Flats in Derabassi

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Home Sales see 134% Jump in Top Cities

The Coronavirus Pandemic, being an unprecedented event, brought with a lot of chaos. Everyone across the globe suffered due to the impact the pandemic had on every sphere of life. The unfamiliarity brought with a lot of uncertainty that hindered the overall routine life of everyone. The pandemic also lead to the imposition of a nation-wide lockdown in India which hindered with the growth or even normal functioning of every sector. Real Estate has been among the worst hit sectors due to the decline in overall home sales. Initially the sector faced a lot of loss; however, there has been a turning point that has been witnessed.

Normality is being restored and with that all the sectors are making a fresh and progressive start. The post Covid world, gradually falling into place is giving way to new opportunities for all the developers. The top real estate developers like SBP Group is gaining a lot of momentum in the meantime due to their credible image and consumers trust earned over time. Even though it cannot be said that all the states are powering through the situation equally well but the top cities in India sure are emerging despite the unfortunate circumstances with a beacon of hope for all the others.

Housing Sector is paving a way towards a strong recovery as the home sales in the recent quarter has seen an enormous and evident increase of up to 134 percent. One of the major reasons behind this increase is the decline that was faced by the sector. The decline lead to an all time low in the property rates which made it easier for people to make investments. Many people saw this as an opportunity to buy a home of their own or even invest in a asset which will be more beneficial and rewarding compared to the returns from stocks.

The major reasons for the same are also the Record low home loan rates, Discounts as well as Incentives being offered by Developers. Lower taxes are also an aspect worth considering while acknowledging the positive shift in the consumer behaviour.

Developers are making the most of this opportunity by luring in consumers with amazing offers and additional benefits, meanwhile, the Homebuyers are making optimum use of this to invest in a home of their own.

Considering the Pandemic, many people have realised the value of possessing a home as it provides a sense of security in times of uncertainty. The potential buyers who were looking for homes right before the lockdown are also making their long-awaited investments in the present time. The Developers are also taking an initiative by providing lucrative payment plans etc.

The Indian Government has always introduced many policies and reforms to help the Real Estate Sector overcome the hurdles it has been faced with. Home Loans have been made easily accessible to people who wish to avail it. The rate of interest has also been relaxed to benefit the Banks as well as increase the inflow of money.

In Addition to all this, the advent of the Festive season has enormously impacted the consumer behaviour as most people wish to make big purchases as well investments during the auspicious season. The festive season also brings with it a lot of festive offers by the Developers, over and above the already existing offers. Major Indian festivals like Navratri, Dhanteras & Diwali are considered the best, in terms auspiciousness and the investments made during this time are believed to bring in a lot of fortune and positivity into the lives of the people.

The upsurge has mostly been witnessed in the Top seven cities considered best for living and in terms of employment opportunities. The Most prominent home sales have been made in Chennai, Hyderabad, Pune, Kolkata, Bangalore & Mumbai etc. During normal times, investing in Property in these cities is quite difficult as the value and price of property is quite high. The home sales price slashes have encouraged a lot of people who have always wanted to own property in these cities to finally be able to afford them.

In conclusion, despite the many challenges the real estate sector has faced due to the Pandemic, it has redeemed itself and emerged stronger than ever. It has been with the collective effort of the Developers like SBP Group who have taken the initiative to recommence the high inflow of investments. Additionally, the reforms extended by the Government to benefit the Developers as well as the Homebuyers have always played a role in the overall Growth.

If you are willing to Invest in Real Estate, right now is one of the best times to consider it without a doubt. If you are looking to invest in property in Punjab, you must take SBP Group into consideration. The Group offers affordable luxury housing options that are suited for everyone regardless of their preferences as the SBP’s Projects have it all.

In Case you have any Queries, Visit Our Website or Contact Us Via Our Social Media Handles.

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Impact of GST on Real Estate and Homebuyers

Purchasing a property involves a lot of paperwork and payments such as registration fees, TDS, stamp duty, GST, etc. It is essential for the homebuyer to know these charges and to stay up to date with them especially about GST.

Before the GST entered into operation, through the construction of a housing estate, a number of state and central taxes were levied on houses. Although the cost of project construction for developers increased with these taxes, no compensation against this tax was offered to builders against the production liability. Value Added Tax (VAT), Central Excise, Entry Tax, LBT, Octroi, Service Tax, etc. were some of the taxes that real estate developers had to pay before the GST entered into force. The expense paid by builders for these taxes was then passed to the buyer of the house.

In addition, as consumers had very little clarity about the different taxes and the prices applicable, developers were often able to manipulate statistics to hold the offer to their best advantage. For a consumer, it would’ve been an extreme challenge, to find out the VAT, Central Excise, Entry Tax, LBT, Octroi, and Service Tax rate applicable to real estate property development.

On July 1, 2017, the GST regime was introduced in India. I India’s biggest tax reform after Independence, the GST incorporated several indirect taxes in order to give the taxpayer a uniform system. The GST for real estate was initially kept higher, but the rate was decreased by the government in 2019. This was achieved in an attempt to make the property more affordable for the common man and to raise their ambitious ‘Housing for All’ aim by 2022.

GST rate on property

The government has reduced the GST rate on property transactions substantially with the goal of stimulating demand in the midst of a prolonged slowdown. This could theoretically decrease the pay-out of the buyers by 4 percent -6 percent on the overall purchase, experts say. While the new tax rate without an input tax credit ( ITC) would apply to all new projects, builders have been granted a one-time option for their existing projects to choose between the old and new rates by May 20, 2019. This bid was only valid for projects that were unfinished as of 31 March 2019. The government’s decision came when, in the absence of ITC, the developer group expressed doubts about tax liability.

Under GST, what is the input tax credit (ITC)?

The ITC system, which makes it distinct from the previous tax system in India, is a special feature of the GST rule. From the beginning of a residential property, until its completion, a real estate developer pays tax several times on the purchase of goods and services. The builder will earn an input tax credit under the GST regime when he pays his production tax.

As a tax on his final product, a developer has to pay Rs 30,000. As an input fee, the developer already has paid Rs 23,000, while buying materials such as steel, cement, paint, etc. In this case, after changing the input tax allowance, he will just have to pay just Rs 7,000 as an output tax.

As per GST, what is affordable housing?

Housing units worth up to Rs 45 lakhs identify as affordable housing under the government-determined description. The unit must, however, adhere to certain specifications as well. If it costs up to Rs 45 lakhs and measures up to 60 sq meters (carpet area), a housing unit in a metropolitan city qualifies to be an affordable home. As metropolitan cities, the Delhi-National Capital Region, Bengaluru, Chennai, Hyderabad, the Mumbai-Mumbai Metropolitan Region, and Kolkata are classified. A housing unit in any other city, excluding those mentioned above in India, qualifies as an affordable home if it costs up to Rs 45 lakhs and has a carpet area of up to 90 sq meters.

GST on home loan activities

As far as the borrower is concerned, although the GST is not applicable to home loan repayment, financial institutions provide many ‘services’ as part of home loans. The applicability of GST falls into the picture on the basis that these are facilities. Consequently, the bank will charge GST for the transaction fee, technical valuation fee, and legal fee if you are taking a home loan.

The impact of GST on affordable real estate

The presence of different taxes prior to the GST could not have overly affected property prices. Nevertheless, the tax calculation for the home buyer was a tedious operation. As a result, not many buyers will venture to find out the different taxes that added up to the property’s final price. While there are still many teething problems, the effect of GST on the property is that it provides homebuyers with more clarification about their tax obligation than the previous scheme. With the GST effect on the real estate sector leading to greater accountability, investors will have more confidence in India’s property transaction taxation. In addition, even if the prices are lowered slightly, properties will become more affordable. Here’s a look at how to measure GST on flats’ acquisition in the affordable housing segment:

Combined with these cost advantages, the GST effect on the real estate sector is expected to steadily increase buyer feelings.

Remember here that taxes like excise duty, value-added tax, customs duty, inputs and service tax depend on approval charges and architectural professional fees, labor charges, legal fees, and entry taxes depend on raw materials. These were among the costs that builders in India had to bear on housing project growth.

Although the government has already cut GST rates for real estate and there may be no room for further lowering of rates for the sector, industry experts believe that lowering rates for other goods and services may cause real estate investments at a time when home sales have dropped due to the post-Coronavirus pandemic economic crisis.

