BANGALORE: At a time when the property prices in Bangalore are shooting up, making it beyond the reach for the common men, more and more Non Resident Indians have shown keen desire to invest in the housing sector in the city. In the last couple of years, investment interests in the real estate sector in Bangalore have risen considerably.
Realty experts say, more and more ‘outsiders’ are investing more and more into housing sector in the city, as Bangalore for them was a better option than many other cities in the country.
Speaking after the inauguration of the State Bank of India (SBI) and Consortium of Real Estate Developers of India (CREDAI) realty expo in the city,
Organizers say NRIs from the United States and the Middle East are investing almost 80 per cent in the NRI category. NRIs from Australia, New Zealand and Singapore are also showing keen interest for property investments in the city.
Around ten years ago, around 40 per cent investment came from NRIs and 60 per cent from domestic investors. But now that trend has been reversed. Now more and more NRIs are investing in the housing sector as soaring prices of properties have rendered made them less lucrative investment option for the common men.
Wednesday, February 29, 2012
Indiareit to raise $500 mn offshore development fund: CEO
Real estate fund Indiareit Fund Advisors, a unit of drugmaker Piramal Healthcare, is planning to raise $500 million via an offshore fund to invest in Indian real estate projects. This was stated by a top executive of the company.To be launched after June, the fund will look at raising money from investors in America, Europe and Asia. Managing director and chief executive officer of the company Ramesh Jogani said that investors are now better- educated about investment opportunities in India. They have become more matured and are more investor-friendly. The company is launching the fund at a time when India's debt-strapped developers are facing limited funding options. This is because banks are now more cautious about lending to the sector and international private equity players are looking to exit investments.
Since 2005, international private equity firms have invested $13 billion in the Indian real estate sector. These companies are expected to take out up to $5 billion worth of investments over the next couple of years. This was stated by an international property consultancy Jones Lang LaSalle.
Given the current spell of crisis in the European countries, foreign investors are looking at India for more and more investment.
Since 2005, international private equity firms have invested $13 billion in the Indian real estate sector. These companies are expected to take out up to $5 billion worth of investments over the next couple of years. This was stated by an international property consultancy Jones Lang LaSalle.
Given the current spell of crisis in the European countries, foreign investors are looking at India for more and more investment.
Tuesday, February 28, 2012
Prices to come down 20% if realty is included in GST
At a time when the Union Government and the states are engaged in a hectic parley on the thorny issue of goods and services tax (GST) regime, 13th Finance Commission chairman Vijay Kelkar is of the opinion that inclusion of the real estate sector in the proposed goods and services tax (GST) regime is likely to cut property prices by a around 20 percent. According to the GST regime, the whole country is sought to be converted into a single market.
Batting strongly for the inclusion of the real estate sector in the GST, Mr Kelkar said the present system of levying stamp duty on property deals will go away once realty is included in the GST. He said internal studies done by the finance commission point out that the prices for consumers will come down by 15 to 20 percent if the realty is included in the proposed GST regime.
The former finance secretary's comments assume significance ahead of the Union Budget to be tabled by finance minister Pranab Mukherjee in the Parliament in the second week of March. The Finance Minister will present the Union Budget on March 16 and the finance minister is likely to present a roadmap for the roll-out of GST.
He also pointed out that the original report of the 13th Finance Commission calls for inclusion of real estate sector in the GST's ambit.
Batting strongly for the inclusion of the real estate sector in the GST, Mr Kelkar said the present system of levying stamp duty on property deals will go away once realty is included in the GST. He said internal studies done by the finance commission point out that the prices for consumers will come down by 15 to 20 percent if the realty is included in the proposed GST regime.
The former finance secretary's comments assume significance ahead of the Union Budget to be tabled by finance minister Pranab Mukherjee in the Parliament in the second week of March. The Finance Minister will present the Union Budget on March 16 and the finance minister is likely to present a roadmap for the roll-out of GST.
He also pointed out that the original report of the 13th Finance Commission calls for inclusion of real estate sector in the GST's ambit.
