Tag Archives: Residential Real Estate

Why is residential real estate considered one of India’s safest investments?

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The Indian real estate market experienced an unprecedented surge in 2023, outperforming all expectations and setting new records. Buyers are increasingly prioritizing homeownership over rental arrangements. 

As we navigate recent times, the Indian residential real estate market has emerged as a beacon of security for investors, allowing the housing market to shine for those seeking stability and growth. In 2023, the Indian real estate market experienced an unprecedented surge, far exceeding expectations and setting new records. Buyers are increasingly prioritizing homeownership over rental arrangements. 

It is expected to have a  promising 2024 as the month progresses, and in India’s ever-changing investment landscape, residential real estate stands out as a pillar of strength and dependability. What is the situation in 2024? As we navigate through recent times, the Indian residential real estate market is emerging as a beacon of security for investors, making the housing market shine for those seeking stability and growth. The Indian real estate market witnessed an unprecedented surge in 2023, surpassing all expectations and setting new records. Buyers are now placing a greater emphasis on owning a home rather than opting for rental arrangements.

It is expected to have a promising 2024 as the months go by, and in the ever-evolving landscape of investment opportunities, residential real estate in India stands tall as a pillar of strength and reliability. What is the situation in 2024? All factors indicate that it is a safe investment compared to other asset classes. 

Residential real estate is resilient 

Despite the challenges posed by the global financial crisis in recent years, India’s residential real estate sector has proven remarkably resilient. Early indications suggest that 2024 will be a promising year for the industry, with increased demand, particularly in urban areas with high development and infrastructure trends. India is positioned at the forefront, and this growth has been attributed to strong economic indicators and consistent demand, creating a positive sentiment among key contributors. 

Affordability and Availability of Luxury Homes 

Indian homebuyers have become more aspirational, seeking to live a luxurious lifestyle. According to a study, residential real estate will remain affordable while increasing threefold by 2024. The real estate sector has grown steadily due to continued urbanization, rental market expansion, and price appreciation. The repo rate cut is expected to be within the normal range, allowing home prices to remain affordable for buyers for an extended period. Metro cities like Bangalore would see affordable luxury, while people could purchase homes regularly. 

Urbanization and increased affordability. 

The Indian real estate sector is undergoing significant transformation, owing largely to the explosive growth of the country’s middle class and rapid urbanization, which is driving demand for affordable luxury housing in tier-1 cities. This segment is the foundation of India’s real estate market and is expected to grow further. The rise in incomes and demand for housing in urban areas has resulted in a massive urbanization process, which is the primary cause of urban India’s growth. 

Breakthrough performance 

The real estate market has been the primary driver of India’s growth story. Not only was the country’s economy the fastest growing, but real estate indicators were also at record highs. In retrospect, 2023 began with global inflation that threatened a full-fledged recession. Despite rising inflation, the real estate market performed well this year. A strong finish was seen across the cities, with Bengaluru leading the pack. The figures were unimaginable in the past, indicating strong expansion-driven growth. 

A thriving outlook. 

As the market prepares for a significant leap this year, there is an increase in demand for residential properties. It has become clear that property markets in India have grown significantly, with an increase in new launches and property sales. Fueled by overwhelmingly high sales and a thriving luxury segment, this instills confidence in developers, driving a supply pipeline and establishing major metropolitan cities as rapid real estate consumers. This promotes economic growth, stable interest rates, and a shift in public perception of property ownership, resulting in property ownership serving as a financial safety net. 

The Indian real estate sector, which is central to the economy and supports a variety of industries, is poised for continued growth. A strong economy, urbanization, rising incomes, government initiatives, and increased demand for various properties indicate a bright future. With a promising outlook, it remains one of the most secure assets for investors to hold in the future. 

The rise of offbeat destinations is a paradigm shift in residential real estate

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Offbeat real estate destinations are becoming increasingly popular, reflecting a broader trend toward a balanced and enriching lifestyle. 

Over the last few years, the Indian real estate sector has experienced a significant shift, with homebuyers increasingly seeking serene and offbeat destinations far from the hustle and bustle of major cities. Sonipat, Bhiwadi, Panchkula, and Meerut have emerged as top residential investment destinations, offering a combination of natural beauty, cultural richness, and a thriving economy. This transition reflects a desire for a higher quality of life, where serenity and modern amenities coexist in a relaxed setting. 

Neoliv’s founder and CEO, Mohit Malhotra, says, “We envision that new-age cities will become the crucible of future economic dynamism. Their appeal stems from a harmonious combination of affordability, accessibility, and lifestyle amenities, creating new relaxed places to call home. Furthermore, the extended NCR is seeing significant infrastructure improvements, thanks to government initiatives to promote sustainable development. With the emergence of large global-scale industries such as the upcoming Maruti Suzuki plant in the Sonipat belt, these areas are poised to drive demand for mid-income housing projects and plotted developments, transforming into vibrant residential neighborhoods.” 

Offbeat destinations are gaining popularity, indicating a broader trend toward a more balanced and enriching lifestyle. For example, Bhiwadi, once an obscure industrial town in the National Capital Region (NCR), is quickly establishing itself as a new real estate development, with parallels to Sohna Road’s highly sought-after micro-market. Bhiwadi with its strategic location, robust infrastructure, and emerging commercial and residential ventures, is on track for exponential growth, similar to Sohna Road in Gurugram. 

Anil Gupta, President of CREDAI NCR Bhiwai Neemrana, says, “Bhiwadi has enormous growth and investment potential due to its strategic location, robust infrastructure, and burgeoning commercial and residential developments. When the region is connected to the Delhi-Mumbai Expressway, its potential for growth and prosperity increases. As stakeholders in Bhiwadi’s development, we are confident in the town’s potential to become a key destination in the NCR, providing unparalleled opportunities for growth and prosperity. 

