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Research Before You Move

Investing in a property is very much like getting married. Gauging your compatibility with the future companion is as important as mapping your compatibility with your new home. Because a home comes with a set of factors – the neighborhood, the infrastructure, and amenities, connectivity and accessibility, etc. Therefore, it is important to research the neighborhood before you move.

  • Legal Compliance

The land on which the development is built is very important. Complete research about the rights, ownership, and onuses towards the property should be thoroughly conducted. The title deed must be verified and the details must be checked concerning possession, builder-buyer agreement, etc.

  • Appreciation Trends

This is particularly important if you are buying a new property. The new house should be located in an area that is progressive and offers good appreciation.

  • Public Conveniences

The accessibility to bus stops, railways stations, auto-rickshaws, and other public transport should be well considered. The nearness to these places can be good as well as bad. Additionally, the closeness to schools, hospitals, educational institutions can be helpful to live connected.

  • Noise Levels and Activity

Staying close to places that are really loud and full of commotion all through the year can be depressing.  The noise levels can cause health issues and take away the peace of living in a healthy, happy and enriching neighborhood. Vehicular traffic in the neighboring areas can be a hassle too.

  • Building Amenities

Knowing about the water supply, sewage system, fire system, security procedures, etc. is extremely important. These points become even more important when staying with children. A clearer picture can be gathered from the existing residents and their living experiences.

  • Immediate and Extended Community

A vibrant community is particularly important in today’s demanding times. Coming home to a happy neighborhood can add years to your life Balancing work and home is better when play is involved too. Common activities, festival celebrations, annual events, weekly meets, evening walks, etc. with the other residents can make way for more fun!

It is rightly said, a home is where the heart is. So, make sure you make the best decision of your life when cherry-picking your abode!

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Importance of Ghar Pravesh (Griha Pravesh)

Ghar Pravesh Pune

We all celebrating our achievements – be it a promotion at work, a new car or a win at a game. Among all our accomplishments, a momentous occasion is when we buy our own house. For generations, we have placed a lot of emphasis on investing in property. And so, when you buy this prized asset, a Ghar Pravesh pooja or house-warming celebration is considered inevitable. Why is the Ghar Pravesh or Griha Pravesh so important?

To begin with, when you step into a new life in a new house, you wish to have your loved ones around. The Ghar Pravesh is the perfect occasion to get everyone together and receive their blessings and good wishes. Because a happy moment undoubtedly deserves a happy celebration!

We Indians also love our ideals and traditions. While we bask in our contemporary attitudes, we equally take note of the traditions, customs and ‘muhurats’. The Ghar Pravesh is one such event, which is important for the entire family. Because the new house, which will harness all our future dreams and desires, should be a haven of good fortune. The traditional Hindu system of architecture, Vastu Shastra, proposes that a house is made up of five essential elements – the sun, earth, water, fire, and wind. All these elements when in proper alignment in a house, is said to bring in cheerfulness, good health, and prosperity. The Ghar Pravesh pooja helps to bring into line these elements and prepare the home for blissful times.

During the Griha Pravesh pooja, priests and the learned perform a ‘yagna’. The fumes from the yagna, holy water from the coconut and the camphor lamps all have a purifying effect on the surrounding and the vibes in the house. Lord Ganesha – the ‘Vighnaharta’ (remover of all obstacles), is summoned and his blessings are seeked. Ghar Pravesh thus remains a significant ritual when entering a new house or even a freshly renovated house.

Believe it or not, the consecrations of living spaces is deep-rooted in our culture. Rightly said, Ghar Pravesh is an important step toward positivity and lifelong happiness!

So, when is your Ghar Pravesh?

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Sharing the Burden with the Subvention Scheme

Sharing the Burden with the Subvention Scheme

The real estate markets have progressed in different ways. Along with the surge in prices across all markets, have come newer technologies, better offerings, attention-grabbing ideas, pioneering marketing strategies, and several buyer-friendly schemes. One of the most prevalent financial schemes floated currently is the Own Now, Pay Later. Under such a structure, a homebuyer is expected to make a limited payment at the time of purchase, and pay the balance at the time of possession. However, in such competitive economic markets, how do these innovative finance schemes actually work?

Real estate developers come up with schemes that profit the end-user buyers and investors of property. In reality, with such lucrative schemes, the real estate developers have indeed succeeded in enticing more buyers. The standard mortgage finance is structured to offer the customers with increased payment flexibility and lessen the economic liabilities on the buyer. Such financial schemes are known as Interest Rate Subvention Schemes’. Subvention comes from a Latin word that actually means help, aid, support, grant, subsidy, etc. Let us understand this interesting concept further!

Through the interest rate subvention scheme, buyers make a property purchase by putting in only a limited sum upfront. After the initial payment, the buyer needs to make no payment until the time of possession. For example, the homebuyer pays only 20-30% of the price of the property primarily and makes a purchase. The balance amount is paid by a bank to the developer as a loan. Under the arrangement, the bank releases specified payments during the development phase directly to the real estate company and the buyer has to disburse the amount only after he gets the possession. Previously, the developers used to get the full loan amount from the banks up front. However, to curb the derelictions and delays in construction from the developer, in 2013, the RBI ordered banks to link payments with the progress of construction and accordingly release payments in batches.

Alternatively, real estate developers also offer deferred payment plans. These comprise of payments at different phases of construction spread across months or years in various combinations: 10:50: 40, 30:30:40, 10:70:20, etc. This way, the risk of payment is transferred from the buyer to the developer. The buyer, on the other hand, gets ample time to plan his finances and accrue necessary money until the time of possession. All in all, with such schemes, developers succeed in not only attracting the customers to their projects but also help them achieve their goal of owning a house.

