Offerings in Luxury Homes in Bangalore

Offerings in Luxury Homes in Bangalore

baan-banburee-villa-ko-samuiVenkatesh and Sumitra completed their higher education at Ivy League colleges in the United States and secured jobs there as well. In fact, it is where the couple met, fell in love and got married. A decade and a half, two children and a comfortable lifestyle later they are now looking at investing in a home back in Bangalore where they both incidentally hail from. The main reason being, that they would like to be closer to their respective sets of parents in their old age.

The only problem is, with the explosion of real estate in Bangalore, they are unsure of what to look for. Of course, they are looking at an upmarket luxury homes, much on the likes of what they currently own in the States. They consulted with two people in the know of the real estate industry – Sunder Dinesh, a Sr. Analyst with LiasesForas that conducts a number of researches in the field of real estate and Karthik Harsha, Joint Managing Director of Built Environment, a property development organization, for advice on the real estate scenario.

Sunder helped them understand what is available to them in various prices brackets beginning at Rs 50 lakh going upwards of Rs 2 crore. The below table summarizes what he told them.

Price range Classification Avg price/sqft Avg size * Amenities**
Rs 50 lakh to Rs 1 crore Upper end In the range of Rs 3600 to Rs 8056 approx. 1300 to 1,955sqft approx Parking, Mini play areas, shopping areas, pool, club house, etc.
Rs 1 crore to Rs 2 crore Luxury Rs 7500# to Rs 10,300 approx. In the range of 1,577 to 3,000sqft approx. Enclosed perimeter, Parking, mini play areas, joggers pathway, swimming pool, garden, clubhouse, sports facilities, security measures, malls, hospitals, theatres, hotels, schools, etc
Rs 2 crore and above Ultra Luxury In the range of Rs 10,500#to Rs 28,000 per sqftapprox. In the range of 2200 sqft to 4100 sqft Same as above plus private pools, private landscaped gardens/living walls, access to internationally renowned interior designers and architects for consultation, exclusive features for homes such as home theatre rooms, gyms, entertainment space custom built, etc.
  • * Varies according to locations and availability
  • * 2,3 or 4BHK depending on project, floor space, apartment or villa
  • ** Amenities differ from apartments to villas, also on the location and the caliber of the builder.
  • # In select CBD areas and those in popular demand in South and North Bangalore especially

Karthik on the other hand, gave them a clear understanding of what to expect in terms of amenities. He explained that apartments and villas need to be looked at separately. When it comes to an upper-end to ultra-luxury apartments, the amenities you get are based on two primary factors – area and location.

 For apartments available in central locations like the CBD area, or those within highly developed localities, most amenities are generally in the vicinity. Therefore, prospective buyers only look at the space being offered in the apartments and other aspects such as fixtures, interior design, technology-based features and more. The builder brand too is a consideration.

As one moves further away from the city, there is an expectation for a project to be more self-sufficient in terms of amenities. That is when swimming pools, shopping centers, groceries, play areas, club houses and other such amenities are looked for.

Villas, when considered, are generally located on the outskirts of the city. These are within gated communities and all efforts are made to make them self-sufficient. You will have medical centers, schools (play centers and day cares, where schools are not available), commercial centers, leisure options aplenty, within the community. An integrated city is what is aimed for.

Like Venkatesh and Sumitra, if you are looking for a luxury home, ascertain the area and location you would like to be based in. Make a list of all the amenities essential to you and another list of amenities that would be nice to have, though not essential. Narrow down on properties at these locations and then work on your final decision. This should help you find the home of your dreams, just as it will for Venkatesh and Sumitra.

 

 

A Budget Home that fits the Bill

A Budget Home that fits the Bill

f1Sowmik and Sunidhi have just reached that stage in life when they are ready to buy a home of their own. A home of approximately Rs 50 lakh is what the couple is looking at. One Friday morning, soon after they made this decision, they sat down with the top newspapers of the city to look through the various advertisements for properties across the city. The idea was to narrow down on a budget home, not too far from the center of the city, but with amenities that would be ideal for them.

