Tag Archives: NRI investment in Property

Upgrading lifestyle actual luxury across all categories

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Opinion: Luxury is not merely a segment that offers expensive homes at premium locations. Luxury is consistently offering buyers in every micro-market the best technology, the best design and the best amenities that help them upgrade their lifestyles.

Omkar 1973 Worli, Mumbai real estate market, Sea facing apartment, Ultra luxury housing project, India real estate news, Indian realty news, India property market, Track2Media Research, Track2RealtyI say this in the context of the fact that Indian real estate sector, of late, has seen an influx of offerings with the Luxury tag.  And most of the offerings vary in comparison. Whether it’s the ticket size, location, amenities, brand affinity, services, innovation or design, the Luxury tag hangs proudly and in the face.

So, where do we draw the line or set a qualifying benchmark to demystify the so called ‘Luxury’ term in India’s housing sector. I would go a step further; how should the customer in different categories perceive and logically accept the offering as ‘Luxury’.

Being at the helm of a leading brand which operates at both ends of the realty pyramid- ultra luxury and free housing- we too grappled with this dilemma but have largely managed to convey and convince the ‘luxury’ quotient in our offerings.  However, certain misconceptions and misleading claims continue to thrive in the industry.

I feel that the term ‘luxury’ in the context of Indian real estate business has to be perceived and judged by micro category of consumers and their realistic aspiration values.

For example, there is a perception that free housing under SRA scheme, specifically in context of Mumbai, does not mean luxury. In Mumbai, SRA (slum redevelopment) is a mode of acquisition of land. Mumbai hardly has any open land. The land either comes from mills, which has workers residing next to it or it comes from old buildings, which need to be demolished and redeveloped and finally from the slums.

The point here is that quality development in SRA means luxury housing to an urban-challenged slum community while also delivering true luxury offerings to an open market.

When you offer a good quality 1 BHK apartment, with a well-planned society, to a slum dweller, you are offering sheer luxury to that person/family. Moving into a proper apartment, in a semi high-rise, for urban-challenged citizens in Mumbai not only means luxury but a life-transforming development.

Now the same theory would not be applicable in case of a LIG or MIG dweller who is already staying in a non-SRA structure. His or her luxury quotient rests in the upgrade they are wanting to. The upgrade would be a mix of bigger house and better amenities. That is luxury to them.

So, in short, upgrading your lifestyle is luxury. For a slum dweller, moving from a 75 square feet house to a 270-290 square feet home with a lift, continuous water supply, a security guard etc, is luxury.

For a middle class family, moving from a regular 600 square feet apartment to a 1000 plus square feet one with a gymnasium, a terrace garden and multi-level parking is a luxury. This is how we differentiate ourselves from our competitors in the micro market, by providing the consumer something extra; by upgrading their lifestyle with the best in class amenities, the best design and the best infrastructure.

However, despite the above interpretation, the term ‘luxury’ still continues to be misdirected by a faction of the industry. By industry, I mean stakeholders and sales channels which influence the end-customer.  Content creators too, sometimes, form a part of this bracket.

Having said this, I feel the onus of interpretation rests at consumers’ doorsteps and mindset. Today’s home buyer is more evolved and much more analytical in differentiating between actual luxury and projected luxury.

Customer in order to assess actual luxury need to experience and closely study the  products, the amenities, construction quality & technology and various collaborations which indicate the difference between multiple offerings which carry a common pitch. There is a strong need to peel the extra layer while judging the importance and luxury quotient of various facets which goes into creating a new lifestyle living offering. Here, the responsibility rests equally with the brand and as well the customer.

To cite an example, our luxury offerings Omkar Alta Monte and ultra-luxury offering Omkar 1973 Worli in the micro markets of Malad and Worli respectively have been consistently selling beyond the market average in those micro markets. The feedback from the experts and industry observers including a highly credible realty media pinpoints to finer luxury factors such as design, finishes, nature and quality of amenities, depth of services and collaborations viz a viz similar luxury offerings in the micro market.

Mumbai continues to take the lead in driving the luxury and ultra luxury market in India. The Mumbai luxury realty market will see a big shift in the future. You need to see the kind of houses that are being delivered, the kind of amenities and services on offer and compare them to the older buildings in prime locations in South and Central Mumbai. The old buildings in areas such as Peddar Road, Cuff Parade and Marine Drive have a very high capital value. But, the new buildings, even in the suburbs, have so much more to offer in terms of amenities. In the next 20-25 years, the entire city will have to be rebuilt and that is where a lot of luxury products will come up. That is the need of the market.

