Latest News

A prominent South Delhi developer said the number of people putting their bungalows up for redevelopment has also increased manifold and he expects rates to go up even further in the coming months. Apartments this side of town are being sold in the range of Rs 4 crore to Rs 10 crore depending on the size and location. On the other hand, the charm of Mumbai's posh southern localities like Cuffe Parade, Malabar Hills and Cambala Hills has waned over the last six months after an astounding three-fold jump in three years.

Homebay (a subsidiary of property consultancy JLLM) CEO Raminder Grover said supply in south Delhi has improved considerably over the last one year. From 50-60 apartments about a year ago, there are now around 200 apartments available or under construction in various areas of South Delhi such as Vasant Vihar, West End, Defence Colony, Gulmohar Park, Anand Niketan, Golf Links, Jor Bagh and Sunder Nagar.

A 1,800-sq ft apartment in Vasant Vihar which was going for Rs 3-4 crore in 2006 costs Rs 7-8 crore today. An apartment of similar size in Maharani Bagh would cost Rs 5 crore today, up from Rs 2.5 crore a year ago. In the last two years, Mr Grover said there has been an appreciation of 70-100% in South Delhi apartment prices.

This is the first time NHB has proposed such a scheme. "This is a new initiative which will provide liquidity to lenders and free up capital. This will ultimately channel more resources to the housing finance sector. This will also ease pressure on home loan interest rates," NHB executive director RV Verma told ET. Here's how the proposed structure will work -- NHB would hold the purchased assets on its balance sheet for onward securitisation. In the process, the portfolios will get more seasoned with NHB. In other words, it will act as a warehouse of mortgage assets to be securitised and then sell to investors without diluting the standard of the assets.

The Group Housing project will have in-house amenities like Entrance Gate with Security, Community Hall, Pool and Kid's Pool, Club and Commercial, Convenient Shops, Entry to Lift Lobby, Tennis Court, Children Play area etc. The Company will now undertake all the development and marketing work of the project. The Project is expected to have a turnover of approx. 50 crores and will be completed in over 2 years approximately.

The stock closed the day at Rs.89.50, down by Rs.2.05 or 2.24%. The stock hit an intraday high of Rs.92.90 and low of Rs.89.

The total traded quantity was 3162 compared to 2 week average of 11238.

Kolkata Metropolitan Development Authority (KMDA) is inviting bids for setting up a five-star hotel and a chain of other commercial establishments on 18 acres near the Kolkata logistics hub off Kona expressway.

KMDA officials said they have already started receiving applications. “There are three separate plots, covering about 10 acres, five acres and three acres respectively. The 10-acre plot is for setting up the five-star hotel. The other two plots are “free use” lands, open for different kinds of commercial establishments, like hotels and resorts,” said a senior KMDA official.

Officials said nearly 100 companies have bought the pre-bid documents. “They would now be asked to furnish details of
their expertise and finally, some of the firms would be selected for taking part in the bids. The bidding would take place on July 31,” said a senior official.

"Owners of flats and plots in the projects like World One and Unitech on the Kharar-Landran road are very eager to sell off their property at minimal profits. Flats at World One, which cost Rs 37 lakh around a year ago, are now available at a resale profit of just Rs 1 to 1.5 lakh," said Gurpreet Singh, sales manager of an online real estate company in Chandigarh.

Kunal Jain, a resident of Delhi, invested in a one-kanal plot at a rate of Rs 12,500 per sq yard in Unitech six months ago. Now, the going price is Rs 12,700 per sq yard. "I bought the plot for the sole purpose of investment. I completely banked on the brand name but it hasn't really worked out. I expected the land to appreciate to at least Rs 15,000 per sq yard within a couple of months but that never happened. Even in the coming months, I do not foresee any increase in prices," he said.

He never visited Chandigarh or the project itself. Now, apparently worse for the wear, Kunal categorically states that he will never invest in real estate in the region.

National developers like Unitech, Ansals and Emaar MGF confirmed that most of the investors were from Delhi. "There are hardly any local buyers for these projects as all are well aware of the current market situation," said a resident. But the developers are still quite optimistic about their projects. Unitech claims that their plots, which opened for bids in January, are completely sold out.

