Looking to buy that elusive dream home for your family? What are the home loan rates in India?

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

Looking to buy that elusive dream home for your family? Even after identifying the location and builder, the next big question is home financing. Which bank to approach and what are the current home loan rates that are offered by these banks? These are some of the questions that need clarification. At the same time, one might begin to wonder what, if any, are the basic differences between various home loan products offered by banks.

Here we help you in clarifying those questions:

Types of mortgage loan:

• Fixed Rate Mortgages - Constant Payment Mortgage Loan (CPM):

In this type of loan, the interest rate remains fixed during the tenure of loan. Rate of interest is normally higher in these types of Loans.

• Fixed Rate Mortgages – Graduated Payment Mortgages (GPM)

Some individuals have less income in starting years of their careers; those individuals are not considered for loan. To overcome this effect, lenders have designed a mortgage loan that retains a fixed rate of interest but includes a series of stepped up payments that are lower in earlier years, thereby better matching borrower’s incomes, and then rising over time.

• Adjustable (Floating) Rate Mortgages (ARM) also known as Floating Interest Rates:

These mortgages provide an alternative method of financing through which lenders and borrowers share the risk of interest rate changes. In this type of loan, since interest rates are adjustable, they are indexed to say wholesale price index (WPI) or other market interest rates.

• Hybrid Adjustable Rate Mortgages

This is the most common type of mortgage loan used these days. Hybrid ARMs combines elements of fixed rate mortgages for periods of 3, 5, or 7 years, after which interest rates are reset and the loan becomes an ARM.

Read here for more on Home Loan interest rates and the process of securing home loan in India.

Interest Rates in India – Dated November 28th 2014.

Loan upto Rs 75 Lakh (Floating Interest Rates)
Bank	Amount	Tenure (Years)	Interest Rate (%)
HDFC Ltd	Up to Rupees 75 Lakh	Up to 20 years	10.15
ICICI Ltd		Up to 10 years	10.15
State Bank of India (SBI)	Up to Rupees 75 Lakh	Up to 20 years	10.15
Punjab National Bank (PNB)	Up to Rupees 75 Lakh	Up to 20 years	10.25
Punjab National Bank (PNB)	Above Rupees 75 Lakh	Up to 20 years	10.5
Axis Bank	Up to Rupees 75 Lakh	10 Years	10.15
Bank of India	Up to Rupees 75 Lakh	Up to 20 years	10.2
Canara Bank	Up to Rupees 75 Lakh	Up to 20 years	10.2
Union Bank	Up to Rupees 75 Lakh	Up to 30 years	10.25
Dewan Housing Finance Corporation Limited (DHFL)	Rs 30 Lakh - 75 Lakh	Up to 20 years	11

Loan Above Rupees 75 Lakh (Floating Interest Rates)
Bank	Amount	Tenure (Years)	Interest Rate (%)
HDFC Ltd	Up to Rupees 75 Lakh	10	10.15
ICICI Bank	Rs 75 Lakh - 5 Crore	20	10.5
State Bank of India (SBI)	Up to Rupees 75 Lakh	Up to 20 years	10.15
Canara Bank	Above Rupees 75 Lakh	Up to 20 years	10.45
Union Bank	Up to Rupees 75 Lakh	Up to 30 years	10.25

Note: Floating Rates changes as and when bank changes their base rates. There are also other kinds of interest rates that bank offer such as 2 year fixed interest rates or 3 year fixed interest rates as described above. Contact your bank for those kind of home loan interest rates.

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Selling your house? Enhance its marketability

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

Ask any corporate honcho or the guys in the sales & marketing division about the product their company manufactures and its marketability, all of them will nod in agreement that besides product features, it should be packaged and presented brilliantly.

Same can be applied to your house. It’s a product and you are the marketing manager of this product. Besides possessing features such as large spacious rooms, attached toilets, balconies, excellent floor plan, it should be presented beautifully to prospective buyers.

Just like a buyer purchases a product he or she feels connected to, similarly, your house that you are putting up for sale shall generate the feeling of belonging to the buyer. How can you do it? How can you make sure that buyer feels attached to the house when he/she visits it? Below are some tips:

• Stage the house:

Have you ever visited the IKEA store Or for that matter, any other large supermarket to buy furniture; groceries; kitchen utensils; etc.? What you see there is staging of items you wish to buy. A bedroom is staged with bed, table, carpet, etc. Even, walls are designed in such a way that it feels like your own bedroom. One begins to feel it, fantasize it.  Therefore, before you decide to put your house for sale, you should stage it and never keep it empty.

An empty house is a terrible way of presenting your house to prospective buyers. A buyer finds it extremely difficult to visualize him living there. The rooms, kitchen, and even toilets in an empty house appear smaller. Therefore, one should stage his / her house in order to sell at high value.

