Housing Sector To Face Shortage Of Supply

Housing sector is expected to face a shortage of supply this year as most of the under construction projects have gone only a halfway through.

The prospective buyers will have to wait for one or two years more for getting their new homes. Though the year 2013 was predicted to see completion of more projects, it won’t happen this year, leading housing sector to face shortage of supply. Continue reading

RBI Slightly Cut Rates, Developers Seek More

RBI decided to cut the key policy rates by 0.25%. Welcoming the rate cut, realtors said that this will boost the sector.

Finally the Reserve Bank of India cut the key policy rates. While welcoming the decision of RBI, realtors said that it would boost the sector. RBI cut the repo rate (the rate at which banks borrow from the RBI) by a mere 0.25%.

RBI slightly cut the key rates.

RBI slightly cut the key rates.

Commenting on the rate cut, realtors said that the interest would have gone down if the reduction rate was further lowered. A further reduction would necessarily boost the home sales. Home loans will be lowered. This will boost the sentiments of the buyers.

Along with the buyers, the builders also will benefit from further rate cuts. If the repo rates are further revised, it will bring the EMIs down.

Speaking on the issue, former CREDAI chief Lalit Kumar Jain said that the common house buyers will benefit from the reduction of repo rate.

The Central Bank of India today cut the repo rate, short-term lending rate, by a mere 0.25%.  After the reduction now the repo rate stands at 7.25.

Developers seek more rate cuts from RBI.

Developers seek more rate cuts from RBI.

The RBI decision was met with mixed response. DLF, one the largest developers in India, said that the rate cut will hardly have any impact on the realty sector. The realty major said that the reduction is too small to leave an impact on the sector.

Rajeev Talwar, Executive Director of DLF Group, demanded further reduction. He opined that only a further reduction will boost both economy as well as realty. Mr. Talwar stated that the rate cut is very so small that it is insufficient to boost either economy or realty.

Sachin Sandhir of RICS (Royal Institution of Chartered Surveyors) also expressed a similar view. He too said only further rate cuts can boost realty sector.

Assotech MD Sanjeev Srivastva said that the move will boost the sector. He hopes that the rate cut by RBI will be passed on to the customers by the financial institutions.

Water Shortage Affects Realty Construction

Water is necessary for realty construction. The water shortage thus affects it adversely.

As the summer is approaching, water shortage has become one of the main keywords in the headlines. We know that people are affected. Are the people alone affected? No, many industries are also affected with it. Continue reading

Rajkot Emerges as a Hot Real Estate Market

Rajkot is slowly emerging as one of the top real estate markets in Gujarat. The city is now witnessing a consistency in the rise of value appreciation.
Rajkot sees increasing demand for top-end residence and villas.

Rajkot sees increasing demand for top-end residence and villas.

GUJARAT: After Ahmedabad and Surat, now it has become the turn of Rajkot. Real estate market is picking up very fast in the city, making it one of the top real estate markets in the state.

Property prices have been rising in the city consistently for the last three quarters. With its gates keeping open to the IT and ITeS companies, the city expects to provide more jobs to the people. The demand for housing units will be more.

Rajkot-based Swastik Properties’ Chintan Vohra said that the most preferred housing units in the area is 2 BHK. He adds that those properties which fall between Rs.35 to Rs.50 lakh are also highly demanded.

Neighborhood localities like Kalavad Road, University Road and Yagnik Road are turning hot home destinations. These areas see maximum demand and supply. Continue reading

Budget 2013 proposes 1% TDS on Rs.50 lakh Apts, by June

The proposed 1% TDS will come into force from June this year. This proposal included in the Budget 2013, is expected to affect the sales of luxury housing units.
1% TDS on luxury houses t by June this year, proposes budget 2013.

1% TDS on luxury houses , proposed by budget 2013, will come into force by June

As proposed in the Budget 2013, those who wish to buy homes or apartments over Rs.50 lakh will have to pay an additional 1% TDS to the government. This will make the apartments costlier.

Those who have booked for flats above the price range fixed by the Budget 2013-14, it will be harder as they will have to deduct an amount as TDS from their payment to the builder. Further they will have to pay the tax and file the returns.

According to the reports of top property research firms, around 5 lakh housing units are believed to be delivered this year. As many homes as the number of people; about the same number of people have ordered for flats. All these people will be affected by the new policy. Continue reading

Mid-segment housing now sets to pick up

In the opinion of the industry experts, the mid-segment housing will pick up in the current year. Nearly 50% of the total demand falls in this segment.
Mid-segment housing turns the need of the hour.

Mid-segment housing turns the need of the hour.

Most of the people speak highly about the affordable housing segment and top-end housing segment. However they seldom speak about the mid-income housing segment which is slowly picking up in the current year.

