Surat and Ahmedabad are burgeoning investment pastures.

It has been in the news that tier II cities are flourishing at a never before rate and are becoming greener in terms of real estate investment. This is especially true in case of Ahmedabad and Surat where there is a great opportunity of investment. Surat and Ahmedabad are the two cities which top in the list and are among the 10 most affordable realty markets in India and here the flats are available within the range of Rs. 30 to 50 lakhs. This was revealed by a survey done by the real estate company JLL India. As per the statistics these two cities offer very profitable real estate investment opportunity.

Apart from Ahmedabad and Surat, the other cities that are in the list of the tier II cities with good investment opportunity are Navi Mumbai, Nagpur, Pune, Jaipur, Hyderabad, Kochi, Coimbatore and Ghaziabad.
 

These cities have a wide spectrum of investment opportunities in the real estate market with relatively low levels of property prices. These properties provide great investment incentives in the future and capital appreciation potential with healthy returns says the Chairman and country head of JLL India.
 

The latest report of the JLL finds Ahmedabad as a specific model for other such cities of India for organized and a fast paced development. The state is prospering at a fast pace with infrastructural development, bullet trains, GIFT Smart City, supportive, stable and steady government is really something great for Ahmedabad. Apart from this the gas, oil and the energy industries too along with automobile and petrochemical industries are some of the major factors responsible for the fast pace of demand in the city.
 

The trend watchers opine that the maximum supply of the properties in the affordable range fall in the range of Rs. 30 lakhs to Rs. 50 lakhs. These are mostly along the SG Highway and are in the areas such as Bopal, Gota and Satellite. The change of Surat have been because of the rapidly improving infrastructure which has helped the modernization of Surat to a significant manner. The whole city is flooded with different physical and social infrastructure. Few areas like the Dumas Road are now interspersed with variety of malls, luxury residential apartments and multiplexes.
 

The experts say that Surat is a comparatively smaller city than Ahmedabad and the excellent road networks within the precincts of the city is an indicator that the city will witness rapid change in real estate and great capital appreciation in the recent future itself. 

Govt. postpones revision in guidance value of Karnataka till budget session

Bengaluru: The State government in an effort to stabilize the real estate market of Karnataka and Bangalore has decided not to increase the guidance value of the properties for the whole of Karnataka including Bengaluru as well. Guidance value is important for any property transaction from the individual’s stand point. The reason is the stamp duty and the registration with the government would only happen at that price no matter what price the property is sold at. The decision is being taken probably to churn up the real estate market of the urban areas and especially Bangalore. This decision of the government comes at a time when the real estate market is in a lull with a huge back log of unsold inventory lying in Bangalore. It is a norm that the government revises the guidance value every November and in the year 2015 the government has been witnessed to postpone it by about three months or more. The decision was that the government would keep the revision of the guidance value in abeyance till the next state budget session.

The state government led by Mr. Siddaramaiah had earlier set a target for the government exchequer of Rs. 8,200 crores from the stamps and registration department for the financial year 2015-16. At the end of the month of November 2015 the amount mobilized by the land registration department is Rs. 4,910 crores which is still short of the set target by about a sum of Rs. 30 crore. The government data revealed that the department had collected Rs. 7, 070 crore as against the set target of Rs. 7, 450 crore. Mr. N V Prasad, the Inspector General of Registration and the Commissioner of Stamps said that the department earlier proposed a revision of the guidance values but received varied comments and objections too from the different stakeholders. The department is currently engaged in handling and investigating these objections after which an appropriate decision will be taken.

The department of land registration issued preliminary notifications with the proposed increment of the guidance value in places like Jayanagar, Rajajinagar, Gandhinagar, Shivajinagar, Bangalore Rural and Ramnagara registration areas. The proposed increment of the guidance value ranged from 10 percent to 200 percent in few of the cases. The sources from the government opine that there have been objections from few of the stakeholders which the department is looking in to. The department officials noted that the usual registration shoots up just before the time of the revision of the guidance value to avoid the payment of the extra stamp duty. But this year it did not which is not a good indicator due to which the government kept the revision of the guidance value in abeyance. The government exchequer receives three fourths of the registration fees from the BBMP (Bruhat Bengaluru Mahanagara Palike) and the different urban districts of Bengaluru. 

There is a section in the political circles who are of the opinion that the buying sentiments have gone down as noticed in the last six months due to the different macro-economic issues and varied market factors. Along with that they opine that in many places the guidance values are not rational due to which it is affecting the real estate transactions in Bangalore too.

