INDEX

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1.Introduction
The real estate sector is one of the most globally recognised sectors. In India, real estate is the
second largest employer after agriculture and is slated to grow at 30 per cent over the next
decade.
The Indian real estate market has become one of the most preferred destinations in the Asia
Pacific1 as overseas funds accounted for more than 50 per cent of all investment activity in India
in 2014, compared with just 26 per cent in 2013.
The real estate sector comprises four sub sectors - housing, retail, hospitality, and commercial.
The growth of this sector is well complemented by the growth of the corporate environment and
the demand for office space as well as urban and semi-urban accommodations.
The construction industry ranks third among the 14 major sectors in terms of direct, indirect and
induced effects in all sectors of the economy.
It is also expected that this sector will incur more non-resident Indian (NRI) investments in both
the short term and the long term. Bengaluru is expected to be the most favoured property
investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and
Dehradun.
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1.1.1.History:
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Indian Organized Retail Market is accelerating with players like WalMart, Bharti, and Reliance
etc. which stepped up the demand for real estate. According to analysts, a price index must be
incorporated for the housing market to track price movement. And even the government must
ensure that there is no shortage of funds. Recent harbinger, the Securities Exchange Board of
India is permitting Real Estate Industry's mutual funds in both private and public sector which
would go in a long way in attracting funds from small investors emphasizing certain return.
Another impediment that can be eased on the discretion of government is the existing tax laws
and other complex regulations relating to multidimensional real estates such as industrial parks
and SEZs.

The success behind the sudden rise of Indian Real Estate Industry is due to the positive outlook
of Indian government and which is the second largest employer after agriculture in India. Today
this budding sector is witnessing development in all area such as - residential, retail and
commercial in metros of India such as Mumbai, Delhi & NCR, Kolkata and Chennai. Easier
access to bank loans and higher earnings are some of the pivotal reasons behind the sudden jump
in Indian real estate.
Government of India has proposed to achieve 9.0% GDP growth during the Eleventh Plan period
and to achieve growth adequate infrastructure is the most basic requirement. To overcome the
current constraints of insufficient modern infrastructure, the government is developing a program
for infrastructure investment through both public and private sectors, and expects to more than
double public investments from 1.2% of GDP in FY07 to 2.8% by FY12. Indian Real Estate
Industry's favorable demographics, rising purchasing power, availability of cheap finance,
professionalism and reforms initiated by the government are some of the spectacular growth.

1.1.2.Exploring Real Estate Investments:

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Chances are, when you think about investing in real estate the first thing that comes to mind is
your home. For many people, their home is the single largest investment they will ever make.
But have you ever stopped to consider that once you purchase a home it becomes part of your
overall portfolio of investments? In fact, it's one of the most important parts of your portfolio
because it serves a dual role as not only an investment but also a centerpiece to your daily life.
Though a home is one of the largest investments the average investor will purchase, there are
other types of real estate investments worth investing in. The most common type is incomeproducing real estate. Large income-producing real estate properties are commonly purchased by
high net-worth individuals and institutions, such as life insurance companies, real estate
investment trusts (REITs) and pension funds. (To read more about REITs, Basic Valuation Of a
Real Estate Investment Trust (REIT) and The REIT Way.)
Income-producing properties are also purchased by individual investors in the form of smaller
apartment buildings, duplexes or even a single family homes or condominiums that are rented
out to tenants. (To find out more about being a landlord, see Tips For The Prospective
Landlord, Tax Deductions For Rental Property Owners .)
In the context of portfolio investing, real estate is traditionally considered an "alternative"
investment class. That means it is a supplementary investment used to build on a primary
portfolio of stocks, bonds and other securities.
One of the main differences between investing in a piece of real estate as compared to stocks or
bonds is that real estate is an investment in the "bricks and mortar" of a building and the land it is
built upon. This makes real estate highly tangible, because unlike most stocks you can see and
touch your property. This often creates substantial pride of ownership, but tangibility also has its
downside because real estate requires hands-on management. You don't need to mow the lawn of
a bond or unplug the toilet of a stock!
In this tutorial, we will discuss the types and characteristics of real estate, things to think about
when buying and owning property, and the rationale for adding real estate to your portfolio.
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1.1.3.What Is Real Estate?:

The most basic definition real estate is "an interest in land". Broadening that definition
somewhat, the word "interest" can mean either an ownership interest (also known as a fee-simple
interest) or a leasehold interest.
In an ownership interest, the investor is entitled to the full rights of ownership of the land (for
example, to legally use and transfer the title of the land/property), and must also assume the risks
and responsibilities of a landowner (for example, any losses as a result of natural disasters and
the obligation to pay property taxes).
On the other side of the relationship, a leasehold interest only exists when a landowner agrees to
pass some of his rights on to a tenant in exchange for a payment of rent.
If you rent an apartment, you have a leasehold interest in real estate.
If you own a home, you have an ownership interest in that home.
Some jurisdictions recognize other interests beyond these two, such as a life estate, but those
interests are less common in the investment arena.
As a real estate investor, you will most likely be purchasing ownership interests and then earning
a return on that investment by issuing leasehold interests to tenants, who will in turn pay rent.
It is also not uncommon for an investor to acquire a long-term leasehold interest in land, which
then has a building constructed upon it.
At the end of the land lease, the land and building become the property of the original landowner.

1.1.4.Private Versus Public Markets:

When you are planning your real estate investments, one of your first tasks is to decide what kind
of exposure to the real estate market is appropriate for your situation.
Different exposures produce varying levels of risk and return. Your choice will also influence the
means by which you will acquire the real estate.
The first type of market you could participate in is the private market. In the private market, you
would be purchasing a direct interest in one or more real estate properties.
You would own and operate the piece of real estate yourself (or through a property manager),
and you would receive the rent payments and value changes from that investment.

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For example, if you were to purchase an industrial building that was leased to one or more
tenants who pay you rent, you would be participating in the private real estate market.
You could also participate in this market by purchasing properties with any number of partners this is known as a pool or syndicate.
Alternatively, you could choose to invest in the public real estate market. You would be
participating in the public market if you purchased a share or unit in a publicly traded real estate
company, such as a real estate investment trust (REIT).

1.1.5.Equity and Debt Investments:

In addition to choosing your market, you need to choose whether to invest in debt or equity.
When you invest in debt, you are lending funds to an owner or purchaser of real estate.
You receive periodic interest payments from the owner and a security charge against the property
in the form of a mortgage. At the end of the mortgage term, you get back the balance of your
mortgage principal.
This type of real estate investing is quite like that of bonds. (To read more about mortgages,
see Shopping for a Mortgage, Understanding the Mortgage Payment Structure and Paying Off
Your Mortgage.)
An equity investment, on the other hand, represents a residual interest in the property. When you
are an equity investor, you are essentially the owner of the property.
You stand to gain a lot when the property value increases or if you are able to get more rent for
your building.
However, if things should go wrong (for example, all your tenants vacate and you can't make
your mortgage payment) then the mortgagee, who has a priority interest in your property,
may foreclose and you must forfeit your equity position to satisfy their security.
In that sense, the risks of an equity position in real estate is much like that of owning stock.
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1.1.6.The Investment Selection Matrix:

Once you select your market and decide whether debt or equity investing is appropriate, it
becomes apparent what type of security to buy or investment to make.
Take

look

at

the

following

diagram:

If you choose quadrant A, Public Equity, you should purchase real estate securities such as
standard

equity

REITs

or

publicly

traded

real

estate

operating

companies.

If you select quadrant B, Private Equity, you should buy direct, ownership interests in real estate
properties.
If you choose quadrant C, Public Debt, you would purchase a mortgage REIT, a mortgagebacked

securities

(MBS)

or

(Commercial

Mortgage-Backed

Securities

(CMBS).

If quadrant D, Private Debt, is most appropriate, then you would lend money to purchasers of
real estate, thereby investing in mortgages.
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1.1.7.Market capitalization:

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In the year 2004 according to government projections for Indian Real Estate Industry contributed
6.5% to the total GDP growth. Indian Government is pushing harder for higher GDP growth
targets and so the jobs in India are expected to be on the constant rise.
According to industry analysis the estimation of the Real Estate Industry has been growing at 33
% CAGR and could be a $50 billion industry in the next four years.
The improvement has been noticed by all the major sectors of the industry such as commercial,
residential, retail, industrial, hospitality and healthcare.

1.1.8.Size of the industry:

India today is the second fastest-growing economy in the World. The Indian construction
industry is been playing a major role in overall economic development of the country, growing
at over 20% CAGR over the past 5 years and contributing ~8% to GDP. In 2005, the sector
generated around 31 million jobs. The size of the Indian Real Estate Industry is estimated to be
around US$ 12 billion and this figure is growing at a pace of 30% since few years.

