Beyond the oft-repeated developers’ rhetoric ‘location, location and location’ as the USP of the project, lies the fact that today’s prime location was once a deserted area that most developers were not ready to bet on with the kind of huge investment that realty projects demand. It has not just been the huge investment involved but the infrastructure, or rather lack of it, which often made them play safe. Though, in some of the cases, the government authorities took the initiative to provide the necessary infrastructure and auctioned the land to the developers; in some of the other cases, it was the developer who spotted opportunity in a virgin territory and reaped the first mover advantage.
It would be easy to vouchsafe that while the state, in most of the cases, has been a reluctant urbaniser, destination development actually demands a daredevil’s vision and that is precisely the reason why only a handful of locations could see the first mover changing the dynamics of urbanisation in general and the realty market in particular.
The first such case study in India has been the emergence of Gurgaon, at a time, when urban land development was in the controlled regime of the state. Facing many challenges at the policy level, it was the vision of KP Singh, chairman, DLF, to replicate a global city in India that Gurgaon was conceptualised, ahead of its time. According to Sanjey Roy, spokesperson, DLF, “Gurgaon was initially conceptualised as DLF Qutab Enclave and the plan was visualised ahead of its time. It was not an easy job, particularly at a time when the urban land development was in the controlled state regime. The success story of Gurgaon eventually led to the development of many such destinations across the country.”
He also adds “One needs to have a vision to transform a nondescript location into a property hotspot. Once it is developed, it is much easier to do a cost-benefit analysis and say the location could have been developed this way or that way. When DLF first ventured into Gurgaon, Delhi needed to outgrow its boundaries with the growing urbanisation. Gurgaon, for one, was picked up as an extension of what, at that point of time, was the most sought-after tourist hotspot, Qutab Minar,” explains Roy.
Similarly, in Mumbai, it has been the developers’ vision that has created destinations in far off suburbs such as Powai. The fact remains that had the Hiranandanis also thought about playing with the land competence of ‘location, location and location’, Powai would not have emerged the way it has shaped up today. Some other locations, like Malad, Goregaon, Kalyan and Dombivli, are also shaping up as excellent destinations. Interestingly, these destinations were spotted by developers who recognised an opportunity in an area which had, for others, been the road less travelled.
Similarly, the Nahar Group’s initiative of developing a new township in Chandivali has resulted in making Chandivali a destination suburb. The Group had begun development in this lesser known area, at a time when not much development was happening in that suburb.
The idea was to, in the next few years, make this location one of the most-preferred destinations in Mumbai city. Today, Chandivali competes with other locations such as Powai, in residential real estate. Manju Yagnik, vice-chairperson, Nahar Group, agrees that to some extent, it is risky to venture into new destinations with no habitation and infrastructure. Hence, developers undertake some research or study before starting with a new project. Location has its own importance in real estate development but creation of residential projects can also be undertaken by the developer, from a futuristic point of view.
“A developer can also create new destinations, by providing amenities and facilities essential for smooth living. Earlier, this suburb was hardly known for residential or commercial development, as a major part of this area was deserted land. Today, the vast 125 acres of land, is full of greenery and plush residential towers and commercial complex. Besides proximity to the domestic and international airport, business districts in Mumbai and arterial roads of Mumbai, have made Chandivali a new destination of Mumbai city,” states Yagnik.
Similarly, when the Knight Frank report, last year, rated south Chennai’s Pallikaranai and Medavakkam, as two of the most promising destinations, many within the built environment of realty business, were taken aback. Even though, Pallikaranai and Medavakkam are about 12 kms from the Chennai International Airport, through the Pallavaram-Thuraipakkam Road, it was not seen as a ‘destination’ till some of the developers spotted an opportunity and shifted their focus to the region, for developing it as the destination next.
There are not many case studies in Indian real estate, where a developer has a vision and has shown the audacity to take the road less-travelled. Experience also suggests that some of them had to take a beating but for those who could spot the right location to be developed as a destination; it proved to be a goldmine. Those who want to capitalise on sheer land competence, established location is all that matters but for those who do not want to be ‘me too’ in the established locations, there are still virgin territories to be explored.
Possession of a property is a right recognized by law.