Last week, Unitech launched another scheme, the three-floor `Executive Flat' ranging from Rs 45 to 55 lakh. "Over 50 per cent of these floors were sold within a week. Most of the buyers of this scheme are genuine and not just looking for investment. Only a very small percentage of buyers -- about five per cent -- hail from Delhi; the majority are from Chandigarh and Punjab," said the sales manager of Unitech, Delhi.

Because of the central bank's monetary measures taken so far to contain inflation, the interest rates on home loan have gone up by 2 percentage points - to over 12% in the last one year. Prior to this, the central bank, in order to contain the rise in the prices of real estate, had curtailed the flow of money to the sector. This has resulted in the rise in interest rates by over three percentage points between 2005 and 2007.

In fact, in the last three years, interest rates on home loan have increased by around 5 percentage points from around 7% in 2005 to over 12% at present. This has led to increase in the equated monthly installment (EMI) on a 20-year loan by a whopping 42%. That means, EMI on Rs one lakh loan for 20-year , increased by Rs 326 - from Rs 775 to Rs 1,101. And on a loan of Rs 50 lakh, EMI has increased by as much as Rs 16,290!

This has affected the demand across the board. Between 2003-05 , because of easy availability of loan at lower interest rates, the price of real estate rose by over 200%. This pushed the land prices in the area also. A senior builder said that at present, the average land cost for the construction of one sq feet comes out to be around Rs 2,000 to Rs 3,000 per sq ft in Noida and Gurgaon. In other areas like Greater Noida, Manesar and Ghaziabad, the land cost in the construction of housing project is in the range of Rs 1,500 to Rs 2,000 per sq ft.

Besides this, as the prices of apartments during 2003-05 went up, builders had also improved the specifications of construction. This led to increase in the cost of construction from Rs (600 - 1,000) per sq feet to Rs (1,200-2 ,000) per sq. ft. The rise in the cost of construction is also due to manifold jump in the prices of raw materials like steel, cement and bricks.

As the land cost and cost of construction increased substantially, builders find it difficult to cut the prices on the finished products to absorb the rise in EMI due to increase in the interest rates. Assotech MD Sanjiv Srivastava said that in the last one year, developers and builders have not increased the prices of their products while the input cost has increased by almost 30% to 50%. Therefore, he said, his profit margin has already been squeezed. And, any further cut on the prices of built up apartments and plotted houses will turn his business into a loss-making proposition.

The 3,000-room hotel would be spread over 12 acres on Sohana road and three blocks of no-frills accommodation. Spice plans to invest Rs 400 crore in the project.

The hotel is being planned to start operations in time for the 2010 Commonwealth Games. The proposed hotel complex would be about 20 kilometres away from Capital's Indira Gandhi International (IGI) Airport. According to tourism ministry's estimate, Delhi would face shortage of about 40,000 hotel rooms by 2010.

"We have already acquired land for the proposed hotel which would be the biggest in the country. The upcoming hotel would provide three-star services at the cost of budget hotel," said Spice Energy CEO Ravi Chilukuri. Instead of the usual system of charging for all facilities, the budget hotel would charge for basic services and customers would have a choice to avail other services at an extra cost.

Rs. 300 crore will be invested in commercial projects in Pune and Rs. 300 crore will be invested in affordable housing projects (Rs. 10 lakhs - Rs. 25 lakhs per unit) in Maharashtra (in Nagpur, Nasik, Pune and suburban towns/ districts of Mumbai). In addition, Milestone is also actively considering a few investment proposals from Nasik.

Rs. 200 crore is being earmarked for development of Logistics Parks across Maharashtra.

Elaborating on the choice of cities, Ved Prakash Arya, Managing Director of Milestone Capital Advisors said that Pune has emerged as a favored destination for the IT/ITES sector. This has led to an explosive growth in the real estate markets, with prices rising by almost 200 per cent in three years. "We therefore believe that in Maharashtra, Pune presents among the best opportunities for a good return on our investment. We believe Pune is ripe to have low cost (Rs. 10 - 25 lakhs) affordable housing integrated township projects," Mr. Arya said.

On Thursday, Delhi Urban Development Minister Raj Kumar Chauhan announced his government's decision to start the process of allotting about 10,000 low cost houses from September onward. This, Chauhan said, is the first phase of the low cost housing being developed by the government. A total of four lakh houses will be constructed in the capital under the Rajiv Awaas Yojana for the economically weaker sections.

