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Common property investment mistakes & how to avoid them

Posted on by HomeCapital Team

A big problem with property investment mistakes is that they can be quite costly. Therefore, it is very important to weigh all your options and make strategic moves according to a well-laid-out plan.

Making profitable property investments is a long-term phenomenon. You learn the ropes. You make mistakes. Then you move on to the next level. Just make sure that the mistakes that you commit are not costly and stunt your future property investment prospects.

Exceptions are always there but investing in properties is not a “quick rich” undertaking. If someone offers you that, raise your antennas. We are not suggesting that you should always be cynical about quick profits but do due research before jumping into an unknown pool of speculation.

Property investment mistakes

It takes plenty of knowledge, skill, and determination to make money through strategic property investment, but if you do the right things at the right time, there is nothing to hold you back from making neat profits. Listed below are some common mistakes you should avoid while making real estate property investments.

1. Not having a plan for property investment

Before buying a property, you must know how it is going to make you money and how long it is going to take. There are two ways you are going to buy property: use your own cash or take a mortgage. In both cases, you will be blocking your resources at least for a few years unless there is a chance for a windfall profit within a few months.

Is the surrounding area going to develop? Is it going to be a good vacation rental? Are you buying a single-family unit or a condo, and if yes, why? What type of people is more prone to buying your property a few years down the line or renting it in the near future?

Prepare a detailed document. Write everything down.

2. Not researching seriously

Take for example buying a smartphone. When you are too involved and interested in the phone you are planning to buy, you do enough research. You read reviews on the Internet. You watch unboxing videos on YouTube. You try to get as much opinion as possible.

The amount of money that you are going to spend on property investment is many times over the money you may spend on a smartphone. Consequently, if not exactly proportional, the amount of research must complement the amount of money you are spending.

What type of research should you do? Here are a few pointers to consider:

  • The law-and-order situation: Nobody wants to live in a neighborhood where one constantly has to call the police. Find out if it is a safe neighborhood.
  • What type of development is going on nearby: Are lots of commercial buildings coming up around your property and if yes, are they going to have a positive impact or a negative impact on the presidential prospects? Such developments can be good or bad depending on what sort of buyers or renters your property attracts.
  • Is it a disputed property: If the existing property owner is entangled in a legal case vis-à-vis the property you will be in trouble?
  • Is the location prone to natural disasters: Is there seasonal flooding and chances of an earthquake?
  • Is major construction needed: What about furnishing and fittings in the house? Is the woodwork done? Are the doors and windows in good shape or will you need to get all this work done after purchasing the property?
  • How is the maintenance quality of the residential complex: Is the Residential Welfare Association (RWA) efficient? Does the developer provide adequate amenities and facilities and timely repair work?

There are many more such inquiries that you can make before deciding to invest in the property.

3. Not considering occupants or buyers before property investment

Prospective occupants or buyers are going to be your source of income. You must always invest in a property taking them into account. You may be in love with a property but unless it is going to be attractive to your target buyers and renters, it will be of no use.

Will people be interested in renting your property? What are the factors that will encourage them to rent your property (if the property investment serves the purpose of renting)?

Families with kids want a stable neighborhood with no or negligible crime rate and some good schools and shopping complexes in the vicinity. Are they being developed? Young couples want proximity to office areas and other places of commercial activities. How about the transit system? The condition of roads? Are good hospitals nearby?

4. Not considering the cost and financial implications in their totality

You must evaluate your finances before settling for a property investment deal. It is not just about the cost of the property. There may be many hidden costs and expenses such as repair work and furnishing. Property tax, registration fees, construction work required, and interior design (before the property becomes a livable place) are also required to be taken into account. Enter all the costs in an Excel sheet and make a total. Accordingly, make your financial plan.

5. Overpaying for the property

Everybody wants to make a profit. The current owner of the property may be overcharging you. Find out the ongoing property rates in the neighborhood for similar properties. You may be smitten by the exact location or a certain view from the balcony, but if similar properties are available and at the same time save you some good amount of money, find that out. Going through and visiting multiple properties may be time-consuming and frustrating but once you consider how much money you can save, the effort will be worth it.

Conclusion

If it was easy to make money from real estate investing, wouldn’t everyone be doing it? Just like any other investment opportunity, property investment is replete with mistakes and pitfalls. Fortunately, most of these mistakes are avoidable if you are aware of making them and you make appropriate preparations.

What is a Freehold Property? How is it Different from Leasehold Property?

Posted on by HomeCapital Team

What is the meaning of freehold property? What is the difference between freehold and leasehold properties? Do they both have their distinctive benefits? Let’s find out.

You can own a property in two forms: freehold and leasehold.

You must have heard phrases like, “this hospital got the land on a 99-year lease,” and such. What does that mean?

