Wagholi- An opportune destination

Wonderful WAGHOLI

With eastern Pune emerging as a central business district, Wagholi is reckoned as a promising residential and commercial destination

Business centres in Pune are gradu ally spreading their wings to the peripheral areas. That's a major reason as to why the outskirts have become happening hubs. Wagholi is one such premium residential destination on Nagar Road that is now a hotbed of realty activities.

Wagholi, which was predominantly an industrial and warehousing belt, is on way to becoming a popular residential destination.As a residential hub, the place is currently in a nascent stage and is recognised as an extension on the eastern corridor.

People are now opting for Wagholi because of the affordability factor, proximity to various IT parks, good connectivity via Nagar Road which has now been widened and access to social infrastructure, malls (Inorbit Mall, Phoenix Market City), schools, and hotels.

About a decade ago, the land price here was low. There were no significant residential projects at Wagholi. The developers started exploring Wagholi as a potential location around 2007 due to heavy demand by flat buyers. In 2007, a prominent developer had launched a scheme of row houses here.Since then, Wagholi has been witnessing a capital appreciation of five to seven per cent annually.

Wagholi offers a wide variety of projects from affordable to high-end. It is strategically located on Pune-Nagar Highway and enjoys the benefit of being located close to the Kharadi IT hub. The locality is still in the initial phase of development. It is witnessing social infrastructure development and is attracting buyers looking for both affordable as well as premium options. The place allows its residents to live away from the hustle and bustle of the city. Wagholi is an upcoming area in eastern Pune. Being close to Kharadi IT hub, new malls on Nagar Road, schools and colleges offer an added advantage to residents of this locality.

Wagholi has several educational institutes such as Dhole Patil College of Engineering, Lexicon Institute of Management, Moze College of Engineering, Joshi's Kohinoor Technical Institute, and several other international schools such as Lexicon, Sharad Pawar International School and Jyotirmay International School. Kolte hospital and Nathshree hospitals are also close by. Several other components of social infrastructure including popular hotels and the multiplexes and malls like Phoenix and Inorbit, are present in close proximity to Wagholi, which gives confidence to the flat buyers.

Over the years, there has been a phenomenal development in the belt and it has emerged as a commercial, retail and residential market. The Nagar road has developed into a sixlane road. Also, Wagholi will be tangent to the ring road which will be surrounding Pune. A new flyover connecting Wagholi to Shikrapur is proposed on this road which will be of four lanes. There are several roads under construction. For instance, the one directly connecting EON IT park to Wagholi is under construction. Due to these numerous upcoming developments, the area has a good potential to develop further into a major residential and commercial hub in future.

Wagholi has seen development from unorganised players to now organised and reputed players. There are numerous new and upcoming properties including residential projects and commercial buildings in Wagholi by leading developers. With so many residential and infrastructural developments in pipeline, it is all set to become a prominent location in the near future.

It's a housing hub

Wagholi has turned out to be a good combination of affordability and easy connectivity. The locality is set to witness new projects across categories

This is the area that now tops many realtors' priority chart. Wagholi is all set to match the increasing demand for smaller units, with almost 50 new projects coming up here, all in different phases of construction.

It is hard to find property that is a true blend of well-developed location and availability of smaller unit at affordable prices. Wagholi is a good combination of affordability and easy connectivity.

The area more than 50 new residential projects coming up which are offering maximum smaller units of 1BHK and 2BHK. Many of these projects will be ready for possession by this year, while the remaining are scheduled to be delivered by 2017-18. So, if you have a timeframe of one to two years before moving in, then you have a number of property options. One can get a 1BHK unit at a starting value of Rs 35 lakh and above, while a 2BHK apartment is available in a budget range of Rs 50 lakh and above.Upcoming projects in the area offer a variety of basic to high-end facilities.These include features like power backup, lifts, clubhouse, swimming pool, gymnasium, parks, reserved parking, security, private terrace garden, vaastu compliance, visitor parking and RO water system.

WHAT DOES WAGHOLI HAVE?

The area is preferred by buyers looking for affordability and easy access to work spaces, entertainment zones and stores for daily needs The locality is witnessing a rise in demand for smaller units with multiple affordable housing projects coming up, catering to the needs of the middle class homebuyers Property within the same budget is not available in the nearby areas such as Koregaon Park, where apartments are priced high, therefore Wagholi comes across as a better and smart location for investment Connectivity is another major reason which makes it an attractive location. It is well connected to other parts of Pune via the Khandala-Loni Road. The locality will soon witness a swift and quick connectivity to the Eon IT Park through the under construction road connecting it to the IT hubs The Nagar Road connects Wagholi to significant parts of city, as it starts from the Yerwada Bridge and passes through Yerwada, Kalyani Nagar, Viman Nagar and Chandan Nagar, reaching Wagholi. A four-lane flyover is also proposed on this road which will directly connect Wagholi with Shikrapur The area has been gaining attention of property seekers owing to the affordability and the well-equipped social and physical infrastructure. With new stock coming up here, the locality is expected to attract more home buyers.It is expected that going forward the demand from IT professionals is likely to be diverted here more.

In short, Wagholi, is a good choice if the buyer is ready to go in for smaller units.

VALUE FOR MONEY

Wagholi has witnessed good appreciation for realty investors over the years

It's one destination that would never let you down. Do you desire an enviable lifestyle in large homes with all kinds of fancy amenities? If yes, Wagholi can be an option to consider.

This east Pune locality offers maximum number of villa options across Pune at reasonable rates. This cost may even go up to some crores, depending upon the size of the unit, distance from the main road, features offered, quality of interiors and the furnishings.

The area offers 2BHK villas, with 1,500-2,000 sq ft area between a price range of Rs 70 lakh and Rs one crore and above. Bigger units of 4BHK and 5BHK with built-up area of 2,200-2,600 sq ft start over a crore onwards. These villas have ultramodern amenities such as private swimming pools, ultra modular kitchens and bathrooms, which cater to all the requirements of luxury-seekers.

Due to its premium offerings, Wagholi is home to senior management professionals who are also natives of the city and want to upgrade their address. Since this area is clean and unpolluted till now, because of limited occupancy and minimum commercial activities, like Kalyani Nagar and Koregaon Park, the locality remains in the preferred list of homebuyers.

“Wagholi is selected for investment as buyers need to pay less service tax, registration and stamp duty charges to the Gram Panchayat as compared to the Pune Municipal Corporation. Hence, buyers who want to save more on government charges choose it over other locations,“ says a broker active in the area.

Wagholi is at a 15-minute drive from the Pune international airport, when traveling through the Patil Vasti Road and the Pune Nagar Road. The Nagar Road, which has been widened, connects the locality to Viman Nagar, another premium locality in the city. The Khandala-Loni Road is an arterial road connecting Wagholi to other areas of Pune.

There is a proposal to connect Wagholi to the Ring Road. A flyover is also proposed on this road, which will connect the locality to Shikrapur, in the opposite direction.

SCOPE OF APPRECIATION

As per some reports Wagholi appreciated 34 per cent in past two years and 11 percent in the past one year. So if you are considering buying a luxury home for yourself, you know where to look!

Zooming in on Nagar Road

The real estate boom continues to unfold on this stretch of Pune where Wagholi is considered an established market

Consistency and sustained growth are the two pertinent aspects of a growing real estate market. The property market on Nagar Road and its periphery area have demonstrated a robust performance over a period of time. The Nagar road is a long stretch commencing from Yerwada going up to Wagholi and beyond. Along the way are prime locations of Kalyani Nagar and Viman Nagar, recently established sub-market of Kharadi and the upcoming market of Wagholi.

