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

 

 

Mitsubishi to invest Rs 180 crore in Shriram Properties’ project in Chennai

Mitsubishi invests Rs 180 crore in Shriram Properties’ project in Chennai

Chennai

In the maiden Japanese investment in the Indian real estate, Mitsubishi Corporation, Japan (“Mitsubishi”), has agreed to invest around Rs 180 crore in a large residential property being developed by Shriram Properties in Chennai.

Kentaro Koga, General Manager, India / Myanmar, Real Estate Business, Mitsubishi and CEO of its investment arm, DRI India said “Given its strong brand, execution and delivery track record, and focus on customer value, we believe this partnership will support our growth aspirations. We are looking forward to working with such credible partner in an important sector in India.

As per the transaction, Mitsubishi will pick up 70% stake in an ongoing residential project named “Shriram Park 63”. The project is being developed at GST Road in Chennai, with over 1,450 residential units and 2 million square feet of saleable area.

M Murali, MD Shriram Properties said “With positively changing industry landscape and improving market outlook, timing is appropriate for accelerating the development and leveraging best of both companies towards creating sustainable value for stakeholders.”

Shriram has pursued the partnership model for accelerated development in several of its past and current projects. The Mitsubishi partnership is an extension of this strategy aimed at leveraging strengths of both partners for superior value.

In the past the builder has partnered with Sun Apollo, Hypobank, Xander, Amplus Reality, ICICI Prudential, Motilal Oswal, and ASK Property Investment, many of whom had profitable exits as well.

The company said that Shriram has already pre-sales of over 25% in the Chennai project that has revenue potential of over Rs.1,000 crores in next 3-4 years.

Foreign investors, including Chinese, Japanese and Korean, have specifically shown a lot of interest industrial development projects in the backdrop of implementation of Goods & Services Tax. However, not much investment has come through so far.

So far investors from Singapore, Canada and United States has made huge investment in the Indian real estate sector.

Recent key announcements regarding Wanda Industrial New City to be developed by Dalian Wanda Group, industrial parks by China Fortune Land Development Company Private (CFLD), Japanese investment zone at Supa and Chinese industrial zone in Vadodara indicate their increasing interest in India.

Source: Economic Times

Imported sand from Malaysia selling briskly in Tamil Nadu

Imported sand from Malaysia selling briskly in Tamil Nadu

Chennai

River sand imported by the state government from Malaysia is selling briskly at the Ennore Port, with 30% of the stock being sold in two weeks. In the wake of rising demand for the construction material, the government has placed an order for a second consignment from the Southeast Asian nation.

Officials at the Kamarajar Port at Ennore said about 15,000 tonnes of river sand had been sold. The sand has been stocked at the port premises where lorry operators who have made bookings arrive to take the loads.

“About 50,000 tonnes of sand have been imported from Malaysia. The number of trucks transporting sand from the port has increased in the last three days,” a port official said.

While 195 lorries carried nearly 460 units of sand on October 19, 182 trucks ferried sand out of the port. On an average, about 2,000 to 2,500 tonnes of sand are being sold per day. “If the sale continues at the same pace, the sand will get exhausted in the next 20 days,” the port official added.

The Public Works Department (PWD) has fixed a price of Rs 10,350 per unit of imported sand weighing 4.5 tonnes.

Apart from sand lorry owners, members of the public can also purchase sand through the web portal of the PWD’s sand operation wing.

Tamil Nadu State Sand Lorry Owner’s Federation S Yuvaraj said the market for river sand sourced from abroad is growing in the city. “There is a strong demand for such sand. The waiting period for getting the imported river sand is just one day,” he said. While the state government’s first consignment of imported sand arrived at the Ennore Port on September 23, the distribution was kick-started on October 8.

PWD officials said around 225 to 275 bookings are made every day to buy the imported sand. “The order for the next consignment of river sand has been made,” a senior PWD official told TOI, adding that it was expected to arrive at the port from Malaysia in the next two to three weeks.

Yogesh Kabirdoss, Economic Times, Chennai

South Chennai is hub of property fraud in city

South Chennai is hub of property fraud in city

Chennai

South Chennai accounts for the highest number of fake property registrations in Chennai zone, with forged Power of Attorney (PoA) topping the list of documents used for the scam. North Chennai is in second place followed by the southern suburbs falling under the  Chengalpet district registrar’s office.

