Invest along the OMR for rental returns


Pushkara,Marg Properties

Pushkara – Marg Properties

A 2BHK apartment along the Old Mahabalipuram Road (OMR) that was available for Rs 12,000-15,000 per month a year ago, now commands a monthly rent of Rs 15,000-18,000! This clearly indicates an annual appreciation of 20-25 per cent. Thus, investing in a residential property along the OMR in Chennai seems to be a good proposition.

OMR recorded the highest gross rental yield at 4.18 per cent during the Apr-Jun 2013 quarter. The rental values in the locality have been rising constantly with an increase of 8-9 per cent registered in the Apr-Jun 2013 quarter. This coupled with stable capital values of apartments in the locality has pushed the gross rental yield along the OMR. In fact the locality has been registering the highest rental yield in the city, ever since Apr-Jun 2012 clocking close to 4.5 per cent yield quarter-on-quarter.

“OMR is faced with a situation of over-supply today. This has resulted in capital values stagnating as buyers have a wide range of options to choose from. Even though the over-supply has had an impact on the rental values, but compared to outright sales the rental market in the location is still up beat,.

So, what has led to a situation of over-supply in the market? Most of the residential demand is pouring from IT professionals working in the numerous MNCs along the OMR. “Since many of these young professionals are not locals, they prefer rental accommodation than buying their own homes. Thus, the demand along the OMR stretch is more aligned for rental housing,”.

Thus, in case you are looking for a second home as a future asset, buying a house on the OMR might prove profitable what with the high rental returns it promises. Hardcore investors may also target OMR for healthy returns.

Source:Magic brick

Advertisements

New launches spurred residential market in Chennai


Chennai’s good economic density, progress in infrastructure development and growing influence of IT/ITeS has enhanced sales in the realty markets. The Chennai property market showed a remarkable improvement seeing an average appreciation of 10-12 per cent in the residential sector across the city during past June-Nov 2012 period.

Marg Swarnabhoomi,Marg Swarnabhoomi Aayush Apartment,Low budget apartments in chennai,low budget flats in chennai

Marg Swarnabhoomi Aayush Apartment starting at 9 Lakhs* – Low budget apartments in chennai

The Chennai realty segment witnessed location-wise appreciation in values. There was a fragmented demand-supply across locations and henceforth value appreciations.” Areas such as Thoraipakkam, Sriperumbudur, Medavakkam and Kelambakam noted an escalation of up to 20 per cent in residential property values in past six months and is still appreciating, he added.

“The new projects being launched in past one year is the key factor leading to elevated inventory level in realty markets,”The new segment offering variety of deals to the end users and in wide range of price brackets to choose from has created buzz in the property market. With options of investing in a luxury apartment to a sea-facing villa has fetched NRI’s, HNI’s and buyers and investors from different parts of the country, he added.

“Chennai’s supply of new residential units has tripled in Jul-Sep 2012 quarter as compared to the previous quarter.” Maximum new supply has been witnessed in Chromepet, Thirumallaivoil and Egmore in the mid‐segment price range of Rs 50 lakh onwards.

The new segment witnessed more number of transactions compared to the resale segment. “New residential units are equipped with all basic and luxury features which are missing in resale market and therefore it is more preferred,” says Gopal. The average capital values of newly launched apartments vary from Rs 3,200-4,500 per sq ft depending on location and other facilities.

Better infrastructure, availability of land parcel for development and relatively lower land prices as compared to Bangalore, Mumbai, Pune and Gurgaon makes Chennai an attractive destination for investment.

Realty regulator will keep builders on a tight leash


Housing

A new law to give home buyers a better deal aims to ensure builders sell residential property on the basis of carpet area instead of ambiguous terms like “super area” while a regulator will ensure housing projects declare the status of importantcivic clearances. The Real Estate (Regulation and Development) Bill, which the government plans to bring to Parliament in the budget session, has been framed under provisions dealing with property transactions in the concurrent list of the Constitution that applies to states, making the proposed legislation more than a model law. In a bid to try and make sure developers stick to timelines, the proposed law states that realty players will have to park 70% of funds in a particular bank account so that resources are not diverted and buyers are not left in the lurch.

make it mandatory for private developers to register all projects before sale of property and only after getting all necessary clearances, addressing a major concern of buyers about incomplete or fraudulent land acquisition. According to the bill’s provisions, failure to declare status of clearances will invite up to a maximum three years imprisonment or fine that can amount to 10% of project cost. Realty players will have to disclose project details and contractual obligations to ensure transparent, fair and ethical business practices. There can be a model agreement which is expected to reduce ambiguities in real estate transactions that not many buyers are familiar with. Builders maintain there is no need for a regulator as they are already subjected to clearances from multiple agencies. They felt the penal provisions hurt their interests, but the government might want to increase the odds in favour of consumers.

