How ready reckoner rates impact property buying

How ready reckoner rates impact property buying


Ready reckoner rates and their revisions are a reflection of the government’s assessment of the property market. In most of the states, the ready reckoner rates have historically been lower than the market rates, and not seen annual revision. This rendered them unrealistic, and not a reliable indication of the exact market realities. In the last 10-12 years however, there has been a provocative movement in prices, and this has also reflected in the reckoner rates. If we take 2009 as a notable exception, the ready reckoner valuations have been positive. However, on several occasions the government had revised the rates by a higher percentage than the market warranted, as the government ventured out to match the ready reckoner values to actual market rates. These revisions over the last couple of years were considered quite unfair by the real estate market’s stakeholders. They argued that no changes were made during the period of 2009-2010, when the prices fell but the reckoner values were kept the same. Also, the rates were hiked by the government in 2013-14, although no market appreciation had taken place. The Maharashtra government’s decision to keep the reckoner rates the same in 2015 was a welcome one, since cities like Mumbai, Pune and some other cities in Maharashtra had seen a rise of about 5-6%. This was also the situation during the 2013-15 period, though the reckoner rates for those years were raised by more than 10%. Given the market scenario that prevailed in 2015, not raising the reckoner rates meant that buyers were not burdened with increased statutory costs of buying property (registration and stamp duty) or heavier recurring cost of property tax - fees that are based upon the reckoner rates. This move by the government was especially a boon to lower income households, who are very price sensitive when purchasing properties. At a time when the property market was only beginning to recover from a slow phase, the government had taken the decision to take buyer’s sensitivity to prices into consideration. In the most recent announcement, the Maharashtra government has further announced that ready reckoner revisions will be done on 1st April 2016, as opposed to the customary date of 1st January. This has given the industry a long and much-needed breather.


How delayed delivery costs customers buying homes on loans

How delayed delivery costs customers buying homes on loans

2016 may be a good year to buy a home. Property prices have remained stagnant for almost a year. While the quoted inventory prices may not have changed, better deals are available in terms of spot discounts, flexible payment plans and freebies across most major residential markets. So, this may be the best time to haggle hard and book a property. "Right now, buyers can get up to 20% additional values in the form of freebies and discounts," says Muddasir Zaidi, national director, residential, Knight Frank India.

But a new trend in the real estate sector may sour your sweet deal. Post the incident of Unitech's top management being taken to court for multiple delays in delivery , developers are becoming more realistic about project completion deadlines.Rather than the standard three-year deadline, fouror five year-completion targets are becoming the norm."It is likely that developers will be keen to hedge their risks of consumer legal action by adopting more conservative completion deadlines," says Anuj Puri, chairman & country head, JLL India.

While developers' aim is to avoid legal action, longer deadlines imply tax loss for those who plan to purchase the property on loan.

TAXING RULES As per the current tax rules, those who purchase a property on loan and for self-use, are eligible for a deduction of up to Rs 1.5 lakh towards principal repayment (under Section 80C of Income-Tax Act) and a further deduction up to Rs 2 lakh towards interest payment (under Section 24D). However, to get deduction under Section 24D, the buyer must get possession of the property within three years of taking the loan. If the three-year deadline is not met, the deduction benefit reduces to only Rs 30,000 a year.

So, if the completion deadline exceeds three years, it would mean a tax loss of Rs 10.9 lakh over a 20-year period (see Graphic) on a loan of Rs 50 lakh. In case of a loan taken jointly, the tax loss could be close to Rs 19 lakh. 

The worst is that the rule adversely affects the end user the most.Individuals who buy for investment purposes can always choose to sell and at maximum, the harm would be they will have to pay tax on the shortterm capital gains, if they sell before three years from the of purchase.

People, who are buying a secondhome which they plan to rent, can claim full amount paid as interest as deduction even if they get possession after three years. They do not even have the Rs 2-lakh cap (see Table).

