Affordable Housing On High Demand

India’s urban housing shortage is primarily driven by people requiring affordable housing.According to a recently conducted  customer survey to identify the most preferred budget for purchasing a house in 2014. Almost 80% of the respondents have a budget of less than Rs. 70 lakhs for buying a house in India. While cities such as Mumbai and Delhi are not in a position to cater for affordable housing, there are few other cities one can look towards for buying houses within a limited budget.

Affordable housing

According to a study by the Ministry of Housing and Poverty Alleviation (MHUPA), India has an urban housing shortage of about 19 million units. While there are several housing projects available, they are beyond the reach of the common man. A wide gap exists between the demand and supply for housing.

According a customer s, about 48% participants have a budget less than Rs.40 lakhs for buying a property. Another 32% of the participants can invest within the range of Rs.40 – Rs.70 lakhs and about 11% can invest more than Rs.70 lakhs but less than Rs.1 crore. Only 9% are capable of investing more than Rs.1 crore in the real estate market in 2014. This explains that there is still a huge demand for affordable housing in the country.

Metros offer affordable housing

In a study conducted by Knight Frank during the second half of 2013 for the tier-I cities, it was found that there are certain cities that still offer affordable housing. The study found that Bangalore was the most affordable residential market with about 77% under-construction projects falling below the price tag of Rs. 50 lakhs. Chennai was the second most affordable city in the country with about 75% projects falling below this price tag. Interestingly, though one may feel that Bangalore residential real estate is more expensive than few other markets, Chennai was found more expensive on the basis of weighted average prices. Hyderabad too came close to Bangalore and Chennai in affordability.

The weighted average prices of Bangalore, Hyderabad and Pune were found to be far less than that of Mumbai and NCR. Mumbai, despite small price corrections in newly launched projects,

still falls beyond the affordability range, with almost 29% of its under-construction projects costing more than Rs. 1 crore. Pune is another city that has emerged as one of the most sought after real estate destination with decent affordability. This is primarily due to its proximity to Mumbai and the demand spillover to nearby cities. The weighted average price in the city is higher than that of Bangalore and Hyderabad, but still lower than that of Chennai.

Apart from tier-I cities, several tier-II cities such as Coimbatore, Kochi, Indore and Lucknow are slowly emerging as investment destinations. While these are definitely more affordable than the tier-I cities, they still need sufficient infrastructure growth to start competing with tier-I cities as real estate hot spots.

How do Eco-Friendly Homes Help To Save Money ?

With modern design and beautiful interiors, Srihari Allamsetti's bungalow in Bangalore looks like just another building made of concrete and bricks. It is not.

When Allamsetti was planning to build a bigger house for his family, he aspired for a home that was 'earthy'. Around two years after first consulting an architect, the family moved into its new home, built with stabilised mud blocks. The family harvests rain water for drinking and cooking. It treats waste water in the garden. The bungalow also has a large basement which gets day light and is visually connected with the rest of the house.

"The house cost us Rs 1,350 per square foot, including construction and fittings. This is the same as what we would have spent to build a traditional house," says Allamsetti.

CHECK OUT: Best Eco-friendly home appliances

Allamsetti is part of a small, but growing, tribe which swears by eco-friendly houses. With an increase in awareness about conserving resources and lowering the carbon footprint-the amount of greenhouse gases an entity emits-going green is the in thing in the real estate market, both residential and commercial. And, it's not just individuals. More and more developers are marketing their buildings as eco-friendly. Does going for a green home make sense? It does.

Price Advantage
"At present, India has 800 million square feet green built-up space, of which 40% is residential. We expect it to touch 1 billion square feet by 2012. The number will double by 2014," says S Raghupathy, executive director, Confederation of Indian Industry (CII), and head of the CII-Sohrabji Godrej Green Business Centre.

Green homes offer quality living space. They also help you save money. 

"A green building can lower energy consumption by 30-50% and water consumption by 30-70%," says Raghupathy.

"If you live in a green building, you save on things such as power and air-conditioning. For example, a good design can reduce the use of air-conditioning. If you factor in these savings, green buildings can be much cheaper," says Majumdar. Right now, availability of green materials and consultants is limited. 

So, the price of an eco-friendly home can be a bit high. This should not be a worry, say experts.

"When we take the full cycle cost of a building, there is a negligible increase. The incremental cost of using green technologies such as insulation and hypo-thermal glass is maximum 5-8%. As savings are also high, you can recover the additional cost in 3-5 years," says Mili Majumdar, director, sustainable habitat division, The Energy and Resources Institute (Teri).

Eco Apartments
Eco-friendly homes are not just for people building independent houses. As awareness grows, an increasing number of builders are offering "eco-friendly" apartments and villas.

TRENDS: Real estate offering better return than gold these days 

"Eco-friendly homes, as a concept and product, are at a nascent stage in India. The awareness level is much higher in case of commercial projects. Having said this, we have started getting enquiries about such residences. As consumers become increasingly aware of the advantages of living and working in an eco-friendly environment, we will see a gradual increase in interest in such properties," says Pirojsha Godrej, executive director, Godrej Properties Ltd.