China eyes Indian real estate market

Chinese developers are eyeing the Indian market and are of the opinion that the next ten years of growth cycle in the Indian real estate market will be like that of what China had experienced in the past decade. This was said by a spokesman of the heading team of Singapore of JLL. He also added that a considerable number of Chinese developers and builders have been studying the trends of the growth patterns of the Indian real estate market investments since the last twelve months or so. Another spokesman of the company who heads a continent said that now the Indian markets are fetching more returns than the most mature and fast growing markets of the world over.

 In lieu of the intentions of the International Property consultant JLL, they are holding high level exploratory talks with the Indian developers also to explore the investment opportunities for their Chinese clients. The Chinese developers are looking forward to make strategic partnership with the Indian developers to invest in large scale residential projects too.

The statistics reveal that the Chinese outbound investment in the global real estate market has risen by about 50 percent to a figure of $15.6 billion since the month of January 2015. The investment destinations include places like London, Sydney and New York which are among the leading investment hubs among others.

Alongside the investment spree of the Chinese developers in the world market, India has also become an investment hotspot and one of the leading groups of builders has announced the intention of investing $10 billion in the Indian markets in the ensuing ten years. They intend to construct industrial townships and retail and commercial properties too.

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The Chinese market watchers opine that while there is a call of better prospects of the Indian markets the slowdown in the Chinese real estate markets is also a reason for the Chinese developers and builders to look for greener pastures overseas including Indian subcontinent. The top officials of the international property consultant JLL remarked that a minimum investment of $ 3 - 4 billion from China can be expected to the Indian property market in the next three to four years.

Indian Real Estate Market - Investment Opportunities for NRIs

 The NRIs undoubtedly have a tie with India and it’s surely an emotional tie. If the NRIs want to buy any property for a long term purpose, the country that they remember first is India. The Indian realty boom has made the NRIs more eager to invest in their home land. There have been various surveys and reports by many and varied agencies, government bodies and private companies on the NRI’s interest in Indian property market. Out of all these there was a recent report published by ASSOCHAM, Associated Chamber of Commerce of India which has revealed that NRIs feel more confident about investing in Indian property market compared to few years back. We delve into the opportunities laid down to the NRIs in few of the sectors where there is low risk and there is an advantage too from the price point of view too.

Changes in the Indian Real estate sector

The Indian realty sector had been changing in the last one and half decade and accordingly the whole macro-economic environment of India has also undergone a change. In this spree of development, the tier 2 and 3 cities have undergone much of development with influx of various types of industries and sectors. These properties in these cities are comparatively cheaper than their counterparts in the established metropolis of the nation.

There is another important point that the NRIs need to remember is that they should target the ready-to-move-in properties rather than the under construction ones. There are realtors and developers who takes advantage of the absence of the NRIs and on top of that the under construction property will give an upper hand on the developer to do unnecessary delay which can go beyond the control of an NRI. In case the NRIs choose the constructed projects the risks of delay are totally nullified.

Investment in REIT (Real Estate Investment Trust).

REITs have added a new dimension to the real estate investment in India by the NRIs. This has allowed the NRIs to be a part of the Indian real estate growth story. The advantage is that the NRIs can still invest in the Indian property market without physically purchasing the property. Additional good news is that the REIT governed by SEBI will make it fairly transparent for them to participate.

Read On : Land Pooling System

Smart Cities – An area of smart investment.

Smart cities have been drawing everyone’s attention since its announcement. Smart cities offer a perfect opportunity for the NRIs in the Indian Real estate industry. Not only that the Smart City projects offers you both short and long term investment opportunities for the NRIs. Talking about the projects that has already kick started including the ones in Gujarat like Tec City (GIFT), Lavasa Smart City or even Kochi Smart City in Kerala, it has been noted that there had been an increment of 10 to 15 percent in the property value in less than a year. This thus is an ideal investment opportunity for the NRIs.

Know how about the construction cost involved in building a house

Every family has a dream of owning a roof over their head and each member of the family would like to add a dash of his/her ideas while building a house, which they may later call it as ‘home’. While planning to build a home there are many factors that needs to be considered beforehand or else you may run into trouble mid-way.

Know the condition on Real Estate
 

  Building a home involves costs revolving around the location of the house whether it is an urban or a sub urban area, if the structure is simple or complex, the size of the building, labor cost at that location and many more. Let’s take a look at them individually to see how these costs add up while building a home.

The shape of the outside boundary is very important while making an estimate of the construction cost. The more complicated the shape of the building, the higher the construction cost. The outside boundary includes the garage area as well.

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 The type of house you are planning to build also determines the cost. If you are willing to build a regular house with standard fittings and fixtures it might cost a little lesser but if you are planning to build a house with your ideas and choices then the costs will increase exponentially. You might like to create home with designer tiles, branded fixtures, high quality paints, attractive cabins and storage space etc., all this will only build-up on your existing cost.

