Should We Invest In Real Estate During This Festive Season?

Mostly homebuyers in Kolkata wait for the festive season to start for availing the residential property sale in Kolkata where they could get the attractive discounts like- heavy concessions, free maintenance for certain period of time, free parking lot allocation, weighty discounts on registration and stamp duties. Same as your daily using components property market has also some specific sale seasons where to attract homebuyers and to push the property market real estate construction companies offer alluring discounts on property items. There are mostly three basic cycles in real estate sale –

1. Price upsurge

2. Price fall

3. Neutral market

4. Then rise again.

Therefore before buying property one should always consider the ongoing state of property market more than anything else.

Right timing has a very important role in property venture – Price of the real estate items has been an eternal reason to worry for the property investors. People have a common inclination of buying property when the prices are eventually slashed. Nevertheless the right property market has an essential role in the real estate investment. Being tech savvy these days people are finalizing their property investments online. Using inventory features like post your property requirement in Kolkata people are getting free online guidance related to the real estate market and their property investments. Experts suggest the earlier you invest in residential items you would enjoy lower financial burden for the long run.

Many commercial real estate investors spend a reasonable amount for monitoring the property market in order to perform the correct real estate investment to gain the maximum resale benefits. A good market analyzer always consider the future prospect of the property market of their probable invest zone. For instance if today if you put your money on properties of suburban areas of Kolkata , after few years the same property will be priced around 4 times than that of the time of investment because of the gradually improving infrastructure of that specific area.

Speaking about the special seasons developers sell both the on hand and existing inventory properties among which investment in the new-launched is the better profitable investment option. As an individual owner property selling has mostly come out of some financial crisis. For property selling one should always consider the open market valuation before confirming the concluding selling price.

Key facts establish the market augmentation – These factors regulate the demand and supply chain in the real estate market. Infrastructural development like transport, retail, environment, educational and medical habitation has crucial role in locality oriented real estate business boom. Therefore in the current scenario homebuyers should have to be enough knowledgeable about this existing factors that straight way impact on the real estate market. It’s always advisable before the property purchase one should consider the property graph of at least past 2 years or so. On the same note builders should have to be transparent enough with all their offerings, discounts and communication with the buyers and hand over the property in the scheduled date promised earlier during the time of registration. Thus it’s necessary for all the homebuyers to know about the property cycle minutely before entering to an active investment zone.

By LNN (Liyans News Network)


RBI Reduces REPO Rate. How Much Will You Stock Against Home Loan?

On 4th of October RBI cuts the REPO rate by 0.25%, but the bank has chosen to keep the CRR rate same as the previous years. Previously the REPO rate was 6.50% now it has been changed to 6.25%. This entire modification is done keeping in mind the inflation data and the slow growth rate.  How the banks act in response when they will have to cut off their lending rates is yet to be seen.

Starting from month of January of the previous year RBI has slashed the REPO rate by 1.50%, accordingly banks reduced their lending rates by 0.5% approximately. Speaking about the definition REPO rate is a rate of interest at which banks borrow capital from RBI, whereas CRR is   basic amount of capital or gold asset which Banks have to park mandatorily with RBI. With both these tools RBI controls entire Indian money market. On the basis of the economical situation of the capital market RBI utilizes its ultimate power of injecting and squeezing to control the liquidity in Indian economical market.

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After-effects on home loan borrowers

The current reduction of 0.25% in REPO rate may be at the no harm no foul state going by the current money market, but if it goes on falling over a period then banks will have to no other choice rather than passing on the benefits, the end shock could be vast. Each bank stores large amount of savings in the interest for long-term value.

With the reducing lending rate borrowers will gain on their existing home loans. On a home loan of 40 lacs for 15 years at 9.5% interest the entire interest load can be lessen by close to 1 lac in the year, if the lending rate again falls by 0.25% then also the profitable amount will be around the aforementioned. Here’s the chart on how much you can save on some home loan amounts-

Impact of rate cut: How much one can save in interest (for a 15-year loan tenure)

Loan Amount EMI @ 9.5% EMI @ 9.25% EMI Saved(RS) Interest Saved(RS)
Rs 25 lacs 26,105 25,730 -375 67,645
Rs 50 lacs 52,211 51,460 -751 1,35,291
Rs 75 lacs 78317 77189 -1128 2,03,000

Monitoring from bank’s perspective

Every single loan with elastic interest rate counting home loans, borrowed after 1st April 2016 will be connected with the banks’ marginal cost of funds based lending rate (MCLR), before this period those were part of banks’ base rate. People who borrowed the loan before April will get only one chance to switch to the MCLR rates.  Presently one year MCLR is about 9-9.5% for most of the banks.