When you have a freehold property, you completely own the land and the space over it. The ownership completely belongs to you. Depending on the bylaws of the jurisdiction and the municipality, you can build any type of house or structure you feel like on a freehold property or a freehold piece of land. You can dismantle an existing house. You can build new floors. You can build more rooms on the area where construction hasn’t been done yet. Basically, you’re free to do anything as long as it is legal.

What about the leasehold property?

In the case of a leasehold property the ownership of the piece of land or the apartment remains with the owner, and you get the right to construct or live in the apartment for the period specified in the lease document. The lease period is normally 30, 60, or 99 years, and it can also be extended to 999 years.

A freehold property is often preferred for the purpose of living and a leasehold property is preferred for commercial purposes.

Advantages and disadvantages of owning a freehold property

Benefits of a freehold property

As the term is self-explanatory, the property that is legally “free from hold” is a freehold property. The owner can use the freehold property for any purpose as per the regulations. There is no time limit as to how long you own the property – it belongs to you and then it belongs to your progeny.

As a freehold property owner, you don’t have to pay any ground rent. You’re not obligated to inform anyone if you want to make some structural changes. The paperwork is simpler if you want to sell the property or even if you want to lease it to someone else. The property is easily transferred from one generation to another, in most of the cases, automatically. There is no chance of the lease running out.

What about disadvantages

Since you are completely responsible for the property all the expenses, big or small, must be borne by you. There is no landowner to take care of the property in case something happens or if the property falls into some legal issue. You are completely responsible for maintaining and keeping the property functional. Comparatively, buying a freehold property is expensive compared to buying a leasehold property.

Why would you choose a freehold property?

Below are the reasons to choose a freehold property:

  • You want to buy the freehold property as an investment.
  • You want to have a comfortable living environment for your family without obligation to someone else.
  • You need a bank loan to buy the property.
  • You want to rent the property or lease it in future.
  • You plan to build additional rooms or floats in the future.
  • You would want to use your property as collateral when getting a loan.

Advantages and disadvantages of owning a leasehold property

The advantages and disadvantages of owning a leasehold property are illustrated below:

Benefits of owning a leasehold property

Although unlike freehold property you don’t completely own the land upon which your house or apartment is built, buying a leasehold property comes with its own benefits. You’re not responsible for the bigger expenses of the leased property.

Buying land and then building property over it can be an expensive undertaking. Instead, if you take the land on lease, you can save substantial amounts of money. The upfront project cost is much lower when the land acquisition cost is eliminated. Even the residential properties built over the leased land, for example an apartment in the residential complex, is comparatively cheaper than a freehold house. A centralized authority takes care of the property and most of the facilities are offered by the landowner.

Disadvantages of a leasehold property

The disadvantages are that you don’t fully own the property and it may be difficult to pass on the property to your future generations. Buying and selling of leasehold property is a bit complicated because aside from buyer and seller, the third party, the owner of the property, is also involved. Getting a loan for leasehold property or using the leasehold property as collateral for obtaining future loans, can also be a problem.

Why would you choose a leasehold property?

Below are the reasons to choose a leasehold property:

  • The property is situated at a place where you cannot afford fully owning it.
  • You don’t want to get into any legal hassles at any point of time.
  • You are simply looking for land in a commercial area to run your business operations on.
  • You don’t want to bother with overhead expenses.
  • You don’t want to tie yourself to the property and want to enjoy the freedom of moving whenever you feel like.

Conclusion

Which is a better option? Going for a freehold property or a leasehold property? Both have their pros and cons. Whether you want to buy a freehold property or go with a leasehold property depends on how you plan to use the property. Is it an investment? Do you want to freely build and extend the property? Then get a freehold property. You don’t want to spend lots of money on the land? You are not interested in expanding the property according to your family needs and personal tastes? Maybe you should explore some leasehold property options.

An overview of blockchain technology and Indian real estate

Posted on by HomeCapital Team

Blockchain technology has been making its presence known in the Indian real estate industry in the recent past. The Indian real estate sector involves complicated procedures such as several transactions, multiple parties, and detailed due diligence. India needs a better efficiency, accuracy, and transparency system for running such processes. This is where blockchain can help.

Blockchain technology is based on the secure and efficient distribution of digital information. This digital information can be accessed; however, it can’t be copied. Features such as these make the perfect technology for a digital revolution of real estate in India.

A deeper dive into the blockchain technology and its influence on the Indian real estate sector

What is blockchain?

Blockchain can be thought of as a chain of transactional records stored in the form of blocks in the system. The technology allows transparency, decentralisation, and encryption whilst making updating or modifying the information stored in the blockchain difficult. A single authority does not manage it. It is protected by a digital signature to verify the transaction’s authenticity.

Initially created to track the bitcoins available in circulation, blockchain technology’s application has moved far beyond cryptocurrencies. It is even being used in unexplored arenas like the Indian real estate sector.