• House should be presentable:

While you should never show the empty house to prospective buyers, one should be careful in placing the furniture. The furniture should enhance room’s best features. Be creative and arrange the furniture in such a way that it downplays the negative characteristics of your house and augment the best characteristics. When arranging the furniture, follow the mantra ‘less is more’. Do not ever block windows or crowd out furniture at one place. Keep furniture at an optimum distance from the door.

• Remove unwanted items and clutter:

There are always some unwanted items in the house that you would have accumulated over a period of time. It was not in use for you but still you kept it in the house. This is the time to sell those unwanted things to make your house clutter free. Any prospective buyer visiting the house will not be distracted by these items and instead will be focused in visualizing the house for his / her family. At the same time, keep away all extraneous things like bottles, papers, cosmetic items, bathroom collections, etc. The idea is to present your house as neat as possible without all these distractions.

• Keep it clean:

No point in highlighting this simple yet overlooked fact. Many a times, we have seen, seller becomes callous and on a typical house tour what one find is unclean toilets, unhygienic kitchen, pile of newspapers, poorly maintained cupboards, greasy electric boards & switches. This surely puts off the prospective buyer. All it takes is 3-4 hours of work to clean the house including the toilets, kitchen, cupboards, flooring, switches, etc. In fact, one can get it done by a house keeping staff for as low as Rupees 1000 or less. Therefore, one should not overlook this simple factor before putting his /her house for sale or for that matter for rent.

• Comfort:

Home is one place where one finds comfort at the end of a hard day of work. A buyer when visits your house, unconsciously or consciously, he / she is visualizing it from many angles including the comfort factor. Pillows arranged on the couch or bed and soft, clean towels in the bathroom will give your home a more appealing look and are easy additions to a space. Decorative candles, even when unlit, are a great styling tool and provide a light scent in the room.

If you can’t do all of these on your own, you can hire one of the housekeeping companies. There are many housekeeping companies that will clean your house and will also give it an appealing look. For example, Rohit Kumar who lives in UK had invested in an apartment in Greater Faridabad. He got the possession of the house 2 years ago. Having kept the house locked for 2 years, Rohit thought of selling the house. Since he was living away, therefore, Rohit took the services of a Property Management Company in Faridabad and got his house staged and was able to sell quickly and at a premium.

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How waste is currently collected and disposed in India? Is the current process efficient? What can be a better way?

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

We all know every households produce waste on a daily basis and the garbage collector comes to every house to collect garbage. A typical process involves household emptying their bin in the dilapidated truck or vehicle of the garbage collector, the garbage collector takes waste from all the households in an assigned territory and then dumps it on a secluded piece of land. Garbage collectors from all territories in the city meet there to do the same. And it creates a landfill which stinks and is not good for the health of the citizens.

This landfill method is hazardous and detrimental to environment. It creates land pollution (and in some cases, ground water contamination). The waste is not recycled. No electricity, bio-gas, or fertilizers are made from this extremely useful waste.

Part I - The current process of collecting and disposing of waste in India:

M - Municipality

C - Contractors

H - Households

An example of how Municipalities in India invite tenders from contractors to collect Waste:

Part II - The suggested process of collecting and disposing of waste in India:

M - Municipality

V - Vehicle used by Municipality to collect waste bags from Households

H- Households

A typical 30 liters waste bag:

Part III - Benefits of new Process of collecting and disposing of waste in India:

1. Household waste will be in sealed waste bags, therefore no possibilities of littering on the streets.
2. Eliminates or minimize the role of contractors.
3. Segregation of waste in the plant becomes easy and fast.
4. Pay as you produce. Citizens will now pay based on the waste they produce. Each waste bag to cost Rupees 5 or the cost determined by each municipality.
5. No need for the municipal body to dump waste at various sites. All waste bags go to a central waste plant.

Part IV - Challenges of implementing new Process of collecting and disposing of waste in India:

1. People are resistant to change – therefore change management practices to be implemented including the robust media campaign.
2. Municipalities may resist the new process because of lobbying from contractors.
3. Investment is needed to build high quality waste management plants along with investments to be made in waste collecting vehicles.
4. Low Income Group (LIG) or Economic Weaker Section (EWS) of the society may not be able to afford the cost of Waste Bags. However, their costs can be reimbursed by way of Direct Cash Transfers.
5. Spending on media campaign – can become part of Government of India’s Swacch Bharat Abhiyaan.

Part V - Implementation – A staged Process:

The entire campaign needs to be carried out in phased manner:

1. First phase: Implementation of the process in one district (or MP Constituency) in India
2. Second phase: Implementation of the process in one district in each state across the country
3. Third phase: Implementation of the process across all districts (MP Constituencies) across India

Note: Waste Plants can be developed on (Public Private Partnership) PPP model.

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Housing Prices in India - June 2014

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

National housing bank’s residential index for the quarter April – June 2014 has been released and the residential prices in various cities across India have stayed stagnant over the last quarter.

