of it more productively when things are a little more stable on your professional front.

Peripheral Expenses

Another factor to consider is the peripheral expenses. To begin with, if you are using the services of a real estate broker, you will be liable to pay him a certain amount of money once the deal is finalised. There are also various legal formalities, including property and registration taxes. Are you in a position to take care of them as and when they arise?

Family

There are both practical and less definable reasons for assessing your marital situation before contemplating the purchase of a home. A shaky or distressed marriage is definitely not conducive to making four walls into a home. The contemporary Indian mind assumes that marital problems will automatically get ironed out once the decisive step of buying a home is taken. The facts state differently, but that is not the point. Let us consider the purely financial point of view.

Many couples take out joint home loans. When a marriage is stable, this does have many advantages. When it is not, the consequences can be quite disastrous. Payment of EMIs in case of separation or divorce can become a major legal issue. Even in the case of outright purchase, actual ownership of the property if the marriage dissolves will be the subject of dispute. Hoping that buying a home will set a disturbed family situation right is akin to hoping that water will miraculously flow upwards if the right kind of pipe is installed.

Cultural Roots

Yet another reason to think long and hard before actually investing in a residence would be sudden geographical change. One major mistake repatriating NRIs usually commit is to buy a home arbitrarily, without considering the possible culture shock.

The fact is that they have spent a minimum of five years in a foreign country, which means that they have assimilated that country’s culture and adopted a certain lifestyle. Such a culture and lifestyle may be hard to replicate in India, no matter how progressive the city of choice is.

The same feeling of alienation and displacement can overwhelm property buyers who decide to settle down in an unfamiliar city or even state, without familiarising themselves with the new area of location.

Finally, the financial investment angle. If you ask a financial consultant about whether the time is ripe to buy a residence, he will probably raise only one point – will you be able to keep the property long enough to make it pay as an investment?

All of these factors are worth thinking about before actually taking the plunge of buying a home.

Jones Lang Lasalle hotels: Gurgaon hotel market update – January 2011

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India real estate news, real estate news india, india realty news, realty news india, track2media, track2realty, ravi sinha, india property news, property news india, india hospitality news, hospitality news india, zee news, aajtak, ndtv.com, ndtv, 99 acres, 99acres.com, Jones Lang LaSalle India, JLLM, Jones Lang LaSalle MeghrajGurgaon initially gained prominence as an outsourcing centre for major international companies that found it cheaper to locate their back-end operations in India due to the availability of high-quality but cost-effective employee resources. GE Capital initiated this trend and was the first multinational company to enter Gurgaon in 1997.

Over the last 15 years or so, Gurgaon has established its presence as an important commercial centre of India. However, the nature of companies in Gurgaon has somewhat evolved from being business process outsourcing (BPO) focused industries to including major multinational companies across a variety of industry sectors at present.

Some prominent sectors having presence in Gurgaon include the following:

  • Telecommunications: Gurgaon is home to major telecommunication companies like Bharti Airtel, Nokia, Motorola, Alcatel Lucent and Ericsson.
  • Information Technology (IT): IT majors such as Siemens,Microsoft, International Business Machines (IBM), Sapient, Hewlett-Packard (HP), Hewitt, Hindustan Computers Limited (HCL), Canon, SAP Labs, Dell, Convergys and Tata Consultancy Services (TCS) are part of the multinational business environment in Gurgaon.
  • Manufacturing: Traditionally, manufacturing had been the base of the Gurgaon economy. The city has grown as an established manufacturing hub, with automotive and garment Manufacturers being the major contributors to this sector. Maruti Suzuki and Hero Honda are the existing prominent auto manufacturing players in Gurgaon.
  • Real Estate: World-class real estate is supported by private real estate giants like DLF Limited, Unitech, Emaar Properties, Parsvnath, Omaxe, Ansal, Ambience, Shipra, Vatika and Vipul. Development has taken place in the form of office spaces, residential complexes, shopping malls and hotels, with the development format typically comprised of high-rise buildings with superior quality construction.
  • Retail: Gurgaon has become an epicentre to the growth of organised retail in the Delhi/NCR area. Multiple shopping malls have sprawled along MG Road, offering high-end shopping and food and beverage (F&B) experience.

Overall, Gurgaon benefits from a deep and diverse mix of domestic and international companies spread across various industry sectors. These companies are also significant contributors of lodging demand to local hotels. Such a diverse corporate demand base bodes well for the future growth of the local lodging market, ensuring that the market is not overly dependent on any specific industry sectors and resilient to global demand shocks.

