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Date:
1st January, 2009
Dear Valued
customer / Investor,
Namaskar!
I take this opportunity on Behalf of the complete staff of Lakshmi Realtors to
“WISH YOU & ALL YOUR FAMILY MEMBERS A VERY HAPPY AND A FRUITFUL
NEW YEAR - 2009”
On This special Eve, we would like bring you
“Excellent Investment options With Guaranteed Return of 9%-12%”. Please find them below:
1) Location: Panjagutta
Area: 6679 S.Ft.
Rent: Rs.60/- Per S.Ft. / month
Escalation: 5% per annum
Tenant: One of the TOP 5 companies in Financial Services
Term Period: 5yrs + 5Yrs
Deposit: 6months.
Rate: Rs.7750/- Per S.ft. (Neg)
Return On Investment: 9.5% per annum
2) Location: Road No:1
Area: 2688 S.Ft. + 2370 S.Ft.
Rent: Rs.80/- Per S.Ft. / month
Escalation: 18% for every 3yrs
Tenant: One of the world’s best Back office operations Company
Term Period: 9Yrs (3 yrs locking)
Deposit: 10months.
Rate: Rs.11000/- Per S.ft. (Neg)
Return On Investment: 9.5% per annum
3) Location: Hitech City, Madhapur
Area: 11730 S.Ft.
Rent: Rs.6,35,000/- per month
Escalation: 5% per annum
Tenant: AP State Government Subsidiary.
Term Period: 9Yrs (3 yrs locking)
Deposit: 9months.
Rate: Rs7.25 Cr (Neg)
Return On Investment: 10.75% per annum
4) Location: Hitech City, Madhapur
Area: 11730 S.Ft.
Rent: Rs.68/- per month
Escalation: 5% per annum
Tenant: Leaders in Manufacturing Sector.
Term Period: 9Yrs (3 yrs locking)
Deposit: 9months.
Rate: Rs7.5 Cr (Neg)
Return On Investment: 11.5% per annum
Note : Return on Investment is calculated only on current rent. We haven’t taken Deposit and escalation into consideration. If we consider them ROI will go up by 0.5% - 1% depending on the properties.
If interested in either of the above properties, kindly call one of the 3 persons listed below with their Telephone Numbers.
Thanking you & wishing you good Profits from your Real Estate Investments
Yours in all Sincerity
1. Mrs. M.Rama Devi - Executive Director
Tel: 91-9397855502
Tel: 91-40-66615573 ( Direct Landline )
2. Mr. M. Sandeep – Director
Lands, Commercial Properties and Plots for Development.
Tel: 91- 9391015967
The Projects of our associates
1. For Independent Homes near Maheswaram, Click at
http://www.lakshmirealtors.com/maheswaram_ind_house.htm
2. For Commercial Space for IT & ITES Companies, Click at
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3. For Residential Plots in Shameerpet, Click at
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4. For Deluxe Flats at Alwal, Click at
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5. For Deluxe Apartments at Yapral, Click at
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6. For Ultra Luxury Flats in
Gachibowli, Click at
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7. For Super Deluxe Flats in
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Article-
1
Realty sector not heading for a meltdown
During the real estate boom period in US, there was euphoria all around and excessive, speculative investments being made in real estate, oversupply in the market, lenient lending covenants followed by banks- all of which were common practice in Indian boom period as well. While the former precipitated into a sub prime crisis what is it that prevented what could have been a major Prime crisis in India.
There are certainly some inherent strengths in the Indian system which have prevented the slowdown to convert to a meltdown.
For one, Reserve Bank of India had put in place very strict risk management practices, specially concerning lending to real estate, says Mohammad Asif, Vice President - Anand Rathi Real Estate Fund. He adds that as opposed to US where there was oversupply of real estate, we in India have shortage of millions of housing units.
"The question is more of affordability. There is a latent demand which would translate into sales if the prices fall to realistic levels. Mortgage institutions in India too have been much more circumspect in providing loans. So, while there surely will be defaults in housing loans due to higher EMIs and banks and housing finance institutions will have higher NPAs, the crisis would not be comparable in scale and in magnitude as we are witnessing in US."
One of the significant strengths of our situation has been the policy interventions. The RBI saw an excessive expansion in bank credit to contain credit growth, they hiked the repo rates, believing that this should have a sobering effect on demand.
Now with the current hike in interest rates, all developers are forced to build smaller and the policy measure is having its desired impact.