More and more families are relocating to these areas, drawn by the prospect of a better lifestyle and excellent investment opportunities. Panchkula, for example, has grown significantly. DLF’s luxurious residential project, The Valley, which debuted in 2010, has seen property values rise from Rs 2,000 per sq ft to an impressive Rs 8,000. This remarkable ascent highlights the tranquil town’s untapped potential, with DLF leading the charge. Their projects, which include The Valley, The Valley Gardens, and their most recent offering, The Valley Orchard, have paved the way for increased demand for homes in these areas. The Valley Gardens spans 34 acres (13.76 hectares) and offers breathtaking views of the Morni Hills and Shivalik Range. DLF unveiled its sample apartment, allowing potential buyers to experience luxury living firsthand. 

These tier-2 cities are expanding rapidly, thanks to improved infrastructure such as better roads, public transportation, and vibrant commercial districts. Most importantly, it provides a peaceful yet connected lifestyle, which tier-1 cities struggle with due to overcrowding and rising property prices. This development includes physical, cultural, and economic growth, creating new opportunities to revitalize local economies. 

Rahul Singla, Director of Mapsko Group, says, “In recent years, tier-2 cities like Sonipat have seen the emergence of the organized real estate market, which has provided unprecedented growth and development opportunities for the developing city. Sonipat offers an enticing combination of affordability and quality of life in an ever-changing landscape, as remote work options gain popularity. Homebuyers prefer spacious homes against a backdrop of lush greenery, which provides a respite from densely populated urban areas. Sonipat’s appeal extends beyond its economic prospects, with buyers prioritizing wellness and sustainability in their investment decisions.

This seismic change in style signals a fundamental reimagining of the Indian residential landscape. It demonstrates a growing desire for a lifestyle that transcends the mundane, promising a future of limitless innovation and steady growth. Indeed, the road ahead in residential real estate is paved with unique destinations where tranquility and modernity meet, beckoning those looking to invest in a lifestyle rather than just bricks and mortar.  

India’s ultra-rich are shifting their investment focus to residential real estate

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The ultra-rich in India devote a sizable portion of their wealth to residential properties, which account for 32% of their investment portfolio. 

For some time now, India’s affluent class has been shifting its investment focus to residential real estate, indicating a significant shift in the country’s investment landscape. This transition highlights changing investment preferences and reflects the motivations behind the elite’s decision to invest in residential properties. 

According to a recent Knight Frank report, India’s ultra-rich are allocating a significant portion of their wealth to residential assets, with 32% of their investment portfolio devoted to this sector. A growing number of ultra-high-net-worth individuals (UHNWIs) plan to buy a new home by 2024, indicating an increasing appetite for residential real estate investments in India. 

Parvinder Singh, CEO of Trident Realty, commented, “This growing interest of elites in the residential real estate sector reflects a shift towards quality living spaces that cater to evolving  lifestyle preferences.” 

Elites are drawn to high-quality residential projects that provide sustainable and multifunctional living spaces, which satisfy their desire for exclusivity and modern amenities. The residential sector is expected to grow significantly by 2024, driven by urbanization, rising incomes, and a desire to live in harmony with nature. To appeal to affluent buyers, we designed our projects to offer privacy, space, and connection to nature. Our developments provide a distinct blend of luxury, sustainability, and comfort to meet the discerning tastes of elite homebuyers.” 

Knight Frank’s flagship report, The Wealth Report 2024, predicts a significant increase in the Indian UHNWIs, rising to 19,908 by  2028 from 13,263 in 2023. This equates to a massive 50.1% increase, the fastest growth rate in the number of UHNWIs in any country over the next five years. 

Aman Trehan, Executive Director of Trehan Iris, says, “The surge in residential property investment among India’s elite class represents a remarkable shift in preferences, fueled by a thriving economy and evolving lifestyle choices. According to Knight Frank India’s 2024 Wealth Report, 32% of UHNWIs are considering investing in real estate, with 12% planning to buy new homes in 2024. This report highlights the sector’s unprecedented growth and reveals Delhi’s rise in the real estate sector. With a combination of high demand, favorable mortgage rates, and a strong economy, the allure of luxury properties and alternative assets is likely to persist among high-net-worth individuals and ultra-high-net-worth individuals. This year, 22% of wealthy individuals intend to invest in residential properties and 19% in commercial properties. 

Furthermore, the ongoing expansion of infrastructure and connectivity initiatives, particularly in the National Capital Region, is expected to open up new opportunities for elite investors, promising capital appreciation and improved lifestyles. As we look ahead, the trajectory of India’s real estate market is poised for further evolution, implying a promising outlook for the market in the coming years,” he adds. 

Furthermore, people exhibit a positive economic sentiment, reflecting the Indian economy’s resilience and potential. This shift in sentiment coincides with a broader recognition of real estate’s enduring value and potential for long-term financial growth. Investors are positioning themselves to accumulate wealth and create multigenerational wealth through real estate investment. 

Aman Sharma, Founder & Managing Director of Azrize Group, says, “Seeing India’s super-rich devote 32% of their wealth to housing properties is extremely encouraging. There is a strong belief that real estate is a significant driver of wealth preservation and growth. This data demonstrates our dedication to delivering high-quality projects that appeal to the discerning tastes of affluent buyers. We recognize the importance of providing luxurious yet secure options consistent with this demographic’s investment preferences. Such insights guide our strategic planning, ensuring that we continue to meet the market’s changing demands while maintaining our position as a reliable provider of premium real estate.” 

Aside from economic factors, lifestyle changes are spurring demand for luxury and larger homes among India’s upper classes. The ultra-luxury housing sector’s unprecedented growth in 2023 reflects affluent individuals’ strong desire for premium living experiences. This emphasis on enhancing lifestyle offerings is a major reason the wealthy prefer to invest in residential properties, as they seek to improve their living conditions and indulge in luxurious living experiences. 

“The surge in luxury housing sales among India’s elite is up 130% Y-O-Y, signaling a seismic shift in the industry,” says Ashish Sharma, AVP operations at Brahma Group. According to Knight Frank’s Wealth Report 2024, they allocate 32% of their wealth to residential properties.

