Vacation Homes: Valuable investment?
A vacation home is a desirable proposition for many. But one needs to consider several important factors before investing in one. Vacation homes or second homes as it is popularly known, is a concept that is catching on among not just the elite but the upper middle class segment too. It is a market that follows different dynamics and is driven by demand from high net worth individuals (HNIs) and non-resident Indians (NRIs) generally. The motive is for leisure and relaxation, spending quality time with family, and pursuing hobbies such as farming and fishing. Vacation homes make up 5-7 percent of the property market. Holiday locations in Goa, Himachal Pradesh, Kerala, Uttarakhand, Ooty, Coorg and areas around Mumbai like Lavasa, Alibag, Lonavla, Igatpuri, Murbad and Khandala are preferred for the serenity, weather, infrastructure and potential for rental income that they offer. So, what are the essentials that one needs to consider before buying a vacation home?
Accessibility: It is advisable to buy a house that is not too far to drive from your residence. Preferably, it should be close to a railway station or expressway. It should be close to a railway station or expressway. The demand for such assets is seen to be greater than those in the interiors. Also, it won’t be too stressful to get there on weekends. Infrastructure: The place should have easy access to basic amenities and services such as local market, commercial centre, medical facilities, restaurants etc. This adds substantial value to the second home if you’ve bought it as an investment. If your house is in a township, a clubhouse will add much value. Security: A gated property with adequate security staff and CCTV at your vacation home will give you a feeling of security even when you are away from the city. Many people are hesitant to invest in vacation homes as they may not frequent it and hence is prone to the risk of encroachment and theft.
Source: Mid-Day, Friday 1 November 2019
Area Focus: Mumbai’s next CBD – Oshiwara District Centre
MMRDA is fast developing Oshiwara District Centre (ODC) as the next central business district on the lines of Bandra Kurla Complex (BKC). Located strategically between Andheri-Lokhandwala and Goregaon, ODC promises to provide premium residential, commercial and retail spaces with state-of-the-art facilities spread across 160 acre; ODC is planned as mixed-use development with a healthy balance of real estate assets, in the ratio of 40 per cent commercial and 60 per cent residential development. It will be one of the first locations to experience the international walk-to-work culture;
The Mumbai Metropolitan Region Development Authority (M M R DA) selected ODC as the next cluster development due to its central location, connectivity, price appreciation and affordability, thus making it the most invested destination of Mumbai; ODC is in close proximity to the Goregaon Railway Station, Chhatrapati Shivaji International Airport and BKC. It has the potential to turn into a real estate hotspot for both, residential realty and corporate hubs; The area has good connectivity to arterial roads such as Link Road, SV Road, and Western Express Highway. ODC is also at a reasonable distance from the upcoming Metro Line (Dahisar-Charkop-Bandra-Mankhurd).
Source: Times Property, Saturday 9 November 2019
Money & Relationships – Should you buy property for kids?
For most parents, children’s education and weddings are among the most important goals. For those with money to spare, leaving a legacy, be it property or other tangible assets, is the next big milestone. While buying a house for kids is a personal decision dictated by one’s financial status, is it a practical way to pass on one’s inheritance? Consider the pros and cons of such a move. Property disputes: Nearly 66% of all civil cases are related to land or property disputes, while 25% of all cases decided by the Supreme Court involve land disputes, as per the Centre for Policy Research. So, if you buy a house for kids, but die without a will, the property may create differences among siblings. This is more likely if a single property is required to be split among two or more siblings. Even if you prepare a will, disposal of property is typically open to dispute after parents’ death. Besides, archaic property laws ensure that the resolution takes several years and a lot of money. Personal use: If your children are affluent and have settled abroad or are in different cities in India, it is unlikely they will need the house for personal use. If they do retain it to settle down after retirement, it will require major renovation, for which they will not only have to shell out huge sums of money, but also be physically present to supervise it. If you have bought it as an investment for them, selling it can also be a cumbersome process for children staying in far off places.
Rs 25k-crore special window for realty
The centre has approved a Rs 25,000-crore special window for the real estate sector. The decision is aimed at reviving has been taken with an aim to revive the sector by providing funding to housing projects that are stuck. The money will be available for “net worth positive” projects, said Finance Minister Nirmala Sitharaman. As many as 1,600 projects with 458,000 units will potentially be covered under the dispensation. The government will contribute Rs 10,000 crore and rest will come from LIC and SBI besides sovereign wealth funds and pensions funds. “This initiative will have a positive effect in releasing stress in other major sectors of the economy as well, ” said a government release.