"Asymmetries between the tax regime and the industry practice of project delivery remain, and need to be resolved to protect the salaried class," says Puri. "The government should consider extending the `period of completion' clause for buyer where the are projects are delayed due to the builder," says Archit Gupta, CEO,

However, till the authorities wake up to these facts and make necessary changes in the law, you need to be careful as a consumer.

WHAT YOU CAN DO NEW-BUYERS If you are still house hunting, apart from the standard guidelines of choosing a reputed builder, it is safer to pick a project closer to completion or at least at an advanced stage of construction. Usually, bigger the project, longer are the deadlines."When the structure construction begins, developers typically take 20 days to lay a floor. So, depending on the total number of floors the building would have, one can calculate how much time it will take to finish.Once the structure is complete, it takes two to three years to finish a project," says Zaidi. 

Also a building with basement parking facility will take longer to construct than where parking is being provided at the ground-floor level.However, going for a near-completion project also means you'll be paying a higher price compared to a new launch, which may offset any gains from tax deductions. So, do the math before buying. 

Another way is to stall disbursal of the loan. The rule says, "possession within three years from date of taking the loan." So, if you can manage paying the installments for the first few years and take a loan at a later stage so that the project finishes within the three-year deadline, you'll be safe.

EXISTING OWNERS You can choose to sell the delayed property and buy a ready-to-move-in property. However, this property transaction will have heavy entry and exit loads in the form of registration charges and transfer fees. Also, the seller may not get a good price for the delayed project while the ready flat will be at a premium.

 Also be very careful of the capital gains rules in such a transaction.The broad rule says: Short-term capital gains tax applies if a property is sold before three years of purchase.However, there is confusion on its interpretation as one pays EMIs in case of home loans. "There is confu sion on how should one calculate long-term or short-term gains. There is no clarity on where the date of original allotment be considered for this or the date of each year's instalments," says Gupta of

There is debate too on whether an under-construction property should be considered a capital asset. "Only in cases where there is an allotment letter, property specifications are identified and there is a clear right to the owner, it may be considered a capital asset," says Gupta.

The issues have been a subject of a lot of litigation and several case laws discuss these implications."Considering delays in housing projects and current confusion around the rule, the government should seriously consider a relief on capital gains for the first-time home buyers who are selling the delayed project to invest in another property," says Gupta.

Till then, if you calculate the gains on the basis of allotment date, do not be surprised if you get a tax notice seeking an explanation on this transaction. 

Pune, Hyderabad, Navi Mumbai among 10 affordable property markets

Hyderabad, Pune, Navi Mumbai, and Ahmedabad are among the 10 affordable property markets in the country where flats are available within the budget of Rs 30-50 lakh, according to JLL India. 

The other six cities are Kochi (Kerala), Ghaziabad(Uttar Pradesh), Jaipur (Rajasthan), Nagpur (Maharashtra), Surat (Gujarat) and Coimbatore in Tamil Nadu. 

In its latest report, property consultant JLL India has listed 10 cities that offer great lower-budget real estate investment prospects .over medium to long term. 

"These towns and cities offer a wide spectrum of investable options in real estate with relatively lower property price levels, providing the incentives for future capital appreciation and healthy returns," JLL India Chairman and Country Head Anuj Puri said. 

On Hyderabad, Puri said it is perhaps one of the most affordable cities among all tier 1 cities of India. Even the well-developed residential localities in Hyderabad, such as Manikonda, Kukatpally, Miyapur and Sainikpuri offer housing properties in the budget range of Rs 30-50 lakh. 

The report mentioned that Hyderabad's realty market is now set for an upswing after a prolonged slump due to the global recession followed by political turmoil. 

About Pune, JLL said the city has recorded good growth in the affordable housing segment over the last couple of years. Such projects are located on the periphery of the city and offer small 1-2 BHK flats with basic, no-frills amenities. 

"While property prices have increasingly become unaffordable in Mumbai, Navi Mumbai still provides numerous options for residential housing within the budget of Rs 30-50 lakh," Puri said. 

