Blogs

What is a balance transfer and when to go for it?

Posted on by HomeCapital Team

In the dynamic financial markets, the interest rates do fluctuate giving an opportunity for better debt management called a Balance transfer. It facilitates the full payment of your existing loan by transferring the balance to a new financial institution like a bank or Non-Banking Financial Corporation (NBFC).

Types of Balance Transfers

Basically, there are three types of loan balance transfers namely home, credit, and personal. We will discuss home loan balance transfer at length. A home loan balance transfer is the transfer of your outstanding loan from one bank or NBFC to another wherein there is a reduction of interest rates or EMI.

When should you go for a home loan balance transfer?

Even after deciding that you may want to transfer your home loan to another lending institution, homebuyers should opt for balance transfer when:

1. High Outstanding Amount – It is generally chosen when the outstanding loan amount is high. There are various factors to be considered as mentioned in the next points.

2. Lower Interest Rates/EMI – When another bank or lender is offering you lower interest rates than your existing bank or a lower amount of EMI compared to your bank.

3. Low Balance Transfer Cost – Balance Transfer Cost or Fee is the charge levied by the lender on the borrower at the time of transferring the existing loan from the bank

4. Favourable Terms & Conditions – Prior to executing the balance transfer, you need to check for the terms and conditions of the lender. These ones are documentation and processing fees, administrative charges, foreclosure clauses, flexible tenure, legal fees, etc.  

These are the situations when you should consider the balance transfer. However, there is one technical aspect you need to check and that is the basis points. This aspect will give you a clear idea about making the balance transfer decision. Let us have a look at the concept of Basis Points.

Basis Points (bps)

It is a universal unit measure of interest rates and other percentages in finance and banking. This is also referred to as “bps”. A basis point is equal to 1/100th of 1% or 0.01%. It is used to denote the percentage change in the loan. The equation of basis points and percentage is that 1bp = 0.01% and 1% change = 100 bps. It is basically, the differential percentage that is expressed in basis points.

Apart from the favorable terms and conditions aspect mentioned above, your decision of balance transfer based on basis points should be based on points below.

i) If the differential interest amount is between 5-20 basis points, then you should avoid balance transfer as this amount is too low.

ii) If the differential interest amount is more than 25 basis points, then this is the perfect time to choose a balance transfer.

Other important aspects to check before balance transfers

Following are the aspects that one should check prior to opting for a balance transfer:

1. Switch to floating rate from fixed or vice versa

Both the conversions of interests are possible. If you find a floating rate will save a certain amount of interest compared to a fixed rate then it is best to choose it and vice versa. Banks do not charge a pre-payment penalty in the case of floating rate. However, this may vary in the case of a fixed interest rate.

2. Penalty clause

When you have opted for a loan from your bank, you need to check your loan agreement whether the bank has included a penal charges clause for balance transfers. These charges may vary from the beginning to the end of your loan tenure. Penalty charges also need to be calculated with other expenses before making the decision.

3. Buying life insurance with a home loan is mandatory or not

Life Insurance is not mandatory to be purchased along with your home loan. Nevertheless, financial institutions do tend to promote as an accessory or additional product.

Home loan balance transfer – List of documents

The process of a Home loan balance transfer is no different than applying for a new loan. When you apply for it, it’s almost like applying for a new loan. Hence, almost all of your documents are required. Below are some of the important documents mentioned. Completed application form for balance transfer of home loan

  • Existing loan agreement and its consent letter
  • Proof of identity
  • Proof of income – IT Returns, Bank Statements, Form – 16 etc
  • Proof of address & age – Passport, Utility Bill, Driver’s License, Aadhar Card etc
  • Latest passport size photographs

With technology inculcated into finance, a homeowner can easily estimate the details and benefits they would receive from transferring a home loan to another financial institution. One simply needs to enter the basic details of the existing loan like outstanding loan amount, interest rate, tenure, etc. The decision of Balance Transfer should be taken very carefully by examining the aspects mentioned above to avoid any issues like paying an additional amount of interest, various fees, and charges.