1.2.Players of rea leading Companies:

GMR Group: is a business house of 2,500 crore focused on infrastructure development as a key
growth driver for India
The DLF Group: one of the leading company in India's real estate industry
The Salarpuria Group: is an ISO 9001:1000 company with offices based in Bangalore, Kolkata
and Delhi
The D.S. Kulkarni Group: of Companies which enjoys a commanding presence in the housing
sector in Pune and Mumbai.
Rishi Ventures: with 9 years of market stand has impressive track record.
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DHFL (Dewan Housing Finance Corporation Limited): founded in 1984 by Late Shri Rajesh
Kumar Wadhawan with a motto to provide financial access to the lower and middle income
segment of the society.
Janapriya Engineers Syndicate :started in the year 1985.
City Square Enterprises Pvt. Ltd.: established in 1969 which is one of the leading realtors and
pioneers in development of Urban and Suburban locations across the Nation.

1.2.1Employment Opportunities:
Indian Real Estate Industry has opportunities for employment in commercial banks, saving
associations, insurance companies, mortgage bankers, consulting firms, real estate developers,
property management firms, and residential or commercial and industrial brokerage.
Employment opportunities created by the Real Estate Industry makes it the second highest
employment generator in India, only after agriculture. Hundreds of subsidiary industries are
dependent on the real estate operations. Graduates can opt for careers such as Entrepreneurs,
Asset Managers, Project Managers, etc.

1.3.Real Estate Of Product:

In 2010 the Private equity fund IL&FS Investment Managers (IIML) have planned to invest US$
300 million in real estate and urban infrastructure projects.
Recently Godrej Group's real estate company, Godrej Properties and Frontier Home Developers
has planned to develop a residential project in Gurgaon.
It would be a first residential project in the national capital region (NCR) for Godrej Properties.
Shristi Infrastructure Development Corporation would invest US$ 444.7 million over the next
three years in seven small cities in West Bengal, Tripura and Rajasthan.
Ansal Properties & Infrastructure Ltd had planned to invest about US$ 330.8 million over the
next three years.70% of foreign investors in India are making profits as the Real estate
investments in India yield huge dividends.
The relaxed FDI rules implemented by Government of India has invited more foreign investors
and Indian Real Estate Industry seems to be the most lucrative ground at present.

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Such friendly revised investor policies allowed foreigners to own property, and dropped the
minimum size for housing estates built with foreign capital to 25 acres (10 hectares) from 100
acres (40 hectares).
Indian real estate sector is on boom and this is the right time to invest in property in India to
reap the highest rewards.

1.3.1.Latest Developments Product:

The S&P BSE Realty index rose 16% this year till December 10. Much of it was due to rise in
stock markets as a whole as there was no improvement in fundamentals of real estate companies
in this period.
The debt of the 29 listed real estate companies whose results were available till March 31 was Rs
35,979 crore in March-end compared to Rs 34,906 crore in March 2013.
Their operating profit in the first half of the current financial year rose slightly to Rs 3,655 crore
from Rs 3,402 crore in the same period last year.

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Real estate investments also gave poor returns as prices remain subdued in most markets,
especially in the residential space. The table, Counting Gains, shows 0-6% rise in prices in 10
markets (Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Pune, Noida, Gurgaon, Bhiwadi
and Mumbai) in the one year to September-end.
The real returns were negative considering 6-9% consumer price inflation. For those who took
loans, which cost 10-10.5% a year, to buy a house, the returns were worse Counting gains.
However, there are some positive signals as well. Inflation has been falling for the past one-two
months and the Reserve Bank of India has hinted at cutting interest rates if the trend continues.
The economy is showing signs of recovery.
The government, too, has taken steps to support the real estate industry.

1.3.2.SITUATION GRIM:
As far as returns are concerned, 2014 was not the best of years. Sales were poor and dragged
down prices.
"The key issue is low demand. Even though the sentiment is up, enquiries are not converting into
sales. Builders are holding on from launching new projects," says Prashan Agarwal, co-founder,
proptiger.com.
High inventories and low absorption rate (it tells how many months it will take for the inventory
to be cleared given current monthly sales) indicate it will take time for things to pick up.
As per data by Liases Foras, a Mumbai-based research firm, as on September, the number of
months needed to clear the inventory in six major markets is 50.