Industry bodies, such as ASSOCHAM and NAREDCO, have already proposed that for a fixed tenure, the government should reduce the GST for different goods and services by up to 50%.

For any more information related to real estate, you can read other articles of SBP Group.

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Impact of Coronavirus on Indian Real Estate

The whole globe has seen and experienced the adverse effect of coronavirus. If we talk about India, every industry has to face severe setbacks due to this pandemic especially the real estate industry.

Ever since the Coronavirus impacted humanity in December 2019, much has changed. Amid countries all over the world applying drastic steps to mitigate the pandemic, a lot of companies have come to a worldwide grinding halt, prompting monetary agencies, including India, to cut growth projections for the world economy.

S&P Global Ratings, on September 14, 2020, cut its FY21 growth forecast for India to -9 percent against -5 percent estimated earlier, as the number of patients in the country reaches record levels.

India registered a total of 6,685,082 cases as of October 6, 2020. After the gross domestic product ( GDP) estimates for the first quarter of FY21 showed a decrease of 23.9 percent over the same quarter last fiscal earlier, in the current fiscal year, global rating agencies Moody’s and Fitch have predicted that the Indian economy will contract 11.5 percent and 10.5 percent respectively.

In the last quarter of the last fiscal year, the adverse effect of the Coronavirus on housing sales is visible because March is normally one of the largest sales months. While we may well be on the road to a more sustainable recovery, with many macro-economic indicators showing a positive trend in September, and the upcoming festival season will be crucial in evaluating the sector’s steady growth over the next 12 months.

The spread of the Coronavirus has further disrupted a rebound that may have seemed feasible due to numerous government initiatives to revive demand, although it does not seem that prices are going to drop immediately right now.

COVID-19 impact on the Indian housing market

NAREDCO ‘s national president, Niranjan Hiranandani, notes that “Saving Indian real estate, the second-largest generator of jobs, is important, not only from the perspective of GDP growth but also for job generation, as the sector has a multiplier effect on more than 250 allied industries.”

“In the event of a longer outbreak, however, the effects on overall economic activity is likely to be wider and more persistent, resulting in a more severe impact on developer cash flows and project execution capabilities, giving rise to broader credit-negative implications,” according to the rating agency ICRA.

The Rs 3.74 lakh crore liquidity injected (by the RBI) along with the moratorium on all financial institutions’ term loans would mitigate short-term liquidity issues and assist developers as well as home buyers. The government has also said that the property developers could get their project deadlines extended by 6 months through the RERA citing the force majeure clause, which is a great relief for developers and buyers to help them mitigate the difficulties they face at present, anticipating delays in project completion and extending support to the builder community.

COVID-19 impact on homebuyers in India

While several rate cuts were announced by the RBI, taking the repo rate down to 4%, any positive impact of the change on buyer sentiment will only be seen in the medium to long term. However, the move will come as a big boost for current customers, who could struggle to pay EMIs because of the lockdown or in the event of job losses in the short-term or medium-term.

The pandemic, however, has also made buyers understand the importance of home ownership, thereby giving residential real estate a boost in sales sentiment.

53 percent of respondents said in a survey that they have put their plans to buy a property on hold for just six months and plan to return to the market after that. To operate from home, approximately 33 percent of respondents in the survey have said they would have to upgrade their homes. In a renters’ survey, 47 percent of respondents said they would like to invest in real estate if it were priced correctly.

COVID-19 impact on office space in India

While individuals are increasingly returning to work in sectors where working from home is not an option, as of now, remote work continues to be the keyway for businesses to operate.

According to international property brokerage JLL, in the quarter of July to September 2020, net office space leasing dropped by 50 percent, to 5.4 million sq ft across seven major cities as corporates and co-working players proceeded to delay their expansion plans amid the pandemic.

In seven cities, including Delhi-NCR, Mumbai, Kolkata, Chennai, Pune, Hyderabad, and Bengaluru, the net absorption of office space stood at 10.9 million sq ft in the year-ago period. Net office space leasing decreased by 47 percent to 17.3 million sq ft from 32.7 million sq ft in the same time frame in 2019 during the January-September period of 2020.

Experts, however, expect this segment’s pre-COVID-19 growth momentum to be recovered eventually.

In reality, according to a study by global property brokerage Knight Frank, the office sector accounted for 81 percent of the total private equity investment of USD 2.31 billion across 11 deals in the first nine months of 2020, followed by 10 percent warehousing and 9 percent residential.

COVID-19 impact on builders in India

In the midst of a lockdown in India to contain the virus and a pause in the supply of manufacturing materials and equipment from China, the near-halting of construction activities would further push the delivery timelines of ongoing projects, thus raising developers’ total costs. China, the nation where the virus emerged, has been able to rein-in the pandemic through furious efforts, with staff returning to workplaces. However, builders here will be forced to delay orders amid friction between the two neighborhoods.

Several initiatives announced by the government during the critical time in its Coronavirus-specific stimulus package and the EMI holiday for developers are some moves that could give the building community some relief.

For any more information or updates regarding real estate or property SBP Group is always available for you.

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TDS Provisions on Rent Paid, Under the Income Tax Laws

income tax lawsTax revenue is the biggest source of the government’s income. There are various kinds of taxes like income tax, sales tax, wealth tax, corporate tax, and many more. You may have seen or heard about TDS in your salary slip or while doing any banking process. Did you know there is a relation of TDS with real estate also?

SBP Group collected all the essential points which will help you fully understand this relation.

Tax deduction at source (TDS) is a mechanism that collects tax at the source through which the income of a person is generated. TDS is imposed on various incomes, including rent charged, as a procedure put in place by the income tax authorities to curb instances of tax evasion. Different kinds of taxes attract different TDS rates under the income tax laws.

The current provisions of Section 194I of the Income Tax Act place an obligation on the payer of the rent to deduct tax on any land or building at the rate of 10% of the rent if the total amount of the rent paid or likely to be paid during the year exceeds Rs 2.40 lakhs.

Thus, if the owner of a property has let out more than one property to the same lessee and the annual rent of which is less than Rs 2.40 lakhs for each property annually, but the aggregate rent is likely to exceed Rs 2.40 lakhs for all the properties taken on rent from the same individual, then the lessee must deduct the source tax.

Who’s responsible for deducting TDS from the rent?

All taxpayers, including corporations, businesses, trusts or associations of individuals, etc., are subject to these requirements.

Nevertheless, the payer of the rent is a person or a HUF, the rules shall apply if the payer of the rent is engaged in an undertaking or occupation and the accounts have been expected to be audited within the preceding year, as the turnover exceeds the limit specified.

When is the TDS on rent is deducted?

The payer of the rent is obliged, even though the payment is made later, to subtract the tax at the time the rent is added to his account books. Similarly, at the time of making advance payment for such a contract, you must subtract the tax, either for the year or even in situations where the rent is paid in advance for more than one year. You need to obtain the tax deduction account number (TAN) for payment of the TDS to the government loan and pay the tax through the specified challan.

Deduction of TDS on rental payments by individuals and HUFs

The government also extended the reach of the tax deductions at source for rent paid in order to get more taxpayers into the tax net. This will include all individuals and HUFs which, as explained above, are not protected under the current provisions. Every person and HUF would have to deduct tax on the rent being paid at the source, at the rate of 5 percent if the amount of rent is more than Rs 50,000 for each month or part of the month.

So, even people who are salaried or retired and do not carry on any business or occupation but pay rent above Rs 50,000 per month with the new rules, will have to deduct tax from such rent at the source. This would put those individuals that are collecting rent into the tax net by leasing out the property to individuals who are not interested in any business or occupation.

How is TDS calculated on rents?

If the lessor is a non-resident for income tax purposes, in compliance with the provisions of Section 195 of the Income Tax Act, the payer must deduct tax without any threshold cap of Rs 2.40 lakhs per annum being levied.

It is not necessary that the owner of the property should be the receiver of the rent. So, in the event that a lessee sub-leases to some other individual the property taken by him on rent/lease, the sub-lessee must subtract the source tax.

Similarly, the tax must be deducted from payments made to hotels in order to provide you with lodging if the rent is expected to reach the cap for the year.

For TDS, is TAN mandatory?

These provisions only apply to the receiver of rent who is a resident for the purposes of income tax, because, under section 195 of the Income Tax Act, non-residents are already covered. While the current provision allows the TAN number to be collected by individuals, the new provision excludes payers from such a condition.