Here is the synopsis:

Hyderabad: Residential prices in Hyderabad have remained stagnant over the last quarter. Marginal increase in Kapra, Uppal Kalan, L.B.Nagar have been noticed.

Faridabad: Residential prices in Faridabad have also remained stagnant over the last quarter of April – June 2014. Areas such as NIT - 1 (NH); NIT - 2 (NH); NIT - 5 (NH); Sector - 62; Sector - 63; Sector - 64; Sector -65; Sector - 21; NIT-3; Sector -14; Sector -75, Sector -76, Sector -83, Sector - 85, Sector – 86 have shown little appreciation.

Patna: Residential prices in Patna have shown an appreciation of 2-3 %. However, localities such as R-Block; Mountasari Lane; Gandhi Nagar; Basant Vihar Colony; Patliputra Colony; Rajapur; Kidwai Puri; Krishna  Nagar; Buddha Colony Part-1; Krishna Nagar Park; Mandiri Kath Pul; Shanti Vihar; Paschim Boring Road; Purvi Boring Kenal Road; RK Bhattacharya Road have shown appreciation over the last quarter.

Ahmedabad: There has been a marginal rise of 2% in residential prices in Ahmedabad. Micro markets of Bhadra, Dudheswar, Gaikwad Haveli, Girdhar Nagar, Wadigam; Gomtipur Gam; Old Viratnagar; Vastral; Zulta Minara; Buddh Nagar; Saijpur-Bogha; Sardar Nagar; Vishnu Nagar have appreciated.

Chennai: There has been 2% price rise in Chennai over the last quarter. However, Perambur; Choolai; Edapalayam; Ayanavaram; Purasawalkam; Kolathur; Virugambakkam; Anna Nagar; Kilpauk; Nungambakkam have shown substantial appreciation.

Jaipur: Residential prices in Jaipur have remained stagnant. Localities such as Khatipura; Kalwar Road; Jhotwara Road; Vidyadhar Nagar;  Sikar Road have shown appreciation of about 5%.

Lucknow: Prices in Lucknow have also remained stagnant over the last quarter of April – June 2014. Localities such as Lalkuan; Wazirganj; Maulvi Ganj;   Gola Ganj; Janki Puram; Daali Ganj; Maha Nagar; Nirala Nagar; Ali Ganj have appreciated by a margin of 5-6 %.

Pune: Residential prices in Pune have shown an appreciation of about 4% in last quarter. Micro markets such as Kasba Peth; Nana Peth; Shivaji Nagar; Hinjewadi; Thergaon; Chinchwad; Baner; Yerwada; Wakad; Pimple Saudagar; Chakan have appreciated by around 8-10% in April – June 2014.

Surat: Residential prices in Surat have fallen by about 2% in last one quarter. Localities such as Rander; Adajan; Jahangipura;   Palanpur; Udhana; Bhestan; Pandesara; Bamroli; Piplod; Vesu; Rundh;Sultanabad have seen 4-5% fall in prices. However, Limbayat; Dindoli; Paravat witnessed about 4% rise in residential prices during the last quarter.

Kochi: Prices in this coastal city has remained stagnant. Areas such as Palariwatam, Panampally Nagar; Thevara; Maradu; Konam; Paluruthi Kacheripadi; Mundavelli; Chullikal have shown about 3% rise in residential prices.

Bhopal: Prices in Bhopal have remained stagnant as well. Localities such as Koh – e- Fiza, Shyamala Hills; Bagh Mugaliya, Katara Hills have shown marginal increase of about 4% over the last quarter.

Kolkata: There has been a rise of 2% in Kolkata residential prices. However, there has been a 5% rise in prices in areas such as Jodhpur Park, Dhakuria; Behala; Thakurpukur, Sorsona.

Mumbai: There has virtually been no gain/loss in residential prices in Mumbai. Lower Parel, Matunga East, Mahim West; Bandra West, Andheri East, Oshivara; Pokaran Road 1 & 2; Mira Road witnessed a rise of 7-8 % over the last quarter.

Bangalore: Prices in Bangalore have remained stagnant. Lavella Road; Richmond Town, Indira Nagar, HAL II & III stage, Domlur Layout, Sadashiv Nagar, Benson Town witnessed a rise of 3-4 %.

Delhi with NCR: Prices in Delhi with NCR region fell by 2%. Most localities witnessed fall in prices except the areas of Mayur Vihar,Dwarka, Pitampura; Noida, Greater Noida, Gurgaon & Ghaziabad; Vasant Vihar & Friends Colony where prices rose by around 4-5%.

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Chennai real estate round up

Chennai commercial real estate witnessed a good amount of absorption in 2013. Most of the absorption was in the prime real estate hubs in Chennai, like the IT corridor of OMR. The residential real estate in the city has witnessed a slowdown in the recent past only because of the pricing of housing units in Chennai. Compared to other metros, Chennai housing and residential real estate market has been on the higher end of the spectrum in terms of pricing. Influx of MNCs and IT companies has been the foremost growth factor in the city. Adding to this trend is the fact that Chennai city is a trade hub and a coastal city with a port that acts as one of the major trade link in the country. Having such potential, the city’s real estate sector has also grown in proportion to the economic development. Additionally Chennai attracts investment in various sectors like education, healthcare and infrastructure. Chennai is definitely a preferred investment destination among all cities of south India.