As a consequence of being an established commercial area with a significant presence of domestic and international companies, the nature of lodging demand in Gurgaon tends to be skewed towards commercial demand sources. As such, commercial demand sources contribute nearly 70–75% to Gurgaon’s overall lodging demand, while the remaining is a mix of leisure (5–10%) and MICE (15–20%) sources.

According to our research, Gurgaon houses approximately 3,000 rooms in the branded luxury, upper upscale, upscale, midscale and economy categories. These rooms are spread across 27 hotels and serviced apartments.

Approximately 29% of the supply is represented by luxury and upper upscale hotels. The tax holiday announced for midscale hotels in context of the Commonwealth Games 2010 further boosted the development activity in this segment across Delhi and NCR recently.

This also led to more midscale hotel rooms being added to the inventory over the past few years, which resulted to the midscale category accounting for majority of the total room supply in Gurgaon (38%) followed by the economy segment at 10%. The serviced apartments concept is relatively new and is offered currently by only two properties namely The Leela Kempinski and Radisson Suites, contributing only 4% to the overall lodging room supply.

The author, Sudeep Jain is the Executive VP, Jones Lang LaSalle Hotels (India)

GURGAON – deep and diverse local economic and hospitality demand drivers

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Gurgaon initially gained prominence as an outsourcing centre for major international companies that found it cheaper to locate their back-end operations in India due to the availability of high-quality but cost-effective employee resources. GE Capital initiated this trend and was the first multinational company to enter Gurgaon in 1997.

Over the last 15 years or so, Gurgaon has established its presence as an important commercial centre of India. However, the nature of companies in Gurgaon has somewhat evolved from being business process outsourcing (BPO) focused industries to including major multinational companies across a variety of industry sectors at present.

Some prominent sectors having presence in Gurgaon include the following:

  • Telecommunications: Gurgaon is home to major telecommunication companies like Bharti Airtel, Nokia, Motorola, Alcatel Lucent and Ericsson.
  • Information Technology (IT): IT majors such as Siemens,Microsoft, International Business Machines (IBM), Sapient, Hewlett-Packard (HP), Hewitt, Hindustan Computers Limited (HCL), Canon, SAP Labs, Dell, Convergys and Tata Consultancy Services (TCS) are part of the multinational business environment in Gurgaon.
  • Manufacturing: Traditionally, manufacturing had been the base of the Gurgaon economy. The city has grown as an established manufacturing hub, with automotive and garment Manufacturers being the major contributors to this sector. Maruti Suzuki and Hero Honda are the existing prominent auto manufacturing players in Gurgaon.
  • Real Estate: World-class real estate is supported by private real estate giants like DLF Limited, Unitech, Emaar Properties, Parsvnath, Omaxe, Ansal, Ambience, Shipra, Vatika and Vipul. Development has taken place in the form of office spaces, residential complexes, shopping malls and hotels, with the development format typically comprised of high-rise buildings with superior quality construction.
  • Retail: Gurgaon has become an epicentre to the growth of organised retail in the Delhi/NCR area. Multiple shopping malls have sprawled along MG Road, offering high-end shopping and
food and beverage (F&B) experience.

Overall, Gurgaon benefits from a deep and diverse mix of domestic and international companies spread across various industry sectors. These companies are also significant contributors of lodging demand to local hotels. Such a diverse corporate demand base bodes well for the future growth of the local lodging market, ensuring that the market is not overly dependent on any specific industry sectors and resilient to global demand shocks.

As a consequence of being an established commercial area with a significant presence of domestic and international companies, the nature of lodging demand in Gurgaon tends to be skewed towards commercial demand sources. As such, commercial demand sources contribute nearly 70–75% to Gurgaon’s overall lodging demand, while the remaining is a mix of leisure
(5–10%) and MICE (15–20%) sources.

Fitch report contradicts itself

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By: Jaswinder Singh

fitch ratings, india real estate news, real estate news india, india realty news, realty news india, kumari selja, rohtas goel, Kapil Sibal, sonia gandhi, rahul gandhi, manmohan singh, Unitech, DLF, india property news, property news india, naredco, affordable housing, government of india, ndtv.com, ndtv, zeenews, aajtak, times of india, hindustan times, indian real estate forum, indianrealestateforum.com, indianrealtynews.com, cnn-ibn, rajdeep sardesai, sagarika ghose, vinod dua, arnab goswami, barkha dutt, raghav behl, prannoy roy, vikram chandra, ravi sinha, track2media. track2realty, DDA, delhi real estate news, new delhi, K.P. Singh, Rajiv Singh, Sharad Pawar, Jairam Ramesh, CBI, DB Realty, LavasaThe Fitch Ratings 2011 outlook for the Indian real estate sector seems to contradict itself. While it says the realty market is stable in the year, it also warns of a negative bias. The negative forecast of Fitch Ratings is, however, based more on the sentiments than the emerging market reality.

