Five smart things to know about real estate terms..

1. Down payment is made to the builder to confirm the purchase decision. It typically represents a percentage of the full purchase price. It could be non-refundable if the deal falls through.

2. The sale deed is the agreement between the seller and the buyer and is proof of transfer of property to the buyer. It is signed by both the parties and also by a minimum of two witnesses along with all their details.

3. Stamp duty is the tax levied by the state government on the agreement value or the market value, whichever is higher. It is payable by the purchaser and may vary across states.

4. It is only after the payment of stamp duty that the sale deed is considered legally valid and can be admitted as evidence of transfer of property in courts. The sale deed has to be registered with the sub-registrar of the jurisdiction where the property is located.

5. The registration fee is paid for getting the sale deed registered and is associated with getting the property transferred in the name of the buyer. The original document, along with two photocopies, has to be submitted and registration requires two witnesses.

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source-ET

Nationalized banks return to fund Noida Extension projects..

Nationalized banks return to fund Noida Extension projects.

NOIDA: The Greater Noida Authority is upbeat that the Greater Noida (West) region, formerly Noida Extension, is slowly being removed from the blacklist of banks and they have started showing interest in backing buyers who want to invest in projects in the region. After the land row in 2011, banks had stopped financing such projects due to fears of land acquisition being quashed by the courts.

Greater Noida Authority additional CEO, HK Verma, said, "There was time when banks were pulling out from backing the projects, but now they are queuing up at the Authority office to be empanelled for funding development works." Verma added that public sector banks have decided to disburse around Rs 5,000 crore as home loans and other construction loans for Noida Extension realty projects.

Apart from nationalized and non-banking financial companies(NBFCs), even private banks have shown their interest in this markets. Development authorities say this will help generate a good cash flow for development works. "We are more interested in Noida, Greater Noida and Yamuna Expressway regions for lending right now, be it fresh loans or stuck installments of loans already sanctioned," said MK Manchanda, a senior officer in a private bank.

Developers have now started breathing easy after this decision of the banks. "Market sentiment is associated with funding and cash flow plays a vital role in delivering projects on time. As nationalized banks have stepped in, like Canara bank is supporting Wave group, the market situation is bound to improve," said Amit Gupta, Assocham member and MD Orris Infrastructure.

Even real estate pundits have called this development good. "Private and public sector banks are now keen to tie up with developers and this will give many choices to homebuyers to pick a financial institution that suits them best," said SS Bhasin, MD of Bhasin group and CREDAI (NCR) member.

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source-toi

Property price changes over time....

Property price changes over time....Noida Price review....

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Wait for home prices to correct further..

“Residex is a function of demand and supply of properties whereas for an individual, buying a house depends on her economic condition. So obviously, people are in a fix,” said Ranjeet S Mudholkar, vice-chairman and chief executive officer, Financial Planning Standards Board India.

The current scenario

Real estate developers are feeling the pinch of a gloomy economy. “Though the fundamentals of demand—young population and urbanisation—are intact, only those with genuine and immediate need for a residence are buying property now,” said Brijesh Parnami, chief executive officer (distribution), Destimoney Enterprises Pvt Ltd, a New Delhi-based home loan consulting and real estate advisory firm.

According to him, investor associations that were around in the bull market of early 2000s and used arbitrage—secured loan at 8% and invested in property which appreciated at a much higher rate of at least 12% per annum—to make gains are now sitting on the fence.

Also, people who were investing in their second or third houses are not doing it at present.

This has led to a shortfall in demand and has created an inventory in the real estate market, which in turn has pulled down prices.

Rising lending rates has further added to low demand.

Widening deficits, forthcoming elections and policy hurdles are some of the problems that the economy is facing at present and these factors have led to a dilapidated currency which has lost at least 20% of its value in the last one year.

“There is a lot of cloud regarding these issues and we are facing a lot of challenges on these fronts,” said Parnami. These factors are leading to an increase in interest rates because it seems that the measures taken by the government and the Reserve Bank of India, which were earlier seen as short term in nature, will stay for a while.

What to expect

Though it seems we are at the top of the interest rate cycle, we may actually see some upward movement even from here. “The way things are moving, there is room for uncertainty.

There are many factors such as the food Bill, US policy actions and our internal conflicts that may take the interest rates in any direction,” said Riten Ghosh, general manager, home loans, State Bank of India, India’s largest lender in the country.

Though Ghosh doubted that interest rates will go down immediately, he said a good buying opportunity should not be missed.

We may see further correction in real estate prices.

