Lower GST will lead to greater alignment in real estate: SBI Chairman

Lower GST will lead to greater alignment in real estate: SBI Chairman

A lowering of goods and services tax for under-construction houses would bring about greater alignment in the real estate sector, said SBI Chairman Rajnish Kumar.

In an exclusive interview with ETNow, the SBI chief said: “GST on non-affordable housing rate may fall to 5 percent and that of affordable housing to 3 percent. The move will bring alignment in the real estate sector.”

His remarks come against the backdrop of a panel, headed by Gujarat Deputy Chief Minister Nitin Patel, favoring a cut in GST on under-construction residential properties to 5 percent, from 12 percent currently. In its first meeting, the group of ministers (GoM) also pitched for slashing GST on affordable housing from 8 percent to 3 percent.

The GoM was set up last month to examine tax rates and issues and challenges being faced by the real estate sector under the GST regime.

The Chairman of the largest state-owned bank hoped that any such decision by the GST Council in its next meeting will lead to faster clearance of houses.

A build-up in inventory and subdued prices have long been a pain for the realty industry. Reflecting the state of affairs, industry body Credai said people are postponing their decisions to buy under-construction flats because of high GST rate of 12 percent and 8 percent on affordable homes.

About RBI’s recent surprise policy move to slash benchmark lending rate in a bid to boost lending and lift economic growth, Kumar said the benefit will be passed on to borrowers “if our marginal cost of funding comes down”.

Bankers are reluctant to pass on all of 25 basis point rate cut because of loads of bad loans and the high cost of deposits, according to Reuters. For the banks, any cut in loan rates will have to be accompanied by a corresponding fall in deposit rates, which is linked to a significant improvement in cash conditions.

Banks price their benchmark loan rates, known as the marginal cost of funds based lending rate (MCLR), mainly based on the cost of deposits.

Source: Economic Times

Fancy painting the walls of your house and making it a fun family activity

Wall to action

Chennai

Fancy painting the walls of your house yourself and making it a fun family activity? We tell you how you can achieve just that.

Movies have a way of making us wish we were a part of it. Everyday mundane events are portrayed so well in movies that we wish our usual routine was half as fun as them. A scene where the protagonist is moving into a new home is often glamourised with a happy song set to a montage of happy things; tasks like colouring your home also seem like a cakewalk. Don’t we all want to have a fun weekend painting a statement wall with friends, just the way Ranbir Kapoor and Konkana Sen Sharma did in Wake up Sid? It’s not entirely unachievable after all.

Gather your friends, order in some pizza and follow the steps given below to get a new look for your home.

Hemil Parikh, Founder, Elysium Abodes LLP, provides us with a step-by-step guide on how to paint your home yourself:

Steps:

1. Find out what kind of paint is currently on your wall. You will have to apply the same type of paint when you are colouring it. If you wish to apply a different type of paint, then first sand and remove the current paint and then continue with the new;

2. Move the furniture away from the walls. You should ideally move them to the other room or gather them in the centre of the room you are painting. Cover your furniture as well as your floor to avoid getting any paint on them;

3. Clean the walls by using large cellulose sponge and a water solution blended with a few drops of mild dishwashing liquid;

4. Ensure that you have thoroughly cleaned the wall to wipe out any kind of dirt or grease. Always check whether the previous paint is removed in order to avoid chalking / flaking of paint;

5. Make sure you do appropriate sanding of the wall with emery paper, so that you have a smooth surface to receive the paint;

6. Keep all your supplies and tools handy. You will need rollers, paint brushes, a spare apron (to prevent stains on your clothes) and a canvas cloth. Include a mask, which will prevent you from inhaling the strong odour from paint;

7. Using a blue painter’s tape, safeguard all the areas that you do not wish to paint. Door knobs, window and door frames, mouldings etc should be covered with the tape;

8. Dip the roller into the primer; slowly roll it back and forth across the ridges of the tray a couple of times in order to eliminate the excess colour and to prevent drips. Once the roller is evenly coated, run it up and down on the wall section. Apply primer evenly on the wall;

9. After the primer coat, it is time for the actual paint, which should be done over two-three coats depending upon the finish to be achieved. It is advisable to keep a plucker handy in order to remove any sediment / flying dust that might settle on the wet paint. It is advisable to check the walls under proper light before the application of the top coat in order to achieve the optimum finish;

10. Use the brushes along the edges and corner while you can use the rollers to paint the wall;

11. Check if the wall is painted evenly and if the finish is fine;

12. Allow it to dry;

13. An important tip for users to follow is to ensure they peel off the tape while the paint is still wet to avert accidentally eliminating any dried paint along with it;

14. And there you have just painted your own home! Step back and enjoy the moment.

Pooja Mahimkar, Times Property, The Times of India, Chennai

Side by side: Coworking spaces bring in new work culture in Chennai

Side by side: Coworking spaces bring in new work culture in Chennai

Chennai

The south has been at the forefront of the IT boom and today, south Chennai also is seeing several coworking spaces cater to a new kind of work culture that is on the rise.