RATING CRITERIA Eco-friendly buildings are evaluated on several parameters before being given a green rating - Site planning and eco-friendly building design Preservation and protection of top soil and landscape during construction Heating, air-conditioning, ventilation, lighting and electrical and water heating systems Optimisation of building design and structure to reduce demand for conventional energy Integration of renewable energy sources to generate energy Water and waste management Selection of ecologically sustainable materials for construction Indoor environmental quality (indoor thermal and visual comfort and air quality) Conservation of soil during construction and proper top soil for vegetative growth Renewal energy-based water heating system such as solar water heaters

Green homes are not a lifestyle statement for those concerned about their carbon footprint. Many builders are marketing their properties with the help of green ratings and certificates.

However, all properties being advertised as 'green' or 'eco-friendly' may not be so. Many small- and mid-sized builders call their projects eco-friendly just because they have lawns and landscaped gardens.

"If builders say a green lawn is eco-friendly, it is incorrect, because a lawn is not environmentally sustainable. The plants in it consume four times more water than the native species," says Majumdar.

"In most housing projects, the 'eco-friendly' label is a greenwash. The concept has not caught on in the real estate sector, except with a few developers. These homes tend to be more expensive," says Chitra Vishwanath, an architect who specialises in eco-friendly designs.

Project Certifications
At the time of buying a 'green' home, checking certification from a rating agency will help you distinguish between a green-washed and a genuine eco-friendly project.

THE ECO WAY Insulate roof and walls Add thermal mass for insulation to ensure that the roof and walls radiate less heat into the room. Lower heating from windows Reduce the size of window glasses on the east and west or use double-glazed glasses to lower heating. Use alternative energy Invest in solar, bio-thermal and wind energy generating equipment. Harvest rain water For a family of five, the cost of a 7,000-litre rain water harvesting system is around Rs 50,000

Factors to consider before investing in residential property

Investing in residential property is one of the most important decisions that has to be taken during an average person’s lifetime. Hence, it is imperative that caution is employed while deciding on the ideal residential property to invest in. If the prospective buyer has a pre-conceived notion about what his requirements are, then selecting the property of his choice would not be a cumbersome process. On the contrary, it will be an enjoyable one.

There are various aspects that a prospective residential property buyer has to consider while making an ideal investment decision. These are some of the aspects that need to be considered:

·  Ideal time to buy property:

If the prospective buyer is looking to invest in residential property for the long-term, then it would be beneficial if he invests during the launch of the project. During the launch stage, property prices will be at their lowest. Moreover, he can also avail inaugural discounts. However, there are many pitfalls while investing in property during the launch stage of the project. Considering that many residential projects face considerable delays in completion, it would ideally be better to invest in a project that is nearing completion or is ready to move-in. This would negate the possibility of having to wait indefinitely especially if the buyer would like to gain possession of the property immediately.

·  Verification of documents:

Before deciding on a property that is ideal for him, the prospective buyer should verify certain documents that are involved in the sale transaction. Some of the documents that need to be verified are the conveyance of title in favour of the builder, the license, development right and approvals that the builder has obtained as well as the clear and marketable title of the residential project. Besides, it is also essential to ensure that an allotment letter has been executed and a sale agreement has been prepared based on the payments made by the buyer. It should also be ensured that recognised financial institutions have approved the project. The buyer should also make sure that he gets a Completion or Occupation certification from the builder. Moreover, he should also verify the tentative layout plan of the project as well as the plinth area of the building.

·  Deciding between a Freehold and Leasehold property:

Leasehold property is a property in which a lease is involved. The user of a leasehold property has the right to construct, develop and use the said property for a period of years that has been pre-decided. However, during this period, the user cannot claim or actually possess the property. On the other hand a freehold property is a property that is free from any liabilities and can be owned by the buyer permanently.

·  Infrastructure:

Besides the location, connectivity and the return on investment expected in future, the buyers should also take into consideration the present and the upcoming social and physical infrastructure facilities in the area. Social infrastructure facilities include schools, colleges, educational institutions, hospitals, religious institutions, banks, shopping centers, restaurants, entertainment facilities, water bodies, parks etc. Physical infrastructure includes transportation networks such as roads, railways, mass transit systems and airports. It also includes bridges, flyovers, footpaths, drainage and sewage systems, street lighting, water and electricity supply, postal and telecommunications services etc. Hence, it is essential that a buyer considers the present or future availability of such infrastructure facilities while deciding on a property to invest.

·  Liveability factor:

If the buyer has bought the property both as an end-user as well as a long-term investment, then it would be better if he stays in the residential property for a short period initially. This will give him a first-hand experience of the liveability quotient of the residential property. It will enable him to understand the pros and cons of the property based on which he can decide on the suitability of the residence for investment purposes. Moreover, he can make necessary modifications to the residence in case he is planning to rent it out in future, thereby enabling him to get higher returns on his investment.