Form for Payment of TDS

Log on to www.tin-NSDL.com to pay TDS for the rental. You will find a link on the website to fill out Form 26QC. Fill in all your information, your landlord’s details, and all the financial transaction details. If you share the accommodation, they must also furnish their information. Similarly, if the landlord co-owns the property with someone else, the form must also include their information.

We hope that the above-written information was helpful for you, for any inquiry you can connect with us at any time.

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How COVID-19 Has Changed Real Estate Marketing?

It is evident at this point that the Covid-19 pandemic has permanently modified the way we live and work. The virus has impacted our offices, our homes, our outdoor spaces, every place. The novel coronavirus pandemic has hit every single sector of the economy, including the real estate sector. This has led to the change in the real estate marketing used to be done.

Historically, real estate developers have relied on conventional print and outdoor media as the preferred forms. The stockpile of land advertisers and salesmen contained the standard weaponry: full-page paper adverts and various hoardings, combined with conveyance drove endeavors with a channel partner, internal sales groups, and institutional financier houses. Nevertheless, times are now unique.

Digitization: The National Real Estate Development Council (NAREDCO) President Niranjan Hiranandani put great emphasis on embracing new real estate marketing trends and improving the number of sales by upgrading.

NAREDCO President Niranjan Hiranandani said ‘In this era of COVID-19, sales and marketing have become extremely relevant. An old story is here, I know, so it’s worth counting. In 1991, how some car manufacturing firms introduced new changes and revamped themselves and survived and reached a large number of sales, while those who could not either stay behind or disappeared from the market.’

With papers and other print media right now working with restricted flow and individuals limited to their homes, the compass of conventional print and outside media isn’t what it was. Advanced media’s span, then again, has expanded significantly. With individuals investing more energy at home on the internet and focused on advanced promotion getting increasingly modern, Builders are currently shifting their marketing moves towards digital stages.

The real estate market seems to have been willing to support digital solutions, like all others. The emergency has demonstrated to us that there are cost-effective practical approaches to direct human conduct. The world has now moved into a digital- irreversibility zone. The real estate market will change accordingly and will feel the effect of digitization; regardless of whether it is exchanged, capital arrangement, property the executives, virtual visits, or even the consumer pattern, digitization will rule the greater part of the cycles. There are likewise advancements for Artificial Intelligence (AI) and Virtual Reality (VR) in this area that are pushing for additional changes and improved client experience.

Social Media: Social media, including real estate, has significantly changed the utilization scene across industries. The ways in which companies engage with customers have radically altered, from advertising on social platforms such as Facebook, LinkedIn, and Instagram to interact with clients via the apps such as WhatsApp, Telegram, and iMessage. Through the organization’s Facebook page developers are announcing upcoming projects and hold channel accomplice meets over video conferencing applications like Microsoft Teams, Cisco WebEx, Google Meets, and Zoom.

WhatsApp and/or SMS based correspondence (pictures, short recordings, URLs, and so forth) is regularly shipped off a wide client base, who are then drawn in with carefully, either through the builder’s site/online media page or at times through a virtual ‘ChatBot‘ which answers inquiries in a way much the same as a human salesman. Since actual site visits are presently restricted, builder use delivered ‘virtual tour’ of projects. These are accessible to a client on the cell phone. Developers invest in ‘search engine optimization’ (i.e. ranking higher than one’s peers on a Google / Bing search) along with the aforementioned social tools, and branding through them, along with some further remarketing.

Advanced digital media tools like the ones we have talked about earlier have become a builder’s branding and marketing pillar. The amazingly ease based entrance they offer (especially in comparison to print and outdoor media) and the advanced targeting and analytics they enable have led to a strong and persistent move towards them. This move is digging in for the long haul. Nonetheless, showcasing alone (advanced or something else), while important, isn’t generally adequate. It must be combined with solid conveyance and distribution, development, and strategic planning to accomplish deals.

Focus on consumer preferences: Developers have revamped the way they communicate with their consumers by understanding changing consumer tastes and a more dynamic environment. Customers expect more than they did earlier, strong distribution, strategic real estate marketing, and product design play a far more important role now than ever. Only those who respond seriously to these demands will continue to take pride of place in the mind of the consumer and be heard over the buzzing of diverse voices competing for it.

Phenomenal construction and possession operation, better design, and more effective use of space, adequate facilities, and high-quality timely construction are fundamental requirements for the success of a project and brand today. The more digitized and interactive the environment becomes and the more powerful information becomes, the more necessary it becomes for developers to communicate with their clients and their needs and react to them.

Post-COVID-19, a revolution in how people think and live is going to be happening. The attitude of the buyer would certainly be affected. Employment instability, decreased incomes, investments, and company volumes have all compromised cash flows to the real estate company. The real estate market, on the positive side, has reacted rapidly to changes and adapted to emerging technologies; this is evident in the digitization of so many activities.

Developers are continuing to market their inventions towards new types of media while keeping in mind evolving customer tastes in their basic offering of goods. Consumers, surrounded with content, expect and demand more from the companies from whom they buy, more interaction, more data, and greater service. Over the past decade, this transition has happened and is one that has radically changed the way real estate marketing is done and processed.

For more information regarding the real estate, you can read other blogs of SBP Group, or you can connect with us on our social media.

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Will COVID-19 Push People Into Buying Homes?

Diverse markets have been severely affected by COVID-19. Although some sectors such as healthcare have benefited, due to the pandemic, a few others, such as the real estate industry, are facing a downtrend in the market. However, the pandemic has turned out as a surprisingly positive development for the real estate market, in particular for homebuyers.

The unstable share market and the struggle to manage expectations of common assets have increased the need for a secure investment, such as by investing in real estate. Also, with lower loan rates and a wide-open market, private land is at its best today. Besides, with lower interest rates and a buyer’s market, residential real estate is at its peak now.

According to a report, buyer preferences are currently dominant in ready-to-move homes, with the highest demand for homes priced between Rs 40 lakh and Rs 1.25 crore. In addition, almost 80 percent of housing deals since the pandemic have been made by end-users themselves.

The final decision to invest in a property is always of the buyer and even though the ball is in their court to make the best choice, they should consider a few factors. SBP Group brings you the following reasons you should consider before purchasing a house after COVID-19 outbreak:

The rate of interest on home loans are at a record low

In the recent past, the Reserve Bank of India ( RBI) has cut the repo rate on many occasions, resulting in interest rates for home loans declining to sub-7 percent levels. Now, from that viewpoint, if they have the requisite margin funds, aspiring homebuyers should not attempt to let go of these record-low prices.

Aspiring buyers must realize that repo-linked home loans come with a scope of customer risk and only those borrowers with credit scores above 750-800 are given the lowest home loan rates. Therefore, before applying for the loan, they must review their credit scores, and if they find it to be lower than 750, they should take steps to enhance it not only to get the best loan deals but also to enjoy low EMIs during the loan period.

Opportunity for buyers

The RBI has ordered that housing finance companies (HFCs) preserve an LCR liquidity buffer, which will facilitate stability of HFCs to possible liquidity disruptions by ensuring that they have sufficient funds to withstand any acute 30-day liquidity stress scenario.

The property market has been overheated in past crisis situations, resulting from higher valuations, lower loan-to-value ratios (LTV), and volatile interest rates. However, for purchasers with higher LTVs, lower valuation, and cheaper credit availability, the scenario is currently more favorable.

Availability of Property at fair prices

In current times, the availability of housing units at affordable prices is another compelling reason to purchase one’s dream home. As rates are as low as they can get and some developers are willing to bargain more, it is possibly the best time for end-users to purchase homes.

Since the businesses have been at a relative halt in the first half of 2020, buyers and distributors are giving buyers a reduced price. The economic downturn has also played its part in reducing rates further. This has made it very cost-effective to buy a home.

Pankaj Kapoor, founder, and MD, Liases Foras, a real estate research company, said that ‘For those who have been waiting to buy for a long time, now is an apt time. The real estate industry has transformed a buyer’s market for the first time in about 15 years as terms have been dictated by builders and suppliers over the last 10-15 years. one  can negotiate hard and get the house at a relatively low-than-quoted price.

Real estate, a secure asset

Not only has the uncertainty and unpredictability of the stock market diminished income, but investors’ confidence as well. As a stable asset class, this has also helped real estate market gain positive momentum. As luxury property buyers usually have a higher stake in the stock market, the luxury property market can be affected initially. With rationalization in prices, rental yields are expected to grow if factors like job stability and gradual economic revival are presumed to remain favorable. It will have a positive effect on improving the behavior of the customer.