The Chennai real estate market, which used to be traditional and populated with independent houses has opened up to many other real investments options in the past 20 years. The year 2014 saw the revival of the real estate sector in Chennai. Mostly an end user driven market, 2014 saw a new lease of life in the city’s real estate sector. The city is in the fast track of development and has gone beyond the IT sector today. Manufacturing sector has also contributed to immense growth in the commercial real estate sector. However in terms of pricing the real estate sector has not shown much progress as there has been an increase in labor, material and construction cost over the years. This has added pressure to the overly expensive Chennai real estate market. There has been a record 15% increase in the cost of construction over the years and this applies to all the markets across the country.

Chennai lags behind most cities in terms of transport infrastructure. Although the state of Tamil Nadu has one of the best road network in the entire country, the intra city transport has been poor and unable to support the growing population. The delay of metro rail has also added to the pressure. Although the pockets near the metro stations have seen a marginal increase in prices, the constant delay has been a cause of concern for many home buyers. Apartments in Chennai are a preferred investment choice as it is the most affordable piece of real estate one can invest in. Independent house for sale in Chennai or land and plot require deep pockets, which amounts to the least kind of investment in the city. Many apartments in Chennai are near the newer investment hubs like Oragadam and the Outer Ring Road.

“Focus is on the Outer Ring Road (ORR) where the Phase I (Vandalur to Nazarthpet – NH 4) has already been completed. ORR Phase II where land acquisition is in advance stages will boost the real estate activity along this corridor. Chennai and its adjoining cities are among the best for primary and higher education in the country today. Healthcare and medical facilities in the city are also among the best available in the country. Development of new hospitals, schools, malls and multiplexes in the emerging locations are all stimulating growth for the city’s residential real estate industry.” Says Sanjay Chugh, Head- Residential Services JLL India to Money Control.

This is a guest post by Sulabha Kulkarni

Integrated Townships: Resolution to Urban Crisis in India

The restricted land availability and therefore the immense unbridgeable gap between the demand and supply for individual plots in addition with rising populace within the metro cities like Ahmedabad, Bangalore, Delhi, Gurgaon, Mumbai, etc. have provoked the demand and development of condominiums, flats, complexes and gated associations. Moreover, higher wages, up-style, increasing objective levels and enlarged data on international movements have created the existing new-generation property buyers further acutely aware relating to the properties they need to invest in.

Nevertheless, the feeble urban planning – coming up with across most of the states, lack of conveyance, longer moving time to the offices and inadequate infrastructure, urban planning has supplementary woes to the property buyers instead of sanctioning them for an enhanced and improved living. In most of the cities, new development areas don't seem to be planned accurately and therefore; don't act as satellite cities, however just as residential district areas.

However, the answer to the existing complicated concern in key metros and tier I cities lies in integrated townships. Usually, an integrated township, the kind of township that is coming up in Gujarat state has the subsequent key features and elements like:

Public infrastructure:- 

• Institution: A high faculty with education up to a minimum of 12th standard must be normal and is setup within the township in Ahmedabad, shortening the traveling time between home and school and successively providing the kids with longer time for play and studies.

• Medicare: A decent health care facility with a minimum of 50-plus beds associate in nursing and emergency care unit is ready inside the township, thereby assisting residents.

• Amusement: Adequate area for basic sports like soccer, cricket, court games and fitness facilities together with a gymnasium and swimming pools area unit discovered among the integrated township in Gujarat state to reinforce social way.

• Community Center: A spacious, well-decorated community center with a club house and a function hall is set up within the township in Ahmedabad.

Infrastructure & Services:- 

• Road Networks: Well-planned road network within the township in Ahmedabad and connecting to the closest main road or highway, thus easing communication.

• Water Supply & Management: A well-organized and continual water management system is made within the integrated township in Gujarat, providing 24x7 hours of water facility to residents and furthermore treating the waste water generated among the township and recycling it. This additionally reduces the dependence on municipal facility. 

• Electricity & Management: Though an integrated township based on a public or non-public utility provider for basic power supply, it's sufficient, if not exuberant, back-up power for each home and customary areas throughout temporary or regular power cuts or disruptions by the utility provider.

• Communication infra: sensible quality telecommunication services also are created and accessible among the township division and nearby.

Estate management:

• The Waste Management: Sensible waste/garbage collection, aggregation, treatment and disposal system could be a better solution for an eco- friendly township. By this way, life remains healthy.

• Infrastructure maintenance: Correct and regular maintenance of roads, footpaths, parks, electrical and plumbing infrastructure, kids play areas and customary areas as well as community center are important for a developed integrated township in Ahmedabad city.

