Chai pe Charcha on Car Parking Issues in India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

Ever since congress wallah [some people call ‘wallah’ as minister J] Mani Shankar Aiyar took jibe on now Prime Minister of India Narendra Modi about his Chai wallah background, the ‘Chai pe Charcha’ has almost attained a godly status. During the election campaign, Mr. Modi used ‘Chai pe Charcha’ as one of the most effective tool to reach out to people of India.

So, how can we, mere mortals, lag behind in this race to have our own ‘Chai pe Charcha’?

Last Saturday, our team members were having a ‘Chai pe Charcha’ on the most heated topic or shall we say most trending topic in Urban India. Actually the ‘chai pe charcha’ started with one member asking “what are the 2 most pressing issues facing cities in India??” Some of them gave serious answers and some who were in Saturday mood…came out with 2 ‘P’s…yes 2 ‘P’s….One is Parking and one is Paani (water).

So, after using the power of elimination (PoE), we centered our ‘Chai pe Charcha’ on the most pressing issue facing Indian cities…and that is ‘Parking’.

India, I mean, about 40% of it (is it the right number for Urban India??)….is constantly fighting every day with neighbors, family members, traffic cops, Municipalities, Housing society head, builder, security guard, Local Chai wallah, street vendor (another wallah…thele wallah…sabji wallah, etc.). But why? Did monsoon not arrive on time? Was electricity available for only 6 hours in a day? Water issues? Garbage on the road? Or what? Well, the answer to this BIG question is “Parking”…yes sir, Parking with Capital P.

If parking issues were not frightening enough in commercial centers…then…face the new situation in residential centers now. On a visit to a residential colony in one of the metro city, one can notice a tree line of cars in front of the houses. If you are a visitor and visiting one of the residents in the colony, you will find it hard to park your car. And if you do find some space…you will find a “No Parking” board with a tag line “parking is not allowed, Tyres will be deflated...lol”.

Well…situation is under control until one abides by these ‘No Parking’ boards…however, just try flouting this rule and a heated altercation is bound to follow.

And if the resident is gracious enough to not use “No Parking” board in front of his house….then the people in and around the locality start misusing the open space. The open space will be used by the neighbor to park his 16 year old son’s new car…..or by Tina Aunty’s maid (yea…she comes in a retrofitted 800).

People in group housing societies with large number of families living together often struggle for car parking space. At most they are provided with 2 car parking spaces when they book a flat. And in most cases, the car parking space is sold by the builder. Open car parking costs less than the covered car parking.

There’s been huge debate going on in the realty market in India about the legality of paid car parking space…is it legal or illegal??

In 2010, India's Supreme Court ruled that developers cannot sell parking spaces as independent real-estate units. The court ruled that parking areas are 'common areas and facilities'. This upholds an earlier Bombay High Court ruling.

So, why are builders still charging for car parking spaces? There are some benefits of charging for car parking spaces and there are some negatives of charging for car parking spaces…

Benefits of selling car parking spaces with a pinch of salt

1. With the number of cars in Indian cities growing with each passing day, paying for parking space ought to become the general norm. This is also the only way to prod people towards public transport. Counter-Point: But, where is the public transport? We do not even have high quality buses? Then...How the hell…will I travel in this 45 degree heat from my home to office??
2. Builders of new housing societies receive little or no help from municipal authorities. In fact, many of these residential complexes are self-sustained units with independent provisions for water, power and parking spaces. In such a scenario, it is only fair that developers are allowed to sell designated parking spots. Counter-Point: That’s all been the making of builder-babu nexus. Why should we residents pay extra for the car parking spaces when the space has already been covered in the sale-able area?

Negatives of selling car parking spaces:

1. Open areas are already included in the sale-able area. Therefore, if one were to pay for car parking space, then, he/she is paying twice for the same space.
2. Allowing builders to price parking slots separately is also bad economics especially at a time when demand for parking slots either doubles or even trebles in a very short span. This is because the developer, who has a natural monopoly over supply of parking slots, has absolutely no incentive to maximize supply. The developer too will hold down supply of parking slots so that he can charge maximum prices for each parking slot.
3. Housing societies belong to the people who have bought the flats. The management of the housing society can come up with innovative ideas for parking space. Selling car parking spaces discourage management to manage their own affairs and instead one is dependent on the builder.

But, will Parking issues be ever resolved in India? The poor government has been doing what it can do…it raised the price of fuel to discourage car ownership…but no success…they are thinking of building high quality public transport system…but that will take time mate…so...What else? What can be done to resolve technical and non-technical issues of PARKING??

Comments are welcome, the ‘Chai pe Charcha’ must carry on J

Cheers

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Happy Independence Day India

Happy Independence Day India!

NirrtiGo wishes each and everyone good times ahead.

May Real Estate sector continue to shine and flourish!