Data accessed by TOI shows that sub-registrar offices in South Chennai had recorded 500 fraudulent registrations over 20 years. A total of 165 petitions on fraudulent land registrations were reported in North Chennai, followed by 117 at Chengalpet, 73 at Kancheepuram and 66 in Central Chennai district registrar offices.

“PoAs make up the largest proportion of forged documents used in land registrations. Bogus legal heir certificates, fake pattas and forged identity cards are the other documents used for this purpose,” a senior registration official told TOI.

In one such case two months ago, the Central Crime Branch police registered an FIR, with the subregistrar of Madhavaram as an accused for creating a fake PoA to sell a plot worth ?4 crore by forging the identity card of a person born in the city, who currently lives in Australia.

Officials said sub-registrar offices in southern pockets of the city have always been on the radar for fraudulent registrations. “About three years ago, a popular layout promoter lodged a complaint that his housing plot falling under the Neelangarai sub-registrar office has been sold using a fake PoA. Further inquiries revealed that the plot was sold to a leading jewellery shop owner in the city, who told us that he was unaware of the forgery,” another registration official said. Housing plots in subregistrar offices under the ambit of Tiruporur sub-registrar office that have not recorded any transaction for a number of years are also vulnerable to such frauds, added the official.

Complaints on fraudulent registrations started pouring in at the registration department after district registrars were given the powers to cancel them in 2011.

However, the powers were withdrawn in 2017 in the wake of a Supreme Court order, which categorically asserted that only civil courts have the authority to declare such registrations null and void.

Later, the office of the inspector of registrations began a review of these complaints filed with the respective district registrars across nine zones in Tamil Nadu.

The Chennai zone comprises 64 sub-registrar offices located in different parts of Chennai, Kancheepuram and Tiruvallur districts, which are functioning under north, central and south Chennai, besides Chengalpet and Kancheepuram district registrars.

“The menace of impersonation and fraudulent registration of properties will end only if Aadhaar is made mandatory,” a top registration official said. Last week, the state government notified the Tamil Nadu Registration (Identity Verification for the Registration of Documents) Rules, 2018 of the Registration Act, 1908, allowing authentication using Aadhaar details obtained from the Unique Identification Authority of India (UIDAI) with a rider that it should be with the consent of the individuals concerned.

Yogesh Kabirdoss, Economic Times, Chennai

The property gamble: Making it yield good returns

K Sathya Anand bought his first house in Perumbakkam because he strongly felt that investing there would always yield good returns.

Homes have always been a great form of investment. Rarely does it depreciate or fail to yield good returns. It was this aspect of homebuying that appealed to K Sathya Anand. Nearly a decade ago, at the age of 41, he purchased his first house and had expected a good return on his investment.

“Conventional forms of saving do not yield good returns. Take fixed deposits – it doesn’t provide enough returns that would help sustain you, especially in an age where the cost of living keeps increasing. The returns increase in proportion to the inflation. If the cost of living increases, so will the rental income,” says Anand, the Vice-President of a global financial technology company.

Elaborating on why he purchased a 3-BHK flat in Perumbakkam, he says, “We wanted to buy a house that was in close proximity to OMR because there would be good returns in terms of rent there. This house fulfilled all the criteria, and it is also close to other important industrial parks and offices. Our house is located within a villa community, which has a serene and calm environment.”

Though he expected good returns, he opines that the price of the apartment has not appreciated much in the last 10 years. “I expected a good return on my investment. However, that does not seem likely. Having bought the house at Rs 3500 per sqft, it has only appreciated to Rs 4,100 per sqft. And if I intend to sell to potential buyers, they would expect a discount. In the process, I wouldn’t get a good return,” says Anand, adding, “This was the only thing that I did not foresee.”

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

Making Chennai brave the weather Editor

The flat terrain of Chennai demands that we find efficient ways to tackle the rainy season and the flood it brings with it. The city is not Monsoon ready though.

Come monsoon, and the city of Chennai is seen grappling with various problems – the most glaring one among them being infrastructure that, at times, cannot handle even short spells of rain. The consequences of these issues include stagnant water and flooded houses that lead to other problems like water borne diseases or sanitation issues.