The application forms will be sold from August 1. The forms, priced at Rs 100, will be available at 54 designated centres.

Officials said applicants will have to declare their incomes. The first lot of 10,000 houses will be allotted soon after verification, processing and completion of other formalities, which will be recommended by the district committees. The contribution of the beneficiary will be around Rs 60,000 for which bank loans will be arranged. The remaining cost will be borne by the Centre.

According to informed circles after the relief given to people in stamp duty rates for registry of property, the government has neutralized it by announcing a hike of 25 to 50 per cent in circle rates.

From July 16, people will have to pay stamp duty as per the enhanced rates.

According to the new rates also, Kaushambi tops in higher residential rates. A sum of Rs 32,000 has been fixed per sq mt as against previous rate of Rs 25,000 per sq mt. For Vaishali and Indirapuram a rate of Rs 26,000 and Rs 28,000 has been fixed which is the second highest rate. Vasundhra is at third place with a rate of Rs 20,000 to Rs 22,000 per sq mt

Though the administration had heard suggestions and objections, it stuck to the rates finalized. Joint commissioner, Stamps, K.P. Yadav kept telling people till the last moment that the rate list has not been implemented.

When the authorities felt that the stamp duty was coming down, new rates were made operative on Tuesday.

"Global Logistix stands to play an integral part in Navi Mumbai. The economic conditions in India are perfect at the moment to support such an initiative," BNA quoted KCB chief executive Ebrahim H. Ebrahim as saying in a statement.

"We are looking forward to sustaining this important endeavour as it will aid the infrastructure and logistics industry development that is sorely needed in that region of the world," he added.

The project is a logistics-focussed real estate development comprising an integrated logistics park on 400 acres of land.

The initial development projects supported by this investment fund will include construction of warehouses, control building, maintenance depots, staff accommodation, parking areas and various other amenities.

Rahul Varma, director of Bengal Shristi Infrastructure Development, a public-private joint venture developing integrated townships in tier-II south Bengal towns like Asansol, Durgapur and Ranigunj, said Real estate prices had gone from Rs 1100 per square feet to Rs 2700 per square feet in Durgapur in the last two years and looked likely to touch Rs 3000 per square feet next year.

Despite this trend, developers were targeting actual users as a target category as this was the more sustainable demand category in the long run, said Sumit Dabriwala, managing director of Calcutta Metropolitan Group.

As far as occupancy rates in residential complexes in tier-II cities was concerned, around 70 per cent were actual users, while 30 per cent were possibly investors. Dabriwala admitted that the proportion of investors in a particular project varied according to the marketing strategy of the developer.

Slapping a fine of Rs 4,05,082 and directing the authority to pay Rs 1 lakh towards compensation for mental agony and harassment suffered by the consumer, Justice JD Kapoor, in a recent order, said, "no person having booked a flat for Rs 4 lakh or so is expected to pay Rs 8 lakh and even if there is cancellation of the flat by non-payment of part of estimated price it was false and misleading statement as impression was given that such a price was actual price whereas actual price was almost double."

According to the complaint, Uday Kulkarni had booked a flat with the DDA in the Sixth Self-Financing Housing Scheme-1985. A flat was allocated to him in the year 1991 at the estimated cost of Rs 4,51,900. The complainant alleged that 90 per cent of this cost was payable in four, six monthly, instalments by July 31, 1993, which he paid. The possession of the flat was to be delivered within two years. However, the final demand letter was issued in the year 1998 showing the disposal cost of the flat as Rs 8,04,590 and after adjustment of the payments already made, Kulkarni was required to pay Rs 4,05,082.

The communication says that the DDA would process applications submitted to it by industrial units before February 7, 2007 with layout and building plans and allow them to re-build industrial sites with 50 per cent increase in FAR as per stipulations of Delhi Master Plan 2021.
However, the DDA would charge appropriate levies for increased FAR over and above which was permissible in 1996 from the beneficiaries as per prevailing orders.

The communication clarifies that the local body will accept the proposals only when the industrial units surrender land to DDA free from financial and physical encumbrances within the framework of the orders of the Supreme Court.

In the event of development of retained land as an individual plot, the FAR will be increased by 50 per cent as per the permissible land use of the plot.