Pune: A sustainable luxury market

Pune

It was only a few years back when a couple of high-end luxury projects were launched in Pune; analysts were busy with the cost-benefit analysis of the surge in the market. The rising interest of NRIs, HNIs and even global realty barons, soon made everyone realise that Pune had already made its mark on the luxury landscape of India. While a large section of market watchers earlier maintained that the smaller ticket size, compared to Mumbai’s luxury property, has been the prime driver of luxury in Pune, the fact of the matter is that Pune’s emergence as a ‘luxury destination’ has been due to multiple factors, including better infrastructure, a booming economy with MNCs attracting expats and more appreciation potential.

Analysts maintain that Pune is much better placed as a luxury housing destination than Mumbai or Gurgaon, since the supply is still in the right proportion to demand and thus, the speculative aspect has been largely curtailed. The supply overhang is much lower because of better absorption, and the demand promises to be consistent, as Pune’s unique combination of economic drivers ensure that purchasing power and aspiration for luxury homes will continue to grow. Moreover, it is becoming an investment Mecca for property investors outside Pune as well.

Arvind Jain, managing director, Pride Group, maintains that Pune holds a very prominent place on India’s luxury housing map. On this front, it now falls in the same bracket as Mumbai, Bangalore and Delhi, and is, in fact, gaining an increasingly bigger share of attention from investors and end-users alike. “There are several factors driving the demand for luxury housing in Pune. In the first place, luxury homes in Pune are more cost-effective than in Mumbai. The price contrast between these two neighbouring cities is actually quite striking and hard to ignore. Secondly, the concept of luxury living is more evolved in Pune, as luxury projects in the city tend to offer much better amenities and also surroundings. In a city like Mumbai, luxury is first defined by the high prices inherent in its upmarket locations. In Pune, it is defined by larger spaces, superior specifications and more luxury amenities,” points out Jain.

This raises the fundamental question as to whether Pune has the potential to grow the way other luxury destinations like Gurgaon have. Analysts tracking the market in this part of the world opine that the price differential is just one aspect that gives Pune an edge. Luxury housing in this city, offers better value not only in lower rates but also a superior luxury lifestyle experience.

Kishor Pate, CMD, Amit Enterprises Housing, believes Pune’s potential for growth as a luxury homes destination, both, from an end-user and investor perspective, is unparalleled. Demand for luxury units is eminently sustainable, and the generous supply of such projects is helping keep prices within the bounds of affordability of the target clientele. Also, there is very little, if any, speculative churn left in this market. According to him, an increasing number of multinational companies are recognising Pune’s unique advantages in terms of trained manpower, cheaper real estate costs and reduced logistical hassles. “More and more high-paying jobs are being created every year, leading to a steady demand for high end homes. At the same time, more and more NRIs from Pune, who have completed their high-paying tenures abroad, are returning every year. Also, Pune offers luxury in the truest sense. Areas like Sahakarnagar, Ambegaon, Baner and Wakad, provide scenic natural splendour as well as excellent connectivity to the city’s economic nerve centres. This aspect has proved to be a major draw for Pune’s Generation Z luxury home seekers,” says Pate.

On the perception that luxury projects in Pune are shaping up just due to being less costly than Mumbai, Abhay Kumar, CMD, Griha Pravesh Buildteck, says, this might be one of the various reasons but can never be the main driving force. According to him, Pune has an identity and culture which is different from Mumbai. Pune is today, shaping up as a self-sufficient city in terms of realty, infrastructure, employment, other economic activities, power, water supply, etc. “Historically, Pune attracted foreigners due to the Osho Ashram but in the last 15 years, this city has developed a space of its own. Being close to Mumbai has always been an advantage but some planned developments, have added new dimensions to this city. Today, IT in Maharashtra does not mean Mumbai or any other city but it is Pune first. Recently, most of the automobile giants have started their production facilities in Pune and when you see the luxury projects, you can identify a new signature of this city,” says Kumar.

The fact remains that the premium housing segment in Pune has continued to thrive even as the market for luxury homes in Mumbai declined steadily. In short, both, from an ownership as well as investment perspective, luxury housing in Pune will thrive and grow in the future. Moreover, the demand for luxury residential units in Pune is highest in areas that provide ready access to the central business district and employment nodes. Unlike Mumbai, these focal points are quickly accessible from various points in the city. This factor has played an important role in boosting demand for luxury housing, even in non-central areas.

The traditional luxury home locations in Pune such as Sahakarnagar, Boat Club Road and Kalyani Nagar, continue to see a lot of demand. Areas like Baner, Aundh and Ambegaon, are also very successful hotspots for luxury projects. Obviously, luxury homes in key areas such as Aundh, Baner, Sahakarnagar, Kalyani Nagar and Viman Nagar, will become increasingly valuable over time.

The driving factors for luxury property in Pune, are however, different from just the buyer-seller perspective. On the supply side, the developers are launching luxury projects because of the availability of big plots of land, relatively lower prices, potential market due to the IT sectors and Mumbai being in the vicinity, good infrastructure support by MIDC, Pune Municipal Corporation and Pimpri-Chinchwad Municipal Corporation. On the buyer side, the factors for luxury projects are good climatic conditions, a cosmopolitan population, good support by banks and financial institutions, better employment opportunities in IT and automobile sectors, closeness to the financial capital and better connectivity through roads, railways and airways.

