Chennai is currently witnessing a stunning growth in the Real Estate Market. Chennai has a diversified economic base. The main industries are software services,hardware manufacturing, automobile and financial services. Chennai has emerged as the top candidate for 'Location Ranking Survey' among the other three Indian metros- Delhi, Mumbai and Kolkata. Software services and Business Process Outsourcing (BPO) has emerged as major contributors to Chennai's economy. Chennai is experiencing a major real estate boom. The primary cause of this is the rapid development of the Information Technology in the city.
This has attracted young professionals with considerable disposable income and a consequent consumerist mindset. The consumerist culture has also encouraged the growth of organized retailing. International automobile manufacturers like Ford and Hyundai has also set base in the city. In order to attract the business traveler several up-market hotels have been established at Chennai in the last decade. International hotel chains like JW Marriott, Radisson has constructed hotels in Chennai. The prospective property buyer in Chennai is highly fragmented; the majority work in the I.T sector followed by Financial Services.
There is also another segment- the NRI's or the Non Resident Indians who usually buys high value 'cream' properties in Chennai. Land prices in Chennai has showed an upward trend in the last few years; this has led to an active demand for flats or apartments. For the well heeled there is the choice of purchasing independent houses like villas and semi detached cottages. These high value properties usually come with other 'frills' like swimming pools, gymnasium and exclusive club memberships.
The unique feature of such properties is that they are usually located on the I.T corridor (old Mahabalipuram Road)- making the daily commuting of residents easier to the office. The promotion of Chennai as an investment destination has resulted in developers promoting I.T Parks. Commercial and Industrial land is getting costlier every passing day. The old industrial heartland of Chennai situated in the western part of the city has attracted commercial developers.
The increase in property prices has also been a boon to the government authorities; higher property prices mean higher revenue collections! There has been a 40% increase in revenue collection compared to the previous years.
Wednesday, March 11, 2009
real estate scenario in kolkata
Real Estate in Kolkata is in a high growth phase, especially in office, hospitality, retail and residential sectors.
Real Estate in Kolkata have appreciated in monetary value in the last few years. A rapid industrialization and creation of a better infrastructure has contributed to development of Real
Estate in Kolkata. Real Estate in Kolkata is defined as the land in the Kolkata metropolitan region along with anything attached to the land like buildings and its fittings. The demand of real estate in Kolkata is fueled by the development of the Information Technology(I.T) and Information Technology enabled Services (ITeS) sectors. The real estate in Kolkata is also driven by the following factors:
Real Estate in Kolkata have appreciated in monetary value in the last few years. A rapid industrialization and creation of a better infrastructure has contributed to development of Real
Estate in Kolkata. Real Estate in Kolkata is defined as the land in the Kolkata metropolitan region along with anything attached to the land like buildings and its fittings. The demand of real estate in Kolkata is fueled by the development of the Information Technology(I.T) and Information Technology enabled Services (ITeS) sectors. The real estate in Kolkata is also driven by the following factors:
- Lower land acquisition cost
- Attractive government initiatives
- Lower asset prices
Availability of scalable infrastructure All these factors make Kolkata Real Estate a magnet of premium developers from all over India and abroad. Foreign real estate investors makes Kolkata Real Estate as their first port of call. Prices of Kolkata real estate have shown a steep upward graph- especially in South and South central Kolkata where the price per square feet has risen a mind blowing Rs 800 in just six months!
For example real estate prices in Bhawanipore has risen to Rs.3000 from Rs.2,200 in only six months! The other boom areas are the Eastern Metropolitan Bypass area and the new Rajarhat township. The unprecedented price rise in Kolkata Real Estate is seen in south Kolkata localities like Ballygunge, Prince Anwar Shah Road and Elgin road.
The factors behind such a steep rise in select localities are the limited availability of real estate options, successful retail and commercial projects and improved connectivity with improved urban road build quality. There is also an abstract reason- aspirational quotient of the consumer. The inflow of Foreign Direct Investment (FDI) has also led to an appreciation of the overall quality of real estate projects. Movement in real estate market has given push to Kolkata Hotels too.