Can NRIs buy property in India? Must know regulations for them

Posted on by HomeCapital Team

NRIs can surely buy property in India, although there are some rules and regulations that specifically apply to non-resident Indians when they are investing in real estate.

The rules that govern the purchase and acquisition of real estate properties by the NRIs are governed by the Foreign Exchange Management Act (FEMA), which is administered by the Reserve Bank of India (RBI).

Who is a non-resident Indian?

A non-resident Indian (NRI) is an individual who is a citizen of India but presently does not live in India or does not reside in India. The person may be residing abroad and doesn’t stay in India for more than 180 days in a year, or he or she may be living abroad for the sake of employment. In most cases, and particularly in the context of this blog post, an NRI is a person of Indian origin who has settled abroad, alone, or with family.

How can an NRI buy property in India?

The RBI has issued certain directions explaining the laws that govern buying a property by NRIs. For certain properties, the NRIs don’t have to go to the RBI to get permission. The RBI has granted general permission to NRIs to buy certain immovable real estate properties in India.

What type of properties can NRIs purchase without getting the RBI involved?

NRIs can purchase residential or commercial properties. At the same time, they cannot purchase any agricultural land, a farmhouse, or property where any sort of plantation work is done. As long as they are buying residential or commercial property, they don’t even need to intimate the RBI.

The money for buying the real estate property cannot be tendered in cash, travelers’ checks, or foreign currency by the NRI buyer. Only the channels approved by the RBI can be used, such as by remittance from abroad or through the balance in the NRI’s NRE/NRO or Foreign Currency Non-Resident (FCNR) account.

An NRI can even buy property in India with a home loan in Indian rupees. The only condition is that the home loan must be granted by the Indian employer of the NRI employee specifically for the purpose of financing the property. The EMI of the loan can be made through direct remittance from abroad or again, through money in the NRI’s NRE/NRO or FCNR account. The EMI can also be paid through the rent generated through such a property. It can also be paid via a relative living in India.

There is no restriction on the number of permitted properties that an NRI can buy. An NRI can also buy property for another NRI.

Does an NRI must visit India to complete the deed of purchase?

Not necessarily. He or she can give the power of attorney to another person living in India and that person can carry out all the formalities of the purchase.

What documents does an NRI need to buy real estate property in India?

An NRI may need the following documents to buy real estate property in India:

  • Passport or/and OCI card: One needs an Indian passport. If an Indian passport is not available, the person buying the property must present a PIO (Person of Indian Origin) card or and OCI (Overseas Citizen of India) card.
  • PAN card: A PAN card is mandatory for all property transactions.
  • Power of Attorney document: In case another person is carrying out the purchase transaction he or she must have a power of attorney document provided by the NRI. This is a special power of attorney which is registered and notarised.

An NRI can also buy real estate property in joint ownership. The other person with whom the property is being brought can be another NRI or an Indian resident.

Is there no chance that an NRI can hold farmland?

An NRI can hold farmland if he had purchased the land or the real estate property when living in India and then goes abroad and becomes an NRI. He or she is allowed to continue to own any agricultural land, plantation land, or a farmhouse that he or she owned prior to becoming an NRI. Such a property can be rented or given on lease and the rent can be remitted after the appropriate Indian taxes have been paid.

The Indian real estate sector in recent times has seen multiple price corrections. Consequently, buying property in India has become quite lucrative for NRIs, with favourable currency rates.

Know how virtual reality will revolutionize home sales

Posted on by HomeCapital Team

Virtual reality is a three-dimensional immersive digital world that you can interact with as if you are inside it. A headset in combination with a console or even a mobile phone creates a stereoscopic 3D effect with a 3D sound system. This technology is on its way to revolutionizing home sales.  Read to know-how.

What is virtual reality?

Virtual reality has so far been mostly related to gaming but it is fast making inroads in other industries such as medical simulation, automobile design, and real estate. By 2020, the overall market size of the virtual reality market in India was $ 1.83 billion. In this, almost $ 173 million of investments are being made in virtual reality for the real estate industry.

In real estate, a three-dimensional simulation of a complete building can be created using virtual reality software and people can be walked through in an immersive environment.