As long as you make a good product, give the buyers the right location and the right amenities, they’re happy and willing. In case of promising new players and first-time projects, consumers can still get to experience the quality on offer with the sample apartments and a sales experience which rides high on transparency and knowledge dissemination about all the project facets.

In the future, we will have to evolve and keep in mind with the new trends, the new tastes, the new technology and buyer preferences. Even brand leaders need to lookout for something better that they can offer to their customers and constantly evolve with time because innovation too is luxury.

By: Gaurav Gupta, Director, Omkar Realtors & Developers

Emotional mistake of homebuyers

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Bottom Line: Home ownership has long been a valued tradition across most societies and cultures. Most people aspire to possess their own homes and it is here that the gullible homebuyers are prone to make emotional mistakes.

Homebuyer Confusion, Confused homebuyer, Homebuyers grievances, Homebuyers' legal options, India real estate news, Indian property market news, Track2RealtyConsidering the overall economic health of an economy is largely influenced by the functioning of its housing market, there is definitely a need to reform the property buying and selling process which allows consumers to be more involved. This is all the more relevant in the present market conditions where, the cost of capital and loans are high and not expected to decrease in the near future – affecting the affordability and availability of homes.

Resultantly, the decision to purchase a house is taking place in a highly constrained environment. Also, biased contracts, lack of transparency in transactions and regulation in development and brokerage services are all factors that are affecting home buyers.

Therefore, as prospective consumers knowing the right questions to ask and if permissible engaging expert advice can definitely help one make a sound investment for your future. Whether you are buying a home to live in with family or for investment purposes, understanding your wants and needs is the way to avoid emotional mistakes. In more organized markets such as the UK, consumers can safeguard themselves and make informed decisions based on a ‘home buyers report’.

The RICS introduced the Home Buyer Report (HBR) in July 2009, which helps provide a clear, unbiased guide to people looking to buy a house. By opting for such a report, consumers can be assured that RICS members will help provide them with requisite professional expertise and independent advice, in making one of the most important decisions of their lives.

As RICS members, who adhere to a set of highly regulated standards and follow a strict code of ethics, professionals act in the best interest of the consumer. Thereby, providing a holistic guide to the entire home buying process – right from choosing the property, to agreeing on the sale/purchase and financing the property, to the completion of the entire process.

Avoidable Emotional Mistakes 

Mistake No. 1: Always looking for a better deal. Get out of wishful thinking of a price crash or distress sale. You may end up paying more after few months of wait. 

Mistake No. 2: Falling in love at first sight. Remember this is an arranged marriage, so no harm in looking for more option even if the first one you have liked. 

Mistake No. 3: Overstretching for perfection. Don’t over stretch your financial capability for that perfect house. You may end up in financial mess and selling that dream house will end up in distress sale.

In India, there is a critical need for such robust practices that coincide with internationally recognized procedures, in order to safeguard and protect consumers, while at the same time having a tangible and accurate approach to determining market value of properties and reporting protocols. Only when such issues are addressed, will anomalies and miscreant practices be eliminated from the system that have existed thus far, due to the lack of regulation and transparency in the practices, procedures and processes; where consumers have been typically been at the short end of the stick.

Sachin Sandhir, Global Managing Director-Emerging Business, RICS says ‘buyer beware’ may sound like a cliché, but it is absolutely essential that a homebuyer protect their interests. Therefore, knowing the right questions to ask can definitely help you make a sound investment for your future. It is critical to understand that the decision to buy any property requires a long term financial commitment.

The ‘urgency’ factor of moving into one’s home will largely depend on one’s disposable income and the decision to invest either in an under construction or resale property. However, prior to making any such decision, it is always wise for the buyer to consider the associated risks that are involved in buying property and evaluate the same, before making a financial commitment.

“For all properties, regardless of age and design, basic checks should include the structural condition of the property; electrical wiring; plumbing; insulation; alterations which have been made to the original floor plan and if the same have been approved and assessed by the local development authority. It is also advisable to consider what the immediate and future maintenance requirements of a house might be,” says Sandhir.