Blockchain technologies and real estate

Blockchain technology is now appearing in the real estate sector because it can make the processes of the real estate sector much simpler. These processes involve documentation, records, due diligence, registration, and closure. The buyer will get a passcode/private security key from the seller with blockchain technology. The buyer will be able to access previous property records such as ownership, maintenance payment, etc.

The title records, property tax, encumbrances, etc., can also be accessed by the property buyer after identifying it. With the digitalisation of the records, mortgage, transference of payments, and property registration can be completed very easily. Hence, blockchain technology makes the real estate process much more seamless, faster, and more efficient.

Blockchain technology in the real estate sector would also benefit in several other ways, such as through title fraud elimination, growth of tax revenue collection, removal of government-level corruption, reduction of property disputes, lower transaction costs because of minimal involvement of intermediaries, and complete removal of the physical storage of property papers.

Advantages of using blockchain technology in the Indian real estate sector

Following are the advantages of blockchain technology for real estate:

  • Blockchain allows the data to be seen but not tampered with. This provides trust and transparency of data.
  • It will be ‘online’, which means that buyers would have access to search for real estate properties online easily. This will be majorly beneficial for the real estate sector given the rise of online portals and their demand.
  • Blockchain transactions are extremely fast and acquire no extra cost, which are both major issues in the Indian real estate sector.
  • The use of intermediates is also limited in the blockchain. This curbs extra costs, and limits fraudulent activities.

Is the Indian real estate ready to adopt blockchain?

The implementation of blockchain technology worldwide is still in the process of development, and many changes still need to be implemented. In India, the real estate sector is a state subject, depending on the state. There are different sets of rules that impact real estate transactions.

For the adoption of blockchain technology in the country, operational efficiencies will need to be boosted to implement the changes across functional areas, which are all very diverse. Computer technology will need to be greatly enhanced to run the blockchain. Any blockchain technology transaction will require a large level of data and electricity consumption.

The roadblocks which are experienced in the implementation of Blockchain for the Indian real estate sector are:

  • Adaptability – The adoption by the masses of India is necessary for the success of blockchain. The adaptability of such a technology is still a challenge in the present time, especially in rural India.
  • Regulation – For the proper execution of blockchain technologies in smart contracts and title transfers, many new regulatory frameworks will need to be implemented. An implementation of such a big magnitude will require laws and government intervention.

Smart contracts

Smart contracts are signed digitally by two or more parties in blockchain technology. If we talk about smart contracts in the Indian context, the Information Technology Act of 2000 allows the use of eSignatures in the signing of almost all documents except notarised documents and registered sale property deeds.

In a court of law, electronic signatures are allowed to show support for the authenticity, acceptance, and existence of a contract according to section 65B of the Evidence Act, 1872. Hence, the regulation already exists. All that is needed is the removal of exemptions of the notarised documents and property sale deeds that is present in the case of eSignatures.

Title history

With blockchain, each property documentation will be available on the chain for all to see. Blockchain would make the availability of documents such as the construction agreements, the certificate of commencement of construction, land title, property plans submitted to the local municipal corporation, mortgage lender’s report, Occupation Certificate, NOCs from the fire department much more simple.

Normally the title history and diligence take months and stall the transaction a lot. Blockchain will make the process much more speedy. The diligence of property will also be made much simpler, which will save the cost of lawyers and accounting firms to a huge extent.  

Conclusion

The whole world is experimenting with blockchain technology, and it will be an integral part of our future. The implementation of blockchain technology will be seen in all sectors of India in the future; it is only a matter of when. India’s real estate sector will take a huge leap forward in operational efficiency. Along with blockchain technology, two other steps – the implementation of GST and RERA and the digitisation of records- create a transparent and buyer-friendly Indian real estate sector.

The critical problem of down payment savings in India for homebuyers can now be solved with HomeCapital’s down payment assistance program. This program is India’s first such program. It comes with many benefits and provides 50% interest-free assistance for home down payment requirement. In-principle sanctions, and availability across different kinds of home payments. The acceleration of homeownership for Indian buyers is the ultimate mission of this program.

All You Need to Know About Home Loan Statement

Posted on by HomeCapital Team

Home loan payment is a lengthy and complex process requiring a lot of patience and planning. Each year, a certain portion of the loan’s tenure and interest are paid off. Ensuring that the home loan repayment remains under the owner’s control is a major responsibility of the home loan borrower. But how can you keep up with the loan amount paid off and the loan amount that is still left? This is when a home loan statement comes into the picture.

A home loan statement provides you with all necessary home loan payment information, such as the amount that was originally borrowed, how much of it has been paid off, how much of the amount is still left, and whether any EMI payment was missed by you, etc.

What is a home loan statement?

A home loan statement is a detailed brief of the loan repayment that you have made in a financial year and is provided by your lender. The home loan provisional certificate or statement is issued by banks at the start of the financial year. With it, you get a detailed track record of the loan repayment from the start of the tenure to the end date.