Sunday, January 4, 2009
IBA Reduce Intrest Rate on Housing loan
New Delhi: Working in tandem with the government to resurrect the economy and boost growth, the Indian Banking Association on Monday decided to reduce the interest rates on home loans. Now, interest rate for home loans upto five lakhs and for a maximum period of 20 years will be 8.25 percent while the loan of Rs 5-20 lakhs will attract an interest rate of 9.25 percent.
In a move which would come as a relief to borrowers, the IBA has decided to freeze the interest rate for the first five years, meaning that his EMIs won’t fluctuate. After the freeze period, the borrowers will have the option of choosing between floating or fixed rate of interest.
The new package has also done away with the processing fee and pre payment charge on loans upto Rs five lakhs. A free insurance will also be provided to the borrowers, the premium of which will be borne by the bank.
The IBA has also announced a margin of 10 percent for loans upto Rs five lakh and 15 percent for loans between Rs 5-20 lakh. It means that a borrower will have to pay 10 or 15 percent of the purchase value upfront, as per the loan amount.
The new home loan rates will be valid till June 30, 2009.
The new package also assures the borrowers in case the lender bank comes up with a home loan product of lesser value. In such a scenario, the bank will match the older package with the lower one.
The package is aimed at boosting growth, and will be available only for new home purchases and not for refinancing existing borrowers.
The special package will only be offered by state-run banks.
Leading private lenders, including ICICI Bank and HDFC, appeared favourably inclined to cut their rates, with sources saying that the two lenders would study the PSU banks’ package before taking a call. The sources said any decision would be taken after ascertaining whether PSU banks are getting any government subsidy for implementing the package.
The banks have also decided to cut the lending rates for the micro and medium enterprises by 100 basis points.
In a move which would come as a relief to borrowers, the IBA has decided to freeze the interest rate for the first five years, meaning that his EMIs won’t fluctuate. After the freeze period, the borrowers will have the option of choosing between floating or fixed rate of interest.
The new package has also done away with the processing fee and pre payment charge on loans upto Rs five lakhs. A free insurance will also be provided to the borrowers, the premium of which will be borne by the bank.
The IBA has also announced a margin of 10 percent for loans upto Rs five lakh and 15 percent for loans between Rs 5-20 lakh. It means that a borrower will have to pay 10 or 15 percent of the purchase value upfront, as per the loan amount.
The new home loan rates will be valid till June 30, 2009.
The new package also assures the borrowers in case the lender bank comes up with a home loan product of lesser value. In such a scenario, the bank will match the older package with the lower one.
The package is aimed at boosting growth, and will be available only for new home purchases and not for refinancing existing borrowers.
The special package will only be offered by state-run banks.
Leading private lenders, including ICICI Bank and HDFC, appeared favourably inclined to cut their rates, with sources saying that the two lenders would study the PSU banks’ package before taking a call. The sources said any decision would be taken after ascertaining whether PSU banks are getting any government subsidy for implementing the package.
The banks have also decided to cut the lending rates for the micro and medium enterprises by 100 basis points.
Saturday, April 19, 2008
Buying a house? Some tips for you!
A real estate agent can ease the harrowing task of buying house. However, it comes at a price. You need to pay him a commission for his services. However, you must also verify the credentials of the agent. You should ask the agent to get copies of all title deeds from the seller. You must get a lawyer to verify these documents. You must get the agent to register the property with the correct valuation.
Be ready to make an offer:
Do an extensive search. Make a list of homes you have seen and the price list, what to like and do not like. Try to take photographs of the houses. It will be easier for you to recollect when you are short listing the options. Go on removing the names that you would not like to take a second look.
Don?t keep more than five options at a time. After visiting all the places, make sure you visit the 5 best places you liked again before taking the final decision. Be ready to offer a deposit for the house you liked the best.
Don?t keep more than five options at a time. After visiting all the places, make sure you visit the 5 best places you liked again before taking the final decision. Be ready to offer a deposit for the house you liked the best.