The stress fund includes: • RERA-registered affordable, middle-income projects that do not exceed 2100 sq ft or 200 sq m of carpet area; • Projects where unit prices are less than Rs 2 cr per unit; • Projects which are nearing completion or more than 70% complete; • Projects that may be under insolvency process before NCLT, but their resolution plan has not been approved yet by the Committee of Creditors; • Projects that are networth positive or where revenue is higher than the cost of completion.
Developers flocking to affordable housing
Last year, Sunteck Realty sold almost 2,000 flats at its Naigaon project in Mumbai in just under a month. The flats, priced around Rs 25 lakh, were a switch in strategy for the premium real estate player that launched the first luxury project in the Bandra-Kurla Complex (BKC) in 2013. The BKC apartments range from Rs 25 crore to Rs 100 crore. Like others, the company now sees greater potential in Mumbai’s affordable home segment for a variety of reasons. “Mumbai probably has more slums than any other metro in the country and that in itself would push consumers to aspire for better modern housing,” said Kamal Khetan, Sunteck’s chairman and managing director. He said that Sunteck is set to kick off phase 2 of its Naigaon project called Sunteck West World and will first launch 2,500 affordable apartments priced between Rs 35 lakh and Rs 60 lakh with bookings opening in January.
Sunteck isn’t alone in the chase for aspirational home buyers for flats under Rs 60 lakh that are sized around 60 square metres. In Bengaluru, the Brigade Group, which has built luxury homes and villas, announced its entry into affordable housing last year. Anuj Puri, chairman of Anarock Property Consultants, said recently the Runwal Group sold 1,000 apartments in Dombivli priced around Rs 29 lakh in less than a month. “This pace of sales is finally happening at price points that they should have been and it is doing so for a couple reasons,” Puri said. He added, “For one, there is a growing number of people who are either employees of Uber or work in similar industries and see owning a home in Mumbai as aspirational and the second is that prices have rationalized.” Consumer audiences do vary across geographies. In Naigaon, it’s a combination of professionals who work in call centres of back offices of banks, the film industry and millennials, said one person.
Compact Housing is Big in Mumbai city
For many Mumbaikars, having one’s home within the city limits, is far more important than having a bigger apartment farther-up in the distant suburbs, as they can save time in commuting to and from office every day. Compact homes promise them all this, within their budget. Developers are trying their level best to find the right price and size for their house on offer which will match the requirements of the end–user. Some developers in the country have been launching projects with small unit sizes (00-1,200 sq ft). The trend is especially catching on in cities such as NCR, Bangalore, Mumbai and Chennai, where the market is gradually opening up and trying to solve its large unsold inventories.
The Compact Concept: While the non-availability of land and the high costs are driving the demand for compact homes, another major reason for the trend is the conscious effort by developers to create affordable projects for middle and lower middle income groups. The aim behind launching such projects is developers trying to improve their own cash flows, as there is a lot of latent demand in this category. A big draw for youngsters: Compact homes are an attractive proposition for the youngsters who have recently started working. As most investments are funded by home loans, smaller apartments mean that EMI outflows are manageable. Smaller homes also have lower maintenance cost which works well for the young buyer who has just begun earning money which may not be on the higher side.
On the spot: Not just the outskirts, compact housing is making its presence felt in the precincts of Mumbai too. Recent projects launched in areas like Goregaon, Malad, Kandivali, Kanjurmarg, Chembur and Mulund, point towards this emerging trend. Also interesting is the fact that prominent builders have also have also entered into this segment recently like Godrej, Gundecha and Nirmal Lifestyle to name a few. We list a few localities that offer affordable but compact homes to the mid-segment homebuyers of Mumbai Metropolitan Region (MMR). However, compact houses in suburb offer the double benefit of low costing owing to smaller areas as well as being far from the cities. Central Suburbs include areas like Dombivali, Kalyan West and Shilphata where the rate for compact housing ranges between 3,500-5,500 per sq ft. Western Suburbs include areas like Virar, Mira Road, Bhayander where rates ranges between Rs 4,500-6,500 per sq ft.
Source: Mid-Day, Friday 15 November 2019
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