Virtual reality is a computer-created environment you can digitally walkthrough. As per current technology, you need to wear a headset that transports you to a three-dimensional audiovisual experience that is completely different from the two-dimensional images and videos that you watch on your computer screen or TV.

How virtual reality can revolutionize home sales

Home sellers (builders, real estate agents, and independent property sellers) and buyers normally face two problems when selling and buying properties:

  1. The property isn’t yet ready but still the sale needs to be closed so that finances can be arranged.
  2. Either the buyer or the seller cannot physically visit the property due to distance or time constraints and good deals are being lost due to that.

Traditionally the builder would show a map of the property to interested buyers. If multiple apartments are involved, they sometimes also build a pilot apartment so that interested parties can visit the place and can get an idea of how the final construction will look. This is costly as well as inconvenient. Besides, during the construction, there may be many changes that neither the builder nor the buyer can envisage.

Virtual reality not just helps the builders to cut costs but also allows the interested buyers to conveniently experience the interiors of the property even when the property hasn’t yet been built.

Virtual reality, as explained above, creates an immersive environment.  Currently one needs to wear a headset to experience three-dimensional virtual reality. The technology is fast improving and soon you may be able to experience virtual reality by simply wearing digital goggles.

Virtual reality offers multi-sensation interaction in real estate

The virtual reality environment allows interested parties to digitally interact with various elements of the properties using audio, visual, and haptic sensations. People participating in the virtual tool can tap on individual items (such as opening the door to a room) and experience and visit them one by one.

When you enter the virtual reality world, things appear in three dimensions. This means the objects don’t appear flat. They have depth. They have shadows. They have backs and fronts. You can open doors. You can go behind the walls. You can climb the ladders. You can turn left and right. You can even turn around and see what’s behind. The real estate agent can completely furnish the house in the virtual world as per your taste. The color and texture of the walls can be changed. You can have your own doors and windows. You can even suggest design changes to the architect by arranging various components in real-time.

Before purchasing a property, a real estate agent may need to show multiple properties to prospective buyers. This involves lots of travel and logistic factors. Many real estate deals fall through because timely visits cannot be scheduled. This problem can be solved with virtual reality. Virtual trips, guided, interactive, or staged, can be organized within minutes for the stakeholders. Other than the physical sensation, one feels like actually roaming inside the property experiencing the various elements.

Virtually seeing the property in three dimensions makes it easier for buyers to make up their minds because now they have a visual sense of how the property is going to look.

Although virtual reality is on its way to revolutionizing the real estate industry for all stakeholders, it is still at an early stage as far as reach is concerned. Not all real estate buyers have the needed gadgets and technologies to participate in virtual tours and interactive virtual visits. But soon, the technology is going to be as common as owning a mobile phone and when that happens, there will be nothing to stop the juggernaut of virtual reality in real estate.

How to convert your ordinary home into a smart home?

Posted on by HomeCapital Team

What is a smart home? What does it take to convert your ordinary home into a smart home? Let’s explore some options.

In a smart home, your home appliances, systems, and gadgets can interact with each other and perform specific tasks on their own. A typical smart home system is connected through a mobile phone and a centralized Wi-Fi network. Through it you can control your air conditioners, lighting systems, garden sprinklers, security cameras, home theater, and any other device or appliance that has the ability to be connected to your smart system.

For example, suppose you have installed a smart lighting system that allows you to change the color of your light bulbs and manipulate their luminescence. You control it through Amazon Echo. Your hi-fi system is also connected to Amazon Echo. Through your smart home system, you can instruct your system to change the ambiance of the lighting based on particular songs. You can turn the lighting blue if you’re listening to jazz blues, for instance.

The benefits of having a smart home

In a smart home, you cannot only automate repeat tasks, but you can also control them from a singular device such as a mobile phone, a tablet, or something like Amazon Echo or Google Home. You can lock your doors without lifting a finger just by voice command. You can switch on and off your security cameras or control their focus based on the time of the day. Your sprinkler can set off automatically if it notes that you have been asleep for more than an hour at night.