All signs point to a typical credit crisis. The perceived risk-reward equation for investing in the domestic realty market is turning awry and seems likely to keep foreign investors at bay, at least in the near future. Following the global cash crunch, one of the major causes of concern for established and emerging real estate firms is to organise financing for ongoing, as well as upcoming projects.

The bloodbath in the stock market has impacted the Indian real estate sector, as a majority of large developers are now finding it difficult to complete ongoing projects. Their shares have tumbled after the RBI's decision not to cut interest rates. Share prices of most listed real estate firms, for instance, fell by nearly 50% from their 52-week highs and are seeing a bearish trend; I fear a further downslide by the time this article goes to print.

The dismal situation in the real estate market is, in fact, reflected in the Asia-Pacific region as well. Indiabulls Real Estate is performing below expectations, while Unitech has had to put on hold its IPO plans for its real estate investment trust (REIT) in Singapore. With the current situation not likely to change very soon, DLF has also delayed its plans for a Singapore REIT listing.

On the domestic front, the Reserve Bank of India (RBI) has declared the real estate space a sensitive sector under its prudential norms. In tune with the rising cost of funds and the need for additional capital for risky assets, banks in India have increased their lending rates for real estate projects. The prime lending rate (PLR) of most public sector banks is in the 12.25-12.75% band, in comparison with last year's rate of 10%. Since banks have to set aside a comparatively higher amount of capital for real estate exposure, compared to other sectors, the sector attracts higher risk weightages and lending becomes closely monitored. Banks have also begun to ask for higher contributions from promoters and developers as a precautionary measure to safeguard themselves against loans. Given the inflationary squeeze that the current government is facing, it is likely that monetary policies will put more pressure on already-high interest rates. That, by no means, is good news.

According to the sectoral deployment data issued by the RBI in the first quarter, the banking sector lent Rs 53,897 crore to the real estate sector as of February 15, 2008. Year-on-year growth in credit deployment for the current period stood at 26.7% (Rs 17,361 crore) as against 79% (Rs 18,770 crore) a year earlier. Credit deployment in the housing sector too decelerated from 25.8% last year to 12% in the current period.

"This is really a tough time for the realty industry," Naveen Raheja, chairman of the Delhi-based Raheja Developers told IANS. "On the one hand developers are hit by a cash crunch and, on the other, sales are dropping."

According to property consultant firm KnightFrank India, despite huge demand, the volume of commercial property sales has dropped 30 percent and home sales by 60-80 percent in the past two months following rising interest rates.

And the worst hit are the small developers who have acquired land at exorbitant prices and now have no funds.

"Small developers are under pressure now. Selling incomplete projects to big developers is the only viable option for many of them," said a senior official with KnightFrank India.

Bigger real estate firms such as Parsvnath, Raheja, Omaxe, Shobha Developers and Hiranandani have received many such offers from smaller developers.

"With sales dropping and property prices going for major correction, the venture has become less profitable," Parsvnath Developers chairman Pradeep Jain told IANS.

"So those who joined the realty bandwagon expecting big returns are now opting out", he added. "Many small developers have approached us."

Even as the real estate market slows, developer Ansal Properties and Infrastructure Ltd (Ansal API), has launched an ambitious 2,500-acre township project adjoining Greater Noida, in Uttar Pradesh.
The company plans to invest Rs26,800 crore over the next five years in developing this project.

The township, branded The Megapolis, is extendable to around 9,000 acres, which means that the company has an option of increasing the size of the township to that size.

If the company decides to extend the township, for which it needs government approvals, this would make it among the largest residential projects in India, after DLF Ltd's proposed residential project, Bidadi Knowledge City on 9,178 acres of land at Bidadi between Bangalore and Mysore.

Other large proposed Indian townships include Ansal's own 5,000-acre township in Lucknow, DLF's 5,000-acre township in Dankuni near Kolkata and Emaar MGF's 3,000-acre township in Mohali, on the outskirts of Chandigarh.

Most large townships are coming up in smaller citiesbecause land is relatively cheaper there and companies are looking to set up manufacturing plants and offices tocut costs, thus providing potential residents.

The Megapolis, which has been approved by the Uttar Pradesh government, is about 3km from Greater Noida. Land for the project will be acquired directly from the farmers and the government. Ansal will have to acquire 75% of the land directly from farmers, while the rest would be acquired for them by the government.

