Indian Real Estate Sector

vera_k · Post by **vera_k** » 12 Nov 2009 10:35

Umrao Das wrote:That is true even in US if it is done with in three years.

Are you sure? My reading says that gains upto $500,000 can be excluded outright, but capital gains tax is due on the rest immediately.

Umrao Das · Post by **Umrao Das** » 12 Nov 2009 10:40

Depends upon how long you held the asset. I will check and confirm though.

Vipul · Post by **Vipul** » 12 Nov 2009 20:44

Badeji the idea for the Do Numbari's is just to find an avenue to park their ill gotten wealth for future price appreciation(depending on the income they may have multiple such "investments") and not necassarily for living/staying there.
About the premium types in Bombay, i have heard the builders make a pitch for hot projects and buying/investing is "By Invitation Only". Of course that was before the economy hit south. Not aware of the situation now.

SwamyG · Post by **SwamyG** » 12 Nov 2009 21:56

Bade ji: The builders are just catering (and seducing) the middle-class folks who have moved up the monetary ladder. They can not be called rich or super-rich, but definitely can not be called middle-class.

Bade · Post by **Bade** » 12 Nov 2009 23:04

Vipul, you are right. It is only a means for the big black money wallahs to park their loot temporarily in multiple units of multiple enclaves and wait for bakras like me to show up with their white money and salivate at the thought of living comfortably away from the city slums so they get to convert black to white very very slowly to meet their day to day 5-star bills.

Given that an SDRE white money wallah can afford these ( some one has to buy it for living in them at some point) is what is baffling to me. At equivalent prices an NRI or RI could buy homes to live elsewhere in the west with similar or better facilities.

Vipul · Post by **Vipul** » 13 Nov 2009 07:10

How's Sector 69 in Gurgaon as an investment decision? This is an under construction property with activity linked payment spread over a 30 months.what are the prospects of ROI in a 3 to 5 year period.

krishnan · Post by **krishnan** » 13 Nov 2009 12:55

Talking about real estate. Our milk man owns a Scorpio , changes bike once a year, is a crorepati, all because of the real estate boom.

Singha · Post by **Singha** » 13 Nov 2009 17:27

I saw a cow 'herder' today in my layout, riding his motorbike with one hand and guiding his buffaloes home with a small branch in the other.

Vipul · Post by **Vipul** » 13 Nov 2009 21:17

Sigh... Wrong time, wrong place(and wrong Profession).

Nirantar · Post by **Nirantar** » 16 Nov 2009 16:42

Vipul wrote:How's Sector 69 in Gurgaon as an investment decision? This is an under construction property with activity linked payment spread over a 30 months.what are the prospects of ROI in a 3 to 5 year period.

Vipul, depends on what kind of investment have you made here. In most cases of pre-launches by companies / builder, the price we book at, is set at 15-25% above the current market. Since sec 69 is yet to take off as potential housing, I believe you can expect:-
Plot - 40-50 %
Floor - 25-35 %
Flat - 20-30 %

Mind you, the era of 2003-07 is not going to repeat this time.

Vipul · Post by **Vipul** » 16 Nov 2009 20:40

Thanks Nirantar. I am hoping for price appreciation when the Metro starts service from Delhi to Gurgaon.As per my information there are two Metro service's proposed in Gurgaon, One internal(DLF) and the other from DMRC.Any info about the likely time-lines?

manish · Post by **manish** » 16 Nov 2009 23:16

Vipul wrote:Thanks Nirantar. I am hoping for price appreciation when the Metro starts service from Delhi to Gurgaon.As per my information there are two Metro service's proposed in Gurgaon, One internal(DLF) and the other from DMRC.Any info about the likely time-lines?

The DMRC link between Qutub Minar - Sushant Lok is expected to be finished by March '10 - Central Sec-Qutub link is expected to open just before CWG.

Not sure about the DLF metro thingy - didn't it get approved only this year? May take longer I guess. SSC forums would be the best place to hunt for such info.