A person in actual physical possession of a property or any person entitled to its possession is said to possess the possessory title of the property.
This possessory title is independent of the proprietary title of the property. Possession by itself is a substantive right recognized by law and has legal advantages attached to it apart from the true owner’s title.
The right to possession is a heritable right and a transferable right. Even the equitable relief of declaration and injunction are available to the person in possession, as against any person threatening to infringe on it. Suits of possession are generally classified as based on proprietary title and on possessory title. Section 6 of the Specific Relief Act 1963 even treats possessory title in a way better than the proprietary title, in matters where the person in possession is dispossessed without his consent, otherwise than through due course of law.
In such matters, the person in possession or any person claiming through him may, by instituting a suit within six months of dispossession, recover possession of the property, notwithstanding any other title that may be set up in defence, in such a suit. If the person holding a possessory title is sought to be dispossessed, without his consent but in due course of law, the person holding possessory title is likely to succeed as against all people except the true owner.
Article 64 of the schedule to the Limitation Act 1963 recognizes that a person holding possessory title, that is while in possession of the property, on being dispossessed, can institute a suit for possession of the property within 12 years of the dispossession. This, the person holding the possessory title can do, even if he does not have the proprietary title.
Possessory title is nothing but a title derived from possession and is good against all except rightful owner and as held by the division bench of Bombay high court in the case of Mariumbi Aslam khan vs Vithoba Yeshwanta-such possessory title has all the features of an estate in land and like any other estate, it can be transferred inter vivos [literally, between the living. It identifies a gift made during the donor’s lifetime.] and can also be acquired by inheritance.
Possession has a two-fold value—it is evidence of ownership and is itself a foundation of right to possession.
Developers are going all out to woo customers this Navratra—from free gold coins and costly electronic gadgets to lucrative discounts, they hope to cash in upon the tradition that favours new purchases during this auspicious period.
Builders and developers are announcing a number of attractive schemes for buyers this Navratra; considered to be an auspicious period, the season will see a lot of deals being finalized across the asset classes, including real estate.
The schemes vary, from upfront discount of around Rs 2 to Rs 5 lakh—depending on the price of apartments—to schemes under which around 50% of the cost of an apartment is paid upfront by the buyer and the rest paid at the time of possession.
In yet another scheme, developers bear the entire registration cost of 7% of the total cost at the time of registry. Many developers have announced free gold coins and costly electronic gadgets to buyers who book apartments or houses this festive season.
During the festival season, which starts with Navratra and continues till Diwali, a large number of serious buyers finalize their deals.
Anil Sharma, CMD of Amrapali Group and president of Credai, Delhi NCR, says that during this period genuine buyers come out to buy houses. So, to make the deal lucrative and bring it to a close, developers offer the right kind of choice that meets the requirement of buyers—all at a reasonable price.
Honey Katyal, CEO of Investor Clinic, says that because of the large number of buyers who turn up at this time, developers offer some additional discount to them, without incurring any business losses. This helps both—the buyers and the builders. This season, too, developers are hoping for a spurt in demand and closing of deals, which will have a salutary impact in reviving the sector.
Supertech Ltd has offered a ‘40:60 scheme’ for this Navaratra season. This scheme is for only those projects where possession will be given in six months. As per the scheme, the booking will be done on 40% advance payment and the balance 60% is to be paid six months later, at the time of possession. This will enable a buyer to save around Rs 3.5 lakh on a property of Rs 1 crore.
Ajnara India Ltd and SVP Group are also offering attractive schemes. The companies are offering bookings on payment of 10% of the total cost in their projects; after this, one has to pay 50% of the cost within 30 days of the allotment, while the remaining 40% is to be paid at the time of possession. In these schemes, buyers save handsome amounts, which may be as much as upwards of Rs 10 lakh in some cases.
Developers like Gaursons, Mahagun, and Paramount are offering subvention in the EMI to reduce the burden on buyers. Manoj Gaur, MD of Gaursons Ltd, says: “The real estate sector is likely to revive by the year end. In our country, festivals are directly connected to emotions of the people, and so is our industry. As the Navratra period is upon us, which is considered to be one of the most auspicious periods of the year, people tend to invest in real estate. To enable buyers to fulfil their dream, Gaursons always tries to come up with innovative deals and packages for its customers and investors.”
