Recently property transactions were down in Beijing, but the worst may have not come yet. Property agencies and brokers in China are the worst hit during this housing downturn as most of real estate developers sell apartments through agents. Hundreds of property agencies were closed in Beijing in last few months as real estate developers in China are also facing a liquidity crisis amid the housing slump and have to suspend some projects and cut jobs. Real Estate Agents are cautious about changing their jobs amid the impending global recession including in real estate industry.
This downturn comes as the growth of China's exports has slowed and stock markets have plunged. These events has resulted in what economists describe as a deceleration in growth, although at nearly 10% China remains strong, and unlike US sub-prime meltdown and credit crisis, weaknesses in Chinese realty market does not appear to pose a threat to the vitality or stability of the financial system. Nevertheless, it may take a couple of years for the housing market in China to stabilize and develop again. Meanwhile, consolidation and rethinking of business strategies should fill-in management thought processes in order to grow in this new world economy.
Courtesy : Realestatetimes.in
Monday, April 20, 2009
Saturday, April 18, 2009
Guidelines on buying a plot
What is a Plot?
A Plot, also called site, is a small piece of land with certain dimensions.
What is a Layout?
A layout is division of a large piece of land into a number of Plots. There shall be Open Site Reservation (OSR) at a minimum of 10 per cent of total area of layout.
Is just Panchayat Approval not enough ?
No. Approval without LPA or DTCP permission is NOT valid. This is true for both Town and Village Panchayat
How do I know if proper approval is given?
The approved Plan of the layout or site is affixed with seal of LPA or DTCP along with a reference number, date and signature by hand. In addition, local body also affixes its seal along with a reference number, date and signature by hand. If both these are present, approval is proper. Make an effort to check on these reference numbers with the respective authorities.
Is a separate Building Approval needed on already approved site?
Yes. Separate Building Approval is needed. Pre-requisite to this is plot approval.
I have purchased one site in a layout from a builder and got him build my house on it. He has given building approval plan only by Panchayat. Is this sufficient? I do not find OSR in the layout.
No. The layout should have been approved by LPA or DTCP first. It is not correct for Panchayat to issue building license without plot/layout approval. Had it gone for approval by LPA, OSR would have been provided. The house itself is now an unauthorised construction.
What is the requirement for approval of a housing plot?
First, it should gain access from a Public Road. Minimum plot size should be 52 feet by 20 feet.
In a layout, what is the status of roads?
In approved layout, all roads are public owned. Promoters are required to surrender road and OSR to local body by gift deed, before getting issued with a licence.
For what purpose can I use a layout site?
Usage of site is decided by approved ‘land use’ given to the entire layout. It can be residential, commercial, mixed, industrial or other as given in the approved layout plan. A Layout with house sites cannot be used for industrial purpose.
What details should be checked for buying a site in a layout?
a) Look for LPA or DTCP approval number and seal, and Local Body Licence number and seal. Do not accept mere ‘Panchayat Approval’ or ‘near DTP approval’, and not even just approval from LPA or DTCP. Final approval by Local Body is a must.
b) Check if usage of site is for residential or other purpose that you are interested in.
c) Check if area of OSR, marked as Play Area, Garden, Park or other, is at least 10 per cent of total layout area
d) Read all conditions attached to the approvals.
e) Get to know the status and purpose of land marked ‘Owners Site’.
f) Confirm, no development charge or other need to be paid while you apply for a building licence. Approach your local body office for verification.
g) Get Encumbrance Certificate and establish owner of your site. If it is not the layout promoter mentioned in the approval papers, ensure your sale deed is made by the current bonafide owner. The sale deed should have an attachment of a copy of approved layout plan clearly indicating dimensions of your site.
h) Clearly understand liability of the seller in case of any irregularities with the property and sale. You may consider including a compensation clause.
i) Get a legal opinion, before commitment.
S. KANAGASUNDARAM
PRESIDENT OF ASSOCIATION OF LICENSED BUILDING SURVEYORS, COIMBATORE.
