Highlights of Union Budget 2011-12 relevant to Housing/Housing Finance Sector

Key budget announcements relevant for the housing sector are as follows. Source: NHB

Proposal Implications
1. The existing scheme of interest subvention of 1% on housing loans has been liberalized by extending it to housing loans upto 15 lakh where the cost of the house does not exceed 25 lakh from the previous limit of 10 lakh and 20 lakh respectively.

The proposal is expected to improve affordability levels and generate increased demand for housing loans particularly from LIG and MIG segments. The proposal will encourage the State and/or Private sector agencies to undertake construction of houses/flats within the cost range of upto 25 lakh, which will cater to the needs of a vast section of the population.

2. On account of increase in prices of residential properties in urban areas, it has been proposed to enhance the existing housing loan limit from 20 lakh to 25 lakh for dwelling units under priority sector lending.

The proposal will encourage lending by Banks to the Housing Sector to meet their overall target of 40per cent lending to priority sector. As a result, banks lending in this segment will witness significant increase in the coming years due to  increased demand for housing loans in this segment.

3. To boost rural housing by providing housing finance to targeted groups in rural areas at competitive rates, the budget proposes to enhance the provision under Rural Housing Fund (RHF) to 3000 crore from the existing 2000 crore.

The proposal will encourage the provision of Housing Finance to target sections in rural areas, thereby  contributing towards mitigating the housing shortage in rural areas.

4. To prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated setting up of Central Electronic Registry under the SARFAESI Act, 2002. This Registry has become operational on March 31, 2011.

The Registry will help in creation of a centralized data base of all immovable properties and will enable  prevention of frauds in housing loan cases involving multiple lending from banks/HFIs on the same immovable property. This will  constitute an important step in developing the market infrastructure.

Housing Schemes in Kerala

(i) Bhavanashree: This scheme is the Housing Micro-finance wing of Kudumbashree.
This scheme is primarily aimed at providing micro finance to Self Help Group (SHG) members for construction of new houses as well as for repairs to existing houses. The loan amount under this scheme ranges from 30,000 - 50,000 to be disbursed in stages.

(ii) EMS Housing Scheme: The main objective of this scheme is to provide house sites with a house to the landless poor and a house to every homeless poor family. The program is implemented through village panchayats, municipalities and corporations.

Emerging Kerala 2012 – Curtain Raiser

Emerging Kerala 2012 – Curtain Raiser (Source: www.emergingkerala2012.org)

Emerging Kerala is planned as a biennial Global Connect, the first being ‘Emerging Kerala 2012′ scheduled to be held from 12th – 14th September 2012 at Le Meridien Convention Centre, Kochi, Kerala. The Hon’ble Prime Minister of India will inaugurate the three-day event.
Several programmes are planned in connection with and running up to ‘Emerging Kerala 2012.’
These include:

• Business meets
• Sectoral conclaves;
• Domestic and international road-shows
• Discussion and debates.

Besides the inaugural session, the first Global connect will have

• Plenary Sessions
• Sectoral presentations;
• Round tables.
• Business to Business (B2B) connects;
• Business to Government (B2G) connects.
• Cultural performances.

The Event as well as its associated programmes would have the support of the Government of Kerala (GoK), in addition to various Trade and Industrial bodies. The Confederation of Indian Industry (CII) and National Association of Software & Services Companies (NASSCOM) are event partners.

Kerala real estate bubble or boom? An exploration of truth behind the possibility of a bubble in Kochi

The rapid growth of the housing market in India and especially Kerala in the recent years has raised concerns about its sustainability and implications for financial and macroeconomic stability. As prices continue to spiral out of control in the Kerala property market, many an aspiring customer is beginning to wonder if this is a real estate trend or is it a bubble that is waiting to burst? The Nandanam Consultants team explores the nuances of this growth and we try and draw conclusions based on available information.

Short video clip (Hindi) on possible real estate bubble in India

The bursting of asset bubbles in the housing market has often been associated with severe economic crises, especially, recessions caused by sharp reduction in spending as a result of loss in the consumers’ power to leverage against capital gains. The OECD Economic Outlook uses two approaches to evaluating housing price bubbles. One is price-to rent ratio and the second is the user cost of housing. One of the most significant factor that drove the growth of housing market in India in the recent years was the easy availability of bank finance at affordable interest rates. As per RBI, the retail loan portfolios of banks including housing and real estate advances expanded at rates ranging between 22-41 per cent in the last decade. The RBI has also tightened the grip on investments by asking banks only to lend 80% thereby reducing scope of a bubble formation.

Observations

For Kochi and Kerala, the user cost of housing has gone up significantly over the last decade or so. As per the Residex which tracks residential property prices in Kochi and other cities, key indicators emerge:

1. The property market in Kochi corrected by 15% from 2008 to 2009 due to global recession.

2. The market bottomed out towards end of 2009, further falling by 12%. So in net the market fell by 27% over the period of 2008 - end of 2009

3. The year 2010 - mid 2011 saw property prices climb by 35% in Kochi

4. The property market tanks and falls by 32% is last three quarters in Kochi.

Inference

The growth recorded in point 3 above was not unique to Kochi. Chennai, Lucknow, Faridabad, Patna, Mumbai, Bangalore and Delhi also recorded significant property appreciation. Much of it was due to the flow of capital post recession and positive sentiments about the India economy and GDP growth. Speculative investments by customers and NRIs were at its heights and people felt there was no looking back. From the developers point of view, they wanted to cash in on the lows of 2009 and sell off most of their inventory at record profits - resulting in higher prices every quarter. 

Post mid 2011, no city in India, has recorded as significant a correction in property prices as Kochi. Clearly indicative of the fact that the price increase was a bit too much, a bit too soon in 2010 - 2011. As per CREDAI " A lot of excess inventory was created which did not sell off. Developers were announcing ten projects a month during that period. "

Key Ratios to consider

(1) Price-to-rent has been on a rising trend since 2003. So although prices have been increasing rents in Kochi have not kept pace. (2) House price to household disposable income also don't have a correlation as although disposable incomes have increased prices have run too fast.

In summary, the information available at our disposal for Kochi clearly points to a speculative real estate bubble which was created. However, in the back drop, the market has also corrected significantly over the last year with the real housing demand coming into picture today. The bubble which was created was predominantly in the luxury segment since most of it was speculative investment by NRIs, but it was not much in the budget segment.

To conclude, although ratios (1) and (2) above appear to be true, the prevailing correction in Kochi, gives hope that prices would stabilize. If they don't and prices continue to rise we could be in for an asset bubble break down in a year or two. If not we could be in for a stable future. But that would be talking too soon.

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The Pre-Launch property game. Proceed with caution.

What is a Pre-Launch project

A pre-launch project is one for which either the entire land has not been acquired (that is, the developer does not have full legal sanction of the title), or clearances (like licences, land conversion and site plan) have not been obtained, or both. Developers are allowed to launch a project only after all clearances, and full ownership of the land have been obtained. But when a developer cannot raise the entire amount needed to launch the project from internal accruals or equity, he turns to private financiers, investors and end-consumers by 'pre-launching' it. He works on the premise that full legal sanction will come through by the time the project is ready.