The motion detectors of your smart home can detect whether you are present in a room or not and accordingly, switch on or switch off the lights or even the AC or the heater. You can set your water heater to raise or lower the temperature based on the environmental temperature in the bathroom. Connected with your smart watch, the volume of your music system can be increased or decreased based on in which room you are at your home. It can automatically turn the TV off if you have dozed off or if you have left the room and haven’t returned for more than five minutes. This way, a smart home helps you create an energy-efficient home. There are many smart refrigerators that can automatically place an order if you’re running out of milk or bread.

Can you easily turn your ordinary home into a smart home?

Yes, you can. You may need to invest in some gadgets and opt for fittings and furnishing items that can be connected to a Wi-Fi or Bluetooth device.

The smart devices and gadgets inside your home can be independently smart, or they can be made smart by hooking them onto a central command system like Amazon Echo. A good thing about a device like Amazon Echo or Google Home is that you can issue voice commands and there are practically unlimited commands that you can either use or feed into the smart devices.

To be able to create a truly smart home, you will need devices that can be connected via Wi-Fi or Bluetooth. Even a single light bulb has the capability to connect to your Wi-Fi and respond to either your mobile app or a voice command. For example, if you install a smart bulb and then connect it to the app through the Wi-Fi, you can control the ambiance, the light color, the temperature of the light, or even switch on and off the light bulb. A typical light bulb gives you an option of more than 16 million light shades!

To turn your ordinary home into a truly smart home you first need to figure out what all functions you want to automate or you want to be able to control through voice commands or through a mobile app. The various aspects of your smart home can also be controlled by the IFTTT (if this then that) service.

Here are some standard features and gadgets that can be turned “smart”:

1. Smart lighting

Almost all lighting solutions companies these days provide smart lighting options. With a single mobile app, you can control the lighting system of your entire house. With a dedicated mobile app you can control individual light bulbs, or you can create complex routines so that they can respond to various environmental factors or even based on whether you’re at home or not.

2. Home entertainment systems

The smart home entertainment system can dim the lights when you are watching your favorite movie. It can even put your phone on silence automatically. Like listening to your favorite songs when you are in the shower? Your shower system, when connected to the smart device that is also connected to your hi-fi system, can automatically raise the volume when you turn on the shower. A multiroom audio system can start playing music or the podcast you are listening to on the speaker placed in the room you are present. This way you don’t have to play blaring music for the entire house.

3. Smart locks and sprinkler systems

Smart locks can lock your doors automatically at a set time. The status of your locks can be checked on your mobile device so if you have left home without locking your doors you can lock them remotely after checking the status. You can also control the security cameras remotely provided you have an Internet connection on your mobile phone.

Similarly, no matter where you are in the world, if you have an Internet connection and if your sprinkler system is connected to a smart device, you can turn it on or off from your mobile phone, or automatically at a set time. You can even have a tiny sprinkler system installed in your balcony to water your pots when you are out of station.

The sky’s the limit when you consider gadgets and appliances that can be used to turn your ordinary home into a smart home. You can begin with a single bulb or a single gadget. Gradually you can expand into controllable curtains, the entire lighting system, mopping and sweeping, your microwave and washing machine, and practically every appliance and gadget at home.

A shift towards “luxury destination” in Pune real estate sector

Posted on by HomeCapital Team

What defines “luxury real estate” and why Pune is fast becoming the preferred luxury destination in the real estate sector? Let’s find out.

For many homebuyers luxury homes are not just a matter of convenience and comfort, they are also a status symbol. This is the reason why luxury destinations come to be many sought-after places because aside from the amenities and material comforts that families enjoy; they also get to live with like-minded people in an amiable locality.

In the olden days luxury real estate meant a garden in front of the house, a prime location people would call “posh” and a parking space for a couple of cars. Although these privileges are still much in demand, luxury real estate and apartments also come with the latest gadgetry and technological amenities such as pre-installed Internet of Things appliances, CCTV security cameras, 24-hour maintenance, temperature-controlled swimming pools, gymnasiums, and international interior and exterior aesthetic appeals.

Why abundant growth in Pune real estate?