Courtesy : The Hindu , Thanks to Mr. Kanagasundaram
Thursday, April 16, 2009
Real estate investments picking up in metros
Real estate investments picking up in metros: ASSOCHAM
Courtesy : India Infoline News Service / Mumbai Apr 16, 2009 15:33
ASSOCHAM President Sajjan Jindal said that the Indian metro cities continue to be the favorite destination for real estate development
Even though real estate has been the worst victim of high cost economy, especially after the meltdown set in, yet it’s share in total private sector infrastructure investments in the metros in last six months works out to be 12%, followed by 10.26% in hospitality, says an assessment of the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
However, metro rail projects accounted for maximum of 27% share in total money injected in metro cities for infrastructure development under central, state, local government including corporates. Sewerage and solid waste management investment in the Tier I cities constitute the major chunk of investments, specifically via government mode. Mumbai (Rs166.94bn), Chennai (Rs15.88bn) and Bangalore (Rs13.54bn) are the major recipients of sewerage related investment. In percentage terms, it works out to be 16.90% of total infrastructure investment.
In a statement, ASSOCHAM President Sajjan Jindal said that the Indian metro cities continue to be the favorite destination for real estate development. The real estate projects constituting residential as well as commercial projects, have pocketed investment worth Rs157.10bn. The southern twin cities of Bangalore and Hyderabad have enjoyed maximum attention of the real estate developers.
The Karnataka capital, Bangalore is the frontrunner in terms of real estate projects planned for the metros with the investment estimated to be Rs79.90bn. Hyderabad at second place among all the cities, has bagged projects worth Rs4050 in realty space. With India being placed as versatile tourist destination across the world and steep rise in tourists arrival in India in past few years, hospitality has been considered as a crucial part of a well-developed infrastructure for the metro cities.
Chennai has come into front run in terms of funds directed towards construction and renovation of hotels. Investment of Rs40bn is being planned to infuse in constructing a five star hotel by ITC Industries in Chennai. Jindal said that as the Tier I cities in India are working out hard to offset the huge pressure on their existing infrastructure, it is the metro rail projects which have been the key driver of the infrastructure investment in these cities with metro projects costing Rs340bn.
The Study is based on the ongoing projects of central and state governments and those announced by private sector in last Six months. Six metro cities taken in the study included Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore. The key challenges faced in the metros include transportation and water supply.
In transportation sector, other than metro rail, Rs62.83bn are being pooled in, accounting for 5% share. Roadway projects in the Tier I cities which include bridges, ROBs, highways and expressways, have been allocated Rs58.19bn. Water Supply projects, primarily being undertaken by the central government under Jawaharlal Nehru National Urban Renewal Mission, have absorbed Rs57.57bn investment with 4.54% share.
Courtesy : India Infoline News Service / Mumbai Apr 16, 2009 15:33
ASSOCHAM President Sajjan Jindal said that the Indian metro cities continue to be the favorite destination for real estate development
Even though real estate has been the worst victim of high cost economy, especially after the meltdown set in, yet it’s share in total private sector infrastructure investments in the metros in last six months works out to be 12%, followed by 10.26% in hospitality, says an assessment of the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
However, metro rail projects accounted for maximum of 27% share in total money injected in metro cities for infrastructure development under central, state, local government including corporates. Sewerage and solid waste management investment in the Tier I cities constitute the major chunk of investments, specifically via government mode. Mumbai (Rs166.94bn), Chennai (Rs15.88bn) and Bangalore (Rs13.54bn) are the major recipients of sewerage related investment. In percentage terms, it works out to be 16.90% of total infrastructure investment.
In a statement, ASSOCHAM President Sajjan Jindal said that the Indian metro cities continue to be the favorite destination for real estate development. The real estate projects constituting residential as well as commercial projects, have pocketed investment worth Rs157.10bn. The southern twin cities of Bangalore and Hyderabad have enjoyed maximum attention of the real estate developers.