Techniques used by Developers

The marketing technique used in a Pre-Launch project is quite simple. It is "Enter Early and Buy Cheap". The temptation and carrot offered by the developer to a customer mostly are:

1. You get to choose your site or apartment you want to live in before everyone else. So you can choose the right floor, best view, road side etc. etc.

2. You get the best rate possible for the property only now

3. The pre-launch rates would only be valid for about 3 months and then rates could be up by 200 or 300 rs. per square foot.

From the developers point of view , every four to six months, as the approvals trickle in, he can keep hiking the prices. Post full legal sanction he can launch the project and by then he has enough bookings in his kitty.

Perils of a Pre-Launch project

One of our customers, brought a project called "Salarpuria Senorita" in Sarjapur Road, Bangalore in 2010. The Project was in Pre-Launch. Salarpuria being a reputed builder, put up huge sign boards at the sight of the property and hoards of people walked into enquire. The project was being offered Rs.300  per square feet lower compared to launch (which was scheduled 4 months away). The promise was some one who books now, would get about Rs. 5 to Rs. 10 Lacs benefit depending on final price and size of the unit. The booking amount for pre-launch was Rs. 5 Lacs.

As the story goes, despite waiting for one year, the project was not launched. The person's money was stuck because in the interim other builders launched projects and he did not take the money back in the hope that Senorita project would launch. Salarpuria finally returned back the pre-launch booking money with bank interest, leaving the person in question flummoxed and exasperated.

This is typical of most pre-launches which do not take off. Six months would already be gone by the time you realise that the promises are not being kept and the construction is not happening as promised. By then, you would have sunk in between Rs 5-15 lakh . If you buy a plot in the pre-launch stage and the project is shelved, the only exit route is to approach consumer forums or courts, unless the developer returns the money. The riskiest move is buying into a project for which the developer has not acquired the entire land.

Checklist to avoiding perils in the Pre-Launch game

1. Check the title deed. Reputed and credible developers start the project only after acquiring 100 per cent of the land and will not shy away from showing the title deed

2. Look for the developers residential housing track record.

3. Be proactive and pull out if you start getting feelers that the pre-launch project is not going to launch in 4 to 5 months or if developers keeps giving excuses that approvals are coming shortly.

Seaplane Services in Kochi, Kerala. Now you can fly out of water!

God's own country would now also offer its tourists and country men, a sea plane facility, so that you can take right off from water!
 
The Sea Plane services are being launched in Kochi, Kerala. The state government has decided to introduce this facility in September this year as part of the Emerging Kerala Global Connect program. The government has taken measures to identify the area needed for this project. Once introduced, the service is expected to boost the water tourism of the state.

Emerging Kerala 2012 is scheduled to be held later this year in Le Meridien Kochi from September 12 to 14, 2012. Kerala, expects to close down investments by business magnets in projects such as Kochi Metro, Mono Rail, NIMZ project, High Speed Rail corridor and others through this conference.

The water transport terminal and office complex of Goshree Islands Development Authority (GIDA) is coming up at the authority's land on Goshree- Chatiath road. The GIDA has proposed to utilise the inland water resource available and would introduce modern and fast boats that provide residents a cheap, fast and safe mode of transport.

The tender proceedings of the Rs 6.33 crore project was completed by KITCO and according to GIDA officials Aluva FIT would initiate the project. The project is slated to get completed within one year, by August 2013.

Onam, Kochi Metro and Emerging Kerala expected to usher in property appreciation in Kochi real estate market

As Malayalees get set to celebrate their most awaited annual festival of Onam in the end of August, real estate developers in Kochi are the most anxious as well as exuberant. In stark contrast to the property correction which has been witnessed in Kochi over the last one year, developers believe that the gloom prevailing over the sector  will soon fade off and prices would again rise by 15 to 20% after Onam due to the triple bonanza - Onam , Emerging Kerala and the Kochi Metro launch.

In anticipation of a rise in price and demand for property near the Kochi metro stations, most developers have already bought parcels of lands in the proposed vicinity of where the stations have been announced. We had mentioned earlier why improvement in accessibility to mono rail or metro or LRT augments the real estate prices within a radius of 1-2 Kms of the station.

The end of Karkidakam masam and the onset of Chinga masam is considered an auspicious time for Malayalees. Most marriages, new business launches take place in this season and it is also an auspicious time to register a property. So Malayalees who are on the look out for property at the moment in Kochi, might be spoilt for choices by many developers. Developers also are hoping to close many new bookings in the Onam season and are preparing welcome bonanza's and discount schemes for home buyers. The key trend that is beginning to emerge however is that after the NRI driven demand, Kerala’s real estate market is now slowly turning in favour of the working class with a gradual shift towards the affordable housing segment.

Since common sense states that most users of the Kochi metro will live and breathe in the city, (than an NRI who would sit abroad), the demand for housing in areas near the metro station is expected to be real and measurable. There is a growing belief that the correction seen in the Kochi real estate market over the last many quarters, might be the prelude to a phase of stability in property prices.

In the interim some malls like Abad Nucleus at Maradu have also started selling individual shops, which is seen to be a new trend in the real estate sector. As per CREDAI Kerala, "Building rules which were amended three years ago, is the main reason behind the collapse of real estate sector in the state. Because of over supply, 40 per cent of residential properties have not been sold.In 2008, 10 new projects were announced in a month but now only one new project is announced in six months. In Thiruvananthapuram, the most happening place in real estate in the state, the property prices have doubled in 4 years."

For the sake of the investors, the developers and those aspiring to own their home in Kochi, we hope the predictions come true and the prices reign in, in Kochi and other parts of Kerala and offer stability.

Onam 2012, can then finally be one to savour and remember!

Kochi real estate market - Down but not Out. Fears of a bubble still strong.

If the statistics are to be believed, the real estate market in Kochi has seen a declining trend over the last 3 quarters starting June 2011. The drop itself is a staggering 32% over the quarters from Apr -Jun 2011 to Jan - March 2012 (data below) as per the RESIDEX index.  This also raises alarming noises amongst a section of the populace, who feel the real estate bubble in Kerala and specifically Kochi might be about to burst. The significant price correction along these lines in Kochi, can in no way be correlated with other 20 odd cities in India, some of whom have shown considerable growth over the same period for e.g. Chennai and Delhi.

NHB Residex is a housing index and first of its kind in India, provided by the National Housing Bank (which is wholly owned by RBI) on a quarterly basis. The objective of the index was to provide transparency to the real estate market in the medium to long term. The index tracks residential price movements and is currently available for 20 cities in India and is proposed to be expanded to 63 cities, covered by the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The index currently has a lag of about one quarter in providing data about the real estate market pertaining to a city.

As per the National Housing Bank "Actual transactions prices are considered for the study in order to arrive at an Index which will reflect the market trends. Primary data on housing prices is being collected from real estate agents by commissioning the services of private consultancy/research organisations of national repute; in addition data on housing prices is also being collected from the housing finance companies and bank, which is based on housing loans contracted by these institutions." 