The proposed SEZs at Dronagiri, Ulwe and Kalamboli, and the upcoming international airport at Panvel are expected to help generate employment and boost demand for commercial and residential developments. 

"Well connected via metro and roads to the job markets of Delhi-NCR region, the city caters largely to the mid-segment home buyers. The city has a high supply of ready-to-move-in properties offered by renowned developers," the report said. 

Infrastructural developments such as extension of the Metro Rail and widening of the NH 24 will further boost Ghaziabad's realty market, it added. 

On Kochi, JLL said: "Gone are the days when the city's builders focused only on affluent buyers. Today, the Kochi residential real estate market is dominated by affordable housing segment, which accounts to about 60 per cent of the total housing projects in the city." 

Telangana real estate summit sets stage for new growth phase


The formation of the new state of Telangana has given hope for a new phase of growth in real estate in the region.

To continue the momentum witnessed in the real estate sector, the real estate associations — the Telangana Real Estate Developers’ Association (TREDA), the Confederation of Real Estate Developers’ Associations of India (CREDAI), the Telangana Developers’ Association (TDA), and the Telangana Builders’ Federation (TBA) organised the ‘Real Estate Summit’ in Hyderabad.

The summit was inaugurated by K.T. Rama Rao, Minister for IT & Panchayat Raj, Telangana, in the presence of P Dasharath Reddy, President, TREDA, and other real estate bodies.

K.T. Rama Rao said, “We foresee a bright future for the Hyderabad region with multinational companies such as Google and Uber planning to set-up their largest campuses in Hyderabad. The availability of a large land bank surrounding the Hyderabad region gives immense scope for expansion and growth of the city”.

It is indeed very encouraging to see all real estate developers’ associations coming together and contributing to the growth of Telangana state, he said.

The state has been witnessing major developments and attracting international companies to invest in the region and the Government is backing and speeding up the process of every developmental project for the benefit of the region.

During the summit, the real estate associations while appreciating the efforts of the Government in taking steps to create an environment of growth, recommended a few measures and sought Government support for them to help boost the real estate sector

The key discussion points revolved around concessions given to the growth corridor, building plan permission, occupancy certificate, uninterrupted power supply, reduction of a city-level impact fee for high-rise buildings, transferable development rights, and a strategic road development plan.

The associations emphasised on fast-track permissions such as TPASS for faster approvals and sanction of new projects, which would bring revenues to the State and also help the growth of the sector. The real estate industry is like the backbone for every State and a summit like this helps discuss and evaluate the growth prospects of the real estate industry in the Telangana region," he added.

The associations thanked the government for the initiatives taken towards development of the real estate sector. There has been a growing positivity among the companies, general public and real estate associates and partners, they said.

Hyderabad booms, on the back of roaring food business! And BeHungry will feed you while you save!

The IT job boom in Hyderabad has seen launching of hundreds of new restaurants. Food is definitely the most happening business, now in Hyderabad! In Hitec City alone, there are an estimated 800 food joints serving a variety of cuisine. This is apart from a number of food trucks plying their ware primarily at night. 

Most restaurants are busy even till midnight with customers hopping from one place to another! Food delivery companies like Swiggy and Food Panda count Hyderabad as their fastest growing market.

The retail real estate n Hitec City, Gachibowli, Lingampally, Jubilee Hills, Banjara Hills, Kukatpalli, Miyapur, Somajiguda etc have boomed primarily due to increased footfalls due to presence of restaurants in every nook and corner


Meanwhile a startup based out of Hyderabad has managed to take on-board more than 1000 restaurants in a short time and launch their food delivery and restaurant deal app "BeHungry" 

According to the founders Mohit & Hersh (formerly of Reliance Group) within a week of the launch, they have hit 100 orders per day. This is apart from customers booking buffet and dine-in deals According to them, the Combo Meals (Which is combination of curry with the main food at affordable price) is already a hit with users. 

