We had agreed for redevelopment as all the nine buildings in our colony were constructed in 1965-67. But we got into trouble with RNA Builders (AA) when they failed to keep the promises made in the development agreement. As per the agreement, the builder had offered us 355 square feet carpet area in a eight-storey building. But now the builder wants to construct 12-storey buildings. In the redevelopment plan, there was a park but now there is no mention of any park.
We had agreed to an eightstorey building as the monthly maintenance would have worked out to below Rs 1,000. In a 12-storey building, we will have to pay atleast Rs 1,500 a month for maintenance. People in the building cannot afford such high rates. Left with no option, the residents have now moved court. The court has asked both parties to get an architect. We are still looking out for one.
Sunder Nagar Cooperative Society Union Ltd comprising members of all nine buildings was formed in August 2004 to look into the welfare of residents. But the union members are now working in connivance with the builders. The redevelopment agreement was not even registered. This we found out through the Right To Information (RTI) Act. It was in February this year that we got the redevelopment agreement registered.
Building numbers 2, 4 and 7 have already been broken down by the builder and foundation work is underway. We at building number 8 have told the builder to take us out of the redevelopment project so that we can repair it ourselves. Redevelopment of old buildings is good, but residents sometimes get conned by the builders.
In our case, most of the residents are not well educated so they did not know what they were getting into.]]>
According to international comparison programme (ICP) in Asia and the Pacific’s purchasing power parity preliminary report, China and India account for 64% of total real GDP of the 23 economies participating in the study.
However, if the size of these economies is adjusted by population, China and India drop down to 10th and 18th positions respectively in the full GDP comparison.
Similarly, China ranks 15th and India 17th when economies are compared based on ‘actual final consumption of households’ (AFCH), a better measure of economic well-being of the population, the study reveals. AFCH is a measure of what households actually consume, comprising what they purchase and what they are supplied for individual use by the government (principally education and health).]]>
If you have a housing loan with a floating interest rate, you can breathe easy, as rates are likely to remain steady in the near future. However, prospective loan seekers don’t have much to cheer about, because interest rates are unlikely to fall anytime soon. RBI decision to keep key policy rates unchanged in the first quarterly review of its annual policy statement is likely to keep interest rates steady in the near term.
The RBI move is good news for investors in stock market. Barring a few sectors like banking, the market is likely to remain buoyant on the back of strong foreign fund inflows.
On Tuesday, the RBI left its key rates — repo and bank rates, among others — untouched. Concerned about excess liquidity in the money market, it has hiked CRR, (money banks have to keep aside on their deposits) by 50 basis points (100 basis points=1%) to 7%. The move is likely to suck Rs 15,000 crore out of the system. It has withdrawn the cap of Rs 3,000 crore on daily reverse repo auction (purchase of securities by RBI) from August 6.
‘‘The RBI’s moves aim to pre-empt inflationary pressures that easy liquidity and low short-term rates could foster. By removing the limit on reverse repo lending, the RBI has ensured that short-term interest rates will rise sharply. However, despite the CRR hike, there will be a surplus in the system, and this should keep long-term yields in check,’’ says HDFC Bank chief Economist Abheek Barua. Short-term deposit and lending rates are likely to harden.
Fitch Ratings senior director Ananda Bhoumik believes that banks are unlikely to raise lending rates despite the CRR hike.
‘‘Banks would be loath to increase lending rates, especially in retail loans — the second largest customer segment after companies — as recent quarters have shown rising interest rates affecting the consumers’ repayment capacity with corresponding increase in delinquencies.’’
In November last year, the state government announced its first comprehensive housing policy. One of the key proposals was to make it mandatory for
builders to set aside a fixed percentage (up to 50%) of houses in all new layouts for lower and middle income groups. Builders would, in return, be offered incentives including 0.5 additional Floor Space Index (FSI) or tax concessions.The government also wanted to encourage rental housing by giving incentives to builders who create housing stock that will be used exclusively for rental purposes. Proposed incentives include higher FSI, lower taxes and a relaxation of some sections of the Rent Control Act.
