Kolkata’s Myriad Real Estate Market!

Real estate has always been a myriad world in the many layered city of Kolkata. Kolkata has always been one of the foremost cities for real estate developments. Real estate progress has happened considerably in the city owing to a combination of factors. Firstly, many professional real estate conglomerates and companies have been formed in Kolkata. Alongside, Kolkata has suddenly become a haven for top end housing and residential projects. The luxury and premium markets have suddenly come up in the city on the back of tangible demand which was nonexistent earlier. At the other end of the market, there is also a huge demand for affordable housing and residential enclaves. There are various midrange options available as well in most cases and this is something that augurs well with regard to real estate development. Real estate development has touched new heights in the city and this has also led to price appreciations and other similar trends.

Kolkata is now a luxury and premium housing hub and with the advent of the proposed metro connectivity in newer areas and better infrastructure, the trend of rising prices should be observed even in the near future. Alongside, Kolkata customers are no longer conservative and conventional with regard to their home choices. A new trend is steadily being observed where customers desire minimum amenities and facilities and do not mind paying a price for the same. Developers have also been experimenting with projects like condominiums, gated enclaves and other residential housing varieties. This has only added to the sheen of the real estate sector in this city which is still a little sluggish though.

Areas like Ballygunge, Alipore and Southern Avenue have become unreachable as far as property prices are concerned. There are very few residential projects coming up in these areas and buying a house here is next to impossible owing to the prices on offer. According to Surajit Malakar, the director at Envision Realty Management Pvt. Ltd, huge demand has been witnessed for properties within the INR 25 lakhs to INR 40 lakhs bracket over the course of the last year. Buyers of property are more willing with regard to walking the extra mile for property purchases within a particular budget range. The budget range mentioned earlier is the top selling property bracket especially in the south eastern areas parallel to the extension of the Bypass. This includes areas like Rajpur, Kalikapur, Sonarpur, Garia and even Baruipur.

These are areas that have been witnessing fabulous demand from customers. There is huge demand for both 2 BHK and 3 BHK apartment units. The former usually comes within 700 to 1000 square feet while the latter comes within 1000 and 1400 square feet. Maximum buyers usually prefer these properties. The metro station is available within only two to three kilometers and the upcoming flyover will connect the Bypass Extension to the Bypass Road. This project should be completed by the month of June this year and will speed up connectivity rapidly in this region. These are some of the major reasons for the flocking of buyers in large numbers to this area. According to real estate experts and professionals, these factors will readily encourage the development of real estate in this region and these areas are expected to be huge draws in recent times.

There are various parameters taken into account by buyers before taking a final decision on the properties to be bought according to Malakar. These essential aspects include the ratio of the super built up area to the carpet area. This is usually termed as the floor efficiency ratio and this holds prime importance in the market. Developers who offer properties with a twenty to twenty five percent difference between carpet and super built areas are usually more popular with customers. Other features include power back-up, security, club houses, playing areas for children and a swimming pool. These are other important facilities that Kolkata customers usually look for before buying any property. The prices of real estate Kolkata in this area should remain stable at least for some time. Short term stability of prices is what is luring buyers to this area. Property prices are stable mainly because of poor sentiments in the market, unaffordability, demand lags for third and second homes and cautious approaches of customers in general.

Alongside, price increases will further be negated by the proposed bill which seeks to declare property prices on carpet area as a mandatory requirement and this will also lead to better stability and affordable rates even in future. Affordable values of property and infrastructural development measures have mainly driven demand for homes in Sonarpur. Kolkata customers are rushing to Sonarpur in droves and this is a highly preferred residential area in recent times. The area has witnessed huge changes over a span of five years in all and this South East Kolkata address is witnessing a large number of projects being undertaken by developers and companies. Land prices are lower in this area and this is what has spurred better development in the region.

Apartments within 750 to 1430 square foot are available in the area at prices of INR 2, 600 to INR 3, 000 per square foot. Alongside, this means that an apartment of 750 square foot comes at INR 20 lakhs in this area. The average prices of property in Sonarpur range between INR 20 lakhs to INR 40 lakhs. High value apartments are also available in this area. Big developers like the Ideal Group and Nature Home Group are thinking of launching multiple projects in this area as a result of growing demand for residential units. Availability of land and good connectivity is fueling this demand. Alongside, students are flocking to the area owing to the presence of the Future Institute of Engineering and Management.

The Mayfair Group, Lord Group and Srijan Manik Developers LLP are also coming up with big ticket projects in these areas. Real estate growth has been dynamic in these areas and further developments are naturally expected!

How To Get The Best Real Estate Deal For Yourself!

Getting the best real estate deal for yourself is no mean feat. You need to be very sharp and on the ball at all times. Real estate is one sector where a lot of fluctuations have happened in recent times. These fluctuations can either be good or bad depending on the present condition of the market and its intrinsic mechanisms. Real estate markets are not really in good shape in present times. Why is this so? This mainly has a lot to do with the market trends that are dominating the economy at present. Real estate markets are having to deal with a slump in demand. It is important to know the background context of real estate in India before you actually think of purchasing a property for yourself.

Real estate has been bogged down by certain problems like price stagnation and unaffordability. Stagnation of prices has mainly resulted from the initial conundrum of lower supply levels and burgeoning demand points. Price increases mainly resulted from this dilemma and henceforth were propelled upwards by sky rocketing development of particular areas and locations in all major cities, even in the suburbs or outskirts. Right now, prices have reached a maximum level which is both unaffordable and unreasonable for entry and mid range buyers. The luxury and premium housing markets continue to do well in India which is rather surprising considering the current state of the Indian economy.

However, there has been a huge slump in demand from the mass as a result of which, unsold inventory has been piling up by the dozens. It is the same situation for hundreds of realtors, developers and companies in this sector across the country. Real estate prices have now saturated and there have even been price corrections in some areas. Price corrections have been to the tune of ten to fifteen in prime locations of cities like Kolkata, Delhi, Mumbai and Bangalore. On the other hand, prices of property in the outskirts or rapidly developing outer fringes have seen a slight appreciation backed by popular demand from customers.

In areas where price corrections have not taken place yet, developers are looking at ways and means to make the offer more lucrative for hard pressed customers. This is another predominant trend that is being witnessed in the real estate sector of late. In this scenario, you need to be careful if you need to obtain the best real estate deal for yourself. Bear in mind that buying your dream home in the present scenario may not be as easy as it looks. Always have a solid database of information and details relating to properties available in your preferred areas and locations.

Always be flexible with regard to factors like location and other amenities. It pays to be flexible in the current scenario as you might end up getting hold of a fabulous deal with only a few tweaks here and there. Do not go by the first impression of the developer or real estate company selling you a particular property. Do not be influenced by sales pitches and the claims of the developer. Developers often make absurd claims about the location in question and its advantages which may not often translate into actual, tangible reality.

Always make your own inquiries with regard to the area, its advantages and benefits, transportation facilities and the like. Always insist on certain basic amenities like power backup, security services, generators, playing areas for children and recreational areas when you start searching. This will help you narrow down developers who have projects that may be to your liking. Keep in mind that you may not find all your desired amenities in one single location. This hard to predict and you may lose out on a good deal if you are too rigid. If it pertains to something absolutely important and necessary you should not be making any compromises.

However, if it is something that can be substituted or replaced or even done without, do not hanker unnecessarily with the developer. Always bear in mind that developers dole out freebies, special payment offers, flexi payment schemes and other benefits in order to offset the impact of high prices on customers.