A strategic pivot towards tangible assets both luxury and long-term capital appreciation. 

The desire for luxurious urban living, combined with an increasing number of high-net-worth individuals, has prompted wealthy investors to design spaces that embody luxury, comfort, and exclusivity. The decision to invest in luxury real estate has evolved into an important statement of status and intent. Furthermore, in the coming years, the industry can expect to see a rise in participation from India’s elite as it continues to grow. 

According to Ashish Sharma, AVP operations at Brahma Group, “the surge in luxury housing sales among  India’s elite, up 130% year on year, signals a seismic shift in the real estate landscape.” According to Knight Frank’s Wealth Report 2024, they now invest 32% of their wealth in residential properties, up from 20%. This strategic shift toward tangible assets offers both luxury and long-term capital appreciation. Driven by the allure of upscale urban living and a growing population of high-net-worth individuals, affluent investors tend to invest in environments that exude comfort, exclusivity, and status. Luxury real estate has evolved beyond mere acquisition into a profound statement of status and purpose. Furthermore, the sector is expected to experience a surge from India’s elite, with an upward growth curve in the coming years.” 

This trend opens up exciting opportunities for the Indian real estate market. Luxury developers can meet the growing demand for exclusivity, comfort, and long-term value among ultra-high-net-worth individuals seeking prime residential investments. However, stay ahead of the curve by anticipating changing preferences and offering innovative solutions to the elite’s ever-changing needs. 

Shops, homes, and faith: places of worship ready for a surge in visitors

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The boom in retail in India has also had an impact on significant religious infrastructure. While visitors to Shirdi can now purchase FabIndia Kurtas, there is a Spykar store in Somnath. There are Zudio and Blackberry stores in Varanasi and Bodh Gaya, respectively. 

Fast-food restaurants such as Domino’s, KFC, and Burger King have not lagged, establishing their presence in remote religious locations such as Puri, Katra, Ajmer, and beyond.

Though the growth of Ayodhya’s retail and hospitality sectors has drawn attention, the nation’s retail chains have grown gradually but steadily. 

This pattern suggests that tourists’ tastes are shifting as more and more visitors look for life-changing experiences outside of customary activities. According to a report by real estate consulting firm CBRE, the growth of urban spiritual tourism is satisfying this demand by drawing tourism to locations recognized for their profound religious and spiritual significance. 

According to the report, the major cities experiencing this retail boom are Madurai, Ajmer, Varanasi, Katra, Somnath, Shirdi, Ayodhya, Puri, Tirupati, Mathura, Dwarka, Bodh Gaya, Guruvayur, and Madurai. 

The products retail brands offer are changing for high-street locations and small clusters. Businesses and local governments are collaborating to develop distinctive retail experiences. This involves incorporating regional customs into the layout and amenities of stores, eateries, and lodging facilities,” claims CBRE. 

To offer visitors a taste of a city beyond spirituality, cities like Amritsar, Varanasi, Madurai, Puri, Guruvayur, and others use their distinctive culinary traditions and Local fashion expertise. 

Infrastructure upgrades enable peaks in spiritual tourism. 

According to a report by Jefferies, despite the current infrastructure bottlenecks, the most visited religious sites in India welcome 10-30 million tourists each year. Such cities are now undergoing an infrastructural upgrade– which will bolster their growth. 

The state and federal governments are constructing airports, public transportation systems, and well-connected roads. It supports the development of lodging establishments such as hotels, guesthouses, and wellness centers to ensure that travelers have a comfortable stay. 

“India’s faith-based economy is expanding rapidly due to the country’s growing spiritual tourism industry. Government programs to enhance connectivity between pilgrimage sites and to boost tourism are speeding up this growth even more. Another important factor is the growth of online retail platforms that make it simple to obtain faith-based goods and services, according to Anshuman Magazine, chairman and CEO of CBRE’s operations in India, South-East Asia, the Middle East, and Africa. 

While Jefferies anticipates 50 million visitors per year on average to Ayodhya, other pilgrimage sites are also expanding quickly. “India offers a vast array of tourism experiences, such as beaches, hill stations, cultural & heritage sites, historic monuments, and more. The largest category of tourism in India is still religious travel, the report continues. 

High-end hospitality brands are also entering these cities, in addition to retail chains. Other chain brands that are opening boutique and experience hotels in these cities include Taj, ITC, Lemon Tree, Novotel, JW Mariott, and Mayfair. 

“Big hotel chains are adjusting to the changing needs of spiritual travelers by providing pristine, sanitary, and kid-friendly lodging at premium rates. According to CBRE, “Branded hotels are starting to emerge as major players, providing a fusion of comfort and traditional hospitality catered for spiritual seekers.”

Investors flock to Coimbatore as the residential real estate market outperforms Tier-1 cities.

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Relying on its industrial and economic growth, Coimbatore has become one of the leading real estate development stories. Investment appeal has increased due to significant strategic projects like defense industrial parks, airport expansion, bypass institutions, and IT development. The recent floods in places like Chennai and Thoothukudi have accelerated the city’s transformation into a real estate hub as investors’ attention has shifted from major cities to Tier 2 cities. Coimbatore is a safer and more promising place to invest because of its pleasant climate and quality of life.  

The investment hub

Due mainly to its variety of real estate options, which include both residential and commercial spaces, Coimbatore is becoming an increasingly attractive destination for real estate investors. In particular, there has been a spike in activity and investments in real estate projects in Coimbatore Western Bypass. Due mainly to its variety of real estate options, which include both residential and commercial spaces, Coimbatore is becoming an increasingly attractive destination for real estate investors. In particular, there has been a spike in activity and investments in real estate projects in Coimbatore Western Bypass. This trend is because Coimbatore attracts investors looking for growth and value in the real estate industry because of the city’s lower costs relative to larger cities and the substantial returns these investments can produce. 