In compilation of NHB RESIDEX the cities have been suitably stratified by administrative zones or municipal wards according to availability of the data. The sample size of price observations consists of 500-600 observations for each city. The index is computed by using Price Relative Method (Modified Laspeyre’s Approach). Under this method price relatives are calculated only once (at the basic stratified unit) and the weighted average of these price relatives leads to the index at next level. (Source: Hindu)

 Source: NHB Residex

 So how does one interpret the NHB Residex. The index is currently fixed with the year 2007 as the base and base index value as 100. If the value in Bengaluru was 100 in the previous quarter and 92 in the current quarter it shows an overall drop of 8% in real estate prices for the quarter.

DRILLING ONE LEVEL DEEPER INTO THE KOCHI REAL ESTATE DATA
 

A further drill down into the data provided by NHB on the Kochi market by locality is given below. As per the data, Fort Kochi Vili, Karugapalli, Vennala & Mammankalam has seen the biggest drop in real estate prices in the last quarter of around 23.75% (From 80 to 61) followed by Mattancherry, Chakkamadam, Cherralai; Panayapalli & Edakochi South which has seen a 20% drop in real estate prices.

Possible reasons that could be attributed to a slump in property values in Kochi are:

1. Slackening of demand due to high interest rates and inflation

2. Property rates hitting their peak from where they have started going downwards

3. Postponement of decision to purchase property on the part of the buyers

4. Oversupply of inventory and less sales velocity (number of units sold vs. number of units created)

5. Drop in speculative investments by HNIs and NRIs prompting a correction

CONCLUSIONS

Although the NHB data provides a good indication about the state of the market, it predominantly covers transactions which involve financing institutions. Thus a complete picture cannot be drawn from this data alone. Also since NHB looks at the overall market, there is no clear indication if specific segments like luxury apartments, villas have been more affected compared to budget properties which trade in the 30 - 60 Lacs bracket. 

Our recommendation for investors looking at Kochi as a property destination, would be to "not resort to speculative buying".  Since most fundamentals in Kerala for Kochi and Trivandrum are still strong, segments which have seen drop in property rates in Kochi, could further see a drop till the demand - supply mismatch is rectified.

Some protagonists also argue that the overall Kerala market is a real estate bubble waiting to burst. The NHB residex at present does not cover other cities in Kerala for us to compare if the Kochi phenomenon is something felt across Kerala. Going by the request of many of our customers, we are going to showcase an article about the so called housing bubble in Kerala and examine whether it is truly a reality or just a figment of somebody's imagination. 

You can write to us with your comments, suggestions or requests for any specific information on Kerala or Trivandrum real estate to nandanamconsultants@gmail.com

7 factors which determine the value for your property - Proven by research

Research studies conducted across the world, especially in developed economies, have used multiple methodologies to determine real estate values and the parameters determining it. The most popular among these is the hedonic model which ascertains value based on the distance from the central business district (also referred to as CBD), access to light rail transport and expressways amongst many other variables. The formula given below, shows the price function in the Hedonic regression model as a combination of factors like structural characteristics (s), neighbourhood characteristics (n), and environmental characteristics (e).

Price Function (P) = f (s1, s2, s3...sj; n1, n2, n3,...nj; e1, e2, e3,...ej)  Source:Wikipedia

Drawing from some of the best research worldwide, we list down seven critical attributes which have been proven to affect property values: 

1. Access to Light rail transport (LRT) - 'Al Mosaind, Dueker and Strathman' claimed a positive correlation between distance to LRT and property values. They argued that properties which were within 500 meters of the LRT got a much higher value, since it improved citizens accessibility to CBD and other job areas within the city. A perfect example is the monorail development within Trivandrum which could improve access to the CBD for the smaller suburbs and amplify real estate rates in areas which are in the vicinity of the proposed station. The correlation with accessibility seems to become void if the property is more than 1.5km away from the station of interest. 

2. Distance to CBD - A study done in Ohio (United States) for a period of five years and another done in Sydney (Australia) point out that distance to CBD is a critical determinant of real estate prices. Most researchers argue that this variable is more critical than accessibility mentioned above,although positive correlation does exist for the latter. However as cities become poly centric with multiple CBDs instead of being monocentric, real estate prices would be determined with respect to proximity to a particular CBD in the zone or the suburb. At present only MG road could be considered as the central business district within Trivandrum with a majority of banks, retail and business houses located in the area. With new retail and business hot spots emerging at Vellayambalam, Pattom and Kazhakuttam, new CBDs could emerge within the next decade in a poly centric model within the city and change the real estate pricing pattern. 

3.Clustering - As per the spatial distribution phenomenon, properties of a similar value appear clustered together than widely spread out. 

4. Promixity to Highways and Expressways - Properties located upto 2kms from major highways and expressways showed a much higher value and appreciation across many global studies. 

5. Proximity to Regional Shopping centers - Research has also shown than real estate which is in proximity to malls, and other regional shopping centers are more expensive than rest of the sample. At the same time, properties located too close to the shopping units saw a drop in real estate rates due to higher levels of noise, pollution and crowding on the streets. The buffer zone was usually about 2kms from the shopping area, within which, the prices seems to be lower due to above factors but increased incrementally after that. 

6. Comparable Sales Approach - 'Can and Megboulougbe' in their research proposed the comparable sales approach wherein they said that price history in the immediate neighborhood of the given property will have a spill over effect on the given property's market value. The lesser the distance between the anchor property (which got sold at a higher price) and the given property, the more the impact on the value. This correlation seems to nullify if the anchor transaction happened before six months or if the anchor property is more than 2kms away from the given property. 

7. Structural attributes - This refers to the size and type of the property. International research concludes that number of bedrooms and washrooms tends to have a positive effect on the property value given that all other factors are the same. Strucutral attributes by itself pales into insignificance if spatial parameters mentioned above are not favorable for the given property. Centralised air conditioning and even presence of senior citizens in a property tends to more propitious as per research. 

In summary a host of factors typically decide property rates and you can get a realistic approximation of value based on these. Since studies of a similar nature spread across many years have not yet been conducted in Kerala or for that matter Trivandrum, the true sense of if any of these seven factors have a particularly significant influence for real estate in the city is left to be ascertained. These 7 factors could act as guiding principles in helping you choose your dream home or property in the Trivandrum or Kerala market.

Don't get carried away by a sample flat

Although seeing is believing and experiencing your new home through a sample flat might be a pulsating experience for a home buyer, there are fallacies with this approach. A sample flat is one of the marketing techniques used by builders to convince customers of what they can expect when they get to live in their proposed house. To the buyers misery, not many are aware of tricks which could be used by builders in the sample flat. The marketing practice itself is not wrong and is more effective than traditional brochures or websites or emails from the builders point of view.

Factors to be considered while seeing the sample flat

1. Sample flats outside of the original property - A sample flat constructed outside of the original property could be deceptive. Most builders use the first floor of the property to showcase the sample flat to customers. A sample flat outside of the property might offer two or three balconies, great views and look more spacious than the one which you are planning to buy, which is not standalone but in a bigger apartment complex.