The company has already bought around 300 acres of land, paying around Rs35-40 lakh for an acre.

"Once we acquire 60% of the land for the project, the government will approve the site plan of the project," P.N. Mishra, executive director, business development, Ansal, said, adding, "we plan to develop the township on 2,500 acres of land for now, but eventually we will expand up to 9,000 acres."

Ansal plans to fund the project through internal accruals, customer advances and by partnering with financial institutions. It has already partnered with HDFC Bank Ltd, which has picked up a 8% stake in the project.

HDFC has so far invested Rs500 crore in the project though Ansal didn't give the total value of the bank's stake.

What are the challenges facing the real estate sector? Also, what opportunities and trends do you see in the property market?
The biggest challenge today is the interest rate on home loans. It has gone up from 7.5% to 10:75% and this has obvi-ously shocked the home buyers whose budgets have gone haywire. As a result,ments or waiting for interest rates to fall.There had been a slowdown for a while.But with the inflation going up, interest rates are not coming down and hence people have started buying again. Neither the land prices nor the construction costs are showing signs of any decline costs are showing signs of any decline and so there is no question of price correction. Building costs are high and there can be no lowering of prices. People are realizing this and are buying. I have noticed in the last two months that transactions have picked momentum.

The opportunities in the real estate sector are infinite. There is a huge growth potential and those who are worthy should take up the challenge.

With soaring real estate prices,there is much talk of affordable housing. You said you will consider yourself to be a professionally successful in true sense only when you are able to deliver houses with an EMt of Rs 750- toRs 4,000. Is this possible and practical?
It has to happen. Market needs have to be met. With support from the government along with right effort, right strategy and right research, this will hopefully be soon possible. Mass affordable housing is indeed very challenging. One has to work within the budget cost and deliver to the market what market wants. For all that,weneed to tightenour belts.

What is the USP and growth strategy of your group?
We have four verticals IT!retail, residential'townships and the mass affordable
housing. We are fully nurturing all the four and want to do better every year. I hope that my delivery exceeds the market expectations. We have been firmly grounded and have an excellent reputation of delivery. People have immense
trust in us.

What are the current projects that you're focusing on?
We are quite active in commercial real estate. We are coming up with a huge children's mall titled Kidopia near Saras Baug, Pune. Also in the pipeline is a large mall (1.6 million sq ft) on Karve Road. An ITSEZin the heart ofHinjewadi has been planned too.

On the residential front, we are launching three major townships near Hinjewadi and Kharadi and that is what is hot and happening for us this year. Also our existing projects like Kumar Kruti,
Kumar Shantiniketan and Sublime are doing well, along with our other projects in Mumbai.

Kumar Shantiniketan is a mega town- ship on Baner Pashan link road housing 375 luxury flats, Shantiniketan is built on the ethos of Rabindranath Tagore's world renowned Shantiniketan. A veritable green paradise with an abundance of water bodies, this modem edifice enjoys the best comforts in natural environs.

Kumar Kruti in Kalyani Nagar offers homes that have been culled from 39 years of our home building experience and Sublime has spacious three-side open terrace apartments in Kondhwa.

The tripartite  deal made the city eligible for financial aid from the union ministry of Urban development the state government too promised rapid improvement in infrastructure these change in climate rise hopes all round and realty in farida bad begin to move ahead with wind behind its back.

Deepak Talwar, a NAREDECO- certified realty experts, attributes Faridabad's sluggish growth earlier, despite its potential, to the states Government's pro-Gurgaon policies in matter of development. According to him, "the city has tree mend hidden capacity of real estate development that will manifest itself now as the civic agencies are laboring hard to insure better infrastructure. Aa a result, various residential and commercial developments have taken places in recent time."

Truly Faridabad today can be proud of good residential developments as well as attractive malls that include SRS Multiplex, Parsvnath City Mall , Manhattan, Pristine City Mall, Vardhman Plaza, Crown Plaza and Crown interiors. The Last Named, recently launched, is the outcome of a joint venture between AerenR Enterprises & Crown Group and is specially designed for lifestyle and interior products. Over two Dozen malls are under construction, indicative of the high level demand of demand such shooping-cum-entertainment designation.