Pune is not only shaping up as a better luxury market than neighbouring Mumbai but the potential is better than that of Gurgaon as well. Huge employment opportunities have made this city an attractive destination. The prices are much better than in Gurgaon, and so is the infrastructure that is quite ahead of Gurgaon. Climatic conditions have always been an edge for this city. It now has everything; world-class hotels and recreational facilities, malls, employment opportunities in sectors like IT, automobiles, manufacturing, agriculture, education, etc. This city also has adequate water supply to support its growth and power too, is not a problem in all parts of Pune. Thus, this city has all the ingredients required to stand out as a luxury destination in India.

Crafting A Dream Home : Pune: Infrastructure To Drive Realty In Wagholi

Crafting A Dream Home : Pune: Infrastructure To Drive Realty In Wagholi: Wagholi is now a days much  sought after residential destination in Pune now. However, still being in its nascent stages of growth, the infrastructure in the area needs to be upgraded. Sumeet Bhatia, Director, Pune, Cushman and Wakefield, explains, “Since Wagholi is not under Pune Municipal Corporation, the infrastructure provided has been limited and therefore it is still grappling with issues over water and electricity.”

“However, the locality has been witnessing some developments off-late. The Nagar road has been widened to six lanes. Also, the area is proposed to be a tangent to the ring road which will be planned to surround the city,” he adds.
In addition, the road connecting Wagholi to Eon IT Park, which goes through the Nagar Road, is under construction. Another flyover is proposed on the road connecting Wagholi to Shikrapur in the opposite direction.

Swift connectivity and public transport systems have played a major role in enhancing the real estate market along in this belt. Located near Lohegaon airport, the stretch offers excellent connectivity by virtue of regular bus routes and a much-improved road network. It can be easily reached from the airport as well as the railway station.

Wagholi is just 5  kilometer away from the Pune Airport located between Viman Nagar and Lohegaon and about eight kilometers from Pune railway station. Also, Vithalrao Vandekar Road and East Avenue provide easy connectivity to the National Highway 4.

Numerous such developments have enhanced the reality

prospects of the belt from Viman Nagar to Wagholi. With more infrastructure projects in the pipeline, the area is set to be one of the most preferred residential options in the city.

Pune: Infrastructure To Drive Realty In Wagholi

Wagholi is now a days much  sought after residential destination in Pune now. However, still being in its nascent stages of growth, the infrastructure in the area needs to be upgraded. Sumeet Bhatia, Director, Pune, Cushman and Wakefield, explains, “Since Wagholi is not under Pune Municipal Corporation, the infrastructure provided has been limited and therefore it is still grappling with issues over water and electricity.”

“However, the locality has been witnessing some developments off-late. The Nagar road has been widened to six lanes. Also, the area is proposed to be a tangent to the ring road which will be planned to surround the city,” he adds.
In addition, the road connecting Wagholi to Eon IT Park, which goes through the Nagar Road, is under construction. Another flyover is proposed on the road connecting Wagholi to Shikrapur in the opposite direction.

Swift connectivity and public transport systems have played a major role in enhancing the real estate market along in this belt. Located near Lohegaon airport, the stretch offers excellent connectivity by virtue of regular bus routes and a much-improved road network. It can be easily reached from the airport as well as the railway station.

Wagholi is just 5  kilometer away from the Pune Airport located between Viman Nagar and Lohegaon and about eight kilometers from Pune railway station. Also, Vithalrao Vandekar Road and East Avenue provide easy connectivity to the National Highway 4.

Numerous such developments have enhanced the reality

prospects of the belt from Viman Nagar to Wagholi. With more infrastructure projects in the pipeline, the area is set to be one of the most preferred residential options in the city.

Can a Vastu prevent home theft

Can a vastu safeguard your house from burglaries? Here are some Vastu tips and guide to prevent a home burglary.

Vastu shastra, the ancient Indian science emphasis on balancing the energy forces that move around in our houses at large. Vastu shastra has clearly drafted guidelines as listed in our epics and Vedas regarding various situations. Any building or house which is not constructed as per Vastu compliance or has an obvious defect as per Vastu shastra principles can bring bad luck, bad health and even theft hurting the house owners and its residents. There are various Vastu principles that require simple changes to the design and can ensure a safe home for intruders and unwanted theft. Let us take a look at some of the vastu guidelines that can help us safeguard our homes and offices.

Vastu direction for valuables: Keeping valuables and currency in the North West corner of one’s houses is not recommended as per Vastu. If you have a safe or a locker located in the North West corner of your house, it is time to change the direction of the safe or locker immediately. North western direction as per Vastu principles enhances the chances of a robbery. Remove valuable items from the North West corner, thereby reduces the chances of theft considerably.

Theft by an employee or a servant: If you have a servant room in your house, make sure that they are not residing in the south west corner of the house. As per vastu, properties or house with servant residence in south west corners are more prone for theft by servants than outsiders. Changing the direction of the servant room or shifting the servant room to a different direction can offset the negative vibes of a possible home theft by servants.