Antriksh Group is offering special cash discounts of up to Rs 50,000 on its projects like Antriksh Sports City in Sector 150 on Noida-Greater Noida Expressway, and Antriksh Golf Link and Antriksh Valley launched in Sector 1, Greater Noida West (Noida Extension).
Rakesh Yadav, MD of Antriksh Group, says, “This festive season, we are sharing the happiness with all our potential customers through our attractive cash discounts on all purchases.” Prateek Group is offering free car parking, power backup, and gold coins this festival season.
Griha Pravesh, another builder, is giving gold coins to the people who introduce a customer this season. “As the project has been sold by referral marketing only, to maintain the gentry we are offering the freebie to the introducer whom we think are our real SBU (strategic business unit),” the company said in a statement.
Landcraft Developers is also working out an exciting Navratra offer in which a buyer will take away home appliances worth of Rs 1.5 lakh free for booking one unit in any of their projects.
Amrapali Group is offering an upfront discount in the range of Rs 2-5 lakh to buyers; Anil Sharma, CMD of the group, said that the company is offering electronic gadgets like laptops, LCDs, and ACs with every booking.
Raheja Group has offered a price discount of Rs 500 per sq ft in its luxury residential project Revanta in Sector 78, Gurgaon; the price of the apartments in the project is around Rs 11,500 per sq ft.
“These are smart homes with branded products like Versace elements in flooring, wall design, wall tiles as well as other subtle elements; the sanitary ware is by Viliroy & Boch, as well as Hansgrohe. Concealed ductable air-conditioning and intelligent homes are other features of these homes which are being constructed by Arabtec, the construction company which built the tallest tower in the world, Burj Khalifa, in Dubai. The structural design consultants are Thornton Tomasetti, the consultants for Kingdom Tower, Taipei 101 & Petronas Towers,” a spokesman of the firm said.
Prithvi Raj Kasana, managing director of Morpheus Group, said: “Traditionally, the start of Navratra is considered the most auspicious time of the year and consumers prefer to invest during this festive season. Going with the tradition, the company is aiming at enticing the maximum number of potential buyers by offering RO water systems, geysers, chimney in the kitchen, and LCD televisions in our project, Pratiksha, in Greater Noida West (Noida Extension).”
Pradeep Jain, chairman of Parsvnath Developers, said: “It has been observed that some of the real estate players tend to offer freebies like cars, white goods, foreign trips for those who book during the festive season. However, freebies do not attract customers. We feel that developers should put all the possible strength in the product offered by way of better specifications, amenities, and facilities, etc, as the customers understand that all such freebies are loaded in the price that they are supposed to pay.”
“Serious buyers prefer a price friendly product, at the right location, from reputed developer. Buyers’ preferences are essentially the specifics of location, the number of bedrooms needed, size of apartment desired, and property that fits the budget—any offer of freebies works only if it is in addition to these criteria in the purchase of property. Thus, we do not intend to offer any freebies in any of our project ever,” Jain said.
Exit route for investors becomes tough due to less demand.
Correction is stark in the case of projects where the composition of investors is higher than end-users. It is because of this reason that there are more ‘sweet’ deals in areas such as Gurgaon, than in primarily end use-driven markets such as Ghaziabad or Noida.
Pankaj Kapoor, founder and managing director of Liases Foras, says that the secondary market has also felt the impact of the slow moving economy. The exit route for investors has become tough and they are being forced to sell at a lesser price.
While Delhi NCR, Ghaziabad and Noida have seen prices correct by 2% to 6%, Gurgaon prices have declined by 15% and Faridabad by at least 20%.
According to a research by Cushman & Wakefield, Delhi NCR continued to witness a s l owd ow n i n launches during the second quarter of 2013 exhibiting a quarterly decline of 11% in the number of units launched.
Shveta Jain, director, residential services, Cushman & Wakefield, says that the residential sector is in a phase where quite a few projects are nearing completion, prompting investors to exit from the market. “This has made units available in the secondary market at a lower rate than the new launches in the primary market. This has also made developers cautious of infusing more inventory in the market,” she says.