Bade · Post by **Bade** » 16 Nov 2009 23:22

BengaLur folks could answer the query I have on the NICE corridor on the south side. Google maps indicate that there is a broken link across a lake bed from what I can make out. Is it done on the ground and google has not updated it.

Reason I ask is there are many builders offering flats at < Rs 2700/sqft to the west of the apparent broken link. So one could get a decent 2 bd room for less than 35 lakh hopefully there.

Sriman · Post by **Sriman** » 16 Nov 2009 23:35

Bade wrote:BengaLur folks could answer the query I have on the NICE corridor on the south side. Google maps indicate that there is a broken link across a lake bed from what I can make out. Is it done on the ground and google has not updated it.

Reason I ask is there are many builders offering flats at < Rs 2700/sqft to the west of the apparent broken link. So one could get a decent 2 bd room for less than 35 lakh hopefully there.

The broken link is around the Gottigere lake which was under litigation. Last i checked, SC had okayed the construction in that section. Assuming you're talking about apartment rates, you can get such rates around Uttarahalli area (that's pretty close to NICE ring road) as well. Rates have gone down over the last year, look around a bit more.

Edit: I checked google maps again and it doesn't show a broken link near Gottigere lake although that's the part where construction has been stopped. Now I'm not sure which place you're referring to.

Bade · Post by **Bade** » 16 Nov 2009 23:49

I am referring to Gottigere lake. If you zoom in enough and remove the labels you will see that the satellite view shows no road around there. The overlaid label for NICE road exists in the virtual world.

Purva has some apartments there next to the NICE road...though I do not see any easy access to the highway planned.

rohitvats · Post by **rohitvats** » 22 Nov 2009 06:07

Bade wrote:I am referring to Gottigere lake. If you zoom in enough and remove the labels you will see that the satellite view shows no road around there. The overlaid label for NICE road exists in the virtual world.

Purva has some apartments there next to the NICE road...though I do not see any easy access to the highway planned.

Bade garu, don't even touch anything on the NICE Road with a barge pole. There are a number of projects in the general area, especially around the Kanapura Road-NICE Junction. This whole story of accessibility is pure BS and nothing else. A for getting on to the NICE Road, one has to first get onto Kanakpura Road and then travel on to NICE Junction.

Bade · Post by **Bade** » 22 Nov 2009 10:41

That is what I surmised. One cannot expect a direct link to the NICE road from any development, but even the local connectivity there seemed poor to get to the NICE road or even to Kanakapura Road from the satellite maps. There must be a reason why the rates are relatively low there.

Like all things in India, a fully functional NICE road connecting the Kanakapura Rd junction to Hosur road will take a good decade to come to reality.

rohitvats · Post by **rohitvats** » 22 Nov 2009 12:04

Bade wrote:That is what I surmised. One cannot expect a direct link to the NICE road from any development, but even the local connectivity there seemed poor to get to the NICE road or even to Kanakapura Road from the satellite maps. There must be a reason why the rates are relatively low there. Like all things in India, a fully functional NICE road connecting the Kanakapura Rd junction to Hosur road will take a good decade to come to reality.

Not only that, the support infrastrcutre in the area is completely lacking. The area is devoid of anything to support any sort of residential development. You'll need to travel ~5kms minimum to even get a packet of milk. The sales as well as capital values have been stangant in the area for couple of years now. Another issue is the number of apartments and design of the project. Even if they sell 20%-30%, they'll need to build the whole project. And with sales and hence, receivable been low (low booking/slow sales pace), the developer will need to put in his own money to complete the project. And this is something the developer will never do in 9 out of 10 cases. And this will result in delay in terms of delivery.

As for the NICE Road, I expect it to come up in relatively quick time. Its a private venture and now the SC and GOK have cleared all the hurdles. The USP of the location is supposed to be ease of access to Banerghatta Road (concentration of IT-Vity companies) and E-City. But unless the issue of support infra can be taken care of, nothing will move. Add to it that DLF is selling apartments at sub-2500/sft on Banerghatta Road (its off ~3-4kms from Banerghatta Road). The pricing is totaly ridiculous.