Almost two decades back, south Chennai saw a new revival thanks to the mushrooming of job opportunities along the IT highway. IT parks were the new norm and hordes of citizens shifted their homes to southern parts of the city. But in the years that have passed, work cultures have undergone a drastic change and today, we are at the cusp of yet another transformation.

In the last few years, co-working spaces have become hugely popular and a preferred option among young professionals. “Buoyed by the central government’s efforts to create a viable eco-system for young entrepreneurs, India is witnessing the mushrooming of multiple start-ups and SMEs across the country. Such businesses are increasingly focusing on coworking spaces,” says Anuj Puri, a realty expert.

Chennai too has had several such spaces come up in the last few years and South Chennai has been abound with coworking spaces. Ashwin Shankar and his brother Shravan started a coworking space in Perungudi in 2014, when the culture was still nascent in the city. Today, their offices are spread across the OMR, Nungambakkam, Alwarpet, Nungambakkam, Guindy, Kilpauk and Anna Nagar.

“We started many of these office spaces close to residential areas as we realised that in our business, location is king. For people who use our premises for part-time work or for specific projects, these neighbourhoods seem to be the right choice. Also, all these offices cater to a different crowd. Our co-working space in Perungudi is largely IT-centric and the one in Nungambakkam caters more to people working in sales and business development. On the other hand, the one in Alwarpet is used for largely creative purposes,” says Ashwin, whose Perungudi and Alwarpet spaces have seen maximum footprint for his network of offices.

A year back Jinal Patel started a co-working space specifically for women in Adyar. She chose Adyar as there was a demand for such an idea in the neighbourhood and connectivity to other parts of the city was also good. “Being a residential area, there isn’t much noise around and it is well connected too. We realised that women are increasingly taking up the path of entrepreneurship (especially post maternity) and are looking for viable space options to work from. Besides, many college students also utilise this space for their work,” she says.

Anuj feels that while many players are jumping on the bandwagon and venturing into co-working space, what bears watching is how they keep pace with the increasing demand for such options from the millennials without really impacting their profit margins. “As long as they are able to sustain a sound business model and earn decent returns on their investments, coworking spaces will continue to thrive,” he says.

Arjun Narayanan, Times Property, The Times of India, Chennai

Move to make ‘pattas’ mandatory for property registrations in Tamil Nadu

In a bid to avert scams and make property registrations more secure, the state government is considering making ‘pattas’ mandatory for transactions. At present, properties can be registered in Tamil Nadu by furnishing either the parent document of the land or the ‘patta’.

The parent document is the registration deed by which the previous owner acquired the property, ‘patta’ is a revenue document detailing all the previous owners dating back to a specified date.

According to revenue department sources, the move would provide a double layer of protection during property sale.

“When ‘patta’ is made compulsory there would be engagement of two departments (registration and revenue), enhancing the security cover for property registrations,” a senior revenue department official told TOI.

The revenue department is sending study teams to other states, including Karnataka, that have introduced the system.

“If we decide to launch, it will be on a pilot basis (in selected places) to look at how it works,” the official said. A certifying surveyor would be nominated for scrutiny of land ‘pattas’ ahead of registration of properties, sources added.

Move to make ❝pattas❝ mandatory for property registrations in Tamil Nadu

The number of land documents jumped by 20,000 over 2016-17.

Registration department sources said they were yet to get a formal communication from the revenue department regarding the proposal. “But, it is good development that would benefit the buyers at large,” a registration official added.

However, a few said mandating use of ‘pattas’ would be a challenge in view of the prevalence of forgeries. An official cited instances of ‘poromboku’ land being sold by forging ‘pattas’.

Yogesh Kabirdoss, Economic Times, Chennai

Follow this procedure in order to get back a certified copy of the property document

Get back

Legal documents are absolutely crucial when it comes to property related transactions. For instance, the sales deed is a proof of purchase and enumerates various important aspects of the property and transfer of ownership. So, without it, the property is legally unsafe to buy and technically also, unfit to be transacted.