It is also important to understand that the subvention schemes can be double-edged swords. Some subvention schemes are for only a limited period, after which the buyer bears the interest cost. In cases of project delays, the buyer may end up paying much more than the price of the property. In addition, in situations when the developer defaults on payment of interest to the bank, the credit-score of the buyer is spoilt and at risk. While being attractive, such schemes should be well-studied and the buyers should make smart judgments after understanding the explicit and implicit terms and conditions and considering factors such as developer repute, his brand value, clause for delay, the developer’s financial strength, bank’s profile etc.

Our experts believe the subvention scheme can be helpful for homebuyers, particularly first-timers, considering that developers deliver timely possessions and include no hidden clauses.

In today’s turbulent times, in all spheres, it is all about subvention!

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Real Estate in India -Opportunities and Challenges in 2019

Real Estate in India – Opportunities and Challenges in 2019
Real Estate in India – Opportunities and Challenges in 2019

India’s real estate sector exhibited amazing potential and growth during the early 2000s. The middle-class and younger population from the non-metro cities ventured out for jobs and began to settle down in the major cities. With increased earnings and better growth opportunities, these people looked towards investments in moveable and immovable assets. Buying a house was on their bucket list and they aggressively explored lucrative options. Additionally, the Government facilitated this population by introducing schemes that were both developer and buyer-friendly. Subsequently, the banking institutions started lending to the segment more smartly and more substantially. The real estate segment in India was in its full galore.

The situation changed and a diverse picture emerged in the mid-2010s. The past few years and last year particularly has been perplexing for the real estate industry in India. For real estate developers and construction businesses, the year 2019 is not expected to be any different. Clearing standing inventory, tackling regulatory changes like RERA, GST and stagnant prices remain the major challenges. The focus now is on promoting existing projects, rather than launching new developments.

Amidst the chaos, affordable housing shows potential. In India, the last few years have seen major investments in the affordable housing segment and the trend looks favorable even for 2019.  In addition, since the Middle Income Group (MIG) under the Pradhan Mantri Awas Yojana (Urban) can avail subsidy until the end of March 2020, a growth is predictable in affordable housing. Co-living is another interesting sector coming up vibrantly. Co-living is an explored concept in major metro cities and remain to be unearthed in the Tier-II and III cities. This year, new, all-inclusive, contemporary projects are expected to come up in the bordering areas of the cities.

In 2019, the established names are sure to further capitalize on their brand value and make progress. To stay significant, the brands have to turn to increased use of social media. By fueling customer engagement, encouraging dialog and staying relevant, the brands can harness the power of social media marketing and be favored by the techno-savvy users and potential homebuyers. It is the perfect time to let go of the traditional mediums of communication and engage effectively through richer, global mediums.

Expecting a complete recovery and rapid growth in 2019 is highly implausible. However, a spike in demand and a hike in sales is projected by industry experts. With the general elections in the country, the sentiment is largely dominated by political views and predicted improvements. Like most other segments, the results of the 2019 election would largely determine how things would progress for the real estate sector.

Fundamentally, we assume that the year will be a mixed bag of opportunities and challenges.  

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GST Impact on Property Prices.

Blog - How GST Will Impact On Property Prices - GharPravesh

The Goods and Services Tax Council has recently reduced tax rates on under construction flats to 5% and affordable homes to 1%. These rates would come into effect from the upcoming fiscal year, beginning 1st April 2019.

As of now, the GST on payments made for Under-construction flats stands at 12% with input tax credit (ITC). The current rate for affordable housing units is 8%.

Additionally, the GST Council also revised the definition of affordable housing to encourage citizens from availing GST benefits. Now, flats costing up to Rs 45 lakhs and measuring 60 sq metres carpet area in metros (Delhi-NCR, Bengaluru, Chennai, Hyderabad, Mumbai-MMR and Kolkata) and 90 sq. metres carpet area in non-metros will fall under the category of affordable housing.

Home buyers are advised to read the fine print

Major concerns making home buyers wary of buying under-construction property are delayed projects and reputed construction companies being involved in fraudulent activities.

While the latest drops in GST rates does spell good news for citizens, there are a few things to consider before celebrating the annfonttypeouncement.

To begin with, these cuts will be effective from 1st April 2019, and not immediately. This means that there won’t be an immediate scramble among buyers to purchase an under-construction property right away.

Secondly, it also depends on whether the cost of construction lowers – and if not, how much of that burden is shifted on to the buyers by the builder. It is understood that the construction costs are unlikely to lower since input tax credits have been disallowed. It is also worth noting that GST rates for some of the raw materials needed for construction have remained the same or are still sky-high.

In the words of Niranjan Hiranandani, National President, National Real Estate Development Council (NAREDCO), “This announcement gives an impetus to the affordable housing and enthuse home buyers to close the sale deals. The GST rate on cement has not been reduced as was expected, at 28% it remains among the highest taxed inputs for construction-and there will be no input tax credit, so developers will face a challenging time.  Also, if the announcement was ‘with immediate effect’, we would have seen sales of Residential real estate units in the current financial year; the w.e.f. 1 April aspect means we will see a rise in sales figures only in the next financial year.”

Going by current estimates, it has come to light that about 90% of the Properties on sale in the market are ready-to-move-in. The remaining 10% share is held by big, reputed construction firms. There were several instances of buyers being unwilling to pay the 12% GST, which led to builders offering discounts on the same in the form of “limited period offers”, and absorbing the cost themselves. This was seen as a good move from the builders’ perspective to sell off any pending inventory, with the buyers benefitting from the move as well.

Thus, to know about the true effects and impact of the slashed GST rates, we would have to wait until well after 1st April 2019 and take stock of the pricing and demand in the housing sector.


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