Nagar road continues to be a sought-after destination as it is a well-developed stretch of road with social and retail infrastructure in abundance along the road. Also, there are schools in the vicinity. The presence of jobs in the IT parks in Kharadi further makes this area attractive. The highway goes up to Ranjangaon where there is substantial industrial development. Travelling straight down this road is easier than travelling across town and therefore the Nagar road belt continues to show potential for the long run.

Experts pointed out that only a few real estate micro-markets in the Eastern part of the city have been able to match the outstanding success of Nagar Road. The success is not limited to this region alone.As a direct result of the relentless demand for properties in this belt, nearby locations such as Dhanori, Charoli and Wagholi have become the new watchwords on the city's real estate market. Their proximity of the Pune Airport adds a decisive ingredient to the overall growth recipe that drives this region.

Nagar Road is one of the pioneering real estate boom areas in Pune to emerge following the city's emergence as an IT ITeS hub. This is where many of the first call centres and medical transcription units opened up shop in Pune. It became the venue for more and more BPO, KPO and software development firms, entrenching this belt's value to the city's economy. Nagar Road offered these firms affordable properties to establish themselves. At the same time, they have sufficient land parcels available for the development of residential projects to house their employees. Nagar Road has gone on to become a prime hub for commercial spaces. Already established as an ITITeS magnet, it also attracted massive interest from the top-notch hospitality and retail developments. Today, Nagar Road has the highest concentration o five-star and business hotels as well as high visibility malls in Pune.

From 2006 onwards Nagar Road micromarket started to witness large to medium size developments starting from Yerwarda Kalyani NagarViman Nagar Kharadi Wagholi. In the short span of six to eight years, Nagar Road turned into a hot spot for retail, entertainment and hospitality sector with retail operators like Phoenix Market City, Inorbit Mall to star rated hotels like Hayatt, Novatel, Four Point, Ibis, PARC Estique et al. With the majority of the population being intra city population who moved in from other metropolitan cities Nagar Road provided them with a perfect cosmopolitan environment.

“Nagar Road catchment has become one of the most popular residential locations in the city with prime commercial properties throughout the Nagar Road has completely changed the skyline.

Today, Nagar Road has the highest number of five-star business hotels as well as malls with presence of renowned schools and educational institutes like Bishop's, St Arnold, Billabong, Aman Setu School, Victoria Kids, Symbiosis International, Symbiosis Institute of Media and Communication, Dhole Patil College of Engineering, Raisoni College, Lexicon Institute of Management to name a few; with the Metro Plan and BRTS on Nagar road the connectivity to rest of the city is for sure going to improve further. Its IT and BFSI support services which have been the major contributor to the growth in Nagar Road followed by Manufacturing because of Ranjangaon MIDC, which is Five Star rated MIDC.

Experts believe that with the perfect blend of various real estate segments and continually cross-pollinating demand across residential, commercial and retail segments, the rapid depletion of developable space in this region was inevitable. With demand being driven into the adjoining areas, Dhanori and Wagholi quickly rose to prominence and saw a significant influx of projects by Pune's leading developers. Charoli, the next location to receive the spillover demand from Nagar Road, is now poised to receive Pune's largest integrated township. The arrival of this massive project coincides with the approval for the proposed 170-kilometer Ring Road which encompasses Pune and Pimpri-Chinchwad.The fact that Charoli lies squarely along this major infrastructure project will result in massive major investments into the area over the next five years.

Equidistant from leading eastern suburbs, Wagholi is a commercial, retail and residential market

The city has many localities to watch out for. Pune's real ty market is spreading its wings to the city outskirts, which are top investment destinations today. Located strategically on Nagar Road, Wagholi is a happening realty hub, which is equidistant from leading eastern suburbs.

Several star hotels and prominent malls, educational institutes, banks, entertainment destinations and interesting restaurants are all close by.

A short drive from the airport and with easy access to areas like Hadapsar, Manjri and Ranjangaon, Wagholi is also close to Kharadi, an emerging large-scale IT hub. The development of Wagholi has made eastern Pune a sought-after residential location. Proximity to areas like Kalyani Nagar, Koregaon Park and Viman Nagar has given them an added advantage. Located on the eastern side of Pune, Wagholi is one of the peripheral areas of Pune gaining limelight presently due to various developments mushrooming here.The eastern areas of Pune have been in demand since the growth of the commercial sector. Major IT and other business companies are also increasingly setting up their base here. Earlier a sleepy town, Wagholi has an important place in the history of Pune. It used to be famous for mining and stone quarries. The vast stretch of Wagholi along the Nagar Road has attracted developers and residents alike.

Wagholi is an extension of Kharadi. Connectivity is good, as it gets access through Nagar Road to various places in Pune. There are certain restrictions in town planning while the development is different under the Pune Municipal Corpora tion (PMC). Wagholi is not completely exploited and is still in its initial phase of development. The social infrastructure is getting developed and new developments will promote the suburb. People looking for affordable housing and working in industrial areas of Nagar Road can find solace in Wagholi.

Social infrastructure here is growing with schools and hospitals in the area. The connectivity is excellent since the area has easy access to Bund Garden, Shikhrapur-Chakan road and Solapur highway. The airport is 30-minute away. As Pune ends at Wagholi, people from locations like Aurangabad, Ahmednagar find it good for investment as it is close to them. Information Technology (IT) professionals find it comfortable. The current real estate market conditions are good and it is the right time to invest in Wagholi as the rates are cheaper here.

Apart from land availability and affordable rates, the other advantages for Wagholi are the commercial establishments planned in various lo cations in Pune reaching saturation level. The cosmopolitan atmosphere of the eastern side is attracting buyers here. Either IT professionals mi grating for jobs or international expats coming to Pune find the eastern zone better due to presence of airport and cosmopolitan lifestyle.

Even the non-resident Indians (NRIs) find this place better for investment.

Wagholi is strategically located on Pune-Nagar Highway; it also enjoys the benefit of being located close to the Kharadi IT hub. It is witnessing social infrastructure development and is attracting buyers looking for both affordable as well as premium options. The place allows its residents to live away from the hustle and bustle of the city. It also has several educational institutes.

Over the years there has been a phenomenal development in the belt and it has emerged as a commercial, retail and residential market.