Real Estate Property Value Appreciation 

Coimbatore’s land value has been rising, indicative of the city’s increasing economic vitality, potential as an IT hub, and allure as an investment destination. Near Coimbatore, neighborhoods like Kovaipudhur, Edayapalayam, Chinnamettupalayam, Vellakinar, Thudiyalur, Palathurai Road, Nanjundapuram, are becoming more well-known for their tranquil surroundings that are suitable for residential development and have more room for appreciation in the future.  

This course is seeing a new age of change in the residential real estate market, with advanced types of living spaces like plotted development communities. 

The surrounding “Tier 2” areas of Coimbatore also experience significant growth in light of the city’s real estate boom, demonstrating the positive spillover effect of the city’s success. Because of its proximity to Coimbatore’s thriving market and warm weather, Kovaipudhur, for example, has recently become the hub for those looking for high-quality residential and commercial investment opportunities. This growth points to a pattern in which urban overcrowding and the desire for quiet yet convenient living spaces in peripheral areas are more alluring due to their appreciation potential. 

The economic dynamism of Coimbatore, strategic development projects, and a growing number of foreign and domestic investments are driving the city’s real estate market, which will continue to grow as investors and end users alike find the city attractive due to its affordability and high return potential. 

Five trends are influencing the residential real estate market in India.

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The rapid expansion of the middle class in India is mainly to blame for the significant changes occurring in the Indian real estate market. Development professionals, investors, and potential end users are all very interested in this revolutionary shift, characterized by a sharp increase in population and economic growth. Urbanization, rising incomes, and easier access to education all contribute to this phenomenal growth. 

The Indian residential market is a leading indicator of changing regulations, economic vitality, and societal aspirations due to its novel opportunities and trends. The value of India’s residential real estate market reached an all-time high of Rs.3.47 lakh crores in FY23, representing a strong 48% annual growth. The sales number also showed an upward growth trajectory, increasing by 36% to 379,095 units sold. 

The nation is changing swiftly, and every part of the industry beats in time. The following are the main developments influencing India’s residential real estate market:

  1. Rise of Low-Density Housing: Plotted developments, townhouses, and villas are among the low-density housing options currently in high demand. Low-density housing uses less energy, such as electricity, air, and water, and is similar to small neighborhoods or single-family homes. Long-term residents of this kind of housing are encouraged to lead sustainable lives. Reducing the need for additional infrastructure in neighborhoods by forming them with fewer houses and preserving the land largely intact can help save resources. Buyers are becoming more aware of the benefits of low-density housing. Low-density housing is becoming more popular for people to escape congested urban areas and prioritize privacy, space, and harmony with nature. Developers are introducing carefully planned, low-density projects in response to this trend, emphasizing the value of open spaces, lush greenery, and a feeling of exclusivity. This change reflects a rising desire for well-balanced homes that combine contemporary conveniences with the peace of suburban settings. According to India Sothby’s International Realty’s annual Luxury Outlook Survey 2023, roughly one-third of HNIs and UHNIs are willing to spend over Rs 10 crores on real estate. For instance, Landmark Group sold out of its plots in record time at Landmark Avana, a new low-density housing project in Gurugram, particularly to a younger demographic looking for more space and a better standard of living. 
  1. Technological Integration: By improving comfort, security, and convenience, technology integration is completely changing the residential landscape. Ad IoT devices, home automation systems, and AI-powered assistants biome standard features in smart homes set new standards for futuristic living while providing residents with a seamless living experience. India’s smart home market is expected to generate US$6.5 billion in revenue by 2024. Based on research and markets for smart homes, India ranked third globally in 2020. Furthermore, by 2025, there will be 442 million smart homes in India, an increase over the current number of homes, according to Statista’s Digital Market Outlook for 2021. 
  2. Growing Preference for Owning a Home: The start of the COVID-19 pandemic has caused a significant shift in the way that society views home ownership. Purchasing a home is becoming more and more important to people than renting one. People now recognize the benefits of living in their own space with areas set aside for work, study, and leisure. As a result, people are more conscious of the inherent worth of owning a home since it provides a greater sense of stability and security during uncertain times. Like the pre-COVID housing loan levels, Indian banks advanced housing loans totaling approximately 2 trillion Indian rupees in FY22. As more Indians were investing in residential real estate, this suggested that homebuyer confidence was returning. 
  1. Elegant living: The market focuses on pricey, showy real estate. These upscale residential developments draw discriminating buyers looking for an unmatched quality of life with their first-rate amenities. According to a recent India Sotheby’s International Realty study, the number of affluent people planning to buy luxury real estate in the upcoming years has considerably increased. The luxury real estate market has seen substantial disruption due to growing income levels, deeper technological integration, and evolving consumer preferences brought about by shifting demographics. Millennials are becoming interested in luxury real estate as their incomes rise and their urban lifestyles change. Luxurious properties are in high demand due to the possibility of substantial rental income and a high return on investment. The sales of luxury homes in India increased by 130% in the first half of 2023 compared to the last year. Set to open in Dwarka Expressway, Landmark Group’s new residential project promises to be the ideal residential complex with its endless luxury services and state-of-the-art amenities that are best suited for the changing way of life. 
  1. Tier 2 becomes a powerful force: After the pandemic, many people assessed their living situations and looked for sale houses in their hometowns to feel more stable. The consequence has been an increase in the visibility of Tier 2 cities, which are growing hubs for real estate. The discernible increase in investment activity is causing significant changes in these cities’ real estate markets. With a robust housing market supporting them, Tier 2 cities are rapidly expanding their infrastructure and offering various opportunities for residential and commercial use. Furthermore, the government’s support of cities helps the real estate industry expand. Projects to develop townships and settlements may receive up to 100% FDI approval from the government. Tier 2 cities real estate growth has surpassed Tier 1 cities. For example, at the end of the fiscal year 2021-22, Ahmedabad’s residential real estate market size of INR 83,390 crores exceeded the market sizes of some Tier 1 cities, like Chennai and Kolkata, with INR 52,554 crore and INR 38,440 crore, respectively. This expansion was also apparent in Tier 2 cities like Nashik, Jaipur, Vadodara,  and Gandhinagar. 