Anshul Jain, Managing Director of Cushman & Wakefield India says one of the most critical mistakes a buyer can make is purchasing a house that they immediately like, even if the total cost they have to incur exceeds their budget. Another mistake could be that they not have an accurate assessment of the total outlay from their pockets, since the lender usually does not cover the service tax, the VAT, stamp duty and registration charges. In addition to that other charges passed on by the developer including legal fees, if any are also not covered by the bank. This could put a strain on the buyers’ finances.

“Getting lured by the project which forces the buyer to overlook the disadvantage from the location is another common mistake. Since it is quite possible that the inconvenience of travelling long distances every day to work may far outweigh the benefits of having additional comforts at home in the long run. Another potential mistake would be falling for marketing gimmicks of the developer including offers of freebies like gold coins, cars, cash discounts and holiday packages etc. influence their buying decision”, says Jain.

Checklist to check Emotional Mistakes

Location

1.    Access to shops, transport, schools, hospitals and other civic amenities

2.   Is it a residential zone?

3.   Is the area prone to water logging?

4.   Is there interrupted power supply?

5.   Is it a traffic congested area? 

Outside the property

6.   Does the building look structurally sound?

7.   Are there enough open spaces and common areas?

8.   Has the project been approved by the government and other requisite authorities

9.   Is there scope for further improvement/expansion of the property

Inside the property

10.        What is the condition of the house – look for signs of seepage, structural damage

11. Is the size of the house in accordance with your immediate and future requirements

12.         Is the flooring intact and level

13.         Natural light and ventilation

14.         Do the doors and windows operate properly

15.         Check for the safety of electrical fitments and plumbing  

A section of developers admit that the buyers’ urge to shift into a house of their own often make them blind to the ground realities. A spokesperson of Kalpatru says the common emotional mistakes that are noticed in home buyers are the reluctance to check the background of the developer and past projects delivered by him.

“We would suggest that a buyer should ascertain the reputation of the developer and past projects delivered by him before entering in to any transaction with them. The developer and the project should be selected after conducting a detailed research and understanding the pros and the cons of investing in the project,” he says.

Percy Chowdhry, Director, Rustomjee agrees that buying a property is a huge investment and it is imperative that one dedicates quality time and goes that extra mile sourcing information about the project. It is also important that the customer understand the real estate dynamics which will help him to be more prudent in his dealings. Every consumer has specific set of requirements and hence there will be a different set of influencing parameters while scouring for a place.

“The first and most important thing is to do an in-depth research or study on each of the developers and projects, financing options, the preference in amenities etc. One should do thorough background check on the past projects delivered by the developer and whether they were delivered on time. Real estate agents along with websites and blog sites, now make it possible to obtain the correct information about a project and its developer,” says Chowdhry.

Also, in some cases the buyers let themselves lured by a model apartment on display at the project site. Usually such display units carry superlative interiors since they are done with the specific intention to influence the purchase decision of potential buyers. The buyer should understand that in all likelihood she would not be spending anywhere close to what the developer had spent on the interior of the model flat, which may have been done by top-notch interior firm at exorbitant costs and hence their apartment may not appear as great as model flat.

By: Ravi Sinha

 

Property the real asset class

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Bottom Line: Real estate has stood the test of times and has emerged as the ideal investment asset class when compared to gold, equities, MFs, etc.

Track2Realty, Track2Media, India Real Estate, Valuations of Real Estate, Realty News, Property News,Capital Appreciation

“Even in times of an economic slowdown, the real estate sector has emerged as the only safe investment instrument when compared to other asset classes. Those who invest early on in their career, earn more in terms of appreciation of property than what they otherwise earn in their lifetime. During one’s old-age, property appreciation ensures better pension and security than even government schemes,” a panelist in a financial planning seminar recently said.

Dilkhush Shah, an interior decorator had only Rs 25 lakh to invest and she was advised to opt for mutual funds and gold rather than real estate. However, her research made her realise that real estate stands as the best asset class beyond the emotional urge to just own a home. The statistics, over a long period of time, clearly indicated how no other asset class had given the CAGR (Compounded Annual Growth Rate) as high as property, despite the short-term drop in sentiments.

