Real Estate: Understanding the Bull and Bear runs
Nov 23, 2013
Source : The Times of India

 

DELHI: My partner and I are invariably asked questions like: “Do you think the property prices will go up?” or “Do you think Mumbai is a good city to buy property or should we rather consider Bangalore?”

I wish I could gaze in to a crystal ball and come up with the answers. Alas, real estate is an asset class and has to be understood in the bigger context of the overall economy — local, country and global. The Indian real estate cycles can be very closely linked to the Indian stock market which in turn is closely linked to the global stock indices.

The boom period in the real estate market was from 1990 to 1996. This was also the period of the stock market boom, both globally and in India. The crash started from 1996 and bottomed out by 1999. This was also the time of the great stock market crash globally, led by the Asian crash of 1997.

The price rise from 1990 to 1996 was at a CAGR of 3 per cent, while the prices dropped by 60 per cent, between 1996 and 1999. From 2000 till 2004, there was a very minimal increase in prices year on year. The big spike was from 2004 to 2005 and thereafter the high octane rise till early 2008. The global stock market crashed in Sep 2008, and with it came down the Indian stock market which in turn brought the real estate market down too.

So what is going to happen in this sector for the next 2-3 years?

Let’s forget the stats of millions of houses shortage, the ever increasing middle class, etc. Does it look like the rates will increase, like they did between 2004 and 2008? Do the macro factors both in India and the world suggest an increase? Our reading is that the rates will go down a little more and stabilise by mid 2014. Thereafter, it will be a period of marginal increase, just like the period between 2000 and 2003.

The big boom should once again start from late 2017, early 2018, similar to the one experienced between 2004 and 2008. So, if you are a long term investor or an end consumer, looking for a house to stay then you should hunt for the right bargains. Close to 60 per cent of genuine property buyers would like to buy a property between Rs 20 lakh to Rs 60 lakh. Yet, none of the major developers build anything in this price point. This creates the pent up demand resulting in supply side shortage.

We have also observed that just over 30 per cent of property buyers are employed with the IT sector. This has been a huge reason for the Bangalore property prices rising steadily. Property developers, investors and end consumers can only ignore data at their peril, but, the ones who have made handsome returns in this sector, have always sought and acted on sound data.

Latest Realty News

The sample flat trap
Nov 23, 2013
DELHI: Home buyers apportion every paisa of their personal savings and income for making a single, lifetime investment and hence have the need to save as much as they can. It is this penny-pinching that developers and real estate agents exploit by offering buttery schemes, freebies and other features to lure customers. At face value, a majority of these options seem attractive. However, when the gloss wears off, these schemes are seen to be riddled with nasty traps.
Modular kitchens make a statement
Nov 23, 2013
DELHI: The demand for modular kitchens is growing particularly for branded quality products. As the demand for apartments grows and lifestyles change, style, convenience and efficient use of space drive the demand for prefabricated kitchens, says Sushil Matey, COO, H&R Johnson.
Meerut: Fast becoming a preferred realty hotspot
Nov 23, 2013
DELHI: Of late, all major developers have begun to re-align their positions and enter unexplored territories. Meerut is one of those cities which have now become a preferred destination for numerous reputed developers in the country. This seems to be a wise move as the skyrocketing property prices and space crunch in the metros have made project execution a costly affair. Also the recent developments in terms of connectivity and infrastructure have added advantage in making a choice of place lik
Four great reasons to buy instead of renting a home
Nov 23, 2013
DELHI: If you’ve been indecisive about buying a home and have so far preferred to rent instead, this is a good time to finally make your move. Home ownership is one of life’s greatest joys, but that is not the only reason why you should finally take the plunge. The advantages of home ownership are:
Part II: Tax-related aspects of buying and selling real estate
Nov 23, 2013
DELHI: I am planning to buy a house by raising loans from friends and relatives. Will I be eligible for tax benefit from all sources? Interest payment to friends and relatives can be claimed u/s 24 but only against a certificate received from them. In the absence of the certificate, you would not be eligible for the deduction. The recipient of interest income who issues the certificate is liable to pay tax on the interest income that he receives. As far as the principal payments are concerned
Part I: Tax-related aspects of buying and selling real estate
Nov 23, 2013
DELHI: Purchase of residential property is one of the most important and long-term decisions and there are several tax aspects. Here are answers to some Frequently Asked Questions (FAQs) on various tax related aspects of property transactions.
Vianaar Constructions launches luxury villas
Nov 23, 2013
DELHI: ‘Vianaar Constructions is a vibrant and a quality real estate developer in and around Goa with its hallmark, unbridled enthusiasm and energy unveils its ambitious and refined line of villas Magia Arr at Salvador Do Mundo, Goa, India. The project is to commence from January 2014 and should be ready for possession by July, 2015.
Govt.working on a mechanism for speedy resolution of Infrastructure Projects disputes
Nov 23, 2013
DELHI: The second day of EXCON 2013 started with a Conference on ‘Sustainable Infrastructure Development’ organized by the Indian Construction Equipment Manufacturers’ Association (ICEMA) in association with the Confederation of Indian Industry (CII). EXCON 2013, South Asia’s biggest exhibition of Construction Equipment (CE) is being held in Bangalore from 20th to 24th of November, 2013 at the Bangalore International Exhibition Centre, Bangalore.
Decision on relaxing FDI norms for housing sector likely Monday
Nov 23, 2013
DELHI: The government is likely to take a decision on Monday on relaxing FDI norms for the housing sector, including easing conditions for exit before the three- year lock-in period.
Delhi home prices fall by 4.5% in Q2, 10 cities see decline
Nov 22, 2013
DELHI:House prices in Delhi fell by 4.5 per cent during the quarter ended September, as compared with the previous quarter ended June. Stretching that timeline to March, prices fell by 5.9 per cent, the latest Residex brought out by the National Housing Bank (NHB) showed.

Latest Realty News Of State

Realty Talk's