Why Dwarka is one of Delhi NCR’s sought after localities?

Dwarka is a micro market which is located in the Delhi National Capital Region. It is located in south western part of Delhi in Delhi NCR and is considered to be one of the most sought after real estate destinations in Delhi NCR. There are many factors going in Dwarka’s favor which have earned it this sought after title. The area is not very pricey, has good social and civic infrastructure and is well connected to all parts of Delhi.

Dwarka lies in close proximity to both Delhi and Gurgaon. It is also well connected to Noida. It is one of those areas which is preferred by those who are working out of these cities. It is also well connected through the Blue Line of the Delhi Metro. Any area which is well connected through a metro line is constantly in demand. Metro connectivity acts as a catalyst for real estate growth for both residential and commercial properties. The Blue line of Delhi Metro Rail begins from Noida City Center and ends at Dwarka Sector 21. Almost all the major sectors in Dwarka have a metro station with a total of ten stations being present in Dwarka. The locality is also well connected to the Indira Gandhi International Airport. It is located at a distance of 10 kms from the airport. Dwarka is also well connected to the airport through the Delhi Airport Express Line. Any property which is located within a 2 kms radius from metro station witnesses a price appreciation of about 20 to 30 percent over time. Hence this is true of properties such as 3 BHK apartments in Dwarka which are located near the metro station.

The affordable rates have also made Dwarka a destination for rentals. Those who are working out of the major commercial hubs in Gurgaon and Delhi prefer flats for rent in Dwarka as they are more affordable than those in their locations. A 2BHK flat for rent in Dwarka can fetch a rental income between INR 15000 to INR 18000.

The most preferred budget range in Dwarka falls between INR 1 and 2 crores followed by the INR 20 to 30 lakhs range. The most preferred unit size for properties here is between 751 to 1000 square feet followed by the 1001 to 1250 square feet range. The most sought after apartment configuration here are 2 BHKs followed by 3 BHK apartments in Dwarka. The area is considered to be an end user’s market and falls under the middle income category.

Since Dwarka falls under the planned development category, the roads and other civic amenities are well laid out and planned here. The area also possesses educational institutions of good repute. Most of the housing units here have been developed by the Delhi Development Authority (DDA).

Whether you are looking to purchase 3 BHK apartments in Dwarka or just looking for flats for rent in Dwarka, the area will be a good fit for anyone as the property rates are not very expensive here.

This is a guest post by Sulabha Kulkarni who is a freelance writer and an avid blogger. Her areas of expertise are flats for sale in Noida.

Furnished Office Space 15000 Square Feet on Golf Course Road Gurgaon for Lease

E-Commerce, IT/ITES, Consulting, Banking & Insurance, Other financial services, or Companies looking to set up their Head Office in Gurgaon have an opportunity to lease 15000 Square Feet of A-Grade Office Space at highly attractive rental and terms. The Office space is fully furnished & ready to move and offers following amenities:

• 170 workstations
• 15 cabins
• 1 Cafeteria for 35 persons
• Separate toilets for Ladies/Gents/Directors
• 15   reserved car parking space
• 100% Power back up
• Conference hall for 50 persons

This fully furnished office space on 3rd floor with a super area of 15000 sq ft is located on one of the most prime location at Golf Course Road, Sector 53 in Gurgaon.

Office Space Details:

FLOOR	: 3rd Floor
COVERED AREA	: 15007 square feet
ELECTRICAL SANCTIONED LOAD	:  75 KW
HVAC CAPACITY	:  66.5 TR
POWER BACK UP	:  Available with DG
CABINS	:  15
TOILETS	:  3 Gents, 3 Ladies
CAFETERIA	:  1 (35 People)
NO. OF CAR PARKING	:  15

Plan:

For more details:

Visit Fully Furnished Office Space in Gurgaon

or Write to us at nirrtigo@nirrtigo.com

Pune Real Estate Trend 2014

Gera Pune Realty Report January 2014 to June 2014 revises price increase expectations of the Pune realty market for 2014 to be in the region of 10% to 14%

1. The half yearly price increase has been at the lowest in years at 2.2% 
2. Pune realty market has expanded by only 22% in the calendar year June 2013 – 2014 as compared to 31.9% in the corresponding period of June 2012 - 2013
3. The average price across the city is pegged at Rs. 4910/- per square foot 
4. Inventory has reached an all-time high of 66,279 units which translated into 29% increase over the past year

Pune, August 6, 2014 - Gera Developments, one of the pioneers of the real estate business in Pune and the creators of premium residential and commercial projects in Pune, Goa and Bangalore released the Gera Pune Realty Report for the period January – June 2014. The consolidated report which is now an industry benchmark presents a detailed update and analysis of the Pune real estate residential market. The current report reflects that the impact of the overall economic slowdown has finally started showing on the Pune real estate numbers over the last 6 months and clearly indicates that the same has had a bearing on the demand in the market place. The assessment of the overall gross stock (defined as projects under construction and ready projects with more than 5% unsold stock and more than 10 units) reveals that the rate of market expansion has come down in the last 12 months i.e. June’ 13 to June’ 14. This period saw the gross stock rise from 200,944 units to 245,674 units, an increase of 22% as compared to the preceding 12 months from June ’12 to June ’13 which saw stock rising from 152,311 units to 200,944 units, an increase of 31.9%.