If you are unable to locate your documents despite rummaging through your house, you can follow this procedure in order to get back a certified copy of the property document:

Step 1: Lodge a police complaint. The minute you realise that property documents have been lost, lodge an FIR immediately. “Lodging a police complaint is very crucial because a sale deed determines the ownership transfer after paying the required stamp duty. The deed is typed on a stamp paper which can’t be made again but can be copied,” says a real estate lawyer. Keep the FIR copy safely with you, as at the time of sale, buyers may ask for that as well.

Step 2: Give an advertisement in newspapers. Two notifications in two newspapers (one in an English newspaper and one in local daily) under the seal of a lawyer has to be given. “The notification usually states that for any issues or claim, if the copy is found it has to be returned to the owner/ lawyer,” says a real estate expert. Then wait for 15 days to see if anybody finds it and returns it.

Step 3: In case of a flat, you can furnish the copy of the police complaint to the Residents’ Welfare Association (RWA) seeking a duplicate share certificate. If the application gets approved, the RWA issues you a share certificate after charging a nominal fee. It’s advisable to also ask for an NOC (non-objection certificate) from them as it will help you while transacting the property at a later stage.

Step 4: Register with a notary. The next step is to notarise the loss of document on a stamp paper. Along with the two newspaper advertisements and the copy of the FIR, get the documents attested and registered with a notary. “The documents are attested and registered with the notary to ensure that your undertaking becomes legal,” explains a lawyer.

Step 5: Seek a true copy from the sub-registrar’s office. With the copy of the FIR and clippings of the newspaper notifications, the next step is to write to the concerned sub-registrar seeking issuance of a certified copy. “A sales deed has two copies. One copy lies with the purchaser while the other copy lies with the registrar. If the sales deed gets lost or stolen, the registrar issues the certified copy,” says the real estate lawyer. The letter, along with the relevant Application Form 22 (which can be downloaded from the department’s website), is to be submitted. Documents such as identity proof, FIR copy, passport and utility connections bill also have to be submitted.

After paying a nominal fee, the certified copy is granted in a couple of days.

Source: Times Property, The Times of India, Chennai

Buying a second house is the best bet

Buying a second house is the best bet

A second house is definitely a good investment. Lessons from the purchase of the first house can help you make a better choice the second time around.

Buying a second house can provide numerous benefits to a home-buyer. Primarily, a second house would serve as a good investment and may prove to be a money saving mechanism, in the long run. That apart, one can always make a better and more informed decision, owing to their prior experience, when they buy another house.

Kumara V, a city-based marketing professional, concurs. “In 2012, I bought my second house in Chromepet (Thiruneermalai Road). I purchased my first house in Bengaluru. But since I have been working in Chennai for more than 20 years, I decided to invest here. The experience of purchasing my first house gave me a lot of clarity while sealing the deal. For instance, I knew that all the legal documents relating to the property would have to be properly verified. The design of the house is also important when you decide to buy a house,” he says.

He purchased the 3-BHK flat, which cost him Rs 3,700 per sqft. He says that in six years, the price appreciated to Rs 4,200 per sqft. He said that the house would be for self-use as well as be an investment. “I wanted to live in a gated community that had all the amenities like a gym, swimming pool and plenty of open space around, where children could play. I also ensured that the builders were of a good repute. Also, it fit my budget besides being located in a place that is well-connected to the rest of the city,” says the marketing professional.

He suggests that buyers ought to purchase a house that will fit their budget, for which the EMI or loan is not a big burden.

Ranjitha G, Times Property, The Times of India, Chennai

Ready to roll – considering ready-to-occupy homes

Ready to roll

With several advantages to its credit, home buyers in Chennai are increasingly considering ready-to-occupy homes.

Buying a house is one of the most important decisions of one’s life. Usually, there might be a long waiting period mixed with anxiety about realising one’s dream of owning a house. This wait has decreased substantially with ready-to-occupy projects gaining popularity. With income levels rising and increase in number of HNIs, ready-to-occupy projects are finding more takers in the city.

“In a significant trend seen in Indian real estate recently, ready to-move-in property has become the flavour of the season with buyers preferring to buy what they see. Also, they prefer to mitigate risks associated with new projects including incessant delays. In fact, as per our survey, a whopping 63 percent of prospective buyers in Chennai prefer ready-to-move-in projects, one of the highest among all metros,” says Santhosh Kumar, Vice Chairman, ANAROCK Property Consultants.

