Hope for houses in heritage zones

For years, 78-year-old S L Mittal has been waiting to add a floor to his one-storey residence in Kotla Mubarakpur. But because Mittal's property is 92m from the ASI-protected Kale Khan Ka Gumbad, he has been unable to get the nod. But, a new move by the culture ministry to bring amendments in the ASI Act of 2010 could grant him his wish. 

The culture ministry has proposed to categorize all centrally-protected monuments as A, B and C based on significance, location and size. Protection accorded to each building will be based on the category it is placed in. 

If Kale Khan Ka Gumbad is categorized B or C, Mittal might just receive permission to build the first floor—with the prohibited zone radius getting reduced from 100m to 50 or less. Mittal is not alone; there are thousands others waiting for the amendment to undertake essential repairs and constructions in their homes. 

Curbs on construction within 100 metres of monuments were first imposed when the ASI Act was framed in 1992, but permissions continued to be granted on case-to-case basis. 

However, the 2010 amendment and formation of National Monuments Authority led to a blanket ban on such constructions. Strict regulations were imposed on development within 100-300m of monuments. 

Delhi has hundreds of monuments located in midst of residential colonies, mostly in south and central Delhi. In areas like Gulmohar Park, Safdarjung Enclave, Hauz Khas, South Extension, Mehrauli, Saket, Malviya Nagar, Rana Pratap Bagh and Nizamuddin, the new law has hit hard. 

People who built homes or bought plots much before the ASI Act came into force in 1992 say the curbs are a travesty of justice. "I can't move a brick in my single-storey house that was built in 1969. Some of my family members have medical problems and I need a second floor. Since my house lies 97 m from the boundary of Biran Ka Gumbad, I cannot construct anything," said a Green Park resident. 

Almost 80% of South Extension falls within prohibited and regulated zones. 

"The colony was built in 1959. At that time, most people could only afford a ground floor. As time passed and people came into money, they built additional floors to accommodate their growing families. Then the Act came into force. Many houses are now falling to pieces because just getting permission for repairs is a long process. The property value here is less than that in even Okhla," said Manjeet Singh, general secretary, Association Of Citizens. 

In Shivalik Colony, empty plots can be seen on the main road and these serve as parking lots. "The owners cannot build their homes here because the plots fall in the prohibited zone of Sarai Shahji. They are just waiting for some relief in ASI Act so they can build their dream homes," Ajit Banerjee, a resident, said.

This article originally appeared on  -  http://content.magicbricks.com/industry-news/delhi-ncr-real-estate-news/hope-for-houses-in-heritage-zones/81210.html

Real estate losing sheen to mutual funds

Thinking about buying a house? After all, property is a safe investment - so everyone has told you. Well, there may be more to it than meets the eye.

Historically, Indians have preferred investing in property for the long term as this asset is perceived as a 'safe' investment. This preference was accentuated after the 2008 financial crisis when investors shifted from financial assets (securities, stocks, etc.) to physical assets (like gold, property, etc.). Yet, that trend may not be true for the future; here is why:

Property is losing its sheen: Currently, there is a situation of over-supply with more property available than the demand for this asset. This supply glut along with the project pipeline already under construction could take over 10 years to dispose off.

Genuine demand for real estate seems low? Census data from 2011 indicates that India has more houses than households. This is a clear indicator that some people actually own more homes than they need and they purchased these as investments. This indicates a high possibility of real estate being used to stash away black money.

So what lies ahead? There is already a realisation in the real estate industry that things are changing. There is a huge backlog in the inventory of real estate across India. To increase sales and clear this backlog, many discounts and offers are available for new buyers of property. According to data made available by Liases Foras, a Mumbai based real estate rating and research firm, residential inventory in Delhi, Mumbai and Bangalore has now reached its highest levels in the last five years. Declining sales and rising inventories are beginning to affect developers adversely.

Changing perception towards real estate: While in the past, people would simply put their ill-gotten wealth into property thinking of it as a safe haven, things are now changing. Many people are now more aware of the low returns real estate investments have offered in the recent past. Today, many investors would be wary of an overexposure to real estate because:

They seek positive investment returns which mean returns that are positive after adjusting for inflation.

They are aware of the new government's determination to root out black money. The government wants to enact the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill which would make tax evasion by owning unofficial foreign assets a criminal offence.