It shows your loan repayment information with details like:

  • Statement period,
  • The date of payment,
  • EMI amount paid,
  • The unpaid principal amount,
  • Terms of the home loan,
  • Home loan account details, and
  • Penalties or fees gained during the loan tenure.

Hence, the document is crucial for financial planning. The statement can also be used to claim tax exemptions on loan EMIs. It is also proof of payment that allows you to close your loan at the end of your tenure.

Why is a home loan statement important?

A home loan statement is important for several varied reasons, such as:

  • It allows you to determine your next loan payment amount and when it is due. With a home loan statement, you can have absolute clarity about the payment schedule and structure of loan repayment.
  • They also allow for tax breaks on home loans. Section 80C of the Income Tax Act allows a deduction of ₹1,50,000 from the principal loan amount in tax. This is applicable only in cases where the property is not sold in under 5 years of possession. You can avail of a tax break on the interest that you pay on your home loan. Section 24 of the Income Tax Act helps you write off an amount up to ₹2,00,000 on the interest amount. In case the property is rented, the amount of tax deduction has no upper limit.
  • Home loan statements also serve as proof that you have completed your home loan payment. They can also make getting another loan easier as it shows that you are capable of paying back the loan amount that you had borrowed earlier.

How to get a home loan statement from a bank?

A home loan statement can be received both online and offline. Banks nowadays have made the process of getting a home loan statement very simple and easy. Online statements can be received right from the comfort of your home.

To get a home loan statement online, visit your bank’s official website. Then log in to your home loan account. The bank’s online website will allow you to access your home loan summary statement, provisional tax certificates, and more.

For the offline process, you will have to visit your bank’s nearest branch and ask an official for the statement. Details such as your loan account number, PAN, date of birth, etc., will be required when asking for the home loan statement in person.

Conclusion

The home loan statement is a crucial document that can be used to verify your loan payment history as well as help you in tax savings. Make sure that you understand the home loan interest that you are choosing and its workings so that you get zero surprises when making the loan payments. Nowadays, banks send your home loan statements on your registered email ID for extra convenience. There are no charges applicable for getting the statement both offline or online.

HomeCapital is India’s first home down payment assistance program created to help you buy your first home. Our down payment assistance program has a completely digital application process, a one-minute eligibility check, and interest-free assistance. It is available for a down payment, stamp duty and registration too. This program eliminates the need for expensive personal loans and reduces can cut down the down payment requirements by 50%.

How a home loan EMI calculator helps you with financial planning

Posted on by HomeCapital Team

Wondering what is a home loan EMI calculator? Almost every bank that gives home loans and other financial institutions that provide mortgages have an online home loan EMI calculator on their website.

Taking a home loan may be one of the most important decisions of your life, and also a turning point. Once the loan is approved and you receive the cash, you can buy the home of your dreams. You can own residential property.

When you take a home loan, you need to pay EMIs (equated monthly installments). Your EMI is calculated based on how much loan you have taken, all in all, how many EMIs you will be paying (for how many years and months), and how much interest you are having to pay.

Considering the number of months involved, it can be a complex calculation that cannot be solved by your conventional calculator. For that, you need a home loan EMI calculator.

What is a home loan EMI calculator?

A home loan EMI calculator is an online tool that you often find on bank and finance-related websites, especially those that give home loans. Different fields allow you to enter your principal amount, the duration for which you want to pay back the loan amount plus interest, and the interest range you are comfortable with. The home loan EMI calculator then calculates how much EMI you are going to have to pay every month.

The calculator interface is normally user-friendly and most of the adjustments are based on the user’s requirements. For example, you may be able to use the first input field to choose the amount of the loan you want to get. As a second option, you can also directly enter the value in the text field.

The input may be the loan tenure. Again, you can directly enter the number of months for which you want to pay back the loan.

Followed by this you can decide the rate of interest. Although ultimately the rate of interest will be decided by the lender, you can use the calculator to play around with the figure. Make sure you enter the interest rate to the last decimal point. Once you have added all these values, you can click the “Calculate” button and your EMI will be calculated.

How can a home loan EMI calculator help you with better financial planning?

When you get a home loan you will be paying back EMIs for many years – 20-30 years, and even more. If you get a home loan of INR 50 Lakhs, you may be returning more than INR 90 Lakhs. This may be around INR 40,000 every month depending on your tenure and interest rate. The EMIs are going to have a big impact on your finances, month after month.

Previously it was difficult to know how much EMI you would be paying unless you had had extensive talks with one of the representatives from the lender. These days you have the home loan EMI calculator on almost every related website and you can get a fair idea of how much you will be spending monthly if you get a home loan.

Once you know your EMI, you can plan your monthly budget more efficiently. You can even decide whether you want to go for a home loan or not. You can avoid awkward moments – you can discreetly check the home loan EMI calculator from the comfort of your home. Using the calculator, you can find out whether, according to your current earnings, you will be able to pay the EMIs are not. Taking the loan and then realizing that you can’t pay the EMIs, would be disastrous.

