Tag Archives: real estate
Budget announcements set to boost India’s residential property market
India’s residential real estate market is set to see a boost with moves that will increase the supply of properties for sale and demand. Experts point out that change announced in the 2016/2017 Union Budget will see a reduction for first time buyers of INR 50,000 on interest repayment for loans up to INR 35 lakh where the cost of a house is INR 50 lakh and this will boost the demand for housing at the lower end of the market. This move is also likely to benefit purchasers in tier II and tier III towns such as Surat, Nagpur, Lucknow, Vadodara, Jaipur, Pimpri-Chinchwad, Indore, Chandigarh, Gurgaon, Rajkot, Bhopal, Kanpur, and Thane, according to Shishir Baijal, chairman and managing director of Knight Frank India. On the supply side, a 100% tax exemption on profit for developers and an exemption from service tax for the construction of houses up to 325 square feet in metro areas and 650 square feet in other cities will encourage supply in the affordable housing segment. The budget has also increased the limit of deduction of rent paid under section 80GG which provides for deduction of house rent paid, provided that a deduction for payment of House Rent has not been claimed under any other section of the Income Tax Act, from INR 24,000 per annum to INR 60,000 per annum, thus providing relief to those who live in rented houses. For investors, the abolition of the dividend tax (DDT) means that there will be no barrier to launching REIT schemes. ‘Removal of REITs from DDT will also make this type of investment more appealing to retail investors. In the long run higher transparency levels will ensure that the cash strapped real estate sector will get easier access to funds at a reasonable cost,’ said Baijal. A focus on improving infrastructure and rural development is also expected to give a much needed fillip to the real estate sector. This includes a significant outlay on improving roads, railways and developing smaller airports to improve regional connectivity. Additionally, incentives to MSME, Make-in-India will get a further boost that will benefit the real estate sector in the long run. ‘Additionally, the government’s focus on digitization of land records is a step in the right direction, especially in more rural areas. The move will also lead to higher transparency levels in the real estate sector,’ Baijal added. There is also likely to be more demand from overseas investors with the forthcoming Indian Property Show in London in April expected to be well attended by Indian expats seeking to invest in real estate. They are expected to be interested in smart gated communities which are being developed in major cities such as Delhi NCR, Mumbai, Hyderabad, Chennai, Bangalore, Pune and Kolkata. According to Srividya Rajan, general manager for sales and brand engagement at Sumansa Exhibitions, the Indian Property Market is affordable compared to other international investment destinations and capital appreciation on real estate in India… Continue reading
Asking prices and sales activity grows across the UK
Property markets across the UK have seen activity soar with asking prices and sales moving upward, according to the latest national index. Asking prices rose in all parts of the UK with the mix-adjusted average asking?price for England and Wales up 0.9% month on month and by 1% in Scotland. But the average annual home price rise for England and Wales dipped slightly to 7.0%. The West Midlands shows the largest monthly rise of 1.5% as demand outweighed supply in the region and supply continues to contract overall with a decrease of 4% year on year, according to the Home.co.uk index. Homes are also selling faster. The typical time on market fell to 102 days across England and Wales, some 17 days less than in March 2015. The East of England, London and the South East show huge drops in marketing times as buyers snapped up properties at pre-crisis rapidity. The number of properties entering the market is down 4% compared to a year ago, the index also shows. The hardest hit region was the West Midlands where 12% less new stock arrived on estate agents' books during the last month compared to February 2015. The South West of England is also indicating shortages in supply with 8% less stock registered on agent portfolios last month. Prices also rose in the North and Wales over the last month but in both these regions marketing times continue to be the longest in the UK. ‘As a result, we expect only small seasonal rises in these regions over the coming months. Supply remains relatively buoyant and, consequently, prices show little if any significant upward progress,’ said Doug Shephard director at Home.co.uk. By contrast, he explained that fierce competition between buyers has driven the typical time on the market in the South East and East of England down to 47 and 49 days respectively. ‘The last time we witnessed such short marketing times was back in the pre-crisis summer of 2007,’ he added. ‘The changes in stamp duty for buy to let investors has meant that the property market has had the equivalent of an adrenaline burst to kick start what was already going to be an excellent year for house prices. Following this aberrant phase we may find that prices pause for breath, but the underlying fundamentals of cheap borrowing and tight supply will remain overall,’ he concluded. Continue reading
UK home lending was broadly flat in January, latest CML data shows
Home buying lending in the UK was flat in January but remortgaging activity was boosted by a plethora of low deals, the latest published figures suggest. The data from the Council of Mortgage Lenders, now available on an unadjusted basis for the first time, gives a more complete picture as it makes it easier to spot underlying trends, according to Paul Smee, CML director general. He explained that while the unadjusted data appears to show large falls month on month, stripping out the usual January lull gives a different picture. ‘We see a general picture of flat house purchase lending but a significant uptick in remortgage activity as borrowers continue to seek attractive new deals despite the lower for longer expectations for interest rates,’ Smee said. On an unadjusted basis, the figures shows that home owners borrowed £8.4 billion for house purchase, down 25% month on month but up 12% year on year. They took out 46,200 loans, down 27% on December but up 5% on January 2015. First time buyers borrowed £3.3 billion in January, down 27% on December but up 14% on January last year. This totalled 21,400 loans, down 28% month on month but up 6% year on year. Home movers borrowed £5.1 billion, down 24% on December but up 11% compared to a year ago. This totalled 24,800 loans, down 26% month on month but up 3% on January 2015. Home owner remortgagors borrowed £5.8 billion, up 35% on December and 32% compared to a year ago. This totalled 33,100 loans, up 28% month on month and 19% compared to a year ago. Landlords borrowed £3.7 billion in January, up 9% month on month and 42% year on year. This came to 23,100 loans in total, of which 13,400 were for remortgage, up 3% compared to December and up 31% compared to January 2015. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that with interest rate rises postponed into next year or beyond, remortgaging activity is going from strength to strength, reaching its highest monthly level for seven years. ‘Landlords are in more of a hurry, and don’t have long left to snap up investment properties before being struck with more debilitating stamp duty. As a result, this storming growth in buy to let borrowing is likely to be short lived, and be balanced out by a more sedate second quarter of the year,’ he said. ‘But Government support schemes have proved a tonic for first time buyers, and this is likely to provide good vitals throughout 2016 as a whole. Existing home owners should be feeling revived too, as house prices show healthy improvements, triggering many to make the plunge and start trading up. It’s supply of homes on the property market that is the fly in the ointment currently, and is the biggest threat to quashing this confidence,’ he added. David Whittaker, managing director of Mortgages for Businesses, explained that in the… Continue reading
