Bangalore Tops Mid-Income Housing Growth: Report

NDTV has good reports about Bangalore!

Bangalore has witnessed maximum appreciation of 41 per cent in the mid-income housing segment
during the last three years, while Pune tops the list with an average increase of 39 per cent in the high-end properties among the country's seven major cities.

In Delhi-NCR, housing prices rose by 22 per cent and 24 per cent in mid segment and high-end categories, respectively, over the last three years (June 2011 and June 2014), according to a report by global property consultant Cushman & Wakefield.

The report analyses the performance of the residential segment of seven major cities -- Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Pune and Hyderabad -- to rank the average capital value appreciation.

"Mid-segment residential properties in Bangalore market have seen the highest average capital values appreciation in the last 3 years (H1 2011-H1 2014), while Pune recorded the highest average appreciation in the high-end properties in the same period," C&W said in a statement.

The capital values of mid-segment housing have increased in the range of 14-41 per cent during the last three years, while those of high-end properties in the range of 16-39 per cent during the period under review.

In the mid segment, Bangalore recorded the highest average appreciation of 41 per cent, followed by Pune at 28 per cent Chennai (27 per cent), Delhi-NCR (22 per cent) and Kolkata (17 per cent). Mumbai recorded an average capital values increase of 16 per cent while Hyderabad saw a rise of 14 per cent.

In high-end segment, Pune recorded the highest increase in capital values of 39 per cent, followed by Bengaluru at 37 per cent and Chennai 34 per cent. Mumbai and Delhi-NCR recorded identical average increase of 24 per cent, while Hyderabad remained last with an average increase of 16 per
cent.

C&W said that North-west Bengaluru witnessed maximum capital value appreciation of 95 per cent, the highest among the top seven Indian cities, due to the launch of quality developments that garnered healthy demand due to their proximity to the international airport.

Commenting on the report, C&W executive director Residential Services Shveta Jain said: "Despite the disparity in levels of average appreciation in capital values in the past, it is heartening to see that against poorer economic sentiments, all markets have recorded capital appreciation."

Ms Jain said markets driven largely by end-users have recorded highest average increases in capital values, while investor driven markets such as Delhi-NCR and Mumbai have seen lower appreciation.

"This is largely because of the fact that in the last few years due to factors such as slower economic growth, devaluation of the Indian rupee against dollar and general unrest on account of factors such as inflation, slower rate of real estate development etc. which has led more probable markets of Delhi-NCR and Mumbai to see a slower rate of appreciation," Ms Jain explained.

20 - 40 lakhs properties are in high demand

As discussed on this page before, low budget housing in on the rise...

Magicbricks reports show the same. Read on...

Properties in the Rs 20-40 lakh range continue to be preferred with over 30% buyers in this range. Apartments are the preferred housing type with over 70% choosing to buy apartments.

The Housing Sentiment Index (IIMB MB HSI) assessed by IIM Bangalore and Magicbricks forecasts that homebuyers across 8 of the 10 cities surveyed expect real estate prices to rise over the next six months. The aggregate Housing Sentiment Index (HSI) measured across 10 cities this quarter stood at 108. (An HSI score of 100 suggests the prices would remain static). This quarter, the IIMB MB HSI buyer index includes two more cities, Ahmedabad and Kolkata, apart from Mumbai, Delhi, Hyderabad, Pune, Noida, Gurgaon, Bangalore and Chennai.

"The Indian real estate is bound to remain attractive in the medium term with faster growth expected in the Tier II cities. Competitively priced urban pockets such as Noida, where robust supply is backed with a promise of better infrastructure, received a thumbs-up from end users. However, active interest will take another 6-9 months as consumers expect prices to go up only after six months, post the 2014 elections." explains Sudhir Pai, Business Head, Magicbricks.

Mumbai posted an HSI of 106, turning positive for the first time. Healthy demand from Navi Mumbai and Thane resulted in this gain. Infrastructure developments in Navi Mumbai including the Trans Harbor Link and the proposed Greenfield International Airport are turning this location into an attractive investment option.

Bangalore topped the list of cities with an HSI of 140 witnessing a further 15% jump in HSI from the previous quarter. Strong demand from the IT sectors and comparatively affordable prices make this city an attractive option.

