Home Loan | Kolkata Real Estate | Kolkata Property

Govt. Should Fiddle With Infrastructure Status To Economical Housing Development

Residential apartments that are supported the program Pradhan Mantri Aawas Yojana, is likely to have concession on home-loan interest according to the latest announcement of PM Modi. This is a time for the potential buyers to do cartwheels who have avowed their decision to invest in low budget flats in Kolkata. According to the recent report central govt. will calibrate the classification of infrastructure segment in their imminent LIG or affordable housing apartment. Experts say that this is supposed to be a significant move that would scale down the cost for the developers and engage investors as well towards these types of developments in specific.

Speaking about this Pradhan Mantri Aawas Yojana PM Narendra Modi announced special consideration on interest rates for low-cost housing loans under the aforementioned program. “If we want housing for all by 2020, re-categorizing affordable housing as infrastructure is essential. The government had sought feedback about this about a week ago,” a person who is a potential buyer of the development said. He also added, “I see this happening in the upcoming budget.”
HUPA has been seen pushing PM’s dream housing project of providing about 20 million houses across the country within 2020. IT has got across to the officials of senior finance ministry and the Reserve Bank of India as well for feedback on the projected modification and how to stop it from being mistreated. “These projects could have a dollar-denominated debt and offer a return of 4-5%. This would work well for both domestic developers as well as foreign investors,” an expert said.

Image and video hosting by TinyPic

Our Outlook– Infrastructural status for low-budget housing is a skillful concept. Resource allocation will have a boost with the execution. It will hike the supply chain against the backlog. This huge project needs to have a policy agenda on an obvious ground, which will help to turn the project approval and deliverance into a fair and transparent deal. In the developed market real estate brings in half of the GDP. Again the moderation in home-loan interest and tax-rebate will be backing the demand quotient to rev up.

At the same point of time builders and developers have been going through a harsh time ever since the announcement of currency ban as they are having some obtained huge amount of loan from the financial market earlier on a higher level of interest. On the other hand banks and other financial companies are now indisposed to lend money to them after the 500 and 1000 rupee note ban declaration.

“If affordable housing is given infrastructure status, it would lower the borrowing cost for the developers. Also, regulations should be simplified to directly borrow foreign debt, which can cost around 4-5% on dollar return,” said Hemal Mehta, a partner at Deloitte Haskins & Sells.
Set of laws will have to be altered so that low-cost housing projects do not attract unhelpful taxes but easier project investment even from investors outside India. An investment from foreign pension funds and insurance companies in this low-budget segment is foreseen by the experts.

_ LNN( Liyans News Network)

States Have No Energy to Weaken Real Estate Act, May Confront Open Objection: Venkaiah Naidu

NEW DELHI: Coming down vigorously on the states that have weakened the land administrative Act, Union minister M Venkaiah Naidu on Tuesday said states have no energy to weaken the arrangements and this will have genuine ramifications including open objection.

Image and video hosting by TinyPic The clergyman of Housing and Urban Poverty Alleviation (HUPA) likewise encouraged the states and Union Territories to meet people’s high expectations and execute the Real Estate (Regulation and Development) Act, 2016 from May 1 this year.

“There are a few media reports that a few states have weakened a few arrangements of the Act in the standards advised by them (HUPA). States don’t have such powers and I trust such reports are not valid,” Naidu said while tending to a meeting of boss secretaries and senior authorities of states and union regions here.

“Today, I need to make it clear that any trade off with the soul of the Act will have genuine ramifications including open objection. Whoever does as such should confront general society clamor,” he included.

On the vagueness about progressing ventures, Nandita Chatterjee, secretary, service of HUPA, cleared up that all the continuous undertakings that have not gotten culmination endorsements till May 1, 2017 would go under the domain of the land Act.

Abhay Upadhyay, convener of home purchasers’ gathering Fight for RERA, feels it was important to elucidate to states that they can’t weaken Real Estate Rules for developers. “We now trust, states will now outline stringent RERA principles and all weakenings for manufacturers done by many states will be denied,” he said.

Image and video hosting by TinyPic

The service of HUPA made it clear that no revisions to the Act would be considered at this stage. On states’ requested to unwind the base plot size of 500 square meter proposed in the Act for enrollment of tasks with administrative experts, Chatterjee elucidated that the base plot size of 500 sqm was touched base at after a few rounds of exchanges by the Parliamentary Committees and in the Parliament and it can’t be modified at this point.

States additionally raised the issue of barring overhangs from the meaning of cover zone, to which the service clarified that it represented no issues as costing could be as needs be educated to the purchasers.

The service likewise asked the states to shape interval administrative experts, as proposed in the Act, to set up vital institutional instruments with the goal that undeniable administrative specialists could get to be distinctly utilitarian from May 1 this year.

In this way, states like Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh, Delhi, Chandigarh, Andaman and Nicobar Islands, Dadra and Nager Haveli, Daman and Diu and Lakshadweep have told the land rules.

In any case, states, for example, Andhra Pradesh, Arunachal Pradesh, Chattisgarh, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Mizoram, Rajasthan, Tamil Nadu and Puducherry said they would tell the land runs in February.

Punjab and Uttarakhand, in any case, said they would tell the principles after the state get together decisions.