Since the mid-2000s Pune has been emerging as a cosmopolitan city. It is home to many technology companies. The outsourcing boom saw a flood of new offices opening in the city. The infrastructure is suitable for unrestricted growth. As a result, Pune is touted as a premium luxury housing destination and the Pune real estate sector attracts interested buyers from across the country.

Currently, Pune is among the top 100 cities in the country for its real estate sector. It is one of the most stable real estate markets in the country. There is an unbridled surge in the luxury housing market. It has a multicultural population. It favourably caters to cosmopolitan demography. Disposable income is higher. The city also has some of the most elegant architecture.

The city boasts of an international airport. The roads are clean. There is a metro rail from one corner to the other. The bus rapid transit system works flawlessly. Commuting is quite easy and there are fewer traffic jams. The city gives a wide option to property buyers looking for luxury real estate investments.

Why is Pune becoming a preferred luxury destination in the real estate sector?

Many real estate developers who are upbeat about the rise of luxury real estate in Pune claim that the recent pandemic has forced many property owners to reconsider their priorities. Many young couples want to shift to smaller cities. Compared to a city like Mumbai, Pune is less populated, is more culturally diverse, and much greener and less polluted. It offers a much better quality of life.

Additionally, luxury real estate in Pune is much more affordable compared to bigger cities like Delhi and Mumbai. The younger generation of techies having six-figure incomes no longer have to wait till their middle age to own luxury real estate. Home mortgages are easily available and loan options are available even for a down payment.

With property owners coming to Pune not just from within India but also from abroad, the city is witnessing a continuous search for luxury residential projects. It offers one of the most stable real estate markets in the country. Many NRIs are coming back to India and they want the same lifestyle they enjoyed in Canada or the US, for their children.

There has also been a big shift in attitude. People don’t want to go abroad and settle there to experience the lavish lifestyle offered by first-world countries. They want to live in their own country but want to have the lifestyles of the first world countries, and such lifestyles are available through luxury real estate properties. Also, they have the inclination. They have the money to spend. They are also aware of the world-class standards since they are much traveled and socially connected with people living abroad.

Luckily for them, Pune real estate offers almost everything they would otherwise experience in a first-world country. The city is green and lush. The luxury flats are spacious. They can enjoy the beautiful scenery right from their balconies. Houses and apartments even in premium locations such as Model Colony, Boat Club Road, and Sopan Baug are within budgetary reach. If there ever was a good time to buy luxury real estate property in Pune, it is now.

Common property investment mistakes and how to avoid them

Posted on by HomeCapital Team

Are you thinking of your first property investment? Are you confused with lots of questions on your mind? You may be concerned about making typical property investment mistakes that could waste your time, money, and energy.

Property investment is a long road journey and can be tricky too, where any beginner can feel lost and make some mistakes. In this article, we will go over some of the most typical mistakes that any beginner investor might make in a rush to win big.

So, here are the 7 most common property investment mistakes to avoid.

1.    Lack of planning

One of the most frequent property investment mistakes to avoid is failing to have a strategy in mind. And the answer is to build a plan before you start investing in the property. Property investment is often a costly process. And irrespective of how attractive or tempting a deal may be, you should carefully consider your options and choose if the offer is ideal for your long-term objectives.

If you’re purchasing a property for the first time, you’ll need to think about many things, such as the price, your needs, future servicing costs, the estate’s growth potential, and many more. Therefore, slow down the process. To avoid making one of the most common property investment mistakes, create a plan ahead of time.

2. Insufficient market analysis

Property buying and sale require thorough research. You need to carefully choose where to buy a property or which area is nearest to your place of work. It’s also about understanding what kind of property you can build on that plot and who your neighbours might be in a specific neighbourhood.

All financial choices connected with property investments, such as the standard pricing in a given area, the need for rental properties in a particular location, and more, require analysis. As a result, one of the essential property investment mistakes for all beginner investors to avoid is lack of research.

3. Aiming for short-term results

Another common mistake property investors make is entering the market without any clarity on the kind of returns they can expect and the time horizon required to see a return on their investment. This could result in misunderstandings, regrets, and financial losses. As a result, if you are looking at a big return in real estate, avoid seeking immediate and short-term benefits.