Make sure that your developer or realtor offers some tangible benefits in this regard. It makes no sense to go for a particular property otherwise and you will find loads of projects and developers which provide you certain extra benefits. Always negotiate with the developer as to the final prices. If the prices cannot be lowered throw in an extra benefit or two wherever possible. Keep in mind that price corrections are not unnatural and it is the developer who should be worrying about stock clearance and not you.

Undue hurry and desperation often gets the better of us and forces us to make a rapid choice. Do not be hurried by the statements of the developer pertaining to limited properties being up for sale and the huge rush expected and so on. Take your time in deciding on the purchase and do not be worried about missing out on anything. While dealing with the developer or real estate company, always be firm yet friendly. Do not be overtly aggressive especially in India as developers tend to rely more on personal interaction here.

Always look for locations that have upcoming and proposed projects and development opportunities. There are loads of development opportunities in place across multiple locations. New and upcoming areas offer loads of fabulous deals for real estate buyers and investors. If you buy a property in an upcoming area at a cheap price now, you will stand to reap the benefits later. If you are an investor, always have a wide margin of about three to four years for getting your investment back.

Follow these tips towards getting hold of a fabulous and attractive real estate deal for yourself. Real estate markets are witnessing major changes and you should get your share of the pie as much as you can! 

Amenities Offered By Builders - Farce or Reality?

Most add facilities free of cost across different pricing segments to make the deals attractive for the buyer. A lot of buyers get attracted by these add on services as they value them a lot. However, how much do these add on services should exactly mean to a buyer?

Modular kitchens which have all the necessary wood work done, twin apartments that have shared private lounging areas, restricted access swimming zones where only row houses that fall in the luxury category are provided entry, special pools for “energizing”, landscaped terrace gardens in every villa, zones for teens and much more are some of the amenities being offered by developers. Some of the amenities such as the modular kitchen are priced nominally while the rest are given away for free!

Not only does the luxury segment get these free ad ons but also mid segment builders are offering interesting freebies. Some of them include no additional car park charges, electricity charges are not imposed over the set price and charges for using the sports zone or club house are waived. Such expensive amenities being offered for free might make buyers sceptical of the actual intention of the builder.

AvikPrabhu who is a loan adviser and consultant states that builders do not make false promises to prospective clients. The competition has increased in Bangalore which is why builders are taking such drastic steps to keep their business afloat. Several new projects have been announced in the city and a large number of the existing ones are inching closer towards completion which has elevated the level of competition that a builder has to face from his own and others’ projects. Therefore, the target of attracting buyers is heating up and developers are offering better deals. From the developer’s side, it is actually a case of showcasing to buyers about how his project is better than those of his competitors.

Therefore, it is very essential for a buyer to clear out what he is imagining the freebie to be and what the seller is offering. As a buyer, you should also consider what your and your family’s needs are over that which is being offered.

Amenities such as children’s play area, swimming pools, club house, mini theatre, roof top entertainment zone, jogging tracks and senior citizens’ walking area are being offered by many mid-segment developers in projects where the starting price of an apartment if Rs 55 lakhs. On the other hand, developers who have more expensive projects are focusing more on the quality of construction, handover date and people density and a few of the aforementioned amenities. The buyer has to check out the different offerings and go for what is her or his need.

Here are some pointers that would help buyers know exactly what they should look out for and what is being offered by the developer.

•  Because the cost of construction has gone up, buyers should actually check out the quality of the free  amenity being offered and exactly what the builder is offering. For example, a facility such as the special energizing swimming pools may have pressure spot tiles, similar to those used in parts or flooring which is extra ribbed and prevents skidding and not Jacuzzi style pressurized flow of water. Similarly, a landscaped terrace might mean a patch of artificial grass that is bordered with flower pots, wooden flooring with miniature pals in pots and partial grass.
•   An Italian kitchen or ready modular kitchen with the apartment does not necessarily imply that the kitchen will be decorated as per your customizations. It implies that basic facilities such as two slide basket sets and two wooden shelves will be provided. Four small cupboards may also be provided on the top for storing containers and jars. It does not mean that a full length double smooth slide storage space would be provided that measures 9X17 feet. When you choose a ready-made modular kitchen, you need to check the quality of wood. Wood, being a part of building materials, has also seen a price hike along with other construction materials.
• Find out the difference between MDF, ply, particle wood, rubber wood and teak and their usage in terms. They can be used in combination to save a lot of stress and money in the long haul.
• Some of the combinations of wood are more water resistant than the others while some are resistant to dampness and some others should be strictly used in dry areas. It is wiser to spend a little more intelligently after some research. You will actually get what you need instead of getting duped by a cost effective pricing option that is offered by the builder.
• Take stock of what you need and look for projects that check your list of wanted amenities. Do not buy into the colourful and glossy offerings that are being claimed by the builder.
• If you are the type of person who is more comfortable with yoga and long walks, then high quality construction should be your priority along with a green view in an area of solitude. You could also go in for roof top entertainment areas and closeness to a good park. Once you have fixated upon your criteria, concentrate on the size of the apartment and its location. Facilities that you do not use such as swimming pools, clubhouse, jogging track etc. would be a waste for you.

 Before making a purchase on any apartment, talk to your friends and family. Focus more on what your family needs. If you need a location near to your workplace, then forgoing landscaped terraces and clubhouses makes sense. Also, opt for an apartment that has multiple rooms. If you are newly married, a 2BHK flat might seem enough for you. However, as time passes by and your family expands, the space will fall short and you will have to go through the hassle of looking out for larger apartments. Assessing what you need now and may need in the future is of utmost importance when you are making a decision about buying an apartment. 

All About Purchasing Distressed Properties

Distressed properties are a popular term in the general real estate lexicon. Is it worth buying a distressed property? Should you opt for the same over a regular property investment? These questions will be answered in due course but first it is imperative to understand the whole concept as it rests in layman terms. Proper understanding and evaluation will help you decide on the pros and cons of investing in distressed properties. Distressed properties are properties that have recently come into the market. They are put up for auction where interested buyers participate. This usually happens when the owners of such property are not able to repay the loan that has been borrowed from any financial institution or bank where the property had earlier been mortgaged as security.

According to real estate property market experts, the purchase of distressed properties is a practice that is gaining more and more ground in particular Indian real estate markets. This includes cities of the Tier II and Tier III variety, like Kolhapur, Jabalpur and Aurangabad. There are many similar cities which witness a favorable response from buyers and prospective home owners with regard to investing in distressed properties. Why is this really such a popular means of investment here? According to many property market experts and professionals, value buys are mostly on offer for buyers of real estate in cities that are considerably smaller. This is mainly because the realization on the base prices is higher in comparison to properties available in metro cities.

There is not high excitement among prospective buyers with regard to snapping up residential properties in Tier I cities. Distressed properties that are mainly bought in Tier I cities include commercial spaces, hotels and other business and office properties. These are large ticket purchases and this is a trend that is witnessed in large metros these days. Distressed properties are naturally more attractive to buyers for many pertinent reasons. Distressed properties are very appealing owing to some specifics. More often than not, the distressed property prices are always reasonable and very affordable which is a huge plus point of sorts. Distressed properties are very attractive to buyers as a result.