"We are focused to bring savings whether users order online or choose to dine out. We have lined up Home Delivery Offers with as much as 35% discount, if they wish to get food delivered! Or users could get discount coupons at BeHungry before walking into any restaurant & order any food and take as much as 55% off the restaurant menu!" they said. 

We tested out the online ordering system at the website It works smoothly and you have online payment or cash on delivery options. 

The BeHungry App was found to be vey well designed, extremely light and smooth. The App will gather your location and list nearby restaurants or you can select a location. You can filter restaurants based on scores of attributes and find the right choice to place the order. 

If you are in Hyderabad, BeHungry should be on your favorite Apps list! They would also be available in other cities soon. 


Real estate in TS still sluggish

Real estate in TS still sluggish

Most predicted real estate activity to start flourishing by December 2014, after the bifurcation of the State, but that did not happen.

As Telangana reached its one-year milestone, the real estate sector in Hyderabad appears to have given up hopes of a quick recovery of fortunes and instead remains content with slow and incremental growth.

Real estate activity, which relished the boom period of 2005 to 2008 with large scale construction work in and around the city, was left with a bitter taste during the global recession followed by the agitation for a separate State. Construction activity almost came to a grinding halt and builders were left with unsold inventories piling up in large numbers.

Post Telangana formation impact on Hyderabad realty many feel that real estate has taken a beating. Photo: Mohammed Yousuf

The coming of Telangana last year was seen by most in the building community as ushering in a new dawn for the construction industry and hopes were pinned on a quick revival being just a matter of months. Most predicted real estate activity to start flourishing by December 2014. However, that was not to be so.

But then, the builders do not really seem perturbed at their calculations having gone awry and express satisfaction at the slow growth that has been registered in the last one year. “Agreed that business for us is not in the fast mode but at least we are slowly moving out of standstill status,” says P. Dasarath Reddy, president, Telangana Real Estate Developers Association (TREDA).

According to city builders and developers, there has been a steady, albeit incremental growth in enquiries and footfall at project sites, particularly in the last six months. “If not euphoric, the mood is definitely optimistic. Unlike earlier years, enquiries are converting into sales but the conversion rate has to go up,” observes Anand Reddy, co-founder, PBEL-INCOR.

C. Sekhar Reddy, national president of Confederation of Real Estate Developers Association of India (CREDAI), says, “There is a positive movement in sales and a rise in enquiries. A small push along the line will bring real estate back into the reckoning.” The Greater Hyderabad Municipal Corporation (GHMC) according sanction for 1,100 building plans in March shows that construction activity is returning to tracks, he says.

The State government’s steps aimed at improving conditions of Hyderabad are cited as factors that will help real estate surge ahead in the coming months. “The government has narrowed down its focus on key issues of power, water and roads and this is going to push the city back in the centre-stage,” remarks Mr. Anand Reddy. Recent announcements on Google, Amazon and few others on setting up and expanding base in the city also added to the buzz, says Mr. Sekhar Reddy.

Property prices remain low

Despite a very marginal rise in the last one year, property prices in and around the city continue to remain very less compared to most other metro cities. Apart from all other attractions, a builder points out, the icing on the cake here happens to be the low pricing.

C. Sekhar Reddy, CREDAI president, puts the average property pricing in the city as ranging between Rs.3,500 and Rs.4,000 per sq ft. “In locations such as Kompally, Alwal and Bollaram, good residential properties are available at Rs.2,000 per sq ft too,” he says.

The preferred locations for property seekers continue to be Madhapur, Gachibowli, Tellapur and Miyapur. Limited stocks at Banjara Hills and Jubilee Hills command a pricing of Rs.8,000 to Rs.9,000 per sq ft while Madhapur and Gachibowli properties are ticketed between Rs.4,000 and Rs.5,000 and along locations such as Miyapur, which are picking up fast with the Metro Rail project, the price tags vary between Rs.3,500 and Rs.4,000 per sq ft. “Prices vary based on location, amenities provided and the present status of construction,” says a builder.