They own sufficient amounts of property and may be already overexposed to the asset class.

Conclusion: It is no secret that the Indian property market attracts a lot of cash money and with the government's new anti-black money initiatives in place, the property market is going to be further impacted. This makes investing in financial assets such as mutual funds increasingly attractive; not only can you invest with maximum convenience (sitting at your computer and hitting a few keys to initiate the investment), mutual funds have the potential to offer attractive investment returns thereby helping you build your wealth.

Disclaimer: The views expressed in this article are personal in nature and in is no way trying to predict the markets or to time them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you. Please consult your Financial/Investment Adviser before investing. The views expressed in this article may not reflect in the scheme portfolios of Tata Mutual Fund.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

This article originally appeared on - http://www.dnaindia.com/money/column-real-estate-losing-sheen-to-mutual-funds-2079117

Five factors that define successful real estate investment

For any investment, the ultimate goal of an investor is to make money. Real estate is one of the preferred asset classes among investor groups across the globe due to the handsome profits attached to it. Nevertheless, it is also true that making serious money is not that easy, and real estate investment is not an exception. Within real estate, there are numerous asset classes, such as residential, commercial, land and retail. There are also various strategies to make money, such as owning and renting, buying and selling, buying shares of real estate companies, investing in real estate investment trusts (REITs), and so on. Each of this strategy involves a few basic steps like determining your investment horizon, researching the market, finalising an asset, financing the purchase and selling the property. 

The key factors that define success in real estate investment are determining location/asset based on the time horizon, researching and conducting due diligence, considering all costs in the financial analysis, defining an exit strategy and setting aside a set time to pursue real estate goals.

1.Selecting location and asset – The first step in any real estate investment is determining a location and then selecting an asset within that location. The investment horizon plays a key role in determining location. Generally, emerging locations need a longer time to develop, and sometimes, exit becomes difficult if development does not go as expected or as per the initial plan. Thus, if you are planning to invest in an emerging location, keep your investment horizon longer to avoid any financial distress.  

 2.Researching and conducting due diligence – Real estate investment is also filled with potential challenges and pitfalls. With developers invariably delaying projects and delivering sub-quality products, it is very important to research and conduct proper due diligence, which involves checking a developer’s track record, quality of previous projects, financial condition, and so on. 

3. Conducting financial analysis –Another key to success is to familiarise yourself with tax structure, payment plans, mortgage calculation, and others. It is important to determine your personal wealth, growth prospects and the maximum amount of loan for which you are eligible. Real estate investment comes with uncertainties in terms of project completion, quality of product and exit, among others. Thus, to avoid financial distress, it is important to keep a buffer always. 
 
 
 4.Defining an exit strategy – Ideally one should exit after achieving the targeted return on investment. Some investors choose to hold the cash flow properties indefinitely. However, it may not be the best decision for them. For example, residential properties are yielding anywhere between 2 to 4% a year in India. It’s good to hold the properties for a longer horizon but sometimes, delay in exit impact the overall internal rate of return (IRR). Thus, exit strategy is as equally important as selecting a property to buy. 
 
 
5. Stay focused – All the four key factors of setting goals, researching opportunities, implementing plans and financial analysis may be in vain if you do not keep an eye on changes in market trends and make adjustments to your plan accordingly. Thus, you need to set aside a time to pursue real estate goal.  Investing in real estate requires proper time allocation for continuous assessment of market trends and opportunities to overcome the challenges encountered.

Given the foregoing, what matters most is taking a reasonable approach, challenging your own assumptions, learning factors that influence outcome and keeping track of where money is made and lost in your overall real estate investment. - 

 This article originally appeared on -
 http://www.moneycontrol.com/master_your_money/stocks_news_consumption.php?utm_source=MC_MYM_Article&cat=realestate&autono=1353404#

All you need to know about NRI home loans

Whether you are a Vijay Desai, a retired stock exchange broker living in Mumbai’s Kalbadevi Road or a Rima Mukherjee, a head honcho in one of Dubai’s leading recruitment company, the desire to own a home is ubiquitous. Magicbricks data indicate India as a popular investment avenue not just with resident Indians but also with Indians posted offshore or on secondments to international destinations. United Arab Emirates, United States of America and United Kingdom are the leading countries who look up for realty updates in Magicbricks. If you are planning to apply for a home loan while posted abroad, there are a few things which you should know.