Property prices may not go up for 6-12 months

Buyers who are currently hunting for a property shouldn't worry too much about prices rising--at least in the near term while the stock markets, the corporate world and a large section of the country's citizens are celebrating the election verdict. Now there is a fear that in the euphoria generated by the Bharatiya Janata Party's (BJP) decisive victory, real estate prices may start rising again, making the purchase of properties more expensive.
Realty experts are of the view that while there might be some euphoria-driven rise in transactions and a marginal rise in prices, this will dissipate soon. “It will take another 12-odd month before prices begin to rise within the sector. And that will happen only if the new government has a successful first six months and its initiatives put the economy on a higher growth path. One reason why prices may not rise immediately is that they are already very high in most major metros. The economic slowdown has had an impact on salary revisions, and hence on urban buyers' purchasing power.
“Economic activity has to pick up and purchasing power has to rise before we see more demand in the housing sector. High interest rates are another deterrent. In the near term, the new government can't down interest rates, especially with inflation reining high.
Urgently needed reforms while the new government can't engineer a quick revival of the real estate sector, it can take several steps that would have a salutary impact in the medium to long term. One, it could expedite the process of granting approvals to real estate projects. “We expect the new government to be more efficient in granting approvals to real estate projects. Developers complain that the authorities too should be made accountable for not granting timely approvals.
But remember that since real estate is a state subject, the central government can at best create a model of best practices for offering quicker clearances and persuade state governments to adopt it.
The new government also needs to get the Real Estate Regulation and Development Bill passed. By making developers more accountable, the Bill will revive trust in the sector. Low trust in developers' ability and intent to deliver a quality product on time is one reason why buyers are staying away. However, some of the harsher provisions of the draft Bill need to be modified. Currently it says that if a developer doesn't comply with certain rules, he could be jailed.
Experts feel that it would be more prudent to punish an economic offence with a penalty rather than treat it as a criminal offence.
The slowdown in sales has caused a severe cash crunch among developers, forcing them to borrow from non-banking financial companies (NBFCs), private equity players and private lenders at high rates, thereby making housing more expensive. “Fund flow to real estate from banks and housing finance institutions needs to improve. This will happen only if the RBI relaxes the provisioning norms and caps applied to realty lending.
The Securities and Exchange Board of India had released the draft SEBI (Real Estate Investment Trusts) Regulations, 2013. “Making REITs a reality will make more funds available to players. The new government needs to give the required tax exemptions to REITs at the earliest.
A couple of tax benefits would provide an immediate fillip to the real estate sector. The UPA government had allowed an additional tax deduction of `1 lakh to persons taking a home loan of up to `25 lakh. This benefit, however, expired on 31 March, 2014. Also, the government had introduced the provision of tax deduction at source (TDS) at 1% on transfer of immovable property priced at `50 lakh or more. “Extending the tax deduction by another year and levying TDS on properties priced at `1 crore or more will provide immediate fillip to the sector.
The new government could provide an indirect but strong fillip to the real estate sector by improving urban infrastructure. Providing urban infrastructure will release more land for real estate development, increase supply, and thereby help cool prices in the major cities.
So if you too are hunting for a property, the general elections and the formation of a new government at the centre don't change the situation much for you in the near term. Unlike the stock markets, which are liquid and nimble, a turnaround within the real estate market takes time. So keep looking diligently and don't lose sleep over prices rising immediately.

Source: TOI

COOPERATIVE HOUSING SOCIETY vs APARTMENT ASSOCIATION

AN IN-DEPTH COMPARISON BETWEEN A CONDOMINIUM AND A SOCIETY


    Though the condominium is more than a forty year old ownership concept for buildings in Mumbai, it is the cooperative society model which has been the most popular so far. However, in recent times, the concept of a condominium is slowly gaining momentum. Buyers who purchase premises on an 'ownership' basis require to come together to manage the building and for that purpose, one of the ways is to form a cooperative society, which is governed by the Maharashtra Cooperative Societies Act, 1960.
    An alternative to a cooperative society was introduced by the Maharashtra Apartment Ownership Act, 1970, which provides for the formation of a condominium. The buyers of premises in a condominium are called apartment owners who form an association known as an 'association of apartment owners', in case of both, residential as well as non-residential premises.
    Although the basic purpose of both the models is similar, there are many differences between a society and condominium, some of which are:
    FORMATION: To form a society, generally 10 persons, each from a different family who reside in the area of operation of the society (within the same city) and who have taken premises in the building, would be required. However, even one person who owns the entire building can form a condominium, provided there are at least five apartments in the building.
    OWNERSHIP: In the case of a society, the title of the land and the building is conveyed to the society, which becomes the owner thereof. Persons who have purchased premises are made members of the society and are allotted the particular premises. In the case of a condominium, the title of each apartment rests with the apartment owner, who also has a proportionate undivided interest in the land on which the building stands, the common areas and facilities of the building.
    BYLAWS: A society adopts the model bylaws in which little can be changed. While adopting the bylaws in a condominium, suitable changes can be made, so long as the provisions of the Act are not contravened.
    SHARE CERTIFICATE: A society issues certain shares to its members, as per the bylaws and the share certificate becomes an important title deed, since the allotment of the premises are related thereto. This is not so in a condominium.
    MANAGEMENT: The affairs of the society are managed by the managing committee, which is elected by the members of the society. The managing committee elects a chairman, secretary and a treasurer. Similarly, the affairs of a condominium are managed by the board of managers, who are elected by the members of the apartment owners association. The board also elects a president, vice-president, secretary and a treasurer.
    TRANSFER FEES: Under the model bylaws, a society can charge only Rs 500 as transfer fees and a maximum of Rs 25,000 as a premium. In case of a condominium, the bylaws can be more flexible and the amount of transfer fees can be provided therein.
    PERMISSION TO LET: In a condominium, the owner can give his apartment on lease or leave and license basis without the approval of the board of managers, while in a society, permission is required.
    VOTING RIGHTS: In a society, every member has one vote, irrespective of the area of his premises. In a condominium, every apartment owner has a voting right in proportion to the value of his premises, which is generally as per the area of the apartment owned by him and which is defined while forming the condominium.
    DISPUTES: In a society, disputes are generally referred to the registrar appointed under the Act or to a cooperative court, depending on the nature of the dispute. In the case of a condominium, the court having jurisdiction over the area in which the condominium is located, hears the disputes.
    EXPULSION: A society can expel its member under certain extreme circumstances. In case of a condominium, there is no such provision. However, if an apartment owner fails to comply with the bylaws or the rules and regulations, either damages or injunctive relief or both can be claimed against him.
    NOMINATION: In a society, a member can nominate a person in whose favour shares of the society should be transferred upon the member's death. No such facility is available in a condominium. An apartment can be transferred to a person to whom the apartment owner bequeaths the same by his will or to the legal representative of the apartment owner's estate.

Source-TOI

Stamp Duty Hike in Pune and MMR Mumbai by 1%

The state government has decided to hike stamp duty on property transactions in Pune as well as the Mumbai Metropolitan Region (MMR) by another 1 per cent to fund major urban transportation projects like the proposed Metro and monorail corridors.

Construction projects — including the ones for redevelopment — will be doubly hit with the government citing the same reason for proposing hike in development charges from such projects. A senior state official said the move to mobilise revenue from these sources comes after a decision to avoid public-private partnership model for infrastructure projects.

The government has also decided to collect a betterment charge from construction projects within 500 m of a transport corridor while offering them additional FSI on payment of premium on 100 per cent of ready reckoner rates. The government has already levied additional 1 per cent on stamp duty for imposition of local body tax in Pune.

The proposed hike will raise stamp duty payable in property transactions to 6 per cent in Mumbai and 7 per cent in other areas of MMR and Pune. Highly placed sources said the state has prepared a proposal seeking Cabinet approval for implementing these in MMR. They said these would be a part of a proposal for a nod to the revised plan for the 33.5-km Mumbai Metro-III route, which will connect Colaba to Bandra, the international airport and Seepz.

The Cabinet gave in-principle nod for these proposals for the Pune region two weeks ago.

The underground metro service was earlier meant to be built under PPP but the plan was scrapped as it was deemed financially unviable. Under the new model, about 57% of the project cost (Rs 23,136 crore) will be raised through loan. The state and Centre will contribute Rs 2,403 crore each (10.4%) in equity. Another 1,650 crore will be raised through subordinate debt and taxes. The revenue collected through hike in stamp duty, development charges and betterment charge will be used to raise another Rs 1,000 crore for the project.

Metropolitan commissioner U P S Madan said there was a case for levying a development or impact fee in a manner that such investments would benefit citizens in the region and lead to increase in property prices. Sources said the government had plans to double the development charge while offering an FSI of up to 4 for projects within 500 m of transport corridors. Madan, however, said these limits were yet to be fixed.

The plan is to set up a dedicated urban transport fund from revenue collections to act as a "permanent source of revenue" for transportation projects. The same model will also be applied in Nagpur, where a Metro service is planned following the Cabinet nod, a senior government official said.

