New I-T rules may send houses beyond middle class means

Re-development of old tenanted properties that provided a bulk of the building stock in the city is set to cease following an amendment in the Income Tax Act that has made such transactions prohibitively expensive. Developers fear the already limited housing stock supply in Kolkata will dry up, leading to price escalation and sending houses beyond the reach of middle income families.

The new rules also discourage the development of low and middle-income properties in localities where a high-income project has been developed. With the valuation authority equating both projects with the same yardstick, not only does the buyer have to pay stamp duty on the value decided by the registering authority rather than the purchase price, he has to now pay income tax for the differential amount (difference between actual transaction value and valuation done by registration authorities). The developer, too, has to pay I-T on the differential amount.

Source: The Times Of India

Kolkata real estate: end users drive property prices

Kolkata is one of the very few real estate destinations where demand by end users is driving the prices of properties.

There has been a consistent demand from end buyers, and this has been unaffected by recession. One can find very good homes in various suburban areas of Kolkata, BT Road (North), Chandpur Champahati (extreme East), Baruipur (South), Howrah (West), with affordable prices keeping in view the low land cost of those areas, various commuting facilities, economic crunch overall, giving a chance to anybody to invest in those areas.

Investment pattern

Rajarhat is expected to soar on the backdrop of future IT growth story. However, due to recessionary economic phase and political changes many are assuming a wait & watch situation. EM Bypass is another attractive location.

Based on the report by ICICI Home Finance for FY 2012, the market will continue to expand by 10-15 per cent for the next 5 years.

Emerging trends

Low cost homes is the recent trend: There is an emerging trend that real estate developers are also going for low cost homes, and also investing in lands beyond the boundaries of Kolkata.

It is high end-user driven market: End-user consumes 65 per cent of this realty segment. The city is witnessing heavy demand for affordable housing apartment units in the range of Rs 25-30 lakh, as per ICICI research.

This is due to lower cost transportation facilities that provide better commuting facilities between sub-urban areas and Kolkata.

Smaller project size is developers choice: Builders are interested in smaller real estate projects, as it is easy to enter and exit these projects. This is considered after government came with revised land acquisition bill that make the takeover of the land very cumbersome.

Key developments

Kolkata’s real estate market is booming is evident from the fact that- Alchemist Township has bought 20 acres of land from Highland group in Kolkata and will build a Rs 600 crore residential project. The deal was facilated by Jones Lang LaSalle.

Godrej Properties is also launching its Rs 100 crore suoer-luxure residential project in South-Kolkata. This is the second project after Godrej Prakriti in Sodepur.

The state government has come up with a land use and development control plan (LUDCP) for the proposed Raghunathpur industrial township on a 29,000-acre barren and less fertile land identified in Purulia.

Land policy once made, will determine the kind of industries that can be set up in the area and at what rate prospective investors could buy land from landowners.


Land and property prices skyrocket in Howrah, Hoogly; Kolkata

Land prices have skyrocketed on Kona Expressway and stretches of National Highway-2 and National Highway-6. Call it the Singur ripple effect or impact of other projects like the DLF township project in Dankuni and logistic hub on Kona Expressway, land prices have risen at least six fold in the past four years.
Many brokers had even purchased land in the area hoping for the price to shoot up further. An acre of land which cost Rs 24 lakh even five years ago, fetches around Rs 2 crore today.

Property prices have shot up even further on Kona Expressway that serves as a gateway to Singur from Kolkata. Even in 2001, the price per acre there stood at Rs 12 lakh per acre.

“With projects like the Tata Motors small car plant in Singur, the DLF township in Dankuni, Kolkata West International City and the logistic hub on Kona Expressway coming up, it is obvious that property prices would soar. But the delay in these projects and the Singur stalemate are a matter of concern for many,” said Ram Ratan Chowdhury, managing director of Panchadeep Constructions Ltd (PCL). He has been a pioneer in bringing mega projects to Howrah.

If poor infrastructure and lack of development held back real estate prices on the western front of the Hooghly even a few years ago, the upcoming projects are changing the industrial landscape in the Howrah-Hooghly belt, thus pushing up property prices.