2. Great interiors - Sample flats usually come with exquisite looking furniture, well finished walls and paintings. More often than not your home won't come with the same embellishment or you would end up paying for the upgrade. To supplement this, the lighting and other artistic wall hangings used in a sample flat improves the aspirational value of the flat in the mind of the buyer. Some builders might even choose furniture sets which fits just well enough in the given space, so that it gives a feeling to the buyer of having enough space within the apartment

3. Thinner walls - Walls made of out wood or even gypsum boards could be used in sample flats which gives an impression of higher floor space. Gypsum which is used in the cement industry as a retarding agent, can also be customized in making the wall finish much more superior compared to cement plaster.

4. Taller ceiling - A sample flat could also look bigger when it comes with a taller ceiling compared to the original flat.

Nevertheless customers don't have much of an option since most of the sample flats are demolished before construction begins. And builders can put terms into the sale agreement that specifications might change later.

Ways around getting deceived by a sample flat
 
1. Look at 2 or 3 properties from the same builder to get an idea of the overall finish

2. Look for builders who offer sample flats in the apartment complex than outside so that it is more realistic

3. Don't be mislead by the aesthetics and interiors of a sample flat. Use the sample flat as a reasonable guide to how your home might finally be. To get a clear picture of your flat, look at the architectural drawing and layout plan and discuss with the builder to avoid future disappointment.

4. If you want to factor in the looks of the sample flat into your own flat, prepare a cost estimate for the same or consult an interior design firm or a real estate consultant privy with the matter.

Planning to buy land in 2013 - You might just turn lucky

As the world talks about the possibility of a global recession in 2013 we explore the after effects of such an event on the real estate industry in Trivandrum if it were to happen. We also predict why it might be favourable for buyers of land in Trivandrum to wait a little longer, if they can afford, to get that unbeatable price!

Going by news reports on CNN, MSNBC, Economic Times and all kinds of business media, all of Europe and especially countries like Greece & Spain are likely to remain in continued recession till end of 2013. Even the US market, might slip into a recession unless US law makers take steps as per Ben Bernake.

Now, the possibility of the recession might be 50:50 at this point, however the main aftermath of a recession are lesser growth, lower number of jobs and in general conservatism in peoples spending. The sectors which usually are most affected by recession are travel and hospitality and real estate. Since real estate is the source of demand for producers of steel and cement, the commodities industry as well subsequently takes a beating.

If we recollect the downturn in 2008 and 2009, a majority of real estate firms, provided any where between 15 to 25% discount's to sell off their inventory. Builders usually sacrifice on their margins if demand is not met to keep up with the liquidity.

However if you look at the current scenario, many expats especially those who are living in Gulf, US, Europe and Canada are looking forward to coming back into India, due to better job and growth prospects available locally. Some are even forming and starting up new ventures to cater to the demand in the Indian market. This does increase demand for housing especially in cities like Bangalore and Delhi which sees a lot of expats returning.

For Kerala, most of the NRI's live in the Gulf countries or the United States. A possible recession would mean lower demands for real estate in 2013 but it's after effects are that developers may cut corners and not provide all amenities as promised in their ongoing projects to keep up their liquidity. Larger projects and townships usually get more affected by recessionary trends as capital becomes scarce and costlier, leading to delays in project completion and frustration for the customers. The other segment which might be affected are smaller builders who operate very much on initial payments from customers to keep the project going.

Overall a recessionary trend might cut down prices for new launches or ongoing apartment projects by up to 15% but we cannot expect much of a drop in  prices in the less than 60 lac segment in Trivandrum and overall Kerala, which has quite a stable domestic demand. More drops in prices could be witnessed in the more than 1crore or super luxury segment. Volatility here would be pronounced as costly projects run the risk of huge capital investments and time to completion. Developers who promise amenities like water front villas and even golf courses, might take a relook at slowing down or providing these features post construction.

For land owners who are looking to sell recession is not an ideal time. The market having grown by about 20% in the last many years could wipe off a year or two of growth in recessionary circumstances. In such an event, one of the options could be to be proactive and sell the property before 2013 or be ready to wait out this time so that you don't have to compromise on the prices and are not adversely affected.

The real good news lurking during the recession might be for prospective land buyers in 2013, who just might crack a good deal, since a recession always lowers land rates by 10-15% due to lower demand and reduced flow of capital in the economy. So watch out for more news in this regard and you might be in into make a few good bucks!

Why developers and owners prefer joint development for residential projects

Own a sizeable portion of land that you are looking to sell and make money? Wait. Have you considered JDA or Joint Development. JDA is one of the best options available if you own a large piece of prime land in the city and are looking for prospective buyers. It could even fetch you higher than market rates, provided you get sound advice on the JDA process and get things right. More about JDA below.

It is fairly common to see developers and builders enter into development related arrangements with land owners rather than making an outright purchase of the land identified for their project. Paucity of good parcels of prime land is one of key reasons developers go for such joint development through out the country.

Land owners may grant rights to develop their land under an agreement entered on mutually agreed terms and conditions. The development rights itself can be granted in three different ways, such as by a joint development rights agreement, sole development rights agreement and through a development services agreement. Joint Development is the most popular amongst these.

As described in Mint  "In a joint development rights agreement, the owner provides the land free and clear of all title defects and encumbrances, and undertakes the development of such land along with the developer. In such arrangements, the land owner continues to own the land and shares the responsibility to develop the building project along with the developer. " The land owner and developer can either agree on sharing revenue out of sale or lease of the built-up space or owning the built-up space in an agreed ratio.

The Supreme Court of India has given concurrence to this proposition in the case of CAT v. Fazalbhoy Investment. In this case, the court held that there exists a concept of dual ownership in India wherein one person can be the owner of the land and another person can be considered the owner of the structure on that land.  From the land owners point of view, a JDA enables an individual land-owner to cash in on the skyrocketing real estate prices, but at the same time, it also helps him/her to retain a portion of the land/property for his/her own use and living.

If you are looking at entering into a JDA, you must pay due attention to aspects like Service tax and Stamp duty, otherwise you may land yourself in trouble while parting with your land.

Two brand new ready to occupy apartments in Trivandrum

Keeping in mind that many of our customers look for ready to move in properties we present two properties here by SFS which are ready to move in currently. One at Vellayambalam and the other near Technopark.

SFS Cyber Gold at Technopark has 1 & 2BHK apartments available for purchase ranging from 687 to 1192 sq.ft. Cyber Gold has some of these amenities like Designer entrance lobby,Fitness centre, Swimming Pool and Kiddies Pool with changing room & toilet,Recreation Multi-purpose hall, Independent letterbox for each apartment, Beautiful landscaped premises, Intercom in apartments,lifts, caretaker room,and security cabin,Care taker room & Security cabin, Proximity sensor entry card & Sewerage treatment plant.

SFS Grande at Vellayambalam has 2 & 3 BHK, ready to move in apartments available for purchase ranging from 1305 to 2027 sq.ft. SFS Grande is the first green building registered in Trivandrum with IGBC. SFS is currently running a promotion for customers to visit these ready to move in apartments even in the evenings!

