ALL YOU NEED TO KNOW ABOUT PRADHAN MANTRI AWAS YOJANA (PMAY)

The much talked about Pradhan Mantri Awas Yojana (PMAI) is an ambitious project aimed at housing every citizen of India. We elaborates on the flagship housing project and the incentives assured by the government under the scheme. The vision of Prime Minister, Narendra Modi, to ensure housing for all not only gave hope to people who refrained from investing in real estate sector owing to high costs, but also stirred positive sentiments amongst builders and developers. Launched on June 1, 2015, the Pradhan Mantri Awas Yojana (PMAY) scheme, aimed to offer pucca affordable housing options to urban and rural poor. In order to aid the efficient development of low-cost homes, the scheme embraced a plethora of incentivising offers for developers, which targeted at helping them to tide over their financial instabilities.

The ambitious project incorporates multiple plans and solutions to benefit all stakeholders involved. Let us delve further into it to understand the key features of the scheme and how it would benefit homebuyers and the real estate industry at large.

What is PMAY all about?

PMAY is an initiative undertaken by the Central government for providing affordable housing options for Lower Income Groups (LIG) and Economically Weaker Sections (EWS).

The scheme was originally rolled out for only the LIG and EWS homebuyers, however, it has now been extended to the Middle Income Group (MIG) consumers as well. Opining on the expansion of PMAY, Rohit Poddar, MD, Poddar Housing and development Ltd shares that it is practical to include MIG under the realm of the project as the definition of affordable housing in Tier II and Tier III cities does not restrict to only 30 sq m units, but also includes bigger 2BHK units. Therefore, the extension to 90 sq m and 110 sq m is a well-contemplated and important decision undertaken by the government. In an attempt to ensure faster completion, the mammoth project is divided into two parts - PMAY-Urban and PMAY-Gramin.

1. Under PMAY-Urban, the focus is on congested slums, where temporary housing units will be replaced with pucca or permanent houses and will be delivered to the slum residents and other groups hailing from LIG, EWS and MIG segments.
2. PMAY-Gramin, the scheme extends to rural areas. Those living on rent or owning a house that entails construction can apply to this scheme Credit Linked Subsidy Scheme (CLSS) Basically, there are two key features of PMAY scheme - First, it will offer affordable permanent housing to LIG, EWS and MIG segments. Second, it has introduced Credit Linked Subsidy Scheme (CLSS) on loans availed for construction, extension and improvement of existing houses.

Eligibility criteria for CLSS

1. The beneficiary should not own a pucca house in his/her or in the name of any member of his/her family in any part of India
2. In case of a married coupler either of the spouse or both of themin joint ownership will be eligible for a single subsidy
3. The beneficiary should have not availed central assistance under any housing scheme from the government or any benefit under PMAY earlier

Who will be the beneficiaries under CLSS?

The beneficiary family will include wife, husband and unmarried children. (An adult who is an earning member regardless of the marital status can be treated as a separate household in MIG category).

Credits : 99acres.com

*Women ownership is not required for loan availed on construction and extension of the house
** For MIG-1 and 2 loan should be approved on and after 1/1/2017
*Source- HDFC

Important facts

1. Interest subsidy will be available maximum for 20 years or the loan tenure, whichever is lower
2. The cost of affordable residential property for MIG should be less than Rs 65 lakh in six metros and Rs 50 lakh in non-metros

Why is PMAY important?

While quarterly report cards of popular metros reflect huge inventory overhang, the overall country exhibits a shortage of 20 million housing units and PMAY is an initiative to cater the shortfall.

Previously, with conventional project approval processes, it did not make much commercial and financial sense for entrenched developers to construct affordable homes as capital carrying cost remained onerous. Besides, there were no incentives for any stakeholder in the entire chain, resulting in much lower margins than anticipated. It is only for the last 1-2 years that such enabler policies have been put in place to encourage developers. Infrastructure status grant to affordable sector in the Budget 2017-18 has also been an encouraging move which would help developers in improving their credit off-take and have easy access to cheaper institutional financing. Overall, the affordable housing segment is set to scale sustainable growth trajectory on account of increased investments from FDI, insurance funds and increased participation of private players.

Challenges on the way

Single window clearance remains the biggest challenge ahead for the developers and builders. Several approvals at different stages of development not only lead to project delays but also add to total construction costs. Moreover, land being a limited resource, is also a major deterrent. While the government is mulling to unlock land parcels under its ambit, there still remain certain political and environmental limitations to overcome.