Go for a home insurance:
Some banks offer insurance along with the home loan at discounted rates. The value of your home is assessed as per the area of your home multiplied by the rate of construction per. sq. feet, on the date of taking the policy. For example, if your home is 1,000 sq ft and the rate per sq ft is Rs 900, then the sum insured for your home?s building is Rs 900,000. Home Insurance covers natural and man-made calamities like fire, earthquake, lightning, floods, explosion of gas cylinder, spread of fire due to short-circuit, riot, strike, cyclone landslide burglary and terrorism.
Plan to buy a house? Head for Bangalore
It seems the Bangalore real estate bubble has burst.
The city, which saw some unrealistic rise in property prices in the past few years, has witnessed a sharp drop this year. A survey conducted by a real estate firm corroborates this.
Real estate company Asipac states that property prices in the city have dropped by at least 10 to 20 per cent in the past one year. In areas like Sarjapur, where the concentration of IT firms is heavy, prices have come down by 20 per cent, while in posh localities like Jayanagar and JP Nagar, there has been a 15 per cent fall. Such a drop seems strange, especially when prices in Mumbai, New Delhi and indeed many other Tier1 and Tier-2 cities are wintessing a phenomenal increase.
So what has led to a dent in property prices in the IT capital of India?
Experts hold that property in Bangalore always had a 'fake' -- or inflated -- price. It soared because of the hype around the IT boom in the city. Prestige Group chairman and managing director Irfan Razack feels that property prices in Bangalore were at an unrealistic high so far. That led to a demand-supply mismatch as a result of which at least 5,000 apartments lie vacant today. Dealers, who used to sell at least 60 flats in a quarter, can now sell just six.
One can compare the Bangalore scenario to that of Mangalore as it was a couple of years back when the Mangalore Refineries and Petrochemicals was set up. Big money was being paid to the the refinery employees then and taking cue from this, realtors hiked property prices. As a result, a house which would be available for Rs 500 on rent at the time was available for no less than Rs 1,500. However that situation did not last for long and prices came crashing down in a few years.
The case of Bangalore is no different. The advent of IT industry to the city led to a huge rise in realty prices. Sky high prices started getting quoted just because IT personnel could afford it. Result: non-IT people too had to cough up these higher rates. Inflated prices in turn generated a false realty market in the city, wherein people not even remotely connected with the construction industry started building apartments.
Thus, a city, which had just 40 apartment buildings till 15 years ago, has over a 1,000 today. And a majority of them are lying vacant.
East Bangalore: Drop from Rs 3,100/sq foot to Rs 2,100/sq foot
South Bangalore:Drop from Rs 6,400/sq foot to Rs 4,000/sq foot
North Bangalore:Prices unchanged
South East Bangalore:Drop from Rs 5,300/sq foot to Rs 3500/sq foot
Builders in Bangalore find it difficult to dispose of the apartments these days and hence are incurring huge losses. They are, therefore, reducing the prices to draw customers.
Take the case of Sarjapur. Prior to the IT invasion, this area was hardly visible on the Bangalore map. Today, there are nearly 40 different apartment blocks, but very few takers.
The prices that used to be quoted earlier for houses in this area were very similar to those quoted for apartments in the heart of the city. An investor, however, thought twice before investing in a property in this area because of its remoteness. (Although Sarjapur and White Field have very good apartments, commuting from these places isn't too convenient). Hence apartments worth Rs 50 lakh (Rs 5 million) and above in the area mostly lie unoccupied at present.
High property prices in the best planned areas of the city -- like Jayanagar and J P Nagar -- forced prospective buyers to opt for less expensive areas, like R T Nagar, Sultanpalya and Kamanhalli. It is said that the demand for land or a house in Jayanagar and J P Nagar went down by at least 40 per cent. Realtors in the area, were in turn compelled to reduce prices.
According to the builders of Bangalore, realtors are to blame for the price debacle. After a building is constructed, the builder sells it to the realtor, who in turn disposes of the property at a price of his choice. The realtors, who have their own network (a very strong one), are the ones who decide the price.
To sum up, there cannot be a better time to invest in Bangalore.
The city, which saw some unrealistic rise in property prices in the past few years, has witnessed a sharp drop this year. A survey conducted by a real estate firm corroborates this.