There are many advantages that a ready-to-occupy property has over an under-construction development. Instead of a sample flat or just the floor-plan, you actually get to see and feel the finished project. Also, in case of an under-construction project, there are many incidents where in they are not completed within the promised time-frame much to the distress of the buyers. Also, as ready to move in property require complete payment before moving in, most of the buyers are end users who are looking to shift from their rented properties.

There are other financial implications also guiding this choice. As Santosh puts it, one of the major factors contributing to this rising interest is that GST is only restricted to under construction properties while ready-to-move-in homes are exempted from it. Thus, a buyer need not pay this new tax which could have increased the cost of the property by as much 8 percent.

So, it is in some sense advantageous for ‘real’ buyers to opt for ready-to move-in homes.

Developers in the city are now offering ready to move in apartments for sale, which now have been constructed. This has helped slightly to pep up housing demand. Also, with many freebies, discounts offered with lower risk ready-to move-in property, housing demand in the country may finally grow at a decent phase.

There are several areas in Chennai where one can purchase a ready-to-occupy house, which will provide good ROI in future. “The residential areas such as Porur on Mount Ponamalle High Road, and micromarkets located along Rajiv Gandhi Salai (Chennai’s designated IT corridor) such as Perumbakkam, Sholinganallur, Thalambur, Navalur and Siruseri, which enjoy proximity to major IT corporates, have potential to yield good ROI as the pricing are relatively stable in these locations owing to presence of good inventory levels,” says Shyam Arumugam, Senior Associate Director, Office Services (Chennai), Colliers International India.

As per ANAROCK data, Chennai currently has as many as 30,220 unsold units as on Q3 2018.

“Of these, nearly 30 percent are ready-to-move-in (approx 9,070 units) as on date. The top five areas with maximum ready-to-move-in supply include Old Mahabalipuram Road (OMR), Oragadam, Guduvanchery, Mogappair West and Kelambakkam. Largely driven by IT/ITeS and industrial sectors, these areas are likely to give returns anywhere between 5-10 percent over the next one to two years depending on location, developer and the property-type,” says Santosh.

Ranjitha G, Times Property, The Times of India, Chennai

Along the coast – ECR Chennai

Chennai

With a sound social infrastructure and residential development that fuels the growth of the commercial sector here, ECR is becoming a safe bet for homebuyers and corporate.

Once this area was considered the back of beyond. Severely lacking in infrastructure, and barely with any amenities, not many would have imagined buying a house in the locality. Today, East Coast Road, popularly abbreviated as ECR, has come a long way. Constructed along the scenic Bay of Bengal stretch, ECR cause of the area’s proximity to the coastline, were popular earlier, now other high-rise apartments are being developed in ECR,” says a Chennaibased realtor.

According to Magicbricks, the prices of multi-storey apartment in the area vary from ‘4,099 to ‘5,302 per sqft.

The average price of residential plot is ‘46,093 per sq yard. The residential houses will apis a popular hangout spot for the locals from the city and also foreigners who head here for fresh sea food and some good sea breeze.

It is known as the city’s entertainment and leisure hub and has also become one of the most sought-after residential localities. It is no longer just a weekend getaway that it was a couple of decades back. The neighbourhood has seen a steady transformation over the years. “This area was once a prominent weekend destination. But now, it is seeing an influx of people who want to relocate from the busier parts of the city to villas or high rise apartments here. While the sea facing villas, beproximately cost ‘8,768 per sqft.”

Shreya V, a corporate communication professional and a resident of ECR, says, “The real estate boom here is unbelievable. There are all kinds of property here, ranging from individual homes to studio apartments and spacious villas. The infrastructure has improved but it can become better. The social infrastructure here as also improved by leaps and bounds. The connectivity to this part of the area and also the roads here need to improve.” Thankfully, the proposal of widening of ECR road will now become a reality. The TN government is working on the six-lane road widening from Thiruvanmiyur to Akkarai in Injambakkam. Additionally, there is a project in the pipeline to lay a four-lane national highway on the ECR from Chennai to Kanyakumari.

The residential landscape in the area has indeed changed. “When it comes to luxury segment, on the outskirts of the city, ECR is a popular choice. The area has uninterrupted supply of electricity and does not have shortage of water. This is what has attracted homebuyers to invest here. Gated communities have come up here. For some, a house here becomes their weekend homes, especially if they have bought a house here despite having to live elsewhere. Other than that, there are plots available which a few homebuyers are keen on buying and building a house of their choice,” informs a developer.