Main door: The main door of the house and subsequent doors of the house have a lot of importance in vastu. For a positive effect, the entrance door of the house must always be bigger than other doors of the house as a rule. The main door must always have two opening shutters. Single doors for small houses are allowed only if they are not located in the eastern or northern direction. Single door in the south is also considered inauspicious for home safety.

Any negative or evil pictures surrounding the entrance door or main door is also believed to attract negativity and possible forces of theft to one’s house. Keeping positive pictures like that of a lotus of lord Ganesha or Goddess Laxmi on the other hand keep the house safe from all negative forces and theft.

Document Checklist for NRIs Buying Property in India

NRIs have a variety of investment options in India. But real estate still remains to be one of their favourite options, not just because of high returns but also because of nostalgic attachment and the dream to come back to a safe and world-class retired life in their homeland. In addition, many NRIs are also interested in several Indian metros considering high growth prospective of the real estate segment in the country having attractive options including apartments, villas, plots and pent houses with world-class facilities.

NRIs have multiple options available and sitting at any corner of the world one can enquire about projects through live chats, see projects through video casts, 3D walk-through etc. However, many people have doubts regarding the documents required for processing home loans as well as property documentation procedures in India. So here’s a quick check list:

Documents for home loan processing:

• Passport and Visa Copy
• Copy of employment contract / Appointment letter / Work permit (which ever or all applicable)
• Latest salary certificate (attested by the embassy, if salary is not bank credited)
• Latest 6 months pay slips (if applicable)
• Last 1 year’s bank statement (of both overseas account and Non Resident External or Non Resident Ordinary (NRE / NRO) account)
• Power of Attorney (to be executed in the format provided by the bank and attested from Indian embassy)

Checklist of property documents:

Whether you avail home loan or not, the basic list of property documents as mentioned below is a must-have for all property buyers. If you are availing home loan, the panel advocate of the bank will go through these documents and certify the validity of the property documents. But if you are not going for loan, do consult an advocate to verify the documents and to see if the property has a clear title.

The documents required are:

• Title Deed (in the name of the seller)
• Prior Title Deeds (of last 15 years)
• Latest Tax Receipts (land and building if any)
• Updated Encumbrance Certificate (covering last 15 years)
• Approved Plan
• Building permit / Notice Of Commencement (from corporation, municipality or panchayat, if you are purchasing a house / apartment)

These are the basic documents required for checking the legal entanglements pertaining to the land. After going through the documents, if there are any complications, the advocate may call for additional documents if any clarifications required.

If the documents are clear, you can get into a sale agreement with the seller after giving a mutually agreed advance payment. If you are presenting the documents to the bank directly for legal verification, they will accept the documents only if accompanied by a sale agreement.

Ensure that seller of property has all documents in original. Original documents need to get verified by the bank and the legal adviser.

Types of properties

NRIs have no restrictions in buying any type of property in India. Be it a land, under-construction house / apartment, pre-launch property or any other. However, there are some restrictions for providing land loans to NRIs. There are also restrictions for NRIs to acquire agricultural land, unless it is through inheritance or acquired before getting NRI status.

Builder projects

For purchasing flats, villas etc. from a builder check if the project is already approved by the bank. If so, you need not take all these documents pertaining to the land. Instead, you need to only submit the sale and construction agreement, receipts of down payment and an NOC (Notice of Commencement) from the builder for making the proceedings.

Formalities and documentations are uniform in India. However, slight variations can happen as is the case with developed projects. A good and cooperating seller or a reputed builder can make your documentation process hassle free.

Registration formalities

As per current registration formalities the title deed needs to have the photograph, signature and thumb impression of the purchaser. In case of the absence of the purchaser at the time of registration, a Registered Power of Attorney can be issued to your immediate relative to sign the document on your absence. This needs to be executed before the registration date.

Documents required at the time of registration:

• Pan card (Permanent account number) if any
• OCI/PIO card (Overseas Citizenship of India/ Persons of Indian Origin)
• Passport
• Passport size photographs
• Address proof
• Registered power of attorney (if you are not physically present at the register office)

 Payment:

Payment to the seller can be made through any normal channels like cheque from NRE/ FCNR or NRO account (Non Resident External or Foreign Currency Non-Repatriable or Non Resident Ordinary), cash, or cheque from bank in case if you availed home loan. 

Advantages Of Small Unit Sizes

In these times where finding an affordable house in big cities such as Mumbai and Delhi has become difficult, real estate markets across the country are increasingly witnessing reduction in residential units sizes. While this has become a common trend across various cities, smaller units also offer advantages. For example, they improve affordability of residential projects. There are various other advantages of buying smaller units.

Residential units reduce in size

Many major cities in India are witnessing reduction in unit sizes in the last few years. According to Common floor data, the average apartment size in Bangalore in 2012 was about 1,640 sq.ft, 43% higher than the national average. However, it saw a reduction of about 10% during the third quarter of 2013. Similarly, areas in the Mumbai Metropolitan Region (MMR) saw a fall in apartment sizes in the last few years. According to Jones Lang La Salle, sizes of flats in Greater Mumbai in 2008 were an average 20% higher than those on a pan-India level. However, the unit sizes have greatly reduced and are currently almost 15% lesser than other cities, indicating a fall of approximately 31% since 2008.