They spent the entire day with the newspapers, rummaging through scores of property advertisements, but things made little sense to them. There were so many properties in their price bracket to choose from that their list seemed endless. Moreover, they were now unsure of whether their dream home came under the classification of a low end home or one that was in the mid or upper range and what amenities their budget entitled them to. The proper classification after all does add to the prestige of home owner and of course the value you get for your money.

The couple approached a good friend, Sunder Dinesh, a senior analyst with LiasesForas, a non-brokerage firm that researches real estate.  Among the many projects they have undertaken, the company conducts a quarterly research on flats, prices and availability at various locations. Sunder says that the segmentation is based on “Flat cost = Price * Size” and the company updates these classifications every quarter.

He went on to say that the prices are determined by the market forces. Though the government has their own guideline values for every location these are not taken into consideration during the information collection stage and interaction with builders.

If you are like Soumik and Sunidhi and are unsure of the kind of budget home you will get  for your money, take a look at LiasesForas’s research for the current quarter. Bangalore currently has approximately 61,948 residential units across all categories of homes available. There are close to 3823 units across Bangalore in the Rs 25 lakh and below category. There are around 23,308 units available for the mid-range budget of Rs 25 to Rs 50 lakh.

If you are looking for a home in the Rs 25 lakh to Rs 50 lakh, this table below will help put things in perspective.

Price range Classification Avg price/sqft Avg size Amenities
Rs 25 lakh and below Low budget homes In the range of Rs 2700 approx 975 to 1,163 sqftapprox. – (a mix of 1 and 2BHK) Parking, Mini play areas
Rs 25 lakh to Rs 50 lakh Mid-range budget homes Rs 3700 to Rs 3800 approx. In the range of 1,144 to 1,240 sqft approx. (2 & 3 BHK)) Enclosed perimeter, Parking, mini play areas, joggers pathway, swimming pool, garden, clubhouse

In terms of amenities in Rs 25 lakh and below homes, there is not much you may expect from small-time independent builders who put up Ground + 3 apartments across the city. Parking space is often a given, though for how many vehicles is something you need to explore. But if you do your research well, you will find a few quality builders that provide you with all the amenities of a mid-range home in a low budget cost.

It is important that you supervise the construction of your unit at every stage and possibly work on enhancing the quality of the materials used in the building. There is always an element of risk with such properties. If the unit ready to move have it quality checked by a qualified civil engineer.

There are however, several branded properties in the low-end and mid-range available with quality facilities such as an  enclosed perimeter, play area, walking and jogging pathways, lifts and good quality, if not high-end fixtures inside the home. Again, these amenities are not guaranteed, and you need to do your due diligence before you invest.

Some of the areas you may look for such homes will be suburbs such as those outlined below:

SUBURB

LOCATION

Bangalore – North West Jalahalli
Bangalore – South Hosur Road
Bangalore – South East Anekal Road
Bangalore – South West Kengeri
Bangalore – South West Mysore Road
Bangalore – South West Rajarajeshwari Nagar

 

With relevant information of this nature, Sowmik and Sunidhi will now be able to find a home that is best suited to their budget, their lifestyle and their needs. This information will help them and even you on settling on an apartment complex offered by a quality builder and with a good set of amenities. This article helps put things in perspective when you are looking for that budget home.

Impact of Metro on Bangalore Real Estate Market

Impact of Metro on Bangalore Real Estate Market

Bangalore_MetroVikas was a happy man on March 7th – Just a week earlier, Reach 3 and 3A of Namma Metro, that connects Sampige Road and Peenya Industrial Area was inaugurated. On this day, a week later, Vikas was going to take his first Metro ride to work at Peenya and cover a distance of 10 km in just 15 minutes for all of Rs 19.50 (he had purchased the commuter Smart Card).

No more traffic snarls to deal with, no more leaving home way to early to reach office on time, no delays in getting home – travelling was now going to be a pleasure.