–LNN( Liyans News Network)

Environmental Clearance Won’t Create Exigency In Real Estate Development

Government now has relaxed environmental clearance process for upcoming real estate evolution in the course of ‘Housing for all within 2022’ project. The changes are likely to dash off through gazette. The central government has to make the clearance portion easier to fast-track the deliverance time of residential projects. Under this rule small projects will have to produce ‘self-declaration’ documents to meet environmental conditions. Whereas the bigger projects need to seek prior green approvals before the construction puts on the board. Therefore along with every other required legal documents before registration builders are bound to show environmental approvals if they are asked for the same.

These changes came in front in the past week with the gazettes as bye-laws in the environment impact assessment to stroke up the approval process for realty development. “Since the states are now required to bring changes in the respective building bye-laws so that it won’t be in conflict with the central notification, the implementation of the new rules will take nearly six to seven months,” said Manoj Kumar Singh, joint secretary in the environment ministry. This inclusion has been made following the footsteps of countries like Japan and Singapore. Speaking about the entire process Sing also informed, “Idea is to make more buildings follow environmental norms. It integrates standard environmental conditions with the building permission to cut delays.”

The following gazettes confirmed that residential projects sized 5000 sq mtr up to less than 20,000 sq mtr comes within range of fulfilling ‘environmental conditions’ through self-declaration and certification process. According to the law the local authorizes have the final say regarding conformity of the green laws. If you want to buy flats in Kolkata you should have a clear idea of whether the builder is well aware of this major submission. This category of project was under supplanting group. “The local authority may issue the building permission incorporating environmental norms in it and allow the project to start based on self- declaration and certification,” it said. Projects that are sized of 20,000sq mtrs to less than 1,50,000sq mtrs will be absolved from the existing modus operandi of ‘prior environmental clearance’ from the State-level Environment Impact Assessment Authority (SEIAA), due its time-depleting infrastructure. Now construction companies don’ need to go to SEIAA. This category of buildings now will get real-time ‘building permission’ and ‘environmental clearance’ from local civic bodies which will be having an ‘environmental cell’ for checking the environmental parameters.

Image and video hosting by TinyPic

Now this cell will process online applications and come forth with it in a meeting of committee of development authorities and Municipal Corporation. The committee will audit and settle the environmental clearance will be issues to be incorporated format by the local authority. This entire move is aimed at ‘ensuring ease of doing responsible business’ and integrating the permission for construction. The key factor of the notification is to bring low budget flats within 2022 for the lower income socio-economical group in urban areas. Under the notification, only building projects of the size of 1.5 lakh sq metres to less than 3 lakh sq metres will have to go to the SEIAA for prior green clearance while the projects having more than 3 lakh sq metres will go to the environment ministry’s central assessment authority.

By LNN (Liyans News Network)

2017 Will Introduce Deducted Home Loan Rates Nationally

Banks will likely to reduce the rates of home loans in the coming financial year. As an outcome of which probable homebuyers will get a chance to buy a bigger home than they thought of earlier, affirms the market speculation. In conversation with the chairman of SBI Arundhati Bhattacharya states, as an aftereffect of demonetarization banks are now going through the cash crunch and the interest level of home loans will reduce by a fourth. If you want to buy commercial property in Kolkata, postpone your investment program for couple of months more.
The president of the Bengal chapter of Confederation of Real Estate Developers’ Association of India (CREDAI-Bengal), Nandu Belani, foresees the EMI of home loans becoming more affordable over the next 12 months with a succession of interest rate cuts. “We will know about the exact situation post demonetization when the Centre comes out with firm numbers. Interest rate cuts should happen early next year, followed by another round after the Budget. From 9.25-9.75% at present, home loans should be available at 7-7.5% around this time next year,” said Belani. He also pointed out, “If someone had budgeted an EMI of up to Rs 32,000 for a loan of Rs 30 lakh, the person can now take a loan of Rs 36 lakh. The enhancement of a person’s loan capacity by 11-12% can translate to the person being able to afford a bigger home or more conveniently located property.”

Image and video hosting by TinyPic

For instance calculating abruptly in a 15 year term a 25% lesser of interest rates could see EMIs on Rs 1 lakh will save of Rs 100 a month. In a 20-year loan term, the saving can be almost doubled the amount. On a loan of Rs 30 lakh of 15-year tenure, the snowballing savings on EMI might be in excess of Rs 5,000. Experts are hopeful that with the reduction of home loan EMI rates will uphold a steady balance. Developers might get a profitable deal as they will be able to deal with the interesting EMI cut rates and also have an access of cheaper capital. Simultaneously they are waiting the micro market condition to get back into business. With the development of the micro market like Tollygunge, Garia and New Town developers are expectant to see some optimistic sentiments in the real estate market.
The former president of Bengal CREDAI Sushil Mohta stated, “For the past three years, there have been cost increases but no price hike. When new projects are launched, new costs will be computed. I expect a marginal hike in prices because no one wants to turn prospective customers away.” “Now that RERA is in place, there will be no soft launches. Developers have to wait for all the clearances to launch a project and that will mean an increase in compliance cost as one has to pay interest on the holding cost,” Mohta clarified.
From the developers’ perspective this will denote a huge liberation to strained builders who are either in the unification or rat on form. Mohta does not expect new projects to be launched till 2018 as developers are mortified of making new development till they take hold of the trade in of the Notified Real Estate (Regulation and Development) Act, 2016.

By LNN (Liyans News Network)

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

On 4^th 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.

Image and video hosting by TinyPic

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 1^st 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

Reduce EMI
Reduce tenure
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)