Interestingly, plots which went out of favour when compared to constructed property few years back, appear to be staging a comeback. Outlining the emerging trend, a realtor says property seekers were evincing interest in HMDA-approved plots at places beyond the outskirts such as Mancherial, Adhibatla and Narsingi.

Hyderabad News.Srisailam Highway posied to take off. A Business Standard Report

Hyderabad News.Srisailam Highway posied to take off. A Business Standard Report 

After a prolonged slump due to the global recession followed by political turmoil, Hyderabad''s realty market is once again set for an upswing. Hyderabad, with its buoyant and thriving economy and a dynamic workforce, is once again a favorable buyer''s market. The thriving IT/ITeS industry has given impetus to consumer trends, which is evident from the growing demand for residential, commercial and retail spaces in Hyderabad. When compared to the other metros, housing in Hyderabad is relatively affordable. Property prices here are almost 60 per cent of those of Bengaluru and Chennai. Due to political uncertainty, land prices in Hyderabad have remained stable. However, with political stability and creation of a new state of Telangana, Hyderabad can now expect large investments in its property market in the near future.

Srisailam Highway benefits from its close proximity to the Rajiv Gandhi International Airport. The area houses several developing regions such as Barkas, Venkatapuram and Tukkuguda. Being situated close to the TCS special economic zone (SEZ) at Adibatla, Srisailam Highway has a superb advantage. The TCS SEZ has become a prominent destination for Hyderabad''s thriving software industry, has a significant impact on the real estate profile of the region and has helped boost demand for residential apartments in the region. On the social infrastructure front, Srisailam Highway is well supplied with entertainment avenues, and the general and physical infrastructure of the region is adequate. ZAK International School of Excellence, VIP''s International School, Huda High School, Al-Qurmoshi Institute of Business Management and Pragati School of Nursing are a few renowned educational institutions dotting this highway. The presence of healthcare facilities such as Life Line Hospital, Al Madina General Hospital and Composite Hospital also add to the value of this well-defined residential catchment. With a number of SEZs planned along Srisailam Highway, the locality is developing at a very fast pace. Already, many developers have launched a wide spectrum of quality projects catering primarily to the middle-income segment. The area is witnessing a strong real estate activity, and there is appreciable demand in store in the years to come. Srisailam Highway is a perfect destination for long-term investment, and is perfect for those who are looking to invest in plot or built-up property at relatively affordable price points.

Snapdeal launches real estate shopping festival

Snapdeal launches real estate shopping festival 

Online marketplace Snapdeal today launched a week-long real estate shopping festival offering properties in a price range of Rs 20 lakh to Rs 5 crore. 

The shopping carnival called 'Freedom from Rent', to be held during January 14-20, will feature special project launches and exclusive offers from builders like TVS Emerald, Provident Housing, Runwal Group, Atul enterprises, Lavasa, Central Park, Ajanara Homes, Mahagun India and Gulshan Homz. 

With real estate sector facing .. 

Reduce your building's carbon footprint with renewable energy

Reduce your building's carbon footprint with renewable energy

Going green is not an alien term anymore. As environmental consciousness grows, every industry is gearing up to go green and embrace eco-friendly technology and methodologies.

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Many consumers who are sensitive to this issue are in fact pushing for this change by selectively buying from environment friendly businesses. The construction industry, too, is under pressure to move towards the challenging goal of carbon neutrality.

As a consequence, vertical expansion is becoming the norm with a slew of skyscrapers, each at least 25 storeys or over, coming up all over the urban landscape in India.

Carbon-neutral building

A building that has carbon emissions at a minimum or near zero in its construction, operational life, and, during the dismantling stage is considered as carbon neutral.

Emission reduction is important

Buildings produce around 40 percent of the greenhouse gases and carbon emissions. As per the NOAA (National Oceanic and Atmospheric Administration, USA) and EPA (Environmental Protection Agency, USA), the average global sea surface temperatures have risen in the past three decades since water bodies absorb the heat in the atmosphere. Therefore reducing the carbon footprint becomes imperative.