Increasing property prices and slow economy can be cited as major reasons for this reduction in sizes. Minimization of risks is another reason cited for reducing unit sizes.

Smaller units increase affordability

Affordability has become the buzz word for the past 2-3 years when it comes to residential projects in the country. India currently faces a shortage of about 18 million units in urban areas. On the other hand, there is an average inventory pile up of 2.5-3 years. This disparity is because the supply does not match the demand. The demand is for affordable houses while the available units are beyond the reach of the middle-class segment. The only way to ensure reduced prices in cities, where costs are high, is to reduce unit sizes. When the unit size becomes smaller, the ticket size too reduces.

Other advantages

While affordability is the buzz word, there are other advantages of buying small units as well. For example, maintenance costs of smaller units are lower compared to those of bigger properties. It is also easier to manage and maintain smaller units. In modern times, due to the cost factor, smaller houses sell quickly. This minimizes the risks and liabilities involved in buying bigger houses.

Builders see advantages

For a builder, a reduced unit size immediately translates into a smaller ticket cost and more sales, as buyers prefer smaller ticket properties. From a larger perspective, it also offers other advantages. It certainly offers a competitive edge over other builders who have slow sales due to larger apartments selling at larger ticket sizes. At the same time, it significantly reduces the risk of inventory pile up. Several builders across the country are facing a situation of tight liquidity. Faster sales can release some of the pressure on them.

According to builders, buyer requirements have changed with increasing prices. Buyers and investors are willing to compromise on unit sizes. Hence, a good balance between unit sizes and ticket sizes can significantly improve sales.

EXPAT INDIANS DRIVE DEMAND IN PUNE’S REAL ESTATE MARKET

IT driven locations, across the country, have been witness to the migration of large educated workforce, be it Bengaluru, Gurgaon or Pune. This upwardly mobile, well-earning and lifestyle-driven class, hence, becomes a key demand driver for property in the given city. In Pune, the expat Indians have thus, emerged as the key demand drivers for property. The rise and growth of Pune, in terms of its overall economics, also suggests that the large workforce will have a major share in creating demand. Primary drivers in Pune are the migrants from sectors like IT, automobile, education, other manufacturing sectors, which have led to the growth of the city's economy. Better supply itself is pushing the demand from the urban buyer while in the past, the good climate all through the year, had made this city the pensioners' paradise. People from different walks of life are settling down in Pune and analysts often assert that they can no longer be termed as expats because they are willing to settle down in the city. However, the demography of the city is changing fast and with the educated workforce migrating to Pune, it has fast turned into a cosmopolitan place and the local crowd is fast becoming more dependent on the migrant population. Abhay Kumar, CMD of Grihpravesh Buildteck, points out that IT still rules the roost in Pune but there are other drivers too, for the real estate growth in the city. The improved connectivity between Pune-Ahmednagar-Aurangabad is driving the Raanjangaon belt on one side, while the news of the Navi Mumbai Airport has created remarkable interest in the Mumbai-Pune Express-way area too. Pune also has the natural advantage of location that allows it to grow from all sides. Lavasa road area, Pirangut, Paud, etc., too, have witnessed some encouraging developments. "Primarily yes, the expat Indians are the main demand drivers in Pune. The quality of development too, has been due to such demand 
    Ammul Goel ,Managing Director ,Pushpganga Ventures ,  shares that Pune has had four key sectors driving its growth - IT, manufacturing, education and auto. Currently, the IT and ITeS industries are the major demand drivers of the Pune property market. In several projects, there has been a very high percentage of IT and ITeS employees, which is representative of the overall industry. The other complementary driver is the demand seen by people from Mumbai. "Due to the high cost of real estate in Mumbai, Pune becomes a far more affordable investment option, especially in the range of Rs 50-150 lakhs range. The NRI population is also contributing significantly to this growth. It is important to note that properties in the Rs 35-40 lakhs bracket, have also seen a lot of interest from the manufacturing sector. However, most of the supply for this product range, is on the outskirts of Pune in areas like Talegaon and Chakan. Since Pune is an industrial and IT hub, it has a large immigrant population (about 30 per cent). All these factors, along with world-class educational institutions and the auto industry, have given Pune’s property market, a stable and sustainable demand for homes," explains Gera. 
    Vinay Phadnis, CMD, Phadnis Properties, however, does not agree that the increased economic activity and that urbanisation will lead to more migration and hence, the local economy will be more dependent on the expat population. The local economy cannot be completely dependent on the expat population. There will always be a fair market share of NRIs and locals investing in real estate. Another important aspect playing an important role is the MNCs investing in commercial property. About 1.2-1.5 lakh people migrating to Pune in a year for the purpose of education and employment, is the target market. "Due to competitive property prices, Pune becomes a rational and desirable choice for property buyers. A huge chunk of investors from the metros, are choosing to invest in Pune because of the price advantage and higher returns. There is a considerable balance in the number of budget flats for the mid-income group as well as in the luxury segment. Mid-income buyers are motivated by affordability and convenience, in terms of basic amenities, value-for-money, location, proximity, social infrastructure and so on. Due to a rise in the number of professionals, mainly from the IT and manufacturing sector, the demand for houses, mostly in the price bracket of Rs 50 lakhs to 1 crore, has been constant," shares Phadnis. A growing number of HNIs have contributed to the growth in luxury apartments. Investors are looking at the present situation as a buying opportunity. Infrastructure and urbanisation also play a vital role in the decision making process of selecting residential properties, as new projects which are closer to developed areas and have a growing infrastructure, will lead to greater appreciation value in future. There is also a huge rise in the demand for commercial spaces in leasing as well as outright sale agreement. There is indeed a large segment of NRIs investing in tier-II cities like Pune. Appreciating foreign currency rates in 2013 had actually increased the demand from NRIs who were investing in properties in the city. As a matter of fact, some of the luxury projects in Pune got a huge response from the NRI buyers. This is due to the fact that the urban environment is offering citizens from rural pockets, better opportunities and a better livelihood. With Pune being a magnet for such a migrant workforce, the property market in the city has benefitted from the same in the last few years. This has also propelled more companies to set up businesses here and it is certainly expected that the number of expats employed, will increase proportionately in times to come. Hence, the ratio of expat Indians in the Pune property market is only set to grow. 

