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Home Authors Posts by Anamika Gairola

Anamika Gairola

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Anamika is a research-oriented writer with experience in writing blogs on home decor and real estate industry. Simply put, she knows the trend and expectations of today’s industry. She is an avid reader, wishes to travel the world, and loves to cook her favorite recipes when not writing.

Mortgage Rates Fall After Silicon Valley Bank’s Bankruptcy Declaration, U.S. Government Bonds Considered the Safest Asset

By
Anamika Gairola
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Mortgage rates have fallen after Silicon Valley Bank declared bankruptcy, causing panic in financial markets. Investors are seeking the safest assets during these uncertain times, and U.S. government bonds are considered the most secure, with guaranteed payments. However, banks must properly manage interest rate risks, or they may face a similar fate to SVB.

Mortgage investors of VA, FHA, and conforming mortgages can rest assured that they will get their money back, as these assets are government-guaranteed. As a result, the average 30-year mortgage rate has dropped from 7% to 6.5% within two days, and monthly payments on typical-size mortgages have decreased by about $100.

There may be further declines in mortgage rates. Although consumer price inflation remains stubbornly high, it is decelerating slowly, from 9% in mid-2022 to 6% in February 2023. The Federal Reserve aims to get inflation to around 2%, which may take another two years, but getting it to 3% or 4% seems likely by the end of this year. Housing costs are a significant factor in inflation, as they represent 34.4% of a typical household budget. While rental costs are still increasing at an annual rate of 8.8%, private sector apartment data shows actual rent declines, and construction of apartment units is at a 40-year high. This increase in supply may lead to more vacant units, which could significantly reduce rental costs.

The Federal Reserve must follow the advice of hockey great Wayne Gretzky and anticipate future trends, rather than reacting to current ones. Given the projected rental costs and the lagging impact of Fed actions, the Fed should stop raising interest rates.

One significant risk remains: Is the national debt making U.S. bonds less secure? The national debt is expected to reach $30 trillion, which could lead to higher borrowing costs for all, including the government, if Washington fails to act. However, a default is unlikely.

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Luxury Real Estate Market Booms in Mumbai as Billionaires Splurge on Multi-Crore Homes

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Anamika Gairola
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India’s financial capital, Mumbai, has been experiencing a surge in its luxury real estate market. Billionaires are signing deals worth hundreds of crores for homes in luxury towers. In February 2023, industrialist B K Goenka, chairman of Welspun Group, purchased a penthouse in a Worli luxury tower for Rs 240 crore.

The same month, industrialist Niraj Bajaj, chairman of Bajaj Auto and promoter-director of Bajaj Group, bought a triplex in an under-construction tower at Walkeshwar for Rs 252 crore. This was described as the most expensive transaction in India. In March 2023, the Taparia family booked six luxury apartments in Lodha Malabar for Rs 369 crore.

Despite these record-breaking deals, experts say that luxury housing in Mumbai still only makes up a small percentage of the market. Only 1% of flats sold in Mumbai in March 2023 were priced above Rs 20 crore, while those priced between Rs 5 crore and Rs 10 crore comprised barely 4% of the sales. 

However, Pankaj Kapoor, founder and MD of Liases Foras, a real estate research firm, reported a 76% increase in the new launches of units costing Rs 3 crore and above in 2022. While there were 19% fewer launches in the Rs 5 crore-10 crore segment, “units costing Rs 10 crore-20 crore and above saw a 142% increase in new supply during 2022”.

The unsold stock in Mumbai recorded a 57% increase from 2021 to reach 1,32,253 units, of which luxury housing made up 15% or 19,334 units.

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DTCP revises policy to promote low density and eco-friendly farmhouse colonies in Gurgaon

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Anamika Gairola
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The Department of Town and Country Planning (DTCP) in Gurgaon has introduced a revised policy to encourage the construction of low density and eco-friendly farmhouse colonies on agricultural land.