The size of total built up area also decides the cost. This area includes all the common area and the total carpet area. This does not comprise of basement and garage area as they will be calculated separately. The bigger the size of the building, the pricier the construction cost. However, it works out lesser when compared to cost per square foot when compared to smaller buildings

Finally, the quality of materials used in construction like sand, bricks, iron bars, gravel, and wood also matters. The labor charges too differ in different cities. They will work out lesser in suburban areas but it will be expensive in urban areas.

So, if you are excited to build your home, don’t rush with your plan. Slowdown, get all your construction costs estimated and covered. Then enjoy a smooth flow of work and also peace of mind which comes with it. Happy constructing!

New places to attract investment in Bangalore as Reach 3B will be up and Running by March 2016

As the demand for homes in Bangalore is upbeat, new metro route is unlocking hidden corners of the city. It is one great buy-out for those smart home buyers who are waiting to grab such opportunities.

It is a well-known fact that as the infrastructure of a city develops, so does the prices of houses in that surrounding neighborhood. The prices of the land is sure to rise in the surrounding areas of Bangalore compared to the city center as the new metro train Reach 3B will connect to the corners of the city from the key locations. This trend is predicted to increase for the coming decade as the Reach 3B is all set to connect the heart-of-the-city to the south India’s largest industrial area- Peenya, Nagasandra and beyond.

Building new metro links to areas that are under-developed opens up an array of potential properties that attract smart investors quickly. Metro Reach 3B has been constructed on a stretch of 42.5 kilometer and was scheduled to be operational by May 1, 2015. But due to technical difficulties the timeline has been extended to March 2016.
 

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Metro Reach 3B will improve the connectivity to important locations, in terms of employment, such as Peenya Industrial area, Jalahalli Cross, Dasarahalli and Nagasandra. This will decrease the time of transit from 1 hour to just 25 minutes making life easier for thousands of people in the city.

The property prices are responding according to the market. According to sources the plot value is priced at 23,000-38,100 per square yard. The value of the flat too has shown year-on-year increase of 8% in the surrounding areas such as Jalahalli. A 2 bedroom home is priced at Rs. 3,900 – Rs. 4350 per square feet.

In addition to these areas, the development of real estate has extended towards Dasarahalli. It was a long drive from city to Dasarahalli, but looks like metro Reach 3B will turn it all around in favor of Dasarahalli. With many new residential and commercial projects too mushrooming across this place it is soon to be a ‘big cheese’ among the home buyers and investors.

The flats in these areas are priced at around Rs. 70 Lacs and more, by various major real estate developers. This is just the beginning and the city is yet to witness the best. It is predicted to increase exponentially as the potential of this area will increase with the advent of Reach 3 B in March 2016.

Approvals delayed in Hyderabad for Infrastructure development plans.

Hyderabad: There has been a check on the furtherance of the builders’ and developers’ plans in the city of Hyderabad. The realty sector stake holders are worried as the red tape has put an abeyance on the permissions and clearances in the city. This is primarily due to the Telangana government’s grand plans of construction of the physical infrastructure like the sky-walks and the expressways which has put approvals of thousands of buildings on hold.

The builders ruefully comment that the approvals and clearances that require to be taken before commencing any construction are moving very slowly in the regions of Greater Hyderabad Municipal Corporation (GHMC). This has an impact on the construction costs due to delay and escalation of material costs which is affecting the end user who has already invested in lakhs for their homes with expectations.

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The realtors remark that GHMC officials had been given circulars by the government in March 2015 to put all the permissions and approvals on hold as the government plans for acquisition of more land for its major projects. One among them was the construction of Strategic Road Development (SRDP) which also includes the construction of skywalks, flyovers and expressways at major junctions and nodes of the city. The higher officials of the GHMC remarked that permission of new projects would have hampered the land acquisition process.

GHMC has 47,000 pending approvals and permissions which have accumulated in the department during the last five years and out of that it has put 1500 new projects on hold. The officials remark that applications once rejected have often been seen to be re-applied which causes more delay in the system. Out of the 47, 000 requests around 38, 000 were approved and 5, 600 were rejected in the month of November, 2014. The officials of GHMC remarked that civic officials are having difficulty in identifying the different land use patterns of the city.

The officials of the top realty firms remarked that in GHMC it normally takes three months to get the building plans sanctioned which is sorted out at the zonal level. But due to the government’s plan of infrastructure development and land acquisition they are scrutinizing the plans at the head office level which is taking six to eight months to obtain approvals.