s where the customers are well-travelled and earn well. One can observe the development of hotels, recreational joints, malls, etc., being the main driver for such growth which has been mainly due to the latent demand of the expats," says Kumar.

TIPS TO KEEP IN MIND FOR FIRST TIME HOME BUYERS

Paperwork is the last thing you think of when you look at a beautiful new apartment. Eyes full of dreams; you imagine your bed against the far wall of the bedroom, wonder how an overstuffed sofa might look in that airy, spacious living room and think of how much play area your little one might enjoy in her tiny, colourful bedroom. However, purchasing a house, just like purchasing any other asset, comes with more than its fair share of paperwork and dreary responsibility.

Understandably then, this drives the typical first-time home buyer to be either too careful or quite careless. While it is natural to be jittery about spending a lifetime's worth of savings, it is certainly not forgiveable to waste a golden opportunity to buy the right property just because you took too long to arrive at a decision. The idea is to strike a balance, cut the clutter and focus only on the critical, important things, such as:

1. Location: Nothing is more important than location. Before you even consider a certain property for purchase, check out whether the building or complex is located close to important amenities such as schools, hospitals, malls, etc. Even if you have to go further due to budget constraints, figure out all about transportation options, so that your family is not inconvenienced on a daily basis. The jackpot, of course, is if you can clinch a place close to your place of work. Imagine coming home for a quick lunch on a workday and getting home within 15-20 minutes after your day's work is done.

2. Price, budget and benchmarking: What is your budget? Before you step into the market, find out your net worth and your loan eligibility. Don't forget to deduct the cost of any other loans and liabilities you are still shouldering. The amount that remains is your final, real budget. However, this does not mean that the cost of the house can be the same as this figure. When you go out to look at properties, add another 11-12 per cent to the quoted cost. This will take care of additional expenses such as stamp duty, registration costs, VAT, brokerage commission, loan processing fee, et al. Once you have shortlisted a property, call a few brokers/agents in that area and enquire about the typical cost of a similar-sized flat in that locality. The amount they quote should not vary by more than 5 to 10 per cent against the amount that you are paying for your new house.

3. Loan eligibility and duration: With the salary your spouse and you make, you might be eligible for a loan worth a crore. However, should you really take on that big a loan? The answer varies as per your mindset. Some people argue that you should max out a loan, since it enables you to save tax from day one. Besides, as you grow in your career, so will your income, which will enable you to pay off the loan quicker. Nevertheless, the other side of the coin is - what if your situation changes? What if your spouse cannot or does not wish to continue his/her career? What if there is an unforeseen expense? The idea is to keep enough buffer to carry you through the lean periods as well. So, do take out a term life insurance worth as much as the cost of your house. It is simply a wise way to guarantee that your home and family are secure, in the face of any eventuality.

4. Life stage: Two years ago, Bandra-based Rakesh tied the knot with Malad-based Sakshi. Since their homes were small, the couple had to find accommodation on their own. Not wishing to move away from the western suburbs, they maxed out their loans to purchase a tiny one-bedroom apartment in Khar. Soon after, they had a baby and due to medical issues, Sakshi had to give up her career to take care of their child. Today, Rakesh is the only bread-winner, taking care of the monthly expenses, as he pays off their loan at a total EMI of Rs 95,000 per month. One can only imagine the pressure of being in this situation. So, before you buy a house, do consider your own life stage and your future in your chosen career.

5. Estimated maintenance costs: Figure out how much it will cost to live in this particular location, in this particular building. Some societies charge as much as Rs 10,000-15,000 for maintenance. If the house is far from the city centre, you might pay extra for rickshaw fare or other transportation.

6. Rent or buy, based on your career prospects: If your job makes you move cities/countries every few years, it might make more sense to purchase a house in the city where your family or relatives live and to take a place on rent wherever you might be working at the moment. This way, your property purchase brings you returns in the form of rent and/or price rise, whenever you choose to sell it and if you have a family nearby, they can be roped in to monitor or conduct occasional checks on your property.