Better Deals

Good ventures will not offer lucrative direct discounts. In terms of complimentary car parking or waiver of fees or phased easy payment plans, buyers can, however, get some composite sweetened offers.

Future Price Speculations

Although the industry has had its share of the decline in price of homes, the trends suggest that there will be no further decrease in rates. Alternatively, with the time of lockdown relaxed across the country, these rates are expected to increase.

The industry experts recommend that the sale be made at the earliest as the timing of investing matters in the real estate market. Since the pandemic has resulted in a serious financial hit to individuals, there is also an increase in the feeling of procuring a safer type of homes. Relative real estate stability is also attracting people to invest their money in the market.

Therefore, for the reasons stated above, The present condition has made it a good time to buy a property. however, you must not rush in to get the loan and purchase the house. Instead, to find the best according to your needs, compare various loans provided by the lenders. Take advice from property consultants if you have you and do proper research on developer and project you are interested to invest in.

If you want to know more about real estate, current trends, properties to invest in, you can explore our website.

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Economic Reforms That Can Make India A Manufacturing Hub

The biggest economic reform India had seen was in 1991. But as wording goes ‘History repeats itself’. With almost a year to the spread of covid-19 now, china (biggest manufacturing hub) has faced serious backdrops in the manufacturing sector. Various multinational industries are now shifting towards India which is a big opportunity. However, considering that the gross domestic product (GDP) contracted by 24% in the June quarter of 2020, there is little doubt that India needs significant economic reforms to put things in order and establish a new phase of progress and expansion that can generate new employment opportunities. As India strives to become the world’s next development center, significant policy reforms have to be made to manage the upheaval after the Coronavirus pandemic and to make it simpler for foreign investors.

FDI or foreign direct investment is a big inflow of the Indian economy. There are simply four factors which determine the interest of foreign investors.

Current Size of economy

Geographical location

Legal stability, and

Political stability

Only after considering each of these determinants carefully any foreign investment gets attracted to any country.

Taking into account the current scenario of our country we need to improvise a few things which are as follows:

Establishing reliable and effective chains of supply

For any fruitful manufacturing and production hub, it is critical to set up a sound supply chain, for which India needs a productive network.  Therefore, given its proximity to the nearest Deepwater ports or current/upcoming international airports, the sites for SEZs should be chosen. Next to underutilized public property, which could be converted into an affordable housing center, with excellent connectivity and efficient supply of water and electricity, a greenfield or brownfield site could be easily found.

Similarly, UDAN ‘s proposed airport development scheme may be a torchbearer for the creation of new cities. Sialkot in Pakistan, for instance, is a global manufacturing center for sports apparel. The local business community built the first private airport and power station in the country to fulfill the requirement because the government failed to build infrastructure. Most of the global sports brands now have their factories in the country, attracting more investment than any other area in Pakistan.

Better administration in special economic zones

India has about 238 Special Economic Zones (SEZs), covering approximately 500 sq km, particularly in comparison to 2,000 sq km in China. The lack of state-supplied facilities and infrastructure has made it extremely difficult for investors to view it as a worthy alternative to China. It was difficult for the government to even provide basic services as it is evident in the 100 smart cities, which are nowhere close to being finished after six years of its announcement. India needs to reduce the number of SEZs in order to handle these and concentrate on building bigger ones that have all kinds of services and facilities. These could be key areas of operation that could enable the creation of jobs, employment, and growth in their neighboring regions.

Emphasis on Skill Development Programme

India spent just 2.7 percent of its GDP on education in FY 2018 compared to China, which spent 4.11 percent. In addition to education, India must qualify its labor force in various industries from low (mining, agriculture-related, etc.) and specialized (textile & apparel, manufacturing of electronics, etc.). Increasing technological advances automate clerical jobs and demand for specialized skill sets, in particular IT skills, which, given the huge young population it has, can be a great advantage to the country. This aspect should not be overlooked by India and the skills required to remain globally competitive should be met.

Fostering good governance and setting up a solid law and order

In the event that lower assessments could pull in financial specialists to any economy, helpless nations would have been the initial ones to observe monetary turnaround. What unfamiliar financial specialists generally search for, is acceptable administration, where regulatory obstacles don’t influence their business and strong standard of law, where the neighborhood organization is ground-breaking enough to settle on strategy choices.

India is where land and work laws are in the simultaneous rundown, with both, the state and focus, skillful to authorize enactment. This prompts a great deal of disarray over contest goals and debasement. Different locales in Asia-Pacific are incomprehensibly not quite the same as India, where working together is on a very basic level simpler with less political cerebral pain.

In addition, the kinds of offers and incentives available to investors in India are restricted to easily affordable real estate and concessions. For individuals relying on the Indian eco-system to establish their production setup, there should be an added advantage and good governance is definitely one incentive.

China’s Tianjin example is a brilliant example of what could go totally incorrect if governance is not part of the economic reforms and bribery is tricked in. 70 percent of offices are vacant here in the Binhai district, once seen as China’s Manhattan, as many housing associations flouted zoning regulations by paying off bureaucrats and trying to exploit democratic links, thereby denting business opportunities here.

While the Indian economy continues to be enveloped by unpredictability, one can not deny that this could be a golden chance for the nation to become self-sustainable. It is also a chance for India to become a hub for manufacturing and to play an increasingly important role in the global supply chain.

To know more information about the Indian Real estate market you can visit other blogs of SBP Group.

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What Is Common Area In Apartments?

As the name suggests, a common area is that area which is common to every resident is Charged by all the residents of a complex of apartments.

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What Is Common Area In Apartments?

There are various terms involved when it comes to real estate sector. One of such terms which you may have heard is ‘common area’. As the name suggests, a common area is that area which is common to every resident is Charged by all the residents of a complex of apartments. A co-owner of the common areas is every property owner in a project. It belongs equally to all owners.

Now let us get in detail about it:

If a developer company offers you the super-built area of a house, the entire area, including the common areas, is included in it. As per the RERA Act, 2016, common areas include:

The entire land for the real estate project, or if the project is developed in phases and registration under the RERA is sought for a phase, the entire land for that particular phase.

Staircases, elevators, staircase and elevator lobbies, fire escapes, and common entrances and exits of buildings.

Common terraces and basements, parks, play areas, open parking areas, and common storage spaces.

The premises for lodging of persons who are employed for the management of the property, including accommodation for watchmen and ward staff, or for the lodging of community service personnel.

All community and commercial facilities as provided in the real estate project.

Installations of central services such as electricity, gas, water and sanitation, air-conditioning and incineration, and systems for water conservation and renewable energy.

Water tanks, pumps, motors, compressors, fans, ducts, and all apparatus connected with installations for common use.

Other portions of the project necessary or convenient for its maintenance, safety, etc. and in common use.

Not only RERA but Apartment Act also have some guidelines for common area:

Before the association of allottees takes over, the developer is responsible for preserving common areas.

The responsibility for the common area maintenance falls to all members of society.

The landlord is liable for the maintenance of the common areas in the case of commercial property.

When it comes to an area that is shared by all there are various questions attached to it. SBP Group offers you answer to all your queries as follow:

Who’s responsible for the maintenance of the common area?

All occupants are equally accountable for open areas and their maintenance. The Real Estate Act (RERA) specifies that it should be the responsibility of every allottee to make payments to maintain the property and the premises. All citizens collect a stipulated fee and this goes towards operational expenses undertaken to protect the community areas.

Can it be possible to inherit and pass common area?

It is possible to inherit or transfer common areas and facilities by sale, mortgage, lease, gift, or swap, along with an undivided interest in common areas. This inheritance of such property will be defined in accordance with the law of succession.

If you are not using common areas and services, do you pay maintenance charges?

According to the Apartment act, ‘No apartment owners may exempt themselves from liability for their contribution towards the common expenses by waiver of the use or enjoyment of any of the common areas and facilities or by the abandonment of their apartment’

In simple words, ‘yes’ it is mandatory for all to pay maintenance charges.

How can common areas be identified?

Information on the property on which the building was constructed and the common areas and amenities must be included in the sale documents of the apartment and its registration papers. It should also note whether the property is freehold property or leasehold and whether the lease period is a leasehold property. It should also include the percentage of an undivided interest in the common areas and services relating to the apartment. It must also explain the restricted common areas and services.