The government has increased its efforts to provide affordable housing in response to the recent spike in housing demand, and developers have modified their business plans. The term “affordable housing” describes real estate with prices within the reach of low- and middle-class families. The affordable housing project Landmark the Homes in Sector 81 is anticipated to be completed by December 2024, according to the Landmark Group. One can look into government-funded programs created especially for low-income groups or home loan options from private lenders/NBFCs to purchase affordable housing in India. A commitment of Rs 79,000 crore (US$9.64 billion) for the PM Awas Yojna has been announced in the Union Budget 2023-24, a 66% increase over the previous years.  

Government initiatives such as the Rajiv Awas Yojna and Pradhan Mantri Awas Yojana have encouraged developers to take on projects to offer affordable housing, thereby promoting accessibility and inclusivity in the real estate market. Meeting the demand for 40 million urban housing units is necessary, given that the population is growing at an average annual rate of 2.1% and that a large portion of our population has low purchasing power.

 India’s growing urban population is driving up demand for homes, changing the country’s skylines and city spaces. 

Most growth in this city occurs in the sale of houses exceeding Rs 4 crore.

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According to a report released today by real estate firm CBRE, sales of luxury houses valued at Rs 4 crore and above rose 97% over the previous year in the seven major Indian cities between January and September 2023. 

The report states that Hyderabad, Mumbai, and Delhi-NCR account for 90% of all sales of luxury homes. 13% came from Hyderabad, 35% from Mumbai, and 37% from Delhi-NCR. Pune is responsible for the final 4%.

The desire for higher living standards, a strong economy, rising disposable incomes, and a shortage of luxury homes in large cities all contributed to an uptick in luxury home sales.

According to CBRE, there will likely be additional growth in the sales of luxury homes from the October through the December holiday season. The company anticipates a rise in people purchasing luxury homes for the first time in the October-December quarter. 

“A growing Indian economy and rising aspirations are the causes of this spike. Aside from the post-pandemic need for larger spaces, some of the reasons for this surge in luxury home sales are incentives by developers. 

According to the CBRE report, there will be a spike in residential sales and new launches in the premium and luxury housing segment due to economic growth, advantageous regulatory measures, and changing lifestyle preferences. It could result in residential sales reaching a 10-year high in 2023. 

It further claimed that as buyers look for larger living spaces following the pandemic, developers’ incentives and the introduction of smart home technology are driving the surge in sales of luxury houses. 

According to CBRE, this increases the rising demand for luxury properties among high-net-worth individuals (HNIs) and non-resident Indians (NRIs) looking for safe and lucrative investment opportunities. 

These patterns imply that the Indian real estate market is seeing the growing importance of luxury residences.  

GST on Renting of Residential Property

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The 47th GST Council meeting recommended that GST be made applicable in cases where the residential property has been rented out to a registered person under the GST starting on July 18, 2022, there has been a lot of discussion about the applicability of GST on renting residential property. Let us first clarify the status of the GST Law about the GST on renting residential property on or before July 17, 2022. 

Refer to Notification No. 12/2017 from June 28, 2017. The GST Act exempted several services, including those provided by renting a residential property for habitation. Thus, regardless of the person’s status (registered or unregistered), GST did not apply to rent a residential property. 

Let us also consider what has changed as a result of the 47th GST Council meeting’s recommendation, effective as of July 18, 2022: Following Central Tax (Rate) Notification No. 04/2022 dated July 2022, CIBIC has revoked the exemption granted to the registered person. 

By RCM, CBIC has announced the following via Central Tax (Rate) Notification No. 05/2022 dated 13/07/2022: 

Category of Supply Services Supplier of Service Recipient of Service 
Rental of a residential property to a registered person as a form of service Every Person Any Registered Individual

The PIB has now made it clear that a residential unit is only taxable for rental purposes when it goes to a business entity:

  • Rent is only taxed when a business entity leases a residence. 
  • GST is not applied when a private individual rents it for personal use. 
  • No GST, even if the business’s owner or partner rents the home for personal use. 

Let us now assess the various scenarios to determine the effect of the GST’s applicability on renting residential property starting on July 18th, 2022: 

  • Registered under GST: If the tenant and the landlord are listed under GST, the tenant will be liable for paying GST due to the reverse charge mechanism. The tenant is thus eligible to submit an ITC claim. 
  • Renting property from a landlord not registered under GST: In this case, liability arises for the tenant under the reverse charge mechanism. 
  • When an unregistered tenant leases property from a legal landlord with the government, the tenant is not liable for paying the tax because the landlord stands with the law. 12/2017 Notification, dated 29 June 2017. 
  • Unregistered Landlord and Tenant: No GST liability exists because both parties are still subject to the GST. 12/2017 Notification, dated 28 June 2017. 

There might also be some other situations: 

  • Renting a residential property for employees is done by Company/LLP/Firm/AOP/BOI: In this scenario, GST will be paid via RCM, and ITC can be reclaimed. 
  • Rental of a home by a registered composition dealer: In this scenario, GST will be paid under RCM, but under the rules that apply to composition dealers, GST paid under RCM cannot be claimed as ITC. 
  • An individual registered for GST as a proprietorship business decides to rent a residential property for himself. In this situation, GST must be paid under RCM, and since it is a blocked credit under the terms of the GST Act, it cannot be claimed as an ITC. However, according to PIB’s clarification on Twitter, no GST is applicable. 

Plan of Residential Building

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An engineering or architectural drawing set known as a building plan is necessary to explain the proposed construction of a building. It also serves requests for approval to notify the appropriate authority. A building plan shows everything, including the surrounding property and the arrangement of the rooms, doors, and windows. Because it is too technical for the average to understand, you should read this blog to learn how a building plan functions instead: 

What is a residential building plan? 