Singha · Post by **Singha** » 22 Nov 2009 18:07

NICE road is going well. but what will they do about bannerghatta road - which is worse than a sector road in most layouts ?

Bade · Post by **Bade** » 22 Nov 2009 20:30

Singha, regarding support infrastructure for residential dwellings it has been true for most other new developments too. As I recall even as recently as 9 years ago, when I had accidentally scouted the Palm Meadows project on a visit to B'lore, there was hardly anything in the neighborhood except for the Sai Baba ashram and a few industrial units. It looked more like the Yehswantpur area. So it will happen even along the developments off the NICE corridor too. Not immediately, but with time.

Having lived myself a large part in Indian cities in the outer suburbs, I tend to overlook the immediate infra. Not being the MG Road pub hang out types myself. The only time I have ever used the nearby city infra was in Westwood, Los Angeles for weekend night out drinking binges. Chicago days were in the far out corn fields, even without a car in snowy and wintry days with a 3 mile trek to the nearest grocers or a bicycle ride to work from the village.

Singha · Post by **Singha** » 22 Nov 2009 21:09

narrow roads cannot be fixed in blr. the road infront of palm meadows is too small now for the big office and residential pop in whitefield + malls traffic. bannerghatta road is same issue - its more like a colony road but carries immense traffic.

even in areas where they had the chance to put in proper infra from day1 like ORR or whitefield they did nothing. step away 20 mts from main roads in these areas and you will hit village style 2 lane roads with potholes and mud enroute to your 'posh gated community'

vera_k · Post by **vera_k** » 23 Nov 2009 11:54

Some builder emailed me an ad for a project in Hosur. Is that a good location for working in Bengaluru IT?

Sachin · Post by **Sachin** » 23 Nov 2009 12:01

vera_k wrote:Some builder emailed me an ad for a project in Hosur. Is that a good location for working in Bengaluru IT?

For people who are planning to work for companies out of Electronics City then this may be a good option. It is around 1/2 hour travel distance, with traffic being okay and the roads are also getting widened etc. (NH 7). But other wise, the commuting time may be more.

RamaY · Post by **RamaY** » 24 Nov 2009 03:22

SwamyG wrote:RamaY gaaru: Apke moh me ghee shakar. There is Bamboos coming up closer too. My only worry is lifestyle sustainability in that area. Water and traffic problems would have to be looked into. In G.bowli, IIRC, there are at least 4-5 skyscraper projects. I tried to ask "aren't you guys depending too much on NRIs and IT professionals". They did not directly answer the questions. But all builders seemed buoyant about the future.

Dabbling in stocks, I know it is tough to find the bottom for a buy. One just watches the trend and makes a decision and faces the consequences. So though I suspect the prices could go down - there is nothing sure to be said for the next year or two. But considering the projections for growth of India, five to ten years down the time, the RoI should be good for these flats. And if dollar falls down even further, it is good to begin the diversification, no?

IMO the buyers are seeing it from a different perspective SwamyG garu

- Can I get a quality life style withing 2-5 KM range?
- Can I avoid long drives (5-15KM) passing thru the city center?
- Do I have access to quality education for my kids?
- Finally what can I afford? Some of us think from a cash-in-hand perspective. But others are thinking from long term perspective. Imagine if I can afford a 30-40K monthly payment between me and my wife, can live in a upscale environment and provide a good schooling access to my kids in 2-5 years, the new city is the best area.

For comparison, my brother works for a IT company in Finance, and has an apt near your apts. He has been living in Malkajgiri all these days. Now that his office moved to Hitech city , he is cotemplating to move to the Hitech city area to avoid 1 hr driving each way.

I think the traffic issue will ease out too once the ORR is complete and the residence areas are filled out.