NRI investments in real estate on the rise
BANGALORE: At a time when the property prices in Bangalore are shooting up, making it beyond the reach for the common men, more and more Non Resident Indians have shown keen desire to invest in the housing sector in the city. In the last couple of years, investment interests in the real estate sector in Bangalore have risen considerably.
Realty experts say, more and more ‘outsiders’ are investing more and more into housing sector in the city, as Bangalore for them was a better option than many other cities in the country.
Speaking after the inauguration of the State Bank of India (SBI) and Consortium of Real Estate Developers of India (CREDAI) realty expo in the city,
Organizers say NRIs from the United States and the Middle East are investing almost 80 per cent in the NRI category. NRIs from Australia, New Zealand and Singapore are also showing keen interest for property investments in the city.
Around ten years ago, around 40 per cent investment came from NRIs and 60 per cent from domestic investors. But now that trend has been reversed. Now more and more NRIs are investing in the housing sector as soaring prices of properties have rendered made them less lucrative investment option for the common men.
Realty experts say, more and more ‘outsiders’ are investing more and more into housing sector in the city, as Bangalore for them was a better option than many other cities in the country.
Speaking after the inauguration of the State Bank of India (SBI) and Consortium of Real Estate Developers of India (CREDAI) realty expo in the city,
Organizers say NRIs from the United States and the Middle East are investing almost 80 per cent in the NRI category. NRIs from Australia, New Zealand and Singapore are also showing keen interest for property investments in the city.
Around ten years ago, around 40 per cent investment came from NRIs and 60 per cent from domestic investors. But now that trend has been reversed. Now more and more NRIs are investing in the housing sector as soaring prices of properties have rendered made them less lucrative investment option for the common men.
Saturday, February 25, 2012
Real estate in Mumbai not in compliance with population growth
Mumbai is the city of dreams and according to the latest census of 2011; the Metropolitan Region of Mumbai is having more than 23.5 million of people. Around 121,384 acres contiguous land is needed for housing this over flooding population in Mumbai, for which dwelling units of 900 square feet is required per family assuming the household size to be 4. The total strength of street becomes 35,606 kilometres if these houses will be built facing the street. It will provide a frontage of about 20 feet to each unit. Mumbai is considered to be the commercial capital of the nation. Migrants from all over India gets attracted to this city of dreams also high population commutes to the city for their work on daily basis.
The developmental activity of the real estate industry in Mumbai is not being able to match with the pace of population explosion in the city. Huge pressure on Mumbai’s limited land resources has forced the market for building more tough discretionary approvals and for circumventing base FSI regulations in context to the civic amenities construction like parking structures. Construction features such as balconies, voids and flower beds have been excluded from FSI so that after construction, there could be utilization of habitable spaces.
The developmental activity of the real estate industry in Mumbai is not being able to match with the pace of population explosion in the city. Huge pressure on Mumbai’s limited land resources has forced the market for building more tough discretionary approvals and for circumventing base FSI regulations in context to the civic amenities construction like parking structures. Construction features such as balconies, voids and flower beds have been excluded from FSI so that after construction, there could be utilization of habitable spaces.
Arab investors interested in Indian Realty
Serious real estate investment enquiries are coming up from the Arab World following India’s new decision which has allowed foreign groups or individuals to make direct investment into stock market of the county. A real estate magnate based in Sharjah wrote a letter to finance minister PranabMukerjee expressing that a large number of family offices based in UAE that are having business relation with Indian counterparts would be first and foremost movers to propagate and to take participation in this initiative. He has also asked for some clarifications regarding the eligibility of groups, individuals or associations that are based in member nations of Gulf cooperation council for their participation in Indian stock market.
The January 1 decision of Finance ministry of India sets conditions that would allow overseas investors for investing their money in India’s stock exchange market. As per the conditions, these investors should be from countries that are signatory to international organisations of securities commissions and Financial Action task force complaint. The FATF help in promoting policies at international level to combat terrorist financing activities and in combating money laundering.The individual member countries to FATF are Kuwait, Qatar, Bahrain, UAE and Saudi Arabia. The Arab investors want the Indian government to comply with them so that the two conditions do not come under their way.