A residential building plan aids in envisioning the project before it is known as the site’s blueprint. Elevations, electrical and plumbing details, floor plans, structural plans, cross-sections, and landscape sketches make up a building plan. It is frequently consulted by civil engineers and architects when constructing a building. 

Types of Residential Building Plans 

I will share with you various residential building plans and designs right now. We are aware that many types of residential buildings, including: 

  • Office structure
  • Industrial buildings 
  • An apartment complex
  • Bungalows, etc. 

These capabilities can be in communal spaces or rooms or have specific rooms for each work. It depends on the type of residential structure. 

A residential building typically has a drawing room, a dining space, a living room, a sleeping area, a kitchen, and an area of convenience. 

Industrial building: This building houses contemporary activities for various residents and usually sits near important transportation corridors outside of city areas. Modern stops can consist of mechanical structures that can fall into one of four categories: 

  1. Significant assembly: highly modified buildings with the tools and supplies manufacturers need to work on and finish projects. 
  2. Modern, flexible structures that typically combine office and mechanical space are known as “flex mechanical” structures. 
  3. Mass stockroom: these typically enormous buildings serve as circulation hubs. 
  4. Light get-together: These commercial properties are not altered and can easily change their configurations. The gatherings of items, stockpiling, and office space are common uses.  

Office Building: 

These are both single- and multi-tenant office buildings, and many are adaptable. Both urban and rural properties regularly receive their orders. Skyscraper properties and high rises are common in significant urban communities where there are urban places of business. Businesses in rural areas often include midrise buildings that have no central location.  

Class A buildings, known as the most prestigious, have state-of-the-art frameworks, fantastic completions, readily apparent proximity, and excellent availability. 

Class B structures feature adequate frameworks and reasonable completions but a less appealing area. 

Class C buildings target people looking for intentional space at rents below the average. 

Bungalow: 

The Bengal area in South Asia is where the word “bungalow” first appeared. It is a small property with a nursery area, a delete, employee housing, and other areas. An image of high status is a cabin. It may have multiple floors despite being intended for a single family. 

Each relative has their own space, and there is a slight separation between areas like the front rooms. Any area of the house can be rebuilt to meet a need, depending on the necessity. A bungalow is a substantial piece of land; it offers more square footage than all the other houses.

Principles of Planning a Residential Building

Keeping the following guidelines in mind will help you plan a residential building. 

These ideas include: 

Features 

The home’s layout should allow the family to live comfortably. The building’s orientation is the subject of the aspect. The placement of the doors and windows in the house’s outer walls should be such that the breeze and a lot of sunlight can enter the building. With the right doors and windows in the right places, each room should have adequate ventilation and lighting. Building features offer convenience, cleanliness, and appealing views.    

The kitchen should receive fresh air from outside, which can remove cooking fumes and keep the space cool during the day. Bedrooms should face either south or south-west. Building a verandah to the west of the bedrooms is necessary to shield the walls from the sun’s rays. The living or drawing room may face either the northeast or the southeast. 

Prospect: The view from the front of a house. 

The house needs a good view so that those who live there can feel happy. If someone was to see it from the outside, they should have a positive impression of it. Prospects should highlight appealing aspects of the home while obscuring unfavorable ones. The house must have good qualities like comfort, cheer, security, labor, efficiency, a modern appearance, and an appealing exterior. For instance, bay windows or small projections can provide an inviting view in addition to a breeze, light, and sunlight.  

Grouping: 

It implies that rooms should be in a circle. There should be separate spaces for various activities. Grouping the open or public spaces like the dining room, family room, living room, and drawing room can be beneficial. Separate the bedroom, study room, dressing room, and bathroom from separate the bedroom. The kitchen and dining room should be close by. There should not be a kitchen next to the drawing room. All the rooms should have access to the bathrooms. The kid’s room ought to be close to the parent’s room.  

Sanitation: 

The cleanliness of the home affects the health of the family members. Provision is there to ensure proper lighting, ventilation, cleanliness, and other sanitary conveniences in the house. Each room should gave adequate lighting and ventilation. For cross-ventilation, the room should have windows on both its opposite walls. There should be two or three windows on different rooms’ walls, not just one, to ensure that each room gets enough light and air. 

Flexibility 

It indicates that the room can serve a variety of purposes. Flexibility of space is crucial when there is a lack of it. For instance, a living room could double as a bedroom at night. Both cooking and eating should be done in the kitchen. Bedrooms can be double as study spaces. Those who live in apartments need to be flexible.  

What Is Residential Property?

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Residential property is any building or unit zoned and intended for use as living space. It is one of two types of general estate, the other being commercial property. Residential property is typically owner-occupied, but it’s not always the same. According to industry standards, any property with less than five units not for commercial use is residential. Commercial properties are more expensive and have a mix of residential and commercial use. 

India has residential properties to suit a variety of lifestyles, preferences, and budgets. Understanding the various types of residential properties available is essential for making an informed decision, whether you are a first-time homebuyer and investor or looking for a second home. This blog will look at the various types of residential properties available in India and assist you in deciding which one is best for you. 

Types of Residential Properties 

Floors for Builders 

In low-rise buildings, builder floors are self-contained residential units. A different person or family owns each floor. Builder floors combine the convenience of shared infrastructure, such as water supply and security, with the benefit of independent living. 

Gated Communities 

Residential complexes with controlled access and shared amenities are known as gated communities. They provide a mix of apartments, villas, and row houses in a secure setting. Landscaped gardens, clubhouses, sports facilities, and 24-hour security are popular features of gated communities, which provide a holistic living experience. 

Plots 

Plots are parcels of land that are available for sale for residential use. Buying a plot allows you to design your own home. It also lets you choose the type of construction, layout, and materials you want. 

Apartments 

Apartments, also known as flats in India, are the most common type of residential property. They are usually part of multi-story buildings with individual units. Apartments come in different sizes, from small studio apartments to large penthouses. Furthermore, they frequently include shared amenities such as parking, security, and recreational facilities. 