Pointing to the fact that India is a country where the majority of the population falls in the mid-income segment, Ajay Mangal, director and CEO MG Housing Pvt. Ltd spoke in an interview that the Mid-segment housing would pick up this year.

Mr. Mangal said that he expects the Mid-segment housing to pick up this year. He added that the situation will not be much different in Delhi the national capital. Continue reading

Foreign investors to focus on commercial realty

With the drop of home prices in many of the top cities, foreign investors now plan to invest in commercial properties in India.
Foreign investors plan to shift investment to commercial sector in India.

Foreign investors plan to shift investment to commercial sector in India.

Foreign investors are active in the country since 2005 the year in which they were permitted. However their main investment options remained residential market due to simpler investment norms. Moreover, once the home is finished, the housing sector offered them chances to exit easily with higher returns.

However with surging number of unsold homes in the country, the foreign investors plan to shift to commercial sector now. It is true that the residential market in India is not as vibrant as it was earlier. This would be a reason what prompts them to exit from the housing sector.

Foreign investors including Blackstone Group, now plans to the move on to the commercial sector for their investment, reported Reuters. The sluggish residential is shown as the reason for their shifted interest.

Though the foreign investors are keen to invest in India due to its fast-growing economy, they do not find investment in the residential project as suitable as it was. Home prices have fallen by 5 to 30% since 2009. This fall of home prices prompts foreign investors to look out for other options. Continue reading

Housing shortage to hit India hard: Knight Frank

According to Knight Frank, India will have to face or witness severe housing shortage. One of the main drawbacks in the construction sector is funding.
Housing shortage will be one of the biggest problems India will have to deal with.

Housing shortage will be one of the biggest problems India will have to deal with.

Knight Frank India has published its latest research report entitled “Economy and Realty @ Glance.” In the global property consultant’s opinion the best way to meet the housing shortage is Real Estate Investment Trust.

The report concentrates mainly on the housing shortage which India faces now. According to the property consultants the best thing to meet the housing shortage is Real Estate Investment Trust (REIT) model.

Knight Frank India suggests that the funding of real estate projects can be met with REIT effectively. Funding is one of the main problems which the developers are facing and it can be well tackled through REIT. Continue reading

Budget 2013-14 Proposes Rs.1L Deduction to First-Home Buyers

With the Rs.1 lakh deduction on interest rates on home loans up to Rs.25 lakh, the first time home buyers alone may benefit from the Budget 2013-14 which was presented in the parliament on Feb 28.
Budget 2013-14 will help the first time home buyers

Budget 2013-14 will help the first time home buyers

The much awaited Budget 2013-14 was presented in the parliament by the finance minister on Feb 28. This year the budget did not have many sops to the real estate sector as a whole.

However real estate sector will benefit from the budget as it includes deduction of interest in the home loans by the first-home buyers. Those who plan to buy home for the first time can gain tax exemption and deduction in the interest rates up to Rs.1 lakh.

This will have more effect on the middle income class and so the buyers of this class will have a reason to be happier. Continue reading

Housing Sector Likely to Have Infrastructure Status

Aiming to provide affordable homes to all the people, the union government is seriously pondering over the matter to confer infrastructure status to the housing sector.
Housing sector is likely to gain infrastructure status soon

Housing sector is likely to gain infrastructure status soon.

Economically poor and weaker sections of people are on the verge to own a home in near future. This will be possible for them if the union government confers the infrastructure status to the housing sector.

The decision is believed to be taken in the upcoming budget session of the parliament. However the matter is under the consideration of the Finance Ministry and Reserve Bank of India.

A senior official with Ministry of Housing and Urban Poverty Alleviation (MHUPA) said that it is likely that a favorable decision is taken on the matter. The official added that the ministry is planning to offer some income tax exemptions and service tax reductions to the housing sector.

Conferring infrastructure status is believed to boost the housing sector as it will provide easier access to funds. As a consequence, the availability of houses also will be increased simultaneously.

A recent study on the urban housing shortage revealed that in 2012 nearly 18.78 million housing units were short in India. A major share of the shortage was in the medium and low budget housing units.

Housing sector may get infrastructure status in the coming Budget session.

Housing sector may get infrastructure status in the coming Budget session.

The supply of housing units in the economically weaker section and lower income group fell sharply. The former witnessed a shortage of 10.55 million housing units while the number of the latter was 7.41 million.

The shortage cannot be mended by the government but only by the private developers who find it all the more difficult to construct cheaper homes due to the increased cost of construction. The land also has become so costly that added the cost of construction. Increase in the interest rates also affected the property prices.

The developers have been demanding for infrastructure status for the housing sector for a long while. MHUPA also raised the demand for the same. Conferring the infrastructure status to the housing sector will boost housing sector and the builders will be benefitting from this as it will enable them to own some tax exemptions and other tax benefits.