An ideal home could be anywhere! Research before you invest!

• One needs to be eligible for home loans. A home loan is sanctioned to the NRIs to purchase a house either ready-built, under construction or from a second owner or for if you are building a property on a plot of land. One can also avail financial services to purchase a plot of land allotted by a society / development authority or for redecoration or upgrade of an existing property in India.

• Are you eligible to apply for a NRI home loan? Overall, the qualifier is the same for resident Indians and NRIs. In the case of the latter, the applicant has to be a graduate; should have requisite employment documents as a proof to his/her work experience; probability of continuing abroad for the loan tenure and probability of servicing the loan with an extended tenure in case you have to return to India. To spend in an immovable property in India, you should have an Indian origin (PIO) - held Indian passport at any point in time; or your father or grandfather was a citizen of India. You cannot be a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan to invest in the country

• Check for documents that need to be submitted. Usually, a copy of the passport and works contract is mandatory along with the power of attorney (POA). The third element is crucial as the borrower is not based in India and in such a scenario; the HFC would need a representative 'in lieu of' the NRI to deal with as required

• Normally, five years is the repayment period of NRI home loans. Some Housing Finance Companies extend the term to seven years. EMI is the popular choice of refund, which begins only after the entire loan is disbursed. If it is a case of part disbursement, normal interest rate would be levied the availed loan amount. The mode of payment is by way of direct remittances from abroad through normal banking channels or from such accounts as may be permitted by RBI from time to time. NRO, NRE, NRNR and FCNR accounts are some ways of payment. However, these accounts change on the basis of RBI permissions to each HFC

Now that you have clarity on whether you can or not get homes loans and whether you are eligible to invest in India, think of visiting http://www.noidaprojects.com/ to arm yourself with a plethora of choices in any city of India.

This article originally appeared on - http://content.magicbricks.com/industry-news/all-you-need-to-know-about-nri-home-loans/81127.html

Govt builds first smart city 'GIFT' in Gujarat to push PM Modi's model for urban future

India's push to accommodate a booming urban population and attract investment rests in large part with dozens of "smart" cities like the one being built on the dusty banks of the Sabarmati river in western India.
So far, it boasts modern underground infrastructure, two office blocks and not much else.
The plan, however, is for a meticulously planned metropolis complete with gleaming towers, drinking water on tap, automated waste collection and a dedicated power supply - luxuries to many Indians.
With an urban population set to rise by more than 400 million people to 814 million by 2050, India faces the kind of mass urbanisation only seen before in China, and many of its biggest cities are already bursting at the seams.
Ahead of his election last May, Prime Minister Narendra Modi promised 100 so-called smart cities by 2022 to help meet the rush.

The layout of the smart city project. HT Photo

At a cost of about $1 trillion, according to estimates from consultants KPMG, the plan is also crucial to Modi's ambition of attracting investment while providing jobs for the million or more Indians who join the workforce every month.
His grand scheme, still a nebulous concept involving quality communications and infrastructure, is beginning to take shape outside Gandhinagar, capital of the state of Gujarat, with the first "smart" city the government hopes will provide a model for India's urban future.
"Most (Indian) cities have not been planned in an integrated way," said Jagan Shah, director of the National Institute of Urban Affairs which is helping the government set guidelines for the new developments.
Among the challenges to getting new cities built or existing cities transformed is the lack of experts who can make such huge projects work and attracting private finance.
"To get the private sector in, there is a lot of risk mitigation that needs to happen because nobody wants a risky proposition," he told Reuters, stressing the need for detailed planning.
To build smart cities, India allocated 60 billion rupees ($962 million) in its annual federal budget for the financial year starting April 1, even as it spent just a fraction of last year's allocation of 70.6 billion rupees, said Shah.