Property Sales Slump as NRI's lose faith - Our analysis and recommendations

We picked off on the same subject line which Economic Times came out with on July 16th 2012 about a nose dive in property investments by Keralites who are NRIs.  You can read the full article here: http://articles.economictimes.indiatimes.com/2012-07-16/news/32698366_1_property-sales-property-prices-nri-investment.

We also post our analysis and recommendations on the basis of the article below.

ARTICLE SUMMARY (Source: Economic Times)

1. NRI's account for 70% of the investments in real estate in the State and this has come down by 40% in the last three quarters.

2. Sahara, DLF, Unitech, SRK have delayed their projects or cancelled their launches.

3. Key reasons for lack of interest is pointed out to be long delays and as per the article a staggering 70% of the projects in 2700 to 4000 square feet bracket are delayed by upto 2 years. There are 10,000 such properties.

4. People are investing in projects which are nearing completion to remain safe with their investments. There is also an example of an NRI investor who put in 70 Lakh in 2005 and is still awaiting possession.

5. Wait and watch strategy by NRIs in the hope that property prices would come down or investment in asset's which give return of 8-9% and are relatively safer. 

6. Small builders are more affected due to working capital requirements not being met

OUR ANALYSIS

A careful second look at the article and a root cause analysis will give you little more insights into what is the real cause behind the problem. We take up one at a time.

Lower Investments
A drop in investments in the last three quarters in the real estate sector is not just typical of the Kerala market. A global economic down turn and less money in the global system and even people losing jobs in markets like Abu Dabhi & Dubai are reason for the same. A sceptical personal future outlook means people want to stick on to their money than invest in real estate. However if you look at the broader picture of the boom - bust cycle, investments tend to work cyclically and you might see most of the world at a peak again  in the next 4 to 5 years. Kerala and Trivandrum are particularly ranked as highly competitive and good cities to invest in by most real estate surveys which were done this year and in 2011. Hence the opportunity is still quite good to invest in real estate as the fundamentals of the Indian economy are still good although GDP growth rates have slowed from 8% to about 5%.

Delays by Larger Builders
Delays and cancellations by larger builders are not just typical of Kerala. There have been huge drops especially by large builders in cities like Mumbai and Delhi. Please read more here on an article published in July 5 on Hindu Business Line. House sales slump in Mumbai due to oversupply. The article mentions that developers have been more open to negotiation in the premium segment, reducing prices upto a maximum of 25 per cent. What we would like to highlight are the fact, that as mentioned by us already real estate is a high leverage business. Groups like Brigade could take loans of upto 300 crore for a Villa project from banks at the prevailing interest rate. When supply overtakes demand, developers tend to slow down on the construction to keep the costs low, since they would want to sell their unsold units. This is particularly evident in the highly valued segment. Often larger builders take up larger projects or announce them in advance to garner market attention or even for share price escalation. However when their earlier projects in cities like Mumbai or Delhi get stuck due to lack of demand, they are bound to cancel their existing plans or put them on hold. We believe the reason for cancellations are also due to undercurrents across India and not just due to a lack of demand in Kerala. Larger builders having a stake in projects across the country will take a look at their working capital as a whole before committing to new projects.

Premium and Luxury properties
The point to note here is that 10,000 properties mentioned here are premium or luxury properties since a typical 3BHK house does not exceed 2000 SQ. FT. in any apartment. A 2700 to 4000 bracket indirectly refers to the Villas segment or the 4BHK or Duplex or Penthouses which usually come in that range. In most villa projects especially by smaller builders the number of units are less and hence cost per property and eventually the risk of completion per property is higher. Thus delays could predominantly be attributed to the premium or high value segment above 1crore, since a 70 Lakh investment in 2005 is equivalent to a 1.2 crore rupee investment in today's time. The real delays have not been reported in the budget or larger chunk of the market which is under 60 lakhs range.

Wait and Watch Strategy
In the world of economics wait and watch has never really worked. Warren Buffet invested and bought 5% share in Gold man Sachs when the market was in a bust. Facebook become a 100billion IPO after the bust cycle and Google came out after the 2001 bust. So investors who prudently invest always tend to make more money than others who wait. However investment has to be done with caution and awareness especially since what you want to do is multiply your investment and get a handsome ROI in 5 to 6 years or longer. We believe that since real demand is there in certain sections of real estate in Kerala, investing prudently with sound advice will not leave you in a state of worry.

Small Builders
As advised in our earlier few articles in this blog, you really need to watch out for the builder and take care of a few factors for new launched properties which deter buyers. For small builders their leverage, track history, ownership and other financial commitments need to be looked at before deciding on a property. Sound advice usually would deter you from a faulty investment and keep you away from fraud.

Our recommendation from the above analysis, is not to feel disgruntled but to really build awareness about what you are putting your money into before making the decision. Builders can easily do marketing events or road shows or boast of things on the internet, but it is for the investor to come to a decision on what he or she wants to buy.

If you are interested in buying a property in the premium or luxury segment above 1crore, there are special advisory services which cater to your need ensuring you can be rest assured of a safe investment. Without proper advice and by just going by hear say, you always run the huge risk of your money stacked up in a real estate investment with zero returns.

Floor area reduction for residential apartments

The Kerala Municipal Building Rules govern the floor area for residential apartments. Floor area ratio is the ratio of total floor area of the building which is proportionate to the area of the plot. This is subject to satisfying other conditions such as parking, setbacks, access width etc.

For example if a plot measures 25 cents (approx. 10886 sq.ft) and the F.A.R. permissible for that area is 2, then a maximum of 21772 sq.ft of space will be permitted to construct in all floors of the building put together. will be allotted to construct all floors of the building put together.

Town planning schemes mandate different FAR values for different areas and a 40 per cent of the total land should be left free. F.A.R. values mainly determine the density or intensity of development of an area. Hence different F.A.R. values are prescribed for different locations in development plans.You can read more about town planning & F.A.R. here: Kerala Town Planning. The concept behind the FAR is to ensure adequate open area on a plot for high-rise buildings. The open area will not only be a blessing to the occupants of the building and the neighbouring community

The usage of land for construction has also been limited in proportion to the increase in number of dwelling units. Thus, only 55 per cent of the land can be used for a building having 51 to 100 units; 50 per cent for 101 to 200; and 45 per cent for 200 units and above. Also the access width for a high-rise building to roads is seven metres for 25 flats; nine metres for 50 flats; 12 metres for 75 flats; and 15 metres for 100 units.

The FAR limitations have made builders scout for more land for projects, leading to a spurt in the prices of apartments. These limitations force the builder to restrict the number of flats in a complex. Builders feel that the changes have a negative impact on the real-estate sector.

Real estate news on Trivandrum via Social Media

Our social media experts in the Nandanam team won the argument, that we need to doing a better job at sharing information with our users on Trivandrum real estate via social media.