What we dont know is lot of ITvity and other business people are moving back from ME and EU too.

KarthikSan · Post by **KarthikSan** » 30 Nov 2009 08:11

More affordable houses, but not enough buyers

After the euphoria, “affordable” realty developers are faced with the reality of excesses.

Consider this: In May this year, property developer Jaypee Greens put the sold-out sign within hours of launching its affordable project Aman on the Greater Noida expressway. The 3,000-odd apartments were priced at Rs 2,100 per square feet. Another Jaypee Group company, which was offering flats along the same expressway for Rs 4,500-6,000 a sqft, was finding the going tough.

Developers are now having to deal with a situation where they have to carry forward the stock as supply has far outstripped demand. As a result, in Hyderabad, almost two in every three sub-Rs 30 lakh apartments that came into the market in the 12 months ended October 2009 remained unsold. In Kolkata, Bangalore and Gurgaon, the situation is only marginally better with one in every two houses yet to find a buyer.......

Looks like realty companies are in for another round of shock.

anupmisra · Post by **anupmisra** » 15 Dec 2009 07:26

For the BRfite real estate gurus: A couple of questions on construction loans for commercial development in India. Are the Indian banks and other Foreign FII lending money to commercial developers nowadays? If yes, what are the typical terms and LTVs (Loan to Value)? Thanks.

amol.p · Post by **amol.p** » 30 Dec 2009 11:03

NRIs flood govt with real estate grievances

A real-life version of `Khosla ka ghosla' is being played out with an increasing number of non-resident Indians (NRIs). Complaints of real estate deals going sour, illegal encroachment and unauthorised occupation of properties have flooded the ministry of overseas Indian affairs (MOIA).

In fact, with the recent Satyam scam casting its shadow on Maytas Properties, apprehensions amongst overseas investors has deepened.

"Property dispute is one of the most frequent complaints by NRIs. They are unable to protect their property due to long absences or lack of awareness of laws," Vayalar Ravi, overseas Indian affairs minister, said.

The largest number of complaints are from major real estate markets like Delhi, Mumbai, Bangalore, Andhra Pradesh, Kerala and Punjab.

The nature of the complaints are mainly protection of property that has been forcibly occupied or encroached, dispute relating to division of property or inheritance and cases where investors have been cheated by real estate developers.

http://economictimes.indiatimes.com/art ... 394071.cms

Rahul Mehta · Post by **Rahul Mehta** » 30 Dec 2009 15:53

amol.p wrote:NRIs flood govt with real estate grievances

A real-life version of `Khosla ka ghosla' is being played out with an increasing number of non-resident Indians (NRIs). Complaints of real estate deals going sour, illegal encroachment and unauthorised occupation of properties have flooded the ministry of overseas Indian affairs (MOIA). In fact, with the recent Satyam scam casting its shadow on Maytas Properties, apprehensions amongst overseas investors has deepened.

"Property dispute is one of the most frequent complaints by NRIs. They are unable to protect their property due to long absences or lack of awareness of laws," Vayalar Ravi, overseas Indian affairs minister, said.

The largest number of complaints are from major real estate markets like Delhi, Mumbai, Bangalore, Andhra Pradesh, Kerala and Punjab. { No Gujarat}

The nature of the complaints are mainly protection of property that has been forcibly occupied or encroached, dispute relating to division of property or inheritance and cases where investors have been cheated by real estate developers.

http://economictimes.indiatimes.com/art ... 394071.cms

Solutions are

1. Torrens System : http://en.wikipedia.org/wiki/Torrens_title . The Assemblies can pass legislation which can implement Torrens System in the State. This will solve the problem to near zero. Australia had this problem for decades, and in 1860, when Austrial implemented Torrens System, the problem vanished as if it was never there.

2. Invest in Gujarat.

except Surat. Ahmedabad has one of the least complaint rates in plots as well as flats. Surat is bad by Gujarat standard. But plot from any reputed builder, build a hut there, get electricity connection, get property tax nill. And ensure that you are paying bills. There are many good builders like Bakeri, Parshwanath etc.