ICICI Bank’s 1-Year MCLR is currently (of use October 1, 2016) at 9.05 per cent, while home loans are offered at 9.35 per cent (9.3 per cent for women borrowers). State Bank of India’s MCLR is at 9.05 per cent, while home loan rate is 9.3 per cent (9.25 per cent for women borrowers). Interestingly, 1-Year MCLR for ICICI and SBI on 1st April was 9.20 percent.  After that, it has come down by 0.15 percent. MCLR linked home loans are either set every 6 months or a year after.

New home loan takers it’s the ideal time to bargain with the construction company any invest in newly built flats in Kolkata 

                              EMI per lac at different interest rate

          Tenure              9.5              9.4              9.3             9.25
180 months            1044            1038             1032             1029
240 months             932             926              919               916
360 months             841             834              826               823

In the table above: a home loan amount of Rs 36 lac at 9.25 per cent for 15 years, the EMI will be (1029 * 36 lac) / 100000 = 37,044 calculated.

A borrower can choose among these options before borrowing home loan

  1. Reduce EMI
  2. Reduce tenure
  3. Transfer loan to another lender


But in each of the cases he will have to keep a track on the total interest saved. If the ongoing loan is about to end the impact of rate change may affect much.

By LNN (Liyans News Network)

Finally A Green Signal For Kolkata’s Monorail Project

The major idea has come into the news once again after almost a decade of its commencement. Burn Standard had submitted this proposal of monorail implementation almost 12 years ago. Central Govt. has finally made the plans performing to inaugurate city’s first ever monorail. With the progress of the project it’s being said that within 2020 passengers will be able to utilize this transportation services fully. Initially mono rail will run from Budge Budge in South 24 Parganas to Ruby on E M Bypass. Yesterday it has been officially approved by the state industry promotion and development board.
State Govt. organized a press met on Wednesday at Nabanna regarding this issue where the honorable chief minister Smt. Mamata Banerjee told the reporters,- ‘’The state transport department will sign a MoU with Burn Standard company very soon. The firm will bear the project cost – around 4216 crore- while the state government will provide the land and give all infrastructural support’’.

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The Board for Industrial and Financial Reconstruction (BIFR) referred Burn Standard company in November 1994. The company nullified this project as they considered it to be sick project in the year 1995, but now the company is all set to restore the project. ‘’ Burn Standard was under the ministry of heavy industries. But I brought it under the railways ministry when I was the railway minister,’’ Mamata stated. On the other hand Burn Standard CMD Md. Asad Alam said, “We are preparing a detailed project report. We will submit the report two weeks after the MoU is signed with the transport department.’’ Regarding the cost of the project he said, ‘’ Fund will never be a problem. Most of it will come in the form of FDI and we are negotiating with various companies and agencies. I cannot comment on the details but we are getting positive response. We hope to start the project by March of next year. It will take another three years to complete the project’.
Transport department officials are expecting monorail services along with the Batanagar- Jinjira flyover will decrease traffic jam on one of the main busy streets in the city. This is about the Budge Budge trunk road which remains always crammed by unruly bulk traffic. Since decade people have been facing this issue as a daily dose of torment. Particularly this route effectively needs an alternative transport way. Transport officials are really optimistic with this project; they are expectant with this implementation will bring positive changes to regular transport. Real estate market of Kolkata is anticipating too some excess sale in flats in Kolkata with this latest infrastructural connectivity.
The Left Govt. had planned for the same in the year 2004 but unfortunately the fruit never got ripen over the years. The project finally was brought into the right track during Mamata Banerjee’s Singapore tour in 2014.