The government is yet to consider levying a cess or surcharge to discourage private transport. Madan said this could be considered once the public transport infrastructure is upgraded. State chief secretary Jayant Kumar Banthia endorsed the plan to hike stamp duty and development charges.


Courtesy: The Indian Express

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Will the New Real Estate Bill reshape Real Estate in India?

How new real estate bill could re-shape the realty ecosystem?

The new real estate regulation bill, approved by the cabinet last month, will make significant interventions in the builder-buyer relationship, tilting the balance of power in favour of the latter.


Project Registration

When the Real Estate (Regulation and Development) Bill 2013 comes into effect, all projects will have to be registered with a real estate regulatory authority.

Promoters will have to disclose details about the project (name, type, plans, partnership companies, names of persons involved with construction etc). Will have to specify what kind of area is for sale (based on standardised markers).

All brokers and agents will have to be registered with the regulator before they can practise. Builder will have to provide a list of agents who will represent each project.

Once the project is registered, all details will have to be put on the website and updated every quarter. This includes disclosing the extent of project completion.

Take informed decisions

A) Buyers can take informed decisions. Today, it's impossible to compare properties because square footage, amenities, floor-space index consumed and even delivery schedules are different for different builders.

B) Which standards to follow? "The Bureau of Indian Standards has laid down standards for the construction industry, and clearly defined things like carpet area, plinth area or how to calculate the difference between the balcony and room area,and  if the bill brings in a new set of definitions, it will create a conflict."

C) Having access to the relevant information will help de-risk lending. At the moment, buying a house is like groping in the dark, he adds. Even with the most trusted builder, you don't know what you will get. This kind of transparency will boost buyer confidence.

All-Round Clearances

Builders will not be able to sell — or advertise — a project till it receives the requisite approvals. These range from land titles and amenities, to provisions for water, electricity and sanitation. This means pre-launch sales are out.

Brokers will be barred from trying to sell an unregistered project, or one that has not received the necessary approvals.

The regulatory authority will get 15 days — after receiving an application for registration from a promoter — to either clear it, or reject it. Reasons for rejection will have to be put down in writing. If the regulator fails to do either of these, the project will be considered as registered.

Right now, the bill appears to only hold the developer responsible, Developers will be penalised for delays, but what about the delays created by government departments in providing clearance for projects? If there is a delay in giving approvals, the government official should also be made accountable for it.

Approvals in phases

Approvals come in phases, and never all at one go. If a developer has to wait to launch a project only after all the approvals are in, this would only mean further delays in handing over the house.

There should be an automated registration process so that there is no human interface, and therefore no chance of corruption.
Smaller builders will be hit harder. After putting down money for all the clearances at one shot, they may not have much left over to start construction right away - especially since pre-launch sales are discouraged. "This will only mean delays in launching projects and escalated costs.

Funds From Buyers

Builders have to open a separate bank account for every project and set aside 70 % (or less, as designated by the local authority) of buyers' money, to be channeled only into the construction of that property. While builders are okay with setting aside a certain amount in a separate account, they feel fixing a sum is unrealistic, since the land-to construction-cost ratios vary from place to place.

Completion Schedule

As per the proposed Regulatory Bill, Builders will now have to give homes on time. In case of delay, buyers are entitled to full refund of their investment, with interest at a pre-determined rate. Builders will face penalties and jail term for sale based on misrepresentation of facts, for failure to update details about project and so on.

The Bill has provision of Jail term for the builder, But in case of builders who have multiple projects going, this means an inordinate delay for all of them." Who is going to make sure the projects are completed while the builder is in jail? So why can’t there be financial penalty instead of Jail so that his other projects do not suffer. This kind of approach is already taken by SEBI and IT department.


Disclaimer: The above content is searched from internet, leading new papers and research etc.

Taxes on property purchase in Maharashtra

Property Buyers, do you really know how much you pay to the government apart from what you pay to the developers while buying a property?

The real estate industry is one of the most heavily taxed industries in the country. The taxes, both, those paid directly by the home buyer while buying a property, as well as those paid by the developer during construction, constitute nearly 35 to 40 per cent of the cost of the property. Let us examine the various taxes a property buyer has to pay while buying a property. 

STAMP DUTY 

In order to give legal status to the property purchase transaction, one has to pay stamp duty on the sale agreement. Under Section 3 of The Indian Stamp Act, stamp duty is payable on instruments by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. The instruments (sale agreement) which are not properly stamped, are not admissible as evidence in court of law. 

Generally, stamp duty is to be paid on or before the date of registration of the agreement. Delay in payment of stamp duty would attract a penalty of two per cent per month, subject to the maximum of 200 per cent of the proper stamp duty amount. In Maharashtra, stamp duty is payable at five per cent on the agreement value or the stamp duty ready reckoner rate, whichever is higher. 

REGISTRATION 

Registration is the process of recording the contents of a document with a registering officer. The documents are registered for the purpose of conservation of evidence, assurance of title, publicity of documents and prevention of fraud. Under Section 41(1) of the Maharashtra Ownership Flats Act, 1963, the agreement with respect to flats to be sold by the owner/promoter/developer to the flat purchaser requires, compulsorily, to be registered under the Registration Act. If not registered, it cannot be produced as evidence in a court of law. The registration fee varies from state to state and in Maharashtra, it is one per cent of the agreement value but subject to a maximum limit of Rs 30,000. 

Value Added Tax (VAT) 

Some states also levy VAT on under-construction property. Currently, in Maharashtra, VAT at one per cent of the agreement value is payable at the time of registration of the sale agreement. However, VAT is not payable in case of purchase of a property from the developer, after the construction is completed and completion certificate is received. There has been a lot of criticism and controversies regarding the decision of the state government to levy VAT on under-construction property. The main argument against the levy of VAT is that if the construction of property cannot be considered as goods (on which VAT is payable) and stamp duty is already payable on property transactions, then why VAT. 

SERVICE TAX (ST)

Service tax is another controversial tax levied by the central government on under construction property. The current rate of service tax is 12 per cent. Education cess and secondary and higher education cess is calculated on top of the service tax rate, which takes the effective service tax rate to 12.36 per cent. 

The calculation of service tax is quite complex. The cost of the property includes the cost of the land and cost of the construction. Service tax is payable only on the construction component and not on the value of the land. Since in most cases, it is difficult to ascertain the cost of land and construction cost separately, the government has come up with the abatement scheme. Under this, abatement (relief) is given for 75 per cent of the value of the property, and service tax is levied only on the balance 25 per cent. This effectively brings the service tax rate down to 3.09 per cent. However, this abatement is not available in case of preferred location charges, floor rise charges, internal and external development charge (like infrastructure development charges), club house charge, etc., in which case service tax at flat rate 12.36 per cent is payable. It is to be noted that in the union budget 2013, it was proposed to reduce this abatement from 75 to 70 per cent, in case of flats having a carpet area of more than 2,000 sq ft or where the property value is Rs one crore or above. Hence, in such cases, service tax of 3.71 per cent would be levied. Service tax is payable as and when the installment payment towards the purchase of property is made to the developer. Like VAT, service tax is not payable, in case the property is purchased from the developer after the construction is completed and the completion certificate is received. A home buyer has to pay nearly 10 per cent of the value of the property, as taxes to the government. There are indirect taxes, like excise, VAT, service tax, etc., on materials and other inputs and services used in construction, which constitute between 25-35 per cent of the cost of the property. Though, these taxes are paid by the developer, they are built into the cost and passed on to the buyer. There is a dire need to rationalize the taxes, particularly on the purchase of residential properties, to make housing more affordable. 

