Archive for January 2017

Bank of Baroda offers cheapest home loan rate, 25bps lower than SBI at 8.35%

The move could trigger a rate war as banks are flush with funds, and loan growth since April has been almost negligible during the current financial year.

Bank of Baroda offers cheapest home loan rate, 25bps lower than SBI at 8.35%MUMBAI: Bank of Baroda (BoB) has outdone market leader State Bank of India (SBI) in cutting rates on home loans, which it now offers at 8.35% as against SBI’s 8.6%. Historically, SBI has been the cheapest in the home loan business and its closest rivals offer loans around 5 basis points (bps) higher than the country’s largest bank (100 bps = 1 percentage point). This is the first time a nationalised bank has undercut SBI.

The move could trigger a rate war as banks are flush with funds, and loan growth since April has been almost negligible during the current financial year. Following the cut in rates by SBI to 8.6% for women and 8.65% for others, HDFC and ICICI banks cut rates to offer home loans 5 bps higher than that of SBI.

SBI might retaliate by bringing down rates further as it has kept some head room for further reduction. Last week, while announcing the rate cut, SBI chairman Arundhati Bhattacharya said that the bank had increased the spread on the home loan as part of a ‘business strategy’ and might again revise its rates depending on what the competition does. Although SBI had cut its one-year benchmark by 90 bps, it brought its home loan rate down by only 50 bps from 9.1% to 8.6% for women borrowers and 8.65% for others.

BoB is headed by P S Jayakumar, a former Citibanker, one of the two lateral recruits by the government. While the government has nudged banks to cut lending rates, the thrust on home loans is also driven by the bank’s search for a secure loan that will provide better returns than government securities. BoB has also cut rates on car loans to 8.85% and on loans against mortgages to 10.35%.

In a statement issued here on Monday, BoB said subsequent to reduction of benchmark lending rates, i.e. MCLR (marginal cost of lending rates) by 55 bps to 75 bps across all tenors with effect from January 7, 2017, BoB has reduced home loans by 70 bps to 8.35% — the lowest among all lenders. The revised rate of interest shall be applicable to all loans sanctioned with effect from January 7.

“On a home loan of Rs 50 lakh, reduction in interest rate by 0.70% by Bank of Baroda will help a homebuyer to save Rs 2,496 per month and approximately Rs 9 lakh during the loan tenure of 30 years,” the bank said in a statement. The bank is inviting existing borrowers of other lenders to get the benefit of lower rates.

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

Farmers to join stir of homebuyers in Noida Extension

They have also decided to take the protest forward in the coming weeks. Farmers from Greater Noida are now expected to join their rallies.

Farmers to join stir of homebuyers in Noida ExtensionNOIDA: The homebuyers of Noida Extension, who are on an endless wait for delivery of their houses, have now reached out to the farmers to bolster their movement against builders, Credai, Noida Authority and the state government.

According to the buyers, Noida Extension has over 58 housing projects with over three lakh apartments. Of these, only 15,000 have been delivered so far. On Sunday, they staged a protest with the slogan, ‘No House No Vote’, calling over 10,000 buyers in the area to boycott the forthcoming polls.

They have also decided to take the protest forward in the coming weeks. Farmers from Greater Noida are now expected to join their rallies.

Ironically, one major delay for the construction of the houses between 2009 and 2011 was the protest by farmers against the land acquisition. This period in Greater Noida West’s real estate construction history, termed ‘zero period’, is applicable for payments of penalties and fines on both the buyers and the builders.

“We will support homebuyers in their protests. Whatever form of protest they choose to adopt, we are ready to join forces with them, because both farmers and buyers are victims. They took our land in the name of industry, but actually built houses for people. Now the people they built the houses for are not getting them. This shows both farmers and the homebuyers have been duped. We will join all rallies with the buyers in the weeks to come,” Teekam Singh from Patwari village of Greater Noida, a representative of Kisan Sangharsh Samiti, told TOI.

Meanwhile, buyers have announced continuous protests every weekendagainst the builders, Credai and Noida Authority.

“This week we held a road rally, a slogan protest and a Twitter protest against Credai, builders and Noida Authority. We have called for a poll-ban and a movement on Twitter, ‘#NoHouseNoVote’. Next week, we will take our voice door to door, and urge more homebuyers, who have not received their promised houses so far, to desist from casting votes. The farmers have agreed to support us in this movement,” Abhishek Kumar, president, Nefowa, said.

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

Budget 2017-18: Industry demands relaxation in Income tax, standardization of construction material and raising HRA deduction limit

For the long-term, cuts in income tax rate, and possibly in stamp duty for home registration could be measures that may help the real estate industry in getting a jump-start.