After all we had over a 1000 page views for our page within 3 days of its launch. And we wanted to make sure we do much more. May be 10X more so that we inform and make many more people in the planet, aware of our small city called Trivandrum, and to help them take better decisions with respect to real estate. So here are a few things which you are going to see in the coming days. We exactly don't have launch dates for these but you should be seeing it within a few months. We also look forward to your comments and suggestions on how we can improve in communicating information to you.

Facebook - Yes! we are going to launch a Facebook page shortly. Now that we have over a 100 million internet users in India and about a billion on Facebook that was the easy thing to decide. So keep a look out for our facebook page. We would also put up that link here once it is ready. Our Facebook page will offer you an easy way to keep track of latest news and killer ideas with respect to investing in real estate in Trivandrum. You could also offer advise to your friends and family on new projects, upcoming developments etc in Trivandrum or Kerala for that matter. And most of all we want to make it really interactive for our customers to have their say in these projects.

Slide Share - For the high flying execs and for most of you who may not have the time to really scroll through our blog posts and there are 59! posts about real estate already, this is the best way of quickly getting a grip of what is happening in Trivandrum. Our weekly reviews and key articles, would be crunched into a slide share deck which most of you can download off the net and keep yourselves abreast of happenings!

You Tube - One thing that our team feels is desperately missing are videos on real estate projects and properties in Trivandrum. How you wish you could see the projects through video. Our team is just in the process of getting that done with over 300 projects in Trivandrum. Not only that, we also would feature  video's of our experts and real estate gurus in Kerala on helping you make the right investments in the state. Also in pipeline is a plan to do a webinar once a quarter where you could join to learn about loans, projects, frauds and what not! So keep a watch out for that.

Our US website - We would also be shortly launching an US version of the site with a US number for you to call us at . Most of customers belong to the United States and this we believe will offer them a quick way to connect with us and seek advice on real estate in Trivandrum.

So our happy social media team is busy at work and we look forward to connecting with you shortly!

Our unbiased and unparalled feedback on builders in Trivandrum

Hi Folks,

Going by our mission of giving utmost, unbiased and complete information about developers in Trivandrum, we have launched a page about builders in Trivandrum. Knowing about a builder, their financial leverage, their past track record and their construction quality is important to have piece of mind as a buyer.

We would feature all the builders in Trivandrum in upcoming blog posts in this section and we welcome your comments, feedback and experiences with various builders. We believe this will become a forum for customers to know, understand and review the builders before they commit to a project, so that they are aware of the pros and cons.

This is critical especially if you are new home buyer since most buyers just know about reputed builders,  but not many know about the new ones. We would like you to avoid cases like what happened with Apple a Day project and avoiding fraud when you end up buying real estate i.e apartments, villas or land in Trivandrum.

Nandanam Research Team

What deters home buyers from newly launched properties?

Today, we see an increasing trend in the market towards ready to occupy projects. To understand further we looked at one of the recent surveys done by Track2Realty across 10 cities. As per a the survey done in ten cities-Delhi, Mumbai, Kolkata, Bangalore, Kochi, Ahmedabad, Chennai, Patna, Pune and Chandigarh  following were some of the reasons why home buyers in India, prefer ready to move in flats. You can read more here.

Possible reasons for preferring a ready to occupy property

• Delay in the delivery is cited as number one reason to book a new launch by almost all the home buyers
• Default in design, construction quality and fear of faulty construction
• Nearly eight out of ten, say they have not got what was showcased as the sample flat.
• Lack of amenities like the water splash as the swimming pool, clubs being no more than cafeterias and under-equipped gyms etc in their housing project
• Home buyers prefer ready-to-move property because they can avail for tax benefits only after the possession of the house.
• Immediate relief on rent and EMI is cited as one of the main criterion for choosing a property worth possession.
• Possible artificial demand in a new launched project and after 12-24 months, prices can be realistic, if not outrightly downward.
• Anxious to make sure who their neighbours would be and the overall community profile of the apartment.

As per our analysis and understanding of the Trivandrum real estate market, most of the reputed builders like Skyline, SFS and Artech who have a history of project completions on time, don't deal with issues 1, 2 and 3 which are the primary concerns for a home buyer.  For new builders one needs to be a little bit more cautious and ask a real estate consultant on their specific requirements from the property and assess if it is the right decision. Areas a real estate consultant can look at include: 1) Financial leverage 2) Clear documentation 3) Approval from banks 4) Contractors who are constructing the project (this could be different from the builder) 4) Getting feedback on existing projects.

With regards to artificial demand, there are examples of that in the market. For e.g when DLF launched its project in Bangalore there was a huge demand for real estate space and then there was a slump which made DLF cut the prices ultimately. However what we find is that real demand truly exists in most places in Trivandrum especially within the city like Vazhuthacaud, Kowdiar or even MG road. Hence an investment with a good builder in an area within the city should allay most of the concerns of home buyers. For those who still have questions should seek help and trusted advice of a consultant.

About our story - Nandanam Consultants

Nandanam Real Estate Consultants was pioneered when our founder, Mr. K Ramachandran Nair came across the fact that most of his friends and relatives were finding it difficult to single out a particular property in Trivandrum within a short span of time at a good price. Mr. Ramachandran, ex General Manager, Finance of  Asianet Satellite Communications with over 40 years of industry experience across a wide variety of sectors used his experience in marketing, strategy and finance as the cornerstone of advisory services on real estate in Trivandrum.

The challenge which he saw was three fold:

1. Lack of credible market information on Trivandrum real estate - Most of the available information comes from news sources or the internet. However these do not always address the entire city, road developments, upcoming projects etc. which could play a significant role in real estate prices and appreciation. A wholistic picture thus wasn't available and the customers had to go with hearsay.

2. Choose from a directory or list of properties which were advertised - Most agents or websites offered property in an area for a particular budget. While this saved time in looking around, a list presented what is available, but not always what is becoming available and had its shortfall as you were never quite sure if that is all to it. To become sure, you needed to look a multiple such lists of properties in an area.

3. Budgets and aspirations vary from person to person - A 40 Lac apartment  in Kazhakootam for example meant two different things to two different people. So properties went beyond square feet rates and locations to personal aspirations and undivided share of land to even finishing.

The only solution around this for us was to give as much information as possible to our customers for free! 
We spent the time and energy on a regular basis meeting builders, infrastructure developers and associations to keep a tab on what is coming and in the pipeline in Trivandrum.

We knew that only if the customers were well educated about the real estate market, the various properties, the pros and cons for different builders, experiences of existing property owners and we then advise them on which one to go for, their decision would be more prudent and fruitful. Some of our customers have even completely changed their location or other preferences once they understood completely the various facets of their decision.

For us every customer is unique and important and we believe our mission is just getting started! 

Buying and Selling advisory services from Nandanam Consultants

Buying your dream home or selling your property at attractive prices is a walk in the park with Nandanam

 

 

Buying your property in Trivandrum.

We specialize in property in the Trivandrum market. Whatever be your budget, type of property you are looking for and the amenities you need, we help you shortlist just the right property. You leave the searching to us and be assured of handsome return on investment with our sound advice. Our market research and insights into developments in Trivandrum helps you identify those properties which may not otherwise be advertised. 