Chennai Residential Real Estate Market 2012


DEMAND, SUPPLY AND PRICING

In contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai�s residential property market saw steady growth in terms of pricing, demand and supply. Chennai�s residential property market is predominantly end user driven, and this fact did a lot to sustain consistent absorption throughout 2011. The absence of overt speculation has also ensured that developer has move pricing of homes in a stable and gradual manner. Unnatural spiking has therefore been successfully kept at bay.

We expect interest rates to decrease over the course of 2012, and this will result in greater demand for homes in Chennai in 2012.

Increased job security in the city has definitely helped the market to maintain buoyancy and a positive outlook. Over the last 12 months, it became increasingly evident that Chennai�s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues.

CONFIGURATIONS IN DEMAND

The preferred size for 3BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. Again, the main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT / ITES sector. This is a welcome trend which is enabling architects, planners and developers to come up with better quality dwelling units. Affordable housing units continue to rule the roost in areas where social infrastructure lags and capital values are therefore lower.

We expect overall demand for residential properties in Chennai to increase once the interest rates stabilizes from their current peak. There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure.

Suburban Demand Drivers:

  • Positive market sentiments
  • Possible softening of interest rates
  • Increased job security
  • Unaffordable property rates in the central city

Year 2011 saw residential property pricing in Chennai moving up in a phased and rational manner, which helped in sustaining the momentum. Prices rose by between 8-30% in different areas, but these rises took place in small compartments and in proportion to the actual sales in particular locations and projects. We expect a similar trend to prevail in the year 2012.

Expected Price Movement For 2012:

  •  OMR – 15-30%
  • GST – 10-15%
  • City � 20%
  • NH-4 – 5-8%

AREAS TO WATCH

Madhya Kailash � Sholinagnallur

This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years. Encouragingly (and in contrast to other parts of OMR) all completed projects here are fully occupied.

Velachery

Velachery is seeing consistent growth, because it is one of the few areas which are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram�Thoriapakkam, the 200 FT. MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery�s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.

Source:moneycontrol

Chennai Residential Real Estate Market 2012


In contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai’s residential property market saw steady growth in terms of pricing, demand and supply.

Siva Krishnan, Head : Residential Services (Chennai) Jones Lang LaSalle India

 

DEMAND, SUPPLY AND PRICING

In contrast to what was been witnessed in many of the more volatile cities over the last couple of years, Chennai’s residential property market saw steady growth in terms of pricing, demand and supply. Chennai’s residential property market is predominantly end user driven, and this fact did a lot to sustain consistent absorption throughout 2011. The absence of overt speculation has also ensured that developer has move pricing of homes in a stable and gradual manner. Unnatural spiking has therefore been successfully kept at bay.

We expect interest rates to decrease over the course of 2012, and this will result in greater demand for homes in Chennai in 2012.

Increased job security in the city has definitely helped the market to maintain buoyancy and a positive outlook. Over the last 12 months, it became increasingly evident that Chennai’s residential real estate market is significantly dependent on the IT/ITES sector. With employment stability in this sector looking a lot better now than it did in 2010, demand for homes has now reached a comfortable and dependable growth trajectory from which developers are taking their market cues.

 

CONFIGURATIONS IN DEMAND

The preferred size for 3BHK flats in Chennai has increased from 1200-1300 square feet during the recession to 1400-1500 square feet in the revival phase. The preference for 2BHK sizes has also increased from 850-950 square feet to about 1100-1200 square feet. Again, the main reason for this upgrade in preferences is increased budgets made possible by improvement in the performance of the IT / ITES sector. This is a welcome trend which is enabling architects, planners and developers to come up with better quality dwelling units. Affordable housing units continue to rule the roost in areas where social infrastructure lags and capital values are therefore lower.