The base prices at these auctions are usually lower by thirty percent as compared to the original market prices for properties in the their particular locations. This causes quite a flutter among real estate buyers and enthusiasts. This makes them stalk such distress sales and NPA e-auctions are proving to be a very popular practice in recent times as well. As a result, one can gauge the level of popularity enjoyed by these auctions of distressed properties or distress sales as they are otherwise referred to. Alongside, according to official market statistics and other figures, more than one lakh properties were put up for e-auction in the period between 2013 and 2014 which is a staggering statistic to say the least!

You should always keep an eye out for liabilities that are unknown and undiscovered. Distressed properties sometimes come with some liabilities that are hard to shake off. These include things like taxes which are unpaid and the like. These are taken into consideration by banks while the base auction prices of property are fixed for properties acquired under the SARFAESI or the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act which came into being the year 2002. Buyers are quite aware of the restrictions involved in selling off these restricted properties and always endeavor to pay off the liabilities in question within a fixed time period. However, there may be liabilities that may be totally unknown for any distressed property and this may only come to light once the property is purchased.

The risks involved in the whole procedure of these purchases are high as a result. However, a little homework and care will help you avoid any common pitfalls that may arise as a result of such concealment of facts. You should always strive to perform a comprehensive background check of distressed properties under consideration. Always research all you can about a particular distressed property. Always find out what made it come under the distressed property category above all else. Always consider the location, the nature of speculation involved in the investment and check whether the land is involved in any dispute or controversies. Alongside, strive to find out about any unpaid dues by checking the official records of the land or apartment building from the public authority records.

Do not be in a tearing hurry to snap up any property, no matter how great the temptation may be. Always look at the discounted prices on other new properties which are offered by developers at times. In case, you get a ten percent discount on a new apartment it is no use going for a distressed property which is sold at the same price after discounts. Always look at the discount prices on offer as these properties are usually sold at prices which are fractionally lower as compared to the market prices prevalent these days. Distressed properties are not readily available at all times as well. Alongside, worthy properties that come up for distress sales are usually chased by equity, third parties, HNIs and realty funds as well. This only serves to push up overall property prices up a notch. This leads to the price of the property being marginally lower than the prices in the market as mentioned earlier.

You can actually skip distress sales for the time being. The overall demand in real estate sectors is decreasing rapidly owing to stagnant prices which are unaffordable for a large section of prospective real estate buyers. This is forcing developers to offer multiple discounts and freebies for buyers. They are rolling out the red carpet for buyers with hefty discounts, freebies like parking, additional amenities and flexible payment plans and also various other benefits. Always check out these offers and benefits thoroughly before making a decision. In case you have a tight budget and find a hassle free distressed property in a good location at a discounted price, you can only go for it then!

Mumbai becomes Expensive for Residential Property Buyers

The Indian real estate market has been witnessing a nationwide slump of sorts. This has mainly been attributed to a combination of factors revolving around the state of the economy. The Indian government has done little to revive the sector with cutting edge reforms and policies even though a few bills were passed in the year 2013. As a result, the industry is now awaiting the election results with a view towards praying for the formation of a stable government at the center. Why is this factor important for developers and real estate companies all across India? This necessitates a thorough study into the present condition of the real estate market in India. Firstly and most importantly, real estate is suffering owing to a severe lack of demand. Indian real estate thrived on huge levels of demand and this was considered to be a permanent factor given the levels of growth.

However, the poor economy and other factors have put the brakes on the steady progress of the Indian real estate industry. Why has demand dropped down to such levels? This mainly has to do with economic fluctuations and changing market conditions. Alongside, the extremely high prices of real estate in maximum areas has put paid to any hopes of attaining a home at affordable rates. This is proving to be the biggest reason behind the steadily dwindling demand especially in metro cities and major business hubs of India. On the other hand, suburban areas and projects situated on the outskirts of major cities are witnessing a tiny growth in demand owing to more affordable prices and better transport connectivity. Alongside, these areas are even witnessing an appreciation in their capital value with the steady development of infrastructure and social amenities in the region.

Surprisingly, demand in major cities like Delhi, Mumbai, Bangalore, Chennai and Kolkata has come down to surprising levels. High prices have severely affected the budget housing and mid level housing segment in major Indian cities including the top eight. Alongside, the premium and luxury segments have not been hit as badly as the entry and mid level areas. However, even these projects are struggling to find buyers owing to high prices of land and liquidity crunches. Developers are in a stressful situation right now and the major problem pertains to unsold inventory. Unsold inventory has gone up to unprecedented levels and is steadily piling up for major real estate companies.

Along with unsold inventory, the high prices of land are making it impossible for developers to reduce prices and offer homes at lower costs to buyers. They are now offering various discounts, special offers and other freebies in a bid to clear out their inventory. This makes it a win-win situation for buyers and investors who can afford it. Yet, the expensive nature of real estate purchases cannot be denied especially in a city like Mumbai in spite of forecasted price revisions and corrections owing to a slump in demand.

Mumbai is one city where the cost of acquiring residential real estate may just increase by leaps and bounds. Mumbai residents are praying for price corrections and revisions to take place and at the same time, the values of property in the city are rising steadily day by day. According to a study brought out by the noted real estate advisory and consultancy, Knight Frank India, it has been found that the values of residential land available in Mumbai have increased to the tune of almost 35.2 percent which is mindboggling and astonishing to say the least! The very fact that this has happened in the previous couple of years is another worrying factor. Land which is used for residential development has now become costlier and the increase in these prices is mainly attributed to factors like residential price hikes along with multiple norms of development.

What prospective customers and Mumbai residents do not realize that the values of built spaces have also been influenced by this increase in the values of residential land. Owning a home in Maximum City has become more and more difficult and expensive in the last couple of years and this is one harsh reality that prospective buyers and city dwellers have to accept without any real solution in sight. This is something that has affected the morale of all those aspiring to own a home in India’s financial and business capital. According to Darshan Vyas, Managing Director at True Value Realty, a Vadodra based brokerage firm, the overall pricing of built spaces is one aspect that is dynamic and all movement happens likewise in an effective manner.

According to Vyas, there are two major aspects that influence the cost of any built property these days, namely the cost of construction and the cost of land. The former is one aspect which is by and large stable as far as trends in both large and small cities are concerned. The latter is the factor that makes the real difference in this case. For instance, the cost of land is lower in places like Vadodra as compared to Mumbai owing to lower demand per square feet. High levels of demand and lower supply of residential spaces have now pegged values of land to exorbitant heights.

Values of property too have a relationship that is symbiotic with the values of land. This proportionate growth is behind the sudden appreciation in property values in Mumbai. This premier city is now one of the most expensive propositions for Indian buyers. Prices have largely appreciated to the tune of ten percent and this has even gone up to forty five percent in some areas. Appreciations have been observed in places like Navi Mumbai and Thane among others. According to Mehul Thakur, the Viva Homes director, the annual increase in prices of land in Mumbai is mainly due to the constrained supply of ample land along with the rising demand for quality residential property. The Mumbai real estate market will soon be on an upswing and positive market sentiments will again prevail after the elections.

According to Thakur, affordable housing is a pressing need in Mumbai and realtors should not scale up their prices any further in case of positive market sentiments as this will only serve to dampen the same and lower demand further to unacceptable levels. The focus should be firmly on affordable housing according to Thakur and many other industry professionals and experts. Whatever be it, residential real estate is set to become even more expensive in Maximum City!