Leverage

“Many of my friends suggested that this is a small amount for a piece of real estate that I will end up calling my own. I was even told that this is not the time to invest, as the real estate market is going through turbulent times. However, I preferred going in for this asset class which has been a time tested investment haven across the world. Yes, with such a small amount, I could only afford a property in a far-off location of Palghar but the way the development has been happening in and around and beyond Thane, I feel this is the best investment bet,” feels Shah.

Returns

The back of the envelope calculation suggests that in terms of returns in equity, gold, residential flat, commercial shop and finally currency, property scores over the other asset classes over a long period of almost a decade. If gold has given returns of 12 per cent, then residential apartments have given returns of 16 per cent and commercial shops have given even higher returns.

Inflation hedging

Real estate is the best bet against an inflation hedge as it is the only asset that loses little value in periods of rising prices. Thus, it holds its value and purchasing power even during inflation. Normally inflation has a co-relation with the booming economy and an investor also buys this asset to hedge against inflation. 

Tax savings 

A house is the only asset class that is majorly covered for the tax benefits. In other investments like the mutual funds or insurance only a limited amount of investment is covered for the tax saving purposes. In some other investment instruments like the gold there is no tax saving benefits.

Lower  risk

The fact remains that gold has seen unexpected fluctuations, the stock market has historically been on a roller-coaster ride and mutual funds, etc, have given nightmares to investors. As against this, there has been absolutely no reason why a home buyer would have anxiety pangs with respect to investment in this asset class of real estate.

High control 

In recent times, the high degree of volatility across asset classes, has definitely raised the debate over which is the best asset class to invest in for a layman. However, the statistics over the ROI, over a long period of investment, have always been tilted in favour of real estate. In the cyclic ups and downs, other asset classes like gold or equity may look more attractive for a given time frame, yet none can match property, which has stood across generations as the first preference of investment.

“I had invested in some of stocks that fell down from Rs 300 and are currently at Rs 45. Since the company is constantly on a downslide, there is absolutely no hope of recovering my losses. I don’t think it has ever happened with any property like this. Yes, there can be cyclical ups and downs but if you are determined to stay invested and are a short-term trader, you will not only recover but make gains as well in the process,” says Anupam Agarwal, a homebuyer who has also invested in a commercial shop.  

Financial freedom 

An investment in property also ensures financial freedom for average Indians. While this is true in the sense that one can earn regular rental yields, it is all the more true for the commercial real estate. Now with REITs becoming a reality, real estate definitely scores over other asset class for providing an investor financial freedom.

Portfolio Diversification

On a comparative scale of the last couple of years, fluctuation in gold prices added with the fact that depreciating rupee adds to the gold stress, does not evoke confidence in the yellow metal any more. Similarly, despite markets being at a two year high, only a few stocks are at similar highs, while most of them are still languishing well below their historical highs and are down anywhere between 80-90 per cent. In contrast, the momentum in real estate may have slowed down, yet there has been a constant appreciation in the range of 5-20 per cent, depending upon the location and the property.

Stability & peace of mind

Analysts advise that beyond the data points what is even more relevant is to back the statistics with ground intelligence and base the assessment on multiple parameters. For instance, in the ROI calculation, dividend yield on stocks and rentals on property is often not factored in. Moreover historically, during a low inflation period (say 2004-2008), equity returns are higher, vis-a-vis hard assets whereas, during a high inflation period (2009 – onward) returns from hard assets are higher.

Advantage real estate

Only asset class after gold that has been risk free

Back of the envelope calculation of the last three decades suggest that real estate has outperformed all other asset classes

Real estate has the additional advantage of impressive rental returns
The only asset class that can be either consumed for self-use or earned for recurring returns

 

Mumbai property on top of NRI’s wish list

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News Point: The demographic profile of the Non Resident Indians (NRIs) may not do justice to conclude why Mumbai is always on top of the wish list of the expat Indians.

NRI, Non Resident Indian, Indian Diaspora, NRI investment in property, Property market for NRIs, India real estate news, Indian property market, Track2Realty, Track2Media, Indian Diaspora investmentThe major demographic profile of the NRIs is from the states of Gujarat, Kerala, Punjab and other parts of North and South India. Going by what the traditional investment pattern of the Indians, the cities that should draw the maximum NRI investment should be Kochi, Ahmedabad and Chandigarh. But then it is the Mumbai city that has over the years commanded the maximum premium from the NRIs.