The new policy replaces the previous one, which focused on large areas but did not generate any interest among developers. The revised ‘Low Density Eco Friendly Farmhouse Policy’ is aimed at promoting projects that are based on ecologically sensitive principles of design and development.

Under the new policy, such projects can be developed on a minimum area of 25 acres in Gurgaon, 15 acres in Sohna, and 10 acres in Pataudi and Farrukhnagar. This marks a significant departure from the previous 2019 policy, which required developers to invest in a minimum of 100 acres. The policy also sets a cap on the number of residents per acre at 25.

In addition to the minimum area requirements, the policy mandates that these colonies install solar plants, stormwater recycling systems, sewage treatment plants, and waste management facilities. Each plot should also have at least 20 trees planted, and there should be a facility to utilize and recycle biodegradable waste.

To apply for a license to develop on agricultural land, a developer must submit a request within the city’s master plan. External development charges (EDC) will not be levied for land outside urban areas. If the land is within 500 meters of an urban area, the developer will be charged 50% of the EDC, which is usually charged for residential colonies. However, all other fees and charges, including scrutiny fees, license fees, conversion charges, and others, will remain the same as those for normal plotted residential colonies in the city.

The revised policy will also help authorities “keep check on construction of illegal farmhouses” while setting guidelines for eco-friendly farmhouses with solar power, rainwater harvesting, and other features. The policy allows for a farmhouse of 1 acre-1.5 acres to utilize 300sqm for construction, which increases to 400sqm and 500sqm if the farmhouse area is 1.5 acre-2 acre and 2 acres-2.5 acres respectively.

The policy stipulates that a farmhouse can be a three-storey structure up to 12 meters in height, or a two-storey building up to 7 meters in height. A basement can be built as per the provisions of the Haryana Building Code 2017. Internal roads should be at least 9 meters wide, and each farmhouse can be between one to 2.5 acres in size. The approach road to the colony should be 12 meters wide or more.

Each gated colony can have a club, and 80% of the total area can be sold by the developer. There is also a provision for shops limited to a 1,000sqft (or 93sqm) commercial space. Of the saleable area, 4% can be designated for agriculture-based non-polluting service industries, but this won’t be mandatory.

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Indiabulls Housing Finance and M3M executives face FIR over alleged property usurpation

By
Anamika Gairola
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Ghaziabad police have registered an FIR against 18 executives of Indiabulls Housing Finance Limited (IHFL) and M3M over a complaint filed by the Shipra group. The complaint alleges that Indiabulls Housing usurped its properties, including the Shipra Mall in Indirapuram, despite having a loan agreement with them.

According to the Shipra group’s complaint, in December 2017, it had signed a loan agreement with Indiabulls Housing for a loan of Rs 1,939 crore at an interest rate cheaper than the market rate to complete four residential and commercial projects in Noida and Ghaziabad. It claimed that Indiabulls Housing had a condition that Shipra would have to mortgage six of its properties, including the Shipra Mall, which they say is worth Rs 6,000 crore. Shares of some group companies of Shipra were also pledged to Indiabulls as a security cover, according to the complaint.

The complaint further alleges that Indiabulls disbursed Rs 1,256 crore but took back Rs 389 crore as “pre-interest”. It also alleges the use of forged documents to bloat the loan amount to Rs 1,686 crore.

Shipra claims that in 2021, Indiabulls Housing demanded that Shipra return Rs 1,738 crore within seven days or the company would acquire its property in Noida Sector 128 forcefully. At that time, both companies came up with a solution to sell 73 acres of land in Sector 128, which was mortgaged to Indiabulls by Shipra. DLF agreed to pay Rs 1,250 crore, but Indiabulls allegedly sold the pledged shares to M3M group company Final Step Pvt Ltd for Rs 900 crore, without Shipra’s consent.

