Lenders cut EMIs, raise tenure to lure home buyers who deferred purchase

Ireo Skyon, Gurgaon

Ireo Skyon, Gurgaon

Dewakar G is looking to shift his home loan to another bank or housing finance company (HFC). Currently, he pays an equated monthly instalment (EMI) of Rs 26,048 on a home loan of Rs 22 lakh – which works out to Rs 1,184 per lakh.

“Many of them (lenders) are offering schemes at Rs 900 per lakh or slightly below. On the face of it, it looks tempting as there would be a lower EMI outflow if I opt for Rs 900 per lakh as against Rs 1,184 per lakh, which I am currently servicing. I am in talks to get the best possible deal,” he says.

Already, home loan rates are pegged to base rates (9.7-10.25%) or close to them. To boost business, lenders are pitching EMIs below Rs 1,000 for every lakh of rupees availed. The calculation for monthly home loan repayment has been roughly Rs 1,000 for every lakh for a loan availed for up to 20 years. Banks are now lowering EMIs to Rs 900 per lakh or even below by extending the tenure by up to 10 years.

Punjab National BankBSE 3.71 % has a scheme wherein the EMI is Rs 926 per lakh on a loan of up to Rs 75 lakh and a tenure of 25 years. Interest is pegged to the bank’s base rate of 10.25%. “Through this, we are looking to extend repayment tenure for the borrower up to 65 years or even 70 years of age,” a senior official of the bank said.

Read more: The Economic Times

SoBo’s high-end luxury homes find few takers

High-end properties in South Mumbai have fewer takers in a gloomy economy. While property appreciation in Sobo, as the area is fondly called, has dropped to 10% from 30% two years ago, rental yields have fallen by more than half.

“All the newer projects in South Mumbai are in the ultra-luxury segment and it’s difficult to find buyers for these higher configuration and big-ticket homes in the current market,” said Akhil Kapur, owner of real es tate brokerage firm AJ Housing.

In Mumbai’s real estate market, buyers can’t sell a house until a project is complete, compounding the problems of those who have invested in multiple houses.

Newer projects that are marred by delays and longer exit-duration clause are not investor-friendly , said Puneet Sejpal, who runs a gas station and invests his business surplus in South Mumbai properties. “The lock-in period is so long that sometimes you are bound by the developer to not sell a house, till the project is delivered.”

According to property consultants, sale of new property has dropped 30% in the past eight to 12 months, with fewer investors and end-users willing to buy expensive homes. For every 100 homes available for sale in a quarter, only six are getting sold.

Read more: The Economic Times

Realtors seek change in stamp duty clauses

Real estate developers have sought the abolition of stamp duty, while entering into agreements with land owners to execute various projects.

Though such a provision exists in the state since 2003, it was practically not affecting builders, as most of them never registered with such agreements. However, after banks recently started insisting on registration of such agreements before sanctioning loans, builders have now become jittery.

While the Confederation of Real Estate Developers Association of India (Credai) state unit has submitted a memorandum to revenue minister S N Patro recently, the Real Estate Developers Association (Reda) of Odisha is planning to make a similar representation soon.

“The government is taking stamp duty twice in case of real estate projects. First, when the builder signs an agreement with the land owner to construct a project. Second, when individual buyers purchase houses from the developer. This duplication should be avoided,” said Reda president Pradipta Biswasroy.

Read more: The Times of India

Economy

FDI up 6% at $10.87 billion in first half of 2013

Foreign direct investment (FDI) into India increased by 6 per cent year-on-year to $10.87 billion during the first six months of this year.

According to data from the Department of Industrial Policy and Promotion (DIPP), the country had received $10.27 billion of FDI in January-June, 2012.

“FDI inflows have a positive impact by supplementing domestic capital, technology and skills of existing companies as well as through establishment of new companies,” an official in the DIPP said.

Sectors that received large FDI inflows include hotels and tourism, pharmaceuticals, services, chemicals and construction.

Most of the inflows came from Singapore, Mauritius, the Netherlands and the US.

The official said the country will receive more and more foreign investment on the back of recent liberalisation in the FDI policy regime.

On August 1, the Government liberalised the FDI regime in about a dozen sectors, including telecom, and relaxed investment norms in multi-brand retailing.

India attracted $22.42 billion of FDI in 2012-13 compared with $35.12 billion in the previous fiscal.

Read more: Business Line

Good news for the Indian economy

Charles Dickens may lose his balance under our present conditions and be compelled to say: it is the worst of times, an age of foolishness, the epoch of incredulity, the season of darkness, the summer of despair, we have nothing before us and we are all going direct to hell.

Our economy is currently in a shambles. Several years of misrule and missed opportunities have resulted in slowing growth, a plummeting rupee, increasing indebtedness, and rising inflation and joblessness. It has pushed us Indians into a panic. But, hang on before you buy that one-way ticket. A silver lining is emerging on this very dark cloud.

Speaking specifically of cumulonimbus clouds, we have had a very good monsoon season. According to the Indian Meteorological Department (IMD), India has had cumulative seasonal rainfall of 804mm versus a normal of 742mm, resulting in 8% excess rainfall. The spatial distribution of this rainfall (except for Bihar, Jharkhand and the North East) has been excellent and should support a bumper crop. The Food and Agriculture Organization (FAO) said that cheaper global food prices last month reflected declines in corn, wheat and edible oil prices. Prospects for a rebound in global cereal supplies to record levels have reversed the price trend this year. The FAO price index, which measures monthly price changes for a food basket, is at its lowest since June 2012 and is expected to decline further.

Read more: Mint

Education

Delhi, NCR lead in quality of schooling

Delhi’s Vasant Valley School is the best of its kind (co-education, day school) in the country. In fact, five of the top-10 co-ed day schools in the country are in Delhi-NCR — The Shri Ram School (Gurgaon-Delhi) is fourth, Step by Step (Noida) is fifth and Springdales School (Dhaula Kuan) and Sanskriti School (Chanakyapuri) are seventh and ninth respectively.

Over 5,000 “fees-paying parents, teachers, principals and educationists” across India were surveyed for the Education World India School Rankings 2013 and at total of 593 day, 75 boarding and 57 international primary-secondary schools have been ranked. “Respondents were asked to rate schools of whom they were aware on a 10-point scale — except for ‘competence of faculty’ parameter,” says Premchand Palety of C-fore which did the ranking. Any school which got less than 25 respondents to mention it was automatically dropped from the list. The survey was conducted in 21 cities.

The Valley School (Bangalore) has got top rank in the day-cum-boarding category; Modern High School (Kolkata) and Campion School (Mumbai) are the top girls’ and boys’ schools in the country. Among the boarding schools Rishi Valley School (Chittoor) topped in co-ed category, while Welham Girls School (Dehradun) and The Doon School (Dehradun) ranked first in girls’ and boys’ categories respectively.

The international day schools list is dominated by Mumbai schools — there are five as opposed to only two from Delhi-NCR (both Gurgaon). Delhi-NCR does better on the day-cum-boarding list — it features five.

Source: The Times of India

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