So overall, property investment is a long-term investment, and most experienced investors will advise you to invest your money into a growing property that will pay off over time rather than a quick grab-and-go scheme that could eventually cause financial losses.

4. Paying more than it’s worth

Once you’ve done your market analysis, make sure you only pay what a property is worth in any situation. But what if you missed a severe issue with the property condition, such as a pest attack that could cost you more money to repair until you can put it back on the market?

You might end up spending more than it’s worth in these situations, mainly if you invest all your capital in the property in the first place. If you intend to rent the property, it is better to avoid leaving it empty for an extended period. Vacant rentals turn into wastes, demanding money out of you for maintenance but generating no revenue in return.

Moreover, be careful when looking for the ideal client for your rental property. You must ask your tenants a few key questions to ensure you’re renting to the right people, who will timely settle their rentals and also maintain the property in its existing state, instead of adding to your costs with extra repairs.

5. Failing to budget for sudden expenses

Another common property investment mistake that every beginner makes is similar to the one above. When investing in real estate, you should invest according to your worth in all situations, but it’s a good idea to create a maximum limit and set aside a certain amount of your money for emergencies and unexpected costs as you prepare your financial plans. These costs might be personal, health, or property repairs that are essential or needed.

6. Failing to have a backup plan

Did your plan A fail? Worry not. There are still 25 more letters! Plan A is a good start, but always have a plan B – a backup plan. For a newbie like you, it’s necessary to have a backup plan for worst-case situations. It would not be a wise decision to invest all your money in the property for the first time.

What if you cannot sell your property for a long time? Will you offer it up for rent? What if you cannot find a tenant in the coming days? Do you have any friends or family members who could support you or spread awareness? Plan everything, including what happens if your financial goals fall through.

Conclusion

Finally, consider that even expert investors can make some of these common property investment mistakes by not doing enough analysis and exploring the marketplace. So, when investing your money in a property, don’t make a quick decision. If you can avoid these 7 common mistakes discussed above, you can become successful in property investment.

Dream home vs starter home – Which one to opt for

Posted on by HomeCapital Team

Home buying is one of the important things on almost everyone’s bucket list. However, to buy a starter home or a dream home is something to be thought about. There are lots of factors to be considered prior to making a decision. Home buying decision depends on your financial planning as well as income. It also depends on which area you intend to buy your starter or dream home.

Let us have a walkthrough to understand the concepts of a dream home and starter home and their merits and demerits.

Starter home

A starter home is a more affordable option when you are low on finances. However, the home buying process remains the same.  You can consider it as a home where you can live for a few years to prepare yourself to buy your dream home.

This starter home comes with some amenities and possibly with some interior designing expenses. Usually, starter homes are smaller in size and located in suburbs compared to the dream home.

With this step, you will have a complete experience of home buying and a chance to prepare your finances thoroughly for your dream home. A starter home can be chosen once you have achieved some stability and have some savings.

Dream home

A dream home is a long-term house that you have dreamt of all the time. It may be in any desired area, any size, or style. It depends on the imagination of the individual. You may think of having a large apartment with a cozy balcony, plush interior, upscale furniture well equipped with electronic appliances.

Dream home can also be the one you are looking for in your favourite neighbourhood where you have spent your childhood. The best time to go for a dream home is when your career is stabilized or you have achieved financial stability or in case, you are planning for a family.

Merits and demerits of starter home

The advantages and disadvantages of a starter home are listed below:

Merits of starter home

1. Making a choice of a starter home and buying it will give you the much-required stability to prepare financially for your dream home in the near future.

2. From an investment point of view, buying a starter home can increase your finances with its appreciated value.

3. You can use the funds to buy a starter home which otherwise you are spending on rent.

4. These homes are affordable in comparison to a dream home with a lesser down payment and also your EMI.

5. You can seek tax benefits from these homes to avail of loans.

6. Starter homes are usually smaller in size, so you can save a lot of money on interior and furniture.

Demerits of starter home

1. Starter homes come in fewer amenities and may have repairs and high maintenance cost

2. They are smaller in size than the dream homes and may not be big enough to start a family.

3. You may take more time in selling your starter home than estimated.

Merits and demerits of dream home

The advantages and disadvantages of a dream home are listed below:

Merits of dream home

1. Dream Home is usually larger in size and can accommodate a larger family

2. With regard to location, possibly it is in your favourite neighbourhood where you had spent your
    childhood. And for your family as well, it is a great aspect of convenience.