East Coast Road is also an important road in the state that connects Chennai with Cuddalore through Puducherry. According to Tamil Nadu Road Development Company Ltd (TNRDC), “The road was formed in 1998 by interlinking and improving a series of small village roads that were connecting the fishing villages along the coast of Bay of Bengal.” ECR is an important road, and it also witnessed residential growth, and hence it was not surprising to see commercial growth in the area.

Prominent localities such as Neelankarai, Panathur, Injambakkam, Thiruvanmiyur, Palavakkam and Uthandi are preferred locations on the ECR. Developments along the ECR definitely offer opportunities for both buyers and developers.

Source: Times Property, The Times of India, Chennai

Affordable housing takes centrestage

Affordable housing takes centrestage

Affordable housing takes centrestage

Affordability, being a relative term, is difficult to determine for a city as dynamic as Bengaluru, says a Vestian report

Over the past one year, the effects of the triple reforms – demonetisation, RERA and GST – resulted in a deceleration of new property launches in Bengaluru. While it dampened market sentiment, it also brought about a fair balance to the market, making it surprisingly end-user friendly, says Vestian, in its half-yearly report on affordable housing titled ‘Real Estate Trends 2018: Bengaluru Residential Market’ .

Furthermore, the government’s ‘Housing for All by 2022’ initiative provided a boost to most developers who were deliberating their entry into the affordable housing segment. Another factor spurring developers to take up affordable housing was the granting of infrastructure status to the segment, thereby opening up a whole gamut of incentives including ease of getting bank loans and a host of tax rebates. Buoyed by the various tax benefits and incentives associated with these policies and schemes, affordable housing is finally on a serious growth curve.

Residential market

Majority of the housing demand observed in Bengaluru has always been in price range of 25 lakh to 60 lakh. While the lower value is considerably sparse, given the rising cost of land in and around the city, the upper range hovering around 45-60 lakh attracts a significant number of buyers. With 2017 proving to be a period of learning for industry stakeholders, the most potent opportunity as deduced by the developer community was pegged in the sub-60 lakh category.

As such, the first half of year 2018 (H1 2018, estimated till mid-June) saw the launch of 13,356 units in the sub-60 lakh category, as compared to just 8,240 units six months earlier, in the second half of 2017 (H2 2017). This depicted a whopping appreciation of 62% in H1 2018 over H2 2017, a significant change in tide.

Out of the total number of new launches, approximately 65% belonged to the ticket size category of sub-60 lakh. On the sales front, H1 2018, estimated till mid-June, saw 3,762 units sold, as compared to 2,183 units sold in H2 2017. Around 72% of the total units sold, of the new launches in H1 2018, were in the ticket size range of sub-60 lakh.

A word of caution

While all seems positive at the moment with demand picking up, some caution needs to be tended to. The government has provided enough policies and incentives to boost the sector but if not treaded with care the glut of relatively cheap housing might potentially create a bubble of artificial demand. The U.S. sub-prime crisis of 2008 serves as an important reminder as to what may go wrong.

Therefore, affordable housing should be treated primarily as a tool to improve the housing situation, rather than create a situation that may spiral out of control. Policy-makers, as much as individual investors, need to tread carefully in the segment.

Outlook

While affordable housing is considered more as a need-based acquisition, it has high prospects of becoming an attractive proposition to an investor as well. Growth corridors in Bengaluru such as Electronics City, Attibele and Chandapura in the south, Tumkur Road in the west, Budigere Cross in the east, and Doddaballapur Road and Devanahalli in the north, that presently offer more of affordable options could potentially become affluent markets in future and yield a substantial return on investment. Additionally, upcoming infrastructure in these peripheral regions portend well for their viability.

For Grade A developers in the city, the segment is no longer looked down upon but has turned into a strong and lucrative avenue for generating profits. Today, the segment holds the key to unlocking inventory, reducing the demand-supply gap and provide for a rewarding business proposition. Besides, the Centre’s recent move to increase the carpet area for residences eligible for interest subsidy under the Credit Linked Subsidy Scheme has come as a boon for the affordable housing sector. The new rule will cover many ongoing projects under the Prime Minister’s Awas Yojana and expand the market size.

Over the next 3-5 years, the momentum for sub-60 lakh housing in Bengaluru is expected to gain ground at a rapid pace, thereby benefiting the long-neglected end-user of affordable housing, as well as work for the betterment of the economy.

With transparency setting in on the industry, on account of the recent reforms, affordable housing is projected to become one of the principal demand drivers of real estate in the near future.

Source : The Hindu