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These markets are Bengaluru, Chennai, Hyderabad, Mumbai Metropolitan Region or MMR and
Delhi-National Capital Region or Delhi-NCR. The situation is worst in Delhi-NCR, where the

period is 83 months or seven years. The figure is 50 for MMR and Chennai.For pune it is 23
inventory pile up.
Even the festive season failed to push sales. Developers' schemes also do not seem to be
working. These include those where buyers do not have to pay pre-EMI and construction-linked
plans. For instance, Lodha Meridian in Hyderabad offered buyers gold vouchers up to Rs 4.5
lakh. Orris offered a
Rs 500 per sq foot discount in its projects in New Gurgaon while Bestech offered a Rs 400 per
sq foot discount in its Spa Next project on Golf Course Extension Road in Gurgaon. Four out of
the six cities mentioned above saw sales fall year-on-year (y-o-y) in the July-September quarter,
as per Liases Foras. Chennai saw the highest drop of 50%. The next was NCR, where sales fell
45%. The exception was MMR, where sales rose 30%, and Pune (65% rise).

1.3.3.POSITIVE DEVELOPMENTS:
Owners of commercial properties were slightly better off in 2014 as fall in capital values
increased rental yields. Experts say commercial properties are an attractive investment at this
moment. Read Business Sense to know what is in store for the commercial sector in 2015.
There were some positive developments in 2014 that would most likely bode well for the sector
in the coming year. One, the election of a stable government boosted investor sentiment. Also,

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the government announced steps to bring relief to the sector. Here is what the sector can look
forward to in 2015.
REITs become real the government has notified the regulations for real estate investments trusts
or REITs. These trusts will not only provide liquidity to developers but also enable easier exits.
REITs work like mutual funds and invest in property. The income earned from these investments
is distributed among unit holders.
The minimum investment for buying a unit of REIT will be Rs 2 lakh. They will not only ensure
regular income to unit holders but also protect their rights with stringent regulations.
REITs can make funding of real estate projects transparent. Some of the stringent measures
proposed in the earlier version of REIT guidelines have been relaxed to make these instruments
competitive globally.

1.3.4.Real Estate Regulation Bill:

A house is usually a person's biggest investment. But buying it can be a nightmare as
absence of regulations means the buyer is at the mercy of the developer. In case the developer
does anything wrong, it is next to impossible for the buyer to seek redress.
This has become worse as absence of a regulator and low entry barriers have led to a sharp
increase in the number of developers.
The sector continues its metamorphosis from unorganised to organised like its peers in developed
economies," says RK Arora, chairman, Supertech Ltd.
The real estate regulation Bill seeks to change this by having provisions for strict punishments
and penalties, which can go up to 5% cost of the project. It also has a provision for putting
wrongdoers behind bars if they fail to abide by certain laws.

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The Bill also addresses issues such disclosure of the flat's exact area rather than the super area
(built-up area plus common areas such as lobby, lifts shaft, stairs, etc).

It also has provisions to ensure that the money raised for a project is not used for any other
project. Also, the developer will be able to launch a project only after taking all clearances.
Once appointed, the regulator will help the industry in two ways - it will instil confidence in
buyers worried about malpractices as well as remove complexity in the approval process," says
Agarwal of proptiger.com.
NCR market is the worst-hit Single window clearances.
The list of clearances required varies from state to state but the average number is 40. These
delays cost developers as they pay 20-30%interest on loans taken to buy land.
Even if a developer buys land from his own money, he can't start the project or market it properly
without clearances. These delays add to the project cost.
This is ultimately passed on to buyers. "Faster approvals will beef up supply, bring down
prices,"india.
The improving economic conditions and measures introduced by the government give hope of
recovery, say experts. But price cuts will be difficult as margins are already low, says Aggarwal
of Microtek Infrastructures.
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"The increase in input costs such as land, labour, cement, etc, means prices will definitely rise in
the coming years and there is no possibility of a price correction in the years to come," says
Arora of Supertech Ltd.
However, others believe that the price trend will depend upon the dynamics of individual cities.
"Each city has own market drivers and not all locations perform uniformly. Basically, if a given
city is seeing a lot of employment generation and, hence, demand for homes or offices, prices
will rise. Some of the cities where this is being witnessed are Bengaluru, Pune, Hyderabad and
Chennai," says Puri of JLL india. Prices will also depend on inventory levels and sales.

Top investment destinations

Developers were advertising in real estate magazines and in supplements in leading dailies for
marketing their products, thus far. One usually saw advertisements of projects in newspapers,
hoardings, theme events, real estate fairs or received the invasive and unwelcome SMSs on realty
projects.
Recently, sops started being dished out on special occasions like Diwali, which read like assured
gifts of white goods on the first 100 bookings a flat Rs 50,000 off on the first 50 bookings and
assured return for eight months, free 42-inch plasma TV for the first 50 bookings, etc.
Some of the recent noteworthy marketing efforts include the clean-up drive, Lets Make
Amritsar Sparkling.

