Location vs Location

The property market in Mumbai is set for another locational price and demand and supply war.

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After the New DCR and specially over the past few months no Developer can complain that he is not getting permission from the BMC as if his files are as per the new norms there is no reason why he should not get permissions to construct.

This has spelt good news for the consumer or the home buyer as each location in Mumbai has something or the other to offer to a home buyer.

The only place we don’t have new construction today is South of Tardeo which is proper South Mumbai.

For further location analysis please visit the research section of our website.

http://www.mumbaipropertyexchange.com/research/consolidated-availability

We do see certain locations having an oversupply and certain locations still have a huge demand.

 

Benefit from the New Launches

A few years back there were limited launches owing to the DCR rules and subsequently in 2014 we have seen a lot of new launches.

The new launches not only give a home buyer an opportunity to get into the project at a nascent stage but also enable to create an asset or build a home with a good 3 to 4 year payment plan.

A few tips to get into the right project;

Ensure that you are dealing with a good brand in the market with proven track record. No point investing in a cheaper non branded property if you don’t get delivery on time or even get it.

Going forward the market is going to be brand conscious.

Get into it on day one and understand what are the options coming up. You can know about new launches by subscribing and registering on our website.

Find out a total cost sheet and understand if there are any hidden costs.

For more information on new launches and a personal discussion on your investments please feel free to call us on 9820030685.

 

Mumbai Property Rates

Mumbai Residential Market Analysis and Predictions: 2014 and 2015

It is absolutely impossible to predict what is in store for the Real Estate Market in the Year 2014 – 2015.

The market largely will depend on the following key factors:

  1. Political Results of the General Election in 2014.
  2. Government Policies to boost the Real Estate Sector
  3. State Government Policies on New DCR, Redevelopment, SRA and FSI
  4. Infrastructure Impact across Mumbai Metropolitan Region
  5. Dollar vs Rupee Valuation
  6. REIT
  7. Role of MMRDA and MHADA in the Real Estate Housing Sector
  8. Affordable Housing Policy of the Government
  9. Stock Market Performance – Both Bull and Bear phases.

Apart from the above, one has to keep a watchful eye on the Demand and Supply in the Micro Markets across Mumbai Metropolitan Region.

In the past 2 years, there have been a lot of New Launches of Real Estate Large Projects by various Top and Middle Range Developers in South Mumbai – Central Mumbai – Western Mumbai – Western Suburbs Extended.

It has been largely seen that there is a parity of Construction Quality, Project Amenities and Configurations. Even then, the prices are different in various developments primarily due to the sales strategies of the Developers based on land holding.

For Example : Lodha – The Park was launched at very competitive price in Worli and the Developer wanted to sell maximum units in the Launch Phase.

The holding capacity of the Developer and his sales strategy, acquisition costs, competition pressure, Premium on a Brand, Amenities in the project, FSI Calculations play a very important role in market dynamics.

If the Political unrest prevails, then we will see a subdued market till the sentiments increase.

If a firm Government comes with pleasing policies then the markets will remain strong. Strong really does not mean here, that the Prices will go up very high, but yes, the fence sitters and investors will surely come back in anticipation of higher returns on the back of a stable economy with better governance.

There are at least 200 Project launches expected in the entire MMR region in the year 2014 of Top Developers.

Year 2014 / 2015 will be the year when one will see a lot of Mergers and Acquisitions and Joint Ventures between Developers Rich in Land Banks and Developers with efficient and new age marketing strategies and a strong goodwill/brand.

The First Home buyers/Investors are not confident of timely delivery of New Projects and going forward Construction Linked Payment Plans, funded with Banks and Structured deals would play a bigger role in Sales, than the conventional sales ideas.

Innovation, Strategic Planning with keeping consumer interest in all respects will be the key drivers for generating better sales.

It would be advisable for Developers to launch the Project with full IOD, CC and other relevant permissions and Bank Loans than on Soft Launches without.

The Year on Year returns are expected to be in the range of 8 to 12%. A lot of this will vary based on infrastructure impact on Locations.

Mumbai by the (First Quarter – Second Quarter) may see the following infrastructure projects getting ready which will surely play a role in Micro Markets like Andheri East, Ghatkopar, Chembur, Lower Parel, Wadala and Thane.