When police did not register a case, Shipra moved the Ghaziabad court, which ordered the police to lodge an FIR and investigate. The FIR has been filed under sections 420 (cheating), 467 (forgery), 468 (forgery for cheating), 471 (using as genuine a forged document), 120B (criminal conspiracy), 323 (voluntarily causing hurt), 504 (intentional insult with intent to provoke breach of peace) and 506 (criminal intimidation) of the IPC.

Indiabulls Housing has denied the allegations, claiming that it had disbursed Rs 1,995 crore to Shipra between 2017 and 2020. IHFL alleges that Shipra committed defaults in loan agreements, and loan recall notices were issued demanding repayment. However, the same was never paid, and the accounts of Shipra became non-performing assets. Legal proceedings were initiated by IHFL for recovery of the outstanding amounts, and shares pledged by Kadam Developers Pvt Ltd were invoked by IHFL.

The Delhi high court held that there was a default by the Shipra Group, and IHFL was entitled to invoke the securities on the occurrence of the event of default. Indiabulls sold shares of Kadam to Creative Souls Pvt. Ltd., and even after the sale of shares, there was a shortfall in the amounts to be recovered. Therefore, IHFL was constrained to take steps for the sale of Shipra Mall, which was mortgaged to secure repayment of the loan, the Indiabulls Housing spokesperson said.

The spokesperson further added that Indiabulls had acted in full compliance with the law and would cooperate with the authorities in the investigation. The company also stated that it had always maintained the highest standards of corporate governance and ethics, and that the allegations made by Shipra were false and malicious.

M3M also denied any wrongdoing, stating that it was not involved in the loan agreement between Indiabulls and Shipra and had no knowledge of any alleged wrongdoing. The company stated that it had purchased the shares of Kadam Developers Pvt Ltd from Indiabulls as a part of its regular business operations.

The investigation is ongoing, and further details are yet to emerge. The case highlights the importance of due diligence and compliance with legal requirements in loan agreements and property transactions.

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Demand for earthquake-resistant homes decreases in Turkey, spurring real estate boom

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Anamika Gairola
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Turkey is witnessing a prospering real estate industry after the massive earthquakes on February 6, driven by declining demand for so-called earthquake-resistant new residences in important western cities, notably Istanbul. Real estate dealers claimed that compared to February, land sales in Istanbul jumped by 200% in March, which pushed up prices.

A real estate consultant, Erdinc Sahin, described the reaction to the earthquakes in the real estate market as a “wave of fear has grabbed Istanbulites, especially after the calamity.” A fast scanning program on home foundations and their structural resistance conducted by the Istanbul municipality in late February revealed that many old buildings in the city were not resistant enough to strong earthquakes, this increased citizens’ fear, according to Sahin. 

According to Sahin, evacuating weak buildings on a broad scale is difficult. As a result of the scanning exercise, dangerous buildings were either reinforced or demolished. He stated that the need is not just there in Istanbul, but also in the neighboring provinces of Kirklareli and Edirne in the Thrace region, as well as in Kocaeli in the Marmara region. Sahin believes that the overall expenditures are far more than anticipated considering a 40% increase in land sales prices in March and rising building costs. ‘We consider these pricing increases to be unreasonable. This demand won’t stay the same forever. That would eventually come to an end, he said. 

In contrast to building conventional big houses, small houses are much more affordable ranging between 15-40 square meters vary from $15,000 to $30,000, he said. According to him, the demand for tiny homes has grown significantly since “almost 90% of people (in Istanbul) don’t know how earthquake-resistant their homes are therefore they want to plan an independent lifestyle in nature a safer, more remote, and more recuperative lifestyle. Zoning is not necessary for the erection of tiny houses, according to Olmez, which saves money.

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Office Leasing Activity in India Sees 9% YoY Growth in Q1 2023

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Anamika Gairola
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According to the most recent official report from CBRE South Asia Pvt. Ltd, office leasing activity increased by 9% year over year and reached 12.6 million square feet between January and March of this year. Bangalore, Delhi-NCR, and Chennai accounted for 62% of the quarter’s total transaction activity.