“It is established that we are in a freefall and in these kind of situations, developers pick up expensive debt to pay for old obligations in an attempt to avoid default,” said Sanjay Dutt, executive managing director, South Asia, Cushman and Wakefield, a real estate consulting firm. He cited similar experiences back in 2009.

In these circumstances, developers welcome equity and venture capital for the first six-seven months but once these dry up, they hit the retail market.

“There could be various schemes that would hit the markets and we expect that to happen in another four months’ time,” said Dutt.

So this could be the phase when end-users will see real correction, which was not visible until now.

What should you do?

The fundamental rule of financial planning says that if you have genuine need and the capacity to pay, then it is always the right time to buy your first property, in which you will presumably live. “If the property deal is good, buy it. If one is a genuine buyer, she should take advantage of low cost,” said Parnami.

There is another way to look at it. Say, the price of the property you want to buy has corrected by Rs. 5 lakh and the rise in interest rate will require you to pay the same amount over a tenor of 10 years.

Even in this situation, you are better off because you will not be paying the money upfront. Also, given that we may be at the top of the interest cycle, the rates may go down from here. Go for a floating rate as chances are that your interest outgo will come down soon.

If you are not buying for own use then compare returns on investment with other asset classes. “Factor in rent and other factors and then see if you are still getting better returns,” said Mudholkar.

However, if you do not have enough money to make a large down payment or you do not have a pressing need to buy a house, you should wait for the home prices to correct further and interest rates to stabilise or come down
.
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source.HT

Rising interest rates, tighter lending norms, poor sales--they all add up to an imminent slump in property prices

Rising interest rates, tighter lending norms, poor sales--they all add up to an imminent slump in property prices

Property prices in major Indian cities, including Mumbai and New Delhi, are set to slump by as much as 30% in the next three-six months as rising interest rates and tighter lending norms have led to a sharp drop in demand for homes.
"Softening in prices would begin in a month or two if sales continue to be low," said Adhidev Chattopadhyay, an analyst at Mumbai-based Edelweiss Securities Ltd. A Credit Suisse note on 19 January forecast that property sales in India may decline unless prices are cut 10-30%.

The Reserve Bank of India (RBI) has signalled borrowing costs will rise further after increasing interest rates seven times in the past year to curb price rise. It has also tightened lending norms for the purchase of property to rein in surging prices. Even as the supply of residences outstrips demand, property developers, who need to repay an estimated Rs14,000 crore to banks by the end of the financial year, are facing the spectre of loan defaults as dropping stock prices make it difficult for them to access equity markets, and banks tighten lending.


"A consensus is emerging that we are seeing the tip of a slowdown or a semblance of a bubble and the nervousness is evident on a pan-India level," said Amit Goenka, national director, capital transactions, Knight Frank India.

The Bombay Stock Exchange realty index, a measure of 15 property stocks, has dropped 26% in the last year, compared with a 17% rise in the benchmark Sen. The realty index has plunged 25% this year.

In November, RBI asked lenders not to loan more than 80% of the value of a property priced at more than Rs50 lakh. It also asked banks to increase the risk weightage of property loans of more than Rs75 lakh to 125%, making it more expensive to lend. Risk weightage assigns the minimum amount of capital that lenders have to maintain, as a percentage, depending on how risky a loan is.



"This was an additional factor along with the price rise which directly impacted investor sales in the higher end of the residential market," said Chattopadhyay.
"The loan-to-value ratio being capped at 80% effectively reduces the purchasing power of a homebuyer," analysts Aashiesh Agarwaal and Chattopaday wrote in a note to clients. "With a homebuyer having to cough up additional 5-10% equity for buying a house, he may have to delay his purchase decision, leading to a fall in incremental sale volumes."

The drop in residence sales has led to an increase of inventory in several cities. Mumbai has been the worst hit with about 88,000 unsold flats in the metropolitan region. About 25,000 of them are within the city limits of India's commercial capital, according to a survey of 2,400 housing projects in Mumbai, conducted by property researcher Liases Foras.

Recent home sales data suggest it may take as many as 22 months for the inventory to be cleared in cities such as Mumbai, Delhi-NCR (National Capital Region), Chennai and Hyderabad, said Pankaj Kapoor, chief executive of Liases Foras.

Residential sales tumbled 15% in Gurgaon, 20-25% in Greater Noida and Ghaziabad and almost 40% in Faridabad during the last two months of the past year, according to PropEquity Research.