Other proposed changes include allowing the transfer of development rights to be used beyond the limits of the BMC in areas, like Thane,Kalyan, Dombivli, Mira Road and Vasai-Virar.
The FSI, which is currently fixed at 0.5, was proposed to be increased to 1 in these areas.
The state government also planned to set up a housing sector regulatory commission, an independent statutory body that would investigate complaints against builders as well as issues relating to housing, including the pricing.
In a presentation made to MLAs a few months ago, the state government had also proposed moving away from the current system where the first developer to get consent from 70% of the slum-dwellers is given permission by the Slum Rehabilitation Authority to redevelop an area. Instead, a system of inviting tenders would be introduced.
City MLAs, including Shiv Sena’s Subhash Desai from Goregaon and Congress’ Bhai Jagtap from Khetwadi, had also discussed the problems faced by residents of old, dilapidated and cessed buildings. Chief minister Vilasrao Deshmukh has asked for a full chapter on this issue in the final housing policy.
Labels: Builders, Government, Legal, Rates, Society
]]>The company, listed at the AIM market of London Stock Exchange, in a filing to the Bombay Stock Exchange confirmed the project located at Panvel, would be the firm’s third investment after its incorporation in December 2006.
Priya Hiranandani-Vandrevala, CEO – Hirco Plc says there is great excitement in his firm over the launch of Hirco’s Panvel project, which is located in an extremely attractive area of suburban Mumbai that is currently witnessing tremendous growth, including the recently approved airport development at Navi Mumbai, within close proximity to the Hirco project site.
According to Priya, featuring a mix of office and retail space with strong focus on IT and Biotech, the development will build upon Hiranandani’s heritage in the Mumbai market as a developer of high-quality commercial space.A new development, the Panvel project will consist of 18-million developable sq. ft. of mixed-use commercial space on 303-acres of land in Panvel, a rapidly growing corridor in the Mumbai metropolitan region.
Hirco, together with its wholly owned subsidiary, Hirco Holdings, has entered into an investment agreement with Burke Consolidated Ltd., an entity controlled by the Hiranandani family, to invest in the township project through a special purpose vehicle owned by BCL called Burke 3 Ltd.
Labels: Commercial, Hiranandani, Powai, Township
]]>According to a global market rents survey prepared by real estate consultant C B Richard Ellis,Connaught Place, often described as the heart of Delhi, is the only newcomer in the list with an occupation cost of $116.19 per sq ft per annum. Rent rates at Nariman Point—I
ndia’s costliest place to set up an office—were quoted at $138.41 per sq ft/annum.The two most expensive office markets are both in London—West End at $241.22 per sq ft per annum and the City of London at $165.72. The next two are in Tokyo—Inner Central at $162.09 and Outer Five Wards at $143.52.
At $69.44/sq ft per annum, midtown Manhattan is the priciest market in North America, ranked No 21 worldwide. In other words, setting up an office in the Big Apple is cheaper than doing so in Connaught Place or Nariman Point. An earlier study had placed Khan Market in Delhi as the costliest retail space, while a recent report said residential rents in Mumbai were the seventh highest in the world.
C B Richard Ellis has tracked the world’s most expensive markets as well as markets with the fastest growing rents in the last 12 months. It found that in terms of growth, Delhi ranked second with year-over-year rent growth of 79%. Rentals have grown at a faster pace (103%) in the last year only in Abu Dhabi. Singapore ranked fifth, with a 54% increase, and Mumbai sixth, having experienced 45% rent growth. In fact, many South Asian markets are in the top 50 fastest growing rents list, including three in the top ten. In North America, Edmonton in Canada saw rents growing the fastest at 60%. Downtown New York ranked tenth with rents increasing 43%.
Of the 176 office markets monitored across the world, 90% showed positive growth in the 12 months to the first quarter of 2007. Singapore rose from the 43rd spot to the 24th in the most expensive market places list. In the Pacific region, Sydney was the only market that made it to the top 50, coming in at 44th.
