Low price hike in cities is an investor’s concern while the end users rejoice

The real estate sector has really girdled up the loin and has reduced the prices of the properties in an attempt to surge demand. Not only that due to factors like unsold inventory, over supply and others the prices in cities are recorded to be stooping lower. The trend watchers say that this decline in prices has pushed investors out of the realty market and this is the time the end users are rejoicing. The prices in few cities have become stagnant and in few other cases the realtors and the builders are offering distress discounts. The investors say that they are unable to come out or exit out of the multiple investments they have done in the properties in the last few years. This is increasing the pain of the investors.

In cities like Mumbai the average surge in residential prices have been of the order of mere 3.3 percent in the year 2015 but in contrast the hike in prices in 2014 was 7 percent. This was pointed out by a study conducted by the global property consultant JLL India. The same situation is noted in the cities where the problems arises in the realty sector like Bengaluru, Chennai and Delhi-NCR which are big investor markets. The report of JLL says that all these markets have witnessed a surge in prices in the range of 2 percent in the last quarter of 2015.

The experts opine that the signs of maturity of any realty market is slow and gradual increase of prices which is somewhat similar to the situation of financial capital markets. The cities of the nation also shows similar kind of situation says the top officials of JLL India. The forecast for the y-o-y increase percentage for the city of Mumbai was 6 to 7 percent for 2015. The forecasted increase for the year 2016 was predicted as 6 percent as well. But the actual increase as says the experts, is expected to be much lesser. In such a situation the investors are not getting much of confidence to invest but it is a great time for the end users opines many. The investors feel on top of it that there is a trend of negative appreciation of properties in the realty market today.

The subject matter experts from Estate Agents Association of India opined that the current realty market does not offer any incentive for investors in the real estate market. The reason is the annual appreciation of properties in the major cities of India is lesser than 5 percent and the yield on lease rental is about 1.5 percent per annum. That is the main reason for the investor’s reluctance in investment in the realty sector. But the association sources opined that there are better instances also which has shown better appreciation percentages like Kolkata, Pune and Hyderabad where the annual hike in prices has been of the range of 5 to 10 percent.

In Mumbai the estimates at the sub market levels reveal that South Central and the Eastern suburbs witnessed an appreciation of 4.3 and 4 percent respectively. The hike in prices in Northern Mumbai was noted to be 3.9 percent and that in the western suburbs was recorded at 3.5 percent. Outside the cities the appreciation noted was in the order of 3 percent. The appreciation noted in Navi Mumbai was in the order of 6 percent.

All about Partial Occupancy Certificate

About Occupancy Certificate, we have all heard of! Occupancy Certificate (OC) is a certificate issued by the local statutory development authority which permits the builder to allow the buyers to occupy the building. This is mandatory to obtain for buildings having more than five units.

But have you heard of Partial OC?

Partial Occupancy Certificate can also be obtained in case of larger projects that are being built in different phases and blocks. Once a specific block is complete the concerned authorities like the BDA or BBMP in Bangalore inspects the building and grants the partial OC. Thereafter the next phases get completed and after completion of each phase, partial OC is granted and finally a common OC is given to replace the rbpartial OCs for the entire project. In short a Partial OC allows a part of the building to be occupied. 

What is the validity period of a Partial OC?

The Partial OCs are valid till the final OC is granted for the entire building or the project. 

What is the provision of Partial OC in law?

The Bangalore Building Bye-laws 2003 state that no one can occupy or allow any new building or part of it to be occupied until the occupancy certificate is issued. This occupancy certificate should be granted by an officer of a local development authority authorized to do so. He will issue the certificate if he feels that the building is completed as per the sanctioned plan and is fit to use for the purpose for which it is erected. In certain cases the authorized body may allow partial Occupancy Certificate allowing partial occupancy at different floors or sections. This implies that the builder should apply for the Occupancy Certificate (OC) from the right statutory authority like BDA or BBMP.

What are the advantages and limitations?

The biggest advantage is that you would get immediate possession even though the building is not completed fully. It is enough to get water and electricity connection through a partial OC.

The disadvantage is that partial OC is not enough to get approval for your homeloans or even application of Khata Certificate is also not possible. That can only be done after you get a full Occupancy Certificate. 

What are the essentials for the buyers?

In case the buyer of a property buys a flat or an apartment being completed in phases one can look for a partial OC. But on completion the buyer should insist for a full OC from the builder. Just like the application of the OC the developer or thebuilder needs to apply for a partial OC within a period of 30 days from the date of completion of the phase or the part of the building.

India beware, lest you get pasted under a flyover in the name of development!

India is advancing with many flyovers and infrastructural growth all over the subcontinent. There are varying political situations in whole of the country. People say there is growth in every corner. Yet another section of the society says there is corruption too. Growth can’t happen along with corruption. We are busy with people’s utterances and comments like intolerance and anti-Indianism and we waste time with all these petty things. But first of all, don’t you think life is most precious of them all? If you don’t then you can be busy with such petty things and one fine day get pasted underneath a flyover with thousands of concrete on your head and yet being alive and asking for water. 

I come from Kolkata. I know that the area near Ganesh Takiz where the flyover was built is one of the busiest areas of Kolkata. In the morning at any point of time there are at least that many people under it as you would see in Chennai Central station or a busy station of Mumbai at a rush hour. The whole flyover collapsed. The government says only 22 people died and few are injured. Dear Countrymen, how long are you going to sleep and die under the flyover and go on listening to nonsense. Please arise and take part in this kind of deadly acts which I think is even more heinous than what General Dier did in Jallianwala bagh. Don’t you think so? The reason is that was the cruelty and mindless terrorism of one man, General Dier which was open and direct. But this is the cruelty, negligence and anti-social urge of many people who are in power which is working against you and me under ground. They are still there today trying to betray the whole nation and trying to take the lives of your kith and Kin. 