Less commuting time, excellent connectivity and ventures by big houses like the Tatas, DLF and the Salim-Ciputra group have made realtors make a beeline for land in the area. The Singur plant is just around 10 kilometre from the point where the Kona Expressway meets NH-6 and NH-2.

Real estate developers and brokers, who have invested in the stretch, are keeping their fingers crossed. For, they feel that the growth of price in real estate will be at a much slower pace if the Tata project shifts from Singur to an alternative location.

“The price of real estate does not change overnight, though there will be an impact on the price of land in that belt in case the Tatas leave. We hope that the Singur stalemate will be solved in a week or so at the most. If the Tatas stay, the price of land is bound to shoot up. Even if they leave, real estate prices will still go up but at a slower pace and rate,” said real estate developer Sumit Dabriwala, managing director of Riverbank Holdings Private Ltd.


Low on cost; high on quality

Building houses can be a costly affair, especially with raw material costs climbing steadily.K R Srikanta Prasad looks at how to build a lasting and comfortable house, and make it cost – effective.
mix and match While trying to be cost-effective, the combination of materials should be planned well. photo by the authorAs we are aware, construction costs are sky-rocketing due to various reasons. It could be due to scarcity, increasing demand, higher production cost and steep transportation costs. Under these conditions, home builders might be happy and more eager to use cost-effective material.

But one should make sure that the cost-effective material they intend to use is of good quality and durable. It should facilitate easy maintenance and not be a post-construction white elephant!

Here are a few general guidelines to aid in analysing how a particular material can be termed cost-effective.

A locally available material is always cost-effective as the transportation costs are minimum and we do not spend on middlemen. Your plans should have a good architectural layout and detail. There should be a proper combination of the materials chosen.

Modular and standardised units manufactured in factories on a large scale cost less as the production costs are low. The materials that can optimise on labour costs during construction and installation are a must as the labour costs are too high. Choose materials that do not have a high processing cost. Material that is recycled is generally not expensive unless it involves more labour to process and install.

While it is important to identify materials that are clearly less expensive, it is relevant to understand that cost-efficiency for a particular material depends on the situation as well as how it is used in a structure.

Also, if one has to achieve substantial savings while building, one has to ensure that cost-effective material is used in every part of the construction, from the foundation to the finishing, because all of it contributes to the overall cost.

We can make a list of different important materials that go into construction and save costs based on the merit of their content and the ease with which they can be implemented.


A dump made out of boulders, brick bats, quarry waste and cement is a good alternative to conventional-size stone masonry. Even concrete waste can be recycled for this purpose.


Regular table moulded bricks used in rat trap masonry require less mortar joint and bricks; hence lower costs. Cement concrete blocks are cost-effective compared to conventional brickwork.

We have terracotta hollow blocks with different designs that are exposable in masonry. This is a good option provided they are not plastered and painted.

Conventional-sized stones that are not elaborately dressed in combination with bricks in composite masonry can work out really well.

While the stone face can be exposed, the brick face can be plastered and painted. Light-weight cement-based blocks made out of cinder contribute to economy in framed and high-rise structures.

Where suitable quality soil is available, soil stabilised blocks made in-situ are a welcome option. They are made using soil, quarry dust and cement and can be used for load-bearing walls.

They have a finish and colour that can be left without plastering. This material is not only cost-effective but also eco-friendly.

Precast concrete wall units that can be assembled on site are an option in large scale constructions. They save time and thus cost. Bamboo is renewable as well as cost cutting.


Composite roofs made out of filler slabs can cut concrete and steel costs. Terracotta blocks that are designed for roofs can be adopted. Precast beams and roof slab elements in RCC are widely used under suitable conditions. Also, there are materials like ferrocement and fibre reinforced concretes that can be explored. These units can be thin and can take different forms. With practically adaptable design options, one can arrive at cost-effective roofing elements.


If one can recycle old wood for doors and windows, it saves a lot of money. Choosing aluminium and steel options are much cheaper than wood. Door frames made of concrete are available which are durable and involve less maintenance. In some situations, less expensive wood used for packing can be reused for panelling, railing or flooring.
Hardwood that is enamel painted is less expensive compared to polished teakwood.