Hyderabad, with an HSI of 97 witnessed a 4% drop this quarter. The Telangana issue weighed down sentiments in this city.

The Seller Survey introduced last quarter rose by 5% to 164 this quarter. Of the sellers, 38% are doing so to book profits while 30% want a bigger accommodation. Of the respondents, 24% are looking to sell property in the Rs 20-40 lakh range.

Key Findings of the Jan-Mar 2014 Report

> The National HSI remained positive at 108 and includes 10 cities beginning this quarter
>Mumbai witnessed positive HSI of 106 for the first time mainly due to surge in demand in Navi Mumbai
>Bangalore, with an HSI of 140, posted a further increase of 15% compared to the previous quarter
>The Telangana issue continued to weigh down sentiments in Hyderabad and dragged HSI down to 97, a drop of 4% from the previous quarter
>The Seller Index witnessed a 5% increase to post an HSI of 164.

Summarizing the findings, Uma Sitaraman, Lead Researcher, IIMB-Century Real Estate Research Initiative (CRERI) stated, “While the average waiting time has dropped to a little over 8 months this quarter, the range-bound increase witnessed across cities and sectors indicate that people are waiting for the election results to make real estate decisions. Clarity will set in based the election results and well after the new Government takes charge.”

Properties in the Rs 20-40 lakh range continue to be preferred with over 30% buyers in this range. Apartments are the preferred housing type with over 70% choosing to buy apartments.

The complete IIMB MB HSI report is available for free download: http://www.magicbricks.com/iimb-hsi/

Guidance value of properties to be revised

Deccan Herald reports...

The Permanent Valuation Cell (PVC) of Karnataka Stamps and Registration department has commenced the process for revision of guidance value (government value) of immovable properties across the State.

The PVC had recently directed all the district registrars to furnish information on property transactions in their jurisdiction and also suggest changes to be made in the existing rates. “We have commenced the spadework now. It will take another 45 days to complete the process,” Inspector General of Registration (IGR) and Commissioner of Stamps Adoni Syed Saleem said.

The State government has set up a 11-member cell to keep a watch on the real estate market and facilitate revision of guidance value at regular intervals. The aim is to rectify the mismatch between guidance value and market value and thereby help the government earn more revenue in the form of stamp duty. The PVC has been set up on the Maharashtra model.

The PVC will collect information on existing market value of properties and property registration in the State and will make recommendations to the Central Valuation Committee (CVC) headed by the IGR on the revision of rates. The CVC will fix the revised rates for properties after consulting the State government. Revision in guidance value will lead to increase in property prices.

No major revision

Saleem said the main focus of the revision is to rectify anomalies. “Certain pockets of properties left out in the last revision will be identified and guidance value will be revised suitably. As the revision of guidance was done less than a year ago, there will be no major revision this time,” he added.  The revision  - between 20 to 100 per cent  - was last done in August 2013.

Bangalore to lead the new job creation

This India Today article suggests new job creation and will we be looking at the rise of affordable housing?

Over 500,000 jobs are likely to be generated in India over the next two years, the bulk of them in Bangalore, Delhi-NCR and Mumbai, revealed a study by a real estate consultancy firm, CB Richard Ellis titled 'India Office MarketView Q1 2014'.

Seventy-eighty million square feet of fresh commercial office space would be ready for possession by 2015, most of these being IT/ITeS spaces that will bring in a fresh lease of recruitments, said a daily.

With growing absorption of office face i.e. about 60 to 65 per cent, approximately 400-500,000 employment opportunities may be realistically anticipated within the next two years, the findings said.

Sector-wise, the IT/ITeS and allied services sectors are likely to account for a substantial chunk of these new jobs, followed by banking, financial, services and insurance (BFSI) sectors, with research and consulting, pharmaceutical, engineering and manufacturing, and telecommunications bringing up a distant rear.

"Transaction activity was dominated by the National Capital Region (NCR), Bangalore and Chennai-representing about 70 per cent of the total space transacted during the quarter. The IT/ITeS, financial and services segments continued to drive demand for office space, according to the findings of CBRE's "said the report.

Half of the companies that participated in CBRE's European Occupier Survey 2013-2014 indicated that they prefer India to China for their global expansion plans. 