The Karnataka capital, Bangalore is the frontrunner in terms of real estate projects planned for the metros with the investment estimated to be Rs79.90bn. Hyderabad at second place among all the cities, has bagged projects worth Rs4050 in realty space. With India being placed as versatile tourist destination across the world and steep rise in tourists arrival in India in past few years, hospitality has been considered as a crucial part of a well-developed infrastructure for the metro cities.
Chennai has come into front run in terms of funds directed towards construction and renovation of hotels. Investment of Rs40bn is being planned to infuse in constructing a five star hotel by ITC Industries in Chennai. Jindal said that as the Tier I cities in India are working out hard to offset the huge pressure on their existing infrastructure, it is the metro rail projects which have been the key driver of the infrastructure investment in these cities with metro projects costing Rs340bn.
The Study is based on the ongoing projects of central and state governments and those announced by private sector in last Six months. Six metro cities taken in the study included Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore. The key challenges faced in the metros include transportation and water supply.
In transportation sector, other than metro rail, Rs62.83bn are being pooled in, accounting for 5% share. Roadway projects in the Tier I cities which include bridges, ROBs, highways and expressways, have been allocated Rs58.19bn. Water Supply projects, primarily being undertaken by the central government under Jawaharlal Nehru National Urban Renewal Mission, have absorbed Rs57.57bn investment with 4.54% share.
Wednesday, April 15, 2009
Kolkata residential projects back in demand
The real estate sector is finally showing signs of revival, on the back of an increasing investment in the residential segment.
Property developers are of the view that there has been a significant improvement in demand in the last couple of months, and at lease one has increased prices in the last one month.
Pradeep Chopra of PS Group, said he had increased prices for one of its projects by Rs 200 per square feet to Rs 1,899 per square feet in the last one month.
Several real estate developers are also planning to launch new projects, which they have been holding for the last six months, which could be seen as a manifestation of demand revival.
"The demand for residential projects has started picking up, and the worst is probably over for the real estate sector. Property prices should look up in the coming months," said Chopra.
P S Group is planning to launch two new residential projects in Narendrapur and Rajarhat by May this year.
Harshvardhan Neotia, chairman, Ambuja Realty, also agreed that demand for housing projects had started picking up since last month.
Property prices in Kolkata and its fringes has seen a correction of almost 25 per cent in the last six months.
Santosh Rungta, president, Confederation Of Real Estate Developers Association Of India (Credai), said, "The real estate scenario is now taking a turn for the better, not only in the eastern part, but across the country. For instance, in Mumbai, there are reports that one developer could sell 700 flats in just two days."
However, the demand for commercial and retail projects are yet to see a pick-up, and the segments are still reeling under the pressure of economic meltdown. Also, rising cost of cement has been a cause of concern for the developers, though the rise has been partly set-off by falling metal prices.
Pradeep Sureka of Sureka Group said, "In the last two months, demand has significantly picked up in the property market. There is no scope for further price correction, as certain raw material prices are still on the higher side. "
Cement prices have gone up by 20 per cent in the last one year, Sureka added.
In the months of October-November last year, several property developers had started advertising freebies to attract customers. However, they are no longer pursuing the strategy.
Eden Realty, which is developing one of the largest housing project in south Kolkata, tried to woo customers by offering free car parking space with flats few months back.
However, the response to the offer was lukewarm, and the realty company was no longer in a position to offer the scheme, admitted Sachchidanand Rai, managing director, Eden Realty.
"We expected selling about 100 flats through the scheme, but could sell about only 32. Now things have started improving and customers' interest has gone up significantly, which is also translating into sales," said Rai.
Sensing the need for easier finance, rather than freebies, developers are now focusing on pragmatic tie-ups with banks.
Thus, while earlier, many developers were paying pre-equated monthly installments (EMI) to banks for the customers, under interest subvention scheme, they were now refraining from paying the entire pre-EMI.
Recently, Eden has tied-up with four banks-- State Bank of India (SBI), IDBI, Bank of Baroda and HDFC-- under its "Empowerment " scheme.
