Educational Courses in Real Estate Management

Management institutes should start diploma and degree courses in real estate property management open to all irrespective of age limit. Should help people who want to start a career in real estate brokerage and consultancy by imparting genuine real estate knowledge and expertise to investors, employees of real estate project promoters, real estate dealers, financial advisors, bank officials, tax planners and others interested in real estate investment.

Deal with conversion of land, obtaining RTCs and khatas, registration, selection of apartments and sites, property valuation, vaastu, feng sui, capital gains tax, legal procedures and documentation, property insurance, housing loan, service and sales tax pertaining to real estate operations and effective use of Right to Information Act with special reference to real estate.

Anyone residing in India and Non-Resident Indians (NRIs) could join this course with state specific subjects as property laws differ from one State to another in India. Realty diploma should become criteria for consumers while choosing a real estate consultant who have knowledge related to the field. While purchasing properties it is important for buyer to know whether the builders have adhered to the National Building Code, whether the flat is in an earthquake-prone zone and whether the builder has taken proper care in construction, litigation of land, inheritance laws and many other factors.

A professional realtor with education will be in a good position to help the end-buyer. We will be publishing list of some reputed institutes and organizations offering courses in India as well as publishing real estate companies, employers and jobs. Stay tuned.

The price of exclusive real estate in Europe is declining

Does the economic crisis touch only upon those who live in poorer conditions? Or is it on the contrary – it is the most painful for the riches? Recently, the prices of exclusive real estate has been growing, it seemed, without a stop. Until this summer – you could see going trough World-Estate.com database. For some time the prices of expensive flats were several times higher than their real value. However, the international crisis is making corrections in these numbers.

It was London which felt the disadvantages of the crisis first. The prices of real estate in the central districts of the capital of Great Britain have been growing constantly for several years and reached the top in March, 2008. However it took only half a year and the prices of exclusive houses and flats in London have been cut in 13 percent.

Paris came next after London. September and October were worthless in real estate market – sales were dropping catastrophically. The forecasts of “downing lightly” were not proved at all in the capital of France. The crisis has mostly touched flats the worth of which was from 1M to 3 M euros – compared to 2007, sales in 2008 dropped in 24 percent. In one of the most beautiful cities of the world one could buy exclusive and very exclusive apartment in an old-style Parisian house for such a price.

It was locals who bought such flats in Paris. They spent 8500 euros per square meter in 2007, and 10000 euros – later. During the crisis prices has dropped to the previous level. Experts declare two reasons for the drop in real estate value: on one hand, buyers are not sure about their own future, on the other hand, the smarter are waiting for a bigger drop in prices.

Some sellers who have no more patience made 3000 euros per square meter discount in selling the exclusive flats. However, News.World-Estate.com observe not all sellers felt headaches because of the crisis. For instance, a few weeks ago a flat on the banks of the river Seine was sold for 51000 euros per square meter.

Most often exclusive flats are bought by Italian, Englishman, Belgians and Swiss people. A part of income is created by Americans. Russians and people from the former Soviet Union have made a hard hit on their investments to real estate. By the way, it is foreign clients who are forming real estate market by their wishes. Foreigners who pay cosmic money for an exclusive flat require servants, drivers, house keepers and other people on duty.

In a sector of even more exclusive real estate where a flat costs more than 5 M euros, no changes have been fixed as the number of buyers has always been low here. For example, a Russian has bought a flat for 66 M euros recently. Crisis has touched upon the market of exclusive villas on the banks of the Mediterranean Sea too. Average prices in Monaco, Saint-Tropez or the Blue Coast were up to 15 M euros, though the number of buyers has evidently decreased. Also, it is feared that British and Irish clients who has bought exclusive villas on credit will be required to sell them by their banks.

ROI and Real Estate Value Addition

When you are building commercial property, you need to ensure that the returns from the investment are as high as possible. It is in this direction that the builder tries to add features that will add greater value and hence enhance the chances of making more from the deal or new construction. A commercial property consists of both immovable assets like the building itself and movable assets in the from of various fixtures and fitting that have a vital role to play as far as value addition goes. Even a small bit of renovation or and spending more finances will raise the value of the property and it's marketability.