Data from across India shows that only 15% of the home deals struck between April and September were at prices less than Rs2,500 per sq. ft, suggesting it is now difficult to buy even a 1,000 sq. ft house for less than Rs25 lakh in most cities. As a result, volumes have begun to slow and new bookings reported by major developers have been lower than expected, Credit Suisse said in their report.

"Builders have started negotiating across the table and are willing to cut prices by 10-15%, but prices need to fall further to become affordable," said Kapoor.

Some prospective buyers have now decided to delay their purchases until prices fall.

Vishal Jain, 35, has taken a break after six months of house-hunting every weekend. Jain, who runs his own optical lens business, wants to shift from his one-bedroom apartment in Ghatkopar, a Mumbai suburb, to a two-bedroom home in the Malad-Kandivali area, another suburban destination. He has a budget of Rs45-50 lakh.

"Even if I stretch my budget by another Rs10 lakh, there is nothing available other than properties in 25-year-old housing societies," Jain said. "So I can either move further north, towards Dahisar, or wait for another six months."

Indiabulls Real Estate Ltd, which is developing the "Bleu" project in central Mumbai at prices that are 15-20% lower than its earlier luxury projects, has also laid out simpler terms for its buyers to ensure sales.

A price correction will help propel volumes, said developers. Analysts predict a 15-20% correction in prices in NCR and rest of India, while "overheated" markets such as Mumbai and Ahmedabad would see a fall of 20% and above.

"If demand is low, we may correct prices," said Vikas Oberoi, managing director of Oberoi Realty Ltd. "We have corrected prices earlier and we will do it again."

In Hyderabad, the Telangana agitation has hurt both property prices and sales. In Bangalore, home to companies such as Sobha Developers Ltd and Prestige Estates Projects Ltd, sales have been stronger.

"You need to keep a price that will be accepted by the homebuyer," said J.C. Sharma, managing director at Sobha Developers. "India is growing and we know people can and are willing to spend now."

The decline in sales, however, has not slowed building activity. Construction in central Mumbai continues, with textile mills being torn down to make way for luxury housing and shopping projects.

An estimated $10 billion (Rs45,000 crore) of new housing projects are in the pipeline in the Lower Parel area of the city, with large developers such as Indiabulls, Peninsula Land Ltd, DLF Ltd and Lodha Developers Ltd in the fray to sell about 10 million sq. ft of luxury housing at an average price of Rs15,000-20,000 per sq. ft.

Knight Frank's Goenka said that despite sluggish sales of premium homes, residences that cost Rs20-40 lakh will find buyers.

Tightened bank lending, declining equity markets, private equity funds demanding steep returns and negligible property sales have compounded the trouble for property developers, said Pujit Aggarwal, managing director at real estate developer Orbit Corp. Ltd.

Indian real estate has always relied heavily on bank financing, with outstanding banking loans to the real estate sector having increased 33% in the past 21 months to over Rs1 trillion, according to Credit Suisse.

Analysts say the pressure is mounting on developers from all sides.

Hari Prakash Pandey, vice-president, finance and investor relations, Housing Development and Infrastructure Ltd, said that if the environment is hawkish--be it the government or financial authorities--decision-making is impacted, affecting business growth.

DLF, the nation's largest developer, said after its third-quarter earnings that it is banking on a series of new properties to generate cash flow and partly pare its Rs20,694 crore debt.

DLF may not meet its sales forecast of 12 million sq. ft by March, as about six of its new projects have been delayed, and due to price rises in recent months, said Angel Broking Ltd in a 1 February report.

To make problems worse, banks may further tighten lending to property developers after DB Realty Ltd and Unitech Ltd have been linked to ongoing investigations into the allocation of telecom spectrum. Lenders are turning down new loan proposals and may also take a close look at the proposed end use of loans that have already been sanctioned, but not yet disbursed to real estate companies.

"Investors want to know whether the money borrowed by developers for real estate purposes are being used for what it is actually meant or are being diverted elsewhere and they want to be doubly sure," said Rajiv Sahni, partner, real estate practice, Ernst and Young India

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source:IREF

New Look to Master Bathroom Interior Design Ideas..

 This is for the child in you or for your own children. They’d surely love this colorful addition to their bath time..

The LED Shower Head will change color from blue to red when the water gets over 89° F/32° C. Sure, you’ll probably still need to do a bit of tweaking to get it just right, but at least you’ll know when it is warm. My favorite part of this is that the LEDs are powered by the water flowing through the shower head. The water pressure builds up energy by passing through small turbines contained within.

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image source:http://www.ohgizmo.com.

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