Essential guide for NRIs investing in Indian real estate

In the aftermath of the Sub Prime crisis in the US and the sinking real estate segment in the EU nations, NRIs have been looking homewards for investing in real estate in past couple of years. Additionally the depreciation of the rupee in the last year has further fuelled the demand for real investment by NRIs in India. In some of the Middle East nations as well as places like Malaysia and Singapore the domicile restrictions are forcing NRIs working there to secure a home back in India when the going is good. But before investing in real estate in India the NRI must be clear about the actual benefits, the options available, the procedure involved and pitfalls that may accompany such a financial decision.

Why buy a House in India?

Read more: Moneycontrol

july2012-newsletterv2

Emerging residential hub

If you have tried to purchase a property in Gurgaon but failed due to the sky-high rates, you should move further a field to Manesar and its adjoining areas (new sectors of Gurgaon), where prices are more reasonable. Manesar is well connected to Gurgaon via NH-8: the distance is approximately 16km and travel time to Gurgaon toll booth is barely 20 minutes. The nearest railway station in Gurgaon is about 20km away. Pradeep Mishra, a Gurgaon-based real estate analyst, says: “Gurgaon’s new master plan 2021 has removed the distance between Gurgaon and Manesar with many new sectors coming up adjacent to the latter township, like Sectors 78, 79, 80, 81, 86, 92, and 95.” The IGI Airport is around 34km from Manesar. The government of Haryana also plans to extend the existing Metro line terminating at Huda City Centre all the way to Manesar – a move that will bring this township closer to both Gurgaon and Delhi.

Read more:  The Times of India

Homebuyers keep realty scene vibrant

Saturation in the commercial property segment and delay in getting possession of residential apartments have made investors in the National Capital Region (NCR) tread cautiously in their real-estate endeavours. While owning property in posh locations in the NCR still remains a distant dream for mid segment end-users, investors are still hopeful of a robust scenario at least in the residential property sector in the near future. Realtors maintain that the sizeable investments made in commercial property in cities like Gurgaon and Faridabad during the past few years have led to stagnation in the prices as well as in the sale-purchase activity in this category.

Read more:  The Tribune 

Insights for India real estate in 2013

By Ashutosh Limaye Head – Research & Real Estate Intelligence Service, Jones Lang LaSalle India

The year 2012 closed on a note of positivity as the inflation was below the Reserve Bank of India’s (RBI’s) projected levels and the Index of Industrial Production (IIP) growth increased in the last two months of the year, giving new hopes for 2013. Overall, 2012 remained inactive, affecting all the major sectors in real estate. Office space absorption remained lower compared with 2011. Meanwhile, retail faced challenges of quality supply, affecting the overall absorption. The residential demand improved; however, developers continued to struggle with unsold inventories. With the expected moderation in inflation and strengthening policies, we have gathered few interesting insights for 2013 from real estate experts. As per RBI, the policies will focus towards growth in 2013, although risks of inflation will continue to remain. Interest rates are expected to witness a downward correction of 100 to 150 bps in 2013. The softening of interest rates is expected to reduce the home loan rates, in turn increasing the buying of real estate assets. Increasing urbanization and consumption despite the slowdown in GDP growth will be the key drivers of the economy in 2013.

Read more:  The Times of India

Revival on cards

Sanjay Dutt, executive managing director – South Asia, Cushman & Wakefield

For the Indian real estate sector, 2012 was a year of cautious approach as stakeholders – developers, investors and occupiers – began the year with an air of skepticism, a trait that continued through the year. Rising inflation, rupee depreciation and increasing cost of capital added to the woes that affected demand as well as future supply dynamics of real estate in the country. Though the Government failed on many fronts and therefore had no choice but to do its bit, mostly in the second half of the year, by announcing new policies and reforms, there was limited impact of these measures within this year. Larger benefits of the policy reforms will be only be seen in subsequent years. Residential was the only sector that witnessed moderate growth, compared to the commercial sector that includes office, retail and industrial that saw limited or no growth. Many new projects were launched in the last few years, I expect most of them to complete in the next three to five years. We should witness another correction at that time before the uptrend begins again.

Read more:  The Times of India

Realtors hope for healthy market in 2013

The Delhi NCR has had a launch of 31,000 residential units during first half of financial year 2012-13, registering a dip of 22 percent compared to the first half of financial year 2011-12. The market shows a cautious outlook as sales have seen a dip. According to ‘quarters to sell’ analysis of Knight Frank India, which assesses the market health by comparing construction and sales timelines, it is observed that unsold inventory levels are showing an upward trend. Rising property prices and high interest rates have also deterred genuine buyers from taking decisions The residential demand has remained strong in the NCR, despite being characterized as a speculative market owing to the predominance of investors. However, recent revision of the circle rates is expected to bring more transparency in the market. The realty market of Gurgaon has had the highest number of launches in first half of financial year 2012-13 constituting about 33 percent of the total launched units in the NCR during this period.

