Government tries to make home affordable
The government announced for lower cost housing are expected to have a significant impact on the affordability of such homes, and encourage developers to get into the segment.

As per the government’s announcement, the value of the house that’s eligible for such subsidy can go up to twenty lakh rupees, but the subsidy will be applicable only on loans up to ten lakh rupees.

The move to extend by two years the tax exemption available to builders of smaller homes is also likely to convince builders to cut the cost of such homes.

The government has extended the provision of section 80IB (10) of the Income Tax Act to projects approved before March 2008 and to be completed before 2012. Earlier, the provision was limited to projects sanctioned before March 2007 and to be completed before March 2010.

The extension exempts builders from paying tax on income from the sale of houses of one thousand square feet built-up area within 25 km of municipal limits of big cities and fifteen hundred square feet in other areas.

Some say that very few projects were launched during the extended period, so it’s unlikely it will have a major impact. But Confident, which did launch projects during that period, thinks they’ll now be able to offer more aggressive prices for them. That could help to drive demand and also facilitate completion of the projects by 2012.

Realty companies are back on track
Emaar MGF, Godrej Properties, Lodha Developers, Sahara Prime City, Nitesh Estates and Sriram Properties will all hit the capital markets in the current year, declaring that the worst may be over for an industry that virtually cratered in the global economic storm last year.

With market conditions still tight, it will be tough for these issuers to demand substantial premium from investors. Looking at the present volatile market, it would be really difficult to predict the premium.

The last to be listed, Mahindra Holidays and Resorts, debuted on BSE 7 percent higher than its issue price. Godrej Properties, the real estate arm of the Godrej Group, plans to sell around 10 percent through its maiden public issue. Before that, the company will place a 3.5 percent equity with select institutions.

The IPO is expected to fetch the company anywhere between 450 crore and 600 crore rupees. It will use the proceeds for building low-cost housing. ICICI Securities and Kotak Mahindra Capital are the merchant bankers to the issue.

Residential property becomes cheaper
Residential property prices are expected to fall by about 10% this year. Residential property rates declined by 18% to 20% in this March. Despite this drop, buyers are watching market scenario with ‘wait and watch’ policy. This trend is likely to continue through 2009. Mr. Sudhir Nair, Head, CRISIL Research says, “Demand in the commercial and retail segment is likely to remain under stress for the next two years owing to excess supply and weak off take.”

It is believed that lower home loan interest rates would help to revive demand in the residential segment. Hence, capital values are likely to stabilise in the first half of 2010, and increase during the second half of the year.

Hyderabad became the capital of the newly formed state of Andhra Pradesh in 1956. Located 650mts above sea level, the physiography of the city is dominated by..   More

Charminar s the symbol of Hyderabad and was built by the ruler Quli Qutab Shah in honour of his Hindu wife. A very busy market place surrounds this commanding structure of Hyderabad..
                                              More