The January 1 decision of Finance ministry of India sets conditions that would allow overseas investors for investing their money in India’s stock exchange market. As per the conditions, these investors should be from countries that are signatory to international organisations of securities commissions and Financial Action task force complaint. The FATF help in promoting policies at international level to combat terrorist financing activities and in combating money laundering.The individual member countries to FATF are Kuwait, Qatar, Bahrain, UAE and Saudi Arabia. The Arab investors want the Indian government to comply with them so that the two conditions do not come under their way.
Realty firms building brand image
The image that comes to our mind when we think of real estate is one of unorganised industry which is run in an unprofessional manner by some promoters and by members of their family.In the past few years many past activities going on construction front will slowly change the impression. In recent times the scale of operation of many companies has also increased. The real estate business in India is growing in recent times. Nowadays many companies are increasing their single or double projects to multiple projects across many cities in India. Builders are scaling their operations and also trying to reform their image.
A lot of real estate firms such as Orriss Infrastructure, Logix Group, M3M India and the 3C Company are hiring chief executive officers, business heads and finance chiefs for heading their real estate operations in much more professional manner. They are taking steps for improving professionalism and transparency which are quite evident these days. The developers are getting professionals for improving their image but seriousness to change could sustain only if growth of these professional team is retained. The growth of real estate companies accelerated during 2006 and 2008 but without adequate support of infrastructure.
A lot of real estate firms such as Orriss Infrastructure, Logix Group, M3M India and the 3C Company are hiring chief executive officers, business heads and finance chiefs for heading their real estate operations in much more professional manner. They are taking steps for improving professionalism and transparency which are quite evident these days. The developers are getting professionals for improving their image but seriousness to change could sustain only if growth of these professional team is retained. The growth of real estate companies accelerated during 2006 and 2008 but without adequate support of infrastructure.
Realty prices to remain stable this year
World economy and regulation are caught up in mode of recession. Real estate in Ahmedabad also seems to be caught up by the global slump. The demand for housing tends to slump but the prices of property has not been appreciated steeply. The demand of housing in Ahmedabad city has been adversely affected by the factors mentioned above and high rate of interests. In order to sustain their position in the real estate market, developers are expected to move toward price cutting or try to keep the price level stable. Realty developers like Adani group, Sun builder and Bakeri group have agreed that the market in Ahmedabad is going through a sluggish phase.
This slowdown is likely to affect the demand for homes in Ahmedabad and it will remain uncertain for a while. The rate of interest is another factor for slowdown as Reserve Bank of India has been hiking interest rate since March 2010 by 13 times. This resulted in sharp decline in housing demand as it crushed the liquidity available with banks and consumers. The global fall has also affected the NRI
investment in real estate market. This has resulted in making the developers to negotiate with their customers.
This slowdown is likely to affect the demand for homes in Ahmedabad and it will remain uncertain for a while. The rate of interest is another factor for slowdown as Reserve Bank of India has been hiking interest rate since March 2010 by 13 times. This resulted in sharp decline in housing demand as it crushed the liquidity available with banks and consumers. The global fall has also affected the NRI
investment in real estate market. This has resulted in making the developers to negotiate with their customers.
Saturday, February 18, 2012
International realty stationary for Indian companies
International ventures started by Indian real estate companies in year 2006-2007 have now been working on to revise their overseas agenda. Many developers on domestic front are departing from weak markets due to decline in the international markets. The development strategies re-assessment has not been easier for realty market. Rahega group has planned to build in countries like Mauritius and Colombo. Real estate has halted new launches so that they could act as contractual bridge for completion of on-going projects. These are the self-preservation tactics opted by most of the developers.
Omaxe which entered Dubai in year 2007 with the plans to expand itself in parts of West Asia has now completely pulled out of Dubai. The world property developer of Dubai, Nakheel with a joint partnership and with an investment of over Rs 50 crore that is $10,850,000 has been exited out of market because of dormancy. Omaxe’s managing director and chairman Rothas goel despite of receiving their investment back said that he has no future plans to expand and invest outside India. Many companies are withdrawing from building in foreign market but Tata Housing has decided to board on projects in Sri Lanka. In year 2011-2012 Tata House has already invested in Maldives for Rs 1,000 crore. Real estate consultancy firm Cushman and Wakefield has advised companies extending themselves that they should focus on their core strength.