3. You can customize and spent more money on interior design, décor, and furniture as per your
    imagination. It is like the way you had dreamed of.

Demerits of dream home

1. A dream home is large in size, its interior will be high on maintenance cost, electricity bills, and property taxes.

2. The buying cost of this home is higher than a starter home. Your monthly EMI will be much
     greater than a starter home and hence a slower return on investment.

Buying a home whether a starter or a dream requires doing proper market research and detailed financial planning. However, the home prices and their appreciation depend on the market dynamics. There are no set rules or standards that one can follow. But it is about understanding the price variation, real estate economics, and financial position of the buyer.

No property tax for flats measuring up to 500 sq ft. in Mumbai

Posted on by HomeCapital Team

The Brihanmumbai Municipal Corporation (BMC), the most extravagant community body in the country, on 3 February 2022, Thursday introduced a spending plan of ₹ 45,949.21 crore for the year 2022-23, in front of the urban races. The financial plan gauges are 17.70 percent more than the last monetary when the BMC had introduced a ₹ 39,038.83 crore spending plan.

Mumbai city chief Iqbal Singh Chahal introduced the financial plan before the city standing board meeting held at the BMC central command. In the spending plan, the metro body reported 100% alleviation from the installment of property tax for the pads comparing 500 square feet of rug region.

Around 16,14,000 residents will get 100% local charge alleviation. How much the exception to residents is to the tune of ₹ 462 crore for each annum. On January 1, Chief Minister Uddhav Thackeray had declared a choice to forgo the local charge for the private units of up to 500 square feet, situated inside the Mumbai city region limits.

Prior to introducing the overall spending plan at the standing board, the BMC additionally postponed its schooling financial plan of ₹ 3,370.24 crore. The current year’s schooling spending plan gauges are 14.45 percent more than the last financial year when the financial plan was ₹ 2945.78 crore.

West Bengal to levy reduced stamp duty till March 2022

Posted on by HomeCapital Team

The West Bengal government has announced that stamp duty will be imposed at reduced rates until the end of March this year. This is expected to have a substantial boost for residential property sales in Kolkata.

The government is looking to boost demand for residential real estate in an effort of short-term stimulus by temporarily reducing stamp duty and relaxing circle rates. This decision comes on the heels of the pandemic’s recent outbreak which has caused several states to go into lockdown status until further notice from officials.

As the country braces for an outbreak of the third wave, leaders have announced that there will be a 2% reduction in stamp duty and 10% relaxation on circle rates. The plan was to last until January 2021 but it’s been extended due to current circumstances.

Impact of Stamp Duty reduction on house sales

The financial relief will help many projects and consumers alike. So far, more than Rs. 75,000 crores worth of registrations happened in West Bengal contributing huge revenue to the exchequer! This will further result in discounts in registration costs, making it a win-win situation for all. It is estimated that the real estate players will offer more freebies and sops to the consumers leading to an increase in sales.

The Kolkata real estate market is booming as homebuyers continue to purchase properties on the back of record-low interest rates and good deals offered by developers. Knight Frank has recorded a 64% growth in residential property registrations within Greater Kolkata since July 2021. With 56% of these units registered since the introduction of stamp duty cut, it is evident that this new legislation was positively received by buyers and sellers alike.

Recovery of Kolkata real estate sector post-November 2021

After a brief break in November 2021 due to ongoing festivals, the Kolkata residential real estate market has shown a significant recovery in registrations according to December 2021 statistics. It’s been an interesting year so far, with the number of housing registrations showing month-on-month(MoM) growth by 248% in December alone.

Kolkata’s real estate market witnessed an exciting increase in property registrations last month, after the reduced volume during November. The massive 248% MoM growth was largely due to people coming to know about the stamp duty cut window for homebuyers- which they took advantage of.