In construction, greenhouse gases and carbon footprint is a result of the construction materials used, use of machinery while constructing, inefficient HVAC (heating, ventilation, and air conditioning) solutions, indoor pollutants, and appliances. Since any construction activity, involves movement of soil, this produces carbon as a lot of the earth's carbon resources lie squeezed below the surface of the earth, which has an ecosystem of its own.

Construction stage

An intelligent method to achieve a lower carbon footprint is through 'SMART' building-construction practices. This entails proper planning like studying the landscape and ecosystem before construction. The building plan can look at locating high-occupancy areas on the northeast side so that these can benefit from good ventilation and natural lighting systems.

Service areas and low occupancy use areas can be located in the southern part of the plots. Building efficiently also means ensuring that the local vegetation and trees are protected.

LEED (Leadership in Energy and Environmental Design) certification is a rating system that awards buildings that are environ mentally responsible and use energy resources efficiently.

In India, too, we have a number of structures that have won Platinum LEED Rating, which is the highest recognition for buildings with low carbon footprint.

Renewable material

These buildings have been built with renewable material, generate more electricity than they use through solar panels, and have intelligent rainwater harvesting systems, low carbon emissions, and extensive plantation of trees. Energy dependence is also reduced through effective insulation, passive building design that employs ways to cool buildings without AC systems and vertical indoor gardens and use of natural lighting by an efficient combination of glass and steel.

What can you do to become the proud owner of a carbon-neutral home that protects the planet? Opt for energy-saving devices that have been rated by the Energy Star system. This will not only reduce your energy bills but also reduce your building's carbon footprint. Every step we take individually, however small, will help restore the environmental and ecological balance in our planet

Why Developers Launch Projects Even In Slow Market Conditions

Why Developers Launch Projects Even In Slow Market Conditions\

Top developers have a strategy of launching new projects even in a slow market, and there is sound logic behind this. There is always demand for residential projects at convenient locations and with good amenities. If the pricing of the project is also in line with what buyers are willing to pay, there is no reason why sales will not be generated.

Market research confirms that sales are taking place, even if it is at a slower rate. These sales are happening for the right kinds of projects – it is projects in the wrong locations, with fewer or the wrong kinds of amenities and with the wrong pricing that are finding no takers.

As a matter of fact, prices of projects have been showing a gradually decreasing trend over the last one year. Developers are offering lucrative deals and discounts on their projects, thereby helping to create end-user markets rather than just pandering to investors, as had been the trend in the past.

Overall, it can be said that the residential real estate industry has reached its lowest trough both with regard to prices and sales. The only change that can now come to the market is a positive one, and the graph will begin rising upward from here onward, not least of all because the Indian economy has strengthened and will continue to gain in strength going forward.

The government is also extending more support to the real estate industry than ever before, and the cumulative results of these favourable circumstances will definitely be seen from this year onward. With India makes strong strides on the path of development, interest in real estate investment is going to increase steeply over the coming years.

Today, cities still accommodate only about 40% of the population in India. But with increasing economic growth, more and more people will shift to urban areas, spawning more and more demand for homes in all price ranges. Developers who continue to launch their projects even while the market is slow are investing in this future.

If we take a closer look at the unsold inventory of residential real estate in India today, the numbers are undoubtedly large. Nevertheless, there is no shortage of new launches scheduled. In fact, we will see even more residential supply hitting the market in 2016 than we saw in 2015.

It is pertinent to note that most of the unsold projects in India today are the result of deficient planning on the part of their developers. They have chosen flawed or hopelessly futuristic locations where people are not interested in moving, and/or have included high-end amenities that drive up the overall cost beyond what buyers are willing to pay.

As we embark into 2016, we will see that the new residential launches are more aligned with the existing demand, both in terms of pricing and what they have to offer.