Housing prices rise in 16 cities by up to 10.5% during Apr-Jun

Ireo Skyon, Gurgaon

NEW DELHI: Housing prices have risen by up to 10.5 per cent in 16 major cities of the country in the April-June period, while only three towns have witnessed a marginal fall, according to National Housing Bank (NHB) data.

NHB ‘RESIDEX’ tracks the movement in prices of residential properties on a quarterly basis since 2007. The NHB RESIDEX now covers 20 cities.

“Residential housing prices in 16 cities have shown rise in prices in this quarter ended June, 2012 over the previous quarter ended March, 2012,” NHB said in a statement.

The maximum increase in housing prices was observed in Pune (10.5 per cent) followed by Bengaluru (8.7 per cent), Patna (8.6 per cent), Ahmedabad (6.4 per cent) and Ludhiana (5.3 per cent).

Read more: The Economic Times

Do vacation homes make for a good investment?

You’ve just arrived at your favourite holiday hotspot, only to spend harrowing hours looking for a hotel room because you couldn’t book one in advance. What do you do? Perhaps think of buying your own house. It’s a tempting idea, especially if you visit the tourist destination at least twice a year. Does it make sense to buy a property if you end up staying there for just two weeks in a year?

Is it a good investment option or just a lifestyle choice? Should it be solely for your use or do you plan to glean income from it by renting it out for a few months? Here are some things you should consider before buying a house in a popular tourist destination.

Read more: The Economic Times

Selling two houses? Club the gains

In some cases, you’ll get the benefit only if you invest the gains in a single property in the prescribed time frame.

Exemption from long-term capital gains tax from sale of a residential property is available under Section 54 provided the gains are invested within a specified time in another property. However, a recent issue of the Income Tax Tribunal before the Mumbai Bench questioned whether the exemption was available even when more than one house is sold and the combined gains are invested in a new property.

Read more: Business Standard

Reality of realty investment

Compared to property prices, returns from markets may look pale, but real estate suffers from other problems.

Many investors (especially high net worth) prefer real estate over the stocks as an investment option. They argue that that stocks are too volatile and the price rise in real estate is substantially more.

While it is true that property prices have risen over time, so have stock prices. Sure, properties in prime locations in the metros (where supply is scarce) have risen rather exponentially. Investors who compare this price performance with the rise in the broad stock market indices will surely feel that stocks pale in comparison. However, to counter this, I can also think of myriad stocks whose rise has been nothing short of spectacular. Hence both these examples are not really representative.

There are some other features of the stock market which, rather perversely, have actually bolstered this rather erroneous belief in investors’ minds.

Read more: Business Standard

Personal Finance

Benefits of buying a house in your wife’s name

What’s the biggest advantage of buying property in your wife’s name? Pleasing her, impressing the family, being seen as a trendsetter in a patriarchal society? Yes, there is all that, but the icing on the cake is that you might shave off 1-2% of the property value. Several state governments offer women buyers a discount on stamp duty as a part of social initiatives (see graphic). Stamp duty is the tax paid to the state government when you buy a property and get it transferred in your name. In Delhi, for instance, a woman needs to pay a stamp duty of 4% compared with 6% for men.

This benefit of lower stamp duty can be availed of even when the property is gifted to the spouse. Here’s how this benefit is extended to women.

Read more: The Economic Times

How to reduce your home loan burden

There’s good news on the home loan front. Last week, the country’s largest bank, State Bank of India (SBI), cut interest rates on its home loans, unleashing what appears to be a rate war. Indian Overseas Bank has followed suit. The catch here is that instead of bringing down the base rate, to which all home loans are linked and which would benefit both new and existing borrowers, banks are choosing to bring down just the spread, which means that only new borrowers stand to benefit. The interest rate on home loans has two main components—base rate and spread. Base rate is the rate below which the bank cannot lend, and spread is the margin based on customer- and product-specific factors. In the case of SBI, for instance, while the existing borrowers will pay 10.5% interest, of which 10% is the base rate and 0.5% is the spread, new borrowers will end up paying only 0.25% as spread, or 10.25% as interest rate.