Other ways in which a home loan EMI calculator helps you in financial planning

Apart from the ways elucidated above, a home loan calculator can also help you in the following ways: 

  • You can readjust your upcoming expenses

Once you know in advance how much money you will be paying for EMI, you can readjust your monthly expenses. There must be many expenses you can do without. Once you proactively start thinking, there are multiple ways of saving money.

  • You can choose the right lender

Different lenders may be offering different EMI options for the same home loan amount and the same tenure. Even a small decimal point in the interest rate can make a big difference in the long run. Since every lender has its own home loan EMI calculator, you have different options to explore before you settle for a particular lender. Again, an online home loan EMI calculator isn’t as precise as the quotes that you will finally get from the lender, but using the calculator on their website gives you a fair idea of the things to come.

  • A home loan EMI calculator helps you choose the right loan amount

Sometimes there is no need to go overboard simply because you are getting a loan. As long as you can prove that you can pay the EMIs the lender can loan you whatever amount you ask for. Perhaps you don’t need that much money? Maybe you can manage with a lot less?

Calculating your EMI with the calculator enables you to know how much EMI you are going to have to pay if you take this much amount of loan. Accordingly, you can reduce the amount to bring down the EMI or shorten their tenure. This will lift some of the housing loan EMI burden from your shoulders.

Conclusion

The best part of a home loan EMI calculator is that it allows you to play around with numbers without much interference. You can access a calculator on any of the websites that offer home loans, may it be from a bank or an NBFC, or any other institution. No one is observing you. There is no obligation. After calculating various EMI options, you can decide to take the loan right now or maybe two years down the line. You can lower the amount of loan you intend to take, or even increase it for that matter. Every home loan EMI calculator these days comes with an easy interface that you can use on your laptop as well as your mobile phone.

Neighbourhood features that enhance the value of a property

Posted on by HomeCapital Team

The neighbourhood around your property can have an enduring impact on the value of your property. Since we are social by nature, lots of our property buying decisions take the neighbourhood into consideration.

The neighbourhood of a property can be narrow and broad. Narrow neighbourhood is your immediate neighbourly environment within the confines of your gated community or residential complex.

Broad neighbourhood is your locality, your colony, or the town where your property is situated. Both types of neighbourhoods can have an impact on the value of your property.

Immediate neighbourhood

Lots of residential complexes these days have their own ecosystem of facilities and amenities consisting of a swimming pool, a gymnasium, cafeteria, grocery store, a playground for the kids and a lush green lawn for older people, and even an auditorium for cultural events. These facilities and amenities considerably improve quality of life and people are ready to pay a premium to purchase property in such a neighbourhood.

Even the type of people living in the immediate neighbourhood can have a bearing on your decision. Are they social and friendly? Is it an old and evolved neighbourhood? Do they talk to each other? Do people of a certain profession or cultural background reside in the complex?

Broader neighbourhood

The broader neighbourhood consists of the town or the city. The following attributes of the broader neighbourhood can considerably increase the value of your property.

Quick access to the main roads

Everyone wants to avoid traffic congestion. How well does your property connect with the main roads of the city? Does one have to drive for long before the main road can be reached? Road connectivity is one of the main concerns whether someone is buying a property. Good road connectivity always has a positive impact on the value of the property.

Proximity to a railway station, bus terminal, or a metro station

Due to traffic congestion an increasing number of people prefer to travel by metro. One of the biggest hassles in the morning and in the evening may be reaching the metro station. Therefore, if the property is near the metro station, people are ready to pay a premium for it.

Many ancillary businesses are supported by a railway station and a bus terminal. There are shops. There are restaurants and food joints. There are repair shops. Markets come up around the railway station or a bus terminal. All these features increase the value of the property around these amenities. You may not travel out of the city often and you may not have to use the train or the interstate buses with greater frequency, but if your property is in the hub of a brisk market, its value increases manifold.

Malls and shopping complexes

Shopping is an integral part of modern-day living. A shopping mall isn’t just for shopping these days; people also go there for entertainment and recreational activities. You have eating joints, movie theatres and cultural auditoriums. Families have their outings in the mall because they are clean, spacious, and safe. Many elderly people are seen sitting in the mall during summers because the environment is so pleasant.

Therefore, the neighbourhood has a shopping mall at walking distance, people are ready to pay a premium for the property.

Lots of business persons having shops and food outlets in these malls and shopping complexes often live nearby, again, bringing an upswing to the property values.

Educational institutions

This factor is important for people having kids. Neighbourhoods that have schools, colleges and other institutions of education nearby enjoy higher property values. The reputation of schools and colleges directly affects the value of the properties.

Areas that have thriving schools and colleges naturally experience low rates of crime, turning them into safe neighbourhoods. When schools are at a walking distance, many children walk to their schools or use rickshaws and cycles, and they cannot indulge in such activities without a safe neighbourhood. It creates a self-serving circle, causing the property values to increase.