Deals in the secondary market have also come down. Dhruv Khanna of LJ Hooker, says that there were 20 deals in this category last year but there have been only ten this year.
Thanks to the approaching festive season of Navratras and Diwali, considered auspicious for buying and selling of property, many prospective buyers are planning to invest in homes of their own. What they, however, need to know is if the market is ripe for a correction and if they should wait for a while before making a decision to buy, given the state of the economy.
Real estate experts confirm that there is pain in the residential real estate market which is there to stay at least till the festive season next year and that a correction in the range of 12% to 18% is expected, depending on housing projects and the holding power of developers. Freebies and discounts are likely to rule, too, as developers will be under pressure to generate liquidity from sales.
The Reserve Bank of India’s recent directive to banks to not lend money to builders under the 80:20 and 75:25 schemes has created ripples in the market as this has come close to the festive season when tractions are generally high as builders float these schemes to increase sales. This is likely to impact the holding power of developers who then may be forced to reduce prices considering the high levels of inventory they are currently saddled with.
Real time appreciation in property prices, adjusted for inflation in tier-1 cities during the last few years, has not exceeded 4% to 5%. This could dissuade developers from reducing property prices, and force developers, especially those with holding power, to keep their prices at current levels.
A marginal correction in prices could, however, be in the offing for certain projects aimed at the mid segment. “If a correction happens, it would be within the range of 12% to 18%, depending on the project and the holding power of the developer. A correction in prices beyond this level will impact developers’ profitability to a non-acceptable extent,” says Ashutosh Limaye, head, research and REIS, Jones Lang La Salle.
Anshuman Magazine, CMD, CBRE, South Asia Pvt Ltd, says that India’s economic growth prospects continued to face strong challenges from a depreciating currency, weak industrial output and a stagnating policy environment, thereby hurting investor sentiment in the real estate sector. RBI’s latest ruling on disbursement of loans on special schemes will further impact the residential market across most micro markets. “I expect the market to remain sluggish in the short to medium term,” he adds.
According to the National Housing Bank residential housing index, Residex, 22 of the 26 cities it tracked have seen a decline in home prices in the April to June quarter. Mumbai has seen a 0.5% drop, Delhi a 1.5% fall in property prices and Hyderabad a 4.6% cut in prices.
Shobhit Aggarwal of Protivity says that investor-driven markets will be largely impacted. Sahel P, vice chairman, Lotus Greens, however, has a different view. The current economic slowdown has been playing spoilsport for the real estate sector, too. Customers have been cautious about their decision to buy new houses. High inflation and increasing cost of raw material, however, has left little scope for any price correction. Projects with good location, construction quality and amenities will continue to attract buyers, he says.
A report by Liases Foras, a real estate rating and research firm, puts the unsold stock figure across the country at 700 million sq ft. The unsold inventory in Delhi NCR was 277.31 million sq ft, MMR was 146.10 million sq ft and Bengaluru was 88.68 million sq ft.
Data made available by Liases Foras also points out that sales in Mumbai, Pune, Chennai, Hyderabad and Delhi NCR declined in the April-June quarter from the January-March quarter. In the April-June quarter sales of residential units declined by 13% in Delhi NCR, 12% in Mumbai and 7% in Chennai.
Inventories in the Delhi NCR market are also at an all-time high. Delhi is sitting on an inventory of 21 months, Bengaluru of 25 months and Mumbai of 48. The comfortable inventory level is 14 to 15 months of unsold supply; offloading this huge stock that has piled up is a difficult task.
According to a recent report by Knight Frank, launches and absorption of residential projects in the country’s top seven cities plummeted by 37% and 23%, respectively, during the last two years (2011-2013) thereby aggravating the structural problems in the sector. Real estate developers have been caught in a trap of ambitious expansion, decelerating sales, hardening interest rates and weakening cash flows.
Unlike earlier occasions, the sector has no bailout package, and alternative funding options have also dried up. Banks are shying away from lending as they are troubled in their own backyard with increased non-performing assets, tightened monetary policy, currency depreciation and volatile debt markets.