The slowdown of the Indian economy and the resultant effect on the property pyramid where the high-end investors started scaling down their portfolio size gave the impression that the NRIs who were fuelling the luxury property of Mumbai would be skeptical with the dream city. However, this proved to be an outside view as the NRIs who have travelled in developed cities of the world still find opportunity cost of Mumbai pretty high. In their cost & benefit analysis, Mumbai continues to be an investment magnet.

Critics who pointed out that the NRIs are exiting the luxury properties probably failed to differentiate between the NRI investors and the NRI end users. It is true that the investors are wary of ultra luxury projects across the country and Mumbai is no exception. But equally true is the fact that the kind of business opportunities, lifestyle and livability index that the NRIs looking to settle down in India want, no other city can match their aspiration level as Mumbai.

Mumbai magnet for NRIs

Mumbai a top pick among the NRIs professionals; retirees prefer hometown

 Mumbai still offers the maximum ROI on property investment

No other city offers the NRIs quality of life and business opportunities like Mumbai

Connectivity of Mumbai with other global cities act as a magnet for NRIs

Satish Dwivedi, and NRI from Western Uttar Pradesh now working in Yemen is coming back to India. The financial consultant was advised by the broker that Noida is a better option for settling down in India and exploring his business. The ticket size of the Noida market is not even 30 per cent of the Mumbai real estate and hence the advice prima facie looked very convincing. In terms of the cost of doing business per square feet, Noida was peanuts compared to Mumbai.

“With the impression that I was given I was pretty much convinced in favour of Noida since it is very close to my home town in Moradabad. The physical infrastructure of the place also is far superior. But then I soon realized that it could only be my retirement destination. In terms of conducting my professional and social life, no city can match Mumbai,” says Dwivedi.

The built environment of Mumbai real estate that deals with the NRI buyers do understand this wish list of the expat Indians. “The first consideration for any home-buyer is how will he conduct his professional life. Then after he has to look for conducting for social life. Then comes the question of budget and affordability which is very relative. For the NRIs since there is no budget constraint like an average salaried class in India, they would go for a city where they get the lifestyle choices along with professional opportunities,” says Arvind Nandan, Director – South Asia with Colliers International.

Ravi Gurav, Member of MCHI points out that Mumbai real estate market has been getting some good support from NRI sales since the last two years. The share of enquiries by NRIs on real estate portals are over 30 per cent in today’s times. Whereas the local buyers are still considering the property prices as high, at the same time NRIs are buying the best deals available from Mumbai market. From the month of August 2016 we are witnessing a lot of new launches along with existing launched properties offering better deals with relaxed payment schedule or free biz such as furniture and home appliances.

“NRIs are especially bullish in Mumbai real estate market due to two reasons. First is that they understand the gradual correction that taken place in Mumbai real estate market. Even if we consider the inflation from 2013 to 2016 at the rate of 5 per cent per annum then overall inflation is 15 per cent in last three years. But if we get the property in 2016 at the price of 2013 means it is at 15 per cent correction. Secondly, Indian Rupees against US Dollar depreciated almost 20 per cent from 2013 to 2016. The Indian Rupee against US Dollar was 55 in April 2013 where as in April 2016 India Rupee was 66 against US Dollar. Which is like the 20 per cent depreciation of Indian Rupee against US Dollar,” says Ravi.

As per this calculation, if we consider the consolidated effect of 15 per cent gradual correction and appreciation of US Dollar up to 20 per cent in last three years, it is as good as Mumbai real estate market poised at 35 per cent corrected price for NRIs and hence they are bullish.

Devang Trivedi, Managing Director of Progresive Group finds a sound financial rationale in the Mumbai property investment of NRIs. He points to the fact that the NRIs are used to low returns on investment in their country. So, in Mumbai rental income is equal to the appreciation in their country and whatever appreciation in property price rise they are getting is a bonus. Moreover, they have a long term option of returning to Mumbai  and have a self use option.

“Among all the different investment classes that is gold, silver, diamond & stock market, property investment is the most tangible & common sensible investment. Long term perspective in Mumbai remains a safe market because of limited supply  and ever increasing population. Ten times growth in Mumbai between 2003 and 2008 is giving encouragement to all the NRIs to invest in Mumbai, as back in their own country the property is the same with only 2 to 5 percent maximum growth,” says Trivedi.

