June 2018 Vol 01
Indian billionaires’ wealth grows 18% in ’17
The ultra-rich are getting wealthier at a faster pace in the country. At 18%, persons with a wealth of more than $1 billion saw the highest growth in their fortunes between 2016 and 2017, according to Boston Consulting Group’s (BCG) ‘Global Wealth Report 2018’. In all, around 50 persons, who have a fortune of more than $1 billion, had a 16% share in total wealth in India at the end of 2017. This was much higher than the share billionaires have at the global level as well as in the Apac (excluding Japan) region. While billionaires accounted for only 7% of the wealth globally, they controlled 9% of the wealth in Apac.
Persons with a fortune of $100 million-$1 billion saw their wealth increase by 17% during the year. The year 2017 saw one of the strongest growth in total personal wealth around the globe, with India seeing a 15% rise compared to 2016. Total personal wealth in India is expected to register a CAGR of 13% between 2017 and 2022 to reach around $5 trillion in 2022 from about $3 trillion in 2017. Globally, total personal wealth is expected to record a CAGR of 7% to reach $281 trillion.
More security for land buyers as RERA to make title insurance a must
Chairman of Maharashtra Real Estate Regulatory Authority (MahaRERA), Gautam Chatterjee, is all set make title insurance mandatory for registered developers. This comes after insurance companies expressing interest in providing title insurances for the real estate projects. Though the RERA had made land title insurance mandatory for developers, the state unit was not able to implement the clause right away as there was no insurance player in the market providing such a cover.
With that changing, Chatterjee has sought a detailed proposal and will soon announce an implementation date. A title insurance provides security to new buyers against any loss from defects in the property title. Currently, a lawyer issues a title insurance letter. However, there is no accountability. Certification for skilled workers: For better construction quality, MahaRERA will provide certification in skilled labour training. It will certify trainers to train workers for the real estate industry. MahaRERA chief Gautam Chatterjee said the training will help the labour force deliver better quality projects that will be graded.
HNIs moving away from Equities to Real Estate and Debt
High net worth individuals (HNIs) are gradually shifting away from the equity market, show the latest data from Association of Mutual Funds of India (AMFI). According to market trackers, fixed maturity instruments and real estate are back on the radar of these investors. Monthly investment through the systematic investment plans (SIPs), which is largely driven by retail investors, has remained constant at around $1billion per month in the past three months. But, the share of HNI and discretionary inflows in the total domestic equities flow dropped to 39% in the past two months compared with 55% in the past one year.
The SIP book in March 2018 was at Rs 7,119 crore, while the total inflow was limited to Rs 2,954 crore. It implies that there were outflows of Rs 4,165 crore from the lump sum investment. SIP flow accounted for 87% of the total domestic mutual fund flows of Rs 24,122 crore between March and May, against 42% contributed by the SIPs in the previous fiscal. Fixed maturity plans (FMPs) are becoming more lucrative giving interest rates between 8.4% and 8.75%. In May 2018, FMP funds collected nearly Rs 12,000 crore.
Pay 68% of RR rates to legalize flat alterations
The BMC will soon be inviting applications from citizens to convert their illegal constructions, alterations/additions constructed prior to December 31, 2015 into tolerated structures. Citizens ready to pay 68% of the Ready Reckoner rates can avail of this facility. Yomesh Rao, member Practising Engineers, Architects and Town Planners Association said a citizen will have to pay premium for additional floor space index in the form of fungible or Transfer of Development Rights. The premium for this is 60% of the RR Rates. Besides there’s 4% Development Charges and another 4% as compounding charges.
Also, those who have encroached on compulsory open spaces can avail of this facility only if the open space encroached is less than 50%. Besides, a No Objection Certificate from the fire department may also be required in certain cases. The state early this week issued a notification allowing all municipal corporations to advertise in newspapers inviting applications for compounding of structures. However, if the building goes for redevelopment, the owner will not get the floor space index for the compounded structure unless the civic body has increased the FSI and the structure can be accommodated within the same. The last date for inviting applications is August 19.
Key points to remember before Purchasing a House
Buying a property is a big decision in one’s life, mainly because a huge sum of one’s saving goes into it. The planning starts much before the actual purchase in order to tap various sources of finance. However, in addition to this preparation, it is also very important to do some research work and consider a number of things before sealing the deal. Every buyer must do a location recce before zeroing in on the place. It is important to know the area inside-out if one is planning to live there. One needs to check out whether the basic facilities such as markets, shops, schools, hospitals and more are available around the area, or not. Make sure you visit the area not just during day but even at night and evening time to get an idea of the availability of transportation services during nonpeak hours, whether the area has enough streetlights at night, and more such details. It is necessary to spend time in the area and also do some market research about the location value.