(PS : I am NOT a real estate consultant. So pls dont ask me for any more details on price, locations etc)

amol.p · Post by **amol.p** » 07 Jan 2010 17:56

Angry 'Maytas victims' gherao Salman Khursheed

A group of five NRIs who have made the full payment to purchase houses in Maytas Hill County, Hyderabad, a Rs 1,100 crore (Rs 11 billion) project promoted by Maytas Properties, are yet to get possession of their dream home and they were not taking it lying down

http://business.rediff.com/slide-show/2 ... rsheed.htm

Construction linked payment model must be made compulsory in India to avoid such situations.

vera_k · Post by **vera_k** » 07 Jan 2010 22:42

^^^

That article is an eye opener for another reason. It looks like much of the "premium" real estate is being sold to NRI customers who in turn are borrowing large sums of money from the banks. I suppose the saving grace is that it cannot be called a bubble since interest rates and minimum downpayments in India are higher than places like Dubai or USA.

rajkumar · Post by **rajkumar** » 08 Jan 2010 19:44

vera_k wrote:^^^

That article is an eye opener for another reason. It looks like much of the "premium" real estate is being sold to NRI customers who in turn are borrowing large sums of money from the banks. I suppose the saving grace is that it cannot be called a bubble since interest rates and minimum downpayments in India are higher than places like Dubai or USA.

Don't know if these NRI's are from the US or not. UK banks and financial houses will not lend to buy property abroad, certainly not in the last 5 years. I suspect that some of these people took out second mortgages on the existing property to buy in India and are now seriously stuck.

Singha · Post by **Singha** » 08 Jan 2010 20:06

I think cashing out equity on US homes or taking personal loans in US was used to buy speculative property here.

buying land always need a periodic visit and tax payment. its not suggested for NRIs unless they have reliable relatives or parent here.

buying flat from any builder should be reasonably safe once possession is given and rented on lease to soft/meek ITvity types. rent it out to a cop or tough looking businessman and you could be in trouble.

vera_k · Post by **vera_k** » 08 Jan 2010 22:14

These people must have borrowed from banks in India as well because they are asking the minister to suspend their EMI payments. And the amount of money involved is pretty significant -

over 500 NRIs have invested more than Rs 600 crore (Rs 6 billion) in the project.

amol.p · Post by **amol.p** » 13 Jan 2010 10:03

Unitech sells properties worth Rs 5,553 cr during Mar-Dec 2009

....good news for the real estate firms after a bad year....

Unitech Ltd, the country's second largest realty firm, has sold properties worth Rs 5,553 crore in ten months till December 2009 on the back of improved demand for affordable housing.

The company is well on course to exceed the targeted Rs 6,000 crore of sales in 2009-10 fiscal.

http://economictimes.indiatimes.com/mar ... 434037.cms

CalvinH · Post by **CalvinH** » 14 Jan 2010 09:40

For a change - Long story ..some snippets

Regulating Developers & Brokers-What About Regulating Buyers & Owners?Case of Aashish Bansal

So the actual people who worked on the deal including manager1 got cold-shouldered, while ICICI and manager2 got all the credit - is it fair? If Aashish Bansal had not liked the 10 properties we showed him, but chosen an 11th property, we would not have held a grudge against him. That is a part of our business. But to buy the exact property, a penthouse in D Tower of Parkview Spa that we showed first, that we provided all details of, that we got company executives to describe to him, by dumping us and introducing a dummy broker is clearly cheating.

We talked to the senior company executives. There was no dispute that we got the client into the sample flat, we introduced them to the company, we helped sell the flat. We deserved the brokerage. But they were in a tough position - the client had cheated us, and had cheated their manager1, but he was holding cheque for a penthouse worth 3 crore that the company could ill-afford to refuse. The executives said the company would hold the booking till later that day, and credit it to us if Aashish would call and tell them to mark us as his broker. The price would remain the same for him.