Beyond all the cost & benefit analysis, the fact lies that Mumbai still offers the high livability index and the reasonable cost of doing business to NRIs. So, any NRI who is returning back to the country and wants to continue the professional life prefers Mumbai for investment. Despite the slowdown of the last few years, which has hit the property markets across the country, everyone understands that in terms of the ROI no city can match Mumbai. Add to it, the quality of life and the business opportunities, and Mumbai acts as a magnet to the NRIs. Last, but not the least, the kind of connectivity that Mumbai offers to all the major international cities is a magnet for NRI professionals returning back to India to set up business here.

By: Ravi Sinha

A2Z of housing investment

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A2Z of Housing, Housing Investment, Track2Realty Investment magnet Report, Property investment, NRI investment in Property, Track2Media Research Pvt Ltd, Indian housing marketTrack2Realty Investment Magnet Report 2015 tries to decode the alphabets of India’s housing market. The editorial team has not invented these alphabetic connotations and everyone in the sector is well aware of the alphabetic practices as well, yet we simplify it for the average investors and homebuyers who often forget the basics that make their fortunes vary. Familiarity with the given A to Z is often the difference between a skilled homebuyer and a novice.

A: Any investment in housing market is driven by ‘A’ for Aspiration; depending upon whether the Aspiration is to own a home, which is a reality in most of the cases, or the Aspiration is for its Appreciation Potential. But fundamentally in a housing market where the A for Affordability has gone for a toss and a rental house makes sense in many of the cities, it is the Aspiration for a home that drives the housing market.

B: It stands for Borrow but the homebuyers need to be careful on this count as Beg, Borrow or Steal mindset to purchase a house may land them up in a debt trap. Hence, Borrowing needs to be carefully evaluated as per the comfortable re-payment capability. Of course, ‘B’ for Bargain is something that makes the sound advice for the homebuyers in a market where the developers’ are reeling under financial stress and liquidity crunch with standing inventory of unsold houses.

C: ‘C’ primarily stands for Catchment Area for an average homebuyer who looks for a house in the area which is close to his work place and other necessary logistics. Of course, ‘C’ also stands for Connectivity which is one critical element that elevates the positioning of an area as the clichéd ‘location, location & location’. If only the given housing project has the ‘C’ for Competitive Advantage vis-à-vis other projects in the vicinity, it acts as a magnet for homebuyers. Of course, the homebuyers need to be Careful with their Credit Reliability & Credibility to get the loan.

D: In a market where many of the homebuyers have burnt their fingers, ‘D’ automatically stands for Developers’ Profile that has a symbiotic relation with the Delivery Timelines of the project. In a broader sense, this Developers’ Profile also equals to the Days in Market for the project, and the less number of Days the units of the project has been in the market the more are the chances of timely delivery. Now whether you make a Down Payment or go for a loan, make sure your finances don’t lead you to a Debt Trap. D nevertheless also stands for Design of the house.

E: This alphabet has both macro as well as micro connotation. While E stands for Economy of the region which primarily translates to job market in the vicinity at a macro level, it also stands for Execution Risk at a micro level. Collectively, these two Es make a housing project worth investing. Some of the developers are also realising, of late, their share of ‘E’ that stands for Economy of Scale and hence the focus is gradually shirting toward mass housing.

F: Probably no other letter has as much dual impact on both the developer as well as the homebuyer as the F since the Financial Management, or the lack of it, impacts both equally. The golden rule of housing investment is hence not to over-leverage; neither in buying the house nor in developing the project. Beyond the Finances of developers as well as the homebuyers, the Fiscal Policy of the government, which translates to inflation and interest rate, also plays its role in the housing market.

G: No other letter has scared the housing market, of late, as much as the letter G with Green Tribunal blocking many of the housing projects midway and thus hurting both the developers as well as the investment of homebuyers. The developers, on their part, are nevertheless trying to put up a brave face by promising Greenery all around their project. The National Green Tribunal does not seem to be convinced and often goes Green and hence the homebuyers’ due diligence is needed before investing. ‘G’ also stands for Government Policies that impacts the housing market.

H: The letter ‘H’ has more of an emotional appeal than rational one as most of the buyers treat the investment as Home and not House. The game is getting more and more High nowadays with skyscrapers in vogue. But wait! It is not that there is no rational logic behind this investment beyond a mere roof over the head. For the average salaried class it is the HRA Benefits that comes with the package of investment. Of course, Horse Trading is very much a reality in the housing market.