  1. Mumbai Metro – Ghatkopar to Versova – Pending
  2. Santacruz – Chembur Link Road – Done
  3. Dual Carriage way at Thane to Balkum – Partially Opened
  4. Free way extension to Ghatkopar – Pending
  5. Bridge over Western Express Highway at Kala Nagar – October 2014

All these aspects will play a huge role in Capital Appreciation, Commercial office spaces, New launches going through 2015.

A few projects which are now pending and are in the pipe line are:

  1. Ghatkopar – Koparkhairane – Sea Link – which will boost Dombivali-Kalyan connectivity from Eastern Express Highway.
  2. Andheri West – Jogeshwari Highway Connectivity.
  3. Ram Mandir Road – Goregaon to Highway connectivity.
  4. Monorail – Wadala – Lower Parel connectivity.

Any large infrastructure plan for the city of Mumbai to ease traffic and build connectivity will directly result in price appreciation in real estate.

Article – Written By Sandeep Sadh.

 

 

 

 

 

 

 

 

 

 

Mumbai Property Prices set to increase after 31st March 2014

Any news paper you see today in Mumbai carries dozens of ads of Gudi Padva offers and below it a fine print saying Book before 31st March 2014 and save few lacs rupees.

This essentially means that after 1st April 2014, you will see an increase in the Property Prices in Mumbai.

With Stock Markets on a high and with lots of new launches, the home buyers are back in the market, but with a cautious approach this time.

The developers version remains that there has to be a cut off time for a decision and if there is no fear of a price hike, the home buyer continues to be on the fence. The Home Buyer feels it is an undue pressure on him to buy a house.

Unlike yesterday’s  market, the buyer has many options today, locations between Andheri East/Powai and Borivali, we have 50 odd projects of Top Developers competing with similar lifestyle projects, Thane has the same story with every developer giving the best possible amenities and prices.

The market sentiment is surely high, the Investor domination still remains agile and the impetus is more on the smaller ticket sizes. South Mumbai is seeing fierce competition and a few developers are seen to crumble under pressure.

Mumbai market is one of the strangest markets, where in the developers take ques from their peers and make large size apartments where the appetite is for smaller ticket sizes.

It is unpredictable as to which side the markets will go forward in May 2014, but the Developers have certainly added a cushion of pricing with the price increases slated to be hiked come 1st April 2014.

Sandeep Sadh -Mumbai Property Exchange.com

Investing in Mumbai Needs Research

5 Years back South Mumbai was a Hot Spot, 3 Years Back BKC Lease Rentals were Rs.300/- to Rs.400/- PSF and now they are around Rs.175/- to Rs.275/- at max. The high End apartments in South Mumbai were going at the highest prices possible.

Suddenly things have changed!!! What has happened??? Nothing much, New Locations with all the basics of a growing location with similar or better amenities have come up and it is not stopping.

Mumbai city is becoming a divided city and each Micro Market caters to the residents need in its own way and if let us say a Hospital is not available in a Micro Location, at least it is not 30 KM away, but in the vicinity of the next Micro Location or just not too far away.

Growing Traffic woes and poor roads etc and long commutes is driving Mumbai Residents to choose Homes, Schools and offices in good proximity to each other.

This has enabled most of the locations to have Hospitals, Schools, Colleges, Malls, Office complexes etc.  So, if you want the best appreciation, go North of where you are at cheaper prices and wait for 3 to 5 years for Capital Appreciation. Keep an Eye on Infrastructure and you cannot go wrong with your Investment.

In short, the Onus of Research is on you and when you Real Estate Advisor gives you some insights, please do not discount his findings.

 

Sandeep Sadh – Mumbai Property Exchange.

 

 
Mumbai Investor Destinations

Analysis of Mumbai Property Market

 Micro and Macro

(Numerous Micro and Macro factors in the market today have lead to the present day situation in Mumbai in 2013)

The stock market down turn after a continued bull phase seems to have finally impacted the real estate market and it once again confirms the deep relation of the two markets which compliment each other most of the times in thick and thin.

However, in the present day situation there are Macro and Micro factors and it is imperative to understand, relate and then act accordingly to understand what is happening around in the market. Higher Interest Rates, Double Digit Inflation topped up with a bit of a political un-stability on the horizon has also lead to the financial and liquidity crunch and these can be considered as Macro factors for the current phase.