Private equity funds have also been seen exiting the Indian markets. The aftermath of the dried-up fund scenario is also apparent in the market, as some real estate companies have defaulted on their debt repayments. Run-up to the elections is generally characterized by a period of policy paralysis and the upcoming elections as well as the general elections in 2014 are expected to have the same impact. Realty firms are now in deep trouble, and the sector is likely to witness more pain in the foreseeable future, the report states.
This festival season, as always, the real estate market is likely to see more offers from lenders and industry with rates holding steady.
People are slowly returning to the real estate market as an investment avenue. It began with the Reserve Bank of India (RBI) initiating some gradual steps to infuse more liquidity into the banking system to promote lending and growth. The industry has been demanding a softer monetary policy for some time now and these steps led to more interest in property on the back of expectations of easier loan terms.
This festival season, as always, is likely to witness more offers both from lenders and industry with rates holding steady.
Another development that is pointing to more investor interest in the real estate sector is the steady depreciation in the value of the rupee. With the dollar bringing in over Rs 60 now, NRIs earning in dollars are looking at investing in property here given the increasing capital values and rentals. The dollar gaining value translates to lower property prices for investors from abroad, making property an even more attractive option given the market conditions here.
Also, the rapid urbanization leading more people to relocate to cities in search of better opportunities is leading to a growing demand for property.
Given these market conditions, it makes sense for investors, especially high net worth investors, to evaluate their portfolio again. Property has a strong case to be a part of an investment portfolio. A portion of equity and equity-based products that are taking a beating at the bourses can be liquidated to raise the margin money. The tax benefits on a home loan to acquire a second property bring down the effective interest cost of the funds, and make the investment even more efficient.
A large number of investors entering the property market will mean a spike in the price graph. In this context, a project makes a good buy at the pre-launch offer stage, given the fact that it will command higher prices even as the construction progresses. Add to this the benefit of festival season offers from lenders, and investors have an attractive option that promises to beat the inflation effect over a period of time.
A key aspect of leveraging property to draw more from your investment portfolio is in efficient management of margin money and home loan finance.
A key aspect of leveraging property to draw more from your investment portfolio is in efficient management of margin money and home loan finance.
From lavish dress-up rooms to high-tech chill-out zones, walk-in wardrobes for men are redefining luxury.
A new class of businessmen well-travelled, gadget-savvy, and not squeamish over splurging for their comfort is emerging in India.
This has not only brought new dimensions of luxury to the forefront but has also introduced new phenomena like walk-in wardrobes, which promise to redefine the concept of luxury. Contrary to popular notion, men, to invest a lot of time and effort in their appearance, a fact which has today evolved into a luxury statement.
In India, although women’s fashion gets all the attention, the men’s wardrobe style has also undergone the same transformation over the years. Men have become more stylish, following the trends of time. “Men today are equally style conscious and love being pampered. This is especially true about accessories like belts, shoes, watches, fragrances, cuffs, ties and even eyewear,” architect and designer Prashant Chauhan says. Once a privilege reserved only for women, walk-in wardrobes have now become an essential component in a home’s design for men too. The idea of dressing up in style includes pampering sessions combined with utmost luxury. The humble storage space, as it was perceived earlier, is now taking centre stage.
Nowadays, men’s walk-in wardrobes can be equipped with features like breakfast areas, sound systems, library-style stacking shelves for shoe and bag collections, secret jewellery safes camouflaged by mirrors, LED-illuminated cases to house suits and couture clothing, elegantly-designed silk or velvet-lined drawers for accessories like sunglasses, climate-controlled coat cabinets-all accompanied by lavish decor with crystal chandeliers and marble vanities, wine refrigerators, television areas, and cigar humidors, among others.
Some international luxury goods companies have even gone to the extent of incorporating private entertainment rooms. “The idea of a closet has changed from being a space just to stack clothes, to a fully-loaded styling room. It can host a mini-spa, a dressing zone with a full-length mirror, well stacked options of fragrances, bags and belts. Watches demand special care and attention. The idea of ‘less is more’ is a thing of the past. These days, it’s the concept of ‘the more the merrier’ which rules,” Chauhan says.
Elegance with functionality:
Although the aim is to create dressing rooms with a lavish elegance, functionality is paramount too. For men, walk-in wardrobes are evolving into high-tech chill-out zones that merge style with functionality. These walkin wardrobes mark a generational shift from custom-built dressing rooms.