I: Yes! Housing is an Investment that takes care of housing Insecurities and is the best Insurance for most of the Indians. But the letter ‘I’ also stands for Investment Horizon. Most of the Indians calculate it in terms of the appreciation over a certain period of time. Needless to say, it is always expected that this should be the Best Investment in the portfolio. Normally ‘I’ is often referred in the housing market for Inflation and Interest Rate, but then this asset class is the best Insurance for most of the Indians.

J: Job Market has a direct co-relation with the local economy that fuels the demand for houses. The prospective homebuyers hence look for Job Market in the vicinity while the developers calculate in terms of commercial to residential ratio. There is no denying that the locations having commercial spaces and hence Job Market are the happy hunting ground for both the residential developers as well as the homebuyers. The developers nowadays have their sight on another ‘J’ Factor – Joint Venture with the land owners that make the investment less troublesome.

K: ‘K’ always stands for King but this Kingship in real estate market can also make you a pauper, if the calculations or risk go wrong. The investors are hence advised not to over-leverage themselves or over-invest in the property market. And for those who do so, the portfolio must be diversified with multi-location and multi-product, including commercial spaces to even out the risk. More importantly, the letter ‘K’ should better be with you in silent mode and help you with its connotation of Knowledge that is the best safeguard in the housing market.

L: The letter naturally sounds synonymous with Launch but the Project Launch per se is not enough to make it worth investing. Certain other ‘L’ including most importantly the overall Liveability Index makes the Launch a success. But before a homebuyer makes a purchase decision, there is another ‘L’ that is highly recommended – Legal Opinion. The absence of this might jeopardise the investment decision. Legal expert or the due diligence team must keep its eyes open on another ‘L’, that is Launch to Sales Ratio which clearly suggests the acceptability of the housing project in the market.

M: ‘M’ in any given business simply means Money but in real estate the relevance of this letter is beyond mere Money. This is because nearly all the developers go over-board with the ‘M’ that amounts to Market Buzz for the collective consciousness. But just arriving in the residential market with a project launch is not enough and the serious developers know it well that M2M (Mark 2 Market) of a residential apartment is a tough job. There is another ‘M’ that fuels the demand for houses –Marriage – as newly married couples are the prime demand drivers of housing market.

N: The world of the developers, especially in the Indian housing market, revolves around ‘N’ that is intrinsically linked to NOC (No Objection Certificate) and the homebuyers nowadays are aware to check the NOCs of the developers before making a purchase decision. Of course, there is another ‘N’ that scares the developers – Negligence – as in this age of consumer activism this can spoil his market reputation and future prospects. For the homebuyers though ‘N’ also stands for the Negotiation Skill since the marketing strategy of the developers nowadays rests on substantial discounts to be Negotiated.

O: By now everyone seems to have accepted that housing market is a good investment bet. It is, as a matter of fact, best asset class in the investment basket of most of the Indians. But there is a word of advice against ‘O’, that is Over-leveraged. Beware of Over-leveraging or Over-investment in this asset class. There is another ‘O’ that is most eagerly awaited by both the developers and the homebuyers. It is called Occupation Certificate. Of course, in the markets where there is huge demand and supply mismatch, and affordability is an issue, low Occupancy in a completed project also spoils the developers’ credentials.

P: The most desirable element for any location and the housing project in the vicinity is the Physical Infrastructure. It is this ‘P’ that is critical to another ‘P’, that is Price to Income Ratio of the Purchase. Of course, there is yet another ‘P’ called Pre-launch that is very tempting from appreciation standpoint but the investors should be wary of in a market where access to information is challenging and transparency is lacking. Potential of the market is nevertheless judged by the Physical Infrastructure, whereas it is the Pre-launch that often works as the lifeline of cash starved developers.

Q: The housing market has its genesis with ‘Q’ for Quest, the quest to have a house of one’s own. Everything else revolves around this quest but the homebuyers must also be conscious of another ‘Q’ that follows the Quest, that is overall Quality in general and Quality of Construction in particular. So, it is highly advisable for homebuyers to ask as many Questions as possible, ask it to the developers, to the local contacts, to the experts and whosoever can tell you a little bit about the project before you make a purchase decision.