Independent Houses 

Independent houses, bungalows, and standalone houses are single-family homes with no common walls. As a result, they provide increased privacy, freedom, and space. Independent houses are ideal for those seeking exclusivity and the ability to personalize their home. Individual homes are for those seeking exclusivity and the ability to personalize their home. 

Villas 

Villas are luxurious standalone properties that provide plenty of space, modern amenities, and a high level of customization. They frequently include private gardens, swimming pools, and exclusive amenities. Villas offer a luxurious living experience and are popular among wealthy homebuyers. 

Reasons to Invest in Residential Properties 

Real estate is an excellent investment option because it can generate passive income without triggering income tax provisions. Investing in residential properties ensures that your long-term returns are higher. A residential property’s value rises over time, making it an effective strategy for beginning to accumulate wealth. 

Here are some reasons to invest in residential properties 

Increased and consistent rental income

The vast majority of home investors’ per capita standard of living has risen due to the rise in rental income. Home buyers can earn substantial rental income, leading to a peaceful life. The housing rental market is increasing the country’s economic engine, and any economic development will result in higher rents. As a result, even if you raise the rent, there will always be a supply of tenants. 

Affordability 

Residential properties are known for their competitive pricing, which boosts interaction between potential buyers of flats and apartments. The absence of a business incentive is one of the major distinguishing features of residential housing. The lack of profit-driven behavior stabilizes the housing market because developers know that raising apartment prices will result in less demand. 

Additionally, it is essential to understand how to invest in residential properties, monitor upcoming real estate market trends, and watch for the growth of contemporary infrastructure and transportation options.  

Tax benefits 

Residential properties are exempt from taxes and GST. Furthermore, income from investments in residential property is not subject to self-employment tax. But to be cautious, ensure the appropriate consultations occur with tax professionals before investing your money in any property. 

Investors can reliably grow their savings without risking any risks by investing in residential real estate, which gives them a sense of security. More security during trying times and protection for your investments are home. 

Conclusion 

Your lifestyle, preferences, spending power, and long-term objectives will all play a role in helping you choose the ideal residential property in India. Independent homes and villas offer more privacy and customization options than apartments while providing convenience and shared amenities. Gated communities offer a safe and well-equipped living environment, whereas plots let you create a home that is uniquely yours. Builder floors strike a balance between individual freedom and communal facilities. 

Can a residential real estate agent sell commercial property?

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Commercial and residential real estate brokers come from the same industry. The simple fact that both agents work in real estate is the only obvious similarity. The property type that each individual specializes in becomes the defining characteristic. Residential real estate agents assist clients with buying, selling, and renting property for their use. 

On the other hand, commercial property agents handle real estate used for business or investment purposes. These agents advise investors on risk issues and ensure they get an ROI when they buy and sell real estate. They also lease properties, locate new spaces for their assets, and locate new areas for their client’s businesses.

Now, we have to consider several factors to elaborate on other differences. What skill sets do they possess first, for instance? What kind of transactions do they handle, what sort of property do they deal with, etc.?

Properties’ nature

One of the vital factors is the type of property. It covers topics like the number of housing units, the kind of building, the size, etc. You might need a commercial property agent when you want to buy or sell a property with more than four properties. Such transactions require commercial real estate loans, with stringent requirements and technicalities that may be challenging for a residential agent to complete. On the other hand, residential agents can complete transactions that do not require extensive 

residential agents to complete. On the other hand, residential agents can complete transactions that do not require extensive commercial knowledge. 

Skillset

Let’s start with the most fundamental factor in deciding if a residential agent can sell commercial property. Both residential and commercial agents must have specific skills to sell a property. Agents are expected to have perseverance, bravery, and strong communication skills. However, selling commercial properties necessitates a thorough knowledge of economic principles. Commercial agents work with properties that require them to understand concepts that residential agents might become familiar with, such as gross rent multiplier, cap rate, internal rate return, etc. However, commercial transactions may be made when residential agents are skilled in aspects of commercial property. Consider a residential agent with extensive knowledge of rent rolls, caps, and internal rates. They’re in a position to conduct business thanks to these skill sets. 

Partnership 

A residential real estate agent can sell commercial property by collaborating with a commercial agent. In addition to helping the client get the best rates, working with a commercial agent offers independent analysis. 

Databases create an issue for qualified residential agents. Most commercial businesses maintain a database of available lease spaces. A residential agent may not, thus, have access to these “private” lease spaces. 

Conclusion 

Agents who specialize in residential sales may also be able to sell commercial properties in some circumstances. Nevertheless, depending on the type of property you are dealing with, it is advisable to select a knowledgeable agent. Choose a residential agent if the property is for personal use; commercial agents are better suited for dealing with commercial real estate. Working with an expert gives you value for money and service. 

Real Estate Chennai Grows Faster Than Bangalore

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Recent trends in Chennai real estate show that it will stand with Bangalore real estate. How far it will take place? Following comparative analysis will tell you how far.

chennai real estate seems to be in safer hands

Chennai Real Estate Seems to Be in Safer Hands. ( image source )

Chennai and Bangalore are two prominent South Indian cities which generate new business. Both the cities have witnessed a higher level of growth in the recent past yet Chennai real estate stands little higher.

Real estate sector in both these cities are growing very fast. Of course Bangalore might stand steps ahead regarding the maturity aspect. Market growth of Bangalore which preceded that of Chennai can be counted as the reason behind this. Continue reading →

Real Estate Investing in Pune, India’s Other Growth City

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Most of the funds are based out of Mumbai, which gives Pune obvious preference, as the city’s proximity allows these funds to track and monitor the market – and their investments – easily. Also, Pune is among the most rapidly growing cities in India after Mumbai, NCR and Bangalore.

According to Sameer Gholve, Manager of Capital Markets at Jones Lang LaSalle India, Pune has been favoured destination amongst Real Estate PE funds since 2005 – the year FDI opened for real estate.