The other significant positive is our banking system which is conservative in determining loan eligibility. According to Balaji Raghavan, Business Head-Home Loans, ICICI Towers, "The situation in Indian housing loan markets is significantly different from that in the US. We look at the customer's current income and the loan eligibility is a comfortable multiplier of that. We ensure that after servicing all the obligations, the customer will have enough funds at his / her disposal. Secondly, the average loan to value ratio which we offer is conservative where we expect the customer to invest a significant amount of his own funds in buying the property unlike US where it could be more than 100%. Thirdly, we are still predominantly a vanilla home loan market where we take equal installments from the customer and do not do structuring wherein we project future income and recover small amounts in the early stage of the loan and more later.”
Raghavansays, “These kind of products are fairly prevalent abroad. Fourth, having a traditional banking system which has not followed the route of large scale portfolio securitizations , the originating entity (Home loan Company) of the loan and the holding entity are the same most of the times. This makes us more conscious of the kind of quality of portfolio that we build, hence the default risks become lower."
Also, as experts say that in India, the speculative part in real estate had always been small and growth was largely driven by actual demand and affordability of people. Real estate prices should fall a bit in India, mainly due to fall in liquidity - but the real losers in that situation would be speculators and financial investors.
A slowdown has meant that there are lesser transactions in the market and the next step in the value chain is that prices start correcting.
According to Mohammad Asif, Vice President - Anand Rathi Real Estate Fund, "The slowdown starts with selling of most liquid assets first, which usually are stocks and commodities. This we are witnessing right now.”
He also said, “All asset classes, equities, commodities, gold, real estate, debt etc will be affected. The real estate which is less liquid follows next. That is why the real estate prices do not fall in the beginning. The sales though have already stagnated. Once the transaction volumes reach healthier levels, we would know the extent of correction."
Experts feel that the ripple effect of the ongoing financial crunch is expected to peak between January to March 2009.
That is when many developers are expected to sell their unsold stocks at a cheaper price. Prices have already corrected by 10% to 15% though real estate is still expensive in metros like Delhi and Mumbai. Another 15% to 25% correction is expected in the second quarter of 2009 though the extent of actual correction would obviously be location specific.
By - Namrata Kohli
Courtesy - ET Bureau
The Projects of our associates
1. For Luxury Flats near Kukatpally
http://www.lakshmirealtors.com/deluxe_ku.htm
2. For Triplex Independent Homes in Gated Community at Sainikpuri
http://www.lakshmirealtors.com/triple_ind.htm
3. For Duplex Independent Homes in Gated Community at Bachupally
http://www.lakshmirealtors.com/duplex_ind.htm
Article-2
Home buyers can expect a better deal in the New Year
The year 2009 will lift the gloom in the real estate market as the property market turns buyer friendly with the cuts in property rates and home US crisis & Indian realty | Home gadgetsloan rates. Developers for their part would benefit as they will focus on creating volumes at affordable price points.
The government move to boost home loans will definitely rejuvenate the low-segment borrowers borrowing loans upto Rs 20 lakh. Public sector banks have made their loans cheaper and private banks and HFCs are expected to follow suit. "The important thing now is for the supply side to catch up with the increasing demand in this segment," say experts. According to Sanjay Dutt, CEO Business, India, Jones Lang LaSalle Meghraj, the thrust given by the Central Government to bring the economy to its full momentum is encouraging. The correction in real estate prices supported by lower interest is a trigger that would lead to many positive things.
Ravi Iyer, looking to buy a home, says he is enthusiastic about the home loan incentives given but is waiting for property prices to correct further to come in line with his expectations. “There is money in the market but people are waiting till January-February as they expect prices to correct further and more conducive policy announcements," say experts. Gulam Zia, Director, National Advisory Services, Knight Frank expects the market will correct itself further by another 15 % and almost 30- 40 % from its peak. There will still be a wait and watch until all of that evens out, he says. Developers point out that it would be a good bargain for buyers as most players would bring down their prices. Boman Irani, Chairman and MD, Rustomjee Group, says there will be more of smaller, value for money homes without compromising on the quality. “For instance , we are developing Rustomjee Urbania in Thane, a walk-to-work township with residences, schools, hospitals and convenience shopping.”
Ram Yadav from Orbit Corporation explains that home loan rates are expected to see a further 150 to 200 basis point cut, which will further boost demand. Once inflation
comes down, home loan rates for all segments will come down. 2009 will also be the toughest year for developers as they will have to work on lower margins and not increase prices. If stock markets can fall from 20,000 to 10,000, developers too have to take a hit in their margins. It would be a phase of consolidation for developers and 2010 for most part will see prices remain stable and appreciate by maximum 10%, he says. Pravin Doshi, Chairman, Acme Group and President, Maharashtra Chamber of Housing Industry (MCHI) says prices have already come down and become realistic. “The movement has started in the market and there are good enquiries. The government must come out aggressively to increase the incentives for loans up to Rs 40 lakh which would make it more meaningful in places like Mumbai besides further reduction in interest rates.”
