As the New Year unfolds, a realty portal ascertains what home buyers expect from the property market and what their demands are.
As the year 2010 folded, the biggest news for the property scenario seemed to be the announcement of the BBMP for a ‘proposed one-time conversion fee' for regularisation of sites (an quicker alternative to the much-awaited larger Akrama-Sakrama scheme) proving to be beneficial both to such land owners and the BBMP. Five lakh of such converted revenue land property in the newly added areas would get their khatas on payment of the requisite charges and get regularised. “This would have far-reaching effects in the property market in Bangalore in the new year,” said a BBMP official.
2010 can be considered a mixed year for the Indian real estate sector, say industry experts. Where does the market go from here? What is the current psyche of home buyers? Is it still a seller's market? Is the affordable home still a top priority when the common man goes home-shopping? Which is the hottest destination for investing in real estate in 2011?
To ascertain all such trends, Makaan.com, online real estate website, conducted a national survey for metros and Tier-II cities of the country online during the first three weeks of December 2010. The survey ‘Property Trends 2011' saw participation from over 4,700 home buyers in the age group of 26-45 years.
Makaan.com, promoted by People Interactive, claims that it attracts more than 11.3 lakh visitors every month and helps browsers in their decisions related to buying, selling, renting and leasing of property in India and abroad. It has offices in Bangalore, Delhi, Gurgaon, Hyderabad, Mumbai, Navi Mumbai and Pune.
The survey throws light on 2010 seeing RBI tightening the flow of “easy money” into the real estate sector. “Steps like increase in risk weightage on bank lending to realty companies, ending the teaser loan regime, higher provisioning for home loan above Rs. 75 lakh and RBI's overall guidance towards high interest rate regime brought some sanity in the property market,” it said. The end of 2010 exposed glaring gaps in the procedure adopted by some banking officials in sanctioning loans to realty companies. This disclosure by CBI, along with RBI interventions, kept the property prices under check for the second half of 2010 and prevented a potential bubble from being formed.
As we move on to 2011, there are several fronts that need to be understood on what home buyers want specifically. Their psyche is paramount in knowing what the industry has to offer to mould a market.
Crucial survey factors
* 32% of home buyers wished for increase in income tax exemption limit on repayment of interest on home loan from the current Rs. 1.5 lakh p.a. to Rs. 3 lakh p.a. in the light of the jump in property prices over the last 5-7 years, as the limit has not kept pace with the price rise.
* 31 per cent want the conflict of super area vs carpet area resolved. Developers should charge on the carpet area rather than the super area as it would bring more transparency and carpet area is measurable as against the latter which in most cases is ambiguous.
* 12 per cent of the respondents also wanted developers to charge only after the project construction is complete. “This will have positive pressure on the developers to complete projects on time,” the survey has recorded.
* 11 per cent feel that to attract more genuine home buyers there should be a three-year lock-in period for home buyers.
* 10 per cent feel that government should subsidise home loans by 200 points (or 2 per cent) of the market rate.
* Four per cent feel that pre-launch of projects should be stopped / banned.
House for self-use
A whopping 70 per cent of national home buyers and 77 per cent of Bangalore respondents want to buy a house for self-consumption. Only 20 per cent are looking at purely a long-term investment.