“Introduction of technology and automation has been the current trend, which works well for today’s suave gadget enthusiast. Take for instance, a mirror which has an inbuilt television screen. You can get dressed while you get your sports update; that’s what excites men these days,” designer Poonam S says.
LED lighting is the latest innovation that has been added to walk-in wardrobes. In order to identify the colours of business suits, designers insert streams of LED lights below hanging areas and overhanging shelves, so that clothes are illuminated from above and below. “Motion-controlled lighting is in demand, with special task lighting to highlight apparels, making it easier to choose suits for different occasions,” Chauhan says.
Library-style coding is another inclusion in the luxurious walk-in wardrobes segment, with encyclopaedic wardrobes becoming popular. For such wardrobes, designers install a specially-designed app in the homeowner’s phone and iPad, which takes photographs of his favourite clothes and matches them with shoes, belts, watches, wallets, etc. It then stores them with the help of codes and hanger numbers, in such a way that the client can search for a complete look or browse through individual clothing items and accessories.
“Organized automated shelving systems for ties, jackets and suits are smart solutions. You need not dig into the depths of your closet to find a favourite belt or jacket. With system fittings available nowadays, those belts and ties can be easily organized or stacked,” Chauhan says.
Contrary to popular notion, men, to invest a lot of time and effort in their appearance, a fact which has today evolved into a luxury statement.
The rupee will bounce back sharply once speculation decreases. The RBI is then expected to soften the monetary policy stance. Many analysts believe the fall in the value of the rupee is not based on strong fundamentals. The rupee will bounce back sharply once speculation comes down, they say. The RBI is then expected to soften the monetary policy stance. A tight liquidity condition and high interest rates will have an adverse impact on the growth rate. With the slide in the value of the rupee, the Reserve Bank of India (RBI) is expected to take further steps. Banks are under pressure because of the tight liquidity condition. There have been reports that they may increase interest rates on deposits and loans too.
However, many analysts believe the fall in the value of the rupee is not based on strong fundamentals. The rupee will bounce back sharply once speculation comes down. The RBI is then expected to soften the monetary policy stance. A tight liquidity condition and high interest rates will have an adverse impact on the growth rate. A home loan is driven more by the long-term interest rate movements in the economy. The focus of the RBI’s recent monetary tightening measures was to raise the interest rates on short-term instruments and gradually bring them down as the rupee stabilizes.
Team Times Property explains the legal process by which a joint tenancy can be converted into a tenancy-in-common.
Joint tenancy has four characteristics: distinguishing features of joint title, joint possession, joint interest, and the same time of commencement of title.
Tenancy-in-common has two basic characteristics: joint interest and the same time of commencement of title.
In tenancy-in-common, if a co-owner dies without leaving any testamentary document behind, the legal heirs can claim the property as per the law of succession. The property is not retained by other co-owners as per the doctrine of survivorship.
In tenancy-in-common, the specific share of every co-owner is somewhat defined. Where the specific shares are not clearly defined, every co-owner is deemed to have an equal share.
Section 45 of the Transfer of Property Act details joint transfer for consideration: “Where property is transferred for consideration to two or more people and it is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in the property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund. Where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interest in the property in proportion to the shares of the consideration which they respectively advanced.”
In the absence of evidence as to the interest in the funds to which they were respectively entitled, or as to the shares which they respectively advanced, they will be presumed to be equally interested in the property.
Joint tenancy can be converted into a tenancy-in-common when the shares of the joint tenants are defined with the consent of all the joint tenants, by partition, by sale of the property or share of any joint tenant.
If a coparcener expresses his individual intention in unequivocal language to separate himself from the rest of the family, that affects a partition, so far as he is concerned, from the rest of the family. By this process, a joint tenancy gets converted into tenancy-in-common.
- In tenancy-in-common, if a co-owner dies without leaving any testamentary document behind, the legal heirs can claim the property as per the law of succession. the property is not retained by other co-owners as per the doctrine of survivorship.
- Joint tenancy can be converted into a tenancy-in-common when the shares of the joint tenants are defined with the consent of all the joint tenants, by partition, by sale of the property or share of any joint tenant.