Selling your property in Trivandrum.
Selling your property is easier these days with a plethora of options available on the internet.  But do you always understand the market valuation and get the best prices for your property. We keep track of trends in all localities in Trivandrum, so that you know you got the best deal out there!

Interior design advisory services from Nandanam Consultants

A well done interior in an apartment can increase its value multi-fold, but often there is less attention paid to the same!

 

Most apartments which are sold in Trivandrum by various builders usually come with basic structure, modular kitchen & basic accessories. However more often than not where customers struggle with is to choose whom to call upon for the bedroom wardrobes or even sophisticated interior decoration if they want to stay in this apartment in the future.

The customer also has many a times an option of an interior enhancements or decoration by the builder. However the cost of interior decoration could raise the property cost by anything from Rs.5,00,000 to Rs. 20,00,000 based on the customer expectations, size of apartment etc. More often we find clients who bought good flats but did not pay attention to interior elements or were not educated about it by the brokers or builders. These could include: 1) bathroom tiles 2) interior tiles 3) provision for A/C  4) wind flow 5) space for wardrobes 6) focus lighting and many more. These small things could actually affect the resale price of a flat by anywhere between Rs.5 to Rs.15 Lacs compared to another flat with the same area in the same building. Remember, an interior once done is quite costly to replace and undo once again if a major overhaul is required!

We do not offer interior design services but give free & custom advice to those customers who buy through us, on planning their interiors, so that their carpentry, glass work, lighting etc. is spot on and gives them maximum value for their hard earned money.

Our customers have always been "WoW"ed by the interiors, post construction, going by our advice. For more talk to our experts here: Interior experts

How do you differentiate between apartments you want to buy?

Make the Right Choice for your apartment

Let's say that you have shortlisted two apartments to buy in Trivandrum. Now assume that they are almost in similar locations, with almost the same amenities, are from reputed builders and are available at relatively the same price. The question is what else do you factor in to decide on this property and how do you differentiate which apartment to buy. 

We offer you a few tips to further narrow down your search results:

1. Understand the Carpet Area, Super built up area and Built up area - Carpet area is the area enclosed within the wall i.e. the actual used area of an apartment. Built up Area is the carpet area plus the thickness of outer walls and the balcony. Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, elevators, stairs, etc. Thus the share of all common areas is proportionately divided amongst all unit owners and it makes up the Super Built-up area.What is important here is to understand if both builders are charging for the carpet area or the super built up area.

2. Look at the payment plan - Most builders ask for a 15 or 20% down payment at the time of booking and then rest of the payments need to be made based on stage of construction. Here there could be a few differences. Some developers like Confident have come out with schemes which say "pay the rest" only during hand over. This offer is excellent since it ensures that your are not charged unduly by bankers for availing part of the loan if the project is getting delayed. The actual payment schemes by various builders could mean a difference of about 10 to 15% of your project cost , which could be around Rs.5 Lacs paid about 6 months in advance. The opportunity cost of that capital would be around Rs.25,000. Hence you might want to negotiate with the builder on payment terms and make it suitable to your needs.

3. Look for small differences in finishing - For e.g.  Vitrified tiles are stronger and less susceptible to wear and tear than ceramic tiles. Vitrified tiles can be further classified into glossy-finish, rustic-finish (has a rough surface), satin-finish (shiny in appearance but has a rough surface), imported, slab-size tiles. Check if the walls of the rooms will be painted with Acrylic Emulsion Paint and if the windows/Glazing will be Anodized/powder coated Aluminum/UPVC. Also check if the flooring will be of Anti Skid Ceramic tiles in the bathroom and other relevant areas.

4. Undivided share of land - In many instances the builders of an apartment do not transfer the entire extent of land to the buyers of flats. Instead, they tend to retain a portion of the undivided share which is subsequently misused leading to various complications. States such as Karanataka have made it mandatory that the undivided share of the land cannot be registered in isolation and they have to be registered along with the flats. Now why is this important?

Imagine you are building a 2000 sqft home over a plot of 2400 sq ft land. In this case, the undivided land share is 2400 sqft and the super built up area is 2000 sqft. The undivided share of land is thus equivalent to building a flat on that assigned land area. Over time, the value of constructed area depreciates while the value of land area appreciates. Say after 30 years, the building is too old to stay and the entire complex needs to be rebuilt. What you own will be only the Undivided Land Share. 

Sometimes the builders might allot you a lesser land share or may not mention the land share in you sale agreement or even worse they might claim the land share of your entitled land. If you are buying resale flats which are quite old (10+ years), undivided share is important to ensure that you get the value of land at the time of reconstruction.

Artech - new launch coming up in Sasthamangalam in six months

As per our sources, Artech developers has recently bought a property near Kochar road in Sasthamangalam. The property is at a location where the Anjaneya Motors was located previously.

Sasthamangalam is a prime target for developers as there is no real space to build apartments left in the area. Kochar road could see more developments due to some parcels of land available here. The current property is only about 100 metres from the Alakapuri marriage auditorium in Kochar road making it an excellent location.

Artech is planning an apartment complex here which should be in Pre-Launch phase in another 3 to 4 months and should be launched in another 6 months. Artech currently has launched two new projects in Vazhuthcaud and Venpalavattom. Another builder who has acquired property in Sasthamangalam area is SI. SI is also awaiting sanctions on this property and it is expected to be launched as well in another 6 months.

Avoid falling into a trap in real estate buying in Kerala

For those who are not aware, it was a harrowing time for all customers of Apple A Day Properties last May 2011.

The majority were NRIs, who were seeking the help of Chief Minister Oommen Chandy after they fell prey to one of the biggest real estate frauds in the state. Apple-A-Day Properties'  a builder based in Kochi, reportedly collected over Rs. 100 crore from buyers which included 125 Indian expatriates in the Middle East.

The company offered villas and apartments in the heart of the city of Kochi at attractive rates. It used the goodwill of a couple of its completed projects to rope in buyers, but after it missed many deadlines for its 11 new projects, customers cried foul. Some NRI's who invested over Rs. 45 lakh each in the project did not see completion even after 5 years of the project. The firm's Director and Managing Director went underground after the company allegedly went bust. Source: NDTV

So the real question is. How does an NRI or any investor avoid such traps and scams. Please refer to our checklist below for common mistakes.

1. Nominate or appoint a real estate consultant - Most NRIs in question were not able to track the progress of the fraudulent project. This is where services of a respected real estate consultant comes into picture. They can keep you updated about the progress of the project and even deter you from buying one if there are hidden dangers.

2. Financial Leverage - Most real estate projects which run into trouble do so because of financial leverage. Real estate being a sector with high working capital requirements, most projects are financed by banks. A project approved by a reputed bank like SBI or HDFC etc. itself shows that the bankers have done due diligence with respect to payback period etc. This actually makes it a lot safer for the investor to know that the project would be completed on time.

3. Credibility of the Builder - Credibility of the builder can be ascertained either via quality ratings like ISO or ratings by CRISIL. If none of these are available, then one of the ways is to ensure everything related to the project documentation is in place before you make the payments. A real estate consultant can help here with going through the papers. You could also refer to the past history of the builder.