Access to commercial zones

Everybody needs a good job. Driving on congested roads can be a real dampener. Studies have shown that an average commuter spends anywhere between 2-4 hours driving to and from the workplace. And this is the lower end of the estimate.

But if the office area or the commercial area is nearby, in the neighbourhood, travelling and driving time is considerably reduced. Many home buyers are ready to pay a premium for this facility. Property owners can spend more quality time with their loved ones instead of being stuck in traffic jams.

Conclusion

Taking the neighbourhood into consideration is vital to the property decision not just in terms of the price, but also quality of life. It’s a different matter if you are purchasing a property for investment (even then, factors that increase the value of your property are important), but if you are buying the property for the purpose of living, you and your family will be spending years in the neighbourhood. You need to make sure there is ample scope for growth, both cultural and financial, within the neighbourhood.

Why is Kalyan-Shil Road becoming a popular homebuying destination?

Posted on by HomeCapital Team

The growth of real estate is not limited to any one area though location and infrastructure development are two important factors on which it is dependent. In recent years, Kalyan-Shil Road has seen such an increase in residential and commercial development that it can be considered a promising destination for those who are looking forward to buying a new home in the Mumbai region. The rapid pace of residential and commercial development at Kalyan-Shil Road has made it one of the fastest-growing destinations in Mumbai’s real estate market.

If you are looking to invest in real estate, then Kalyan-Shil Road is the place for your home. With its incredible growth trajectory and positive trends within our market as well, there will be no shortage of returns on investment with this purchase.

Why is Kalyan-Shil Road a preferred location:

There are many reasons why Kalyan-Shil Road is one of the most preferred locations to buy a home. Let’s look at the top six reasons Kalyan-Shil Road is becoming a popular location for homebuyers:

  • Affordability

The prices of residential properties in Mumbai are exorbitant. But this region offers homes that can be affordably priced for those who want to live here but don’t have an extravagant budget. With under-construction and ready-to-move properties, this area has both end-users as well as investors looking at its rich buying opportunity that offers lower property rates.

A 1 BHK home in this area can cost anywhere between INR 20 – 35 Lakhs which makes them perfect if you’re on a budget but want to buy a home in the Mumbai region itself as a similar size home in Mumbai may very well cost you thrice or four times of this price.

  • Connectivity

The Kalyan-Shil Road is a major highway that connects Dombivli and adjoining areas with Thane, Mulund, Airoli, Panvel, and Bhiwandi. The current expansion plan includes widening it to 6 lanes as well construction of an overpass that will connect this route directly via a bridge or tunnel towards the Multimodal corridor. The construction of the Airoli-Katai tunnel Road and 126 km long Alibaug – Virar multimodal corridor will serve as a major connectivity boost in this region.

Apart from the many road networks, there is also good connectivity available through the railway network. The Diva and Dombivali stations on the central railway lines are just 15-20 minutes away from Kalyan-Shil Road. From there, you can reach South Mumbai as well other suburban areas within an hour via train.

  • Land availability

The land at Kalyan-Shil Road is a precious resource that can bring about much-needed development for this region. Many renowned developers have already acquired properties here, showing how significant it really has become in fostering economic growth and building infrastructure.

The premium townships provide all things good in your life with their luxurious design features. The clean, modern lines of these townships are a far cry from the typical housing developments in this area. The affordable prices and impeccably designed homes will have you feeling right at home while enjoying all that life has to offer.

  • Infrastructure

The Kalyan-Shil Road is about to undergo a major transformation in the next few years because of infrastructure projects lined up. The Airoli tunnel road and Multimodal Rail Corridor will reduce traffic on this busy thoroughfare, making it easier for people who live nearby or work thereby providing better commutes.

The Kalyan-Taloja Metro Line will be a game-changer for affordable housing in this region. Its connectivity and available options make it an excellent means of travel as well.

The ambitious and highly anticipated Mumbai-Ahmedabad bullet train project has the potential to be another feather in Kalyan-Shil Road’s cap. The Thane station on this corridor is just a few kilometers away from Kalyan-Shil Road, which means that all these infrastructure projects will not only improve connectivity but drive-up real estate prices too.

  • Greenfield development

Greenfield development is a type of construction that takes place from scratch, such as on an unused piece of land. Since Kalyan-Shil Road has many open spaces and space for growth there are plenty of opportunities in this area for greenfield development. Development in a greenfield manner will happen with planned features such as wide roads, footpaths, and large open spaces. Good drainage systems are also expected to be present due to the fact that it’s part of an established city plan rather than being done on-site without any prior planning similar to the planned development witnessed in some areas of Navi Mumbai.

  • Neighborhood

Kalyan-Shil Road is the ultimate destination for all your needs. Whether you are looking to buy a new home or just want some retail therapy, this location has it covered! Not only does it provide access to major areas in Mumbai with its plethora of hospitals and schools but also ensures that there will always be something happening within walking distance from one’s doorstep like Lodha Xperia Mall and Lodha World School which is just a few minutes away from the mall.

