Residential Trends in India - Vikram Goel
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RESIDENTIAL | INVESTMENT SALES | COMMERCIALS | VALUATIONS | CAPITAL MARKETS
Residential Trends in India – Vikram Goel
DISCLAIMER: HDFC Realty Limited (HRL) has reproduced the information contained in this document from various sources. Please
note, the material available in this document is general information only and is subject to change. The information in the document
should not be relied on as a substitute for legal, financial, real-estate or other expert advice.
No representation or warranties of any nature are given, intended or implied. You should rely on your own investigation, including
the merits and risks involved. HRL disclaims all liability, responsibility and negligence for direct and indirect loss or damage suffered
by any person arising from the use of information presented in this document.The Indian Economy Expectation on revival of GDP growth and Job creation Improvement in Investor sentiment Anticipation of a game-changer budget FDI Policy reforms aimed at easing certain sectors Speedy clearances expected on infrastructure projects Fast tracking of Public Private partnerships Infrastructure boost expected in key cities – Metros, Freeways, Corridors
Impact on Real Estate
Legislative Impetus Investment Impetus
• Real Estate Regulation & • ‘Affordable Housing’ proposed for
Development bill introduced ‘Infrastructure status’
in Rajya Sabha
• 100 smart cities with latest
• REITs Policy approved by SEBI technology & infrastructure
pending Govt Clearance .
• Impact through Pan India
• Affordable Housing for all by connectivity through roads, rails,
2022 Bill passed – HUPA ports
Ministry
• IITs & IIMs in every state
• Real Estate has 100%
through automatic route- • Additional Industrial corridors
further relaxation of riders modelled on DMIC to be executed.A Growing Residential Market
1 Urbanization
Chandigarh
2 Favorable Demographics
NCR
Jaipur
Lucknow 3 Increased Affordability
Kanpur
Ahmedabad
Vadodara
Indore
Kolkata Increasingly favorable interest rate
Surat
Nagpur
4 regime
Mumbai
Pune
Nashik Hyderabad 5 Next Level of Learning Curve
Vijayawada Guntur
Bangalore 6 Policy aimed at Transparency
Chennai
Kochi
Coimbatore• What does it mean for a homebuyer? • Would the prices go up? • Ready or under construction ? • Where to invest ? • Is it the right time?
Who we are & What can we do A 100% subsidiary of HDFC Limited We are a Real Estate Advisory Services company. We assist in: Buying, Selling and Leasing Products: Residential •Residential - New Sales - Re-sales - Rentals •Commercial / Retail / Land Transactions / Valuations and Feasibility / Capital Markets Present in 25 cities across India
Traditional Established Growth Emerging
Cluster Cluster Cluster Cluster
New Delhi NCR •Noida Extn., Bhiwadi, Sector 67
Gurgaon are top 3 supply markets
followed by Raj Nagar Extension
and Yamuna Expressway
•2 & 2.5 BHK preferred typologies
in Delhi NCR market followed by 3
& 3.5 BHK.
•Preferred unit size ranges are
1,001 to 1,500 sq ft.
•The highest number of launches
witnessed in 2013 in same
category as well.
•Demand highest in INR 30 – 75
Lac units followed by units in
• INR 75 –250 Lac range.Price Trends – New Delhi - NCR
Location Prevailing Capital Value (sq.ft
(sq.ft.)
sq.ft.) Rental Rates
Delhi North 1L - 8L sq.yd. 15,000-45,000
Delhi East 1L - 5L sq.yd. 12,000-35,000
Delhi West 2L - 12L sq.yd. 18,000-50,000
Delhi South 3/4L - 15/18L sq.yd. 25,000-4,00,000
Gurgaon 5,000 -28,000 15,000-1,00,000
Noida 12,000-50,000
2,400-12,000
Greater Noida 10,000-30,000
Ghaziabad 2,200 – 7,500 8,000-25,000Traditional Established Growth Emerging
Cluster Cluster Cluster Cluster
Mumbai MMR • Growth clusters in Dombivali,
Ambernath, Kalyan, Chembur and
Panel – MMR moving in Eastern and
Southern Direction.
• 2 & 2.5 BHK are the preferred
typologies in Mumbai market.
• Highest number of launches in 2013
was in 1& 1.5 BHK. (Inventory in
affordable segment rising).
• Demand highest for units between
500 - 1000 sq.ft units followed by
1000 – 1500 sq.ft units.
• 54% of the total absorption was
seen in properties within 500 - 1,000
sq ft.Price Trends – Mumbai-MMR
Mumbai & MMR Prev. Cap. Val. Rates (sq.ft
(sq.ft.)
sq.ft.) Rental Rates
South Mumbai 45,000-80,000 2L - 7L
South Central Mumbai 20,000- 50,000 48,000-3L
Western Suburbs 12,000-45,000 25,000-1.5L
Eastern Suburbs 9,000-16,000 25,000-60,000
Thane & Periphery 7,500 -14,000 20,000-40,000
Navi Mumbai 8,500-14,000 15,000-30,000
Extended Western Suburbs 3,500-6,000 10,000-20,000
Kalyan & Dombivili 3,500-6,500 5,000-12,000
Wadala 13,000- 20,000 25,000-75,000Pune
Traditional Established Growth Emerging
Cluster Cluster Cluster Cluster
• City expanding in a Northerly and
Pune Easterly direction.
• Developments on East (Viman Nagar,
Nagar Road) and West (Hinjewadi,
Pirangut Road) side.
• Townships/Larger complexes with
amenities.
• IT Industry driving the demand.