But what makes Vikas an even happier man is that as a landlord, his property, close to the Metro station at Sampige Road, was now going to fetch him a higher rent. With the Metro up and running, the infrastructure in the area just got a significant boost.

Scheduled infrastructure projects tend to increase the value of properties in the adjoining areas. This occurs because the infrastructure project becomes a part of USP for the developers or property owners. There have been instances where property prices have increased 50-70% from the announcement of an infrastructure initiative until the operational phase, says Saugata Maitra, National Director – Strategic Consulting, JLL India. That said, property price increases may not be a unanimous phenomenon across all property segments.

In the case of the Metro, while the low-to-mid-income property segments would definitely be positively affected, property prices in high-end residential areas in the Bangalore real estate sector would be less likely to experience a steep rise with the announcement of a major infrastructure project.

Impact of the Metro so far

The development of infrastructure, especially one that encourages connectivity within a city is critical for its growth.  Since the inauguration of Reach 3 and 3A of the Metro the decongestion of traffic is an obvious benefit. It serves to decongest traffic on the stretch and provide an affordable, fast moving travel option to the public. Areas in and around the Metro stations are already witnessing transformation.

Ganesh Vasudevan, CEO & Co Founder, Indiaproperty, says, “When Reach 1 from M.G.Road to Baiyappanahalli was inaugurated, prices of many high-end apartments for sale in Indiranagar went up by close to 20% over the past 6 quarters leading to its opening. Today these homes are priced between INR 10,000 to INR 12,000 per sq. ft. Commercial real estate in Bangalore received a much needed push with the proposed increase in FAR (Floor Area Ratio) from 3.2 to 4 improving revenue from commercial and residential real estate and encouraging investment. The Reach 3 and 3A have further improved the overall sentiments of the buyers and the real estate sector although only 4 out of the 10 stations are currently operational.”

There are scores of residential projects coming up in the vicinity of the Metro project. Schools, hospitals and retail malls are located along the track and this has changed the face of realty in the region.

Reach 3 and 3A have a long way to go in terms of completion of all necessary infrastructure. However, its impact is already perceptible. Only time will be able to give us a clearer picture of the where Bangalore’s realty in the region is headed.

Access and Repay your Home Loan Effectively

Access and Repay your Home Loan Effectively

home-equity-loans2Vivek and Deeksha are on the verge of making one of the most important decisions of their life – buying a home. They are an IT-couple in their early 30s and have a double-income household with two children.

They have seen the worst of the economy in the recent years – from mutual fund returns plummeting to an all-time low, to fluctuating inflation, to the fall of the Indian rupee and now the current uncertainty of economic policies with the May elections looming overhead.

Despite this massive roller-coaster ride as far as maintaining their finances is concerned, a home of their own is something they are considering right now. Naturally, they want to examine every aspect of home purchasing.

Two of their immediate concerns are the extent of loan they are eligible for and the repayment process that will suit them best. Let’s take a look at both of these aspects:

Enhancing eligibility:
Your current financial status will determine the quantum of home loan you will receive. Being able to increase your eligibility is therefore a priority. If you are like Vivek and Deeksha, then you may apply for a loan with your spouse as a co-applicant. As a double-income family, with steady paychecks your eligibility is better. Even your fiancée may be a co-applicant increasing your chances of getting a home early on in life.

Any additional forms of security you may have, in terms of investment, may also be provided as a way of enhancing eligibility. All your bonds, fixed deposits and LIC policies, along with a guarantor, if you can provide one, work to your benefit.

Over the last decade, credit histories are an important consideration for eligibility of loans. Check with CIBIL on your current credit history status to know where you stand. If your score is not good, work on improving it before applying for a loan.

Credit histories are based on how well you have cleared any earlier loans, the timeliness of your credit card payments, etc. It is a mirror on the kind of borrower you are. 

Understand your repayment process: Once you have secured a loan and have moved into your dream home you will have to understand how fluctuations in the market may affect your repayment scheme. With a fixed rate loan you have nothing to worry about for a while, but with a floating rate, there is a certain amount of risk you have taken on.