7. Leave paperwork to the professionals: For your very first purchase, see if you'd like to get an experienced lawyer or real estate agent to look over the documents and make sure that all is in place. It's just an additional buffer against making beginners' mistakes.

Expected office uptake indicates realty boom in Gujarat

The property market in Gujarat is on a boom and the main focus is mainly on the residential apartments. However, office space is becoming a silent contributor and is acting like a catalyst in accelerating the pace of the market. Office space, though, lesser in transaction volume has a higher contribution in terms of its value and overall market sentiments of the state. More importantly, in terms of quality spaces, Return on Investment (ROI) and overall transactions, the Gujarat office market has performed better than the national average.

Office market in any given city is a true indicator of the potential of that property market. It is indicative of the fact that more jobs are emerging and thus, leading to retail growth. These two factors also have the potential to drive the residential property demand. The questions which arise here are: Has the Gujarat property market reflected on the fact that office uptake has been responsible for the booming property market across the state? More importantly, in future, whether the office market will be the prime demand driver of real estate in Gujarat?

Fact speaks for itself. Even though, there has been a decline in net absorption, it has been far better than other parts of the country. As per Cushman & Wakefield report, overall net absorption in Ahmedabad for the first three quarters of 2013 was recorded at 0.35 million sq ft, a decline of 37 per cent compared to the same period in 2012. Net absorption among all grades of offices for the third quarter stood at 76,000 sq ft, registering a marginal decline of 6 per cent from the previous quarter while grade A net absorption recorded an increase of 26 per cent quarter-on-quarter (q-o-q).

In terms of absorption and leasing activity, the city has been among the top eight cities during the year. Though, most of this absorption was concentrated primarily in the suburban submarkets of Prahladnagar and S G Highway, the existing high vacancy levels in these submarkets have led to a 6 per cent decline in quoted rentals at S G Highway and Prahladnagar. Low levels of pre-commitments in upcoming projects are expected to result in an increase of vacancies, thereby inflicting additional pressure on rentals in these two submarkets.

The city witnessed no new supply in the last two quarters. This has led to a decline in vacancies compared to a year ago despite the low transaction activity. Grade A vacancies have declined by 1.7 percentage points q-o-q to 31.3 per cent while all grade vacancies have dropped by 0.5 percentage points in the quarter to 14.2 per cent.

Rentals in the CBD declined by 8 per cent during the quarter, due to increasing vacancy in the sub-market. Most of the companies are opting for suburban areas due to non-availability of Grade A spaces in CBD. Rentals were stable at Ashram Road due to low vacancy and low transaction activity. Strata sales of office spaces continue to be the norm for most developments in the city and some projects have up to 60 per cent of their space sold to end-users.

Dhaval Ajmera, director, Ajmera Realty & Infra, says, “The current momentum for investment in Ahmedabad and Vadodara may be stable, but it is temporary as the state’s potential is strong and is based on real and concrete growth. It is heading towards a progressive path. Looking at the current scenario for the cities of Gujarat, as compared to other cities, the future yield will be high, making investors compliment their investment. Various industries in and around the city are fuelling the demand in state. Further, the property rates here are still realistic as compared to other cities which is a positive sign for investors and developers.

He adds further, “Real estate sector in Gujarat has shown tremendous developments in the last few years. It has proven to be one of the most sought-after locations when it comes to commercial properties, mainly due to its excellent infrastructure facility and being a trade hub. With the growth of varied sectors and industries,

Gujarat has turned out to be the home for many important IT companies, industrial and manufacturing units, corporations, KPO, BPO and ITeS firms. Hence, there has been a considerable rise in demand for commercial spaces to set up their offices.”

Manan Choksi, regional director, RE/MAX MGM, however, feels that since the beginning of the year 2014, there has been a contrasting change in the outlook and net absorption. According to him, the vacancy of commercial office space is reducing very fast and rental deals are more since 2013. New projects are picking up slowly but market looks positive in 2014.

“The focus is shifting from large offices to small offices with quality infrastructure. As far as Gujarat office market with respect to the other states is concerned, small and medium enterprise are ruling the office space consumption in Gujarat, while in other major cities, MNCs, banks, IT companies, and BPOs are the prime consumers of real estate. The next boom is expected in the office space of Gujarat realty as the empty buildings are occupied and new projects are soon to be launched. So, for the medium term, shortage in office space market is expected,” says Choksi.

The main purpose to move into quality office space is high quality physical infrastructure and keeping in mind the array of basic facilities like electricity, water, gas, district cooling, roads, telecoms and broadband. Further, today, modern hi-tech office spaces inculcate integrated townships, an entertainment zone, hotels, a convention centre, shopping malls, stock exchanges and service units. Gujarat is witnessing many such developments, hence, the percentage of people moving into quality office spaces is increasing at a faster pace. One such example is Gujarat International Finance Tec-City.

Analysts maintain that Gujarat has emerged as a forerunner due to all the improvements and progress displayed in terms of the activities to supplement the process of development. From real estate point of view, there is not one but many demand drivers for commercial properties in Gujarat like the infrastructure capacity, well maintained roads, flyovers and bridges.