4. Timeliness - Variations of around 6 months etc in completion. are common in today's real estate scenario due to lack of funds availability. Anything beyond this should raise a doubt or two in your mind about possible date of hand over. Some reputed builders in Kerala like Skyline and SFS maintain a great track of timely completion.

5. Safety over Price - If Safety is more important than price, one could look at a project which is ready for hand over within 3 to 6 months. This means than you would have to pay about 15 to 20% more than launch price , however you can be safely assured of the completion of your project.

Nandanam Consultants can help you overcome a lot of these difficulties with prudent advice and regular communications via newsletters and emails so that you can avoid such traps in the real estate market.

Technopark Kollam - Bookings Open

TECHNOPARK Kollam Plug & Play  SBC  facilty( in SEZ. )  has opened for bookings

Technopark as part of the hub and spoke model of development is expanding its activities to Kundra, Kollam, which is 63 km away from the Trivandrum Campus. This is to tap the Kerala's unique advantage of uniform talent distribution, Infrastructure and supporting IT platforms, e.g. telecom, datacom and digital exchanges, excellent infrastructure availability and back-up support. Technopark Kollam is located in 44.46 acres of prime land beside scenic Kanjirode Lake. This park is being developed as a Special Economic Zone.

CHARGES FOR COMPANIES:


Rent rate /sq ft : Rs.26.15 
Service Tax : 10.3% 
O & M Charges : Rs.4/- per sq ft 
Power/water/A/c  Charges : Actual as per consumption 
Annual escalation : 5% 
Security Deposit : 6 months Rent 
License Period  : 11 Months

FACT SHEET:

* Project area: 44.46 Acres
* 22 Kms. from Kollam City
* 70 Kms. from the Trivandrum International Airport
* Location: On the banks of Kanjirode lake, a tributary to Ashtamudi lake
* Type of development: SEZ
* Basic infrastructure- power, water, roads, telecom, datacom, water treatment plant STP, Executive Hostel, Health, Club, Food Court etc.


OFFERINGS:
* SEZ Land parcels available for IT/ITES Companies and/or developers on long lease
* SEZ Built-up space available on monthly rental basis to be ready by August 2012
 

Fore more on Technopark - Kollam you can read here

SBI home loan - Analysis and features

Analysis

    Speed of Sanction - 7 working days
    Ease of documentation - Pre- Approved projects only.Less Documentation
    Balance Transfer Charges - (incase of refinance) 2%
    Part-payment Charges - Nil
    Switching Charges - (Fixed to Floating or vice-a-versa) 1.75%
    Loan to Value ratio - Upto 20 lakh-90%,Above 20 lakh-80%
    Customer Service -  Good
    Franking Charges - 0.2%

Features

• SBI home loan contains package of exclusive benefits.
• SBI offers lowest interest rates. Further, they charge interest on a daily reducing balance!!
• Low processing charges.
• No hidden costs or administrative charges.
• No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan.
• Over 12000 branches nationwide, you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
• Actual loan amount will be determined taking into consideration factors such as applicant’s income and repaying capacity, age, assets and liabilities, cost of the proposed house/flat etc.
• Security:
  Equitable mortgage of the property.
  Other tangible security of adequate value like NSCs, Life Insurance policies etc., if the property cannot be mortgaged.

Documents Needed - Salaried Individual

• Application form with recent photograph
• Salary slip of last 3 months
• Latest Form 16
• Bank statement for last 6 months
• Processing fee check
• Proof of identity (any one): Passport Driving licence/photo credit card/Employee licence/Voter's ID/PAN card
• Proof of Residence (any one): Driving licence/Any utility bill/Govt. or authority bill
• Proof of age (any one) : Passport/Voter's ID/PAN card/' Birth certificate/life insurance policy or premium receipt
  Signature verification proof
• Repayment track record of existing loans/Loan closure letter

Documents Needed - Self Employed

• Application form with recent photograph
• Bank statement for last 6 months
• Processing fee check
• Proof of age (any one) : Passport/Voter's ID/PAN card/'Birth certificate/life insurance policy or premium receipt
• Proof of identity (any one): Passport Driving licence/photo credit card/Employee licence/Voter's ID/PAN card
• Proof of Residence (any one): Driving licence/Any utility bill/Govt. or authority bill
• P&L and balance Sheet for last 2 years certified/audited by CA
• Qualification proof of the highest professional degree
• Proof of existence
• Income Tax return/Computation of total income/Auditor's Report Balance sheet/Profit and loss account for last
  2 years certified by CA
• Repayment track record of existing loans/Loan closure letter
• Proof of office address
• Board Resolution in case of company

HDFC Bank Home Loan Analysis and Features

Analysis

Loan To Value Ratio –HDFC Home Loan can be applied for a maximum of 85% of the property value subject to credit discretion


Through its Home Improvement Loan scheme, it facilitates internal and external repairs and other structural improvements. HDFC finances up to 85% of the cost of renovation (100% for existing customers) subject to market value of the property.

Speed of Sanction
Subject to all documentary compliances loan sanction within 7 working days

Ease of documentation
Simplified credit and legal documentation 

Customer Service
Excellent

Features:

    Loans are available to individual to purchase or constructed houses.

    Anyone can apply for home loan individually or jointly

    Loan is available up to 80% of the cost of property based on repayment capacity of the customer

    Automated repayment of home loan by giving standing instructions or PDC’s

    Flexible repayment options are available

Eligibility:

    Minimum age to apply for home loan is 21 years, and maximum age at maturity is 60 years

    Minimum 2 years in employment and minimum of 1 year in current organization.

Charges:

    Late payment charges: 2% per month

    Cheque swapping charges & Cheque bounce charge : Rs 500/-each

    Duplicate statement charges: Rs 100 per page, Maximum Rs 300/-

    Issue of duplicate provisional interest certificate, balance certificate, amortization schedule charges Rs 300 each

    Prepayment charges: No prepayment is allowed in first 6 months, 6 months to 5 years it is 1.5% of original loan amount,for 5 to 10 years 0.75% of original loan amount & for >10 years there is no closure fee

Interest Rate:

    Loan is available at both floating rate & fixed rates
    Floating rates are linked to base rate & BPLR

Documentation:
 

Salaried Individuals

      Application form with recent photograph
      Latest salary slip and Form 16
      Bank statement for last 3 months
      Proof of Identity (any one): Passport/Driving license/Photo credit card/Employee license/Voter's ID/PAN card
      Proof of Residence (any one): Driving license/Any utility bill/Govt. or authority bill
    
For Self Employed Professionals / Self Employed Businessman
    Application form with photograph
    Identity and Residence Proof Identity and Residence Proof
    Education Qualifications Certificate (for professionals only)
    Last 3 years Income Tax returns, Profit /Loss account, Balance Sheet and computation of income
    Business profile (for non professionals only)
    Last 6 months bank statements ( personal and business accounts)
    Proof savings & investments
    Processing fee cheque

* NRI’s are required to submit copy of the passport, work permit, CDC (in case of sailors) and
visa in addition to the documents listed above.