Local Body Tax (LBT) in Corporation areas in Pune

Additional 1% of the agreement value is to be paid as LBT on registration of your agreement, which is the new form of indirect octroi to be paid to the PMC and PCMC.

So the overall tax comes to around 11% of the agreement value which is paid to the government which is ridiculously very high.

For knowing more about the real estate please call me on 9823116000/9158400500 or wrote to me on hitendra2309@gmail.com

Source: TOI and internet.

1 and 2 BHK becoming dearer in west Pune

Hey guys, I am posting after a long time, I will write about a very general topic today.

I came across many readers and buyers asking me to find properties in the west region of Pune for 1 BHK for sub 30 lacs budget and 2 BHK in sub 50 lacs budget, and that to in locations lile Baner along side the NH-4 bangalore highway, Wakad,  Balewadi, Pashan, with new Projects or resale in ready possessions recently completed projects only. Frankly speaking there are very few propejcts which have the matching properties as mentioned above and mostly cost somewhere around 35-40 lacs for 1 BHK and 60-75 lacs for 2 BHK apartments. But the answer is also a YES as there are Developers who have projects offering apartments in these ranges but they are not reputed ones or developing for the first time. But then the risk factor comes in play like will he complete the project or not, quality, etc.

Now with the price for apartments in these locations is from 4800 to 5500 per sqft it is difficult to have choice of apartments in budget apartments.

Now people ask whether the price rise will be creeping up and up for ever or what. The answer is absolute YES as there will always be a demand for houses and the properties will always be finding the required buyers, altough there may be a correction in the coming future but it wont affect the buying spree. As you do not know when is the correction going to come because it does not give you any warning like in case of a Natural calamity or weather changes etc. Some people wait for this to happen and then buy but these guys have lot of patience.

So to sum up there are apartments available in sub 30 lacs for 1 BHK and sub 50 lacs for 2 BHK but the locations are different and farther away. So these buyers should shift their priorities in the newer areas like Punawale, Kiwale, Talegaon, Dehu road, Wadgaon Maval, Kanhe, Sus, Maan, Ghotawade, Pirangut, Urawade, Farther end of Paud road etc.

Advice for those who want to buy Real Estate now, Today is the best day and there is nothing like "Got Late". It is like a running train and you need to catch it at your nearest station.

Please get in touch with me for any query and sale transaction.

Regards

Hitendra Choudhary

9823116000 or 9158400500

hitendra2309@gmail.com

Undri- The next Property Destination of Pune

Undri has always been a logical residential property destination in Pune, but for many years it lacked the required infrastructure. However, as NIBM Road became increasingly saturated, Undri started to come into focus. The revival of demand from the city's manufacturing and IT sectors helped to encourage developers to concentrate more on this area. Locations like Undri are ideal for offering residential options to these segments and at the same de-congesting the main city. The area, which is also temptingly close to Pune Camp, is now developing rapidly, and it is becoming a hotspot for residential property investment.

Undri has the advantage of being well connected to various key localities in Pune via various local and interstate highways and expressways while retaining its serenity. It has dense green cover protected by Government regulations. Proximity to Wanowrie and NIBM gives ensures that residents in Undri have access to all necessities of daily living. It is an ideal residential real estate location, and one of the few in the more central part of Pune which still offer the city's laid-back natural charm at affordable rates.

Home buyers as well as investors are very enthusiastic about this location, which offers cost-effective housing options to employees from the close-by IT/ITeS companies. with the widening of the The Katraj-Kondhwa-Phursungi-Solapur highway, Undri's all-round connectivity is going to increase dramatically. Moreover, it will soon be completely included within the Pune Municipal Limits, which will boost infrastructure development even further.

REFORM ISSUE IN REAL ESTATE SECTOR

The Indian real estate market is still in its infancy, largely unorganized and dominated by a large number of small players, with very few corporate or large players having national presence. The Indian real estate market, as compared to the other more developed Asian and Western markets, is characterized by smaller size, lower availability of good quality space and higher prices.
However, the concept of real estate has recorded a major increase in the recent past due to the increase in the population and also due to the fact that majority of the people have started settling in the urban areas due to their employment opportunities and hence the need for these structures has increased abundantly. The consequent increase in the business opportunities and the migration of labour has increased the demand for commercial and housing space especially the rental housing development in the real estate sector is being influenced by the development in the retail, hospitality and entertainment (i.e., the development of hotels, resorts, cinema houses) industries, the economic services and the IT enabled services.
It is the major employment driver being the second largest employer next only to agriculture. This is due to the reason that the other industries like steel, cement, brick, timber and building material are linked to this sector. It is difficult to estimate the exact contribution of the real estate sector to the gross domestic product. The gross value added in the ownership of dwellings is equivalent to the gross rental of the residence dwelling less the cost of repairs and maintenance.
The Indian market is still in its infancy, unorganized and dominated by a large number of small players with a few corporate or large players having national presence. The Indian real estate market as compared to the other developed Asian countries is characterized by a smaller size, lower availability of good quality space and higher prices. The State- owned Development bodies and the Housing Boards leaving very little space for the others largely control the urban land.
The restrictive legislations and the lack of transparency in the transactions are the other main impediments to the growth of this sector. Limited investments from the organized sectors has also hindered in the growth of this sector. There do exist large amount of undeclared transactions mainly due to the high stamp duty rates and also stringent legislative Acts.
In order to enhance reform in Real Estate Sector the following points are to be taken into consideration:
1. Infrastructure Status to Housing: This will enable easier access to the low cost institutional funds and also allow the sector to tap long term funds.
2. Real Estate Mutual Funds: The government should consider setting up the Real Estate Mutual Fund/Investment Trusts to provide the much needed support to the cash starved housing sector. The Real Estate Mutual Fund/Investment Trusts would be an efficient mode for providing equity financing as against debt, which is currently the norm for financing real estate development in India.
3. Stamp Duty: In some states the stamp duty is as high as 14–15% of the value of a transaction. Astonishingly, in Indian context not only the stamp duty is high but the levy of duty is done at every subsequent stage of transaction, be it the initial transfer/purchase of the land or on further sale of the same land after development or any other succeeding transaction. Though the rate is stepped down to 6–8%, it will be ideal to get it down to 2–3% and make it uniform throughout the country.
If the above is not practically possible, then stamp duty is to be mechanized whereby a provision for concession or a system of credit for any subsequent transaction should be made which would avoid the cascading effect of stamp duty and reduce the cost of the property. This concept is already in existence in the other statutes viz., CENVAT, VAT, etc.
4. Public private partnership: There is a need to evolve a regulatory framework that encourages participation of the private sector in bringing technical and managerial expertise to formulate and deliver basic amenities like water, sanitation, transport and electricity.
5. Amendment of Laws: There is need for amendment of the laws involved in this sector to encourage growth.
6. Environmental Impact Assessment Notifications: The notification specifies that no construction activity can be taken up despite the approval of plans by the competent authority, till the environmental clearance has been sought. In cases where the approval of plans has already been granted the construction activities are allowed, though in the intervening period the builder/ developer should obtain the clearance.
Further in cases of proposed projects the environmental clearance in city development projects should be obtained by the states themselves or by the planning bodies and not by the individual to save time.
7. Taxation: Over a period of time the tax and the regulatory environment in the real estate sector have become very important. The construction industry is already subject to a number of taxes and is considered one of the most overburdened tax segments. The corporate involved in this segment is of the general opinion that there should not be further imposition of levy in any form in this particular sector. Any further tax burden on this sector would affect the growth and the development of the sector as a whole.
a) Service Tax: The service tax in relation to construction of residential house complexes having more than 12 houses has been imposed. However, no rationale has been provided for the exclusion of services in relation to construction of residential bungalow that may not be part of a ‘residential complex’.
There seems to be no plausible rationale for taxing a residential complex and not construction of a bungalow that may entail a higher cost of construction in many cases. Further, no rationale has been provided for the threshold of 12 dwelling units in a residential complex. The service tax should not be levied, because the sector is paying a number of taxes.
b) Value Added Tax: VAT has been introduced in 20 states. For the successful implementation of VAT it is important that there should be uniformity in the rates, rules and regulations throughout the states. Not only do the rules vary but also the regulations. There is an urgent need to abolish CST as VST and CST cannot go hand in hand. It is important that local levies be completely abolished from all states.
c) Free Trade Agreement (FTA): The government may consider signing up of more FTAs with other countries in the interest of the real estate segment. However, while doing so, the interest of the domestic players should be borne in mind.
d) Form C: Uniformity regarding the permission to issue a Form-C for the purpose of purchasing goods to be used in the work contracts. The State Government should abide by the Central Laws regulating the issuance of Form-C.
e) CST: According to the norms of CST, sale includes work contracts. Hence, any goods moving from one state to another for the purpose of usage in execution works contracts now fall under the ambit of inter state works contract and the state from where the goods are moved is liable to impose the tax.
f) Excise Duty on Immovable Property: The excise duty should not be levied in the case of immovable property like in the case of installation of lifts to encourage this sector.