We expect overall demand for residential properties in Chennai to increase once the interest rates stabilizes from their current peak. There is a very healthy demand in both the primary and secondary markets, since supply is scarce in both owing to the severe lack of land within the city. Land pricing has, in fact, surpassed the buying capacity of developers and this has put pressure on their ability to come up with viable residential products. Lack of supply and exorbitant pricing are causing both the end users and investor segments to take a closer look at suburbs with decent infrastructure.

Suburban Demand Drivers:

  •  Positive market sentiments
  • Possible softening of interest rates
  • Increased job security
  • Unaffordable property rates in the central city

Year 2011 saw residential property pricing in Chennai moving up in a phased and rational manner, which helped in sustaining the momentum. Prices rose by between 8-30% in different areas, but these rises took place in small compartments and in proportion to the actual sales in particular locations and projects. We expect a similar trend to prevail in the year 2012.

 

Expected Price Movement For 2012:

  • OMR – 15-30%
  • GST – 10-15%
  • City – 20%
  • NH-4 – 5-8%

AREAS TO WATCH

Madhya Kailash – Sholinagnallur

This stretch is witnessing a clear supply-demand mismatch, with demand outstripping supply. With new employment being generated in this corridor and corresponding absorption of IT space, this area and its peripheries are witnessing extremely healthy demand for residential property. Its proximity to the city adds to the appeal of this area, which will see good appreciation over the coming years. Encouragingly (and in contrast to other parts of OMR) all completed projects here are fully occupied.

 

  • Velachery

Velachery is seeing consistent growth, because it is one of the few areas which are seeing holistic and self-sustaining development. With malls and other social infrastructure improving, Velachery is definitely next in line for good appreciation. In fact, near-lying areas such as Medavakkam, Pallikarnai, Pallavaram,Thoriapakkam, the 200 FT. MMRD Road and Rajakilpakkam are already experiencing the positive fallout effect of Velachery’s growth as a residential property destination. These areas are also witnessing good absorption and capital appreciation. There is also significant demand for homes in Porur along the NH4 corridor up to Urapakkam on the GST Road.

 

Source  : Money Control

Property at OMR Chennai : The Demand


Chennai, the southern tech city of India, has a brighter side to live. The city is the most charming city of the Tamil Nadu. Chennai is the fourth metropolitan city of India. The city has a slightly slower residential property market because of its cultural aspects. But, being an IT heaven, it is one of the most favorite destinations for the IT Professionals. People are in a race to come to the city to achieve a IT Career. They seek here a better enjoyable place to live and to work. The city has many tremendous localities to live. Some famous localities in the Chennai are Anna Nagar, Velachery, Medavakkam, Pallikaranai, OMR, etc. Out of these highly premium localities OMR is a most demanding hub for residential and commercial activities. Rate of the property at OMR, Chennai are quite high but these property investments promise a handsome return. If looking for a property for residential purpose, then also it can be a advantageous place.

The OMR in Chennai stands for Old Mahabalipuram Road. This is one of the most prominent places in the Chennai city to live. It is an important corridor of the city that has various residential and commercial colonies on both of its sides. The road is like a widely spread city that has many important landmarks on both of its sides. The Municipal Department of the city is also very keen on infrastructure development at the OMR Chennai. The road has been witnessing a marvelous development of its basic infrastructure in the past decade. Prices, too, have risen for residential and commercial property at OMR.

 

A real estate consultant Mr. Akshaya Gauda says that there has been a demand made for commercial spaces within the coverage of this OMR. In his own words, “ a number of representatives from different multinational companies have consulted to me for office spaces.” Adding to this he said “they are ready to give any said amount to own a property at OMR”. This can be considered as the reason behind the rise in the rates of commercial and residential properties at OMR.

 

There has been a trends that where some commercial developments will take place the price of the residential will also rise. You can find this scenario in any part of the world. Being the main road, OMR Chennai has basically known for the commercial place and corporate offices but there has also been some residential site are also there in vicinity to this IT corridor of Chennai city. These residential properties situated around the OMR are properly connected to this OMR. Some of these sites are situated at the main road but some are quite distant from the main road and enjoy a serene neighborhood.