Is it possible to sell common roof rights through a developer?

Giving or selling exclusive rights to the terrace or rooftop is an unethical activity in a housing society. All other common terraces belong to a resident unless the terrace is attached to a unit. A terrace, if inaccessible from common areas, is private. It is not possible to buy or sell common terrace space and is, thus, not included in the floor area ratio (FAR). Buyers may contact the consumer forum or even bring a civil lawsuit against the contractor if a developer participates in such unfair practices.

Can we use a common area for other purposes?

For other purposes, common areas may be used but not ‘converted’ by an entity for some other use that serves his/her personal interest. For instance, it won’t become a parking spot if someone tries to park a car in the common area. Residents, both tenants, and owners should refrain from invading common areas, since there are many co-owners lawfully, and your actions should not prohibit them until and unless you have special authorization from the apartment association.

What happens in the event of apartment destruction?

If an apartment project is damaged or demolished and the apartment owners do not intend to restore, rebuild or repair such a property, the property shall be considered to belong to the common owners of the apartment and the undivided interest in the common ownership of such property shall be the percentage of the undivided interest previously held by that owner in the common ownership.

We hope that this article satisfies your query related to the common area. If you need any more information on real estate, you can visit our blogs with us anytime.

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Festive Decor Ideas For Indian Homes

Festivals are the spirit of India. It brings fun, enthusiasm, and is a new beginning. But this year it is different. Due to the outbreak of COVID-19 celebrations are no longer like before. However, one thing which hasn’t changed is the warmth of being at your own home with your family. To add more to it SBP group shares with you some Festive decor ideas to revamp your house for this festive season.

Choose some handmade accessories

You can go classic and stylish with some hand-crafted decoration pieces. There are multiple options available on the market, in different sizes, styles, materials, tones of color, and placements. Instead of going out to purchase this, you can order them online in the comfort and safety of your home.

DIY Diwali Toran

The Diwali festival is all about lights and colors. And because quarantine has helped people in reviving the artist inside of them, you can go for some DIY projects for home décor. Torans are positioned to welcome visitors at the entrance of a house and create a festive atmosphere. There’s a simple and fascinating way to build Torans for your house if you are passionate and imaginative.

Using recyclable materials like cardboard, crafted paper, excess ornaments, etc., you can create your Toran very quickly. All you have to do is decorate lights, waste ornaments, etc. with bits of cardboard. This will facilitate recycling and build a nice festive decor.

Options for home lighting for the festive season

In the living room, fairy lights can be used. They may be placed or put up against the wall along with the coffee table. As candles make a wonderful item of festive decor, you can use the scented candle in different areas of the house. Fragrant of the candles create a wonderful aroma which engulfs your room.

Diyas can add to your home’s glamour as well. There is also a deeper meaning attached to lighting a Diya. It is said that they reflect the transformation from darkness to light. You can uniquely organize Diyas for Diwali and let them float in a bowl filled with water and beautiful flower petals. If you have an unused large copper or ceramic bowl, you can put it to use by giving it a makeover with petals and Diyas.

Light diyas, not just close to the temple, but at the doorway. When placing diyas close to the main door, windows, or in the temple, keep security in mind. Opt for glass-covered diyas.

Decorate temple

The pooja room and the temple are the most ideal location to decorate your home at Diwali. Laxmi pooja is the major part of the Diwali celebration which takes place in a temple pooja space. You can decorate the temple with flower arrangements, such as roses, marigolds, and mogras for it. Write ‘Shubh Labh’ with Kum Kum on the white paper and keep it near the Lakshmi idol or photo.

Rangoli

Rangoli is an antiquated Hindu floor art, in which colored rice, colored sand, and flower petals are used to create patterns. With a hand-drawn rangoli to depict a traditional floor mat, this Diwali, create art of your own. Rangoli has been through years of Indian tradition just to ward off evil spirits, such as the daily white easy to elaborate decoration outside many Indian homes, but continues today even more as a celebrated art that women love to practice.

It also has a deeper significance. Rites, offerings, functions of the festival, social occasions, Rangoli augurs well for the house and wherever it is placed and is a welcome sign of good news and blessings from God.

Decorate with colors

The best time of the year to show colors in your living room is Diwali. As a simple hack for the living room, you can use handmade lanterns in green, purple-red, and blue colors, neatly hung from a string, straight across a wall. Home Decor of a beautiful handmade chandelier, made with various colored crepe paper and shiny streamers that will add to the beautiful and colorful Diwali theme, can also be positioned from the center of the ceiling.

Make it a green Diwali, with plants in beautiful pots, decorating the inner and outdoor areas of your house. Arrange lighting and lamps to emphasize the freshness of plants strategically. .The advantage of plant decoration is that you do not have to move it even if the festival is over.

We hope that these festive decor ideas help you in getting in the mood of festivals and also in making your home look astonishing. Remember to be safe and celebrate your festive season while taking care of your health.

For any further information related to property, house trends, and more, you can visit our website.

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What Type Of Property Should I Invest In?

Whenever you decide to buy a property one of the questions which arises in his/her mind is that is what type of property should I invest in? There are various factors that need to consider before selecting the house you want. Everyone has their own wishes and life requirements which will help them decide whether they are going to spend on a home or not. Deciding how much can be spent on real estate transactions often differs.

You can either select an under-construction property and wait till its possession or ready to move property according to your needs and circumstances. It is easy for a person to deal with real estate every day since they have a good deal of knowledge (properties), but it is a real challenge for a layman to choose.

To help you make your decision, SBP Group has collected the following details of the property and its use for different people:

Points to be considered for Under Construction property:

The most ideal approach to fulfill the longing to claim your house is by buying an under-development property. These properties are mainly found in the city’s non-structured areas and therefore have the capacity to increase on account of future development opportunities.

It’s a great option for those who want to buy an investment property because the price of the property is lower at the beginning, and the demand for a location continues to increase. Their costs also increase, eventually benefiting the owner when building assets grow. In comparison to ready to move on the property, they also offer high resale values.

If you want to own an estate at less cost than you are advised about building a property, but many of the projects will be delayed due to an outbreak which results in a high delay for you. It is sensible to invest, After careful understanding of the project, including authorizations, government fees, project plan, etc.

Points to be considered for Ready to Move property:

In general, people needing a house to live in decide on the ready to move type of property as there is no convincing motivation to hold on for proprietorship.  Basically, complete the documentation, make the payment for the project or apartment you like and you are ready to Move into the perfect home you had consistently needed.

Thinking about the current circumstance, it is recommended that you decide ready to move into the apartment so that you will stay protected The principal reason for the inclination of ready to move house is that you get what you see. In addition, there are also tax benefits for you at Ready to moving homes or properties.

Also, you can select the society, location, area, amenities, accessibility, etc as per your need.  It is very important to have high-quality amenities now that many people stay at home, working at home so that you should face no discomfort. So, you should choose such a project which offers you great amenities.

The individuals who need to live in the house and are not aiming to sell it, later on, should choose ready to move property. If you want to buy a house for investment purposes then these flats will provide you good rental value, but not so good resale value.

Homebuyers need to take care of all these factors before making the decision of investing in either type of property. You need to invest with a developer who has goodwill and has always fulfilled its customers’ expectations. The year 2020 is very important to all and you need to buy an estate that can offer you safety at the moment as the most important facility.

Overall, if you are looking for a safe property to enjoy your life with your family, then ready to move property is good for you, and if your main objective is to obtain good capitalist value from the property in the future, then the type of property property is preferred under construction.

If you need any more help with real estate, you can connect with us.

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Which Are the Top 3 Localities to Invest in Tricity?

Connectivity and good infrastructure attract many of us to start out living or to line up their business here. The famous Tricity is everyone’s dream place to live in because it is renowned for its clean, green, and developed infrastructure.

Chandigarh, Panchkula, Mohali is called Tricity as all the three cities are linked together. Chandigarh is UT, Mohali Falls in Punjab and Panchkula falls in Haryana. You’ll find a great property to take a position in Tricity also as in nearby areas. As Chandigarh is fully developed it’s quite difficult to urge an honest deal of land here, Mohali could be a great substitute for it.

MOHALI:

Mohali was built as an extension of Chandigarh, which is why it’s strategically and is a promising place for everybody. It’s also become a significant spot of land projects/ investments now. Today, Mohali is a busy commercial destination and plans are underway to further develop it through the efforts of the Greater Mohali Area Development Authority (GMADA) and the state government.