Budget 2017-18-Industry demands relaxation in Income tax, standardization of construction material and raising HRA deduction limitNEW DELHI: Real estate industry has high expectation from the upcoming budget 2016-17. Stakeholders are demanding that central government gives relaxation in income tax rate, provide clarity on GST, raise House Rent Allowance (HRA) deduction and announce policies to standardize construction materials in order to uplift the real estate industry.

Here is what various stakeholders are demanding from the central government:

Sunil Mishra, Chief Business Officer, PropTiger

It’s time for the Industry to acknowledge that demonetisation had a severe impact on sales, as potential buyers kept on postponing their purchase decision, waiting for an imaginary fall in property prices. We expect some confidence-boosting measures in the upcoming budget, which will put more money in people’s hands, and that itself will bring back home sales to pre-demonetisation levels. Under that, specifically, some cut in the tax rates for middle-income groups will be the most awaited measure.

For the long-term, cuts in income tax rate, and possibly in stamp duty for home registration could be measures that may help the real estate industry in getting a jump-start.

Rattan Hawelia, Founder & Chairman, Hawelia Group

In Union Budget 2017, policies on standardization of major construction material should be addressed so that cartel such as in cement and other supporting industries can be controlled which is affecting the cost of housing to the end user. Moreover, tax clarity on REITs should be worked on by the Government making it a viable tax structure and thus easing the investment options. All such policy reforms will give momentum to the struggling real estate sector and 2017 can be the year of remarkable progress in real estate.

Anuj Puri, Chairman & Country Head, JLL India

The government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. The current limit of Rs. 2 lakh is insignificant, given the ticket sizes in cities like Mumbai where most houses are priced at Rs. 1 crore and above. Also, tax concessions on house insurance premiums could be introduced to encourage end-users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs. 1 lakh and be auto-set to match inflationary trends in a financial year.

While the goods and services tax (GST) tax structure has been announced, the real estate industry is waiting with bated breath to see which tax rate is applied to the real estate and construction industry. Clarification would also be needed on the abatement scheme, and whether credit for input tax would be allowed if the composition scheme has been availed by developers.

Salaried persons get house rent allowance (HRA) as a component of their total salary, and can therefore claim a deduction. This deduction can be substantial in cases where the salary and its HRA component are higher. However, self-employed persons and those who draw lump sum pays without an HRA component can only claim a maximum deduction of Rs 2,000 a month under Section 80GG. The Budget can and should address this anomaly.

Sachin Sandhir, Global Managing Director – Emerging Business, RICS

Directly or indirectly, the real estate sector contributes to over 15% of India’s GDP. It has been asking for industry status for quite some time now. In its absence, developers are forced to borrow at high interest rates and comply with a stringent evaluation process. Unavailability of funds at a reasonable rate of interest delays the construction process and increases the final cost of homes, negatively impacting the end consumer. Giving industry status to the entire real estate sector, instead of granting infrastructure status only to the affordable housing segment, would help in pushing the housing demand in India. We hope to see this announcement in the upcoming Budget.

For the real estate sector to really grow and execute its projects on time, various government approvals should be given in a timely manner. Developers have for long been demanding single window clearance to remove bureaucratic delays, which in turn delay delivery of homes. Research by RICS indicates that a single-window clearance system would drastically boost the real estate sector in India.
We have not seen a single REIT listing till date because of the presence of multiple taxes. Until tax hurdles are removed for developers and asset holders, it is highly unlikely that we will see any REIT listing. The government should recognize the capacity of REITs to improve market conditions for the real estate sector and remove the policies constraining their growth. The government should look at:

· Reduced level of taxation of REIT income

· Waiver of capital gains for the developer at the time of transfer of property into REIT

· Removal of service tax on lease premises

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

Haryana govt may act against Unitech as panel points to impending failure

Taking note of the various complaints against Unitech, the CM had on Apr 11 directed that a panel be set up by Gurgaon deputy commissioner.

Haryana govt may act against Unitech as panel points to impending failureNEW DELHI: In what could make the Haryana government to act against Unitech, a committee set up by the chief minister has reported diversion of home buyers’ funds by the realty major and collective failure of its management and board, driving it into possible bankruptcy.

ET has accessed a copy of the confidential report submitted to the state government. The panel, with the National Institute of Financial Management (NIFM) on board, says the company is staring at a “potential business failure” and recovery proceedings.

CM Manohar Lal set up the panel in April last following consumer complaints about delays in the company delivering homes in Gurgaon. Senior officials of the state government said they were deliberating on the report.

“All key management personnel (and) board of directors including independent directors have failed to discharge their duties and obligations under the statutes and decrees,” its report says. It is proven that Unitech diverted funds collected for residential projects to commercial projects or other business requirements, it alleges.

