For Property Byers: Prefer Paying EMI's Than Rentals

The National Capital Region or NCR, is India’s largest urban agglomeration and the 2nd largest in the world, had been one of the fastest growing realty hot spots in the country since a decade. It supports an ever increasing population and is responsible for development of many regions in the nearby states of Haryana, Rajasthan and Uttar Pradesh. Two essential factors that determine the lucrative prospects for any property in Real Estate sector are Infrastructure and connectivity and NCR has been a tough market to interpret with a number of different regions projecting various trends from time to time. A recent in depth survey conducted by IndiaProperty.com throws light on the many aspects of the real estate market in the National Capital Region. According to the survey almost 82% of respondents purchased property in the region for end use. The other 18% have purchased as an investment option. In year 2015, increase in number of new home buyers in NCR was noticed. One of the major drivers of the recent shift from paying rentals to paying EMIs is Affordable homes in many parts of NCR. Same trend will continue with the new government and its policy of promoting the growth of affordable housing sector in the country. However the number of first time home buyers may go a bit down in 2016 and the purchase solely inclined towards investment will rise, indicates the survey. Another interesting observation was that almost 55% of the respondents have purchased their second home in NCR. This is an indicator of the fast paced development of the region. It also indicates that home buyers have been extremely receptive to property purchase, although 2015 saw a slow patch for the real estate industry. This number is expected to go up by 5% in 2016. Almost all the major metro cities like Mumbai, Hyderabad and Bengaluru have witnessed a similar trajectory. Though apartments were a top choice for Delhi NCR people to invest in, 2015 brought an increase in demand for individual homes by 8%. Mostly, the Residents of Delhi NCR invest in property based on the infrastructure development in the region followed by the future prospects. Both 2014 and 2015, seen a lot of infrastructure development in top markets like Noida, Gurgaon, Ghaziabad and Greater Noida. The track record of the builders and their reputation is of vital importance to home buyers when it comes to property purchase. NCR is the worst hit when it comes to delays in projects and this has resonated in the choice of home buyers, indicates the survey. Similarly property frauds are one of the biggest concerns amongst home buyers in Delhi NCR. Buying decision has been strayed in all the metros of the country and Delhi is no exception. More than 40% of home buyers in Delhi NCR have taken more than 1 year to come to a decision considering many of their concerns. One of the reforms that encouraged the home buying decision in the region is the tax exemption on home loans. Mid segment and affordable housing has greatly benefited by this reform. As we start the year 2016, the buyers have only shown confidence in the policy and reforms charted out by the NDA government and this is said to benefit the real estate market across the National Capital Region.

Real Estate Bill – A Boost for Investors & Buyers

Ever wondered why stocks, mutual funds and insurance investments are all regulated to death, but not property purchases? Well, that’s what the Real Estate (Regulation and Development) Bill, seeks to do. Last week, the central government with the help of opposition support able to pass Real Estate bill in Rajya Sabha.

So what actually Real Estate Bill is?

The Bill seeks to set up a regulatory framework that will govern contracts between real estate buyers and sellers. So far, home buyers were forced to take what they got from builders — one-sided contract terms, delays running into years, cost escalations, arbitrary changes to the plan — you name it.

The Real Estate Bill, which aims at protecting home buyers' interest, moved closer to becoming law after it was cleared in the Rajya Sabha on 10th March’16. The bill, designed to bring transparency and accountability to the realty sector, is expected to revive investor and buyer ­­confidence.

: Highlights of the Bill :

1) All residential and commercial projects that include eight flats or cover an area of 500 square meters or more, will now have to be registered with the Real Estate Regulator. This pretty much covers most real estate being built in the cities of India. No project will be allowed to be sold to the buyer, unless it has all necessary permissions from local authorities to start construction.

2) Buyer-seller or builder-buyer agreements are extremely lopsided, offering almost no rights or protection to the home buyer today. Once the bill becomes an Act, one-sided agreements will become a thing of the past. Any delay in payment by the builder will attract the same penalty as what the buyer needs to cough up, if his payment is delayed. Builders who are notorious for changing project plans, midway, including the number of floors in a building or the layout of a flat, will now be barred from doing so, without the approval of 2/3rd of the buyers.

3) Realty projects often get delayed because developers divert funds meant for one project to another. But once the bill becomes law, real estate developers will have to deposit at least 70 per cent of money collected from buyers in an escrow account to meet construction costs. This will ensure that developers who run out of cash don't stall projects.          

4) Developers cannot sell property on the basis of super area (flat area plus common area). They will have to clearly define the carpet area which includes spaces like kitchen and toilets. So a buyer will know exactly what is he getting as living area and the price he's paying for it.

5) What's more, developers are also banned from making claims in advertisements or publishing pictures of site/project which are untrue. Misleading advertising has been made punishable. For flouting any of rules laid out in the Regulator Act, the developer can be fined 10 per cent of the total project cost. And for repeated offense, the builder can also be jailed.

6) 70% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project.  The state government can alter this amount to less than 70%.