A Lowdown on the Current Situation of the Real Estate Market in India

Are you worried about picking up the right real estate property? Understand the true dynamics of the prevailing situation in the Indian real estate market first. Otherwise, you will end up making a wrong decision. The economy and its performance have a lot to do with the overall customer demand for both commercial and residential properties. Overall demand for properties in a particular city has more to do with the location than anything else and this also pertains to factors like infrastructure. The real estate has phases of both depression and growth and currently, supply is more than demand, a very rare case in this industry.

Indian Real Estate

Market depression is primarily responsible for the difficulties faced by developers in selling homes. According to Pankaj Kapoor, the MD of Mumbai based Liases Foras, a real estate analytics firm, the housing sector is facing a situation on the throes of typical recession. According to the firm, the NCR-Delhi region saw sales of just 1.24% of inventory in the June quarter of 2013 while the monthly sales velocity should ideally be at least 2.75%! The Mumbai Metropolitan Region saw sales velocity figures of just 1.12% while the numbers were 1.53% and 2.27% for Chennai and Bangalore respectively. Pune’s market had a figure of only 1.61% while Hyderabad had only 1.34% of sold inventory.

According to co-founder Kartik Varma at PropTiger, a property brokerage, the market is witnessing a definite slowdown and lowering of business volumes. Transactions are going down by the day and unaffordability counts as the major reason for the same in cities like Mumbai and Delhi and not the shortage of willing buyers. Kolkata and Chennai are typically conservative real estate markets and supply overhang is not as pronounced as say markets in Pune, Mumbai, Delhi-NCR and particular areas in Bangalore. There are buyers for homes that are priced quite reasonably and are habitable. However, affordable housing is only available in locations that are far from the heart of major cities and this is a major reason for the slump.

Developers are still launching newer projects in spite of a drop in overall customer demand. However, in what is a first, many of these new projects are a quest to align reasonable prices with decent amenities. Alongside, middle income housing and affordable housing is sectors that are now drawing more developers owing to the immense demand in only these two areas. About 85% of all launches in the prominent eight Indian cities revolved around these two segments and most buyers in India are currently looking for properties priced between INR 40 to INR 80 lakhs. There is a huge demand for properties priced between INR 20 lakhs and INR 40 lakhs from end users mostly. Government support with a subversion of 1% interest for loans till INR 15 lakhs along other tax deductions mainly fuel this demand.

Suburbs and other areas on the fringes of major cities are witnessing a real estate boom with affordable housing projects aplenty. Buyers are looking at snapping up properties in remote locations which have good infrastructure and decent connectivity options. However, local builders mainly dominate this segment and companies stay away owing to low margins of overall profits with these projects. At the other end of the spectrum, high end premium projects are also being launched in top Indian cities which are situated close to business and commercial hubs. Yet, this segment has also seen a slump in sales as more and more buyers adopt a cautious approach towards investing and decide to wait for better deals courtesy impending price revisions.

Ideally, real estate markets in all cities should see corrections in prices owing to unsold inventory and diminishing sales and this is happening in some areas but by and large, real estate prices are either going up or are static. Mid segment prices have gone up last year and returns for investors have been decent too. Surprisingly, real estate investment returns have been very good and have gone up to the tune of almost 30% in some markets with an average of 20% prevailing across almost all cities which is more than returns from stock markets or even gold according to Frank Knight India studies. Prices should be static over the next few months of 2014 according to experts and analyst. Small price revisions will happen thereafter but nothing in a big way.

However, some experts beg to differ and state that price corrections of about 10-15% should be in place over the next couple of years. Alongside, time corrections could also take place and this is substantiated by the fact that properties in secondary markets are being sold at prices which are less by 10-20% than what is charged by builders. One thing is for sure: there should be no sudden price increases in the near future. Alongside, the sector will also be under a lot of pressure owing to newer rules and regulations. There should be a new law in place soon which will make life very difficult for real estate developers.

According to financial advisors, if you are thinking of buying a house, you should do it immediately as you will save on income tax and house rent. Alongside, the market will never be quite perfect for purchasing a home. Property prices will not be rising largely anytime soon but they might just rise a little after the elections. Thus, it makes sense to go for a property now with some additional discounts thrown in from the builder’s side. Flexible payment options are now available and this makes it a good time to snap up your desired property. The resale market is still going strong and many properties are selling at cheaper prices than those originally desired by developers. If you are looking to sell your home, you might do well to wait till the election results. However, buyers should not waste time as the market will never be as perfect as they want it to be!

Should you Invest in Real Estate in Kolkata Right Now?

The real estate market is witnessing a slowdown and prolonged slump for quite some time. This is not unusual, considering the global situation and the increasing costs of materials and other costs of production. Alongside, there is one big factor that has hit the real estate market hard in recent times. Owing to increasing costs of land and other variables, real estate prices have increased drastically across all major metro cities in recent times. Over the past year, prices have been extremely high and this has expectedly led to fewer takers for various newly launched projects. The real estate industry in India is in bad shape overall and the sector is looking at governmental reforms to revitalize the market.

Alongside, the upcoming Land Acquisition Act promises to toughen up things for real estate companies and developers and might lead to further price increases. At the same time, developers are trying their hand at affordable housing projects. Some are selling projects with hefty discounts and special payment schemes including flexible payment options. These discounts translate into almost 10-15% of the entire price of a property on an average. Alongside, real estate prices have seen minor corrections in some areas while suburban areas are witnessing slight increases in price owing to the actualization of much needed development. Unsold inventory has been piling up with developers and they are facing a sticky situation in this regard. Kolkata is no exception to this slump that has gripped the industry.

Are you looking to invest in the real estate market in Kolkata? You should be careful about your decision though and should only go ahead after a thorough understanding of the entire situation. Is this the best time to invest in real estate here? Read on to find out more about the prevalent situation in the Kolkata real estate market.

Customers are now hell bent on ferreting out the perfect home for themselves and this is one of the most dominant factors behind the overall performance and sales of the real estate industry currently. End users are still seeking out perfect homes at the end of the day in spite of the condition of the Indian economy. This is one trend that can be observed in Kolkata especially. Real estate developers of Kolkata are slowly shedding their traditional inhibitions pertaining to non investment in affordable housing projects. Some of them are even snapping up land in remote locations, almost on the city outskirts. This was something that would have been greeted with loads of skepticism and censure from middle to high income background customers earlier.

This would have mainly been on grounds of minimal commuting options to central business areas in Kolkata. However, this does not hold ground anymore in today’s times. Communication systems have improved to a great extent and the Kolkata metro railway system offers a fabulous alternative for people living in the outskirts. Real estate can only thrive on proper infrastructural support for a large chunk of customers in any location. Developers are now coming up with projects in areas that are quite a distance from major city centers. The suburban areas, namely Baruipur, BT Road (North), Howrah (West) and Chandpur Champahati (extreme East) are witnessing a slew of top notch projects. These are affordable housing projects and developers can keep prices low in these cases owing to the low costs involved in acquiring land in these areas. Other transportation facilities and the economic crunch on a whole, make these projects attractive options for a mass market.