Check out Real estate projects in Thane by Squarefeet Group in Thane

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Source - 99acres.com

"TAKE THE REAL ESTATE PLUNGE NOW"

What happens when you get the young guns of Mumbai's real estate market in one room to discuss the burning issues plaguing the sector?
In an exclusive Times Property roundtable, we tried to achieve just that.

Here are a few takeaways

The recently held CREDAI-MCHI Thane Youth Wing roundtable saw the getting-together of the young fresh blood that has taken it upon themselves to catapult this liquidity-starved sector (the third highest contributor to India's GDP), to a brighter future.

THE YOUTH OF TODAY...

The age demographic of the young buyers is in the range of 27-40 years. Their priorities have shifted from other materialistic indulgences to something more substantial such as real estate. They understand that real estate, as an asset, will only give them healthy returns in the future. After all, it's the only asset that appreciates, isn't it? They have also refrained from investing in other assets such as stocks or gold.

MANTHAN MEHTA
president, CREDAI-MCHI
Thane Youth Wing and managing director, NM Spaces

ADVANTAGE HOME-BUYER

With the triple threats of demonetisation, RERA and GST out in the open, fence-sit-ters are urged to become active home-buyers. Since there are no more big poli-cy changes that are left to be announced, it is the best time to go home-hunting. Also, the ease of doing business has come in, with the help of which it would take about two months to get the n clear-ances.

DHAIRYA SHAH 
vice-president, CREDAI-MCHI
Thane Youth Wing and director, Rosa Group

AN EMERGING BUYER SEGMENT

The youth today, is well-aware, well-read and is well-versed w.r.t its needs and preferences while buying a home. They are earning well and are seeking a more wholesome living experience and not lust four walls. Hence, we should not under-estimate the youth as a buyer segment.

DHAVAL SAVLA
joint treasurer, CREDAI-MCHI
Thane Youth Wing and sales head, SquareFeet Group

Credit : epaperbeta.timesofindia.com

A WHOLESOME LIVING...

PEOPLE TODAY ARE GOING BEYOND JUST FOUR WALLS WHEN IT COMES TO HOME-BUYING. THEY ARE LOOKING AT SOCIAL AND PHYSICAL INFRASTRUC-TURE, THE REPUTATION OF THE DEVEL-OPER AND ALSO, A GROWING TREND HAS BEEN OBSERVED IN THEIR KEEN-NESS TO LOOK FOR HOMES THAT ARE CLOSE TO THEIR PLACES OF WORK.

MPHIL MEHTA,
SECRETARY, CREDAI-MCHI
THANE YOUTH WING AND DIRECTOR, ROSA GROUP

10 CREDIBLE DEVELOPERS ONLY...

WITH THE INTRODUCTION OF REM, A LEVEL-PLAYING FIELD HAS BEEN CREATED WHEREIN FLY-BY-NIGH OPERATORS HAVE EXITED THE BUILDING LEAVING BEHIND ONLY GENUINE AND AUTHENTIC DEVELOPERS. HENCE, BUYERS COULD BE ASSURED OF A SAFE PURCHASE.

MANISH DEDHIA,
TREASURER, CREDAJ-MCHI
THANE YOUTH WING AND PARTNER, ACE GROUP

EMI V/S RENT

THE INHERENT QUALITY OF REAL ESTATE HAS ALWAYS BEEN THE SENSE OF OWNERSHIP THAT ONE DERIVES. AS AVERSE TO POPULAR BELIEF THAT RENTING IS A BETTER OPTION, OWNING A HOME ALWAYS HAS MORE ADVANTAGES, AS IT COMES WITH A LOT OF MONETARY RETURNS, A SENSE OF PRIDE AND ABOVE ALL YOU HAVE A LIFE-TIME ASSET THAT YOU CAN CALL YOUR OWN. IT IS ALWAYS ADVISABLE TO PAY EMIs AS OPPOSED TO RENT.

JAY VORA,
COMMITTEE MEMBER, CREDAI-MCHI
THANE YOUTH WING AND ARCHITECT - LIASONING, PLANNING & CO-ORDINATION, DOSTI GROUP

Check out Real estate projects in Thane by Squarefeet Group in Thane

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in

Source - epaperbeta.timesofindia.com

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

MOST IDEAL APPROACHES TO PAY OFF YOUR HOME LOAN EARLY

Reimbursing home credit before the residency and disposing of the weight of Equated Monthly Installments (EMI) is a blessing from heaven for each property holder. We offers key tips to get ready for home advance dispossession.