"The scheme is a refined version of the interest subvention scheme, in keeping with the concerns of the banks as well as customers," said Rai.
The scheme, though not much different from the interest subvention scheme, involves a15 per cent down payment of advance by the customer, against which Eden would receive the sanctioned home loans in tranches, based on actual completion of the project. This would reduce the burden of the pre-EMI on developers, as payments would be based on the project completion, Rai said.
Chopra of P S Group also said, "Pre-EMI was not a profitable option for developers, as pre-EMI sometimes constituted even up to 70 per cent of the EMI, which was payable only when the project is up for possession."
Courtesy : Business Standard
Property developers are of the view that there has been a significant improvement in demand in the last couple of months, and at lease one has increased prices in the last one month.
Pradeep Chopra of PS Group, said he had increased prices for one of its projects by Rs 200 per square feet to Rs 1,899 per square feet in the last one month.
Several real estate developers are also planning to launch new projects, which they have been holding for the last six months, which could be seen as a manifestation of demand revival.
"The demand for residential projects has started picking up, and the worst is probably over for the real estate sector. Property prices should look up in the coming months," said Chopra.
P S Group is planning to launch two new residential projects in Narendrapur and Rajarhat by May this year.
Harshvardhan Neotia, chairman, Ambuja Realty, also agreed that demand for housing projects had started picking up since last month.
Property prices in Kolkata and its fringes has seen a correction of almost 25 per cent in the last six months.
Santosh Rungta, president, Confederation Of Real Estate Developers Association Of India (Credai), said, "The real estate scenario is now taking a turn for the better, not only in the eastern part, but across the country. For instance, in Mumbai, there are reports that one developer could sell 700 flats in just two days."
However, the demand for commercial and retail projects are yet to see a pick-up, and the segments are still reeling under the pressure of economic meltdown. Also, rising cost of cement has been a cause of concern for the developers, though the rise has been partly set-off by falling metal prices.
Pradeep Sureka of Sureka Group said, "In the last two months, demand has significantly picked up in the property market. There is no scope for further price correction, as certain raw material prices are still on the higher side. "
Cement prices have gone up by 20 per cent in the last one year, Sureka added.
In the months of October-November last year, several property developers had started advertising freebies to attract customers. However, they are no longer pursuing the strategy.
Eden Realty, which is developing one of the largest housing project in south Kolkata, tried to woo customers by offering free car parking space with flats few months back.
However, the response to the offer was lukewarm, and the realty company was no longer in a position to offer the scheme, admitted Sachchidanand Rai, managing director, Eden Realty.
"We expected selling about 100 flats through the scheme, but could sell about only 32. Now things have started improving and customers' interest has gone up significantly, which is also translating into sales," said Rai.
Sensing the need for easier finance, rather than freebies, developers are now focusing on pragmatic tie-ups with banks.
Thus, while earlier, many developers were paying pre-equated monthly installments (EMI) to banks for the customers, under interest subvention scheme, they were now refraining from paying the entire pre-EMI.
Recently, Eden has tied-up with four banks-- State Bank of India (SBI), IDBI, Bank of Baroda and HDFC-- under its "Empowerment " scheme.
"The scheme is a refined version of the interest subvention scheme, in keeping with the concerns of the banks as well as customers," said Rai.
The scheme, though not much different from the interest subvention scheme, involves a15 per cent down payment of advance by the customer, against which Eden would receive the sanctioned home loans in tranches, based on actual completion of the project. This would reduce the burden of the pre-EMI on developers, as payments would be based on the project completion, Rai said.
Chopra of P S Group also said, "Pre-EMI was not a profitable option for developers, as pre-EMI sometimes constituted even up to 70 per cent of the EMI, which was payable only when the project is up for possession."
Courtesy : Business Standard
Residential Sector likely to witness oversupply
The residential sector, which has already seen a 15-20% price correction in markets across the country this year, is going to witness a significant residential supply over the next 12 to 18 months in two key markets Mumbai and Gurgaon (NCR).