Unitech spokesperson Priya Kapoor said the company had no knowledge of the report’s findings and claimed that it was ramping up construction activity and working closely with customers to ensure delivery.

“We have not received any report or its finding from NIFM to respond to your queries. The Haryana government has been supportive in terms of processes and clearances for project deliveries,” Kapoor said in an emailed response to ET’s questions.

“In some projects, Unitech has opened joint development accounts with customer as one of the signatory and joint monitoring committee to have periodic review on progress and expenses. This has helped us to regain customer trust and speed up construction and delivery activities in these set of projects,” she said, adding that the company has ramped up construction activities on some more projects by raising funds from internal accruals and financial institutions.

“The amount required towards project development and completion is lesser than the customer receivables. Also, the balance unsold inventory with substantial value would be created on the completion.

The amount received from the customers of these projects is lower than the spends done by company in development, land costs, government charges and finance costs,” it said, referring to allegations of fund diversion.

Unitech has been under the Haryana government’s scrutiny for failing to deliver on projects across Gurgaon. Taking note of the various complaints against the company, the CM had on April 11 directed that a committee be set up under the Gurgaon Deputy Commissioner and NIFM be roped in to give an “unbiased view on the matter”.

Unitech is also facing a number of court cases filed by home buyers. Last month, the SC lifted a stay imposed by the Delhi HC on proceedings against the company and its directors before different courts.

The report calls Unitech’s business model “ambitiously conceived, inefficiently executed and operated on customer funds”. On the company’s financial health, the committee says its analysis reveals a negative position of `11,076 crores and a very poor Altman Z score of 0.85, indicating an “impending business failure”.

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

How drones will solve land disputes in NCR district

Two dozen satellites, a specially modified short range drone and a team of experts has for the first time created a digital map of the district.

How drones will solve land disputes in NCR districtThe idea started with one of the several property disputes that the national capital’s neighbouring district of Gurgaon has got used to by now. Two of India’s prominent real estate developers were locked in battle over a sliver of land – one coming up with a commercial project and the other building a new set of residential apartments.

What should have been a fairly easy matter to resolve was complicated by the fact that despite several attempts to demarcate the two plots, government officials with available tools could not accurately locate a seasonal rivulet at the centre of the problem.

For a country where land is at premium and often in the middle of business and personal feuds, India has an antiquated method of measuring and recording it – depending largely on painstaking ground surveys and decades old maps in which errors have amplified by both commission and omission.

A new initiative that has won this year’s National eGovernance award hopes to reverse this, creating what are perhaps the most accurate maps in Asia that can be used to verify land holding, demarcate boundaries and help resolve land disputes pending in Gurgaon.

Two dozen satellites, a specially modified short range drone and a team of experts that has been at work for over two years has for the first time created a digital map of the district, with geo referencing at land holding levels that has helped identify errors that crept into official land department records over the years.

“We found that in the Manesar Tehsil for instance, errors had crept in between 1957 and 2016. These errors were measured at 7.39% and have been brought down to just 0.1%,” Gurgaon Deputy Commissioner T L Satyaprakash told ET.

While giving these digital maps legal validity is the next big challenge, this is the first time that digital rights of records (jamabandis) with land holdings verified conclusively can be generated. “The resolution of these maps make them the most accurate ever used in Asia for land record management purposes.

The resolution of 5 cm generated with the help of a special drone is a big improvement over the 20 cm resolution that has been used in a Singapore project,” Satyaprakash says. This new age tool will assist the administration on its most difficult duties – checking on encroachments, collecting property tax, urban planning and conclusively resolving the thousands of land disputes that have burdened the legal system. Officials estimate that cost for the pilot project in Gurgaon is just slightly over `50 lakh.

The plan is to progressively connect several government databases to this digital map – a linkage to AADHAR numbers for example can generate land parcel IDs that can be used to instantly verify land sale and purchase transactions. The end product could be a public website that can be a one stop shop before any land transaction.

If implemented throughout the state of Haryana, the project has the potential of attracting industry as well which can access the digital database to plan a production hub with adequate available land, transport links, resources and expansion potential.

A lot of work however is still pending to draw up a comprehensive database, including gathering more accurate aerial imagery. The drone that was being used to map the district for example, could not get accurate readings of urban Gurgaon – magnetic interference led to it crashing thrice, bringing up costs. India may for the first time have a clear, dispute free platform to generate land titles, what remains to be seen is if this is taken ahead.

How drones will solve land disputes in NCR district

How drones will solve land disputes in NCR district

DISCLAIMER
The news and data posted here is from various sources, published and electronically available. We have taken all possible care to verify and crosscheck the accuracy of the same. However, despite due diligence, sources may contain occasional errors.www.noidapropertydealers.co.in will not be responsible for any errors in such an instance.

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