Labels: Commercial, Office, Rates, Rent
]]>The cost of living for expats in the four major Indian cities - Mumbai, New Delhi, Chennai and Bangalore - has increased over the past year primarily due to high real estate prices, says a new study by global human resources advisory and research firm Mercer HR Consulting.
According to the study released on Monday, Mumbai has jumped to 52nd position in the worldwide ranking from 68 last year, while New Delhi has moved up to 68th place from 73rd. Chennai moved up four ranks to 133, while Bangalore rose to 134 from 139th position last year.
Mumbai among world's top 10 financial flow hubs
It was the rising property prices that pushed the Indian cities up the ranking, Mercer said.
The study has ranked the cities based on cost of basic necessities, including housing, transport and food among others during the 12-month period ending March 2007.
The list is topped by Moscow, which has retained its position as the costliest city for expats, followed by London, Seoul, Tokyo and Hong Kong among the top five.
Labels: Infrastructure, Mumbai, Rates
]]>The aftershocks of the finance minister’s announcement levying a 12.5% service tax on commercial lease rentals were felt in Mumbai’s real estate industry on Thursday. Corporates, banks, multi-nationals, malls, restaurants, BPOs, IT companies and multiplexes are expected to be hit if the proposal goes through.
“Today, 90% of the BPO/IT companies in the city have a policy of only leasing properties to carry out their functions. Many banks, MNCs, malls, restaurants and multiplexes are also likely to be caught in the crossfire. The bottom line of all these companies can be affected, which in turn will affect the stock prices of these companies,’’ warned property consultant Ashok Narang.
For instance, a company paying Rs 1 lakh as lease rental will now have to shell out Rs 12,500 more as service tax. The bigger the premises on lease, the bigger the impact on the company. Lease rentals in the city are anywhere in the range from Rs 80 a sq ft to Rs 225 a sq ft. There are commercial premises in areas like Worli where foreign banks have taken on lease floor space at the rate of Rs 400 a sq ft.
J S Augustine, corporate advisor of the Acme Group, said the proposed service tax will have a bearing on the commercial lease rental market. “This is bad news for the industry as it will reel under high prices. A lot of real estate companies can get affected because many of them have stopped selling and have started leasing out their commercial properties. It will also affect the retail industry and developers.’’ According to him, investors buying commercial premises and leasing them out too will be hurt.
“Introduction of service tax for commercial rent is likely to increase pressure on the developer and thereby the tenants. As for new leases, this will, in all likelihood, become a passthrough cost (by way of increased rentals). This can result in further increase in property prices as the enduser demand remains strong,’’ said Sanjay Verma, executive managing director, South Asia, Cushman & Wakefield India.
Jaidev Mody of Piramals said the cost of rent will go up in an already over heated market. “It will be passed on to the end user,’’ he said. Mody did not rule out the possibility of companies buying property outright instead of taking them on lease. “Today, most MNCs take it on lease because it is a deductible expense,’’ he added.
Some experts warned that the payment of service tax may lead to disputes between the landlord and licensee/tenants, if the agreement already executed is not clear on who will pay the tax. According to them, returns of mutual and real estate funds which have invested in commercial leased premises may be affected if the licensees refuse to pay the service tax. Others feared that ownership prices of commercial property are likely to go up because of the impact of service tax on rented premises.
“Today, 90% of the BPO/IT companies in the city have a policy of only leasing properties to carry out their functions. Many banks, MNCs, malls, restaurants and multiplexes are also likely to be caught in the crossfire. The bottom line of all these companies can be affected, which in turn will affect the stock prices of these companies,’’ warned property consultant Ashok Narang.