Real estate company Asipac states that property prices in the city have dropped by at least 10 to 20 per cent in the past one year. In areas like Sarjapur, where the concentration of IT firms is heavy, prices have come down by 20 per cent, while in posh localities like Jayanagar and JP Nagar, there has been a 15 per cent fall. Such a drop seems strange, especially when prices in Mumbai, New Delhi and indeed many other Tier1 and Tier-2 cities are wintessing a phenomenal increase.
So what has led to a dent in property prices in the IT capital of India?
Experts hold that property in Bangalore always had a 'fake' -- or inflated -- price. It soared because of the hype around the IT boom in the city. Prestige Group chairman and managing director Irfan Razack feels that property prices in Bangalore were at an unrealistic high so far. That led to a demand-supply mismatch as a result of which at least 5,000 apartments lie vacant today. Dealers, who used to sell at least 60 flats in a quarter, can now sell just six.
One can compare the Bangalore scenario to that of Mangalore as it was a couple of years back when the Mangalore Refineries and Petrochemicals was set up. Big money was being paid to the the refinery employees then and taking cue from this, realtors hiked property prices. As a result, a house which would be available for Rs 500 on rent at the time was available for no less than Rs 1,500. However that situation did not last for long and prices came crashing down in a few years.
The case of Bangalore is no different. The advent of IT industry to the city led to a huge rise in realty prices. Sky high prices started getting quoted just because IT personnel could afford it. Result: non-IT people too had to cough up these higher rates. Inflated prices in turn generated a false realty market in the city, wherein people not even remotely connected with the construction industry started building apartments.
Thus, a city, which had just 40 apartment buildings till 15 years ago, has over a 1,000 today. And a majority of them are lying vacant.
East Bangalore: Drop from Rs 3,100/sq foot to Rs 2,100/sq foot
South Bangalore:Drop from Rs 6,400/sq foot to Rs 4,000/sq foot
North Bangalore:Prices unchanged
South East Bangalore:Drop from Rs 5,300/sq foot to Rs 3500/sq foot
Builders in Bangalore find it difficult to dispose of the apartments these days and hence are incurring huge losses. They are, therefore, reducing the prices to draw customers.
Take the case of Sarjapur. Prior to the IT invasion, this area was hardly visible on the Bangalore map. Today, there are nearly 40 different apartment blocks, but very few takers.
The prices that used to be quoted earlier for houses in this area were very similar to those quoted for apartments in the heart of the city. An investor, however, thought twice before investing in a property in this area because of its remoteness. (Although Sarjapur and White Field have very good apartments, commuting from these places isn't too convenient). Hence apartments worth Rs 50 lakh (Rs 5 million) and above in the area mostly lie unoccupied at present.
High property prices in the best planned areas of the city -- like Jayanagar and J P Nagar -- forced prospective buyers to opt for less expensive areas, like R T Nagar, Sultanpalya and Kamanhalli. It is said that the demand for land or a house in Jayanagar and J P Nagar went down by at least 40 per cent. Realtors in the area, were in turn compelled to reduce prices.
According to the builders of Bangalore, realtors are to blame for the price debacle. After a building is constructed, the builder sells it to the realtor, who in turn disposes of the property at a price of his choice. The realtors, who have their own network (a very strong one), are the ones who decide the price.
To sum up, there cannot be a better time to invest in Bangalore.
take a hoam loan,must insure it
With Finance Minister P Chidambaram announcing recently that rates are going to stabilise in the near term there is lot of expectation that housing loan rates will fall further.
A few months back, banks and housing finance companies, cut rates on loans under Rs 20 lakh (Rs 2 million).
Some experts also feel that real estate prices in most cities would come down as supply far exceeds demand.
So, is it the right time to go hunting for that dream house? With loan rates likely to come down or at least stabilise, should you go for a second house? In an hour-long chat on rediff.com on Friday, personal finance expert Harsh Vardhan Roongta answered to many such readers' queries. Roongta is the CEO of apnaloan.com , a site that help people get the most competitive loans. After a successful entreprenuerial stint and an equally impressive career at ICICI later, he co-founded apnaloan.com in 2000. A chartered accountant by qualification, Harsh Roongta has over 23 years of experience in financial services and consultancy.