Omaxe which entered Dubai in year 2007 with the plans to expand itself in parts of West Asia has now completely pulled out of Dubai. The world property developer of Dubai, Nakheel with a joint partnership and with an investment of over Rs 50 crore that is $10,850,000 has been exited out of market because of dormancy. Omaxe’s managing director and chairman Rothas goel despite of receiving their investment back said that he has no future plans to expand and invest outside India. Many companies are withdrawing from building in foreign market but Tata Housing has decided to board on projects in Sri Lanka. In year 2011-2012 Tata House has already invested in Maldives for Rs 1,000 crore. Real estate consultancy firm Cushman and Wakefield has advised companies extending themselves that they should focus on their core strength.
NRIs happy by regulatory changes
In last December Reserve Bank of India announced deregulation of interest rate which was paid by banks on external rupee deposits. By following this most of the banks have been offering high rate of interest on NRE account in accordance with rates on domestic term deposits. The result of this deregulatory policy enables the NRIs to earn more on deposits and invest in real estate. A committee headed by K.J. Udeshi which was established for reviewing the policies in the Foreign Exchange Management Act 1999. There are certain provision which have been liberalized by the apex bank this will not only help the Non Resident Indians but will also be helpful to resident Indians.
RBI has permitted NRIs for opening NRE account with a relative based on recommendations and conditions. On the basis of former-or-survivor basis and by fulfilling the formalities account can be opened. Transaction by resident Indian relative can only be made if the person has power of attorney. The problems faced by the NRIs and their relatives will be solved to a great extent by permitting opening of joint account. Earlier even a close relative was not permitted to withdraw money on behalf of the NRI but now it’s possible to do so.
RBI has permitted NRIs for opening NRE account with a relative based on recommendations and conditions. On the basis of former-or-survivor basis and by fulfilling the formalities account can be opened. Transaction by resident Indian relative can only be made if the person has power of attorney. The problems faced by the NRIs and their relatives will be solved to a great extent by permitting opening of joint account. Earlier even a close relative was not permitted to withdraw money on behalf of the NRI but now it’s possible to do so.
With falling rupee, NRI’s taking interest in real estate in India:
As the value of rupee has been constantly falling over a period of time in the international market, the interest of Non- Resident Indians (NRI) in real estate market of the country has been increasing during such time. The non resident Indians have clearly shown their interest in the housing projects in the country as the best investment option at a time when their returns could be much as compared to investments at any other time.
Mr. Vijay Kumar Sharma, Director and CEO of LIC Housing Finance Ltd, was of the view that NRI’s have started taking keen interest in the real estate markets of the country due to appreciation of the dollar. Mr. Sharma also added that Bangalore Metro Rail Project would also add up in transforming the real estate sector in the city in the next three years in line with what happened in Delhi.
Referring to a recent study he emphatically said that the Bangalore real estate market is looking up again after two years and the demand has also gone up in recent years. LICHFL had started a three day property expo in the city with participation of around 50 builders who were showcasing their 250 projects.
The major reason for the growth of the real estate sector in the city, he attributed to the Metro project and the lifestyle and development of the people.
Mr. Vijay Kumar Sharma, Director and CEO of LIC Housing Finance Ltd, was of the view that NRI’s have started taking keen interest in the real estate markets of the country due to appreciation of the dollar. Mr. Sharma also added that Bangalore Metro Rail Project would also add up in transforming the real estate sector in the city in the next three years in line with what happened in Delhi.
Referring to a recent study he emphatically said that the Bangalore real estate market is looking up again after two years and the demand has also gone up in recent years. LICHFL had started a three day property expo in the city with participation of around 50 builders who were showcasing their 250 projects.
The major reason for the growth of the real estate sector in the city, he attributed to the Metro project and the lifestyle and development of the people.
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