Conclusion

The Kalyan-Shil region is a gold mine for real estate investors and home buyers alike. It has all of the positive trends that you could want, including affordable pricing with good connectivity!

In case you are looking to buy a property in this area, the HomeCapital program can assist you in getting up to 50% home down payment assistance which is absolutely interest-free.

RBI Extends Home Loan Interest Rates Rationalization

Posted on by HomeCapital Team

The Reserve Bank of India (RBI) on Friday extended the rationalized home loan interest rates norms by another year till March 31, 2023. In October 2020, the Reserve Bank, as a countercyclical measure to deal with the pandemic situation, rationalized the risk weights by linking them only with Loan to Value (LTV) ratios for all new housing loans sanctioned up to March 31, 2022. The move is aimed at facilitating a higher credit flow of individual housing loans.

Reason for home loan interest rates rationalization extension

The Reserve Bank of India (RBI) on 6 April 2022, Wednesday unveiled the first bi-monthly monetary policy of the current fiscal. It said that risk weights for individual housing loans were rationalized by linking them only with the LTV  for all new housing loans sanctioned up to March 31, 2022. Recognizing the importance of the housing sector and its multiplier effects, it extended home loan interest rates rationalization till March 31, 2023, with the hope of higher credit flow to individual home loans.

The government has announced that such loans will continue to attract a risk weight of 35% where LTV is less than or equal to 80%, and 50% where it’s greater than 80% but less than or equal to 90%. The standard asset provision of 0.25% will also continue to apply to such loans.

While deciding the quantum of loan to be granted as housing finance, banks should abide by the following Loan to Value (LTV) and Risk Weights (RWs):

Category of LoanLTV Ratio (%)Risk Weight (%)
Individual Housing Loans
Upto ₹ 30 lakh≤ 8035
> 80 and ≤ 9050
Above ₹ 30 lakh & upto ₹ 75 lakh≤ 8035
Above ₹ 75 lakh≤ 7550

However, as a countercyclical measure, for individual home loans sanctioned on or after October 16, 2020, and up to March 31, 2022, the risk weights had been rationalized by the RBI as per the circular DOR.No.BP.BC.24/08.12.015/2020-21 dated October 16, 2020. The risk weights are as under –

LTV Ratio (%)Risk Weight (%)
≤ 8035
> 80 and ≤ 9050

These norms have been further extended by the RBI till 31st March 2023.

Industry reaction to interest rates norms extension news

Despite inflationary pressures increasing, the Reserve Bank of India Monetary Policy Committee (MPC) has continued with its supportive approach to economic growth and maintained a status quo on key lending rates.

The RBI has recognized the importance and multiplier effects that home loans have on our economy. By extending the applicability date for LTV ratio till March 31, 2023, they are making it easier than ever before to get a mortgage. The real estate market in India has been steadily recovering for a while now and these policies are going to help it continue on this positive trend.

Many are pleased with how rationalized risk weightage norms have helped to boost participation in this sector. Housing sales have increased sharply last year after a major setback in 2020 when demand plunged by about 50% due to the pandemic.

The all-time low-interest rate is one of the many reasons why people are buying homes.

Tamil Nadu government effects property tax revision after 24 years

Posted on by HomeCapital Team

The Finance and Taxation Committee of the Coimbatore Corporation Council has recommended a hike in property tax, as well as vacant land taxes as was recommended by the State Government a few days ago. 83% of houses in the city will be affected by a property tax hike of 25-50 percent. This is due to the changed assessment values of homes following the reassessment this year.

The tax rates were revised based on the 15th Finance Commission’s recommendations to fix the minimum floor rate for property tax as made compulsory by the Union Government.

Change in the property tax

The Committee has recommended a 25% increase for houses that are up to 600 sq.ft., 50% more than what was before in regards to homes between 601-1,200 sq. ft. and 75% for those who have home areas between 1201 to 1800 sq. ft. and 100% for those more than 1800 sq. ft. along with an increase in the property tax for commercial buildings, with a 100% hike, and those belonging to industries or self-financing education institutions at 75%.

An increase in vacant land tax for each square foot has also been proposed. The rate will be increased from 100% to either 6% or average growth over the last five years, whichever is higher.

Impact of the property tax hike

With the increase in property prices, many homeowners are expected to see an increase in their taxes. The government has announced that 1.52 lakh houses will experience a 25% hike while 3.46 lakh and 3.12 lakh will experience an increase of 50% and 75% tax hike respectively. This means that of 77.87 lakh houses in the State, just 1.4% will experience a hike of 150% while of the remaining, 58.48% will see an increase of 25% and the rest 24.70% will see an increase of 50%.