Fitch report says the overall demand environment improved during 2010, and is likely to remain stable during 2011. The demand for residential units, driven by the high growth rate in the Indian economy and rapid urbanisation, is expected to be the main driver of the industry in the medium term. However, the absorption rate is likely to be slowed down over the near-term on account of the strong increase in residential unit prices witnessed in the second half of calendar year 2010 (H2CY10).

The withdrawal of teaser interest rates by lenders and the increase in interest rates expected in H1CY11 are also likely to dampen residential demand. Fitch expects renewed hiring by the IT/IT-enabled services (IT/ITeS) sector is likely to give the commercial real estate sector a boost in 2011. Oversupply in this segment, however, is a cause for concern.

Regulatory measures by RBI will have a considerable impact on the real estate sector during 2011. Any increase in risk weights on bank lending to real estate companies would adversely affect the amount of funding available to the industry and cause liquidity problems, as the majority of the companies are highly leveraged and their dependence on debt refinancing is high.

Real estate companies planning IPOs in 2011 may experience a lack of enthusiasm on the part of investors due to the lending scams uncovered. Any failure to raise funds through the equity markets would increase real estate companies’ dependence on banks and increase their vulnerability to the RBI’s regulatory action.

Tracking Pune’s real estate growth wave

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Mohammed Aslam, Jones Lang LaSalle India, Pune Real Estate, Track2Realty, Track2Media, NDTV, NDTV.com, India property news, property news india, india realty news, realty news india, india real estate news, real estate news, zee news, aajtak, cnn-ibn, dlf, unitech, ravi sinha

Mohammed Aslam

Pune is virtually unrecognizable from the sleepy, laid-back city it was a few decades ago. There were no signs of any significant real estate action in the erstwhile Punyanagari before that. Today, however, Pune numbers in the Top Seven property hotspots within the country. The transition from a base for defense activities and personnel to a serious presence on the property market was a gradual one.

Pune’s ambient climate and surroundings had first earned it the title of Maharashtra’s Pensioner’s Paradise. However, a significant shift in this status occurred with the coming of Pune’s Industrial Revolution. The MIDC was the forerunner, but eventually some of the world’s leading corporates decided to take advantage of the city’s ample land availability, high education quotient and infrastructure by establishing major manufacturing and administrative branches here.

Industry requires manpower, and manpower requires homes. Inhabited homes require retail shopping and entertainment facilities. In other words, the industrial, residential and commercial property markets assumed steady upward mobility more or less at the same time. The coming of the Information Technology culture was high-octane fuel to the speed of property development in Pune. More and more land was required to accommodate the various national and international IT companies that finally led to the formation of such landmarks as the Hinjewadi IT and Software Park, Magarpatta and Eon IT Park. Once this process was begun, there was no stopping it.

Tempted by the sudden prosperity and opening up of the employment opportunities, job seekers from other cities made Pune their final destination of ambition’s pilgrimage – the new Entrepreneurial Promised Land. Another distinct shift took place with this inward migration – the profile of the average property buyer changed. The IT/software culture typically attracts young computer-savvy achievers who are willing to put everything on the line for their career.

The attractive pay scales offered by this industrial sector enable them to be extremely generous in their personal home-buying budgets, and downright choosy in the kind of homes they want. There was a year-long setback in the residential property demand from these segments when the downturn hit both the IT/ITeS and manufacturing industries, but both are now riding an upward wave again.

Since the demand for commercial and residential space was growing hand in hand, many outlying villages along the major expressways and highways were officially added to Pune’s geographical territory. Areas like Baner, Pimple Saudagar, Wakad, Kharadi, Warje etc. emerged as the new gold mines on Pune’s realty scene.

The clarion call of Pune’s upgraded realty fortunes did not attract local builders and developers alone – a number of major construction houses from beyond India’s borders began planning and executing ambitious housing projects in Pune. On the whole, the entire standard of quality and scale underwent a major sea-change, and hitherto unheard-of amenities, facilities and standards of luxury became commonplace.