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Property prices in Delhi-NCR are on fire and the highest appreciation in the past two years has
been

in

the

upcoming

areas,

triggered

by

infrastructure

development.

Gurgaon has seen the maximum price appreciation since September 2010, with Palam Vihar
witnessing the highest rise of 85% per square foot.
Palam Vihar, where the rates have increased from Rs. 3,960 to Rs. 7,350 per square foot in the
past two years, is expected to be connected by both Delhi Metro and Gurgaon Rapid Metro
(feeder network). Areas around Nirvana Country, Vatika City, Sohna Road and Sushant Lok have
seen

price

appreciation

of

52-68%

during

the

same

period.

The Delhi-NCR property market is upbeat and is expected to appreciate in capital value on
account of low supply and huge latent demand, said Vineet Singh, business head, 99acres.com.
Gurgaon is primarily a market with a high level of investor interest, while Noida is an end-user
market.
In Delhi, though more preferred destinations such as Vasant Kunj, IP Extension and Mayur Vihar
Phase I have seen a rise of 33-42%, the spike in Dwarka, Rohini and Vikaspuri is between 50%
and 56%.
Greater Kailash, however, shows a lower rise of 50% despite being one of the most expensive
places. Greenfield in Faridabad and Indirapuram in Ghaziabad have seen a price rise of 74% and
55%, respectively.
Source-TOI
Source-SH

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In a competitive real estate market, where developers increasingly feel the need to attract the
well-travelled global Mumbaikar, residences in the city are becoming unique and innovative.
As mindsets change, home-buyers are no longer impressed simply by facilities such as clubhouses, swimming pools or health clubs; their lifestyle aspirations now go far beyond.
Buyers often want homes with an international look and feel; residences that help them unwind
at the end of long stressful days, and which have that extra edge in the project that provides a
little lift to the status, developer say.
According to Ashok Kumar, Principal & M.D, Cresa Partners: Swanky lifestyle options like
recreational facilities, huge parking space, extensive landscaping and trendy architectural designs
are quintessential in modern homes.
With luxury becoming a necessity and people keen to live life king-size, everyone now likes to
dwell in aesthetically designed surroundings. So, innovation and unique offerings are becoming
the order of the day.
The trend, however, is not limited to super-luxury projects alone. Global exposure and
awareness even among the middle-income group, has forced the developers to come up with new
concepts. Themes based on education, nature, health and luxury, among others, are prominent.

Source-TOI

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Property in Airoli-Ghansoli-Koparkhairane stretch in Navi Mumbai, is an attractive prospect for

those who are looking for to settle into a serene place, away from the hustle bustle of
Mumbai and also want luxury living at an affordable price.
A gradual but robust infrastructure development and realty growth over the last few years has
been observed on this eight Km. long stretch.
Today, it promises affordable residential property, with an expected annual appreciation of 15-20
per cent, say experts.
Out of the 14 nodes, that CIDCO carved as small townships in Navi Mumbai, with a view
towards facilitating comprehensive development, Airoli, Ghansoli and Koparkhairane, are the
one.
The major reason for residential property boom on this stretch, is the affordable property rates in
comparison to Mumbai. Today, the Mumbai real estate market is sluggish and buyers interest
has shifted to Navi Mumbai, owing to the comparatively lower prices.
This stretch offers 1, 2 and 3-BHKs in the range of Rs 6,000-12,000 per sq ft, whereas in
Mumbai, buying a property at this cost is not viable.

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Mumbai: The state Cabinet on Wednesday allowed the Brihanmumbai Municipal Corporation to
continue levying property tax based on the rateable value-based assessment for a year. The civic
body had sought more time to implement the capital value-based property tax system, which was
scheduled for adoption since April 1, 2010.
As a result, the BMC will continue to dispatch bills for the coming financial year based on
rateable values the notional rent that a property could earn fixed in 2009-10. The civic
body has sought more time to finalise its business rules for implementation of the new system,
widely acknowledged to be a more rational system and expected to bring in several hundred
additional crores into the BMCs coffers.
While the BMCs proposal to continue implementing the existing system of tax assessment is
ostensibly in order to finalise rates of tax and to gather accurate data of properties, there has been
stiff political opposition to the new system from all parties with South Mumbai properties
whose rents have been frozen since 1940 and therefore pay a pittance as property tax despite
occupying highly valuable properties set to rise sharply. Alongside the proposal to continue
with the rateable value-based system for another year, the BMC is also simultaneously finetuning
the business rules for the capital value-based system in a way as to ensure that nearly 80 per cent
of all properties do not see a rise in their bills.

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