We called Aashish and he took the phone, said he was busy and would call back later. Called his mother and she said the same. They just would not attend to us. Later in the evening he returned our call, and said he thought there was nothing wrong in what he did. And by that time in the evening it was too late to do anything about getting credit for the booking. The same night he boarded a plane with his wife and daughter to Plano, Texas. The next morning he must have woken up in Texas, and we woke up holding the bag back in India.

What recourse does a broker in India have? A few can get the actual, or threat of, violence to work for them, but mostly you have to let it go.

It is strange that in the US some people learn to play by the rules, but in India it is okay for them to bring their daughter to India after years and teach her that it is perfectly acceptable and so easy to shaft the locals. She will be back in coming years with this lesson about dealing with Indian property brokers, and implement the same next time too. And another thing she would have learnt is how to score free taxi service in India. The family of Aashish always came to see the properties in a big group - Aashish, his wife, his daughter, his sister, her husband who is a Colonel in the Army, their son, and Ashish's mother. And obviously they would not fit in the Santro that they own, so they would spill over and sit in our car. Why pay Rs 800 per taxi per day when your friendly broker will come to your house and pick you up. Then the broker will get you access into all these gated places, act as a guide giving you the pluses and minuses,and then drop you back home - all for free!

But the best one

Should there not be regulation that protects brokers from clients like Mr Aashish Bansal of Infosys?

The guy (curious case of Aashish Bansal) is a VP with Infosys and based out of US.

rohitvats · Post by **rohitvats** » 17 Jan 2010 05:13

So the actual people who worked on the deal including manager1 got cold-shouldered, while ICICI and manager2 got all the credit - is it fair? If Aashish Bansal had not liked the 10 properties we showed him, but chosen an 11th property, we would not have held a grudge against him. That is a part of our business. But to buy the exact property, a penthouse in D Tower of Parkview Spa that we showed first, that we provided all details of, that we got company executives to describe to him, by dumping us and introducing a dummy broker is clearly cheating............<snip>..............The guy (curious case of Aashish Bansal) is a VP with Infosys and based out of US.

Now,now,now....I know exactly how the broker feels............and forget an indivisual doing this to a broker on the street...you have companies hunting for office space going through IPCs(International Property Consultants) based in India and then refusing to recognize that the property came through you..............

CalvinH · Post by **CalvinH** » 19 Jan 2010 04:10

Poky little shop pays Rs 9.5 lakh monthly rent

some excerpts

It’s probably the most expensive piece of real estate in the country. But it’s so small you are bound to miss it if you will not look for it carefully.

The property is a store in a bustling market adjoining Safdarjung hospital, across the road from All India Institute of Medical Sciences.

At 133.37 square feet it’s tiny — possibly no bigger than a modest kitchen — but it went for Rs 9.52 lakh monthly rent at a recent auction by the New Delhi Municipal Council.

That’s over Rs 7,100 per square feet.

“The reserve rental rate for this shop was kept at Rs 3.05 lakh per month. The highest bid was Rs 9.52 lakh per month,” said Anand Tiwari, spokesman NDMC.

“This is clearly the highest rental in the country,” said Jaideep Wahi of realty firm Cushman and Wakefield.

Singha · Post by **Singha** » 19 Jan 2010 08:14

I wonder what is sold there for such high profit margin ?

amardeep_s · Post by **amardeep_s** » 03 Mar 2010 14:50

Weekend family members visited central mumbai, wadala to be precise. bad choice of day - saturday.
the place is certainly developed from earlier 80s Antop hill area
but the rate there is upwards of 10,000/-

even few years back it would be lower than 3000.
the crash is coming people

Ameet · Post by **Ameet** » 11 Mar 2010 05:35

Slumdog Billionaires

http://www.forbes.com/forbes/2010/0329/ ... aires.html

A father and son are making a fortune rehabbing some of the worst neighborhoods in Mumbai. It's not a pretty business.