On the property market, the phenomenon of expansion and development is known to be a self-perpetuating one – prosperity is never confined to a single locality. It positively affects its immediate surroundings, and this has been eminently true in Pune’s overall Property Boom, as well. Using the central part of residential and commercial Pune as a reference point, development is distinctly visible on all four sides of the compass.

Today, the entire residential, commercial and industrial real estate landscape in Pune has been transformed forever. A city that once lacked any significant standing on the national realty scene now stands out like a polished emerald that is the cynosure of every investor’s eye. The city boasts of an international presence. Apart from BPOs and IT/Software parks, Pune now features shopping malls, multiplexes, top-grade restaurants and hotels on a scale so far confined to cities like Bangalore, Mumbai and Delhi. Healthcare, too, has taken a quantum leap forward, with hospitals and diagnostic clinics of international standards catering to an enlarged, wealthier and more aware population.

Obviously, an enhanced and more prosperous population also calls for a major upgrade in educational institutions. Pune has always had the Oxford of the East title, but the amount of reputed schools, colleges and management institutions operating in the city today has qualified this label beyond all previous norms.

The city turns out top-class academics that are absorbed in the existing entrepreneurial infrastructure. The process is virtually seamless and perfect in itself, preserving local talent by providing career opportunities hitherto unavailable even in the rest of the country.

A quick look at the property scenario in India’s other major cities serves as a useful reference point by which to view the property boom in Pune:

MUMBAI – Commercial and residential activity is spilling over into the suburbs. Lack of available space and unaffordable property rates are to blame. Ironically, Mumbai’s suburbs seem ill-equipped to handle the sudden exodus.

DELHI – Most development had been confined to selected, preferred areas. This led to a concentration of residential and commercial development in these areas while the suburbs were largely stagnant. The trend seems to be ironing itself out now.

KOLKATA – As in Pune, the coming of the IT/Software/BPO culture has revolutionized the City of Joy’s fortunes. The obstinate blue-collar image is now largely a thing of the past as Kolkatans are getting a taste of capitalist nirvana. Housing is once again a major issue.

BANGALORE – Another victim of saturation development. The suburbs are beginning to experience a revival as far as property sales and purchases are concerned. Close parallels can be drawn between Pune and Bangalore by virtue of the strong ‘cybernetic’ undercurrents.

2011 promises comfort level for Indian realty

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1st of a series of 2011 forecast

india real estate news, india realty news, real estate news india, realty news india, india property news, property news india, real estate forecast 2011, real estate trends india, india real estate trends, ravi sinha, track2media, track2realty, india real estate forecast 2011, india property trend 2011, property trend india 2011By: Ravi Sinha

If 2008 was the year of shock, 2009 the year of discovery & introspection and 2010 the follow-up experiment; the year 2011 promises to be the year of comfort level for the Indian real estate sector. It seems the turmoil of the last couple of years has made everybody come out intelligent–investors, developers, bankers and end users. While the critical approach by all the stake holders is a sign of the maturing of the sector, the number of speed breakers ahead with increasing input costs, commodity & oil prices, overcautious foreign fund inflows and troublesome balance sheets of many of the developers clearly indicate that mayhem is far from being over.

The year 2011 promise to be the year of comfort level for the Indian realty, however, is more due to the guarded optimism of the realty consultants, developers, investors, bankers and end-users. Sunil Dahiya, Managing Director of Vigneshwara Developers asserts that credit reliability and brand reliability are going to be differentiator for the sector now onwards.  “With strong collaterals there is more stable money flowing into the sector with a long time horizon and investors are not crazy for short term returns. With India being the most safe investment option, I see long term investments like pension funds coming into the sector.”

Will it help the sector regain its lost ground? A senior official of Ansal API believes it will. “With the economy expected to grow by 8.5-9% and an average increase of 20% in salary levels being projected by HR surveys for 2011, the realty sector is expected to do much better than 2010. While in 2010, the industry was mostly doing ‘catching up’ after two bad years, 2011 will see a significant increase in various asset classes including realty across various segments. There has been a clear shift in the market of late, with the actual users constituting a majority of the buyers. In 2011, the trend is not only expected to continue but is expected to consolidate in favour of end users,” he said.

Sanjey Roy, DLF Spokesperson agrees to it. “With the Indian economy improving & global market also strengthening, the year 2011 will see the Indian real estate improving in all the segments. In the residential vertical the more demand and less supply indicates a price appreciation and the robust GDP also indicate more retail demand. Hence demand for the retail space has to grow. Of course, the demand for commercial real estate is dependent on the global economy, but then while the global market conditions are much improved today as against the last two years, India stands out as the best investment opportunity for them as well.”