Property investments have risen in Kolkata as more and more people look for affordable real estate investment options as a security option against the wake of growing economic insecurity and income depreciation. Realty prices are not going down and are only increasing with time in the suburbs. Real estate companies in Kolkata have been following models used in Bangalore, Mumbai and Chennai and are offering various goodies with projects. For instance, mid range cars are being offered to the first lot of customers along with other freebies like air conditioners and modular kitchens for the second and final lots of customers. This allows them to sell off flats which would otherwise be difficult to dispose of, owing to design aspects and other factors. Kolkata is witnessing high demand from NRI buyers and individuals from other cities who are making safe investments in the city. Real estate markets are thus witnessing an increase in overall demand and this is one favorable sector for the overall growth of the sector in the future.

Investments are mainly being triggered by market aspects and prevailing economic scenarios instead of hardcore preferences in some cases as opposed to the perfectionist group of buyers on the other. The latter has a good budget to partake of while the former wants value maximization at the lowest prices. Real estate companies are going by amenities, facilities, infrastructural support, good designs and good locations to market affordable housing projects to customers.

Kolkata has suddenly emerged as a good arena for investments in real estate owing to better infrastructure, low prices and steady appreciation in the value of properties. The resale market is also a thriving one here and these properties do fetch good returns for investors. This may just be the right time to invest in real estate in Kolkata according to experts and market watchers owing to the static prices. Some areas have even seen a reduction in overall prices and developers are going all out to clear inventories with discounts and special offers. Buying a property now will help you stay secure for the future and get fabulous value on your investment.

The Kolkata market has not been as fluctuating as say Mumbai and Delhi and that has worked in its favor with more people from other cities choosing it as a safe haven for their investments. If you are among those looking to snap up a property in the city, do not waste anymore time!

Should You Invest in Real Estate at this Point of Time?

Many of us are concerned about the overall real estate scenario in India. Indeed, the market has witnessed loads of downturns in recent times. The Mumbai real estate market has been suffering and stagnating on the pressure of unaffordable prices and other problems. This is not a problem unique to Mumbai alone. Even areas in Kolkata, Delhi, Bangalore, Hyderabad and Chennai are witnessing major problems on account of high prices and lack of customer demand. Indeed, customer demand has dwindled by unexpected proportions. Overall customer demand has gone down due to the extremely high prices of property in most areas.

On the other hand, suburban areas are witnessing renewed demand with a slew of affordable housing projects being implemented in these areas in major cities. These areas should be witnessing price increases as well in the future owing to speedy development. Price saturation in posh areas and localities has left developers with little choice in terms of selling inventory. Inventory has been lying unsold and developers are doing their best to lure customers with offers, flexi-payment options and other special benefits. However, this strategy has not been working for quite some time now. Unsold inventory has been putting pressure on developers from various quarters. Alongside, home loans may become more expensive owing to an impending in repo rate courtesy the RBI.

This will force banks to jack up their rates of interest and will in turn, affect demand for property in almost all locations. Alongside, the sector is dreading the aftermath of the land acquisition act which is also slated to be cleared this year. This may make things tougher for realtors and force them to increase property prices by a fair margin, which again, will affect demand. In this scenario, is it really the right time to buy property in Mumbai? Recent reports of price revisions and corrections have raised the hopes of many people with regard to finally being able to invest in Maximum City without any hassles.

According to a recent study and report brought out by leading real estate industry expert, Knight Frank, the prices of real estate have gone down in particular areas of Mumbai. This depreciation has been to the tune of a staggering ten percent and this has raised the hopes of investors by a fair margin. Alongside, these findings have also highlighted the fact that up to 45% of all new properties under construction are yet to find any buyers. According to real estate market experts, it is the same situation in other metro cities as well. Prices are and will be softening steadily in the wake of diminishing demand. Will this make for an ideal investment situation?

According to the national director at Knight Frank India, Mudassir Zaidi, the present time is highly favorable for property investments across India. Major cities have witnessed a dip in real estate prices owing to an uncertain economy, slackening demand and uncertain political climates. Alongside, prices should be rising if there is the formation of a stable government at the Centre after the 2014 elections. This rise in prices will mainly be due to the boost in confidence. However, the reverse will happen in case of a fractured or coalition government assuming the reins of the government. However, Zaidi also feels that the current pressure prevailing on real estate prices will not last for long if there is political stability and an improvement in market sentiments which would lead to price increases as mentioned above. As a result, this indeed makes for a good time to invest in real estate all across India. Even a report issued by Knight Frank states that prices are most likely to see a boost in the latter half of the year owing to the end of the elections and the improvement in economic conditions. However, there are several micro factors to be observed for that to happen.

According to the executive managing director at Cushman & Wakefield, the leading real estate consultancy, this does make for a good time with regard to investing in real estate only if other aspects like job security, business stability, proper financing and all other elements are in place for an individual. Most experts seem to concur on this fact and this should raise the expectations of serious real estate investors. Alongside, the study by Knight and Frank has highlighted the depreciation in prices to the tune of ten percent in certain areas of Maximum City. These include areas in Lower Parel, South Mumbai, Parel and even Central Mumbai. Alongside, stable prices have been witnessed for areas in Thane and Navi Mumbai among other suburbs.

According to market experts, the tide is turning in the favor of real estate investors and buyers. Inventory increases, lower demand and other factors are putting heavy pressure on real estate prices across India. Demand should also remain low throughout the first half of this year according to market experts. Knight Frank swears by an impending correction of prices which should further benefit buyers. Yet, Dutt highlights particular areas in Mumbai which have not yet witnessed any correction in prices. According to him, prices may not decline by whopping amounts but locations in LBS Marg, central south and other prime areas may see greater discounts being offered to buyers.

This will be done to fuel increasing demand. However, before investing, buyers must consider the viability of the location, the scope of accessing proper infrastructure and proper access to prime city locations. Another important factor behind investments lies in the social infrastructure surrounding a particular project. This includes colleges, schools and other educational institutes along with centres of recreation, entertainment, malls, health care provisions, retail outlets and many more amenities. There should be future developments planned for the area in question and there should also be a thriving transport network. These are factors that must influence your investment decision but otherwise, the first half of 2014 is indeed a great time to invest in real estate in India!

Should you Buy Residential Capital in Mumbai Now?

Is this really the best time to buy property in Mumbai? This is one question that has dogged various prospective buyers for a long period of time. There is a lot of anxiety prevailing around the real estate sector in today’s times. As a result of the otherwise sluggish market and other factors, prices of real estate are steadily softening in most areas of Mumbai. However, buyers are concerned about the pros and cons of investing right now or waiting for a further reduction in prices. Is this really a good time to invest in property in Mumbai? 

Mumbai has always been largely unaffected by the trends in the Indian real estate market and a large scale price correction in prices of real estate. Many of us dream about owning an apartment in the commercial and financial capital of India. Mumbai has always held on to its high prices much in the mold of other major cities like London or even New York. This has been a fact in spite of dwindling project launches, a sharp capitulation in overall demand and rundown financing for real estate developers. However, a recent study conducted by Knight Frank, the leading real estate consultants, indicates that prices may be softening in Mumbai. 

As per this study, the prices of real estate have been fluctuating in a somewhat narrow range and have largely been going down over the last four quarters. This has been happening with the adjustment of the market to newer launches. Premium micro markets usually witness more volatile pricing as compared to suburban micro markets which are close to the periphery. Prices have gone down by almost 10% across the last three quarters in locations like Mahalaxmi, Parel and Lower Parel. At the same time, the suburbs in Western and Central Mumbai along with areas in Thane and Navi Mumbai have seen overall stability of prices which have even risen with the passage of time. 