• Security: Advanced estate security associated safety for all residents could be a vital part of an integrated township.

Shopping and entertainment:

• Entertainment: Quality cinema or multiplex, widespread games and child recreation facilities ought to be established within the integrated township.

• Shopping: Well-stocked grocery stores likewise shopping centers as well as branded garment stores, electronic merchandise ought to be established within the integrated township. 

• Food courts: Sensible quality, and hygienic food courts with plentiful menu choices ought to be established with within the townships to cater to the style buds of all sorts of residents.

Proximity to workplace:

While the intent of an integrated township in Ahmedabad city is often to own the geographical point and also the residential domicile in close proximity, within the current background of double-income families, it's not possible to realize this objective totally. However, it will establish sufficient, well-equipped workplace house infrastructure and provide lower rentals to draw in firms, banks and company homes and make ample use of opportunities for residents. Except for this, to develop communication between the township and also the geographical point for the remainder of the residents, the situation of the township ought to be specified it's simply accessible from numerous components of the city.


This is a guest post by Suhaag Srivastava

The government of India has relaxed the rules for Foreign Direct Investment (FDI) into real estate sector in India. What will be the benefits to realty sector and what is missing from these new policy changes?

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

As presented by Union Finance minister Arun Jaitely during his July budget speech, the changes to relaxation in FDI (Foreign Direct Investment) into real estate sector in the country has now been notified.

The changes - FDI into Real Estate

• Minimum area requirements, in case of Construction-development projects - built-up area of 20,000 sq. mts now from 50000 sq. mts.

• Investment - Minimum capitalization for wholly owned subsidiaries - US$ 5 million now from US$ 10 million. However, the lock-in period for investment has not been relaxed from 3-years. Foreign investors can still exit earlier if the project is completed. The Government may also permit repatriation of FDI or transfer of stake before project completion on a case to case basis by Foreign Investment Promotion Board.

• For serviced plots — where roads, water, drainage and other conveniences are available — the minimum land size has been waived, from a requirement of 10 hectares earlier.

• To boost funding to affordable housing projects, the conditions of minimum floor area as well as capital requirements are waived if at least 30 per cent of the total project cost is committed for low-cost affordable housing. To qualify as an affordable housing project, at least 60 per cent of the floor area must be used to build small homes (not more than 650 sq feet).

These are all welcome steps by the government to boost real estate sector in India. The sector which is starved of liquidity can breathe a sigh of relief. However, the notifications would not result in pouring of FDI in short term. It may take 9-12 months before we see results on the ground.

Reduction in minimum built up area to 20000 square meter and reduction in capital investment to US$ 5 million will have rippling effect on the state of the property market in India. Experts and analysts believe that these 2 initiatives can in fact help in doubling the FDI into the real estate sector. FDI into construction development sector was 1.22 billion US$ in fiscal year 2013-14 (1 April 2013 to 31 March 2014). Whereas FDI into real estate sector in fiscal year 2012-13 (1 April 2012 to 31 March 2013) was 1.3 billion US $. This year from 1 April 2014 to 31 August 2014, the FDI flows into real estate sector have been 446 million US $. Below one can find the history of FDI in India in various sectors including the real estate.

What will be the benefits?

• Liquidity

It is a well known fact that developers are cash strapped and are in dire needs of funds to complete projects. Since 2011, the repo rates have been hovering in the range of 8%, making it extremely costly for developers to raise funds from banks and financial institutions. With these relaxations in place, developers can now have access to institutional funds.

• Small Projects

Prior to this, small projects of size less that 50000 square meter were not allowed to access FDI. However, this has been changed now. Small scale real estate developers coming up with housing societies, multi family developments can now be exposed to institutional funds.

• Affordable Housing

The government is of the view that state of affordable housing is in dire straits of special attention. Till 2012, approximately, 18.78 million units were needed to be built. And about 99% of the total shortage of housing in urban areas belongs to the Economic Weaker Section and Low Income Groups of the society. This new policy initiative will give boost to affordable housing in India and will be a step in right direction to achieve housing for all by 2022.

What is missing from the new policy initiative?

Land-use rules for the sector have not been mentioned in this new proposal by the union government. Norm on land-use is a local issue which will vary from State to State, remarked a DIPP official.

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Happy Diwali 2014

NirrtiGo wishes each and everyone a very Happy Diwali.

॥ॐ॥
।।।दीपावली की हार्दिक शुभकामनाएं।।। ॥ॐ॥

Will growing popularity of online commerce put an end to boom in shopping retail malls?

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

Take it or not, e-commerce is here to stay. A survey by industry body ASSOCHAM reveals that online shopping this Diwali 2014 season will touch Rs. 10000 Crores. Phew…this is a stupendous jump of 350% over the last season. Despite Flipkart’s ‘Flopkart’ day glitches, online shopping is surging with Amazon launching a 6 day Diwali Dhamaka. Snapdeal is also not far behind and there are options galore for consumers to choose from.