Global tech companies have established themselves in Mohali and are turning the city into an IT hub. This is why many of us from different parts of the country are moving here and are trying to find a premium place to remain in.

It has even the simplest facilities, refinements, and adaptability to the changing environment. Residing next to such a good location which complements lifestyle of people with its lucrative wealth, is what everyone needs.

The best localities which give you superior design with world class facilities with the advantage of a secure and healthy environment are provided to you by none other than SBP Group. Some of the best residential townships in Punjab are also in Mohali which are SBP City of Dreams, SBP Gardenia, Elite Homes, Nature City, etc. These are the premium residential projects in the whole of Tricity offering world class amenities with a safe neighborhood which is very important considering the outbreak of COVID-19 in the whole world.

ZIRAKPUR:

We know that a good neighborhood is the one which provides good connectivity, is safe and secure, and can be easily accessible to our daily needs. Zirakpur now has an excellent connectivity with the International Airport and other prominent locations nearby.

The speed of growth in Zirakpur adds value to this area, making it more lucrative for buyers and investors.

The location of those ventures is their USP since significant places like Hospitals & Educational Facilities are accessible very easily. Furthermore, projects like Gateway of Dreams and Housing Park offers you 2/3 BHK premium flats in Zirakpur. It makes everything available to you, including the transport facilities. City transportation is often used conveniently and therefore the International Airport is often reached on time without an important traffic problem.

As because of covid-19 safety has become the priority of everyone, we make sure that our premises are properly sanitized including the special areas made for elders and youngsters. Our security personnel also follow adequate precautions by wearing masks and washing their hands at regular intervals. No outsider can enter the society premises without providing appropriate information of them.

DERABASSI:

The strategic location, close to Chandigarh and Panchkula, is one of the key reasons behind Derabassi being a promising residential and commercial hub. Many citizens who are looking to buy property consider Derabassi a worthwhile option. Genuinely priced homes and a wide range of projects make it an even more promising venue.

Derabassi is also very environment friendly, away from city pollution and surrounded by greenery. One can easily find residential townships which provide wide areas, parks, and walking tracks to help you live a healthy lifestyle.

Each of these localities has distinctive characteristics that make the living experience superior. they’re made consistent with the necessity of adjusting conditions considering the well being factor the foremost significant. When you invest in tricity’s premium projects, you don’t just get an investment property but you get a home with a life filled with serenity, ecstasy, and happiness. They’re the region’s finest Ready to move projects which are insightfully planned for your comfort.

Investing with us are some things that give you big benefits within the sort of location, accessibility, project security and yourself, healthy lifestyle, top-notch amenities, and far more. We deliver a fresh and healthy way of life which is additionally important to your insight into the planet we reside in. To become connected with SBP is like belonging to a group where everybody keeps supplying you with the best.

Besides, with the government’s efforts to increase liquidity and relief to people in this outbreak, the rate of interest has been lowered. Banks are providing easy loans and are helping you in buying your dream home. For any more information related to home loans, interest rates, or real estate you can read our other blogs as well.

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Should You Buy A Property Amid COVID-19?

You may have read various articles telling you how it is the best time to buy a property as the home loan rates are lowest and developers are offering discounts and freebies etc, but to buy a property one needs to consider various factors, especially in the current scenario of Coronavirus pandemic which halted the whole world.

Job losses due to COVID-19 in India

Simply from the perspective of affordability, this might be the best ideal opportunity to buy a property. Yet, as per the Center for Monitoring India Economy, 50 lakh salaried representatives lost their jobs in India, in the period of July 2020, as a result of the Coronavirus-incited monetary burdens. Though, salaried jobs are not lost commonly, says the CMIE, when lost, they are additionally undeniably harder to recover. This implies all idealistic forecasts on the recovery of the economy and the employment market, for the time being, could be excluded.

These job losses have also impacted the stock market. The BSE Sensex dropped 1,115 points on September 24, 2020, or 3 percent, to end at 36.554, its lowest close since July 10, and the largest decline since May 18, 2020. It was the product of the US Federal Reserve vice-chair Richard Clarida’s statement ‘deep hole of joblessness and weak demand’. The Sensex reported its biggest single-day fall in four months as a result of his comment.

Buyers need to remain vigilant in such a situation. Your work might not be reluctant to risks. More significantly, it may be a hard challenge to find another job that fits your profile and remuneration.

The decline in Property Prices in India

Suddenly, purchasing a property in India has become much affordable than it probably was in the past few years. Prior to that, properties were so overpriced and the developer class so widely misused their dominant role that investors were left with no choice but to follow an impermeable approach to real estate.

While real estate continues to remain the country’s most desired investment, buyers remain somewhat hesitant. As indicated by the most recent information, 19,865 new units were launched across India’s eight markets while an aggregate of 35,132 homes was sold between July and September 2020, when the Government began the staged opening of the economy, after a drawn-out lockdown that began in March.

The real estate market has seen various downs recently because of regulatory amendments, such as the Real Estate Act (RERA), GST, demonetization, the Benami Property Act, the Bankruptcy Code, etc. and the situation of Covid-19 has not been much help as well.

As India’s second-largest employment-generating sector after agriculture, real estate plays an integral role in shaping overall economic development. As the market came to a sudden halt, hasty steps were launched by the government and administrative bodies to boost buyer sentiment. After periodic cuts, the country’s banking regulatory RBI lowered the repo rate to a 15-year low of 4 percent. And thereafter, financial firms lowered the average price of their home loan items. Many public sector banks are currently providing housing loans at less than 7 % annual interest.

Another aspect that works for buyers seeking to purchase right now is the fact that India’s developers currently have a lot of unsold housing units. This ensures that the customer can conveniently book ready-to-move homes because they don’t have to stress about project delays. As builders have to pay taxes to the government on unsold properties, they are willing to sell this ready stock at special offers. In addition, extra discounts may also be available during the festive season.

Now the main question arises:

Is it a good time to buy a property after COVID-19?

For end-users with a secure career/business, who are financially in an agreeable position, it is a fine opportunity for them to invest in residential property, taking into account the price advantages, with proper background checks on the developer and project.

Remember that home-buying has long-term repercussions and is not just financial.  Most consumers, based on the prevailing circumstances, are currently doing their home purchases. Since remote work is the new standard, most individuals are searching for homes on the outskirts of cities. They might also lose sight of the fact that business conditions may reverse, offices may reopen and it may not be a smart idea to be far from the city centers after all. The option of a buyer’s property must not be solely dictated by the prevailing market situation, no matter how daunting it is.

All points are taken into account, today’s real estate buyers are in a privileged situation and can make the most of it if one has the resources to invest in property. A buyer must, however, take care of different factors in order to make property investment after COVID-19 even more lucrative.

Do a background check on the developer you are interested to invest with.

Also, do a proper check on the financial institutions offering home loans, do a comparative analysis to know what and how different their loan policy is from others.

Consider taking a loan on a fixed rate of interest as they are at an all-time low right now.

Before you enter into a deal for a ready-to-move-in home, ensure that the developer has secured all requisite approvals from all concerned authorities.

Investment in an under-construction property should be avoided as there are chances of delay in possession.

For any other real estate queries, please refer to other SBP Group blogs.

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Difference Between Agreement of Sale and Sale Deed

There are various terms that are used in real estate and main confuse the homebuyer. We understand that when purchasing or selling immovable property, persons enter into a contract with the seller. It must be noted, however, that the form and format of the agreement can vary. In general, there are two kinds of contracts, an agreement of sale and a Sale Deed. The names of both contracts may sound very similar, so one tends to believe that they mean one thing or the same thing. Let us understand the concept of both.

What is an agreement of sale?

The Transfer of Property Act, 1882, which governs matters relating to the sale and transfer of property, describes the sale contract or an agreement for sale as follows:

According to the Section 54 “A contract for the sale of immovable property, is a contract that a sale of such property shall take place on the terms settled between the parties” Furthermore, the Section 54 specifies that “it doesn’t, of itself, create any interest in or charge on such properties.”

In simple words, an agreement of sale is a deal to sell a property in the future. The terms and conditions on which the property in question will be transferred are set down in this agreement.