The direct implication of the over supply will be that the rentals will come down drastically which could lead to a further price correction over a prolonged period of time (one to two years).
Says Niranjan Hiranandani, MD, Hiranandani Developers:”There is no over supply in the Mumbai market. In last one month there has been a good sale of apartment as far as Mumbai market goes. There was a short phase and thing are changing. There has been softening of prices, but things will look up from May onwards. This is all a temporary slowdown and the market will pick up.”
Morgan Stanley Research Asia Pacific reveals that in the next few months mid Mumbai micro market will get six to seven lakh million sq ft of residential space as compared to negligible delivery over the last couple of years. In fact the Mumbai market has seen a 50% rental correction in prime areas from Rs 2 lakh for a three BHK in 3Q 2008 to Rs 1.1 lakh now.
Rohtas Goel CMD, Omaxe Group & president Naredco said: “The low sentiments majority of buyers are in wait and watch policy. After the recent price cut by the developers by squeezing their margins to the minimum level and interest rate cut by banks, we don’t foresee any further price correction in the real estate.”
In fact, in many markets, the level of transactions have gone down drastically, which has resulted in this dip. This is also because residential capital values in some micro markets in the metros have shown a negative growth in the last one quarter.
Says Santhosh Kumar, deputy CEO of Jones Lang LaSalle Meghraj (JLLM): “In the current real estate scenario, what is being observed is a stabilization of select markets. A consistent upswing is not possible in any market. When a large level of supply is in the offering. Real estate markets have observed high growth levels in the recent past. However, in certain areas, market stabilization has been observed. This indicates that there are not many buyers for the prices quoted for various real estate typologies at this point of time.”
In various markets, despite a slowdown in demand, essentially from the end-user and speculative investors, developers have refrained from reducing rates. But both in Mumbai and Gurgoan now developers are offering 25% to 30% discount on the market rate. Sales in secondary markets have also taken a beating with very few transactions taking place at relatively lower price points than market expectations.
courtesy : IndianRealityNews
Tuesday, April 14, 2009
Commercial Real Estate Sector shows positive signs
There are signs that the commercial real estate sector is looking up. Enquiries, which had totally dried up in the October-December quarter, are now restarting in the leasing area. Kaustuv Roy, executive director at Cushman & Wakefield says there has been a 50-70% increase in enquiries over the previous quarter. Property advisory companies have started to see this new interest since the beginning of January. Across the country, office space rentals are down 20-40% from the peak in late 2007 and early 2008, and this is one of the main triggers for the movement in the market.
“Certain sectors which are doing well even in the downturn are now starting to execute their expansion plans. They were sitting on the sides waiting for a correction,” says Anuj Puri, chairman and country head at JLL-M. Sectors like pharma, healthcare, education, telecom, FMCG and infrastructure have been comparatively less affected because of the downturn.
Because of the perceived correction, people who have growth plans are sniffing around. “These were the people who smartly held back their decisions earlier. Now that the market has started to correct, they are beginning to look around,” says Vivek Dahiya, CEO of GenReal, a property consultancy firm.
Some leasing deals have already happened in the past few months. According to sources, United Power has picked up 20,000-25,000 sq ft of space in 3C Group’s Green Boulevard; Mid Land Credit has picked up 80,000 sq ft in sector 44, Gurgaon; a management institute has picked up 44,000 sq ft in Gurgaon; Avenue Capital has taken 2,000 sq ft at Global Business Park in Gurgaon; Asia Pacific Diagnostics has taken 1,500 sq ft at Global Orchid and Future Generali has picked up 6,000 sq ft at sector 29, Gurgaon. Mr Dahiya feels this is a good time to do a thorough site search and selection to get the best product at the best rate and then take a decision in the next few months.
The requirement for space though is smaller at the moment. “People are not taking big positions right now. Office space pickup is happening but the size of transactions is small,” says Anshuman Magazine, managing director of CB Richard Ellis. The firm is getting some large deals as well but in a fragmented manner, unlike earlier, when there was a steady stream of large-ticket deals where companies were looking at space in the 2,00,000-3,00,000 sq ft range. “But in this market, even to get these larger deals in a fragmented manner is a very good sign,” he says.