Harinder Dhillon, VP, Marketing of Raheja Developers echoes the sentiments of the sector. “2011 will continue to see the real estate industry in a very strong position. Demand will be upbeat across residential, retail as well as commercial sectors in major metropolitan centers across the country. The year 2011 has a very positive outlook for the real estate industry since the demand-supply gap in housing in India is huge. There is a tremendous shortage of housing in this country & till such time the gap is not narrowed down, there is only one way the prices are going to go & that is up. There might be a very minor price correction in certain over-heated sections of metropolitan centers towards second half of 2011 but by and large, it is a very bullish outlook for 2011” he said.

Om Chaudhry, CEO of FIRE Capital Fund, however, has a word of caution here. He believes that while there is a huge hunger line for the realty, FIIs inflow can be a matter of concern since China is going to control the GDP. “The speculative elements have added to the demand-supply mismatch in the Indian market. Crisis of credibility is going to be the biggest challenge for the developers, since many of them were reeling under the debt and balance sheet problems in the last couple of years either forced them to delay the projects or completely abandon it” he adds.

India real estate: The second homes market

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Track2realty, track2media, india real estate news, realty news india, india property news, real estate news india, india realty news, property news india, 99 acres, 99acres.com, ndtv.com, ndtv, zee news, aajtak, cnn-ibnThere has never been a real decline in the popularity of second homes in India. It certainly is a full-fledged real estate market segment in its own right. However, just as on the first home market, the demand for second homes is driven by the general economic climate. When the economy declines, all real estate segments decline with it. By the same coin, the demand for second homes always rises when people’s spending power increases.

Speaking of the current scenario, it is a good time to buy a second home – not solely because of timing, but because there is a very healthy supply of second home projects that have come up over the last two years. There is therefore a wide choice. However, the market for second homes is slightly inflated at the present time, so circumspection and a deep understanding of one’s actual requirements is necessary to strike a good deal.

WHO’S BUYING SECOND HOMES?

The traditional second home clientele in India has been the HNI class. However, with a very distinct improvement in the economic scenario and therefore on the overall job situation, the upper middle class has also become an active second home buyer segment. Their motivations are usually equally balanced between aspiration and investment objectives.

The second home destinations in greatest demand are within 4-7 hours of drivable distance from larger cities. There is demand for second homes in naturally ambient locations as well as in self-sufficient projects that offer entertainment and ease of living.

In terms of projects close to Mumbai, Lavasa and Amby Valley come readily to mind. Locations such as Lonavala, Khandala and Karjat continue to be in great demand. The popularity of a second home destination is often driven by how close it is to large cities. Religious places such as Hrishikesh, Tirupati, Nasik and Pota are also in demand for obvious reasons

WHAT TO WATCH OUT FOR

In most areas, the second home market begins with land that has been categorized as agricultural and then converted for non-agricultural use. The projects are often structured as farm houses, which do not have a lot of permissible built-up area. In other cases, the projects are a pure real estate play, which means that developers can construct as much as they want. When this happens, the ambience and quiet that the second home buyer aspired for naturally goes for a six.

It is necessary to do a deep-drive into the location, the applicable permissions and future developments, etc. Also, the infrastructure development in remote locations – which is where second home projects often come up – can be a tricky point. Unless the second home has the benefits of all facilities such as water, electricity, sewage and road accessibility, it will not serve much purpose. It is best to buy a second home from a reputed developer who is known for high quality projects.

The author, Ramesh Nair is the Managing Director, West India – Jones Lang LaSalle India

8 out of 10 home buyers in India sulking

Posted on by Track2Realty
Track2Realty exclusive survey on customer satisfaction

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By: Team Track2Realty

8 out of every ten home buyers in the Indian cities are sulking with the unfair trade practices of the real estate developers. Only 20 per cent of the buyers said they received a defect-free home and timely possession. The low customer satisfaction index was as much evident with developers offering affordable housing as with luxury housing. But as a surprise pack most of the respondents, as high as 74 per cent said they would not mind investing in the stocks of these realty companies, since the absence of any regulatory mechanism will help these companies continue to grow with the unfair trade practices.