By LNN (Liyans News Network)

Pre-Festive Purchase Spree On In The Capital

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It’s been almost two years while the property market of Delhi hasn’t seen any remarkable improvement. As a capital city it was expected that people would show some positive outlay in the real estate segment in this festive season this year. But monitoring the market growth of past couple of years there was no surety in this entire surmise. But to everyone’s true surprise the capital this year has started showing positive lights and inflow before the festive of lights. CREDAI claimed that the upsurge is currently on a revival mode.

In Gurgaon around 2015 there was 10-15% upswing in the property market. 1St October onwards expectedly there will be further upturn. Specifically Noida and Greater Noida have topped the list with 20-25% greater sales figures than projected followed by the city Gaziabad. The recent development has made the builders to offer lucrative discounts against the on-hand assets to push-up the sale volume in a bigger way. For the first time homebuyers developers are even are coming up with great renditions like- heavy discounts on service tax and stamp duties, car parking fee, electric meter charges and several other such propositions. On an average it’s can be said homebuyers will have 8-24 lacs benefit range in terms of earning profit.

It is also seen that a large number of projects are on a finishing stage to be a part of this selling competition. All these projects are targeted to the improvement of mid-ranged market. Experts have said that the bulk sale is likely to come from the apartment priced under 50 lacs. Comparing with Gurgaon Noida and Greater Noida will have some assured gain in property business as Gurgaon is still stuck in between the infrastructure and the settlement issues. It is expected that real estate market in Kolkata might rake in money with the selling of Affordable flats in Kolkata.

Nevertheless where one portion of the market is about to recover another segment of buyers who have already done their investment already are still waiting for the final delivery. Renowned builders like Jaypee and Unitech have kept buyers on hold since close to 8 years, other companies builders are also running late by 3-7 years. Therefore it’s always wise to invest in the ready to move apartments.

_ By LNN (Liyans News Network)

Shopping Malls Above 350,000 sq ft Area Have Been The Favorite Investment Zone Of The Retailers

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Based on the recent survey of Cushman & Wakefield it can be stated that private equity venture in retail real estate has been pitched close to 3350 crore in the first half of 2016. It looks like the bigger shopping malls are gaining the better investment preference from the international and domestic retailers. For establishing shops inside a mall 40% of the perceptive investors voted for Shopping malls of 350,000 sq ft and beyond.

From the investors perspective it’s visible that with the bigger alignment they will achieve the access to an additional wide-ranging retail surroundings like superstores, multiplexes, gaming zone. Thus they could attract more visitors and further inflow. The recent cost of property, quality of shopping malls and incentives and rent-free period materialized as the prime factors to manipulate the property locations by the retailers. Proper shop size, required floor area, appropriate micro-market were the other formidable aspects for choosing the location of such stores.

Capacity of the mall and the functional area, economical cost are top three facts bumping the location selection of the mall. For setting up shopping malls around the highways factors like wide spread parking zone, external surroundings have a vital impact on the choice of location. In the metro cities like- Delhi, Gurgaon, Noida , Mumbai have shown some great effects against the expansion plan applied by the retailers. This is an inevitable offshoot of the brand consciousness and purchasing power of the people of these mentioned gateway cities. Specifically speaking fashion and apparel retailers do great business in all the major cities. But Delhi NCR is way ahead in terms of the all season selling quotient in comparison to the other major cities.

These are the reasons behind the sale of office and retail segments are taking upstairs with the passing fiscal years. As per the latest property selling statistics of Property Portal in Kolkata sale of new built constructions which will be used for commercial purpose or office spaces are being purchased in limited numbers where as
Commercial Property in Kolkata is majorly occupied on lease. For shopping malls there has been a mixed scenario in terms of single ownership and lease holders.
Private equity investment in retail real estate surged to whooping Rs. 3350 crore in the first half of 2016. It is the highest amount of money that had been ever invested after 2008 according to the Cushman & Wakefield report. Central Govt. has sorted out all tax difficulties for real estate investment trusts (REITs), retail properties have been continuously in demand. It seems like it could be slated under REIT assortment. New malls have been registered in the maximum counts out of which the supply of 4.8 million sq ft has been already accomplished. This quotation contains the supply statistics first half of 2016 which is supposed to be the biggest supply during past five years, where as in the first half of the previous year it was just 0.2 msf.

Till the first half of 2016, NCR comes first with the lofty 64% supply of the share in new supply followed by Pune and Mumbai.

By LNN (Liyans News Network)