Locally available natural stones that are pre-polished are a good option. Other economical options are cement-based tiles, ceramic tiles and clay tiles. In-situ mosaics and cement floorings are also possible. Thin granite tiles made out of wasted granite works out really economical both in material and labour costs.


There are so many other places where costs can be cut. Non-modular switches in electrical work, CPVC pipes and fittings in plumbing, white fittings in sanitary work, distemper in painting, kadapa slabs for storage shelves etc are options to name a few.
Thus, by a thorough market survey and an intelligent and discriminating choice and combination of material, it is possible to make a project cost-efficient. Cost-effectiveness need not always mean cheap. Good quality is a must.

Often cost-efficient material is also eco-friendly. Conversely, one that is eco-friendly can be cost effective. It costs little to be natural! The “add-ons” are what add to the cost!

Source: Deccan Herald

Real estate woes: Demand slowdown forces developers to reduce property rates

“It has been observed that some of the real estate players tend to offer certain freebies like cars, white goods, foreign trips for those who book during the festive season. However, freebies do not attract customers. We feel that developers should put all the possible strength in the product offered, by way of better specifications, amenities and facilities…,” reads an October 3 note from Pradeep Jain, Chairman, Delhi-based Parsvnath Developers.

At a time when the real estate market is going through one of its toughest phases, it seems like a bold decision for a company that’s reeling under debt – Parsvnath’s net debt stood at Rs.1,200 crore on March 2013, which is roughly twice its annual revenues of 2012/13.

Parsvnath is no different from other developers in the realty sector where project delays and over-leveraged balance sheets have become fairly common. Early this year, around 250 allottees of its Lucknow project Parsvnath Planet went on a day-long hunger strike to protest the delay in the construction of the project that was launched in 2006.

Festive season or not, the demand slowdown has forced developers to reduce property rates. While ‘official’ price corrections are few, developers have started providing backroom discounts by waiving off expenses such as preferential location charges (PLC), one-time parking costs and club membership fees. PLC charges are levied by developers on certain properties (within a project) which have a better location than most other apartments such as those facing a park, road or swimming pool, or close to the ground floor.

Residential prices across all major metros and several smaller cities have fallen in the first quarter of the current financial year. According to National Housing Bank’s Residex, an index developed to capture the price movement in residential housing across 26 cities, 22 cities have witnessed a drop in property prices in the first quarter as compared to the earlier quarter. Only four cities – Lucknow, Nagpur, Dehradun and Surat – have seen a marginal surge in prices.

Interestingly, the piled up inventory – growing number of unsold flats – is forcing developers to reduce unit sizes. Markets such as Delhi NCR and Mumbai have witnessed such a fall. In 2008, the median size of apartments across the country was close to 1,600 sq feet. While this number continues to remain more or less the same in most other cities, unit sizes in Mumbai and Delhi NCR have drastically reduced. They are currently 15 per cent and 14 per cent, respectively, lower than the national median size.

The decision to launch projects with smaller-sized units could be due to the sharp rise in apartment prices during previous years and concerns about the affordability of residential real estate, say experts at Jones Lang LaSalle India. “Prices in Delhi and Mumbai have grown at 20-25 per cent annually since 2009. Affordability has taken a big hit because incomes have not risen sharply. Moreover, the interest rates have also moved up between 2009 and now,” says Pankaj Kapoor, Managing Director at Liases Foras. The real estate research firm estimates the cumulative nationwide unsold inventory at 670 million sq ft, or roughly 600,000 units, as on June 2013.

As a result, wary developers are coming out with few launches. Real estate research firm PropEquity says that new housing launches fell by 38-59 per cent across different markets such as Gurgaon, Pune, Noida, Navi Mumbai and Kolkata. Noida in the Delhi NCR region saw the biggest fall in new launches.

Delhi NCR, which accounts for some 65 per cent of the total housing stock in the country, has been hit particularly badly by the demand slump. According to a September note by real estate consultancy CB Richard Ellis, capital values across most micro-markets of Delhi witnessed a decline owing to restrained demand levels, besides cautious buyer sentiment. Developers delayed the launch of new projects as they wanted to clear existing vacancy levels.