An agreement for sale consists of the following terms:

Proposal to purchase and agreement to sell in future

Detailed property description

Disclaimer that the property is free from legal obligations

Value of the property including payment details

Delivery of the original documents on the final payment

Execution of sale deed and registration of the same if the titles are found good

Method of property delivery

Payment reimbursement in the event of improper titles

Action course for non-completion of sale on the part of the seller

Loss of payment in advance if the buyer fails to complete the transaction

Remedy if legal issues besiege the property

Transfer of tax-related certificates

All other matters related to the proposed sale

Importance of agreement for sale:

In view of several factors, signing an agreement of sale becomes essential. Firstly, this is legal documentation of the consumer and seller entering into an agreement on the basis of which, in the event of a disagreement, the potential course of action will be determined. In addition, if you apply for a home loan, the bank will not approve your application until you sign an agreement of sale.

What is a sale deed?

A sale deed is a legal document proving that the seller has transferred the buyer absolute ownership of the property. The rights and interests in real estate are obtained by the new owner via this document. The deed should, however, be drawn only after the clear resolution of all the contractual terms of the sale agreement. In addition, it is compulsory under the Registration Act, 1908, to register a sale deed at the registrar’s office.

A sale deed usually includes the following details:

Details of the buyers and sellers (name, age, and addresses)

Property description (total area, details of construction, the exact address and surroundings)

Transfer of titles

The clause of sale consideration

References to the agreement of sale and the price details

Transfer of rights, interests, and claim of the property to the new buyer

The time frame when the property title will be actually passed to the buyer.

The actual date of delivery of possession.

A clause that the previous owner does not hold any authority on the facilities, privileges, and easements of the property

Compensation to the purchaser for losses arising out of the negligence of the seller or heirs of the asset

The authority of the vendor to sell the property.

Key Differences

Transfer

Agreement for sale: It implies the future transfer of property

Sale deed: It signifies an immediate transfer of the property titles

Risk involved

Agreement for sale: Unless the property is sold in the future, risk/liabilities remain with the seller

Sale deed: Risk is shifted immediately to the new buyer

Contract

Agreement for sale: It is an executory contract. An executory agreement is one which has not been fully implemented

Sale deed: It is an executed contract

Violation

Agreement for sale: Breach of sale may result in a suit for damages

Sale deed: Sale breach results in a legal complaint as well as monetary compensation for damages

Registration

Agreement for sale: It is not mandatory to register the agreement of sale. Nevertheless, requirements can vary across states.

Sale deed: Registration of a sales deed is mandatory.

From a legal perspective, to arrive at a hassle-free closure, it is important to understand the terminologies listed above. A lack of knowledge can not only lead you to legal issues but may also put your investment at risk.

For example, if you purchased a house under the agreement of sale and failed to execute a sale deed, then the right to property will stay with the developer even though you get hold of the property possession. Therefore, it is imperative to create a sales deed and have it registered to prevent certain circumstances. Only a stamped and licensed deed ensures the buyer's possession of the legitimate property.

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COVID-19 Impact: Homebuyers Looking for Larger Apartment

As we know due to COVID-19 people are not shifting to bigger houses and demand for ready to move houses has shown a positive shift in recent months. With the outbreak of the virus all around the world, many changes have been made and seen around us as well. One of such major change is work from home culture and online schooling as well as classes. With numerous organizations permitting work from home (WFH) to countless workers, in the scenery of the continuous COVID-19 pandemic individuals are presently searching for open houses bringing about expanded interest for moderately larger apartment. The new interest design is driven by homebuyers’ have to oblige space for remote working.

A joint review on purchaser assumption by self-administrative body National Real Estate Development Council (NAREDCO) and a real estate portal showed that over 40% of purchasers are hoping to enhance their homes. Due to this reason, there is a decrease in the interest of 1 BHK apartments.

As per the most recent update on real estate news, over these recent couples of months, enquiries for bigger homes in Bengaluru have expanded up to 40% with property searchers prevalently exploring for 3 BHK Apartments with normal 1,800 sq ft developed region as against the beforehand favored 2 BHK Flats. In cities like Mumbai as well people are trying to upgrade their houses from 1 BHK to 2 BHK.

Why Is There A Sudden Rise In Demand For A Larger Apartment?

Numerous organizations permitted WFH because of the lockdown yet are presently wanting to proceed with it. Thus, individuals are presently hoping to cut out an office space into their homes. For around the previous half-year, a great many people have been working from their home space. This has brought about a longing for extra space where one can focus on work.

Moreover, families with children are also looking for extra room as students need some privacy while attending online classes. Content creators, influences, and creative personnel also need a huge amount of concentration for their work which can only be provided through non-disturbance.

Another impact of COVID-19 on housing demand is that due to the availability of world class facilities and open spaces around new homes, the demand for new houses relative to those on resale has increased.

For those working from home, traveling is no longer a concern, which has eliminated the need to move a house closer to the workplace. As a result, for greater affordability, individuals are more open to moving to peripheral areas.

It has been seen that With certain individuals moving to the places where they grew up because of WFH, the interest in tier II and tier III urban areas has gone up. In Punjab, demand for property in Mohali, Ludhiana, Amritsar, etc has been expected to rise as well.

Another reason behind the demand for larger apartment is that the Reserve Bank of India (RBI) has reduced the repo rate on several occasions in the recent past, resulting in interest rates declining to 7 percent for home loans. Now, from that point of view, if the necessary margin cash is available to aspire homebuyers, they should not try to let go of these record low prices.

With the easy availability of home loan at less rate of interest, the decision of moving to another house which offers them more space is very easy to make for potential buyers.

In India, homebuyers typically start their home ownership experience with small new houses with the intention of upgrading at a later stage to a larger apartment. When affordability increases, these upgrade decisions are normally made. According to property brokers, the current record low home loan rates, enticing festive season discounts, and developer deals are leading many of them to take the decision with secure finances.

If you want to know more about home loans, interest rates on loans, etc then you can read our other article ‘how to get the best home loan deals right now?’

Besides that, In the present circumstance, consumers prefer developers that have a credible track record. There is a certain change in homebuyers’ enquiries to trustworthy developers such as SBP Group after the recent implication of Real Estate Regulatory Authority 2016 (RERA)  and Goods and Services Tax (GST). Also during the lockdown, developers with a strong track record reported notable sales are given preference by customers.

Buying a home is a very big financial and emotional decision. Considering the sudden outbreak of coronavirus and changes in work culture and home environment and rise in some basic facilities, everything has contributed to larger apartment surge. The current buyers are mainly working couples with children, most of whom are currently exploring options for WFH and e-learning.

Their budgets have not risen in many situations previously, but now with the government’s efforts and developer’s offers, they are even willing to settle for peripheral locations to obtain larger apartment and a better lifestyle at a more affordable price.

In peripheral locations, new projects which are being launched are taking good advantage of it and are offering ample space in rooms as well in parking space as well and with their top notch amenities and safe neighborhood.

Our advice to you is that one of the greatest purchases in one’s lifetime is a home, so it’s important to be cautious. To determine whether WFH would be long term for you and decide accordingly, be aware of the activities followed by employers in your sector. Invest smart and invest with a good developer, so that you can feel secure in every way.

For any more information, you can check out our other blogs, or if you are interested in buying an apartment you can visit our website to know detail about our projects or connect with us on our social media pages.

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Revised RBI Guidelines for Housing Finance Companies

As you know that our country is facing liquidity issues and the COVID-19 outbreak has not done any good to it especially the real estate sector. The government has been taking various measures to increase the liquidity inflow in the country. For the same, The Reserve Bank of India (RBI) made amendments to the administrative structure for housing finance companies (HFCs) on 22 October 2020.

The Apex Bank directed HFCs to lend at least 60% of their net assets to housing through the final RBI guidelines issued on 22 October, which is a follow-up to a drafted issued in June 2020. The RBI has also ordered HFCs and non-banking financial institutions, which may not currently lend an appropriate amount of their total housing loans, to achieve this stage by March 2024.

Net assets deployed for housing loans by HFCs

Timeline                 Min % of total assets         Min % of total assets for individual March

March 31, 2022               50%                                                      40%

March 31, 2023               55%                                                      45%

March 31, 2024               60%                                                      50%

[Source: RBI]

“These HFCs are expected to submit a board-approved plan to the Reserve Bank within a period of three months, including a roadmap to meet the above-mentioned requirements and a schedule for transition,” read the final RBI guidelines.

The followings are the highlights of the Amendment made for HFC by RBI:As per the RBI guidelines issues the word ‘providing finance for housing’ or ‘housing finance’ is not formally specified in past and hence they gave a formal definition of what housing finance means as follow:

Loans to individuals or group of individuals including co-operative societies for construction/ purchase of new dwelling units.