Rentals have rationalised in the last few months and this, along with an option to move to better quality office space is starting to move the market. “In terms of rentals, there will be a further dip of at least 10-20%, excluding in Mumbai. In this market, the expectation is that there will be a dip of further 30%. In terms of demand, it has started to pick up but is being led by strictly value for money buyers,” says real estate expert Anckur Srivasttava. According to Cushman & Wakefield, compared to six months ago, rentals of commercial office space in Gurgaon has fallen by 26%, in Noida by 17%, in Worli and Lower Parel by 38-39%, in Nariman Point by 30% and in Andheri by 33%.
Also, a positive has been the reduction in the time taken for deals to close. “We are working on several transactions which are closing in 1-2 months compared to 4-5 months last year. The negotiation cycles have reduced,” says Mr Roy of Cushman & Wakefield.
Courtesy : Indian RealityNews
“Certain sectors which are doing well even in the downturn are now starting to execute their expansion plans. They were sitting on the sides waiting for a correction,” says Anuj Puri, chairman and country head at JLL-M. Sectors like pharma, healthcare, education, telecom, FMCG and infrastructure have been comparatively less affected because of the downturn.
Because of the perceived correction, people who have growth plans are sniffing around. “These were the people who smartly held back their decisions earlier. Now that the market has started to correct, they are beginning to look around,” says Vivek Dahiya, CEO of GenReal, a property consultancy firm.
Some leasing deals have already happened in the past few months. According to sources, United Power has picked up 20,000-25,000 sq ft of space in 3C Group’s Green Boulevard; Mid Land Credit has picked up 80,000 sq ft in sector 44, Gurgaon; a management institute has picked up 44,000 sq ft in Gurgaon; Avenue Capital has taken 2,000 sq ft at Global Business Park in Gurgaon; Asia Pacific Diagnostics has taken 1,500 sq ft at Global Orchid and Future Generali has picked up 6,000 sq ft at sector 29, Gurgaon. Mr Dahiya feels this is a good time to do a thorough site search and selection to get the best product at the best rate and then take a decision in the next few months.
The requirement for space though is smaller at the moment. “People are not taking big positions right now. Office space pickup is happening but the size of transactions is small,” says Anshuman Magazine, managing director of CB Richard Ellis. The firm is getting some large deals as well but in a fragmented manner, unlike earlier, when there was a steady stream of large-ticket deals where companies were looking at space in the 2,00,000-3,00,000 sq ft range. “But in this market, even to get these larger deals in a fragmented manner is a very good sign,” he says.
Rentals have rationalised in the last few months and this, along with an option to move to better quality office space is starting to move the market. “In terms of rentals, there will be a further dip of at least 10-20%, excluding in Mumbai. In this market, the expectation is that there will be a dip of further 30%. In terms of demand, it has started to pick up but is being led by strictly value for money buyers,” says real estate expert Anckur Srivasttava. According to Cushman & Wakefield, compared to six months ago, rentals of commercial office space in Gurgaon has fallen by 26%, in Noida by 17%, in Worli and Lower Parel by 38-39%, in Nariman Point by 30% and in Andheri by 33%.
Also, a positive has been the reduction in the time taken for deals to close. “We are working on several transactions which are closing in 1-2 months compared to 4-5 months last year. The negotiation cycles have reduced,” says Mr Roy of Cushman & Wakefield.
Courtesy : Indian RealityNews
Construction tips
* Ferro cement walls are fire resistant.
* It can resist termites.
* Ferro cement walls are weather proof but a coating of quality paint can make it durable.
* Cracks in cement can be sealed with a coating of waterycement solution after wetting the surface.
Thanks to : The Hindu
* It can resist termites.
* Ferro cement walls are weather proof but a coating of quality paint can make it durable.
* Cracks in cement can be sealed with a coating of waterycement solution after wetting the surface.
Thanks to : The Hindu
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