According to the CEO and MD of Orbit Corp, Pujit Agarwal, the study presents accurate findings to a large extent. However, he feels that the market trends are constantly in a state of flux, varying with regard to the area taken into account. He says that prices across South Mumbai have remained unchanged while price corrections have taken place to the tune of 15-18% which is mindboggling, in areas like Lalbaug and Parel and even close to Wadala. According to Agarwal, prices have been somewhat sluggish in comparison in the suburbs of Mumbai and have risen a little in places like Navi Mumbai. However, places like Dombivili, Thane and Kalyan have witnessed price appreciations to the tune of 10-15% and this is set to continue all throughout the MMR region. 

There has also been an appreciation in prices of resale flats or properties that have been completed even though strangely, there is a dip in prices to the tune of 10-15% for buildings that are still under construction as per the Chairman & Country Head at Jones Lang LaSalle India, Anuj Puri. The price drop may not be as visible yet owing to such manifold market variations. However, there are various concessions, such as free stamp duty, rent back, floor charge waiver, subvention policies, waiver in car parking charges and registration concessions that may be behind the overall 10-15% discounts that are being offered by real estate developers according to Knight Frank. Alongside, these discounts have been seen to go up to a whopping 25% when it comes to housing projects that are of a premium and high end nature. 

There is a large scale desperation noticed among builders and developers in Mumbai. This is because 1.3 lakh apartments are still unsold out of the 2.9 lakh residential units being constructed in the city. The NCR or the National Capital Region has 26% of unsold inventory as compared to the huge 44% witnessed in the MMR or the Mumbai Metropolitan Region. This is a huge worrying sign for developers. The overall demand on part of customers has come down quite significantly. The period between January and September in 2003, saw the launch of 47, 488 units at an approximate level. This translated into a drop of approximately 46% and 42% when the same period for the years 2010 and 2011 was taken into account respectively. Cancellations are another area which is causing problems for developers. The numbers have gone up in recent times and this again, does not augur well for the Mumbai realty sector at large. 

Is this the best time to buy real estate as a result? Experts feel that it would make sense to wait a little more especially if investors are targeting areas like central Mumbai. According to Knight Frank, there should be a more definitive correction of prices to come which should be even more beneficial than the current revisions. Builders have been stuck with unsold inventories and decreasing demand that will lead to greater pressure on the prices. When profits go down and costs of interest rise even further, developers will have to lighten their inventories and offer even lower prices. Alongside, prices have gone down by almost 10% in the central suburbs of Mumbai. However, the overall prices will not be going down owing to limited supply and this might be a dominant trend over the next few years. Alongside, areas like Navi Mumbai which represent particular micro markets might not see price corrections as well. There are many projects which are selling successfully while nearing completion and this is another factor behind the same.

According to Jones Lang LaSalle, real estate developers are also waiting for the results of the elections to determine the final prices. In case of a stable government being formed at the centre, there will be huge euphoria and it might boost demand, thereby leading to prices stabilizing. However, you would do well to wait if you are betting on a weak election result according to Puri. Going by that perspective, it would truly be a good time to snap up a property in Mumbai now!

Kolkata Land Prices Stir a Hornet’s Nest of Sorts!

Kolkata has always been a favorable market for the real estate industry. Real estate, as we all know, forms a pivotal part of the Indian economy. Much of the growth of the overall economy is dependent on flourishing real estate sectors across cities. However, the industry has been witnessing a rapid slump all throughout last year. Demand for real estate projects has dwindled to unthinkable proportions in recent times.

Why has this happened? This is mainly due to a combination of factors which have triggered a collapse in customer demand in the industry. The real estate industry has been hit by lack of governmental regulations and policies that were deemed favorable for the industry. Alongside, the high prices of land have also acted as a trigger towards the increasing of overall prices of property across cities. Property prices have swelled to unmanageable levels. Earlier, the real estate industry thrived on the basic principle of greater demand as opposed to supply. There was a need to fulfill the housing aspirations of millions. However, with the sudden increase in prices, the mass has turned its back on the real estate industry at present. Everyone is cautious about investing his/her hard earned money in real estate these days.

With regard to investments, Kolkata still remains a good market with regard to NRI investment and property acquisitions by individuals from other cities. These investments are fetching good returns owing to sudden appreciations in overall value of properties across major areas of Kolkata. However, it is the end user segment that is giving developers sleepless nights. End users are reluctant to buy property at this time and for the first time, supply far outstrips demand, with unsold inventory piling up with real estate companies. To add to these woes, Kolkata is witnessing the same price syndrome which is making the public turn their backs on mainstream real estate projects.

In spite of the slowdown in the real estate sector at large, as mentioned earlier, the prices of land have been increasing at an unprecedented rate all across Kolkata. This is having a chain effect on the housing prices in Kolkata, taking them into uncharted territory across major areas. Areas which are considered posh and premium localities have seen an increase in land prices to the tune of fifty percent which is staggering to say the least. Overall demand has gone down but prices of land are rising on the back of steady demand courtesy outside investors and high net worth individuals. Semi-urban and urban areas have not seen many townships or affordable housing projects recently.

At a recent auction of land by the Housing Infrastructure and Development Corporation or Hidco and the KMC or the Kolkata Municipal Corporation, buyers witnessed the spiraling prices for the first time. The highest land deal in Kolkata this year was successfully concluded when a 2 acre plot right on the EM Bypass was sold off for a mindboggling INR 115 crores! The biggest land deal earlier was taken to be the INR 135 crores received for a 3.35 acre EM Bypass plot. Alongside, the Rajarhat IT Township recently saw an INR 51.3 crores deal for a 2.5 acre plot on which a retail complex and office are slated to come up pretty soon. These deals indicate at the rising prices of land in the city and the effect on the costs of housing. According to market sources, the mainstream public will feel the pinch as developers will have no option but to hike housing prices considerably owing to their own rising costs of land acquisition. Alongside, the new land acquisition act, if passed, could also lead to a further rise in prices for properties in the city.

According to a realtor in Kolkata, Santosh Rungta, the overall value of land in Kolkata has gone up by a mindboggling fifty percent and this impact will be felt on most of the upcoming projects coming up in good localities. Demand remains steady for high priced land surprisingly while the supply of the same is dwindling steadily. Alongside, demand is not being met by the creation of new townships in major areas according to him. Sudden price rises of land are not new to the state. West Bengal witnessed huge surges in prices in and around the year 2009 and government agencies made pots of money by selling off land in premium areas.

The KMDA or Kolkata Metropolitan Development Authority, Hidco and the Kolkata Municipal Corporation have okayed deals which are estimated to be worth more than INR 18, 000 crores which is indeed a staggering sum in these times. This involves about 5, 250 acres of land in just a little more than two years. KMDA has in reality signed deals more than INR 800 crores with city based real estate developers in just one day! This is fascinating to say the least and just goes to illustrate the current situation prevailing in the city. Townships are facing hurdles like the ULCA or the Urban Land Ceiling and Regulation Act of 1976. There is a limit on vacant land which can act as a constraint. Godrej Properties is one of the prominent conglomerates who had appealed for a reconsideration of the ULCA. However, the urban development minister ruled out any repeal and instead, announced permission for land purchases beyond the fixed ceiling in case thirty percent is kept for the low income housing sector.