The Survey clearly points out that builders have faulted in satisfaction survey. Move-in date delays top the list of concerns cited by home buyers in Track2Realty survey.  Poor construction quality and customer service problems ranked next. A large 70 per cent of the house buyers repent investing their life time savings on the house. 65 per cent of the home buyers, who have seen the property price appreciating, are still looking for a better house worth living. The prime drivers of this customer dissatisfaction was found to be—

  1. Delayed possession
  2. Poor construction quality
  3. Customer Service Problems
  4. Floor Area & Carpet Area less than promised
  5. Hidden Cost of the developers

A shockingly high number of Indians are angry that the worth of their hard earned money has not been what they would have liked to. One in three, 31 per cent, have either filed a case in consumer court or are planning to do so against the developer. More than two in five, 43 per cent, of those who filed a case against the builder have even refused any out-of-court settlement in exchange of builder’s promise of getting the home repaired. Seven in 10, 69 per cent, have serious issues with the facility management of the developer.

Two in three, 67 per cent, are sulking the extra amount they paid in hidden cost of the property.  Three in five, 61 per cent, look at their home as more of a future investment than a place where they would like to spend the life by choice. Among the double income families almost nine out of 10, 87 per cent, are already looking for a better home and won’t mind disposing off the home that they so fondly bought within the last five years.

Majority of the home buyers, 77 per cent said they would never like to buy the property from the same developer. 92 per cent were so dissatisfied with the quality of construction that they said their preference would now be for the government housing. Buyers of new homes across the country are so disillusioned that the customer satisfaction score on a scale of 1,000 was a pathetic 212.Track2Realty, track2media, ravi sinha, india real estate news, real estate news india, india property news, property news india, india realty news, realty news india, property news, property survey, real estate survey, 99 acres, 99acres.com, ndtv, ndtv.com, ibnlive.com, cnn-ibn, aajtak, zee news,

“It’s clear that new home buyers are sending a message that there is considerable room for improvement in how some builders handle what is probably the largest purchase consumers ever make,” said Rakesh Panini, a home buyer in Mumbai.
Additionally, the study noted that the importance of real estate agents has increased substantially in the sector, with developers relying on the negotiating skills of their chosen agent and help in navigating the market. The study found that builders who proactively communicate with buyers enjoy significantly higher levels of customer satisfaction than those who wait for customers to contact them.

The results were based on a set of 27 questions to the buyers of single-family homes in the past 5 years from 28 leading builders across the country. The answers were grouped into eight key factors of satisfaction, which were weighted according to how important buyers said they were. The survey found that “home readiness” is the No. 1 issue for buyers. That means the accuracy of the completion date, when the builder promised the home would be ready, and the condition of the home at the pre-delivery inspection and after. Builders who delivered homes on time did especially well in the survey because readiness was weighted at 23.8 per cent of the total score.

The second big issue is construction quality, weighted at 23.6 per cent, and includes how customers rate the quality of their homes in terms of raw materials used and finishing done. Next issue is how quickly builders handle customer complaints and post possession obligations as well as the general courtesy of their staff. These three account for almost 65 per cent, and they are clearly areas where customer expectations are not being fully met.

Methodology

These are the findings of a ten city exclusive survey by Track2Realty. Track2Realty conducted this survey in ten cities-Delhi, Mumbai, Kolkata, Bangalore, Ahmedabad, Jaipur, Patna, Kanpur, Allahabad and Indore between December 1 and 25. A structured questionnaire that was based on the satisfaction index and their choices and concerns was given to male and female respondents who belonged to a mix of qualitative and quantitative socio-economic groups.

However, the survey demography belonged predominantly to the middle and upper middle class of society, and that a significant number of respondents, even in the given tier-II and tier-III cities were buyers of mid segment houses. Majority of these buyers were first time buyers who had shifted to the new house either from parental homes or rented accommodation.  While 62 per cent of the buyers were first time buyers, satisfaction was equally low with the second time home buyers. 38 per cent of these buyers who bought the second house and were wise enough to understand the developers’ marketing jargon and hidden costs involved, were equally dissatisfied with their possession.

A total sample size of 2000 house buyers was initially targeted. Out of these 1672 samples were finally zeroed down and considered for analysis. Rest 328 respondents were not considered for evaluation since they either gave incomplete questionnaires or were rejected for non-seriousness of their choices.

The total sample size had 34 per cent females and 66 per cent males as a representative set. The surveying method was one-on-one interviews, in which the researchers explained the theme and purpose of the survey and then handed over the questionnaire to the respondents to be filled and returned the next day. All the researchers being the local residents of the city, they managed to assure the respondents complete anonymity.

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