A relief for people like Vivek and Deeksha is that small changes in interest rates are often absorbed by the loan providers or HFCs – housing finance companies. This is purely from a competitive perspective. Here are some options for repayment schemes to insulate your loan from the vagaries of the market:

  • Short term fixed rate loans
    You may choose to lock interest rates for 3 years, allowing you to plan your finances for the period well. 5-year lock-in periods are also available however the rates are a bit higher than 3-year options.
  • Floating interest rates 
    This is only for those with a larger risk appetite. These loans have interest rates that are lower by a significant number of basis points. When interest rates fall, you will benefit. But with every increase of 25 basis points, your tenure for the loan will increase by around 9 months. Weighing the pros and cons of this option will depend entirely on your financial abilities.
  • Two-in-one loan 
    A household with dependents, like that of Vivek and Deeksha will prefer to have a fixed rate loan for a while. This will help them stabilize their finances and then decide how to move forward at the end of the fixed interest tenure. That is what the two-in-one loan is about. You may choose to lock interest rates for 3 or 5 years. At the end of the fixed period, you may choose to go with whichever mode suits you best.

Despite this massive roller-coaster ride as far as maintaining their finances is concerned, a home of their own is something they are considering right now. Naturally, they want to examine every aspect of home purchasing.

Tips on How to Manage your Home Loan Smartly

Tips on How to Manage your Home Loan Smartly

home-loanAditya and Meghna are in their late 30s and have taken a home loan of Rs 20 lakh for a period of 20 years. This loan was taken at a fixed interest rate of 13%. With still a decade to go for repaying the loan, the couple are now faced with the interesting prospect of refinancing their loan to another bank for an interest rate of 11%. With the penalty on pre-payment of loans no longer a clause to worry about, this seems like a good step for the couple to take.

Let us work on a few calculations to understand the benefit of refinancing the loan at this stage.

  • The couple’s current EMI is approximately Rs 23,433.
  • Their outstanding principal is approximately Rs 15,69,320.
  • The processing fee applicable when refinancing is around 1.5% (in some cases it may go up to 2%) on the outstanding amount, This brings their outstanding to Rs 15,92,860.
  • The new monthly installment for the 10-year period remaining with 11% interest is now Rs 14,734.
  • The savings over a 10 year period for Aditya and Meghna will be Rs 86,990.

Many home loan holders are often wooed by other banks that offer lower rates of interest or a change from fixed to floating, if you shift your loan to their bank. Tempting as it may be, here are a two questions you need to ask yourself:

  1. Switching from fixed to floating involves a conversion fee of around 1.5% to 2% per cent on your outstanding. Is it really worth it?
  2. Change in interest rates may affect all banks. There are chances that once you make a move, the home loan market takes a turn and the rates at your new bank are also hiked.Is this a risk you are willing to take?

When you shift your loan to another bank with a lower rate of interest, there are a few benefits that you may avail of, depending on your needs. You may work on renegotiating the terms and conditions of your loan. You may try to increase the duration of your loan and reduce the EMI, an option which your current bank may not give you.

The value of your property may have appreciated with time and you may require a top up to renovate or refurbish your home. This will help increase its value on the resale. Not every home loan organization has a provision for a top-up for an on-going loan. When you refinance your loan, this is a possibility you may have.

When you refinance a loan, in some cases, you may also look forward to better services and utilities, which you may not have received with your earlier bank.

What you have to keep in mind is that the process of refinancing is the same as applying for a new loan with a few additions. You will first need to submit an application to your current loan provider to sanction the refinancing of your loan.

You will receive an NOC, a statement for your outstanding loan amount, and the documentation related to your home. Once submission to the new bank is done, all the outstanding will be cleared with your previous loan provider. Your account will be closed and all documentation shifted to the new bank.

As a general rule of thumb, a difference of 0.5% to 1% in interest rates for home loans is a good deal, if you are considering refinancing your loan to another bank. Make it a point to evaluate the savings you will have at the end of the loan tenure.