Read more:  The Times of India

View from the midrise balcony at Ireo Victory Valley, Gurgaon

View from the midrise balcony at Ireo Victory Valley, Gurgaon

Approximately 26 percent decline in absorption of office space

Concerns over cost reduction, following a cautious approach by occupiers, had a negative impact on leasing activity across key markets in India. With major corporates continuing to review expansion plans and focusing on improving existing space utilization to control costs; key markets across India witnessed about 26 percent decline in absorption of prime office space during 2012. According to CBRE’s latest report on prime office space — India Office Market View Q4, 2012 — the total absorption of prime office space for 2012 was approximately 26 million sq ft as against 35 million sq ft witnessed in 2011. The last quarter of 2012 (October to December) witnessed an absorption of approximately 7 million sq ft of office space as compared to about 6 million sq ft in the previous quarter. About 70 percent of the transaction activity was dominated by the NCR, Mumbai and Bangalore.

From  Hindustan Times (Delhi edition), 19th January 2013

Premium housing on a fast lane

The market for middle-income and affordable housing may currently be facing some stagnation or going through a phase of slowdown, but that is hardly the case with the premium-housing segment. In fact, driven by the fast pace of urbanization, higher disposable incomes, new offerings and greater influx of NRIs, the luxury and ultra-luxury housing segments — with unit prices ranging between Rs 1 crore and Rs 30 crore — have not only evolved significantly over the past few years in India, but are also expected to grow handsomely in the near future at least. Sandeep Bedi, the director (systems & strategy) of BPTP Ltd, says, “There is a definite increase in the demand for luxury housing and it is clearly emerging as one of the most vibrant and dynamic real estate segments in India. We believe that there is a substantial and sustainable market for this segment and the positive response to some recent luxury projects launched by developers in Mumbai, Delhi-NCR and Bangalore bear testimony to this.”

Read more:  The Times of India

Residential supply fell by 46% in 2012 in Ahmedabad

With developers still waiting for an anticipated increase in floor space index (FSI) norms, the year 2012 saw a major drop of close to 50 per cent in total number of residential units being launched in Ahmedabad.

Moreover, while majority of the launches were in the mid-end segment, the high-end segment comprised just over 12 per cent of the total units launched in Ahmedabad, even as developers stayed away from launching any luxury residential units last calendar year.

As against 12,270 residential units in 2011, Ahmedabad saw only 6,607 units in 2012, registering a decline in supply of 46 per cent, says Cushman and Wakefield, a real estate consulting firm.

Read more: Business Standard

Policy

Tax breaks for realty sector on cards

tax-cutIf the demand for tax sops and incentives put forward by the housing and urban poverty alleviation ministry (HUPA) is accepted by the finance ministry, not only the affordable housing sector but the overall infrastructure sector may get a fillip in the coming Union Budget. Recently, Ajay Maken, the HUPA minister, submitted a detailed proposal in this regard to the finance minister as part of the Budget deliberations. HUPA has asked for infrastructure status for the housing sector under Section 80-IA of the income tax Act. HUPA has also asked for one-year extension of the tax relief under Section 80-IB of the IT Act. HUPA has also asked for extension of the service tax exemption to all categories of affordable housing projects. Currently, the projects under JNNURM, Rajiv Awas Yojana, affordable housing in partnership and other slum rehabilitation schemes of the state governments are eligible for this exemption. The HUPA ministry has also sought a separate creation of commercial real estate (housing) guidelines from the Reserve Bank of India (RBI). Currently, the housing sector under RBI guidelines are treated at par with the commercial real estate category.

Read more:  The Financial Express 

Capital gains’ tax liability on selling a house

The real estate market is growing and this is evident from the hordes of advertisements in newspapers. Buying or selling a property is not just about transfer of deeds, but also about handling your capital gains’ tax liability properly. Gains realised from sale of a property held for 36 months or more are termed as long-term capital gains. In other cases, it’s short-term capital gains. Long-terms capital gains are taxed at 20 percent, while short-term capital gains are taxed at normal rates. Here are ways to reduce your tax outflow arising from long-term capital gains:

Read more:  The Financial Express 

 

Increase in circle rates good or a huge dampener to the realty sector

The increase in circle rates came as a huge dampener to the realty sector in 2012. But what is the real implication of this raise for homebuyers: is it a curse all the way or could it be a blessing in disguise.

Real estate properties are registered at circle rates. Circle rates were introduced in July 2007 only and the capital was divided into eight categories. This is the minimum valuation at which properties are registered with the government.

Recently, the circle rates were raised in Delhi in the range of 20-200 per cent across different categories of properties in the city.

Category A localities of Vasant Vihar, Shanti Niketan, Anand Niketan saw a steep hike of 200 per cent, Category B properties saw a jump of 50 per cent while properties in the remaining six categories – C to H – saw a hike of 20-25 per cent.