The general pace of residential development has also gained momentum owing the rising population in and around the city. Though 90% of the development in this segment is plotted development done by HUDA,a few private builders have also contributed their bit. Eros Group has developed Charmwood Village, a residential locality on Surajkund Road whereas Omaxe has built Omaxe Green Valley in Sector 42. M fordable land price is another significant growth driver. Consequently, the investors are getting increasingly interested.

Says Amit Raj Jain, Vice-President, BPTp,"Since neigbouring Gurgaon has come up to a saturation point in real estate and the prices there are beyond the reach of the masses, Faridabad has emerged as a good option especially I as affordability here is better than any I other NCR town."

Affordability apart, realty experts cite one more reason behind the thrust of development. Informs Talwar, "Recently the government has permitted change ofland use (CLU)for the tracts along Mathura Road where a number of factories, rendered sick, were lying abandoned. The uses of these spaces are now geared to the development of IT and commercial ventures. For example, Vatika Group is coming up with an IT Park and Realtech is constructing a commercial tower over there."

These developments will, in his opinion, have a positive impact on the development of Faridabad's residential and commercial zones.

New Activity Zone
New activity zone prospects of saturation looming large within the main city limits have forced the government to open a vast tract of land on the other side of Agra Canal as another centre for residential and commercial growth.

Locally known as Neher Paar, this  Greater Faridabad area is being developed beautifully by several big and small builders for both housing and business purposes. Among them are BPTP,SRS Uppals, Omaxe, Puri Constructions, Shivsai Group, Era Landmarks and RPS Group. The projects are lavish but not too expensive. In the Faridabad Master Plan 2021, Haryana government has allowed new sectors of Greater Faridabad to be developed as multi-storied residential area.

The basic conditions needed for granting permission for transfers are, there ought be no arrears of instalments, extension fee, enhancement
cost, overdue interest etc; no dispute,litigation or court case/encroachment and misuse of the plot of any kind; no encumbrances like mortgage;and physical possession of the plot by the transferer and its proper demarcation.

About the actual transfer, the proposed method, as opposed to the earlier dual procedure, involves a single stage of operation. The appropriate documents and application submitted
will be scrutinized within 30 days and if no objection is received during that period, the transferer and the transferee can visit the Estate Office in another 30 days. After a photograph is taken of both of them along with the Estate Officer, the EOwill issue the re-allotment letter in favour of the transferee.

Now, such a transfer can take place only on the basis of the execution of conveyance deed/ sale deed provided the latter has been executed. with the sub-registrar of the area in which the plot
proposed to be transferred is situated. However, in such a case the two sides need not appear before the Estate Officer after submission of papers. But the transferer/transferee have to submit a certified copy of the sale deed within two months with some other documents.

If the transfer is to be effected through a court decree, only administrative charges will be levied. In case of collusive decrees, the same will not be challenged provided the judgement does not violate the HUDApolicy guidelines.

The Apartments coming up as part of the Commonwealth Games Village, next to the Akshardham temple, is all set to change the image of east Delhi. If real estate experts are to be believed, the prices of these flats will bring the value of new properties in east Delhi and satellite towns like Noida, Greater Noida and Ghaziabad at par with similar properties in central, west and south Delhi.

During the 15-day long games in October 2010, the apartments will be used to accommodate 8,500 athletes. Post games, the developer, Dubai-based Emaar MGF, would hand over one third of the total 1,168 flats to DDA and the remaining 779 flats - for which bookings have already started would be handed over to the buyers.

"The developers are obviously benchmarking it for Delhi. Though there is a general decline in sale of residential properties, there are still end users in the market. The high prices of flats at the Commonwealth Games Village will ensure that more end users buy it instead of investors and speculators," said Anshuman Magazine, Chairman & Managing Director of real estate consultancy firm CB Richard Ellis.

Magazine added, "A similar brand new developer's flat in west and central Delhi would cost only a little more than this. The main reasons that the property will find takers will be its exclusivity and location."

In the last one month, there has been a good response with about 200 people booking apartments at the games village.

Realty experts also feel that the games village has also impacted the existing realty market in east Delhi and its adjoining areas. "It's not only about the Commonwealth Games Village. The kind of infrastructure like hotels, airport, flyovers, metro, railway connectivity, etc. that is coming up in the entire eastern part of the city to supplement the games has impacted the property price in the area," said an oncial of 99acres.com, India's leading real estate portal.