Advances, regardless of whether taken for a home or whatever other reason for existing, are constantly upsetting for the borrowers. While the procurement of a benefit is justified regardless of the month to month trouble, watching your financial balance get auto-charged with the EMIs squeezes in any case. Be that as it may, dispossessing your advance can enable you to spare significant intrigue pay-outs.

Vaibhav Sankla, Managing Director, H&R Block India, shares that until a couple of years prior, banks required high prepayment charges which gone about as a noteworthy obstacle for individuals inspired by shutting their advance early. Be that as it may, the evacuation of such charges has made dispossession a lucrative thought for borrowers.

Here are a few hints that can enable you to pay off your advance early:

Begin sparing, quick!

Since shutting a home advance early requires a tremendous measure of cash to be paid in a shorter measure of time, money related specialists counsel borrowers to begin making generous cuts in their costs and spare however much as could reasonably be expected. This is particularly fundamental for those whose month to month wage is settled and they have no option wellspring of wage. Curtailing pointless extravagances can have a noteworthy effect on your investment funds toward the finish of the month. You may need to abandon films and eating out for quite a while, yet the peace that originates from being sans obligation will positively be justified, despite all the trouble.

Credit : freepik.com

Make bigger installments

While it might appear to be difficult to deal with extra installments, tweaking your installment intend to make somewhat higher regularly scheduled installments merits considering. Indeed, even a little extra installment of Rs 1,000-2,000 consistently can help lessen the vital measure of your credit. As the foremost lessens, so does your advantage sum. Consequently, you will have the capacity to diminish your credit residency by no less than maybe a couple years.

Get the credit renegotiated

Renegotiating an advance, which alludes to supplanting a current credit with another advance, is most likely the least demanding approach to pay off your advance early. Reasonable just for those with sound record as a consumer, it can be a helpful apparatus to acquire a lower rate of enthusiasm with better terms. A lower enthusiasm with a similar regularly scheduled payout will imply that a bigger sum goes towards clearing the key segment

Use benefit picks up

On the off chance that you can't stand to make significant investment funds each month, fuss not! Put those reward pay outs and expense forms to great use as opposed to purchasing another TV or cooler amid Diwali. Specialists unequivocally propose utilizing any benefit pick up or extra cash in your grasp towards clearing your credit.

An expression of alert

While abandonment is a savvy choice on the off chance that you can bear the cost of it, do remember the accompanying variables before putting it all on the line

1. Have a rainy day account for spontaneous possibilities, for example, a medicinal crisis or unemployment
2. Consider other exceptional liabilities and pay off the ones having the most astounding loan fee.
3. Analyze the expense finding accessible on home credit installments and decide on dispossession of home advance just if the aggregate enthusiasm on the advance is more noteworthy than the duty conclusion accessible.

Do counsel a monetary master who can enable you to pick the choice that best suits your money related circumstance and furthermore get ready for any conceivable changes later on.

Check out Projects in Ghodbunder Road by Squarefeet Group in Thane

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Money related Numbers that determine Your Home Buying Capacity

While you plan to benefit a home advance, it is imperative to comprehend certain numbers that are of most extreme noteworthiness to contract banks, we shares a clench hand of such numbers that find out your home purchasing limit as well as make a great monetary picture.

As you choose to buy a house, there are a plenty of things that need watchful examination. Ideal from the outsides to the insides of the house, all variables ought to be nearly filtered to keep away from later laments. By the by, before you go to the point of property examination, one thing that is most extreme basic to comprehend is your money related position.

Assessing your purchasing power is huge to determine the advance sum that is destined to be allowed by contract banks. Essentially, there are four money related components that loaning foundations conspicuously focus in on - FICO assessment, initial installment obligation to-pay proportion, and resources for decide a purchasers monetary foundation. Grasping how these numbers influence the odds of credit endorsement is vital for each forthcoming homebuyer.

Financial assessment

Financial assessment is a standout amongst the most fundamental ways a moneylender decides your capacity to reimburse home advance. The score ranges from 300 to 900. As indicated by Muralidhar, a money related master, 'The nearer the score to 900, the higher is one's capacity to reimburse a credit and, in this manner, better the odds of advance endorsement. In a perfect world, anything over 750 is considered as a decent FICO rating. Anything lower than 750, does not really imply that the home loan will be denied, notwithstanding, it will affect the nature of credit advertised. For example, an advance for a borrower with a FICO assessment in the vicinity of 580 and 699 accompanies a higher loan cost, which would make the home loan more costly to reimburse."