R: The letter ‘R’ signifies many aspects in the housing market. In recent times, since the residential property is seen as the best asset class in the savings portfolio of an average Indian, ‘R’ stands for ROI (Return on Investment). A section of investors even evaluate this Return On Investment with another ROI of Rental Yield. Of course, ‘R’ for Rock Bottom Prices is always music to the ears of house seekers but one must be wary of the ‘R’ for Risk as well. It is hence ‘R’ for Ready to Move apartment that average homebuyer loves to see. It is your hard-earned ‘R’, that is Rupee, and hence you must be aware of both the ROI as well as Risks.

S: Despite of the location, physical infrastructure and the price point, what separates the potential housing location from a matured & established location is ‘S’ factor – Social Infrastructure. It is the Social Infrastructure like schools, colleges, medical facilities & entertainment options etc that make a location most sought after. Of course, for the developers the ‘S’ is critical from the standpoint of Sales Strategy at a time of liquidity crunch and Slow Sales. Of course, in their bid to Separate themselves from the crowd, the developers are increasingly experimenting with another ‘S’ called Smart Homes.

T: While ‘T’ stands for Technology if one speaks purely from construction standpoint, this letter has a huge influence over the psyche of both the homebuyers as well as the developers. The reason is Tax that most often tempts the fence sitting salaried class to jump into the property market to save the Tax. For developers also, there are various known and unknown swords of Taxation hanging over their head which affects the housing market. Of course, ‘T’ for Transparency is most desirable but missing link in this housing market, leading to Trust deficit on part of the homebuyers.

U: This letter is very much in demand due to its status of Under-construction. After having burnt their fingers in many of the pre-launches and new launches that could not hit the construction on the ground, Under-construction property is the most desirable element in the housing market today. Of course, ‘U’ also stands for Upgrading where people buy incremental property to Upgrade their lifestyle. But one set of ‘U’, that is Underwriters, must be avoided by the developers, since it spoils their reputation in the collective consciousness while leading the project to artificial appreciation, thus out of the reach of the end-users.

V: ‘V’ stands for something that in the housing market is not physical but Virtual. After all, what a homebuyer gets with an apartment is Virtual Land and not the physical land. Yet, it is this Virtual element called Vision that differentiates in the cost & benefit analysis between a good deal and a bad deal. Vision also stands equally true for both the developers as well as the homebuyers. The developers have burnt their fingers with this Vision, or rather lack of it, in their quest with the Pipeline Visibility of land bank. Homebuyers equally lack the Vision when it comes to differentiate between rational call and emotional temptation in the housing market.

W: It is the ‘W’ for Wow that makes a residential property worth its price. But wait nowadays there is another ‘W’ that is making the Wow Factor in the housing market – it is Women. Women are no longer just the influencers in the family to buy a house. They are rather taking the centre stage and in many cities it is the single Woman who is the critical demand driver of the housing market. But for men also the housing market demands more ‘W’ of Who, What, When, Where and Why to be addressed than their usual three ‘W’ of Women, Wine and Wealth.

X: Property market in general and the housing market in particular has always been driven be the ‘X’ Factor. It is the X Factor that separates a housing market and project from the other. More importantly, the quest for Xclusivity is always there to drive the homebuyers, especially in the upper end of property pyramid. In the bottom of housing pyramid it is the quest for Xtra that is high on the wish list of most of the homebuyers. Xpress construction and delivery of project is something that is yet another highly desirable ‘X’ element of housing market.

Y: Wikipedia describes ‘Y’ as an abstract strategy board game. In the context of Indian housing market one is not sure how far is the game abstract and to what extent is it real but whatever the strategy the market is getting Younger. Yes, you got it right! Homebuying is increasingly inching towards Gen ‘Y’ that is borne out of Young aspirations. There, of course, is a search option of ‘Y’, that is YouTube which is now a major source of information about the housing options in the market as well as the live construction update of housing projects.

Z: Zero-sum mentality is a term used in community psychology to describe a way of thinking that assumes all games are zero-sum; that for every winner there is a loser; for every gain there is a loss. It is not sure how far is this a reality in the housing market but everyone loves and hates ‘Z’ for its connect with Zero. While it is Zero Risk that brings smile on the faces of everyone in the housing market, a few extra Zero being added here and there makes one jittery. A house of one’s is nevertheless a Zazzy show off for most of the Indians.