• Proximity to Mumbai – preferred
choice of investors.Price Trends – Pune
Pune Prev. Cap Val. Rates (sq.ft
(sq.ft.)
sq.ft.) Rental Rates
City Centre 15,000-18,000 25,000-35,000
Pune West 5,000-9,000 12,000-30,000
Pune East 3,500-18,000 12,000-25,000
Pune North 3,500-7,000 8,000-15,000
Pune South 3,500-8,000 10,000-20,000
Kothrud 7,500-10,000 10,000-15,000
Kondwa 4,500-6,500 8,000-10,000
Undri 4,000-4,500 8,000-10,000Traditional Established Growth Emerging
Cluster Cluster Cluster Cluster
Chennai
• Demand highest in INR 30-75 Lac
category followed sub INR 30 Lac
range.
• 2 BHK and 2.5 BHK are the
preferred typologies in Chennai
market followed by 3 and 3.5 BHK.
The demand for villas and 4/4.5
BHK also there.
• Thoraipakkam, Kelambakkam,
Peumbakam (all along OMR)
Sriperambadur and Porur are
hotbed for sales.
• Chengalpattu, Sriperambadur,
Navallur (OMR), Mudichur (GST)
are top supply markets.Price Trends – Chennai
Prevailing Cap Val. Rates
Chennai Rental Rates
(sq.ft.)
sq.ft.)
City Centre 18,000-25,000 35,000-1.5L
South Chennai 12,000-18,000 35,000-1.5L
North Chennai 4,500-7,000 10,000-20,000
West Chennai 4,500-12,000 10,000-40,000
Ponnamalle & Suburbs 4,000-7,500 8,000-20,000
GST Road 3,000-4,000 15,000-25,000
OMR(upto
OMR(upto Sholingnallur)
Sholingnallur) 6,000-7,000 25,000-40,000
OMR (Sholingnallur
(Sholingnallur to Siruseri 3,500-4,000 15,000-20,000
Oragadam 2800-3600 8000-10000Bangalore
Traditional Established Growth Emerging
Cluster Cluster Cluster Cluster
Bengaluru
• 2 & 2.5 BHK are the preferred
typologies in Bengaluru market
followed by 3 & 3.5 BHK
• Demand highest for units
between 1000sq.ft to 1500 sq.ft
units followed by units in 1500 -
2000 sq.ft range along with over
2000 sq.ft units.
• Sarjapur Road, Devanhalli,
Hebbal, Electronic Kanakpura
Road are top supply markets.Price Trends – Bengaluru
Bengaluru Prev. Cap Val. Rates (sq.ft
(sq.ft.)
sq.ft.) Rental Rates
City Centre 12,000-30,000 50,000-300,000
South Bangalore 3,500-12,000 15,000-60,000
West Bangalore 4,500-11,000 18,000-70,000
North Bangalore 3,200-11,000 12,000-50,000
East Bangalore 3,500-7,000 20,000-200,000
Whitefield 4,000-7,000 20,000-200,000
Electronic City 3,200-5,500 15,000-50,000
Devanhalli 3,000-4,000 40,000-100,000
NICE Corridor 3,200-4,500 15,000-30,000Property ownership for NRIs: Overview No Prior Permission Required Property Transactions are governed by FEMA NRIs / PIOs can own both Residential and Commercial Property No Restrictions on the number of properties Cannot own agricultural /farm land/plantation property unless gifted/inherited Transaction in INR using NRE/ NRO account Wealth Tax @ 1% for ownership in excess of Rs. 30 Lacs (as on the last day of the financial year (FY)) Funding options – Loans from India or Overseas Funds lying in or remitted into NRO/NRE account in India
Documentation and Checks Check Title Deed of Property (esp. if Inherited or Jointly held) Take Bank Release if it was held under Mortgage. No Dues Certificate from Seller: water, elec., pending bills all paid out New Constructions – Clear Land Titles, all Approvals and Permits for construction from Civic Authorities. In case of PoA for Developer – Ensure Review by trusted legal counsel Check Payment Terms & Conditions – Construction Linked (CLP) or Payment Linked (PLP).
Sale of Property in India NRIs can sell any Residential / Commercial property to anyone under FEMA Any ‘agricultural ‘ property has to be sold to a Resident Indian only. However, no such restriction on gifting or succession. Repatriation Options: Sale proceeds deposited into an NRE account is freely repatriable. However, proceeds deposited in an NRO are repatriable up to $1million in one FY. PoA - have your PoA as a resident Indian who can process registration, possession, execution of agreement of sale.
Capital Gains (CG) Every asset is classified either as a Long Term (LTCA) or a Short Term (STCA) asset depending on the holding period of the property - Property held for over 3 years is considered as a LTCA. Gains on sale of a LTCA is chargeable @ 20% whilst that from sale of a STCA is chargeable at the normal Income Tax rates which are specified for each financial year under the Finance Act.
Capital Gains (Contd.) The benefit of Cost Inflation index is available to NRI’s selling a LTCA Exemption available if the Capital Gains are re invested in: A. another residential property within a period of 2 years or B. Construction of another residential property within a period of 3 years
Tax Benefits NRI entitled to same tax benefits as residents 1.5 lakh in tax deduction applicable under Section 80 (C) of Income Tax on repayment of the loan principal No upper limit in deduction for home loan interest if let out. Deductions in stamp duty, registration charges, municipal taxes, and flat 30% on rent (excluding municipal taxes) are applicable to NRIs
Letting Out Vacant property considered ‘self occupied’ and exempted. Second deemed as let-out and fair value added to taxable income NRI to withhold tax @ 1% on sale of property, if property value exceeds Rs. 50 Lacs. The tax withheld has to be paid to the government treasury TDS on sale of property to NRI, shall be deducted at 20% but benefit of lower deduction can be taken at the time of sale.
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ceo@hdfcrealty.com
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