IVRCL Limited which is a Hyderabad based company which got contracts for constructing flyovers in Kolkata had constructed this flyover. The Chairman of the company has stated that it is an act of God. But it is not. If you read through the analysis and study the videos and comments of the engineers and politicians you will get to know that there is marked negligence in the construction. Many big companies like L&T and others have stopped taking contracts in Kolkata and in that this company started constructing and this is what the result was. Don’t you think that this is a joint sabotage on human lives in the name of development by a coterie of politicians and businessmen? The Chief Minister Ms. Mamata Bannerjee is saying that this flyover started its construction in 2008 while CPM was ruling. Just see that she is still worried about her position and is busy in saving her political image instead of thinking of saving the lives that are remaining. Instead she should look into the fact as to what is needed to be done to prevent such untoward incidents in the future. If you do not want to get pasted under a bridge or a flyover please, please write and let your wrath, disgust and discontent about the system vent in a manner that it creates enough public furore to go against such heinous businessmen and politicians and overthrow them. We should jointly condemn such political system which allows such negligence and the businessmen that creates such public assets. If you don’t it may claim your life one day. India, Beware!!
My heart felt condolences to the diseased and the ones who are injured. May God heal the injured quickly.
Jai Hind!

Maharashtra Budget allocates Rs. 400 crore extra on cities that aren’t selected for being Smart

In his budget speech on Friday the Finance Minister of state of Maharashtra, Mr. Sudhir Mungantiwar said that Maharashtra government will set aside a fund of at least Rs. 400 crores for the development of eight cities that have been excluded from the centre’s Smart City list. The BJP led government in Maharashtra has announced this on the eve of proposing the budget. The central government selected Solapur and Pune from Maharashtra among the first phase cities that would be developed as Smart Cities which were 20 in number. But astonishingly as per the policies the cities like Mumbai, Thane, Navi Mumbai, Nagpur, Klyan-Dombivali, Aurangabad, Amravati and Nashik could not make it in the first phase.

The centre is yet to choose more cities for the Smart City projects over the next ensuing years. The minister said that even then the Maharashtra government has decided to step in to this spree of development and see that the growths of other cities are also accelerated. Thus the state government will look in to the matter and would provide the funds to implement the funds for the Smart-City plans of the eight municipal corporations that have been excluded in the first round.

 
The finance minister said that in the Smart City project the state governments are supposed to deploy equal amount of funds allocated by the central government. The state has also decided that it would allocate the same funds for the other cities left out in the first phase.

The central government has set a target of developing 100 smart cities in the whole nation under the Smart City mission. In that the potential beneficiaries are the 98 cities that have been selected. The initial funding for the projects were Rs. 48 thousand crores and in that the government choose 20 cities in the first phase. The promise is to give each of the cities Rs. 500 crore for its projects over a period of five years. The Urban local bodies and the state governments are supposed to invest Rs. 250 crore each in the same period.
The senior officials of the State Urban Development ministry opined that all the other cities would be selected in the subsequent rounds but the state has decided to release the funds straight away. The corporations have been urged to upgrade and ready their proposals which have also to be submitted to the central government. In the meanwhile they can also start the initial work of constructing the Smart City on some of the projects proposed by them.

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 In this spree of development the ten cities have already submitted their proposals together which is estimated to be worth of Rs. 32, 000 crore to the central government. Out of all these the plan of Navi Mumbai was the most expensive of around an outlay of Rs. 8, 500 crore. This was followed by Thane and Amaravati. Thane and Amaravati quoted around Rs. 6, 660 crore and Rs. 5000 crore respectively. In this the cities like Pune and Solarpur submitted their plans costing Rs. 2900 crore and Rs. 1000 crore respectively.
The minister said that apart from releasing the funds from the state government the additional funds will be arranged from external loans for the ambitious plans of the eight corporations.

Govt. to develop 1000 acre Mumbai coastline land on its own

Mumbai
The government is planning to develop more than 1000 acres of land on the east coast of Mumbai which is owned by Mumbai Port Trust (MPT). This was announced by the Union Minister of Road Transport, Highways and Shipping, Mr. Nitin Gadkari. In his statement to the press he categorically mentioned that none of the land parcels of the Mumbai Port Trust (MPT) will be handed over to the private parties or developers to develop. The government will do it themselves, said the minister. The minster also added that currently discussions are going on with international consultants about the plans and programmes.

The government has plans to develop three or four towers for different needs like financial institutions, Marina, Convention Centre, Entertainment Zone, Cruise terminal and other facilities. The Ministry of the Union government said that discussions are also going on with the Maharashtra government. Work is proposed to start at the earliest. 

In a conference organized by Edelweiss India the Union Minister said to few of the private parties in a gathering that 1300 islands of India will be converted in to tourist’s destination.  According to the Minister there are many insurance companies of the globe who have shown keen interest in investing in the Indian Infrastructure industry. But currently due to the factor of hedging the currency required for this, it has become a challenge as it will add to the cost.

The ministry also reiterated that the government plans to build 150 to 200 ring roads in the key cities of India and also plans to develop Logistics parks next to these. Nitin Gadkari said this will add to the prospects of tourism in the country which has huge untapped potential. This will also lead to good creation of jobs said the sources from the ministry.
  
There are of course other ambitious plans of the government said the Minister citing the example of Sagarmala project which is supposed to cover twelve of the key ports in the nation.  This project is aimed at improvement of the infrastructure of the port along the coastline of the country which is 7, 500 km long.

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.