Top of your construction: A prospective buyer or tenant would like to have a well made ceiling and that should be as presentable as possible so that once a person sitting inside looks up at it, he gets a feeling of happiness both visually and satisfaction. There are a number of options in the aspect of sprucing up the building and perhaps one of the best and more attractive that are present in buildings of the developed world is to have new ceiling by suspension. Another option is a coffered ceiling look with units hanging from the ceiling wit lighting fixtures provided for maximum benefit at low energy cost.

Other important aspects are taps, sinks, and other devices that are connected with plumbing work, ensure that the quality of such fixtures are good and do not create a sense of irritation down the line. And by doing such things that please the eye and ad to the overall aesthetic value of the building, you can be sure that any evaluator will give more point on account of these changes. Side by side is the connection it would be pertinent to mention that the better the quality of paint, the more elegant the building looks. The quality of paint should used and any property and also ensure that no one will turn the back on this aspect. Paint should be applied with discretion and use only appealing colors.

Furniture appeals and gives more comfort. It may directly affect the property value, but can surely help provide customer comfort and increase the flow of cash. You should be aware of the fact that value of a commercial property depends on the income it generates, which is used for mortgage calculation, rent, taxes and extending the property as collateral for loans.

Rising Property Costs - Souring Housing Dreams!

Property costs has risen in cities such as Mumbai, Bangalore and New Delhi over the past two years and even the richest NRI find themselves struggling to invest.

In some areas of Mumbai, property prices are equalling London/New York levels, although middle class salaries are rising fast with wage costs at top private companies, incomes remain a tiny fraction of those in the UK or US.

Sounds like the market is overhyped and overvalued. Realtors say it may be less than a year before the air gets sucked out of some of India's localised property bubbles. But such predictions have been common for months and the market shows no sign of cooling.

There is a lack of reliable data, but over the last two months, there've been lot more speculators coming into the market than first-time buyers and that's not encouraging. Prices are sky-rocketing in neighbourhoods in Gurgaon, national capital territory of Delhi.

In South Mumbai, spoilt sellers can pick from lines of willing buyers. Prices are sky-high for decent buildings and available properties, even for those with few millions to spend, can be counted on two hands. The sharp rise in prices has been driven by the easy availability of cheap capital.

But there are India centric factors at work too. Banks have been cavalier, with loans for housing rising by more than 50% year on year and credit to commercial real estate more than doubling. RBI in a belated move aimed at mitigating the risk of a housing-related banking crisis, increased the amount its own capital banks must set aside against property loans. It lifted the CRR by 50 points to 5.5 per cent. With consumer price inflation hovering about 7%, economists expect further interest rate rises early this year. This would affect the finances of thousands of middle-class Indians who have stretched themselves to buy homes.

With the economy driven by consumption, a drop in housing would hurt. The potential impact growth rates may be magnified if it is accompanied by a slump in the stock market.

As per economists: There is a wealth effect from rising equity prices, but not as a dominant determinant of Indian growth rates. The corrective process in the property market is for prices to plateau rather than crash.

Banks & The Indian Property Market

Indian banks are opening their doors to real estate developers but remain wary about the risks of a rapidly growing but new property market, making loans expensive and difficult to come by. Rules on inward investment in the construction industry got eased last year, unleashing a wave of activity and a flurry of deals involving foreign funds.

The realty industry is shedding a shady image of self-financed wheeler dealer property developers. Young businessmen are eager for bank borrowing to help lure foreign partners and turn plots of family land into offices, shopping centers and housing befitting an economy growing at more than eight per cent a year. But industry professionals complain banks have been slow to adapt.

Prospective foreign investors, such as US shopping mall developer Taubman Centers, are also keen to borrow locally but balk at the personal and corporate guarantees on loans often required by Indian banks.

"The immaturity of India's debt markets is one of the most constraining conditions of investing there," said Taubman's Asia president, Morgan Parker. "It's not only the requisite guarantees but the cost of debt and low leverage that make Indian sourced real estate debt generally unattractive."

On the equity side, India's regulators are allowing real estate mutual funds (REMFs) to set up to channel much needed capital into the property industry.

But traditionally, the central bank has tried to steer banks away from lending too heavily to the property sector, wary that banking systems in other developing countries, such as Thailand, have nearly disintegrated because of property market crashes.