So what can the existing borrowers do? Those who were lured by teaser loans at 8-8.5% in the past two years are in a quandary because their interest burden has increased to over 11.5% as the rates automatically switch to floating rate. To be sure, all loan takers are in the same boat given that the RBI raised its key rates 13 times between 2010 and 2011.

Read more:  The Economic Times

Time to switch your home loan to get best interest rates

Shopping around for cheaper interest rates on existing home loans has been possible for a while now, but never really feasible. That’s set to change now.

With SBI slashing home loan rates this week, and other banks facing a “cut rates or lose market share” scenario, home loan borrowers may finally get an opportunity to really take advantage of the “no prepayment penalty regime”, a year after it was put in place.

Three years ago, when SBI launched a rate war with an 8% teaser rate offer, stiff pre-payment penalties deterred many borrowers with other banks from making a switch. But by the time pre-payment penalties were abolished in 2011, rate wars had abated, leaving borrowers with no attractive options for a switch.

Now, more such options are likely to open up as other banks consider a response to protect their market share.

Read more: The Economic Times

Economy

India has been the favoured investment destination in Asia: Mecklai Financial

MUMBAI: India has been the favoured investment destination in Asia, according to Mecklai Financial.

“The Indian financial markets have witnessed favouritism among the investing Diaspora compared to its Asian counterparts such as South Korea, Taiwan, Thailand and Indonesia” said the Mecklai Financial report.

On a year to date basis, India received flows worth $11 billion in equities and $4.7 billion in debt investments.

The second highest flows were received by South Korea to the tune of $6.2 billion.

Read more: The Economic Times

India to outperform other markets: Shankar Sharma

Shankar Sharma, global trading strategist at First Global, shares his view on how the Indian market is going to perform ahead. “Since India offers better value than other markets, we expect it to outperform. Commodity prices will decline in the coming months,” he added.

Below is the complete interview.

Read more: NDTV Profit

Employment

Motorola Mobility to shrink ops in India, cut 4,000 jobs worldwide

Ailing cell phone maker Motorola Mobility will shrink its operations in India and lay off 4,000 employees worldwide as part of its restructuring efforts, a report has said.

Loss-making Motorola Mobility, which has good presence in India, was acquired by Google early last year as part of the internet major’s strategy to bolster its capabilities in the Android platform – one of the widely-used mobile technologies.

The restructuring efforts at the company are aimed at reviving its sagging fortunes.

“It will shrink operations in Asia and India, and center research and development in Chicago, Sunnyvale and Beijing,” Motorola’s new chief executive Dennis Woodside said in an interview to the New York Times.

Read more: NDTV Profit

Transportation

Airlines cut flights out of Delhi after hike in airport charges

The hike in Delhi International Airport charges of 353 per cent in May has actually forced some airlines to cut flights out of Delhi. While Jet Airways has reduced its total daily flights from Delhi, Spicejet has decided not to deploy more aircrafts.

“We have definitely scaled down our operations, from operating 75 flights per day in the summer schedule last year, we have reduced it to 66 per day in the summer schedule this year,” a Jet Airways official said. The biggest Indian carrier incurred a total additional cost of Rs 55 crore annually on account of the airport charges hike, according to a statement earlier this month.

Read more: NDTV Profit

Retail

Sahara India to pump Rs 3,000 crore in its retail venture

NEW DELHI: Sahara India today announced Rs 3,000 crore investment for its retail venture, while setting an ambitious revenue target of around Rs 50,000 crore after two years.

The group claimed that it will open around 1,000 retail outlets under the ‘Sahara Q Shop’ brand initially in five states covering 60 cities and towns by 2013. The initiative will kick off from August 15.

“The company has made an initial allocation of Rs 3,000 crore towards this business. We will invest according to the need as we go ahead,” Sahara India Pariwar Chairman Subrata Roy told reporters here.

The first-phase launch of Sahara Q Shops, which would have an area of 300 square feet each, in Uttar Pradesh, Uttarakhand, Rajasthan, Bihar and Jharkhand.

Earlier this year, Sahara had announced its plans to foray into the retail sector under the ‘Sahara Q Shop’ brand of stores. These store would market a range of products under 73 categories, including staples, processed foods, personal care products and home care products.

Read more: The Economic Times

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