Now, let us go back a few years and look at the entire real estate story, the past 3 years have been the best ever for real estate, this was also possible because the stock markets were booming, there was industrial growth all across and with political stability there was definitely a vision and of course the infrastructure development, launches of lot of projects by a lot of top developers across locations and other factors added to the glory of it. People had disposable incomes because of the stock markets (read: unconventional income) apart from their regular incomes out of the overall booming businesses to invest in real estate and create an asset and the pricing was looking attractive and the outlook was promising to the extent of the fact that people could see their money and investments yielding returns both from capital appreciation/lease rent returns in a short span.

Take the case now, we have the opposite happening and I am sure you are witness to the stock markets state of affairs today. There is a cloud of political un-stability, financial markets are down, people have nearly lost their profits and their principle amounts invested are looking to be at stake now. Owing to all this, there is a little bit of a slowdown in the economy and a lot of small and big fear varied factors have tamed the mind set of people and turned them conservative. The increased burden of EMI which was 7% in Year 2004 – 5 is now become 11% plus and it is a big deterrent to a lot of home buyers as they have to look at their monthly budgets today a little bit more seriously before they commit to the property purchase.

The valuations of property prices which were looking strong have started looking a little bleak because of the fact that they had actually grown too big owing to a rapid fire round of price inflations across and suddenly in all this the un affordability has kicked in. This means, only the people who have money or the need to buy a home will be the buyers in the property market. Each location has reached its peak in terms of property prices and now it seems to a few people that there is definitely a margin to reduce as the locations and properties do not value so much once you look at the ground realities. All these factors coupled together can be termed as Micro Factors as well.

The market as on date is not majorly impacted but at the same time the general feeling which has been witnessed is that people are waiting and watching and may grab a deal which makes sense to them financially. Also, if you look at the future prospects it is become a bit unpredictable and hence the inevitable slow down will be haunting the market for a while. This also means more and more waiting and watching and in turn stagnation may be round the corner.

Monsoons, are generally a slow period, but let us look at the micro picture and ground realities a bit deeply. Mentioned below are a few categories of buyers in the market, with the categorisation of buyers we see that the demand may be existing but it is very different and scattered across various segments and the market should also offer products to sell in the same segment, and only if the parameters of both the buyers and sellers match then things can move else, the slow down will remain eminent. It should also be noted that a lot of people have already bought homes and they are the executives working for MNC’s, Corporates, Banks Companies etc. and a lot of business families are also invested already in a small and big manner. The very fact that buyers are finding the properties unaffordable means that the cycle will slow down and hence the Micro Factors will play a big role in coming months.

Buyer Categories

Overview

Analysis/Deterrents

Actual users (NRI’s and HNI’s)

These 2 Categories are probably the only buyers left out today in the market as they have the money to still be deployed as they have invested a few years back and are yielding lease rent returns etc, and can afford to stay afloat and still on the look out for premium apartments.

(Analysis – Slow and Selective Demand, gets crippled at times when they do not get transparency in the transaction)

Property Investor

The Property investors have disappeared for a while, they do not think it is worth investing to get in at this stage and in any case, there are not many projects left out, which will give them enough Capital Appreciation and good lease rental returns and a lot of them cannot even recycle because they will have to pay Capital Gains on their initial investment etc. So they are sitting quiet as of now, In fact they are the best people to learn from as they have a deep sense of actual experience of the returns which is both on paper and tangible.

((Analysis – Weak Outlook, low returns, shortage of new projects, builders asking for large amounts upfront while the possession is 3 years away)

Re-investment due to Capital Gains

These are forced buyers who are always in the market scouting around for a suitable match for their investments which may either be a distress sale which promises a future capital appreciation and lease rental returns, most investors today look at combination of both these factors.