The half yearly price increase has been at the lowest in the years at 2.2% for the period January’ 14 to June’ 14. There is however a counter effect of increased loading and extra charges that has, to an extent added to the price rise but does not show up in the normal analysis. The average price across the city is now just shy of Rs. 5000 psf and stands at Rs. 4910 psf. The average basket of homes has delivered a 41.29% increase in rates over the last 3 years where average prices in June 2011 were at Rs. 3475 psf.  The 3 year compounded annual growth rate has been 12.25%. Investors who have purchased homes 3 years ago with mortgage rates at 10.5% and loan to value of 80% would have seen an equity returns of 18.75% per annum, making real estate still an attractive investment especially when factoring in tax benefits and deducting entry load costs.

Commenting on the key findings of the Gera Pune realty report, Mr. Rohit Gera, Managing Director, Gera Developments said, “We have studied and evaluated the Pune realty market to realize that on the surface there seems to be a slowdown in the rate of increase of realty prices. However the quantum of slow down needs to be viewed with total cost of purchase rather than the traditional rate per sq. ft. model that has been used to value property. The loading of the common areas onto the carpet area is in the region of 33% to 35% for the common areas.  This has had an impact of 8% - 10% on the carpet area or 5% - 7% on the saleable areas. The increase in the extra costs like club house charges, infrastructure etc. has risen more than the rates themselves thereby having a positive impact on the overall cost that the consumer pays for the home.”

Mr. Gera further added “We have gauged the market in terms of supply and unsold stock based on the category of housing. The categories we have created are Budget, Value, Premium, PremiumPlus & Luxury. These parameters have helped us to understand that the maximum stress is on the luxury segment (where current quoted prices are in excess of Rs. 7500 psf) which has seen a 61% rise in unsold stock in the last 12 months. This segment is most exposed to the vagaries of the economy which has resulted in to a deferment of purchase. Also customers seem to have found greater value in the prices between Rs. 6000 and 7000 psf.”

For today’s buyer there may appear to be a slowdown in the increases in rates over the past years, however it is interesting to note that the rate of increase in luxury specifications and amenities has only increased. Locations where Italian marble or home automation would have been considered extravagant a year ago, now have a number of projects offering higher better specifications and amenities.  All these amenities end up costing the developer but are provided in a hyper competitive market. The boost to infrastructure and civic amenities  have provided customers with a better bargain since homes are actually getting cheaper in real terms with lower rates of appreciation, adjusted for infrastructure, better specifications and amenities. Though the additional loading and extra costs have impacted the overall prices, customers continue to look at the cost per sq. ft. and as such, feels satisfied that the rates have not risen. In reality, the overall cost of ownership has increased over the last few years.

While commenting on the price outlook, Mr. Gera explained that, “Our previous price outlook had indicated an increase of 13% to 18% for the year 2014. The first half of the year has shown a mere 2.2% increase.  Keeping this in mind, we would like to revise our outlook for the future and would recast price increase expectations for the upcoming 12 months to be in the region of 10% to 14%.”

The increase in inventories has also continued with unsold inventories at an all-time high – the unsold inventory that was at 39238 units 24 months ago increased by 30.9% to 51363 units 12 months ago and currently stands at 66279 units, an increase of 29% over the past year. On a macro level, areas like Chakan and Kondhwa saw the most infusion in terms of new supply, followed by Wagholi and Pradhikaran region of PCMC. City center, Vimannagar, Erandwane, Kothrud & Karve Nagar witnessed the maximum price appreciation in the last 24 months while Sopan Baugh, Khed, Aundh and Koregaon Park witnessed the lowest price appreciation owing to the saturation in those micro markets.


SUMMARY
Years of the economy slowly grinding to a halt has finally seen the impact on the real estate sector.  While there is a renewed sense of optimism in the air, the same has not translated into demand into the market place as yet.  This enhanced demand when triggered has the potential to create an upward pressure on prices as seen in the earlier years.

The counter effect to increasing prices is the hope that that simplified procedures with reduced red tape will improve the supply into the markets thereby keeping prices in check. The question of the timing of these two significant developments will determine the impact on prices.  The more likely outcome seems to be that the optimism will turn to demand sooner than the simplification of processes and reduction of red tape.

