Real estate bill is likely to protect flat owners and prospective buyers from the unethical and unscrupulous builders. The real estate bill is expected to be presented in the upcoming parliament session.
Real estate bill will give new horizon to real estate industry
The prospective buyers can rejoice finally. They have got a reason to do so as real estate bill is expected to be passed in the upcoming parliament session. It is expected to restrain the unethical and unscrupulous builders from looting the flat owners and buyers.
In the opinion of the experts, harsh and corporal punishment to the builders for fraud behaviors will remove all unethical and unscrupulous practices from the industry as a whole. Real estate sector looks so fine and attractive from outside as it gives new shapes to the cities.
However once the real estate bill is passed, the real estate developers may not be as happy as they used to be. The new real estate bill has provisions to punish the unscrupulous builders for proved fraud behaviors in the industry. Though the builders have demanded for monetary punishment in place of jailing, the decision has not yet been taken. Continue reading
Summer indicates a calmness for the real estate sector as transaction volumes take a downward leap. The trend is clear seeing that estate project launches have been the least during the second quarter from 01st April 2011 to 30th June 2011. As many as 46,093 high rise apartments were launched between January 2005 till December 2010. Of these, the highest launches were during the third quarter (July to September) when over 41% highrise homes were announced in the city. In contrast, the lowest launches came in the second quarter when the launch of only 5,448 apartments that is 11.82 % were launched.
When asked why home buyers postpone purchases, real estate analysts blames it on the roasting heat and summer vacations. “It is true that transaction volumes are lesser during the summer months. This is a time when the weather is not inspiring for buyers. Moreover, since summer vacations are the longest, many families go out of town for holidays. People wait for the Navratras and Diwali as they consider this time to be auspicious which falling in the third and fourth quarters respectively.Also, as the weather is acute, many people feel this is not an appropriate time to shift into a new home. Also, since children are already into their new academic year, parents do not want to make a change.
According to the launch figures, the next highest number of launches of 13,814 apartments comes in the first quarter. Also, over 16 per cent announces were seen in the last quarter from October to December. The phase from January to March is the time for financial closures and, hence, it boosts transaction volumes. On the other hand, the winter months see a large inflow of non-resident Indians arriving back in India to visit relatives. The transaction volumes at this time are mainly due to NRI purchases.
The apartment buyers were already burdened by the day by day increasing property rates, and now come another burden to their door. Since last month, many developers have been demanding the buyers to start paying up the service tax announced in Union Budget, 2010, i.e. a 2.5% tax.
However, this service tax will be imposed only on the under construction residential project or where the building has not yet received its occupation certificate. Some sources revealed that some developers admitted that they asked purchasers to pay this tax.
On the other hand, buyers say that they were not told about this additional taxation at the time of booking of flats. A market source told that although the buyers are raising voice against this game played by builders, but they do not have much choice. As they are forced to pay the development charges, society fees, hefty parking charges and other various charges, they will have to pay this tax too.
Raising home prices may anticipating festive season demand.
Mr. Niranjan Hiranandani, MD of Hiranandani Group, said “It is not very wise to increase prices drastically now”. Further he said, “The market has just recovered and buyers are returning back”.
The shortening of supply due to a 45% decline in new projects in tier-I cities has also enhanced the prospects of higher prices.
Mr. Abhisheck Lodha, director of Lodha Developers, said, “We have sold around 2.5 million square feet in the last quarter and are expecting to sell over 1.5 million square feet during the last quarter of this year”. Further he added, “Normally, the festive season is when there are a lot of bookings in the real estate sector”.
We often read that recovery in realty market is visible now. Such news has reached to general people and they have started looking at property of their choice at affordable rates. Competition between builders results into rate cuts and attractive offers for buyers. It can be easily figured out by taking a look on the increment in property registration in major cities. With the improvement in macro-economic conditions and affordability of buyers, developers witnessed a stronger response to new launches across cities over the past quarter.
Real estate is known as growing industry. That is why, change is the only constant thing or I must say that the change is the only predictable thing for this industry. We got the know the prediction that real estate will be on peak for residential properties and in the very next week we hear that investing in commercial properties are good for future. Such trend may create dilemma for the prospective buyers and investors.
The best way to update yourself with recent and upcoming trend is to keep your eyes on reliable websites. Information technology is playing very important role in providing information on time, which is needed before taking investment decision.
Photo by thisperthlifeResidential property prices are expected to fall by about 10% this year. Residential property rates declined by 18% to 20% in this March. Despite this drop, buyers are watching market scenario with ‘wait and watch’ policy. This trend is likely to continue through 2009. Mr. Sudhir Nair, Head, CRISIL Research says, “Demand in the commercial and retail segment is likely to remain under stress for the next two years owing to excess supply and weak off take.”
It is believed that lower home loan interest rates would help to revive demand in the residential segment. Hence, capital values are likely to stabilise in the first half of 2010, and increase during the second half of the year.