The total flow of PE funds into Pune until December 2011 was approximately US$800 million. This consisted of both foreign and domestic monies through around 32 major transactions over the last five years. 2009 saw the lowest flow of private equity funds into the city, though Investors regained confidence in 2010 arrived. The renewed investor confidence resulted in a massive recovery of private equity deal closures in Pune

As expected, most of these funds have been invested in the residential property asset class. In fact, residential real estate has proved to be the most consistent and enduring magnet for private equity funds into Pune’s real estate sector. In comparison, investments into SEZs, industrial parks (STPIT) and mixed-use townships have primarily been seen only before mid-2008. From 2010 onwards, the interest in these formats as asset classes has been quite meagre.

Significantly, 61% of the total private equity investments that have been seen in Pune were done in projects located in East Pune. East Pune has the majority of the city’s IT industry developments such as Magarpatta Cyber City in Hadapsar, EON IT Park in Kharadi, CommerZone in Yerawada, Weikefield IT Park on Nagar Road, etc. These IT developments have had a major spin-off effect on the profile of these areas. The higher spending power and commensurate aspirations of the people working in these establishments has caused the arrival of massive malls and also generated a huge demand for quality residential projects. These projects are proving to be the major magnets for private equity investments into Pune’s real estate sector.

NRIs want to buy home in India

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NRIs are investing into residential real estate specifically in large Indian cities to build a back-up base in the country as many of them intend to set up businesses in these cities in the future. I think there is  not a single non-resident Indian (NRI) who is not keen to buy real estate in India. Having a own home in this country is one of the means available to them to stay connected to their motherland. As they make their fortunes abroad, such investments in their country help them to maintain their relationships back home.

What I found most interesting was that they had not even considered eventually relocating to India when they bought property here as they have simply done it for investment.

NRIs are investing into residential real estate specifically in large Indian cities to build a back-up base in the country. This particularly applies to NRIs with professional/entrepreneurial ambitions who intend to set up businesses in these cities in the future.

As during 2008-2009 global financial crises (GFC), India has presented itself as an example of financial stability. This GFC has caused NRIs to seriously think about buying homes in India.

As per the limits regarding how many commercial or residential properties they can own in India, there is no restriction to the NRIs. But when a NRI wants to sell and take the money back, he can do so with the sale proceeds of only two units. NRIs can invest into real estate by transferring funds to India through normal banking channels, or by invest through funds in a Non-resident external (NRE)/ Foreign currency non resident (FCNR)/ Non- resident ordinary rupee (NRO) accounts maintained in India. But payment via travellers’ cheque or foreign currency notes is not permitted.

Home loan can be availed from Indian institution approved by the National Housing Bank (NHB), and loan repayment can be done either through inward remittances, debit to a NRE/FCNR/NRO account, through the rental income which is earned in India. NRIs can also apply for home loans from the employer in India, provided specific terms and conditions listed by RBI are met.

NRIs are allowed to mortgage their residential property in India with an Indian financial institution without any approval from RBI. They can also mortgage it with a foreign financial institution with prior approval from RBI.Also they can rent out their residential property without the approval of the RBI in India and the rent received can be credited to NRO/NRE account.

Pre-Slowdown Observed in Realty Prices

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Residential Property Goa | Royal Heritage - Axiom Estates
HDFC, one of the leading home-loans lenders has observed that the prices of residential realty which were hitting the peak levels are now undergoing pre-slowdown.

Deepak Parekh, the Chairman of HDFC said that there is an improvement in the economic condition and therefore, developers have started charging premiums. Due to the land prices touching sky, the realty prices also shot up.

As per the report, there was a downfall of 25% in residential real estate prices in October 2009, but now it’s steeping upwards again.

Parekh observe this change in the most active markets of India, for instance, suburbs of Mumbai, NOIDA in the NCR, a Bangalore suburb etc which all are experiencing price hike.

Also, he plans for having a real estate regulator in place.

Big Deals in Real Estate

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With a recovery in the residential portion of the real estate sector gaining ground, developers in Mumbai are banking heavily on the premium category. While relatively older apartments in South and central Mumbai continue to command a premium, new properties in these locations have not been left behind. Developers said that the big-ticket deals in the sector are in the range of Rs 5 crore to about Rs 35 crore. The price starts from twenty-five thousand to one lakh rupees per square feet. Among the properties that are bringing in high levels of interest are Mantri Ruby in Walkeshwar, Orbit Arya in Nepean Sea Road and Mittal Grandeur in Cuffe Parade. Adjoining areas like Worli Seaface and Mahalaxmi are also viewing concern from buyers. A deal for the sale of a new apartment in Cuffe Parade was hit at Rs 33 crore, with the transaction expected to be completed in about a month. One more property in Cuffe Parade, Mittal Grandeur, has an asking price of fifty crore rupees per apartment. This is for eight thousand square feet property having six bedrooms.

Mumbai flat got record Rs 28 crore

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Residential real estate prices are growing in Mumbai very fast. The highest price stands at Rs 97,842 per square feet for a flat at NCPA Apartments. The transaction took place about fifteen days ago in the Maker Tower B building located close to the World Trade Centre at Cuffe Parade.

In November 2007, the largest-ever residential transaction on record was completed when a four-bedroom flat at NCPA Apartments at the Nariman Point end of Marine Drive fetched a price of Rs 34 crore.

Real estate recovery story being scripted by investors

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The real estate recovery story is being driven by the residential segment, but contrary to the claims made by a number of developers that end-users are their main buyers, the current trend is being driven by investors.

Investors are back in good numbers and before the curve goes up, they want to buy. Some who have bought are already hoping to book profits during this Diwali. This could be a precursor to further improvement in investor sentiments, since investors would take this as a sign to look towards a sustainable run in the future.

Investors moved away from the residential real estate market when the market crashed last year and many have not been came back. The last few months though have seen a number of affordable launches at price points, which have stimulated the market. Most developers have launched mid-income housing in the Rs 20-40 lakh range, which has created a movement.