 
About Gera Developments
Gera Developments, one of the pioneers of the real estate business in Pune are recognized as the creators of premium residential and commercial projects in Pune, Goa & now Bangalore. Gera Developments has recently unveiled ChildCentricTM Homes, a new way to live for today’s young home buyer. It is a revolutionary concept and an innovative solution that is set to create a new category in the residential real estate industry and establish a benchmark in the product + services model.


Find the detailed Pune Real Estate Report below:

Pune residential realty report for the period January to June 2014 from Green Realtech Projects Pvt. Ltd


Appendix:

Demographic Projections for Pune Municipal Corporation, 2001-2027

Pune's Population Projections:

Year	Population
2001	1855476
2007	2138243
2012	2371663
2017	2650482
2022	2975720
2027	3356121

Bloomberg TV India to launch “Tracking the Recovery – Real Estate”

Press Release:

~ First of its kind show that is all set to be the final world on India’s Real Estate story ~








Mumbai, 1st August, 2014: Bloomberg TV India, the nation’s leading English business news channel, is launching the first of its kind show - Tracking the Recovery - Real Estate.  The on-air series will put the spotlight on the road to recovery and analyse the triggers of the industry’s growth by engaging industry stalwarts in a series of exclusive round table discussions. The show will also rank India’s most successful real estate firms.

The realty sector in India is upbeat about Finance Minister Arun Jaitley’s Budget promise to provide incentives for the establishment of Real Estate Investment Trusts (REIT). This has sent, the stocks of real estate developers soaring high, continued improvement in the overall macro-economic scenario; both telltale signs of the real estate sector coming back on track.

The Indian real estate sector has enormous potential at churning out huge revenue and contributing to the country’s economy. Yet, the sector has to overcome a lot of challenges in order to move ahead and be stable. Tracking the Recovery – Real Estate, will help one understand the challenges faced by the real estate industry as well as the means to clear the roadblocks in its path.

Mr. Lavneesh Gupta, COO, Bloomberg TV India said, “Tracking the Recovery – Real Estate, promises to serve as a reality check for the Indian real estate market. Our efforts will be to focus on the larger issues around the real estate industry and its future growth, as the country’s best thought leaders highlight the growth triggers and map the sector’s road to recovery. Taking into consideration our position, as a responsible business news channel, we will present an up to date analysis on an industry that contributes to the development of the economy.”

Tracking the Recovery – Real Estate, will be a five-part series comprising of panel discussions with the best minds in the sector, on a single platform, to be held in Mumbai and New Delhi. These discussions will involve industry chiefs and thought leaders from the real estate sector, telling it as it is, to help you get real with realty. The panels will be moderated by Ms. Mini Menon, Executive Editor – Bloomberg TV India.

“Tracking the Recovery - Real Estate” will air exclusively on Bloomberg TV India, in the month of August, 2014.

About Bloomberg TV India:

Bloomberg TV India, nation’s leading English business news channel with unique access to newsmakers and research-based data, illuminates stories that affect companies and industries. Bloomberg TV India provides immediate perspective on critical business news as it happens, from where it happens. Backed by an enviable squad of Indian journalists, global network of 150 bureaus and 2500 professionals, we deliver the most credible insights to our viewers. 

Bloomberg TV India’s focus on delivering breaking news and key insights aligns with Bloomberg's overall goal of being the world's most influential news organization. The core of the channel’s viewership is formed by influential leaders, business executives, and affluent professionals.

Service Tax on Under Construction Property in India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

Whenever a builder sells an apartment in an under construction project to a home buyer, the builder is said to be rendering the construction service to home buyer and therefore, service tax is levied.

The service tax is levied only on under-construction property and not on completed property. An under-construction property is one which is still not complete and the completion certificate of such a property has not been received from relevant authority (Local Municipal body or development authority).

Therefore, it becomes mandatory for the builder to collect service tax from the buyer and deposit it with the service tax department.

Budget 2010 brought Abatement Scheme, under Notification No. 1/2006 dated March 1, 2006, which provides that the contractor is entitled to claim abatement to the extent of 67 per cent of the value of services rendered by him. Hence, the net effect of the tax could be lesser than the 3.4 per cent, since construction attracts service tax only on 33 per cent of the value. In the 2010-11 budget, the Finance Minister rolled back service tax to 25 per cent of the value.

So, essentially, the service tax is levied on 25% of the gross value of the property. In other words, 3.09 % will be the effective rate of service tax on under construction properties in India.

Service Tax – 12.36 %
Abatement – 75%
Service Tax applicable on under-construction property – 25% x 12.36% = 3.09%

One can also find out the Total Property Buying Costs in India.

For more on Service tax on under construction property, read the below document:

Service tax implications on buying property from developers from Green Realtech Projects Pvt. Ltd

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