What does it mean for shopping malls that mushroomed from 2003 to 2010? Is this the end of the road for new shopping malls? Time will tell, however, a survey by ASSOCHAM reveals that in 10 major cities across India shopping mall footfalls have fallen drastically. The survey was carried out in Mumbai, Delhi NCR, Chennai, Kolkata, Bangalore, Ahmedabad, Hyderabad, Chandigarh, Pune, and Dehradun. Delhi NCR has registered a highest drop (49.5 %) in footfalls at city malls. Ahmedabad registered a fall of 48.2%, Chennai a drop of 46%, Mumbai a drop of 42%, and Hyderabad a drop of 39%.

Those are sharp fall in footfalls in one year period. And with institutional funds backing the e-commerce space, there is all the likelihood, that new e-commerce ventures will come up and put more pressure on the shopping mall sales.

Why are consumers flocking to these e-commerce sites as opposed to visiting the shopping malls? There are various reasons and we list them below:

• Convenience:

No debate about it. This is the most common reason for the success of e-commerce sites. Let’s have a look at the typical process in online purchase:

1. Consumer logs on to the e-commerce site(s). Or one can visit the aggregator site that shows the products by 10-12 e-commerce sites.
2. Search for the product
3. Compare the products (reviews, price, etc.)
4. Purchase
5. Home delivery
6. Payment

In a matter of minutes one can purchase the product he/she desires. It’s as simple as that and the consumer is rest assured that he/she is not overpaying for the product.

• Rising fuel and parking prices:

Going to a shopping mall is a project in itself. Get ready, ask your family members to get ready, take a car, drive, and park the car. All of it costs. Fuel costs and Parking costs are rising with every passing year. Finding the car parking space in a metropolitan area is a hell and even within a shopping mall it is cumbersome and expensive. With online shopping, one can certainly save on these costs. Does it mean that people will stop visiting the malls altogether? No way, people will continue to visit the malls for leisure activities such as movies, restaurants, window shopping, kid’s play zones, etc. However, the footfall at malls will decrease due to the change in shopping habits. And this is clearly evident from the ASSOCHAM survey.

• Online discounts:

Other than the convenience of buying products on e-commerce sites, one can also find various offers, discount deals on display. In fact, during the festive seasons, major e-commerce sites come up with lucrative offers to sell products to consumers across cities in India. Flipkart recently came up with ‘Diwali Day’ and registered a whopping sale of Rs. 600 Crores. Similarly, Amazon and Snapdeal have also launched special Diwali sales. Other e-commerce websites are not far behind.

• Variety of choices:

It goes without saying that consumer is spoilt for choices on these e-commerce sites. One can only find limited choices if he/she visits a showroom in a shopping mall, however, e-commerce sites have no end (or tail as it is called) and there is plethora of options to choose from.

What will be the impact of 'rise in online shopping' on Retail Malls?

1. As discussed, footfalls will continue to drop.
2. There are possibilities that launch of new malls will be postponed by the real estate developers to assess the larger impact of online shopping on retail development.
3. Rental across shopping malls may begin to fall.
4. And subsequently, Capital values at retail malls will fall.

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Lukewarm Diwali Season for Real Estate Sector

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

This Navratri 2014 and Diwali season has been rather disappointing as far as real estate sector in India is concerned. One can notice it easily; lack of new launches and the missing buzz in builder’s offices is there for all to see. Other than in Bangalore market, home sales across India have been slow despite muted prices. Buyers are still uncertain because they are still looking for greater surety and prosperity on their job front. Experts believe, market is waiting for a trigger such as high GDP numbers or interest rate cuts to revive the realty demand. And that is likely to happen post March 2015.

What could be the reasons for rather lackluster festive 2014 season?

• Unsold stock

According to a report, there were about 7.6 Lacs apartment units that were unsold by the end of June 2014. New launches have dropped considerably. 27 new projects were launched in the month of September 2014 across top 15 cities in India. In comparison, in September 2013, about 279 projects were launched. It clearly shows there is too much inventory that needs to be cleared first.

• High interest rates

Interest rates have remained rather high. RBI’s policy rates have remained at 8% throughout the 2014. However, good news is that inflation has moderated and therefore there could be possibilities of rate cuts in the future.

• Builders focused on completion

In recent months, for right reasons, builders have gone back to drawing boards and have started focusing on completing the existing projects before launching any new projects. Focus on delivery is extremely important to get back the trust of home-buyers. With a series of cases of builder’s delaying projects by 2-3 years or more, the market needed the pill and this slow demand has provided that opportunity to builders to deliver projects on time.

• Penalties Galore

In recent times, real estate sector has been hit by series of penalties being imposed upon some of the largest developers in the country by regulators and courts. Overall sentiment within the sector has diminished. We hope that lessons have been learnt by realty companies and from now on-wards there would be a positive atmosphere of transparency and trust among various stakeholders within the sector.