Property project funding by Indian banks adds up to $1.8 billion, about 1.5 per cent of outstanding bank loans, according to the Reserve Bank of India. In comparison, Chinese bank exposure to developers in a private property market barely a decade old is worth $114.7 billion, 4.7 per cent of total loans.

Murky land titles
Banks are wary of murky land titles and lack of centralised title registry in India, and land disputes are hotting up as property prices soar. Projects can also get tied up in red tape, and few developers have proven track records.

Yes Bank, says it is leading the way in property project lending, together with ICICI Bank and UTI Bank.

Some 12 per cent of Yes Bank's loans have been to relty developers, and around a third of those are non-recourse loans, which are priced just on projected cash flows with the property as collateral and do not require personal guarantees.

The bank, with outstanding loans of $750 million after two years, aims to double its business each year. Many of its property loan deals are syndicated to other banks. "We're the active players, the rest are frankly followers," as per Yes Bank's president for corporate finance.

Charges and interbank rates: Loans with personal guarantees are charged at a 10.0% to 10.5% rate, compared with an interbank rate of 6.1%. Chinese banks lend to small developers at around 6.0%, but offer much lower rates to listed developers. Loan to value for a project in India is typically 65%, similar to emerging property markets such as China, but much lower than developed markets such as Japan or Hong Kong.

Maytas Infrastructure & Satyam Connection

Shares of Maytas Infrastructure, a company promoted by Satyam family are falling after Andhra Pradesh Chief Minister said the state government is reviewing the ability of the company to carry out the work awarded to it. Earlier, CM had reported to have said Maytas and its joint venture partners together have been awarded Rs 13,000-crore worth of works out of Rs 38,000 crore Pranahita-Chevella lift irrigation project. Maytas consortium was also awarded Rs 12,000-crore Hyderabad Metro Project and Rs 1,200-crore Machilipatnam Sea Port project by the state government.

The Hyderabad Metro project is expected to announce its financial closure by March 2009, while Sea Port project will take about six months for the same. Earlier, bid of Maytas Infra for Metro Rail seems to had a self-serving side. Maytas has not only foregone the Rs 4000 crore grant from the government but has also assured that it will pay the government Rs 30,000 crore in 30 years.

The bid caught the attention of the Planning Commission, which recommended to the Center that it should not entertain requests for funding Metro Rail projects elsewhere. Now, the group is believed to be looking at expanding the project on two routes not just to make its bid viable but also to get more value for its properties by providing connectivity. Satyam, the parent company of Maytas, owns thousands of acres on the city outskirts which the latter is developing into real estate ventures.

As per sources, the company planned to take the Metro Rail beyond Shilparamam to Sankarpalle on the Line 3 and to Patancheru beyond Miyapur on Line 1. In both the places, Maytas has taken up or has proposed to build mega residential and commercial ventures, including Hill County, spread over hundreds of acres. Sources said the government had agreed to give the company the opportunity to expand routes and therefore additional land.

A clause in the agreement of Kakinada port clearly gives the first right of refusal to the existing developer over future expansion. Similar leverage could be given to Maytas for the Metro. The Hyderabad Metro Rail Corporation is reported to have said there was lot of pressure on the government to extend the Metro Rail route to Patancheru and Alwal. Referring to the argument that metros in the west are making losses, HMRC said the high density of population would ensure revenues. Nine lakh commuters already travel every day on the LB Nagar-Kukatpally stretch. The Maytas proposal would click if 26 lakh passengers travel by 2026.

Real Estate Deals worth more than 23,000 crore rupees in this year.

Despite slowdown in the real estate market, land deals are thriving. According to a ET report, the total value of such deals, in the first few months of this year, have touched around Rs. 23,000 Crore.. As per a study by JP Morgan, BPTP Developers' (Delhi) Rs. 5,000 Crore land deal in Noida was largest, while land auctions in Bandra Kurla Complex had fetched around Rs. 4,000 Crore.

Deals in the pipeline are Indian Railways 50 acres worth Rs. 10,000 crore, Rs 115-crore deal between the Balaji group and Prestige group, etc.

This report comes at a time when it is expected that a tightening in global liquidity and a slowdown in the economy, could put the brakes on the real estate markets witnessing a sharp rising growth in the past few years.