The decision, effectively, ‘spared’ people in middle-class neighborhoods and urban villages across the city, and in many ways is being seen as a ploy to appease vote banks and garner greater moolah for the Delhi government’s revenue department.

Read more: The Economic Times

Infrastructure

Delhi Airport Metro to resume operations tomorrow

Delhi MetroAfter being shut for six months, Reliance Infrastructure-run Delhi Airport Metro Express would be thrown open for the public from tomorrow but trains will run at a drastically reduced speed of 50 km per hour. Trains on the corridor were earlier running at a speed of 105 km per hour. Commercial operations of the 23-km corridor that connects Connaught Place with Terminal-3 of the Indira Gandhi International Airport will begin at 5.30 a.m. on Tuesday morning. However, check-in and baggage facilities for both international and domestic passengers would not be available for the time being. Though the resumption of services would bring smiles on the faces of commuters, an 18-20 minute journey from Connaught Place to the Terminal 3 of IGI Airport will take at least 30 to 35 minutes, effectively failing the purpose of a high-speed corridor. “Reliance Metro’s Airport Express Line would run daily from 5.30 a.m. to 11.30 p.m. at a frequency of 15 minutes.

Read more:  The Hindu Business Line  | The Hindu | Deccan Herald 

Work on Haryana metro project soon

The foundation stone of the much-awaited Metro rail project between Bahadurgarh and Mundka in Delhi will be laid on February 2 by Haryana chief minister Bhupinder Singh Hooda. The overall cost of this project is estimated at Rs 1,991 crore and is expected to improve commuting in the national capital region. This will be an extension of Delhi Metro from Mundka to Bahadurgarh. The project will provide Metro link to Jhajjar district in Haryana. The length of the Metro route from Delhi to Bahdurgarh is 11.182km, of which 4.27km is in Haryana and the remaining 6.307 km will be in Delhi. Of the total estimated cost for this project, Rs 912 crore will be spent on Metro rail falling in Haryana, whereas Rs 1,079 crore will be spent on Metro rail in Delhi. The 11.18-km Metro stretch will have seven stations at Mundka Industrial Area, Ghevra, Tikri Kalan, Tikri Border, Modern Industrial Estate, Bahadurgarh Bus Stand and City Park, between Mundka and Bahadurgarh.

Read more:  The Times of India 

Makeover time for over 100 road points in city

The Delhi Parks and Garden Society (DPGS) on Monday said about 100 road points, such as those on NH 24 and in Dhaula Kuan, in the Capital have been taken up for landscaping and greenery. The DPGS is coordinating with various land-owning agencies such as the Public Works Department (PWD) to ensure greenery on roadsides, central verges and roundabouts. SD Singh, chief executive officer of the DPGS, said, “We have beautified the ITO crossing. The model is being replicated at 100odd other locations.”

From  Hindustan Times (Delhi edition) 

Economy

Growing demand for home loans lifts HDFC net 16 percent in Q3

India’s largest housing finance company, Housing Development Finance Corporation’s third quarter net profit grew 16 percent on a standalone basis boosted by strong demand for home loans from individual customers. In the October-December quarter, HDFC’s net profit grew to Rs 1,140 crore from Rs 981 crore, a year ago. “The growth in profit was because of strong loan book growth in the individual category of buyers across the country,” Keki Mistry, Vice-Chairman and CEO, said. The higher profit during the quarter indicates a growing demand for home loans in India’s tier-II and tier-III cities and higher value of each loan size. HDFC’s average loan size is Rs 21.50 lakh compared with State Bank of India’s Rs 12 lakh. SBI is the country’s largest home loan lender. Year-on-year, HDFC’s loan book grew 22 percent to Rs 1,60,434 crore. In the quarter ended September 2012, the housing finance major’s loan book stood at Rs 1,55,128 crore. Total income in the period ended December 2012 grew 17 percent to Rs 5,242 crore (Rs 4,467 crore, a year ago). Expenditure increased 18 percent to Rs 3,705 crore (Rs 3,144 crore, a year ago).

Read more:  The Hindu Business Line  | The Economic Times | The Financial Express | The Hindu | Financial Chronicle | Mint | Business Standard  

Hospitality

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Ludhiana gets its first five-star deluxe hotel

The Radisson Blu Hotel Ludhiana is now open

Malhotra book depot (MBD), the famous publishing house, launched The Radisson Blu Hotel on Friday after signing a franchise agreement with the Carlson Rezidor Hotel Group. With this, Ludhiana gets its first five-star deluxe hotel with 81 suites and rooms. Monica Malhotra, Senior Director, MBD group, said, “The hotel’s guest rooms are the largest in Punjab.” A party was also organized on Friday night to celebrate the launch. Education Minister Sikander Maluka, Congress Legislature Rajinder Kaur Bhattal and Deputy Commissioner Rahul Tiwari attended the party.

Read more:  The Indian Express 

 

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