Sarjapur is the best location in Bangalore

Bangalore has been the fastest - rising city of India since the past few years . It has been the main growth is responsible for insistent real estate development and the IT growth. Being the IT hub of India, Bangalore has a multi-cultural population with excellent social infrastructure, superb educational institutes and regularly upgrading physical infrastructure. Currently, the most promising residential micro-markets are Sarjapur Road.

Real Estate development are growing up around Sarjapur Road, and other areas around the Sarjapur Road are witnessing a rapid growth . Bangalore's South and East area are about to saturated. But if there's one part that's still seeing large real estate action, it's Sarjapur Road. 

Read this fact finding article by Silicon India on Sarjapur trends.

The rates of residential property at Sarjapur Road in East Bangalore have appreciated by just 6 per cent during the last five years. From Rs 3580 per sq ft in the first quarter of 2008, the property rates here have increased to Rs 3830 per sq ft in December 2012. The year 2011-12 saw a depreciation of 6 per cent in the prices of residential space when the average rates fell from Rs 4390 per sq ft to Rs 4110 per sq ft. The prevailing property rates in the area are around Rs 4000 per sq ft.

In most of the cases, the Real Estate units are made affordable by reduced unit sizes, compromising on amenities and other USPs which were naturally provided as differentiators to the challenging projects in the Sarjapur Road . inexpensive housing has seen stable demand on the outskirts of Bangalore, in all directions. Availability of large land parcels at lower price points has optimistic of these developments.Sarjapur Road is one of the most promising markets for villa projects in bangalore. Villa and row house developments, High-end residential property are most active with in Sarjapur are very sensitive in terms of amenities, product quality and unit sizes.

Romancing with affordable housing armed by PE funds

India's affordable and low-income housing sector, which is short of millions of homes, is set for expansion with the segment finding favour with real estate-focused private equity funds. 

New York-based not-for-profit venture fund Acumen is looking to invest in this space in 2014, while Mumbai-based PE fund Avenue Venture Partners has tied up with Pune's Vastushodh Projects to invest in their affordable housing projects. Another PE fund, Brick Eagle Capital Advisory, plans to incubate companies to fill gaps in the affordable-housing ecosystem.

India has a shortfall of about 22 million homes, of which 5-6 million are in the affordable housing segment. "Affordable housing is recession-proof and sells regardless of market conditions," said Rajesh Krishnan, managing director and chief executive of Brick Eagle Capital Group. 

Read more at:
http://economictimes.indiatimes.com/articleshow/34448885.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Bangalore's Top Posh Expensive Realty Area

Once Bangalore emerged as a IT hub of India, state government of Karnataka started to develop well connected roads with least traffic to reach most of the places within the city. Since then few places come into picture as the posh areas of Bangalore by the surrounding of infrastructure, shopping malls, educational institutes and IT parks. Now a days these localities also changed as the posh region of Bangalore with existing High-class areas of Bangalore. 

Millionaire of bangalore's real estate customer are looking for privacy, customization, classy technology (digital safety, electronic supervision systems, temperature control, and wireless), amenities such as helipads, and professional service and maintenance operators.Here we are listing few emerging and existing posh localities of Bangalore.

Read more here: http://www.siliconindia.com/realestate/news/Bangalores-Top-Posh-Expensive-Realty-Area-nid-165791.html

New launches in residential segment increase by 43% in Q1: Cushman

Business Standard's news article on increase in the new launches.

The number of new launches in the residential segment during the first quarter of thisyear has increased by 43% at 55,000 units across eight major cities. Bengaluru recordedthe largest number of units launched at an increase of 22% at 16,838 units, according to a report by real estate consultancy firm Cushman & Wakefield.

Bengaluru was followed by Mumbai and Chennai with new launches at 10,698 units and 7,436 units with a growth rate of 93% and 191% during the first quarter. NCR saw the sharpest decline in number of new launches by 18% at 6,555 units.

Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield says, "Developers have taken a conscious decision to launch projects in the firstquarter of 2014 as they anticipate sales to improve this year in the secondhalf foreseeing economic stability that will most likely prompt purchasedecisions from end users.

"The luxury segment grew by 120% in the first quarter. The largest number oflaunches was in the mid-end segment at 90% over the previous quarter. Rental values remained stable in Ahmedabad, Chennai, Hyderabad and Kolkata during the quarter. However, the rental values in a few high-end segment submarkets of Bengaluru, Mumbai and NCR registered a decline in the range of 3-10%, primarilydue to large companies and individuals adopting a cautious approach in the wakeof overall economic scenario and political environment in the country.