A few months back, banks and housing finance companies, cut rates on loans under Rs 20 lakh (Rs 2 million).
Some experts also feel that real estate prices in most cities would come down as supply far exceeds demand.
So, is it the right time to go hunting for that dream house? With loan rates likely to come down or at least stabilise, should you go for a second house? In an hour-long chat on rediff.com on Friday, personal finance expert Harsh Vardhan Roongta answered to many such readers' queries. Roongta is the CEO of apnaloan.com , a site that help people get the most competitive loans. After a successful entreprenuerial stint and an equally impressive career at ICICI later, he co-founded apnaloan.com in 2000. A chartered accountant by qualification, Harsh Roongta has over 23 years of experience in financial services and consultancy.
FM wants low rate for hoam loans
Making a strong case for a cut in interest rates on home loans of up to Rs 20 lakh (Rs 2 million), Finance Minister P Chidambaram on Thursday said he would continue to talk to bankers as these accounts, which form a lion's share of total borrowing for housing, carry less risk weightage.
The finance minister, however, in the same breath added that the ball is in the court of banks and the Reserve Bank of India.
"I made a number of efforts to impress upon bankers in this regard. It is a constant effort that I will have to make. Bankers will have to take a call, the RBI will have to take a call," Chidambaram said in his post-budget interaction with industry chamber Assocham in New Delhi.
Following the Reserve Bank's tight monetary policy initiatives, interest rates on housing loans have shot up to the range 10-12 per cent, bringing the demand sharply down.
If the rate of inflation is high, RBI tightens monetary policy, leading to higher interest rates. But at its last Monetary Policy review in January, RBI kept all key rates intact.
But even then many banks, including market leader SBI (State Bank of India), cut interest rates after RBI said their net interest margin is still high.
The finance minister said he agreed that housing loan borrowers of less than Rs 20 lakh should be incentivised by lowering interest rates.
As much as 80 per cent of all housing loans fall in the category of below Rs 20 lakh, he said, adding that these loans have less risk weight than those above Rs 20 lakh. Therefore, bankers have incentives to lend to these borrowers at lower interest rates.
"I shall certainly bear in mind that there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered," Chidambaram said.
At the same time he also defended the RBI stance. The RBI governor's position to strike a balance between low inflation and high growth is unenviable, he said.
"He (RBI governor) can never please everyone. It is his judgement call what should be the interest rates in order to contain inflation and promote growth," the finance minister said.
Chidambaram said he recognised that from the government's point of view it is important to promote growth without stoking inflation.
The finance minister, however, in the same breath added that the ball is in the court of banks and the Reserve Bank of India.
"I made a number of efforts to impress upon bankers in this regard. It is a constant effort that I will have to make. Bankers will have to take a call, the RBI will have to take a call," Chidambaram said in his post-budget interaction with industry chamber Assocham in New Delhi.
Following the Reserve Bank's tight monetary policy initiatives, interest rates on housing loans have shot up to the range 10-12 per cent, bringing the demand sharply down.
If the rate of inflation is high, RBI tightens monetary policy, leading to higher interest rates. But at its last Monetary Policy review in January, RBI kept all key rates intact.
But even then many banks, including market leader SBI (State Bank of India), cut interest rates after RBI said their net interest margin is still high.
The finance minister said he agreed that housing loan borrowers of less than Rs 20 lakh should be incentivised by lowering interest rates.
As much as 80 per cent of all housing loans fall in the category of below Rs 20 lakh, he said, adding that these loans have less risk weight than those above Rs 20 lakh. Therefore, bankers have incentives to lend to these borrowers at lower interest rates.
"I shall certainly bear in mind that there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered," Chidambaram said.
At the same time he also defended the RBI stance. The RBI governor's position to strike a balance between low inflation and high growth is unenviable, he said.
"He (RBI governor) can never please everyone. It is his judgement call what should be the interest rates in order to contain inflation and promote growth," the finance minister said.
Chidambaram said he recognised that from the government's point of view it is important to promote growth without stoking inflation.
Subscribe to:
Posts (Atom)
