However, the recent fall in the gold price has raised questions whether the returns given by these relatively safer investments are likely to sustain. While the gold price has fallen 20% from the peak, are the real estate prices also likely to correct is the question asked by the most.
Unfortunately the correlation cannot be verified as there is no long term real estate index data in India that will help with any reliable conclusion.
However, an analysis done by Karvy’s research team on 20 years data of the Hong Kong real estate index and gold price showed that the prices of both have 81% correlation. Similar holds true for the Indian data in 2012-13.
According to the experts the reason for this is that the correction in the gold price makes people sell their real estate investments and invest in the yellow metal.
Although this cannot be used as a certain conclusion, if you are looking to buy a house and were not able to do it earlier due to high real estate prices, you can hope this theory to hold true.
Old Mahabalipuram Road favours home owners most because of moderate property prices and high rental values. While Tambaram and Medavakkam have low property prices and rental values, Porur and Kolathur make a strong case for renting because of low rental values. Chetpet is the least affordable locality with high property prices and rental values. OMR and Tambaram offer a better lifestyle because of larger residential spaces.
At 6.85 sq. ft per Rs. 1 lakh, Chetpet is the costliest locality while OMR is the cheapest at 28.9 sq. ft per Rs. 1 lakh. These are some of the findings of a new report on Chennai’s real estate market conducted by ArthaYantra.com, an integrated personal financial services company.
Based on average property prices, a professional needs to save for four years to afford the down payment for a house in Medavakkam, Tambaram or OMR, compared to seven years for a house in Ashok Nagar, eight for T. Nagar, 10 for Anna Nagar or Adyar, and 10 years for Chetpet.
Other key findings include Chennai’s rise of 209 per cent in index value from 2007, with Kolathur scoring the highest rise, followed by Chetpet and Ashok Nagar.
The report attempts to provide a quantitative and merit-based answer to the question of buying vs. renting a home, says a press release, and analyses the costs of both options across 13 locations ranging from Adyar and OMR to Anna Nagar, Chetpet, T. Nagar and Tambaram. The research considered three important factors: rental value, property price and gross income.
For those buyers who have bought and sold a property, they have a fair bit of idea how to avoid common mistakes. But for the first time buyers it is better to avoid some of the mistakes one naturally makes. Buying a house is quite a financial commitment and one does not want to spoil the party .
Working the budget is the most important part before buying a house. You see a house and you love to buy it. You work on the budget and find that it overshoots your financial planning. But you love that house- remember and your are all out to buy it. Put a brake on it. The financial planning you worked out may not be strict. There may be some loose ends and in the long run you will find the payment difficult. It is better to pick a house which is less than the budget estimated.
Aahha! the future:
You never know what type of financial commitment you will be pushed to, in near future.You may have prepared a budget keeping the present scenario in mind. But when you get married and find your kids running in house., you suddenly think about his education expenses and additional expenditure you may face. Medical expenses is also a key part. Keep that in mind. Your parents may depend on you in near future and you have to meet the expenses. Vacation and holidays also make things expensive. Buyers forget these future expenses and commit themselves.
Forgetting market sentiments:
Everything is about supply and demand in real estate. When the condition favors sellers, if your have the patient and time, stall house buying. Time will come where you can bargain for a good price and save in lakhs when the market is dull and favor buyers. Do some research and weigh your options and be armed with information, so when the time is right, you can strike a good deal.
When you forget the resale value:
You buy a spacious house in a remote area at a cheap rate. You are happy now. But things not are constant. World changes every second. Transfers, sudden change of plan may force you to sell the house. Resale value of the house is vital and any house should have a good resale value.
Don’t forget the rental value of your house. Rental value far below the EMI your paying is not advisable.
Don’t completely believe the real estate broker.
Brokers may give you lot of advice and will talk about a house which he is selling with a coat of sugar. He will talk about the positives of a property and good things. It is your duty to do a background check on the property on your own and get the facts right.
Oops! I forget the hidden cost:
Talking on the phone to buy a house, you usually enquire about the size of the house or a flat and rate per sq feet. Then you go and visit the house only to find that you have to pay for car parking, registration charges, VAT, service tax, development charge. It overshoots your budget and you find that you have wasted you time.
Haste makes waste:
Inspecting the house in the dark and taking a look at the house in haste, only to find that you have not seen it properly. Inspect hall, kitchen, bedroom carefully and try to arrange your household things in your mind and visualize. This will give you a better idea of the space availability and good understanding of the house.
Just keep these points in your mind before hunting for a house. You will feel the difference.
The much anticipated real estate regulation bill is proposed to be tabled in the winter session of the parliament for approval. Before that, it has been sent to law ministry for vetting and then to the cabinet for the final nod before sending it to the parliament to become a law.
This bill has come as a welcome relief for the buyer but the real estate industry is in doldrums. The real estate industry is all furious as this bill imposes harsh punishment for any irregularities.
The bill proposes to set up regulatory machinery named Real Estate Regulatory Authority for implementation of the provisions of the bill. The main objective of the bill is to create transparency and accountability in the real estate sector which has been lacking for such a long time.
Main provision asks the builder to register all the projects with the prescribed authority. If not, then it is going to attract penalty and imprisonment up to three years.
Another provision that makes things hard for the real estate sector is that they have to commit time frame for the completion of the project. Further they have to deposit 70% of the money taken from the buyer in a separate account and it has to be used only for that purpose.
Sellers cannot advertise or start booking of the flats without registering with the nodal agency. The developer has to share all the details like land status, approval, contract structure before the nodal agency.
These provisions are really tightening the screws on the developers and are going to provide some relief to the customers.
The issue of the unorganized agency services has also been addressed. Now all the property brokers have to obtain license to do business. The main aim of this clause is to eliminate malpractice and cheating which is carried on regular basis.
The bill has been modified 8-9 times and is doing rounds for 3 years now. It has seen about 3000 comments from developers and buyer before it was given final shape.
The ancient architectural science conceived and propagated by the sages; Vaastu shastra, has become an important part of every real estate construction carried out. It is believed that a house which is built, based on the principles of Vaastu shastra provides mental piece, health, wealth and a happy family. Vaastu shastra says that, there are five basic elements in our planet earth. They are bhoomi( earth), water( Jala), air( Vayu), fire( Agni) and space( Akasha). These elements interact with each other to generate energy.
Based on the principles of Vaastu shastra, each component of the house is to be arranged accordingly. The basic position and direction for each components is discussed below
Foundation Stone: It is placed in the north east corner of the plot or it can be placed in the north east corner of the building
Foundation: Construction is started from south west corner and then proceeds towards north west and south east corner
Master Bedroom: Master bedroom is in the south west corner of the house. Beds in the south west corner of the bedroom
Mezzanine: It is positioned anywhere except in the north east corner of the building
Tube well: It is positioned in the north east corner of the plot
Drawing Room: North east side of the building
Dining Room: Best to put it in the east side of the building.
Kitchen: It is best to construct kitchen in the south east corner of the house. The next choice is North West corner of the house. The cooking platform is made facing east and one is going to face east during the cooking.
Puja Room: Best position is north east. If not possible then it is located in the north or east direction
Toilets: It is better to build toilet in the west side of the house. Avoid making the toilet in the north east side of the house.
Balcony: It is good to keep the balcony in the northern or eastern side of the building
Study room: Study room in the western side of the house
Water Tank: It is placed in south west corner of the house
Store room: it is placed in the south side of the plot
These are some of the basic principles of Vaastu shastra which one can follow to start with. All the builders today incorporate or take into consideration, Vaastu shastra while constructing a property. If you are building your own house it is better to consult an expert in Vaastu shastra.