Approximately 11.6 million square feet of development were recorded in Jan.–Mar. 23, an increase of 31% year over year. With a cumulative share of nearly 82%, Bangalore, Delhi-NCR, Pune, and Hyderabad led supply addition during the quarter. The non-SEZ segment dominated development completions with a share of around 88%, up from 82% in the same period last year. The report highlights the fact that almost 50% of the recently finished developments during the current quarter were green-certified (LEED or IGBC), demonstrating a strong emphasis on sustainability.

In the January-March quarter, BFSI companies and flexible space operators drove space take-up with a share of about 22% each, in contrast to the previous quarters where technology corporates predominated leasing activity. Technology corporations came in second, with 20% of the market, followed by engineering and manufacturing firms (11%), and research, consulting, and analytics firms ( 10%). Leasing activity in the January to March 2019 quarter was dominated by the closing of medium- to large-sized deals by global capability centers of BFSI corporates, Indian banks, and domestic flex operators. As compared to earlier quarters, this showed a divergence in office absorption trends. Due to a sharp rise in the number of large-sized deal closures, the combined share of BFSI companies and flexible space operators increased from 20% in Oct.-Dec. 22 to 44% in Jan.-Mar. 

Similar to the prior quarter, domestic companies outperformed American businesses in terms of quarterly leasing, accounting for nearly half of the leasing activity in the Jan.-Mar.’23 quarter. Flexible space operators, BFSI companies, and technology corporates were primarily in charge of this leasing activity.

Office space take-up in Jan.-Mar. 23 was primarily driven by small-to-medium-sized transactions (less than 10,000 sq. ft. to 10,000 – 50,000 sq. ft.), accounting for 84% of total take-up, a slight decline on a Q-o-Q basis. Greater than 100,000 square foot deals made up 6% of all transactions between January and March of this year, which is consistent with the prior quarter. Bangalore dominated large-sized deal closures from January to March of this year, followed by Delhi-NCR, Hyderabad, and Chennai. A few of these deals were also reported in Pune.

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Understanding Certificates of Deposit (CDs) in India: Features, Benefits and Eligibility

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Anamika Gairola
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What is a Certificate of Deposit?

A dematerialized Certificate of Deposit (CD) is a fixed-income financial instrument issued by the Reserve Bank of India (RBI) and subject to RBI regulation. The payout amount is guaranteed from the beginning. Any All-India Financial Institution or Scheduled Commercial Bank may issue a CD. They are issued at a discount off the face value. Similar to a fixed deposit (FD), a certificate of deposit (CD) serves to officially state that you have deposited money in a bank for a specific amount of time, and that bank will pay you interest on that deposit based on the sum and time period of your deposit.

Difference between CD and FD

A fixed deposit and a certificate of deposit are very similar to one another. Both of them are identical. Some banks even refer to fixed deposits as CDs or time deposits. They have the same term length, a minimal deposit requirement, and higher interest rates than standard savings accounts. CDs are freely negotiable, whereas FDs are not.

Features of Certificate of Deposit 

These are some key characteristics of CDs and how they compare to other financial instruments. 

  • In India, CDs can be produced for a minimum deposit of 1 Lakh and in multiples of that amount. 
  • A CD can be issued by All-India Financial Institutions and Scheduled Commercial Banks (SCBs). A CD cannot be issued by RRBs or cooperative banks. 
  • The term time of CDs issued by SCBs ranges from there month to a year. 
  • The terms of financial institution-issued CDs range from one to three years. 
  • Dematerialized CDs can be transferred through delivery or endorsement, just like dematerialized securities. 
  • For a CD, there is no lock-in necessary. 
  • A CD cannot be used as collateral for a loan. 
  • The Internal Revenue Code completely taxes certificates of deposit. 