An aerial view of a site under construction at the Gujarat International Finance Tec-City (GIFT) at Gandhinagar in Gujarat. Reuters Photo

Old cities or new?
Gujarat International Finance Tec-City (GIFT), as the smart city is called, will double up as a financial hub, with tax and other breaks to lure banks, brokerages and other businesses.
Developed in partnership with IL&FS Engineering and Construction, it aims to compete with India's own financial capital of Mumbai as well as overseas rivals like Dubai and Singapore.
Pressure on India's existing urban centres is already intense, with cities like Mumbai gridlocked by traffic and hampered by poor infrastructure and a lack of amenities like parks and effective public transport.
Yet some experts believe that building new cities may not be the answer to India's swelling urban population.
"To address India's urbanisation challenge we have to start looking at our existing cities," said Shirish Sankhe, director at consultant McKinsey and Company, India.
He added that new cities would be only a small part of the solution relative to brownfield projects.
India has built planned cities in the past, including Chandigarh, designed by French architect Le Corbusier, and Gandhinagar itself. But the scale of its current push is unprecedented.

A worker folds the cable of a welding machine in front of two office buildings at the Gujarat International Finance Tec-City (GIFT) at Gandhinagar in Gujarat. Reuters Photo

A bird's eye view from atop one of the two office buildings on the 886-acre GIFT site, a venture which began when Modi was chief minister of Gujarat, shows little sign yet of the 9 billion rupees spent on the first phase.
But the sandy plain hides infrastructure including an underground tunnel for utilities, a first in India.

What makes a city "smart"?
The government has yet to decide what exactly will make a city "smart", but the programme is expected to include building new centres as well as adapting existing ones.
A detailed definition with guidelines is due soon, said the National Institute of Urban Affairs' Shah.

Engineers walk past a cooling system plant under construction inside Gujarat International Finance Tec-City (GIFT) at Gandhinagar in Gujarat. Reuters Photo

Existing cities like Dholera and Surat in Gujarat, and Visakhapatnam in the east, have already begun work to transform into smart cities with help from companies such as Microsoft Corp, IBM Corp and Cisco Systems.
Beyond GIFT, greenfield projects are likely to face hurdles including land acquisition rights and lengthy approval processes, as well as finding the right location.
GIFT has the advantage of being flanked by a river on one side and a national highway on the other, and also sits between Gujarat's political capital of Gandhinagar and its business hub of Ahmedabad, with a large international airport.
The key, experts say, is time.
"Physical masterplanning takes time. Complexity is built into this. And my sense is it is probably going to take longer than what most people think," said McKinsey's Sankhe.

This article originally appeared on -  http://www.hindustantimes.com/india-news/india-builds-first-smart-city-in-gujarat-to-provide-modi-govt-s-model-for-urban-future/article1-1337401.aspx

Capital projects may not bring cheer to local realtors, labourers

With the State government making rapid strides for construction of a world class Capital, there is an expectation that the realty sector will boom in AP Capital Region Development Authority (CRDA) jurisdiction. However, local realtors and and construction labourers feel they will be hit hard.

Going by the rules and regulations framed in CRDA Act, and also the ambitious plans announced by the State government, there will be a gross mismatch between global standards and competency and expertise available in the region.

Realty sector captains feel the existing builders will not be in a position to meet the competition from multi-national companies if the funds and technology required are to be taken into consideration. At the same time, the construction labourers available right now are not skilled and trained to meet the global standards, they say.

Senior builder and Capital Region Builders Association (CRBA) founder chairman Gadde Rajling says the government plans to construct huge towers and multi-storied complexes in the capital city. Though there were many builders, who have been in the construction /real estate industry for two to three decades, they do not have technical know-how to construct such high-rise structures.

Even if technical know-how and expertise was hired, investment would be a major problem. On other hand, the funds would not be a problem for foreign firms. “We cannot match with zero interest funding available in countries like Japan,” he says.

But how do the MNCs manage construction labour? They would outsource it to firms that have skilled labour. Mostly construction labour from Uttar Pradesh and Bihar, who haven been working for MNCs, are preferred. Labourers from Odisha, Tamil Nadu and Karnataka also have experience of working on huge buildings.

About four lakh construction labourers are there in Krishna district. Majority of them work in cities like Vijayawada. There are about 1,000 builders in the city who executed more than 7,000 projects in the last two and half decades. Of this, close to 100 are professional builders.

This article originally appeared on  --http://www.thehindu.com/news/national/andhra-pradesh/capital-projects-may-not-bring-cheer-to-local-realtors-labourers/article7107089.ece