In the current situation, Banks are also asking for higher contribution from the promoters and developers in a move to secure their position in the housing finance segment. They have made the contribution limit 30 percent. It was 25% earlier. The State Bank of India has initiated the move. As the contribution limit is extended, the promoters will now have a higher stake in project completion and housing finance repayment. Keeping with the rising cost of loans and the need for additional capital for risky assets of real estate sector in mind , the banks have increased the housing loan interest rate.

All the real estate companies are now bound to pay prime lending rates (PLR) for their new projects. The PLRs in case of most public sector banks is in the band of 12.25 to 12.75 per cent. However, lending was done at a PLR below 10 per cent rate last year. The Indian banking system as a whole gave Rs. 53,897 crore to the real estate sector as housing finance. The year-on-year growth in credit disbursement is 26.7 per cent (Rs. 17,361 crore) compared to 79 per cent (Rs. 18,770 crore) in 2007. The growth in the commercial real estate loan segment remained high.

The companies embarked on major projects in Kolkata in the last couple of months but none is able to expedite them, albeit for different reasons.

Construction at Uniworld City (Unitech's project on EM Bypass Road) has stopped because there are no funds. "The company is now seeking joint venture partners and private equity money," a source familiar with the development said.

The project was to be executed in five phases but even the first one hasn't been completed.

Unitech paid thrice the existing rate to buy land for the project Rs 33 crore per acre.

A Unitech spokesperson, however, denied the development saying construction was on and bookings have begun.

No. 1 realtor DLF isn't much better off, either. It won a global tender for developing Bengal's largest public private partnership (PPP) venture in Dankuni.

But due to inordinate delays in land allocation, the project has been put on ice, sources said.

Duly approved and licensed by the Directorate of Town and Country Planning (DTCP), Haryana, CHD City is offering residential plots in sizes of 300/350/500 sq yards and is expected to house over 25,000 families, according to a Press release.

Says Gaurav Mittal, director, CHD Developers, "Karnal and its surroundings define the future of urban life, a finely tuned balance of commerce and lifestyle. We are confident that CHD City with its myriad features will find favour with those who seek an affordable yet quality lifestyle."

CHD City promises the best of amenities in fine dining and entertainment, including a mall, food court, hotel, clubhouse, commercial centre, school, multiplex, play area for kids, jogging tracks, etc.

For sale in Berstech's Parkview Residency (Palam Vihar) a 3 BR, 1642 sq.ft, club and pool facing, lower floor, premium apartment. In tower 8, #3 unit.

Great oppportunity to get a 3BR in less than Rs 60 lakhs.

These two projects, with 400-500 units, involve an investment of around Rs.10 billion each.

'We have received proposals from the DLF group as well as the Siddha group for setting up clusters of such units at Rajarhat in Kolkata,' WBREDA director S.P. Gon Chaudhuri said.

'We have agreed in principle for the DLF proposal but are yet to weigh Siddha group's proposal,' he said.

The units would have solar panels on the terrace to generate power for residential use; excess power, if any, would be sold to the state grid.

'They proposed to build 400-500 houses spread across 70 acres. Apart from solar power, the projects would also have rainwater harvesting capabilities as well as equipment to convert waste into energy,' Gon Chaudhuri said.

These units would be built with green materials, which are made by consuming lesser amounts of energy in comparison to traditional building materials.

The two proposals come close on the heels of WBREDA's Rabi Rashmi Abasan project, India's first commercial solar housing scheme.

The government SEZs, which were earlier known as export processing zones, are located in Kandla, Chennai, Falta, Cochin, Noida, Santacruz and Vishakhapatnam. These zones are currently under the supervision of development commissioners.

In the new dispensation, the zones will come under an SEZ authority, which will be responsible for their development.

Moreover, the zones will be able to use income from the land and building rentals to sustain themselves and at the same time invest in infrastructure development.

"The financial autonomy of these government zones, if accepted, will result in better management of resources and greater investments," said Yogendra Garg, director general, Services Export Promotion Council and former development commissioner of Kandla SEZ.

SEZ expert Tapan Sangal, senior manager, PricewaterhouseCoopers, says the move is timely. "With the private zones coming in to operation, an autonomous government zone will be in a better position to face competition. Many government zones need to beef up their infrastructure and the proposed autonomy will help them in doing so."