Difference between Commercial Paper and CD 

Commercial paper and a CD have two glaring contrasts from each other. The first is who has the authority to issue them. Banks and financial institutions both issue CDs. Primary dealers, major enterprises, and All-India Financial Institutions all issue commercial papers. The minimum deposit amount is the second difference. A certificate of deposit allows multiple investments up to the minimum requirement of one lakh rupees. On the other hand, commercial paper is only issued for investments totaling at least 5 lakhs, and then in multiples of 5 lakhs. 

When do Indian banks issue a CD? 

Any scheduled commercial bank may have high-risk obligations related to CDs. In some circumstances, some banks are more inclined to offer a CD than others. There are only two circumstances:

  • When there is a high demand for credit and limited growth in deposits. 
  • When the market is experiencing difficult or tight liquidity conditions, which indicates that cash is invested in non-liquid assets. 

NRIs who have invested in a CD are prohibited from returning home once the money has matured. 

Benefits of Indian CD Publishing There are advantages to releasing a CD, which is why investors prefer it so much. As follows: 

Security: Due to market volatility, a certificate of deposit, or FD won’t consume all of your capital. Similar to regular insurance, it is a perfectly secure financial instrument with an assured amount at maturity. There is no risk of losing any money you deposit into your CD, which will continue to expand reliably. A short to mid-term investment in it is quite safe. 

High Interest Rate: The majority of investors are drawn to CDs because of this feature. They provide higher interest rates of up to 7.8% on the lump sum deposited than standard savings accounts, which have interest rates that hover around 4% on average

Flexibility:  When your CD matures, you can choose to withdraw it in one lump sum, monthly payments, or annual payments. Although it must adhere to a number of requirements established by the bank, you can choose the length and price of the investment. You may take the most of the CD if you adapt it to your needs

Final Thoughts 

In the short to medium term, issuing a certificate of deposit is a safe investment strategy. Hopefully, this CD guide has helped you understand the features, advantages, and eligibility of fixed-income instruments like CDs and why you should invest in them to secure your financial future.

However, you must first open a Demat account to proceed with your CD. Dematerialized accounts are abbreviated as “demat accounts.” To hold dematerialized securities like a CD, an online Demat account is necessary. With just a few easy steps, you can open a Demat account and get started buying your first CD.

Disclaimer: Access to the content on this internet page is provided by iPropUnited as a courtesy to the public service for educational reasons based on related news and stories. The accuracy of any information on this website cannot be guaranteed, however, it is all believed to be credible.

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Pune Residents Demand Action from PMC in Mohalla Committee Meeting

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Anamika Gairola
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Residents of Aundh, Baner, Balewadi, and Pashan have voiced their concerns during a recent Mohalla Committee meeting held in Pune. The committee demanded that the Pune Municipal Corporation (PMC) address various issues affecting their areas, including the scarcity of water and the construction of new buildings.

The Baner-Balewadi-Pashan Residents Association (BBPRA) members have raised additional issues such as cleaning storm-water drains and unnecessary overhead cables.

The residents have requested that the PMC refrain from granting permission to construct new buildings in the area until the water scarcity issue is resolved. They have also demanded a survey of nullahs and storm-water drains to prevent waterlogging during the rainy season. Furthermore, the residents have raised concerns regarding a garbage sorting station in the vicinity of Sai Chowk and 43 Private Drive society. They want the station to be relocated as the garbage sorting is rendering the footpath unusable for pedestrians.

Sandip Khalate, Aundh Ward officer and assistant municipal commissioner, has assured that the PMC will consider the demands raised in the Mohalla Committee meeting. The removal of unnecessary overhead cables is already underway, and the PMC will ensure that the garbage does not spill onto the footpath. The storm-water drains will also be cleaned in preparation for the upcoming monsoon season.

If the PMC does not relocate the garbage sorting station within 15 days, the residents have threatened to hold a protest march.

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London house prices record lowest growth in England

By
Anamika Gairola
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According to the Office of National Statistics (ONS), London has recorded the lowest price growth in England in the year to January 2023, with house prices remaining the most expensive of any region in the UK.