Once you choose the location, it is advisable to have a detailed information of the housing project where you plan to buy. Check out the track record of the builder and whether the project has the possession of all the legal documents. Also check the security and fire safety measures in the building. “In the current market scenario, the first and foremost thing that every buyer should check is whether the project is RERA registered. That should be featured at the top of homebuyers’ priority list while purchasing in the newly completed or an under-construction project. If the project is RERA-compliant then buyers can take a sigh of relief. It is certainly important to do some ground research and to see if any social and physical infrastructure development is taking place in the area as all these contribute to the overall value and long term benefits of a residential property,” said a property expert. The property investment is worth only if the individual is getting the value of the money he or she is investing. Talk to the local residents and real estate agents to have reliable information.
Source: Mumbai Mirror, Saturday 23 June 2018
‘Capital inflows into India’s Real Estate 10 times higher than outflows in 2017’
Capital inflows into India’s real estate sector were 10 times higher than outflows last year, as a series of reforms and other measures launched by the government boosted investor confidence. The country recorded $2.6 billion (Rs.17,700 crore) of inflows into the sector in 2017, compared with outbound capital flows of $0.26 billion, showed data from property consultant Knight Frank. Changes in business environment brought by landmark reforms such as the implementation of goods and services tax, demonetisation and the Real Estate (Regulation & Development) Act 2016 (RERA), coupled with government impetus for housing and an imminent possibility for the introduction of Real Estate Investment Trusts (REITs) as an asset vehicle have improved the prospects of the Indian property market.
“The numbers indicate a certain shift in Indian realty’s potential as an attractive investment avenue, not only from overseas institutional investors but also from domestic institutions’ perspective,” said Shishir Baijal, chairman of Knight Frank India. Institutional investors from the US, Canada and Singapore collectively contributed 84% to the capital inflows into the Indian property market, followed those from the UK, UAE and Hong Kong. Around 80% of the outbound capital flows from India found a place in Austria, the US and Singapore, while the balance were mainly to the UK and Portugal. India ranks 19th among 73 countries that attracted cross-border capital into their property markets in 2017.
Look before you buy!
It’s prudent to do a thorough research before taking the big buying decision. It may save you from physical, mental and financial hassles in the future. We provide you with a checklist that needs to be adhered to at all costs before signing on the dotted line: 1) Always ask for original property papers. Non-availability of these is a clear signal to stop any kind of dealing right away as there are chances that the title of the seller is unclear or there is a mortgage issue over the property. A title certificate will ensure a clear and marketable title for the property.
2) A legal opinion of an advocate is advisable in which case you will have to hand over to him the copies of documents of title deeds related to the house under sale. 3) Check for any pending loans on the said property. 4) Check for approved layout and building plans with the number of floors available. Also, check the building bye-laws in the area of purchase. 5) Make enquiries if the asking price is justified. Also check the transfer fees, stamp duty, and registration charges. 6) It is advisable to check for recurrent charges like property and water taxes. Society maintenance charges differ in different co-operative societies and may or may not be suitable for you. 7) If you are intending to buy your home in a co-operative society, you must verify the original share certificate. This is issued by the society and will ensure that the property you are about to buy is indeed owned by the person selling it, as it would have the latest owner’s name mentioned.
8) You would have to complete the transaction of the purchase by registering the deed. You must always remember that the unregistered agreement would not have any validity in law. 9) You must also watch out for the income tax clearance certificate to ensure that the owner has discharged all the income tax liabilities. 10) Make sure to acquire the completion certificate from the builder. It is authorized by the Municipal Corporation after the builder complies with the rules laid out by it. 11) Make sure to acquire the occupation certificate. This is issued once the building is ready for occupation with permanent water, sewage facilities, and electrical connections. 12) Acquire all the NOC’s of all the concerned departments from your builder or seller. For example, a no-objection certificate from the society or committee if it is part of a registered society. Also acquire documented approvals from the society regarding the amenities offered to you like parking space, usage of a clubhouse, etc.
Source: Mid-Day, Friday 29 June 2018
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