There are five variables that impact one's financial assessment, each shifting in significance: installment history (35 percent), already owed obligations (30 percent), length of the record of loan repayment of the client (15 percent), credit blend (10 percent), and new credit (10 percent). In India CIBIL, Equifax and Experian are three establishments approved by the Reserve Bank of India (RBI) to decide financial assessments.

Initial installment

The measure of money installment made amid property buy is another critical variable that decides your home loan qualification. Keep in mind, while you are jarring with the advance endorsement prepare, a higher initial installment wou Id enhance your general purchasing capacity.

Ideally, 20 percent of the aggregate sum ought to be used towards initial installment. Keep in mind the higher the measure of money installment, the lesser the future risk and more grounded is your position to consult with the loaning foundation for bring down financing cost.

Credit : freepik.com

Obligation to-pay proportion (DTI)

As vital as FICO rating, obligation to-salary proportion is a budgetary computation that decides your capacity to pay the home loan sum notwithstanding other extraordinary back payments in your name. Essentially, there are two sorts of DTIs':

Front-end proportion: Also alluded to as lodging costs, front-end proportion is the rate of pay that would be utilized for lodging costs, comprehensive of month to month EMIs for other land home loans, protections, and different levy. This is figured by summing up the lodging costs and separating it by net salary (before charges). The perfect proportion suggested is 28 percent.

Back-end proportion: This incorporates your month to month obligation liabilities, for example, Mastercard charges, auto credits, understudy advances, and different costs, elite of house contribution. To compute back end proportion, month to month obligation costs are included and isolated by month to month net salary. The proportion ought not be higher than 36 percent as it represents a test to your budgetary wellbeing.

Resource proofs

A bank's greatest concern is whether the purchaser would have the capacity to reimburse the entire sum paying little heed to other monetary issues that may emerge later on. Considering the surge in the quantity of defaulters throughout the years, banks have turned out to be more mindful and sweep heaps of records up to dispensing the credit sum

Government forms, pay stubs, pay proofs, letter of work, evidence of assets, and personal ID are some essential archives required. These are not by any means the only records required however and a loan specialist may request numerous increasingly if necessary.

In general, while you get ready for a house buy, do the above budgetary estimations at your end and assess your purchasing power before moving toward a loaning foundation.

Check out Budget Properties in Mumbai by Squarefeet Group in Thane

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Purchasing Tips

1. Is land a superior speculation when contrasted with the share trading system?

The land showcase is like the share trading system, with its pinnacles and troughs continually appearing to bode well all things considered. Likewise, both markets mirror the economy of the nation and offer great venture openings. In any case, the dangers must be comprehended alongside the open doors. Realty record will acknowledge five times, however not the share trading system.

Putting resources into stocks:

The overall revenue innate in stock speculation has dependably been higher when contrasted with other resource classes. Securities exchange speculations offer favorable circumstances, for example, liquidity and adaptability, which land does not. Stocks likewise offer development rates that the land market can once in a while coordinate

Putting resources into land:

Home proprietorship is the most essential type of land venture. Not at all like stocks, land is a substantial resource that accommodates more prominent mental solace, security and fulfillment. Additionally, the arrival on speculation for land is sensibly steady in view of the marvel of property appreciation. Securities exchanges are far less unsurprising.

2. What per penny of aggregate wage should a man in the age gathering of 25-39 years put resources into land?

At a youthful age, you can contribute 300 for every penny of your aggregate resources by getting for your first house. Specialists trust that your aggregate regularly scheduled payments ought not surpass 30-35 for each penny of your gross month to month wage. This is a decent beginning stage and you should work towards diminishing that number over some stretch of time.

3. What per penny of aggregate salary should a man in the age gathering of 40-60 years put resources into land?

At a youthful age, you can contribute 300 for every penny of your aggregate resources by acquiring for your first house. Specialists trust that your aggregate regularly scheduled payments ought not surpass 30-35 for every penny of your gross month to month wage. This is a decent beginning stage and you should work towards diminishing that number over some undefined time frame of the city, on the off chance that it is from a decent designer and fits your financial plan, yet at the dispatch organize and when you leave, you get some esteem appreciation. That turns into your seed cash. Most banks enable you to leave one advance and take another. Along these lines, you would sell be able to off the littler valued property in a fringe area and utilize that as seed cash to purchase where you might want to remain. Else, you will dependably be behind the market as far as back.

