Real Estate regulatory bill 2013 to bring more transparency

Cabinet passed the Real Estate (Regulation and Development) Bill, 2013,  which makes the various parties involved in the real estate sector be accountable for their actions.

The bill proposes the establishment of a Real Estate Regulatory Authority in each State / Union Territory. In some cases two or more states / union territories can be under a single authority. This authority will work as a nodal agency for the development of the real estate sector and ensure transparency, efficiency and competitiveness.

The emphasis is in transparency. Every project with more than 4,000 SqM, (approximately 40,000 Sqft or 92 Cents) needs to be registered with the Regulatory Authority. A notable point is that the developer is supposed to maintain a separate account with a scheduled bank for each project. As much as 70% of the funds received from allottees needs to be in this account to cover the construction costs. This is to prevent siphoning out the payments received for one project into another project. The builder is supposed to make public details of promoters, project & layout plan, land status, carpet area, number of apartments booked, its registered real estate agents, contractors, architects, structural engineers etc.

The bill calls for a Fast Track Dispute Settlement mechanism for the settlement of disputes. An appellate tribunal will be formed to hear appeals from the orders of the Real Estate Authority and the adjudicating officer of the dispute settlement mechanism.

While the allottee has the right to information related to status of the the project and refund with interest in case of default by the promoter, it is their duty to make the payments and complete obligations as per the agreement.

Property price fluctuations around the world

As per a study by 'The Economist', Property prices around the world gave mixed signals in the last year. While emerging economies like India, Brazil and South Africa showed a 10-12% price rise, most European markets showed a decrease in prices. Hong Kong property prices appreciated most (24.5%) while Spain had an average decrease in price of 7.7%.

This is in contrast to the property price rise before the Global recession when the prices appreciated in every market in the world in a more or less uniform fashion. The post recession catch-up however was not uniform with some economies still struggling in depression, the report says.

At 10.7%, India had a healthy increase in property prices during last year.

Kerala building rules liberalized.

The building rules in Kerala have been amended to promote more vertical development. In a state where land is scarce and the cost of land is skyrocketing, this appears to be a welcome move.  The last amendments were done in Dec 2009 and the present changes are mostly reverting to what existed in 2009.
The maximum permissible Floor area ratio is now increased to four. This was three earlier. Floor area ratio (FAR) is the ratio of the area of construction to the actual land area. This means more area could be constructed in a given land area which is good news for both builders and customers.
The other notable change is in the definition of high-rise buildings. High-rise buildings require additional sanctions in addition to certain mandatory requirements. Previously anything above 15 meters or over 3 floors was considered as High-rise buildings. However this is now increased to 16 meters and there is no restriction on the number of floors. With the present rules, 4 floors are easily possible and the ground floor can be used for parking.
One of the main constraints for constructing high-rise buildings was the minimum road width required, which was 12 meters. Now high-rise buildings are possible with road width as low as 5 meters.
However this is not without its demerits. Many of the projects approved under the Building rules prior to 2009 lacked some of the basic requirements like adequate approach roads. Reducing the minimum road width for high-rise buildings can easily choke up our under developed road infrastructure.

Home loan rates touch below 10%

After a series of recent rate cuts by the Reserve Bank of India on Cash Reserve Ratio (CRR) and Repo rates, most banks especially public sector banks have reduced the Interest rates on home loans for new as well as existing customers. State Bank of India is leading the rate cut by announcing home loans at 9.95% for amounts below 30 Lacs. The home loan rates dropped below 10% after many months. This is expected to give a fresh impetus to the real estate market.

Banks to exclude registration and stamp duty for home loans

The RBI has issued a circular to all commercial banks to the effect that the stamp duty, registration and documentation charges should not be included in the amount given by banks as loans. These expenses do not add value to the property and are non realizable. The practice of including the above mentioned charges to the loan amount increases the loan to value ratio, which is set at 80% for properties above 20 Lacs and should not exceed 90% for properties below 20 Lacs.

KeralaListings is now DLF DSA. What does this mean to you?

KeralaListings now offers Kochi DLF projects. As a DSA (Direct Selling Agent) customers get the same fixed prices of DLF projects at any time. In addition, as a KeralaListings customer you get that same highly personalized support, price change alerts and other services.
DLF, India’s biggest and most high prolific real estate developer has come up with some of the most prestigious projects in Kochi. These projects, DLF Bay View, Marine Drive, DLF Riverside Vyttila, DLF Infinity Towers, Kakkanad and the New Town Heights at Kakkanad. These projects are unmatched in its class. The locations of these projects are ideally suited and strategically located. The earlier of these projects, the New Town at Kakkand have sold out more than 80%  of 1800 units in 2 years and has appreciated by around 50% despite the recession.
The association is in line with KeralaListings Direct Developer Price Policy and our efforts to present the best of properties in Kerala. 
Please Click here to see the different DLF Kochi Projects.

What is the real cost of your new flat or villa?

Most property developers as you might know quote the price per sqft. So your 1200 sqft flat costs Rs.1200 X sqft? What you need to know is that a plethora of other charges that comes along with it. Unfortunately there seems to be as many different ways of pricing as the number of builders. While the base rate might be the square feet rate multiplied by the area, the actual cost of owning a property might differ a lot. (In most cases higher than a new buyer might expect) For example there are some builders who include the parking charges along with the sqft rate while there are others who charge up to 2.5 Lacs for a dedicated parking space.

Statutory charges are what you need to pay apart from the construction cost. Some builders give a bundled price which may include some of these charges. Statutory charges include Service tax, VAT etc. All of these charges may not be completely known to the buyer beforehand.

Some thing like round the clock security looks attractive, but actually it has nothing to do with neither the construction nor the project as a whole, as it is the residents association that needs to provide and maintain the security personnel.

Apart from all these, there are the registration and stamp duty charges when you want to make that property your own legally.

See also : Why KeralaListings?
                Do KeralaListings offer best prices?
                Which project? They all look same!