According to the managing director and chairman at the PS Group, Pradip Chopra, prices have remained quite steady in the city and the market will remain steady for quite some time now. Kolkata real estate sector was earlier driven by mainstream customers but investors rule the roost these days. There has been a slowdown in the commercial real estate sector with very low rates of occupancy across major office areas and Sector V. According to Pradeep Sureka, the Sureka Group Managing Director, the commercial real estate market has not been growing in comparison to the housing sector. Prices of office rentals have not gone down according to him.

The Top Players in the Real Estate Market in India

The Indian real estate market is one of the biggest drivers of the economy and creates thousands of employment opportunities every year. Housing is one sector where demand is more than supply and this should see further growth of this industry in the future. Who are the major real estate players in India? Here’s taking a look at the top real estate players from various Indian regions. These are the movers and shakers of the industry and have been recognized for their contributions in this field.

Top Real Estate Players in the North

DLF Ltd is one of the biggest players in the country and is considered to have the biggest market capitalization, developable area, earnings and annual revenues. It is headed by the Chairman, Dr. Kushal Pal Singh. DLF has a presence in almost thirty Indian cities and has developed area of a mindboggling 238 million square feet. It also has planned projects spanning over 413 million square feet and the entire product range of the company include IT parks, residential apartments, multiplexes, townships, hotels, commercial complexes and so on. This is the only real estate company that has been incorporated into the MSCI India Index, BSE Sensex, MSCI Emerging Markets Asia Index and NSE Nifty. It is also known for its luxury DLF Emporio mall.

Omaxe Limited is spearheaded by the CMD Rohtas Goel and the company has made a name for itself with its variety of commercial and residential projects. There are more than fifty projects that the company is undertaking at present and it was the first construction outfit in north India to get the ISO 9001:200 certification. The group specializes in malls, group housing, hotels, integrated townships, commercial complexes and SEZs among other projects. It has also got into constructing highways and bridges in Punjab. Unitech, headed by the Executive Chairman, Ramesh Chandra is another real estate behemoth in northern India and has also received ISO 9001:2000 certification. The company is operational in sectors like IT parks, SEZs, residential projects, amusement parks, retail and even hotels.

There are more than 600, 000 shareholders of this company. It has also entered into mainstream infrastructure. The company has a failed venture, namely Uninor telecommunications, a joint venture with Norway’s Telenor Group which made the headlines.

Western India’s Real Estate Kings

MD Milind Korde heads Godrej Properties Limited, one of the biggest real estate players in this belt. The company was setup under the umbrella of the much respected Godrej group in the year 1990. This is one of the top real estate companies in the industry and has a fabulous brand image. The group has several successful projects to its credit and is currently involved in almost eleven cities throughout the country. The company is also listed on the BSE and the National Stock Exchange or NSE. The popularity of the company can be gauged by the fact that it managed to sell more than two hundred residential units within two days of the launch of the Godrej Frontier project in northern India, its first foray into this region.

Chandru L Raheja also runs the K Raheja Corp which is another real estate behemoth in the Western region. This company has been operational for four decades and more and has specialized in residential properties, hotels and commercial buildings all over the country. The group has also got into hospitality and retail and there are several successful projects under its belt. The K Raheja Corp has also committed towards building Leed Certified Green Building Projects only in the future which gives it a unique dimension of sorts. CMD Vikas Oberoi also runs Oberoi Realty Limited which had its IPO and is a strong presence both in Pune and Mumbai. The company focuses mostly on social infrastructure, retail, office space, hospitality and residential segments.

South India Sobha Developers is the leading company in this space, headed by Chairman PNC Menon and was founded in the year 1995. This company is worth more than ten billion dollars and had its IPO in the year 2006. The company has loads of commercial, residential and contractual projects to its credit and is known for its commitment to development. MR Jaishankar heads the Brigade Group as the CMD and the company is one of the leading lights in South India with its headquarters in Bangalore. The company specializes in sectors like hospitality, property development, education and hospitality. The Puravankara Group is managed by the CMD and Founder Ravi Puravankara. The company has projects located in Dubai, Kolkata, Chennai, Colombo, Mysore, Coimbatore and other areas.

East India Ambuja Realty dominates this sector, headed by Harshavardhan Neotia, the CMD. The company has been a prominent name in Eastern India and is the first company to receive the ISO: 9002 certification in this sector in Eastern India. The Group takes care of hospitality projects, commercial projects, residential units and retail projects as well. The company is presently building malls, IT parks, business hotels, hospitals, luxury resorts and a university. The City Centre brand of malls built by the group has also done immensely well. Sushil Mohta led Merlin Group has also been at the forefront of development in the region with commercial complexes and residential properties. The group has also gone into bungalows, office towers, premium housing projects, malls, country homes and the like.

The Merlin Group has a sizeable presence in Ahmedabad, Chennai and Chattisgarh among other areas and has also entered sectors like stadiums, service apartments, townships, resorts and new generation clubs. Surendra Kumar Dugar and Pradip Kumar Chopra control the PS Group which is another top company in this sector. The group now has seven key players under the umbrella with a strong interest from the next generation with regard to taking the business forward. PS Group builds shopping malls, integrated townships, hotels, residential complexes, hotels, IT parks and other commercial buildings. The company has successfully completed more than a hundred projects successfully and has loads of exciting projects in the pipeline too.

Things Might Look Up for the Mumbai Realty Market with Pre Launches!

The realty market in India had been going through an overall slump of sorts owing to global recession and the downturn among other factors. Realtors are still anxious about the tides of revival hitting this indispensable sector for the Indian economy. Mumbai, as one of the prime cities for real estate development, had also been hit badly by the downturn with sluggish development in the sector. Alongside, the market in Mumbai remained dull and placid through most of last year and this was a worrying sign for leading developers. However, as per latest news and reports, things may just be looking up for the Mumbai realty market. This is mainly due to the sudden flurry of pre launches which are back on the horizon. This mainly underlines the continuation of new projects and the discovery of a viable market for the same which augurs well for the sector in general.

What are pre launches at a very basic level? Pre launches are a time tested method with regard to raising and generating funds even before the actual construction process starts off. This method has been used by real estate developers in the past to fund ambitious projects. The real estate market has been very dull in Mumbai, as mentioned earlier. In order to shake things up a bit, developers and real estate companies in Mumbai are steadily putting up more and more pre launches for residential apartment projects. This is seen as a positive move to shake up the sector and spur into some much needed growth.

The commercial and financial capital of India has witnessed close to twenty five pre launches over the last few months. Buyers have readily accepted most of these including some big projects by the Lodha, Runwal and Kalpataru groups, which are among the top real estate companies in Mumbai. These projects have been readily accepted under the pre launch model, owing to the smaller sizes of these apartments and subsequently, the considerably lower and better prices as per leading real estate consultants. When a pre launch takes place, developers usually expect to sell approximately between 20-30 percent of the entire project. Buyers also need to shell out 30 percent of their total asking price as an advance to the developer.

According to Ashutosh Limaye, the research head at Jones Lang LaSalle India, Mumbai is witnessing a revival of the pre launch market. According to him, real estate companies and developers are not taking any risks with regard to piling up unsold inventory. They are playing totally safe and getting buyers locked into a particular project before all necessary approvals are garnered. The pre launch model is favored even more owing to the prevailing conditions in the real estate market in Mumbai. As per Knight Frank’s report, the global consultants have pinned down almost 130, 000 of the total 290, 000 residential properties under construction, which have still remained unsold. This is mainly because of low levels of demand and the extremely high prices of real estate in today’s times.