You have zeroed in on your new house, negotiated with the builder and the bank, and are all set to sign your loan papers. Buoyed by dreams of moving into a dream house that is owned by you, you are in a rush to get the deal sealed as quickly as possible.

The loan document runs into 50 pages and its legal language so arcane that it does not even look like English. So you think, "Hey, everyone signs the same agreement with the bank, what is there to read? It can't compromise my position; otherwise somebody would have pointed it out to me before". If this sounds like you, think again! There are a whole lot of potential dynamites in all the leading banks' home loan agreements.

In the last few years, with the number of players and home loan offers multiplying manifold, getting a home loan has become a fairly easy process. Competition among housing finance companies (HFCs) has ensured that at least you will have no dearth of lenders.

But, almost as if a cartel was operating behind the scenes, the terms and conditions behind the home loan are framed in such a manner that the HFC acquires a strong legal cloak and your position is often compromised.

Internationally, there are strong legislations ensuring that both the borrowers' and lenders' rights are expressed in all loan transactions. (See: When will we see truth in lending?) Unfortunately, in India this is not the case.

The home loan agreement is the most important document here. But HFCs are often hesitant to provide you with a copy in advance so that this could be read and understood before you sign the agreement. HFCs use every method to refuse or delay handing over a copy to the borrower. Their excuse? "No one really reads them," states a State Bank of India (SBI) official.

It is important that you read the agreement before committing to the terms and conditions laid down by the HFC. Outlook Money attempts to assist you in this by pinpointing a few of the clauses in the agreement that side with HFCs.

Reset clause on fixed rates. With the current trend of rising interest rates, most borrowers choose to opt for a fixed rate loan. So does this mean your interest rate is locked at 11.5 per cent for the entire life of the loan? Not anymore. This is because banks have introduced a reset clause in their fixed rate home loan agreement that allows them to change the interest rate in the future, even on fixed rate loans. For instance, SBI has introduced a clause according to which it has the right to revise the fixed rate after two years. Corporation Bank and Canara Bank have reset options at the end of five years.

Sachin Shinde, a Pune-based software engineer, thought he had made a "prudent" decision by opting for a fixed-rate home loan five years back from IDBI Bank. Three years after the date of disbursement, Shinde received a letter which said it was time for renewal of his loan and that the interest on his fixed home loan had been increased by 0.5 per cent.

On checking with the bank he learned that there was a clause in the agreement that said the fixed rate was only for a period of three years and not for the entire tenure.

A senior official with Bank of India points out that no lender can have an agreement that says a fixed rate can be fixed for the entire tenure of the loan, say 15 or 20 years, as this is likely to cause an asset-liability mismatch.

Clearly, most borrowers are misled by the `fixed rate' loan. Read the loan agreement carefully, look out for the reset clause and quiz your HFC about it.

Force Majeure Clause. Often a semi-fixed rate loan gets advertised as fixed rate loan. You can find out the real picture only if you happen to read a clause such as this: `Provided further that from time to time, the bank may in its sole discretion alter the rate of interest suitably and prospectively on account of change in the internal policies or if unforeseen or extraordinary changes in the money market conditions take place during the period of the agreement.'

This is called a force majeure clause, which allows an HFC to `un-fix' and raise the rate under exceptional circumstances. But what constitutes an exceptional circumstance for the HFC is ambiguous.

Defining a default. Also ambiguous and uncertain are the numerous clauses on what constitutes a default. A lay person cannot be faulted for thinking that default purely means non-payment of one or more loan installments. But HFCs go way beyond this. Here's a look at Citibank's home loan agreement as to what constitutes default--(i) "where the borrower, or where the loan has been provided to more than one borrower, any of the borrowers is divorced or dies (applicable in case of an individual)", and (ii) "if the borrower or any of the borrowers is/are involved in any civil litigation or criminal offence."

The ongoing slowdown in the Indian real estate sector has started impacting the securitisation of loans available to the industry. The demand for such securities has also witnessed a dry up. Now, the biggest buyers of such products cut exposure to these securities and consider them as the most illiquid of tradeable papers. The process of securitisation has come down. There is no large scale real estate loan securitisation in the last few month.