Lull before the storm

Having considered the reasons for rather lukewarm demand, we must now explore if and when the recovery will take place.

There are already signals that economic recovery is on the way up:

1. 40 million square feet office space is likely to be leased by top companies over the next 12-18 months.
2. The Union Budget 2014-15 has laid considerable emphasis on the realty sector and this has infused a positive sentiment for the future. The impact of which will be visible by early next year.
3. Office space leasing up 31% in Jul-Sept 2014 at about 8 million sq ft.
4. On the back of office space demand, home sales will also pick up.
5. And if interest rates come down, we could see demand picking up by March 2015.

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Press Release: Gera Developments Among Top 10 Pune Residential Developers

Gera Developments Among Top 10 Pune Residential Developers

Bloomberg TV India along with knowledge partner JLL announced the top real estate developers for both residential and commercial projects across in major cities

Pune, 10th October, 2014: Gera Developments, with a track record of over 43 years is one of the pioneers of the real estate industry and the creators of premium residential and commercial projects in Pune, Goa & Bangalore, have been announced as one of the top 10 Pune residential developers by Bloomberg TV India, the country's leading English business news channel and knowledge partners JLL.

Commenting on the accolade, Mr Rohit Gera, MD, Gera Developments said, ”This recognition is a testament to our commitment to our customers. Our commitment to quality, trust and customer satisfaction is part of our continued efforts to fulfill our vision.  The scoring system adopted by JLL takes into account sales pricing as well as velocity along with the construction delays of the projects.  We believe we have been able to show sales velocity as well as sales premiums as our customers recognize the benefits of buying with a reputed developer with a track record and commitment to customer satisfaction.  This honor will further motivate us to achieve greater heights. We are happy with the acknowledgement from industry experts like JLL who have recognized our extended benchmarks in the real estate realm with our constant innovation techniques which are way ahead of time – be it India's first ChildCentricTM project or Pune's first intelligent building. ”

Gera’s vast expertise in the sector that spans across more than 4 decades, along with its commitment to trust, transparency and innovation have ensured them a place in the top players in Pune. They have established a footprint across Pune, Goa and have recently entered Bangalore by meticulously constructing and delivering over 50 projects, with close to 4 million sq.ft. of development.

The comprehensive analysis and research was carried on the basis of detailed parameters like total units launched, Launch Price (INR psf), average size of units in each project, sales velocity etc. The secondary factors for evaluating the companies were price and rental bench-marking, the total space built by the company and vacancy levels for commercial projects by the company etc.

The report is based on hard data and demonstrated deliverable, and is the most rigorous study of its kind to date.

The Top 10 real estate companies in Pune are: 

Note: The developer names have been arranged alphabetically

	Top 10 Pune Residential Developers	Top 10 Pune Office Developers
1	Amit Enterprises	DLF
2	Gera Developments	Embassy Property Developments
3	Goel Ganga	K Raheja Corp
4	Kolte Patil Developers	Kolte Patil Developers
5	Kumar Properties	KUL
6	Marvel Realtors	Magarpatta Township Development & Construction Co.
7	Panchshil Realty	Panchshil Realty
8	Paranjape Schemes	Paranjape Schemes
9	Pride Purple Group	Pride Housing
10	Sukhwani Associates	Shapoorji Pallonji Group

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.

Gera Developments prides itself on providing long term enjoyment to customers and innovation being a hallmark of the company’s projects.  There are many 'firsts' that stand to Gera Developments’ credit such as 5-Year Warranty on Real Estate consisting of Preventive Maintenance and Repairs for the first time in India and providing Insurance of buildings for 3 years (prepaid). 

REITs: SEBI’s Next Move to Revive Indian Realty Market

After a long wait of almost 8 years, the Securities Board of India (SEBI) finally gave a nod for establishing the Real Estate Investment Trust (REITs) in India. Before marking a foray in India, REIT had already made a name for itself in more than 20 countries in different parts of the world. This operating body receives special tax treatment and takes care of the realty projects that comprise, office buildings, commercial and residential buildings, hospitals, shopping malls. There are other realty assets that the organization (trust) takes care of, such as construction of hotels & resorts, multiplexes and warehouses.

However, very few people know the organization has played a pivotal role in helping the Indian real estate grow big like never before. With continued support from REIT, Indian realty market has achieved an enviable stature on a global platform.

Let us have an inside perspective on this:

REIT: The Meaning Explored

Real Estate Investment Trust is actually a trust-like company or organization that operates income-producing real estate assets. The realty projects that are likely to follow on the company’s radar could be residential as well commercial projects; preferably commercial ones the most as they generate employment and income both in a good number. The people who are keenly following the realty market have to halt for a moment and take note of the organization as it is helping the realty market in a big way.