Analysis – Very Slow and Selective Demand/ Limited availability of Capital Gain bonds

Upgrade Buyer

This category buyer is an evergreen component of the market and is always present in the market year on year as the back to back deal is not very easy to transact and the quest is always on for that dream home

Analysis – Extremely Slow and very selective demand (Extremely cumbersome as it is a double deal and to match all the parameters and synchronise it becomes a bit tough for the non seasoned)

First Home Buyers

Year 2004 through 2007 experienced the maximum activity in this segment and as per an estimate around 40000 families in the Mumbai region itself jumped into owning their first homes with maximum loan components, the first home buyers generally like to book in an under construction and pay the entire price over a period of time)

Analysis – Ongoing demand but in select locations and projects. The prices in most locations are all time high and most people are unable to afford the current day prices and they are watching and looking forward for some kind of respite in the short span.

 

 

Source – Sandeep Sadh CEO Mumbai Property Exchange

Taxes For Leasing Property

Highlighted below are a Number of Taxes payable along with General Expenses incurred for leasing the property.

1.Fringe Benefit Tax payable by the Employee in case of a Company – Lease – 20% (Tenant to Pay)

2.Service Tax – Presently only on Commercial Property – 12.36% – (Owners to Pay)

3.Property Tax on Leasing/Licensing (more in commercial property) – (Owners to Pay)

4.Stamp Duty and Registration Fees  – (Jointly shared by both the parties in most cases)

5.Income Tax  – (Owners to Pay)

6.Society Maintenance/Non – Occupancy Charges charged by the Society – (Owners to Pay)

7.Municipal Taxes on Property in General – (Owners to Pay)

8.Incidental Expenses/Consultant Fees/Lawyer Fees (owners and tenant to pay)

9.Painting / Polishing / Furniture / Maintenance (owners to pay)

10.Sundry repairs from time to time (owners to pay)

11. Interest payable @ nearly 11% to the Banks for Purchasing the property.

Souce – Sandeep Sadh CEO Mumbai Property Exchange.

Buying a Home with Full Ready and Down Payment

Buying a Home with Full Ready and Down Payment

Real Estate buying is well known for having its own uncertainties and the stories which go around are really bizarre when it comes to the final commitment and sticking to it and closing the deal. Over the years in the Property Market in Mumbai it is been seen that there are slips and issues created for silly reasons and lapses.

One such transaction which we came across which went down smoothly, was where the Seller had sold the property, got the money in his bank and he started speaking to us. Further more, when we went to meet the Seller, he carried a copy of his Bank statement showing the Seller his Cards right upfront and meaning REAL Business. The result was awesome as the seller was much relaxed and he knew the time lines without grey areas. The advantage buyer got was an additional 3% negotiation since the money was ready with him.

A few points i would like to highlight here which works well in this unique circumstance.

1. Home Sellers are surely to favor buyers who can pay the amounts in the least period

2 Helps to cut out a lot of unwanted discussion and focus on negotiations with Ready Money as a strong point even for a Premium Property.

3. Elimination of the entire Bank Loan process and the whole documentation and processes around it.

4. Additional saving cost for the Buyer with no extra fees payable to the Bank and Taxes around it.

5. Ready Money purchase removes any risks on the Home Loan Disbursement or eligibility.

6. Immediate Possession and in turn one can lease immediately.

In Mumbai property market, some times the Demand for a property outstrips the supply and with Home Buyers or Investors looking for Homes with ready money are tough to find as even from a Capital Gains perspective they have 1 year to go in for a ready possession property or within 3 years for an under construction property purchase if they have any Long Term Capital gains implications.

Also, getting the property approval from the Bank is another side of the story, where in if the Bank has to value the property, it is another 15 days process and if your housing society or your block has any paper deficiency like the Occupation Certificate has not come then it is another grey area.

Ready Payments purchases carry lower costs and risks and Peace of mind is priceless
Most importantly, full down payment purchases for ready to move in clear title properties bring an inviolable sense of security. Owning your home outright means never having to worry about covering your loan if you don’t need to. Going forward you can always get a Loan Against property or various loan products from the market.
Figure out how to pay Full Down payment.

Buying your Home with Full Down Payment seems like an impossible dream. Here are some tips to help you achieve it:

♣ Set aside amounts with you when you decide you need a home.
♣ Lock money in a long-term Fixed Deposit to earn interest.
♣ Set out home hunting when you have all the money you have with full confidence
♣ Do not spend money over depreciating assets
♣ Stick in your budget, even if you get an older building, review again and see if you can spend a few lacs on interiors
♣ Older houses have an advantage of lower outgoings as well.

paid infull

 

Sandeep Sadh