Real Estate in Pune city- A feel good factor...

Pune real estate has been the most consistent markets across the country and the future seems very good because of lots of growth drivers and prevailing good economic conditions. Here are few factors responsible for this.

1. Since 2007-2008, the city has witnessed the launch of more than 200,000 units of which more than 150,000 units have been absorbed till Q3 2012, resulting in 23% remaining unsold; the reason behind the same is the rate of absorption is not able to match the pace new launches.
2. Construction activity concentrated more on eastern and western Pune, about 33%and 28% of the under construction units are located in West and East Pune respectively.
3. Strong growth of IT/ ITes and Auto & Auto Ancillary sector (17%) is one of the driving factors for Pune’s real estate growth and will continue to be for coming 5 years.
4. Currently the IT/ITeS sector accounts for 74% of total office space and this percentage is going to go up with new IT/ITes offices becoming operational in the coming years.
5. Office space in Pune witnessed growth from 20.4mn sq.ft. in 2007 to 64.7mn sq.ft; however the absorption has been slowing down leading to gradual increase in vacancy level. Presently the vacancy level stands at 26% as on Q3 2012.
6. Majority, almost 95% of overall office development in Pune is focused on eastern and western Pune.
7. In western Pune, the residential prices are bound to rise in majority of destinations with some destinations outperforming others. Destinations closer to Hinjewadi IT Park and along Pune-Mumbai By-pass will witness higher appreciation as compared to farther locations.
8. Hinjewadi, Wakad, Tathavadeand Ravet are expected to witness maximum price appreciation in Pune residential market; primary reasons being
i) 80% of office space located in western Pune concentrated in Hinjewadi; it increases importance of residential market in proximity.
ii) West Pune has become a self-sufficient zone, reducing dependence on Pune City.
iii) Due to present state social and physical infrastructure in the region, proximity to workplace has gained paramount importance for home buyers
Hinjewadi:
1. Since 2007, total of 15,000 units launched in Hinjewadi of which more than 11,000 units have been sold resulting to 76% absorption till date.
2. Prices in Hinjewadi will move up to Rs. 8000/sq.ft from average level of Rs. 4000/ sq.ft.; appreciation of about 100%.
3. Besides reasons mentioned above, growing preference of walk-to-office concept has made Hinjewadi most sought after destination among IT professionals.
Wakad:
1. Since 2007, total of 15,570 units are launched of which 12,864 units have been sold accounting to 82% absorption till date.
2. The prices in Wakad are expected to touch Rs. 8,600 / sq.ft mark in 2017 from present average level of Rs. 4,500 / sq.ft.; a 91% appreciation.
3. A drop in new launches in 2012 in region will help to decrease the unsold units from previous years.
Tathawade
1. 4 km from Hinjewadi, physical characteristics similar to Wakad but prices 5% less than that of Wakad.
2. Since 2010, a total of 1,400 units launched of which more than 1,000 units are absorbed; absorption 73%.
3. The prices in Tathawade are expected to touch Rs. 8,500 / sq.ft mark in 2017 from present average level of Rs. 4,300 / sq.ft; a 98% appreciation.
Ravet:
1. 9 km from Hinjewadi, relatively a new location
2. Since 2010, a total of 1,750 units launched of which 1,200 units are absorbed; absorption 70%.
3. Prices in Ravet will move up to Rs.7, 800/sq.ft from average level of Rs. 3,950/ sq.ft; appreciation of about 98%.

These are the excerpts from the recent reports from the a leading research agency..

Pune Property Ready reckoner rates zoom northwards

The Maharashtra state’s RR rate for Koregaon Park is Rs 10,212 per sq ft for a house or flat — the highest in the city. Though the current market rate is much higher, the RR rate has recorded an increase of Rs 1,712 over last year’s rate. Areas such as Koregaon Park, Shivajinagar and Kalyaninagar attracted maximum ready reckoner rates for housing, other areas that closely follow are Shivajinagar (Rs 9,520) and Kalyaninagar (Rs 8,550), where high-valued deals of residential properties were registered in the 2012 calendar year. The earlier rates in Shivajinagar and Kalyaninagar were Rs 7,930 per sq ft and Rs 7,125 per sq ft respectively.
    “RR rates are revised based on the number of deals and their value reported at the property registration office and information gathered by the officials about real estate. It gives the department an idea about the current trend in the real estate market,” said S Chockalingam, Inspector General of Registration (IGR) and Controller of Stamps of the state.
    The IGR office has increased RR rates in most areas in the Pune Municipal Corporation (PMC) limits by about 20%. However, the steepest rise in the rates is in the Pimpri Chinchwad Municipal Corporation limits, as more and more residential projects are coming up in those areas.
    A senior officer from the IGR office said that in the PMC limits, most under-construction residential complexes fall under the redevelopment category — where projects are coming up on plots where residential property previously existed. Very few vacant plots are being developed. As a result, the rates in these areas, which are driving development, are higher than the fringe areas, the officer said.
    The RR rates in Bibvewadi, Kothrud, Sadashiv Peth, Baner, Gultekadi and Dhankawadi have gone up by Rs 1,000 per sq ft as these areas are witnessing high-valued transactions compared to areas such as Narayan Peth, Hadapsar, Mundhwa, Warje and Wanowrie.
    Property rates in Pimple Nilakh, Bhosari and Pimple Gurav are so high that the government has increased the RR rates by 35% to 70% for the current year. The state government wants RR rates to be close to the market rates, which would generate more revenue in the form of stamp duty. Stamp duty is charged on the amount quoted in the deal documents. At present, stamp duty is 5% for urban areas and 4% for rural areas.
    Ready reckoner rates are government approved rates used during valuation of property, legal disputes over real estate and compensation after acquisition.
    The IGR office has increased ready reckoner rates every year for the last two decades. The general tendency of customer is to show lower than the actual amount on paper while buying a flat or property. As stamp duty is charged only on the quoted amount, the government loses revenue and black money is generated. To curb such practices, the government regularly gathers data of ongoing rates of properties in various areas across the state and updates the ready reckoner rate. It is mandatory for buyers and sellers to get the deal registered with the government and file stamp duty accordingly. If a buyer shows an amount lower than ready reckoner rates, he/she has to pay stamp duty as per the ready reckoner rates. The exercise is to reduce the gap with market rates to maximise government revenue. 