Loans to individuals for purchase of old dwelling units.

Loans to individuals for purchasing old/ new dwelling units by mortgaging existing dwelling units.

Loans to individuals for purchase of plots for construction of residential dwelling units provided a declaration is obtained from the borrower that he intends to construct a house on the plot within a period of three years from the date of availing of the loan.

Loans to individuals for renovation/ reconstruction of existing dwelling units.

Lending to public agencies including state housing boards for construction of residential dwelling units.

Loans to corporates/ Government agencies (through loans for employee housing).

Loans for construction of educational, health, social, cultural, or other institutions/centres, which are part of housing project in the same complex and which are necessary for the development of settlements or townships;

Loans for construction of houses and related infrastructure within the same area, meant for improving the conditions in slum areas for which credit may be extended directly to the slum-dwellers on the guarantee of the central Government, or indirectly to them through the State Governments;

Loans given for slum improvement schemes to be implemented by Slum Clearance Boards and other public agencies;

Lending to builders for construction of residential dwelling units.

All other loans, including those for furnishing residential units, loans to mortgage property for any reason other than the purchase / building of a new residential unit / s or the renovation of an existing residential unit / s as defined above, shall be treated as non-housing loans and shall not come under the scope of housing finance.

HFCs’ related to real estate builders:RBI’s update states that “In order to resolve double financing issues arising from loans to construction firms in the group and also to individuals buying flats from the group, the HFC concerned can only decide to loan for one. That is, in the projects of group companies, the HFC may either disclose the group company to the real estate market or lend to retail individual home buyers, but not do both. If the HFC intends to directly or indirectly take over any exposure in its group entities (loans and investments), the exposure may not be more than 15% owned by the group entity and 25% owned by the group entity for all other group entities. The HFC will follow the principles of arm’s length in letter and spirit with respect to extending loans to individuals who want to purchase housing units from companies in the association.”

Foreclosure Charges:No foreclosure fees / pre-payment penalties shall be imposed on any floating rate term loan sanctioned for purposes other than business to individual borrowers with or without co-obligators, as a measure of consumer security and also in order to bring uniformity with regard to the repayment of different loans by borrowers of banks and NBFCs. As similar regulations for HFCs are not currently recommended, it is suggested that these directives be applied to HFCs.

Liquidity coverage ratio (LCR) norms:LCR is the amount of liquid assets that banks set aside to satisfy short-term necessities. The RBI guidelines have ordered that HFCs preserve an LCR liquidity buffer, which will facilitate HFCs’ stability to possible liquidity disruptions by ensuring that they have adequate funds to withstand any acute 30-day liquidity stress scenario.

Timeline and ratio norms on LCR:All non-deposit-taking HFCs with asset size of Rs 5,000 crores and above, but less than Rs 10,000 crores, with the timeline as:

From                    1/12/2021 1/12/2022 1/12/2023 1/12/2024 1/12/2025

Minimum LCR           30%           50%         60%         85%          100%  

Housing Finance Companies with asset size of Rs 10,000 cr and above, and all the deposit taking Housing Finance Companies, irrespective of their asset size:

From          1/12/2021 1/12/2022 1/12/2023 1/12/2024 1/12/2025

Minimum LCR         30%          50%           60%          85%         100%

[Source: RBI]

While specifying that the minimum net-owned fund should be Rs 20 crores for a company to commence services as an HFC, the notification also specified that company will be excluded as HFCs and will be regarded as NBFC-Investment and Credit Companies (NBFC-ICC) unable to comply with these RBI guidelines within the fixed timelines. To get a conversion certificate to the same effect, they will have to approach the RBI, subsequently.

Banks can restructure builders’ loans on the basis of projects, says the RBI:

The Reserve Bank of India ( RBI) said banks should restructure loans from real estate firms at the level of the project rather than at the level of the developer. This implies that default would not affect loan restructuring for a builder at the corporate level. Since each real estate project would have its own set of risks, the RBI has directed banks to separately assess the risks associated with each project and call for credit restructuring on that basis.

However, to be qualified for restructuring, the project must meet some specific criteria. The banking regulator clarified that if the debt was classified as normal and not overdue, as, on March 1, 2020, lenders could restructure loans taken over by a developer during the current financial year. This assumes that financial institutions will only restructure loans from developers who have been consistently repaying their loans as of March 1, 2020, and who have not been overdue for more than 30 days. This also means that, under the COVID-19 stress fund, housing projects where defaults were made prior to the Coronavirus era would not be eligible to gain.[Source: RBI notification as of 22 October 2020]

For more information please stay connected to official website of SBP Group.

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What to Expect When Banks Process Home Loan Application?

Buying a home requires a huge amount and for a layman, it is not possible to invest such an amount all by itself, which is why most homebuyers seek the help of financial institutions to avail home loans. Prior to banking digitalization, The way of acquiring home loans in India includes various procedures that were complicated and time-consuming for applicants. Now, the procedure for online home loans is not only simple but also fast. Within a few weeks, your loan will be disbursed. Whether or not you will be able to execute your home buying plans will ultimately depend on the evaluation and approval of your home loan application that will be processed by your bank.

Since interest rates on home loans are currently at record low rates (less than 7%), most customers are willing to do real estate investment. The applicant must be vigilant as it is important to get approval for the sum you have requested from the bank as credit. Let’s look at some of the considerations that must be followed by you while your Home loan is being processed.

Make Sure You Are Accessible

Officials of the banks can attempt to contact you on your mobile phone to request confirmation of the many details given in your application form. There may even be a call to ask you to provide extra documents. As part of an applicant’s liabilities, banks also often disclose many hidden fees on home loans that a buyer has to pay. They could send emails as well. Keep your emails updated frequently, as well. So, if the bank officials were to get in contact for something, make sure you do not miss the call or an email. If that happens, the processing of home loan application can take longer.

Prepare For The Verification Of Property For Legal And Technical Teams

Bank will send two separate teams to complete the most important part of the processing. In order to make their assessment, one member of the legal team and another from the technical team will visit the property you want to buy. The buyer would have to be available at the house they wish to purchase at all these times. They should also make sure that the dealer is available, along with all documentation and payment receipts relevant to the property ownership.

The legal team will ensure that the property has no legal issues, will examine all the original documents, NOC, and ownership papers. while the technical team will evaluate what the market value of the property is, the physical condition of the property, building specifications, etc. They will recommend the bank to process your request only after the legal and technical teams are satisfied with the property and its legal title. If you are not available for these appointments, it will take much longer to process them.

Be Present At The Address Given By You

A check on the applicant will also be carried out by the bank. They can verify the truthfulness of the personal data you have provided. For this, your current address and your office address may be visited by bank representatives. At a designated time, they will make a visit, during which they require you to be present. This is a vital aspect of the processing of home loans and can be easily accomplished, with the assistance of the borrower.

All this is to ensure that the loan falls through the “right” hands and that the borrower has the “means” to pay the debt back.

Inform The Witness About The Home Loan

Banks ask you to include the names, contact numbers, and addresses of two people in your home loan application who may know you well. They mention that these associates are not your relatives in any way. The names of their friends or co-workers are often given by home loan applicants.

Notice that bank officials will separately contact each of these individuals and ask about you and your relationship with them. They can also ask the person about his occupation and address. This means that calls from the bank should be open not only to you but also to your contacts. If even after repeated attempts, the bank fails to contact your witnesses, it will prolong the whole operation.

Inform these witnesses in advance that you have provided the bank with their information in relation to your home loan application and that they should expect a call about the same.

Overall keep the following points in mind when requesting a home loan:

While the whole process of home loan approval is being conducted, make sure to be available on time at the right place.

Check your emails from time to time.

Don’t avoid unknown phone calls as they may be from the bank to know some information.

Be ready with valid documents and sellers when the legal and technical team pays a visit.

Inform the people whose name and contact you have given as witness in the home loan application.

You can fix the time according to your convenience, just be present at the appointed time.

You can not give the name of your blood relative as a witness.

Banks typically charge for conducting the technical assessment of the house. This may be part of the processing fee as well.

Once the process has been completed and the loan has been approved you can purchase your dream home and can live a comfortable and safe life.

If you need any information related to real estate, home loan, the realty market, etc. SBP Group is available for you. You can connect with us on our social media and website anytime.