The Union Budget for the year 2011, especially in housing sector, the focus is clearly on the affordable and rural segment. In order to enable easier availability of housing loans for the affordable segment, the Government has proposed to create Mortgage Risk Guarantee Fund under Rajiv Awas Yojana scheme which provides guarantee for the loan taken by the Economically Weaker Section (EWS) and Lower Income Group (LIG). For rural housing, allocation of approximately INR 3,000 crores has been made to enable targeted groups in the rural areas to avail housing finance.
The Union Budget has taken cognizance of the growth potential in the residential sector especially in the priority sector and has announced a laudable interest subvention. The budget has redefined the priority housing sector to include property up to Rs. 25 lakhs in urban areas and Rs. 15 lakhs in rural areas granting such properties. This is expected to increase the development momentum in such locations. This will have a positive impact in the smaller towns as well as the distant suburbs of the major metros, and may possibly prompt some of the larger developers and funds to enter these segments. Furthermore, the Budget has also indicated an investment linked deduction to businesses which develop affordable housing under a notified scheme.
Here’s a quick roundup of what’s new in real estate business…
Realty cos will now be charged for extra FSI
The local bodies can now charge a fee for granting additional floor space index (FSI), as Maharashtra government has amended the State Regional Town Planning Act (MRTP). The amendment will be implemented with retrospective effect from January 11, 1966, the day MRTP Act came into being, to validate all levies collected in the past four decades, an official from Urban Development Department said. The FSI is the ratio of the total permissible built-up area to the size of the plot it is constructed on.
Homeowners doubt these days of the future home values due to which they plan to put their home up for sale if they see the same conditions prevailing in next six months too.
According to a survey, 33% people believed that home values in their housing market are still above the bottom line while 38% believe that they have already reached a bottom.
28% homeowners expect a decrease in home values in the next six months. However, 30% of them are expecting an increase in their local market.
Interest subvention offer on luxe realty projects comes with riders
MUMBAI: The recent offer by many realty developers for luxury projects that involve 10% upfront payment and interest subvention until possession, has a rider, which may burden a buyer with higher-than-expected liabilities. In the event of a default by developers to pay interest to banks, buyers will have to make good the interest payment that developers had promised to subsidise until the possession of property.
In India, it seems like real estate companies are following a different trend for compensating their top management. During 2009, many company CEOs took massive pay hikes, but now they have chosen to either forego their hikes, or at least take modest ones this year, when the sector is doing much better
MARG has selected some interesting real estate news from around the virtual world and brought it to you.
Realty Prices To Further Shoot Up
It is very likely that the Real Estate prices in the country will shoot up further with the Finance Ministry’s decision of not withdrawing 2.5% service tax. This move was proposed by the Urban Development Ministry in the budget of FY10-11.
The budget had earlier proposed this tax on all under-construction projects. And it is common knowledge that eventually the customers will have to bear the burden and not the developers. The declination came as no less than a shock to the Urban Development Ministry…… Read More>>
Indian Realty Sector And Overview
Indian Real Estate Market has grown with time. The main reason for the accelerated growth can be contributed to the fact that the industry is very flexible in nature.The development has caused higher aspirations for better standards of living and a good quality of life.
The rapid increase has been because of the relaxed policies of our government regarding Foreign Direct Investment which favors economic development of the country as well as easy Home Loan terms and conditions with an increase in the income of people, degree of urbanization, and their purchasing power. All this has helped shape up the Indian realty sector…… Read More>>
Real Estate Invesment Trusts In Asia To Rise
The number of Real Estate Investment Trusts (REITs) in the Asian Continent is going to swell over the coming 3 to 4 yrs according to HSBC. It will be because of increasing call for investments in more risk disinclined properties.
REITs invest in commercial properties mainly and pay rent collected from their properties to shareholders as dividend. This is why some investors see them as safer investments than property stocks.Another advantage is that they usually offer returns that are higher than yields of government bonds….. Read More>>
Real Estate Collaborates With Education Industry
Realty and Infrastructure firms like GMR and Hindustan Construction Company, HCC have announced to set up university campuses and other educational institutes within India. They mainly aim to ride high on the huge returning education industry.
The education industry in India is worth more than 10 bn US dollars with continuous growth rate. Because the Real Estate market is on a low these days developers are looking at alternate assets such as education….. Read More>>
Fear of Recession in Europe Draws NRI Investment in India
Indian expatriates have started investing in their home country in a big way. Increasing job security in Gulf countries, coupled with fears of recession in Europe and North America, are prompting NRIs (non-resident Indians) to repatriate their savings to Indian assets, the most favoured being real estate, closely followed by equities and high-coupon debt.
Several Gulf-based investors had redeemed or sold their investments during the Dubai credit crisis last year. The current flow of money to Indian shares can be seen as Gulf-based investors reversing those transactions, according to investment experts. While Gulf-based NRIs are trying to benefit from investing in home markets, the Indians in Europe and North America are sending back their savings to preserve it in Indian assets….. Read More>>
Watch the video below, for an interesting coverage of Marg ProperTies, by NDTV Hindu. Anchor Sara Mohan did a great job giving rightful perspectives of Marg Swarnabhoomi project.
The video also features Marg ProperTies CEO S Ramakrishnan speaking on the vision behind Marg Swarnabhoomi