Pune Luxury Real Estate on Rise

After a lull of over a year, the luxury segment of the city's real estate market has shown signs of a comeback. Realty sector experts say that there has been a steady increase in luxury projects across cities in India and Pune is a big contributor to this movement.

"Bangalore is at the top of the chart as more than 50% of total luxury units launched in 2012 are there, while Pune has a contribution of nearly 8%," Shveta Jain, executive director of realty advisory company Cushman & Wakefield India, told TOI.

"Residential luxury market in India has exhibited a bullish behavior despite a slowdown in the real estate market of India during the last couple of years. The growing demand in the segment is mainly due to the increase in the number of high net worth individuals (HNIs),'' she said.

Ashutosh Limaye, head of real estate investor services at realty research and advisory company Jones Lang Le Salle (JLL), said despite global economic and financial crisis, the Indian residential market has been relatively stable. "Luxury homes is a growing preference of new age buyers and that has encouraged developers to launch luxury or super luxury housing projects priced between Rs 1 crore and Rs 20 crore.''

The data available with Cushman & Wakefield indicate that there has been a steady increase in luxury projects across the major cities in India.

While cities such as Hyderabad, Bangalore and Pune have witnessed an upward trend in the total number of luxury housing units launched, cities like Mumbai, Kolkata, and the NCR have witnessed a decrease in the total luxury units launched in 2012 in comparison to 2011. In Bangalore, Mumbai and Hyderabad, the luxury segment contributed 7%, 5% and 5% respectively of the total housing supply in 2012, while in Pune it contributed nearly 1%.

Locations such as Goregaon East in Mumbai, Gurgaon in the NCR, Hebbal in Bangalore, and western Hyderabad witnessed the highest capital appreciation at 44%, 42%, 21% and 13% respectively in 2012, the firm said.

The enthusiasm of developers is visible as Pune and surroundings witnessed the launch of three high-end homes projects in less than a month's time, with each unit carrying a price tag of Rs 1 crore upward, going up to Rs 7 crore. Pune witnessed launch of three luxury projects in 2012 in comparison to two projects last year. While the number of total units launched in 2012 increased by nearly 170% over those launched in 2011, the number of luxury units launched in 2012 increased by more than 250%, Cushman & Wakefield pointed out. The average launch price of luxury projects launched in 2012 increased by nearly 20%, compared to 2011.

Sanjay Bajaj, managing director for Pune at JLL, said: "Despite the cautious economic climate, there is still a lot of wealth generation happening among India's HNIs. The luxury homes segment is not a huge contributor to the overall real estate demand in the country, but it has a definite - though limited - clientele and developers who are catering to it. Pune has a relatively good demand ratio for luxury housing in the country; thanks to better amenities and less exotic land prices.

Rishabh Siroya, director of a realty firm, told TOI that seekers of luxury homes are showing renewed interest, though there was never a slump as far as this segment was concerned. "It's perhaps a coincidence that developers did not launch any ambitious high-end homes project in the last one year or so, but there was no question of demand for these properties at any time. Recession never hits luxury. If one wants to buy a Rolls Royce car, he buys it - good markets or bad,'' Siroya said, adding, "The key to luxury housing is that the buyer must be convinced about the features he's getting. Once that happens, price is no hindrance."

Abhisheck Lodha, managing director of a Mumbai based realty company, offered a different paradigm for luxury. "Luxury is a state of mind. Strangely, however, luxury has been connected with the price of homes. It is important how a person feels living in the house he occupies and the comfort he draws from its surroundings," Lodha said. Lodha added that the market for high-price homes was niche one and thus small. "This segment is about 4% of the country's residential market, led by select cities such as Mumbai, Pune, Bangalore, Chandigarh and Delhi NCR. It is, however, growing steadily on the back of rising aspirations and higher disposable incomes.

Luxury housing in India is here to stay, but will probably never cross the 5-6% of the overall real estate demand, Bajaj said. "The rich-poor divide is still too big. While buyers of luxury housing are less affected by economic fluctuations than the middle-class, it cannot be said that performance of the economy does not drive the sentiments in this segment."

Update on Real Estate Bill

The central government has clarified that there is no definite time-frame for approval and implementation of the 'Real Estate (Regulation & Development) Bill, 2012.

The bill was prepared to promote planned and healthy real estate development of colonies and apartments with a view to protect consumer interest and to facilitate smooth and speedy urban construction.

"In order to provide a uniform regulatory environment to enforce disclosure, fair practice and accountability norms and fast track dispute resolution mechanism in real estate transactions, the ministry of housing and urban poverty alleviation has drafted the 'Real Estate (Regulation and Development) Bill, 2012 in consultation with all stakeholders... Since necessary approvals for introducing the bill in Parliament have not been received, no time-frame can be assigned for its finalization at this juncture," states a press statement issued by the government.

The bill aims to establish a regulatory authority and an appellate tribunal to regulate, control and promote planned and healthy development and construction, sale, transfer and management of colonies, residential buildings and apartments.

As of now the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 enables the state government to monitor timely completion of real estate projects. The draft cabinet note on the new bill has been circulated to all state governments for comments. A meeting with the state ministers dealing with the subject was also held recently.

"The state government has given its feed back to the central government regarding this bill and The state government

has held rounds of meetings with the municipal corporation office-bearers in the state. Considering the opposition from the real estate market, the bill is likely to get delayed," said a state government official.

Real estate housing may get Industry status.....

Housing may get industry or infrastructure statusTNN | Dec 13, 2012, 02.40AM IST
PUNE: The state government has 'in principle' supported the recommendation by a technical group to make housing a part of infrastructure or declare it as an industry.

The 'technical group on estimation of urban housing shortage' of the country for the 12th Five Year Plan period (2012-17) has recently submitted its final report to the ministry of housing and urban poverty alleviation.

"The state government in principle has supported the suggestion. The final decision will soon conveyed to the central governmentIf housing becomes part of infrastructure or treated as industry, it will change the dynamics of urban development," said a state government official.

If housing becomes an industry, the rules and regulations would change; and if it is put under the infrastructure category, more central and state funds could flow to civic bodies.

According to the technical group, the total housing shortage estimated at the beginning of the 12th Five-Year Plan period is 18.78 million. Out of that, 10.55 million is in the economically weaker section (EWS) category and 7.41 million is in the low income group (LIG) category.

In Pune, the mid-city area, comprising 17 'peths' and surrounding areas, spanning over 147.85 sq km, is facing a shortage of 658,975 houses. To accommodate the burgeoning population, the municipal corporation will have to facilitate construction of over 30,000 affordable houses in the coming years. Failure to do so will result in rise of slums.

The new Development Plan (DP) for the old city areas has highlighted the need for affordable housing in the heart of the city.

According to the housing survey incorporated in the DP, in the 17 'peths' and six sectors that the city has been divided into, the requirement of the EWS is around 290,873 houses (that is 44.14% of the total housing requirements). The low income group requires 132,022 houses (20.03%), middle income group requires 172,977 houses (26.24%) and the higher income group needs 63,103 houses (9.58%).

Saarrthi Souvenir launch at Baner

New Launch At Baner Annex - Saarrthi Souvenir

A brand new project comprising of 1, 2 and 3 BHK apartments in 3 exclusive buildings viz, Titatinium having 2 & 3 BHK apartments, Platinum having 2 BHK apartments and Gold having 1,2 BHK apartments with all buildings of parking floor and 11 floors above.