Credit : freepik.com

4. What is the most ideal route for a first-time purchaser to set a financial plan to buy a home?

Numerous new home purchasers get energized and neglect to consider the measure of cost they have to pay to secure a home. Over-desire from your pay would put be able to you in a budgetary anxiety. Your EMI ought not be progressively that 30-40 for each penny of your bring home compensation. On the off chance that the property showcases in your city are extremely costly and you can't manage the cost of the property that you need to remain in, put resources into whatever is reasonable even in the fringe of the city, in the event that it is from a decent engineer and fits your financial plan, however at the dispatch organize and when you leave, you get some esteem appreciation. That turns into your seed cash. Most banks enable you to leave one advance and take another. In this way, you would sell be able to off the littler valued property in a fringe area and utilize that as seed cash to purchase where you might want to remain. Else, you will dependably be behind the market regarding fund.

5. At the point when is the stamp obligation expected to be paid?

When all is said in done, there is Stamp Duty to be paid each time there is an exchange of proprietorship. It is ascertained on the premise of the aggregate estimation of your property. The sum to be paid changes from city to city.

6. What are the elements that one ought to consider while ascertaining the home credit portion every month?

For computing the month to month home credit portion, consider your month to month family wage - now and expected later on. Family pay incorporates yours and also your parent's or companion's pay. Furthermore, your family's present costs, including every single other advance you are adjusting, are imperative to be considered. Try not to spend more than 50 for every penny of the aggregate wage on a month to month EMI.

7. Why do investor's home credit loan fees contrast?

Frequently your own bank (e.g. where you have your compensation account and most saving money connections) will give you the best loan cost. Likewise banks have favored or welcome evaluating and you would benefit be able to from these exceptional plans.

8. Would i be able to go into a deal concurrence with any purchaser without clearing the home loan? What will be the methodology of the exchange?

Make sure to esteem the said property which is sold to a bank. In any case, you will be required to clear the advance of the bank and after that continue to enlist the property for the sake of the purchaser. It is additionally conceivable that you, the new purchaser, and additionally the bank execute the assention at the same time.

Check out Upcoming Project in Ghodbunder Road Thane by Squarefeet Group in Thane

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

A good time to invest in Lower Parel and Wangle Estate, Thane

The last few months seemed to have worked well for Mumbai’s office market. Many transactions have taken place. The demand from the corporates are not limited to under construction buildings only. This development in turn seems to be slowly influencing the residential market as well.

To name a few transactions in the office real estate market that have taken place in the recent past are Dot Solutions and DCT Infotech. The demand for office space in this node of Mumbai is increasing consistently. Not just conglomerates, start-ups are also finding its way into the suburban areas.

Shantanu Chakraborty, a sound engineer who has several popular tele series’ background scores under his credit says, "The line I am in does not follow any schedule. Until recently, I was working with a well-known sound effects professional. I have now decided to open my own studio and work independently. I am looking at Lower Parel for some space and will eventually move to the locality along with my family."

The strong growth in Navi Mumbai's office leasing activity (close to 8 lakh sq ft of absorption in 2015) has generated substantial demand for residential apartments.

Consumer demand

According to a report, localities such as Lower Parel and Wagle Estate, Thane might witness more consumer demand due to the increase in office demand. Apart from this factor, suburban areas are offering attractively priced properties and noteworthy infrastructure developments like the upcoming airport, metro corridor and ease of connectivity with Mumbai and Thane, have attracted the attention of consumers.

Yogika Sharma, a HR senior executive of a finance company based in Thane says, "Most of the employees reside in nearby areas. We have employees who have moved from Mumbai. Thane offers good residential options at a cheaper budget. Therefore, it is becoming a common practice for people to move closer to their offices especially single working professionals and the ones who have joined the company from other parts of the country."

Houses in Lower Parel and Wagle Estate, Thane

Manish Thakre writes on the Magicbricks Forum, "How is the infrastructure developing in areas like Lower Parel and Thane? I want to buy a property for my own use." The real estate of the former is already developed and sought after while the latter is still developing.

The residential inventory of Lower Parel consists of new properties, co-operative societies, under-construction properties as well old existing buildings. The most common property type in the area are apartments of different configurations. The residential market offers 1, 2, 3 and 4BHK units to potential buyers. The first three options are easily available.