According to Limaye, all discounts provided to buyers are taken into account and all financial costs are also considered especially as real estate developers expect to get all necessary approvals within a time period of 12 months at least. Pre launches are doing really well in a real estate market which has been plagued by rising prices and dwindling sales volumes and new launches. The Runwal Forest was recently pre launched by the noted realty company, Runwal group, to be located in the Kanjur Marg (west) area. The developer has priced this project at a viable INR 9, 900 per square feet while market prices stand at INR 12, 000 to INR 15, 000 per square feet approximately. This generated huge demand and the company managed to sell off a whopping 400 units in only a couple of weeks! The fabulously enticing price point and the smaller sizes were huge selling points for this project. The developers sold 1.5 BHK apartments measuring up to 725 square feet and two bedroom apartments measuring up to 1025 square feet as well. Prices started from INR 73 lakhs in this case.

According to the Gatere managing director, Raja Kaushal, most developers do not commence on small apartments in the area mentioned. As a result, the INR 70-80 lakh proposition must have greatly appealed to mainstream buyers. According to Kaushal, these purchases are highly favored by those who are investors. This is mainly because investors can gain up to 20 percent in the very first six months of the launch or about 40 percent on an annual basis. Kalpataru managed to sell 400 units during the Thane project pre launch, titled Kalpataru Sunrise. Again, they sold off these units in only a few days and the USP of this project remained the same, i.e. lower pricing and small sizes.

Sunrise came with an INR 7, 500 per square feet price tag as compared to prevailing market prices ranging between INR 9, 000 to INR 10, 000. Two bedroom apartments measuring 801 square feet came with a price tag of INR 60.08 lakhs while 813 square feet apartments with two bedrooms were listed at INR 60.98 lakhs. In a similar fashion, approximately 2, 500 units were sold off by the Lodha group at its Palava project pre launch. This Dombivali area project listed one bedroom, 729 square feet apartments at only INR 34.19 lakhs, or in other words, INR 4, 689 per square foot. Runwal group is also looking at the pre launch model for another Thane based residential project named Runwal Eirene at prices of INR 7, 499 per square feet.

According to Runwal group director, Vvikas Aroraa, there is a prevalent demand for particular price points and sizes and this is prompting the company to launch suitable products for the same. However, there is a note of caution sounded by market experts, with regard to pre launch purchases not actually translating into great deals for buyers as possession would take up to 3 or even 4 years. Yet, pre launch models are working wonders to revive the hitherto dull real estate market in Mumbai.

Why Bangalore is an Even Playing Field for Real Estate Investments

Real estate investments are dicey things in today’s times. Realty is one sector which is witnessing a downturn currently. As a result, investors are afraid to pump up their money and most people are unable to contend with the constantly rising prices. This is a period of large scale transition as far as Indian real estate is concerned. The last year was a fluctuating market with customer demand dropping hugely and prices steadily softening in major real estate markets. However, Bangalore has always had a real estate market at the residential level as compared to other cities in India. The realty sector in Bangalore is expected to gain a bit of necessary momentum with a revival of customer demand for the same. Bangalore should always make for an even playing field when it comes to real estate investments.

Economic prosperity has been on the rise among the masses and purchasing power has increased to a great extent as well despite an economy that has struggled to barely stay afloat. Residential properties have been quite popular especially at the mid range level. The real estate market in Bangalore has been catering to a huge customer base including NRI’s, professionals, businessmen and people who have come in from other metropolitan cities in India. There is a global client base which is the backbone of the real estate market here. Modern day customers have given real estate developers plenty of scope to expand their offerings and product range. Alongside, this has given rise to loads of new projects coming up all across the city including luxury villas, condominiums, mid range residential apartments and townships as well.

The real estate sector has been hit hard by the sliding value of the rupee and the slowdown in the global market at large. Economic conditions are quite challenging as well and in spite of the same, the real estate sector has largely performed well and above expectations. The superior value of the dollar has worked in a positive manner at the other side of the spectrum, acting as a catalyst for greater investment by NRI’s in Indian properties. Bangalore is one of the most conducive environments for NRI’s and this has attracted greater foreign investment in real estate projects in Bangalore. This has boosted the market to some extent and has been a benefit in disguise for the real estate industry in Bangalore. Yet, home buyers will be affected, no doubt by the increase in repo rates by almost twenty five basis points as per the announcement by the Reserve Bank of India. This will serve to make home loans substantially costlier and may impact the fortunes of the real estate industry in the state.

However, Bangalore provides a great opportunity for buyers looking to snap up some exquisite properties at good prices. Bangalore possesses fabulous overall infrastructure, road developments, connectivity, facilities, rail networks and other amenities which are considerably better than other states. Alongside, realtors have expanded their overall network to areas that are on the outskirts of the city and these areas can become hot spots in the future. Socio-economic conditions have vastly improved in Bangalore as well and families from a mid-income background have been investing in this sector as well. FDI will also ensure that many more international companies invest in the real estate market in India.

There are some particular regions in Bangalore that have seen tremendous growth in recent times. Here are some of the top areas for real estate investments in Bangalore. Development has been taking place rapidly across all areas of the city. The popularity of East Bangalore is on the upswing owing to top notch road connectivity garnered as a result of IR corridor linking and other areas of special interest. This includes areas like Mahadevpura, Whitefield, Kundalahalli, ITPL, Marathahalli, K R Puram and Kasturi Nagar as well. West Bangalore is now swarmed by residential areas and localities. There are some major developments taking place at this end as well. This has been through retail complexes and residential projects of a high end or premium nature. Alongside, commercial complexes have also come up in West Bangalore.

Some of the top areas for investments in West Bangalore include Malleswaram, Vijayanagar, Yeshwantpur, Matthikere and Rajajinagar. Alongside, North Bangalore has also come up as a viable destination for real estate investments. Some of the major areas in this belt include Hormavu, Hebbal, Sahakar Nagar, Ramamurthy Nagar, Banaswadi, Yelahanka, RT Nagar and Ramamurthy Nagar. These areas are properly planned and have tremendous connectivity with regard to providing access to major city areas. This is the major factor behind the rising demand for quality real estate in these areas.

South Bangalore has also emerged as a major real estate hub and various multinational companies have come into this area, thereby boosting developmental activities. Metro connectivity is superb for this area and the NICE Road development endeavor has also been a success. The value of properties in locations like Electronic City, Uttarahalli, HSR Layout, JP Nagar, Sarjapur Road, BTM Layout and Bannerghatta Road has increased manifold as a result. There is also multiple road blocks that need to be overcome properly if the real estate industry in Bangalore has to thrive.

In spite of a promising future ahead, there are major challenges lying in wait for real estate in Bangalore. Some of these can be tackled with ease while intervention from higher bodies and seats of power is necessary to take care of the others. The Reserve Bank of India strategy, mentioned earlier, with regard to hiking repo rates by a whopping twenty five basis points will definitely hit real estate companies hard all across India and also Bangalore. Loan rates will be increased by all financial institutions and public demand for residential properties will come down all of a sudden. Alongside, regulatory approvals take loads of time which is another huge problem while launching big projects. Political will and mechanisms play a huge role in determining approvals and regulatory bills.

The Land Acquisition Act, which is slated to be a reality soon, will be a point of concern for most real estate developers. This may also influence prices of real estate in Bangalore and project development costs. All in all, Bangalore still offers a level playing field for real estate investments.