Launch price point is Rs.5100/- for Garden facing flats and 5000/- real facing flats. Floor rise applicable.
For more details please call me @ 9158400500 or 9823116000

Low cost housing

HOUSING

Redrawing the Low-cost Model

Builders are finding it difficult to make profits in the true low-cost housing space and are, increasingly, moving their core business proposition to accommodate higher price points.

    In 2008, Jaithirth ‘Jerry’ Rao set up Value and Budget Housing Corporation (VBHC) to build low-cost houses — of below 10 lakh each — for the urban poor. Four years on, VBHC has completed the first phase of its maiden project in Bangalore, and sold 400 apartments. However, it has marginalised the low-cost premise it started out with. Low-cost houses make up only 15% of a VBHC project; 75% of the units cost 13 lakh each and the remaining 10% cost 18 lakh each. Market players term these higher price points — which target those seeking bigger, better houses and having the ability to pay a little more — as ‘affordable housing’. Increasingly, companies in the stated business of low-cost housing are operating, in varying degrees, in these pricier spaces. For example, Tata Housing defines low-cost as below 10 lakh and affordable as 15 lakh to 40 lakh, and has an equal mix in its projects. But PS Jayakumar of VBHC says this is mere semantics. “For us, low-cost and affordable are interchangeable terms,” says the managing director of VBHC. “We target salaried people who are willing to invest a little more. It is not for people below the poverty line or at subsistence levels.” Such an evolving price-volume split, and the splitting of hairs over the definition of low cost, is a challenge and reality for builders in this space. Rising input costs, and the extraneous costs related to real estate in India, is making a pure low-cost project commercially unsustainable. This is pushing builders to adopt a hybrid model — a mix of pure low-cost housing and affordable housing. The larger the ticket size, the higher the profit margins. There’s also a pull factor. Buyers are showing a greater inclination towards buying lowcost houses for investment purposes, as opposed to living in them, creating upward pressure on prices. “About 30%-40% is being picked up by investors in these projects,” says Subhankar Mitra, head, strategic consulting (west), Jones Lang LaSalle India, a real estate consultancy, adding that the very idea of low-cost housing is under threat. 
Hybrid Model 
In spite of moving up the price curve, the positioning of builders hasn’t changed: it is still low-cost. Take Tata Housing, which launched a 100% subsidiary in 2010 called Smart Value Homes to build houses in the 5 lakh to 40 lakh range. “The lowincome tag got them the buzz, but all their projects are mixed,” says Vikram Jain, lead, low-income housing practice, Monitor Group, a management consulting firm. Smart Value Homes has two brands: Shubh Griha (houses below 10 lakh) and New Haven (between 15 lakh and 40 lakh). According to Brotin Banerjee, MD and CEO of Tata Housing, both brands co-exist in most projects; some, though, are only under the New Haven brand as the land prices there are higher. “Our projects are usually spread across 40-50 acres and we give them (customers) townships,” he says. “We don’t want our low-cost customers to miss out on the community experience just because their houses cost less.” Jayakumar of VBHC agrees. “When poor and rich communities stay together, security issues are better than communities segregated from each other,” he says. “Our aim is not to build ghettos but vibrant communities where social balances are useful, apart from the economic compulsion of the project.” More groups are looking to enter this space, including Mahindra and TVS. Both declined comment as their projects were in the conceptual stage. But Jain of Monitor, who has spoken to both groups, says Mahindra is focussing on the low-cost segment and TVS on the affordable-housing segment. 
Lack Of Standardisation 
The main issue before developers is how to keep costs down — and, by extension, prices. Jayakumar expects the mixed model to deliver an operating margin of 15%-20%, while Banerjee pegs it at 12%- 15%, adding that a builder needs to achieve “economies of scale” to succeed in this format. A pre-requisite for economies of scale is standardisation: like uniformity in sizes, in design. But building laws — for example, built-up area and open-space norms — vary between cities, even across localities in a city. “It increases our cost and we cannot derive the benefit of economies of scale,” says Jayakumar. Sachin Kulkarni, managing director of Vastushodh, says the current rules and operating environment disincentivise a pure low-cost model. “The bribe we pay for premium-housing projects is the same as for our affordable category, with the same amount of paperwork,” he says. Vastushodh, which works on a hybrid model, has 12 projects in Pune and is planning to enter Mumbai. Kulkarni says approvals take at least six months. “The longer this process, the higher our costs — our capital assets remain idle, gathering interest,” he says. Similarly, for its maiden project in Bangalore, VBHC had to wait 18 months for approvals. “We can reduce our costs by 20% if the approval process is shortened,” says Jayakumar, adding, more states need to follow the Rajasthan lead of single-window clearance for affordable-housing projects. 
    Investor Inflation 
    The low-cost segment targets 
    households with a monthly income 
    of 15,000-20,000; the affordable segment, 25,000-50,000 a month. The supply 
    of low-cost units is not only being challenged at the builder end, but also, unintentionally, by buyers such as Manoj Kurey. This 52-year-old medical representative in Pune, who earns 4.5 lakh a year, recently bought a oneroom set in a Vastushodh project in Yerwada for 4 lakh. “I bought it for investment purposes,” says Kurey, who lives with his family in a two-BHK in central Pune. Kulkarni of Vastushodh says investors have made offers to him to buy an entire building and sell once prices appreciate, but that “we do not encourage investors and prefer selling to end-users”. According to Kulkarni, “not more than 10%” of buyers of such projects would be investors. Even among them, he adds, many are deferred users. Mitra of Jones Lang says investor interest in the low-cost space, which is being fuelled by low ticket prices, is counter-intuitive to the idea this segment stands for. “The pool of investors is very large, and they are pushing up prices and blocking out end-users. The objective of low-cost housing is lost,” he says, adding the government should do more, in terms of checks and balances, to support private initiatives and ensure supply reaches genuine beneficiaries. There are few pure low-cost players left. Even those left are raising their floor prices. For example, Ahmedabad-based premium developer Foliage, entered this business in 2008, with apartments of Rs 3-7 lakh. Today, its price range is 5-11 lakh. “In another five years, it will be 7-12 lakh, depending on land prices,” says Nehal Shah, CEO of Foliage. According to VBHC, between 2010 and 2012, the price of steel increased by 52%, cement 82% and labour costs 55%. Still, Shah finds the low-cost proposition compelling. “My premium segment does not subsidise Navjivan (its low-cost offering). They are two separate entities and I find the low-cost model sustainable,” he says. “We invested 4 crore in the first project and have an RoI (return on investment) of 60%.” But Foliage is an exception. Most players, seeking greater operational and financial stability, prefer the middle ground. And that is the new normal for the low-cost space. 

 This article was published in Economic times in Mumbai on 6th Dec 2012. 

The above toipc if the the most talked one across India. The developers are targeting only the 4-5 % people who pay taxes. Who is bothered about the the remaining 95%. Can they really afford any house below 15 lacs. You see everywhere in Pune the minimum price of a 1 BHK is not below 35 lacs in a good upcoming suburb. But there are some available in remote places like Talegaon, Phursungi, foot hills of Sinhagad, Ranjangaon but who is buying them? Again retail investors, localities in that area,  guy who works in city limits will find it very difficult to commute from remote places.

The basic raw material which is the "Land" the real "Real Estate" is very costly and it is not becoming any cheaper. The land which is in Government's hands, some portions of it should strictly be reserved for Low cost and affordable housing only. Otherwise  it is going to be very difficult to handle the situation in the near future.

Regards,

Hitendra