Dutt emphasises that the success of real estate projects or sales in 2009 would depend on how quickly developers align prices to the market, offer attractive financial packages, differentiate themselves in quality, demonstrate delivery or keep time lines. The next tipping point would come when job confidence is restored along with all other factors and forces, says Dutt, and adds that he is hopeful sales would start by quarter 3 (calendar year) with 15% to 20% growth over 2008.
Balaji Rao, MD, Starwood Capital, observes that since it is a free market there is no formula that a 30% or 20% cut would help. If a developer does not sell at a particular price he will automatically come down. There is also scope for buyers to insist on more transparency, be it in area calculations, provision of amenities within the time line or insisting on escrow accounts for under construction projects, says Rao.
R V Verma, executive director, National Housing Bank says the June 2009 deadline set for availing these concessional rates for home loans is meant to quickly revive the sector. "Only if the supply side is available will it add comfort. There should be a powerful message from the developers that there is such supply available for responding to these demands. This would help stimulate the economy. "
By - Padma Ramakrishnan
Courtesy - TNN
The Projects of our associates
1. For Deluxe Flats at Bachupally, Click at
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2. For Plots at Kandukuru, Click at
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3. For Luxury Flats at
Nallagandla, Click at
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4. For Deluxe Apartment near Miyapur
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Article-3
Saving capital gains tax
It is possible to save capital gains tax if the capital gains arising on the transfer of a long term capital asset is utilised in the acquisition/construction of a residential house within the specified period. This and a few more provisions are contained in Section 54 and 54F of the Act. Some distinctive features between the two sections of the Act are given below:
Section 54 of the Act
1 Applicable to an individual or a HUF
2 Applicable in case of a transfer of a long term capital asset being buildings or land appurtenant thereto and being a residential house the income of which is taxable under the head ‘income from house property’.
3 The investment of ‘capital gain’ arising on such transfer is required to be made in the acquisition or construction of a resi- dential house.
4 The above investment in acquisition of a residential house is required to be made within a period of one year before or two years of the date of transfer. In case of construction of a residential house, it is required to be made within a period of three years of the date of transfer.
5 Proportionate exemption is allowed if part of capital gain is invested in the
acquisition/ construction of a residential house.
6 The amount of exemption would thus be equal to:
(i) Amount of capital gain arising on the transfer of residential house property; or
(ii) Amount invested in acquiring or con structing in the (including the amount deposited as per (7) below) new residen- tial house property if the investment is less than the amount of capital gain.
7 The capital gain not so invested in the acquisition/construction of a residential house before the date of filing the return is required to be deposited in a bank account in a capital gain scheme account before the date of filing income-tax return as provided under section 139(1) of the Act. The withdrawals from such an account can be utilised only for the acqui- sition or construction of a residential house within the specified period.
8 If the amount of deposit is not utilised for the acquisition or construction of a new house within the stipulated period, then the unutilised amount would be treated as a long term capital gain of the previous year in which the period of three years from the date of transfer of the original residential house property expires. In such a case the assessee can withdraw the unutilised amount at any time after the expiring of three years from the date of transfer.
9 The assessee can invest in acquisition or construction of a residential house even if he owns more than one house as on the date of acquisition of a new house.
Section 54F of the Act
Applicable to an individual or a HUF
Applicable in case of a transfer of any long term capital asset not being a residential house.
The investment of ‘net consideration’ is required to be made in the acquisition or construction of a residential house.
Same as required in Section 54 of the Act
Proportionate exemption is allowed in case part of net consideration is invested in the acquisition/construction of a residential house. The term net consideration for this purpose means the full value of consideration received or accruing as a result of the transfer of capital asset less any expenditure incurred wholly and exclusively in connection with such transfer.
The exemption allowable would thus be worked out as under:
Cost of new residential house X Capital gain Net consideration
The amount of exemption can not exceed the amount of capital gain.
The deposit requirement is in respect of net consideration not so appropriated. The other conditions remain the same as in case of Section 54 of the Act.
If the amount of deposit is unutilised for the acquisition/construction of a new house within the stipulated period then the amount shall be treated as a long term capital gain for the previous year in which the period of three years from the date of transfer of original asset expires.
Unutilised amount in the deposit account in respect of which exemption was claimed and is not so utilised X Amount of original capital gain Net sale consideration
Exemption is available only if the assessee does not own more than one residential property other than the new house as on the date of transfer of the long term capital asset.
BY S.C. Vasudeva
Chartered Accountant
Courtesy – DC Estate
Luxury Independent Home near The International Airport
http://www.lakshmirealtors.com/ind_modern.htm
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