 

A real estate consultant Mr Deependra Chandra from the Chennai said “People chose to live in serene and calm localities. So, if the demand is coming for these areas, why should builders not plan a property at OMR. He suggested “ the real estate companies should plan their project at such a place that is quite distant from the chaos of the busy highways but also that should have an easy connectivity”. He is expecting a number of new property at OMR or shall we say near to the OMR Chennai.

Source:freearticleforyou

For stability, NRIs turn towards realty


Recently an acquaintance, a fund manager by profession, relocated to India to set-up a domestic private equity fund. He had invested in a Mumbai residential property strategically located close to the primary business district and an international school. This investment, done a few years back, helped him crystallise his plans for relocation to India and start his venture without spending time in finding the right location, house and school.

What I found most interesting was that he had not even considered eventually relocating to India when he bought this apartment. He had simply done it for investment five years previously.

The Way Of The NRI

To date, I have not met a single NRI who is not keen to buy real estate in India. Home ownership in this country is one of the most satisfying means available to them to stay connected to their motherland. Very often, such investments in their country of origin help them to maintain their relationships back home while they seek their fortune abroad.

Another NRI businessman based in Europe and now relocating to NCR on the heels of the Euro crisis, was seeking to build a local business base here. Achieving this while resettling family on all fronts has not been an easy task for him. He is on the lookout for the ‘best’ location for a residential property in NCR and naturally finds the cost of properties in the prime areas staggering and beyond belief.

He had not considered investing in a property earlier. Completely out of sync with the market dynamics back home, he blithely assumed that his foreign-earned savings would make finding a luxurious home a breeze. He was ill prepared for the astronomical ticket sizes that now prevail.

Over the past few years, we have noted that NRIs are investing in residential real estate specifically in large Indian cities to build a back-up base in the country. This particularly applies to NRIs with professional/entrepreneurial ambitions who intend to set up businesses in these cities in the future.

After the 2008-09 global financial crisis, India has stood out as a showcase example of financial stability, specifically in terms of its conservative banking sector. More than anything else in the past, the crisis caused NRIs to seriously contemplate owning homes in India as their rattled confidence in all things foreign gave way to a yearning for familiarity and stability on both on the personal and professional fronts.

Rules Of Engagement

NRIs have no restrictions limiting them with regards to how many commercial or residential properties they can own in India. However, there are restrictions on the repatriation of sale proceeds, which is limited to two units. Effectively, this means that NRI face no restriction while investing into commercial or residential real estate in India. However, when a NRI decides to sell and take the money back to the country of residence, he can do so with the sale proceeds of only two units.

NRIs can invest into real estate by remitting funds to India through normal banking channels, or by invest through funds in NRE/FCNR/NRO accounts maintained in India. They cannot make payment via traveller’s cheque or foreign currency notes. They are also restricted from making any payments outside India or settling payments through exchange of funds outside the country.

NRIs can avail home loans from institutions approved by the National Housing Bank, and loan repayment can be done either through inward remittances, debit to NRE/FCNR/NRO account, via rental income earned in India or by borrowing from close relatives residing in India. NRIs can also avail of home loans from the employer in India, provided specific terms and conditions listed by RBI are met.

NRIs can mortgage residential property in India with a financial institution without any approval from RBI and a foreign financial institution with prior approval from RBI.

NRIs can rent out their property without the approval of the RBI. Rent received can be credited to NRO/NRE account or remitted abroad. Authorised dealers have been empowered to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIOs who do not maintain an NRO account in India, based on appropriate certification by a chartered accountant confirming that the funds proposed are eligible for remittance and that applicable taxes have been paid or provided for.

No one can exactly predict the fate of any currency, or the stability of any economy. Economies are notoriously ‘subject to market risk’ — for instance, no one had expected that west Asia would see political uncertainty a few years back. However, when it comes to personal and career stability, there must be no margin for error. The current trends suggest that more NRIs are taking important decisions with regard to owning residential real estate in India as a bulwark against uncertain times.

Source:http://www.financialexpress.com/news/for-stability-nris-turn-towards-realty/953968/0