A fewmid-end segment sub-markets of Bengaluru, Pune, Thane (Mumbai) witnessed an increasein the range of 2-14%, the report said.According toanother report by Dun & Bradstreet (D&B), the demand in residentialreal estate segment is expected to pick up in the second half of FY15.

With GDP expected to grow by 5.5% as per D&B estimates, coupled with easingof inflationary pressures towards the end of FY15 are expected to improve theconsumer sentiment. However, thedemand for office space is likely to be subdued during the fiscal.

Goldman Sachs’ Bangalore realty project still mired in uncertainty

Madhurima Nandy writes about the pending delay in GoldmanSachs' Bangalore property here.

Close to a year after Goldman Sachs Group Inc. invited bids for its 6.5 acre under-construction project in Bangalore, where a Four Seasons hotel and residences were planned, the transaction is still mired in uncertainty.

Goldman Sachs, the 75% majority shareholder in the property, accepted a bid by real estate firm RMZ Corp. to buy the project towards the end of 2013.

But that deal came to a standstill when its Bangalore-based partner Century Real Estate Holdings Pvt. Ltd, which holds the remaining 25%, brought inEmbassy Property Developments Pvt. Ltd three months back, said people familiar with the development.

The deal, for which Embassy Property has now emerged as the frontrunner, is far from closure as Goldman Sachs and Century Real Estate remain at odds on the buyer and sale proceeds, the people said on condition of anonymity.

With close to Rs.300 crore of bank liabilities on the asset, creditors—a consortium of banks led by State Bank of India (SBI) that also includes Axis Bank Ltd—have set a 30 April deadline for the partners to make the required interest payments, failing which the loan would turn bad.

Last week, Century Real Estate infused Rs.6 crore into the asset towards an outstanding interest payment, which will bring temporary relief and keep the account running, said one of the people cited above. “The remaining payment will be made shortly,” he said.

It remains to be seen if the lenders are satisfied with the partial payment or will opt for auctioning the property.

SBI declined to comment on individual accounts. Axis Bank didn’t respond to queries.

“The deal will be closed in two months’ time,” said Jitendra Virwani, chairman, Embassy Property.

Embassy plans to pay the liabilities along with Rs.330 crore to secure the asset in its entirety. The Bangalore-based developer is closing a large transaction to buy Vrindavan Tech Village, a 106-acre special economic zone in Bangalore.

The City View project in Bangalore’s Yeshwanthpur area is a joint venture involving Goldman Sachs and Century Real Estate, the land owner. Construction at the site began in 2010. So far, around Rs.600 crore has been invested in the property in addition to some long-term debt.

While RMZ, a leading developer in office space development in Bangalore, continues to hold on to its offer, as confirmed by a company executive, the situation has left Goldman Sachs baffled.

“Though there is a genuine bid on the table from RMZ, which has also put in the money, the deal is being held up. In the last three months, there has been no other formal bid to counter the one from RMZ, where, in fact, the deal could have been closed long back,” said another person involved in the matter.

The deal will take a long time to conclude owing to the number of differences that have cropped up along with way, analysts say.

Many real estate transactions are taking longer than usual to conclude owing to a number of reasons ranging from seller-buyer disagreements to valuation differences and a slow-moving property market.

“Hospitality is a tricky asset class, different from other real estate assets, with the former throwing up operational demands,” said Rajeev Bairathi, executive director of the capital transaction group at property advisory Knight Frank India. “Several developers and investors who committed to building hotels are in the process to exit, and there are many such opportunities across cities today.”

Don't be stingy

Many customer I see who are looking at buying a property be very stingy. Let me explain.  

I always tell them it is important to check for documents and have a lawyer or a deed writer check them for you. Wouldn't you check the background of a doctor or read reviews of a restaurant before you got to use their services? If you take so much care for a simple expenditure why would you risk being swindled when buying a property?

Spend some 10k and get the documents and your agreement checked before finalizing the same. In Telugu there is annoys proverb. It says won't you buy a rope to tie the horse as it is costly?

Think again. Get the docs checked before you buy the property.