While the city receives rainfall every now and then, the crucial question remains if the city is prepared for the rainfall. Kiran Rajashekariah, an expert in urban policy and planning, explains “This year the India Meteorological Department (IMD) has predicted normal rainfall, which means there will be a little more than average amount of rainfall. The cities, including Chennai, need to prepare for the monsoon. The problem is our arrangements (solutions) are on ad-hoc basis. We come up with temporary solutions to resolve the problems. This should not be the case.”

Nalas to the rescue

The problem lies not in excess rains or for that matter even average rains. The lack of sound drainage system is one of the problems that leads to the flooding of roads. But that is not all. Rajashekariah elaborates: “Chennai is a city that is on a lower elevation, a few feet above sea level. So, the chances of flooding are higher. Restoring natural drains, often referred to as nalas, should be the foremost priority, which will be a long-term solution. Wetlands, in the natural topography, act as a sponge which absorb and store water. Due to rapid urbanisation and the resulting change of land use, they have been encroached upon, and destroyed. Also, roads are designed in such a way that the water will not percolate into the ground. All that needs to change.”

The city on the other hand is trying to cope up with the rainy season by making a few improvements.

He strongly insists that effective maintenance of the four major waterways, 30 canals that run through the city, and the numerous temple ponds, is imperative for the safety of the city.

The ISWD project is one of the ambitious plans of the government but there are reports that indicate it could be delayed by another few months.

According to Shaju Thomas, Director, Office Services (Chennai) at Colliers International India, “This means that the city may not actually be ready to face what the northeast showers could bring about. While a lot of plans are being thought about, including construction of missing storm water drain links, desilting tank beds and the like; one is yet to see action on ground. Apart from the government, there are a lot of things the common man should ensure as well,” he says and adds, “Free flowing drains get choked with garbage that gets dumped irresponsibly. There are many cases of unfinished storm water drains ending up as garbage dumpyards and one that stands out is on the Velachery-Taramani bypass road, where thanks to increased retail activity and disregard for the ecosystem, citizens of the city continue to dump just about anything. The area has always been known to be low-lying, which requires to be treated with extreme care.”

A Shankar, Coo, Strategic Consulting (India And Sri Lanka), JLL India, Says, A detailed project report had been prepared in 2016, for Kosasthalaiyaru, Cooum, Adyar and Kovalam basin for a length of 1069 kilometres at a total cost of Rs 4034.30 crore

This forms part of activities planned under Phase 1 of the Integrated Storm Water Drain (ISWD) project for improvement of the basins.

Improvement activities under this project and projects such as the Chennai Mega City Development Mission, covering other extended areas and the core city must be expedited.

Considering that the city is prone to floods and cyclones attributed to rapid development, it is vital that the initiatives to prevent these calamities, be progressive and planned to keep up with the pace of developmental activities.

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

Property tax in Coimbatore higher than in Chennai

 

With the revision of property tax in the state, tax payers in Coimbatore corporation will be paying higher tax for their buildings than those in Chennai.

“The revised property tax might be appropriate for buildings in Chennai corporation, but it definitely is not appropriate for those in Coimbatore,” said K Kathirmathiyon of Coimbatore Consumer Forum.

During 2008, civic bodies other than Chennai corporation revised property tax not extending up to 25% of the existing slab for residential buildings, up to 100% for industrial buildings and up to 150% for commercial buildings, he said, explaining that Chennai corporation last revised property tax during 1998.

Though the land value is higher in Chennai, building owners from other parts of the state are paying higher tax than those in Chennai, he said.

“For instance, if a building owner in Chennai is paying Rs 2,000 as property tax until revision, we have been paying Rs 2,500.” He explained that now the tax amount has been increased to Rs 3,000 for the building owner in Chennai and to Rs 3,750 for people elsewhere.

“Why should we pay a higher amount,” Kathirmathiyon asked.

Former counsellors said that if the local body council had been in place, such a thing would not have happened.

The hike is exorbitant, C Padmanabhan, a former counsellor, said. The civic body, without knowing how to manage funds, has spent lavishly. “How will the civic body have funds if they privatise all projects?” he said.

The state government in general recommends that the civic body hike the tax up to a certain point and during the discussion at the council meet the exact hike percentage per building type would be decided, said S M Samy, former counsellor.

Since there is no council this year, civic body officials had accepted the government recommendations without any discussion, he added.

Source: Economic Times, Chennai