SEBI under its aegis brought REIT on to the main stage to help Indian real estate market come out of the unfortunate liquidity crunch and poor sales figures. The market regulator has jotted down few protocols that the trust company will be following. Here are some of them:

1. Instead of launching any particular realty related schemes, REITs will raise funds through initial offers and will be allowed to raise additional funds through follow-on offers as well.
2. At least 90% value of REITs assets should be incurred in ready properties and the rest 10% can be utilized in other specified assets. 
3. REITs will be quiet far away from vacant and agricultural lands. 
4. The assets held by REIT will have to be valued through physical inspection of properties, at least once a year.

However, one can’t figure out the benefits that the organization has brought in here, merely by reading through the protocols mentioned above. In fact, the figures are analytical in nature and straightaway just can’t understand the good things.

Here’s an inside perspective:

A Sigh of Relief For the Indian Realty Market

The biggest announcement made in the Union Budget 2014-15 brought some respite for the Indian real estate domain. One cannot imagine the potential benefits the REITs can bring in for the domain. Here are some of the advantages:

• Improved Liquidity Situation

The decision to allow listing of the REIT in India will give a positive boost to the liquidity situation of cash-starved developers. These developers have been struggling really hard to fetch funds for their own construction activities. The advent of the trust company has already opened doors for an investment avenue that is fool-proof than under construction properties.

• Indian Realty Market Yearning for REIT

Among major reasons behind India getting actually desperate for REIT was to pull in big time investors. Union budget’s green signal to open up such bodies in the country is expected to bring in globally accepted protocols to the Indian realty market’s funding schemes. Through this, revival of interest of both global and domestic investors is expected.

• Benefit for the Buyers

REIT makes use of investors’ money to purchase real estate assets for the purpose of rentals and capital gains. Through this, buyers will also be benefited by realty price appreciation in preferred areas sans hassles associated with buying and maintaining properties. The buyers will now have seamless ways to pitch in for best residential or commercial realty projects.

• Realty Market Will Now Mature

With stage set to allow fully-fledged REIT to enter India completely, Indian real estate domain is on the verge of getting matured and more productive. The organization will enable flow of more professional investment and management in the domain. Moreover, individual speculation in real estate assets will also be reduced.

• Increased Reliability in Indian Realty Market

There are special benefits that the REIT is expected to bring in the Indian realty market. Advantages like increased accountability & reliability in the sector. The organization’s support to the Indian real estate market will also pull in greater FDI in the sector.

Indian Real Estate Domain On a Roll

There was a time in the growth of the Indian realty market when there was a persistent struggle for alternate avenues of funding. Other than traditional banks and financial institution, permission to launch REIT in India will act as a key launch pad for smoother capital markets inclusion and clean exit options for investors.

Once formally announced by SEBI on the full-fledged operation of the organization, REIT will help the property market in a long way and will also help in reviving global investor sentiments.


This is a guest post by Vineeta Tiwari who is a keen writer on Global Economy and Realty market.

What is FSI in real estate development? What is the floor space index that is allowed for various Indian cities?

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

FSI or floor space index is the ratio of total develop-able gross floor area to the total plot area. In other words:

FSI = Total covered area on all floors / Gross plot area

Higher FSI means, more area can be developed in a given plot. How is that possible? It is done by adding more floors to the plot of land. In metropolitan area of New-York, the permitted FSI is 17 and in Singapore the permissible FSI is 10. Whereas in Commercial Business Districts (CBD) of Mumbai, the highest allowed FSI is at Nariman Point (FSI – 4.5), and at Bandra Kurla Complex or BKC, the allowable FSI is 4.

There is always a case for increasing the FSI in Indian metro cities of Delhi, Mumbai, Kolkata, Bangalore, and Chennai. However, higher FSI requires building of infrastructure such as sewerage, roads, safety features, traffic management, water, and electricity. Without the proper infrastructure in place, higher FSI will choke the city and can cause great deal of discomfort to the residents.

At the same time, there is a widespread belief among real estate and city planning experts that doubling the FSI in metropolitan cities of India can bring down the cost of housing and commercial real estate. It is estimated that prices of residential real estate in the island city of Mumbai would fall by one third in such a scenario. The State Government, however, is reluctant to raise the FSI because they believe it will lead to crowding and create an additional burden on the city's infrastructure.

More on FSI is explained in the below document:

Floor space index fsi in indian cities from Green Realtech Projects Pvt. Ltd

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Swachh Bharat Abhiyan - Citizen participation is must

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

Prime Minister Narendra Modi launched clean India or ‘Swachh Bharat’ campaign today 2nd October 2014 on the birth anniversary of Mahatma Gandhi.

As part of the 'Clean India' campaign that Prime Minister Narendra Modi launched today, he said he had invited nine people to join the cleanliness drive and requested each of them to draw nine more into the initiative to take it viral.

What are the most common things we the citizenry, municipalities, corporate, and activists do to make our cities and country clean? We list them here…

Swachh Bharat Campaign 

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