The annual increase of 3.2 per cent in January took the average cost of a home in London to £534,000. Meanwhile, the North East has topped the chart for house price growth, with prices increasing by 10 per cent in the same period. House prices in the North East average at £163,000, which is the lowest of any region.

The housing market and mortgage borrowers are adjusting to the impact of the cost of living crisis and higher interest rates, and forecasters predict that London prices will fall by between five and 10 per cent this year. Despite this, demand and supply have been solid this year, and sales volumes are expected to catch up against an economic backdrop that is proving stronger than expected.

Across the UK, the annual house price growth has slowed to 6.3 per cent, with the average cost of a UK home now standing at £290,000, which is £17,000 higher than in January 2022. While the drop in annual house price growth in January was attributed to the mini-budget, Tom Bill, head of UK residential research at Knight Frank, believes it tells us very little about how the UK property market will perform this year.

In terms of rental prices, private rental prices in London increased by 4.6 per cent in the 12 months to February 2023, accelerating from a 4.3 per cent rise in the previous 12 months, making it the strongest annual percentage growth since January 2013. Rental prices paid across the UK also increased by 4.7 per cent in the 12 months to February 2023, which is the largest growth since comparable records began in January 2016.

The average house price in Scotland increased by one per cent over the 12 months to January 2023, with the average house price in Scotland being £185,000 in January 2023. In Wales, the typical house price increased by 5.8 per cent over the same period, with the average house price in January 2023 being £217,000. In England, the average property value increased by 6.9 per cent over the 12 months to January 2023, with the average house price being £310,000 in January 2023. Northern Ireland saw the highest annual house price increase of 10.2 per cent, with the average house price standing at £175,000.

Overall, annual house price inflation, measured using final transaction prices, slowed again in January, consistent across all nations and regions. However, UK rental prices continued to climb, with the strongest growth since records began in 2016. The surge in London’s rents remained evident with the highest annual percentage increase in over a decade.

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MCG Organizes Property Tax Collection Camps in Gurugram to Boost Revenue

By
Anamika Gairola
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GURUGRAM: In an effort to augment the collection of property tax, the Municipal Corporation of Gurugram (MCG) has initiated organizing camps in various parts of the city.

This move will provide residents with an opportunity to deposit their dues at their convenience. The camps will be held until March 29, and it is hoped that the initiative will increase the civic body’s revenue.

Property tax is a vital source of income for the MCG. The corporation aims to collect Rs 1,100 crore from property tax alone in the current fiscal year. Unfortunately, they have only been able to collect 16.3% of that amount, which is equivalent to Rs 180 crore. Given that there are only ten days left in the current fiscal year, the civic body has decided to hold these camps to boost its revenue.

Besides depositing their property tax dues, residents can also visit the camps to get their property tax data corrected. MCG spokesperson SS Rohilla confirmed this in a statement to the press.

The property tax camps will be set up at various community centers and malls throughout Gurugram. On Wednesday, the camp will be held at community centers in sectors 9A and 22A, South Point Mall, and Tulip Lemon (Sector 69). On Thursday, camps will be organized at the Sector 4 community center, Radhakrishan temple (Kirti Nagar), DT Mega Mall, and Bestech Park View Spa Next (Sector 67).

On Friday, MCG will organize property tax camps at AVL 36 (Sector 36), Ram Mandir (Sai Kunj), TDI Ourania (Sector 56), and M3M Merlin (Sector 67). The next day, they will be set up at the community centers in Sector 10, Sector 14, Mahindra Aura (Sector 110A), Palm Grove Heights (Ardee City), Princeton Estate (DLF 5), and The Legend (Sector 57).

The MCG’s efforts to increase revenue through property tax camps have been well-received by residents. This initiative has made it easier for people to pay their dues and avoid any legal consequences for late payments. Additionally, it will help the civic body to meet its revenue targets and fund essential public services in the city.

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