For instance, a company paying Rs 1 lakh as lease rental will now have to shell out Rs 12,500 more as service tax. The bigger the premises on lease, the bigger the impact on the company. Lease rentals in the city are anywhere in the range from Rs 80 a sq ft to Rs 225 a sq ft. There are commercial premises in areas like Worli where foreign banks have taken on lease floor space at the rate of Rs 400 a sq ft.J S Augustine, corporate advisor of the Acme Group, said the proposed service tax will have a bearing on the commercial lease rental market. “This is bad news for the industry as it will reel under high prices. A lot of real estate companies can get affected because many of them have stopped selling and have started leasing out their commercial properties. It will also affect the retail industry and developers.’’ According to him, investors buying commercial premises and leasing them out too will be hurt.
“Introduction of service tax for commercial rent is likely to increase pressure on the developer and thereby the tenants. As for new leases, this will, in all likelihood, become a passthrough cost (by way of increased rentals). This can result in further increase in property prices as the enduser demand remains strong,’’ said Sanjay Verma, executive managing director, South Asia, Cushman & Wakefield India.
Jaidev Mody of Piramals said the cost of rent will go up in an already over heated market. “It will be passed on to the end user,’’ he said. Mody did not rule out the possibility of companies buying property outright instead of taking them on lease. “Today, most MNCs take it on lease because it is a deductible expense,’’ he added.
Some experts warned that the payment of service tax may lead to disputes between the landlord and licensee/tenants, if the agreement already executed is not clear on who will pay the tax. According to them, returns of mutual and real estate funds which have invested in commercial leased premises may be affected if the licensees refuse to pay the service tax. Others feared that ownership prices of commercial property are likely to go up because of the impact of service tax on rented premises.
Labels: Commercial, Office, Rates
]]>Many potential house hunters have stayed away from the market for the past three months, forcing developers to freeze price hike. Sales in many prime markets have come down by 40-50%, industry officials said. During past one year, banks have increased the interest rates four times, and on Friday, RBI increased the CRR by 50 basis points in two phases, hinting a fresh round of rate hike by commercial banks.
“The sales are down now. Next two months are crucial for developers. If the sales are not picking up, it might lead to price cuts,” Pranay Vakil, chairman, Knight Frank India, said.
Spurred by low interest rates, the housing market had boomed during the past two years. However, the government is now trying to curb the unusual spurt in the Indian real estate sector by the hike in interest rate, the new service tax on commercial rentals and withdrawal of the tax benefits enjoyed by the Sebi-registered funds. RBI has been warning of an asset price bubble in the Indian property market and has blocked foreign venture funds from investing in the realty sector.
Developers have admitted that home prices are stagnant for the past three months and sales have dropped by 60% last month. “We used to sell 15-20 units a month. But in last two months, it has come down to 5-10. But, we have not cut the prices so far,” a Worli-based developer said.]]>
Real estate companies who fail to deliver properties on the agreed date would have to pay a penalty of 1% of the price of the property. This is proposed to be calculated for every month till the property is delivered to the buyer. This means that if a flat costs Rs 20 lakh and there is a five month delay, the buyer will get a compensation at the rate of Rs 20,000 per month totalling Rs 1 lakh for the five month time overrun. This provision will have to be incorporated mandatorily in a pre-determined manner, at the time of transaction itself. “Once implemented, the policy will have a major impact on develop-ers, as most real estate projects inevitably get delayed. For instance, Sahara City Homes projects has been delayed by over 2 years. Moreover, the developers would be prevented from shortchanging consumers,” a consumer affairs official said.
On the other hand, for the end-buyers, though they will be bereft of their dream house, the 1% compensation on offer is significantly higher than the rent that the property would have otherwise generated.
States asked to set up realty regulators
AT present, in a place like New Delhi, the rental values commanded by a residential property is less than 0.5% of the capital value. For instance, a property valued at Rs 50 lakh, will not generate more than Rs 25,000 per month as rental.
The department of consumer affairs is working in tandem with the ministry of urban development over the proposed move.. Government’s move to fine builders for late delivery of property is a part of the modification.
The final Bill would be tabled in the monsoon session of the Parliament.
Labels: Builders
]]>