The size and price range of these properties are:

The residential inventory of Wagle Estate, Thane consists of co-operative societies and existing buildings. The most common property type in the area are apartments and builder floors of different configuration. The residential market offers 1 and 2BHK units to interested buyers and investors. The size and price range of these properties are:

Experts project an increase in prices for Lower Parel. Accoding to Magicbricks data, the residential supply is low in the market. The rental market performs better than the capital market in this locality. In Wagle Estate, there has been a rise in property prices. Consumer demand has also increased though currently supply is limited. The market has been performing better than last year because of the advent of office hubs. The annual rental yield of Lower Parel is 2.9 percent.

The social infrastructure of Lower Parel is developed as it is a commercial business centre in South Mumbai. Its proximity to Worli Sea Link makes it one of the most sought-after areas. The Worli Sea Link has not only opened the road for good connectivity between Bandra and Lower Parel, it has also brought new opportunities in luxury housing as well. While it has the high class charm of South Mumbai, its location makes it very convenient - 20 minutes from Nariman Point, 15 minutes from BKC and 20 minutes from the airport.

Wagle Estate on the other hand houses many industries, including engineering, electrical, textile, pharma, rubber and electronics companies and more recently IT. Its infrastructure is developed and its proximity to Mumbai city is a major advantage. The social fabric is fairly developed.

Before choosing a locality, make a list of your needs. The locality should be able to cater to them on a daily basis and at the same time should bring you good returns in case you wish to sell off the property. Check, research and read about the areas before putting in your money.

Check out Commercial Property in Wagle Estate, Thane by Squarefeet Group in Thane

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in

Residential realty attracts 60% of overall investment in 2016, Q1 2017: Report

While residential and office real estate remained favourite asset classes for domestic and foreign investors, residential property market has edged the commercial segment in in 2016 and the first quarter of 2017.

During this period, residential projects including townships across India attracted an investment of over Rs 26,000 crore, while commercial projects including IT, on the other hand, got almost half of this amount at slightly over Rs 13,600 crore, showed a JLL India report.

Land attracted 2.5% of the overall investment at Rs 1,065 crore, while retail could attract only 2% or Rs 870 crore due to the lack of quality mall supply, the report added. These investment figures are a combination of debt and equity.

"Only in 2014 did investment in the office asset class go past the corresponding figure for residential. In all the other years from 2010 to 2016, residential has been the preferred asset class for both institutional and private equity (PE) investors. Interestingly, equity flows have reduced in the residential sector in the last four-five years and made way for largely debt and structured instruments," said Shobhit Agarwal, MD - Capital Markets & International Director, JLL India.

According to him, the relative slowdown that this asset class has seen over the past three-four years has made investors somewhat conservative and made them turn to construction debt, last mile funding and bundling receivables to ensure that their investments are protected against the lien of the asset. On the other hand, equity flows in the commercial asset class turned stronger, indicating that large investors are keen to look at equity positions, although the right asset remains a key consideration.

The increasing share of equity financing is a key indicator that investors are looking to become project partners and points towards their strong positive sentiments for commercial assets. A major consideration in recent times for commercial assets has also been the impending launch of REITs (real estate investment trusts) in India. It remains to be seen if REITs will eventually change these sectoral inflows in the years to come.

Immediately prior to the global financial crisis (GFC) in 2007-08, the office market witnessed healthy leasing transactions and bustling construction activity. However, all this traction came to a virtual standstill as the GFC erupted, leading to a host of unfinished buildings and a perceptible lack of space demand. Consequently, there was a sharp decline in office market rents and capital values over the subsequent periods.

Even before the office sector began to come out of the woods and display some green shoots of recovery in 2011, the residential sector had already picked up the slack and was driving the industry forward. Increase in new project launches, sales and price appreciation became the norm and there was enhanced investor activity as well. This asset class became the darling of both institutional and private equity investors who were looking to make good their losses from the office asset class, Agarwal said.

Some strategic investors, however, realized the growth potential that the office asset class had in the long-term in India, and that the lull was a temporary one as occupier activity would again emerge stronger when India regained its edge as a preferred destination for back-offices, high-end software development firms and financial services. These investors banked on the lower capital values and high yields for rent-yielding assets in 2010 and its upside potential.

Check out Residential projects in Kasarvadavali Thane by Squarefeet Group in Thane

You may also contact us at - +91-22-25452903, 66543333 or
Email us at - sales@squarefeetgroup.in

Squarefeet Group

Satyam Building, 2nd Floor, M G Road,
Opposite Navpada Telephone Exchange, Above Punjab National Bank,
Naupada, Thane West - 400601
Maharashtra, India

+(91)-22-25452903, 66543333

info@squarefeetgroup.in