The registration data is for residential sales documents registered and included transactions in both the primary and the secondary market.

New flats vs resale flats: which one you should go for

Posted on by HomeCapital Team

Are you planning to buy a new flat for you and your family? Which one should you buy? A brand-new flat or an existing flat for resale? Let’s explore.

A new flat is a flat that you purchase straight from the builder. You probably start paying for it even before it is built. You see an advertisement in the newspaper about a new residential complex coming up with a great offer and the builder invites you to make the down payment. New flats are sold by builders and construction companies directly to the buyers.

A resale flat is a flat that has already been bought by someone. They may have already been living in the flat, but they may have rented it out. They may have simply kept it for capital gains or as a real estate investment tool. You don’t buy a resale flat from a builder or a construction company. You buy it from an owner.

Why are new flats cheaper than older, resale flats?

New flats are cheaper because they are generally constructed in places where the cost of the land is low compared to already developed areas. These places are slightly removed from the main city. This is how the NCR developed – people who found buying property prohibitive in Delhi and New Delhi could find cheaper and better options in the NCR. The further away the upcoming residential complex is, the better cost advantage you get from the builder.

The developer may adopt many cost-saving techniques such as using cheaper raw materials, making it more appealing to you as a buyer. It will be difficult for the builder to explain to you that because of the fittings in the kitchen you are having to pay a few lakhs more.

Older resale flats on the other hand are already time-tested. The owner may have used good-quality wood for doors, windows, and other woodwork. The plumbing may be of good quality. There may be a thriving cultural life within the complex. Lots of social amenities in the forms of markets and recreational centers may have cropped up around the complex. There is probably a school nearby and a hospital. The eating joints market may be thriving. There are even neighboring residential complexes inviting more businesses. There may even be a dedicated metro station nearby. There are multiple factors that increase the value of older resale flats manifold.

Why do people purchase new flats?

One of the biggest reasons people buy new flats is because they are cheaper compared to resale flats. The flat may come with some amenities, but this also gives you an opportunity to furnish the house in your own taste. People usually have cars these days and there are roads everywhere so commuting may not be such a big issue even if your building is slightly away from civilization. Many people find the prospect of living in a less polluted environment away from the pollution and the hubbub of the city, quite attractive.

There is less wear and tear. Everything, including gardens, recreational facilities, and other common amenities are new, fresh, and sparkling. Even people in the neighbourhood are new to the surroundings and hence, may appear friendlier.

New flats are also better for investments because their prices generally increase in a few years unless the social or environmental conditions deteriorate unexpectedly.

Since the price of a new flat is considerably lower compared to resale flats, the required savings for a down payment, and even getting a loan for the down payment is easier. Even the possession is easier in terms of making the payment because many builders (in case they are collaborating with certain banks or financial institutions) offer you to make the down payment and then start paying the EMI only at possession. New flats are ideal for young people who are either single or newly married.

Why do people purchase older resale flats?

Resale flats come with a surety. Developers need to ensure that their cash flow is positive as this would help them complete the construction of the project. Deviations may lead to the developer not completing the project on time and delay in possession for homebuyers.

Resale flats are time-tested. They already have a thriving neighborhood. There is a well-formed cultural and social ecosystem around resale flats. Public amenities have already matured. There are schools, colleges, and malls in the neighbourhood. There is less crime. People who have been living in the area will certainly share their good experiences (after all, that’s where they are staying). Families with children prefer to move to such neighborhoods.

Conclusion

Whether you buy a new flat or a resale flat depends on multiple factors such as your budget, your concerns for your family, and your personal urban or rural preferences. If you don’t want to move away from the city much and there are no upcoming residential complexes, you may consider resale flats.  You should also be prepared to pay more because resale flats are costlier because of the benefits they come with.

New flats are comparatively cheaper. You may need to invest in redesigning the interiors after moving in. Also, in some locations, civil amenities such as schools, colleges, hospitals, and public transport facilities may not be as good as in older neighborhoods.

Both new flats and resale flats have their pros and cons.