The government has announced that property tax rates in Tamil Nadu will be increasing from the first quarter of 2022-23. Local bodies are expected to pass resolutions for this, and accordingly, people should start paying their new bills without delay. The property tax rates in Tamil Nadu seem to be lower than that compared the other parts of the country.

Property tax hikes in the past

The government increased tax rates by up to 300% in 1987. That year, it was hiked for own houses by 100% and rented ones by 200%. Commercial spaces were taxed at a rate of 300% whereas, during the next regime in 1993, it was again hiked by 50% for own houses, 100% for rented houses, and 150% for industries along with 200% for commercial spaces. In 1998, the property tax was hiked by 25%, 50%, 100%, and 150% respectively. The Chennai Corporation saw a general revision of property tax in 1998 while the added areas and surrounding municipalities saw a revision in 2008.

A notification from the state government said that while the growth parameters are on a rise, the property tax has remained the same. The expenditures for the civic body too had risen while the own source of revenues for local bodies was low, putting the municipal finances under strain. Thus the body had to take the decision of increasing the tax rates. 

Changing real estate trends in the Mumbai Metropolitan Region

Posted on by HomeCapital Team

The real estate trend in Mumbai shows that it is bouncing back and experiencing growth in the real estate sector which is better than its pre-pandemic level. Especially because there has been an increase in the demand for residential real estate after the pandemic.

Mumbai especially has seen a sharp recovery in home sales during 2022, because of which it accounted for a 16% share of the total real estate investments. The Mumbai Metropolitan Region (MMR) comprises 9 Municipal Corporations of Navi Mumbai, Thane, Greater Mumbai, Panvel, Kalyan-Dombivali, Bhiwandi-Nizampur, Ulhasnagar, Mira-Bhayandar, and Vasai-Virar.

The MMR saw the highest price increase of 5% in average residential property prices in the last quarter of 2021. This has been attributed to government incentives, and developer discounts and offers in the MMR region.

Emerging Real Estate Trend in the Mumbai Metropolitan Region

Let’s take a look at the emerging real estate trends seen in the development of the MMR region.

1. High-end homes saw an uptick

The uber-luxury housing is in huge demand. Costing between Rs 10 crore to Rs 30 crore and covering an area between 5,000 sq. ft. and 30,000 sq. ft. These homes have attracted the attention of entrepreneurs, businessmen, and celebrities who have acquired an increased amount of wealth in the past few years. The positive impact of the Real Estate Regulatory Authority Act (RERA)’s promised quality and on-time delivery has made investors and buyers confident in RERA’s professionalism.

The pandemic has also had a hand to play in this shift towards luxury housing. Staying indoors has taught buyers the importance of green spaces and lifestyle homes they are eagerly exploring.

2. The lowest share of affordable housing in MMR recorded

There was a 6.27% quarterly drop between the Q3 and Q4 2021 transactions of affordable sales. The affordable sector is crucial for the overall growth of the residential real estate sector. In comparison to this, the real estate trend in the premium segment in Q4 2021 saw 63.9% in property sales volume.

3. Great demand in MMR for affordable housing sales

An average quarterly increase of 8.91% was witnessed in property sales in the MMR region. Properties with a ticket size of less than Rs 45 lakhs come under affordable property sales. 58.97% of the property sales volume in Q4 2021 was contributed by affordable property sales. However, there was higher sales volume in the affordable housing segment in districts other than the Tier-1 cities of Mumbai and Pune. These Tier-1 cities had a lower sales volume in this segment.

4. Central Mumbai sales improved

In the total sales of Rs 25,000 crore, Rs 15,000 crore was attributed to the Rs 5 crore and above luxury segment. Consumers in Central Mumbai have experienced increased buying prowess because of better economic conditions and a stronger GDP. The total number of flats sold in Central Mumbai saw a surge of 73%, and the western suburbs also saw a 21% increment.

In Central suburbs, apartments above Rs 2 crores marked 80% of the sales. The number of flats increased by 17% in the real estate trend of the diverse MMR market’s central suburbs.

5. Government initiatives have helped immensely

The government’s aid in the MMR region with initiatives like reducing the stamp duty, lower interest rates, and low repo rates attracted skeptical buyers to buy their own houses. This has sustained and strengthened the MMR region’s recovery in the real estate industry.

The robust government policies and vaccination rollouts have improved the buyer sentiments and made them realize how important owning a home is.

6. High-end amenities

The pandemic and its indoor restrictions have made buyers more attracted to grand living spaces, providing high-end amenities. The MMR region’s luxury homes have benefited from this real estate trend. Amenities such as gardens, private cinema screening rooms, personal gyms, libraries, and more are often found in MMR luxury homes’ burgeoning groups.

Conclusion

The MMR goldmine has seen a boost in the real estate sector even during and after the pandemic. After a slight slump in the April-May months of 2021 in property sales, the sales volume quickly recovered. The low-interest rates, favorable demographics, and affordability are credited for this growth.

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