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Know About The Future Of Real Estate Industry

A Business man holding the real estate bulding kit.

A Business man holding the real estate bulding kit.

Real estate is a popular sector that influences the Indian economy. The real estate industry indeed faces specific challenges and problems. But there is a stable demand for real estate related business. There is a good future in store for the real estate industry due to the policies passed by the Indian government. Here you would know about the future trends of the real estate industry.

Future Real Estate Trends

The following are some of the future trends that you can witness in the real estate industry.

Demand For Affordable Housing Units: In the future, there would be a high demand for affordable housing units. The government has allocated funds for affordable housing. This would be a driving factor for the growth of the real estate industry shortly. Affordable housing seems to be a feasible option for people who wish to own a house.

Increased Trust On Real Estate Industry: Real estate experts predict that the real estate industry would build trust and confidence in the hearts of the buyers in the coming years. This is due to the recent legal amendments passed by the government. Thus small and prominent real estate agents and promoters must possess a license under the Real Estate Regulatory Authority. Therefore small and fly-by-night real estate promoter try work along with big and recognized developers. This has created a sense of confidence, and homebuyers can invest their hard-earned money without any fear.

Low-Interest Housing Loan: The Reserve Bank Of India has slashed the interest rates for housing loan by 1 %. Also, EMI costs have increased considerably. This is of great advantage for middle-class people who dream of investing in a property. Thus with lower interest rates for the real estate industry, there would be growth in the real estate industry.

Maximum Utilization Of Less Space: It is evident that the prices of the real estate property in the urban areas continue to increase. This is the main reason for the popularity of apartment in big cities. Housing developers work along with architects and interior designers to come up with innovative and trendy housing projects. These housing projects would offer maximum utilization of the available space.

Challenges Of Real Estate Industry

The real estate industry faces some common problems like the unavailability of funds and project delay due to approval formalities. There is constant change in the requirements and expectation of home buyers, and this influences the growth of the real estate industry.

The above offers a clear picture of the future of the real estate industry.

Buying A Home In The Current Real Estate Market: A How-To

Image That Representing the gradual growth of real estate property's rate.

Image That Representing the gradual growth of real estate property's rate.

The Slow, Steady Rise In Home Prices

  • From 2017 to 2018, the US home price market saw a massive jump of 10%. In 2019, the story is much different. Yes, the price is still increasing but at a plodding pace. Add to it the total number of houses up for sale this year is forecasted to increase by only one percent. The reason for this slow rate is twofold:
  • The interest rates on a mortgage have increased.
  • The overall economy of the country is uncertain.
  • The two factors are combining to make buyers more cautious about purchasing a house. Those who are still looking are in search for new construction.

How Do You Buy A House In High Price Market?

  • For those who are still adamant on buying a house in the current market, there are some necessary steps.
  • Find out your budget, an amount you can afford. Apply a mortgage calculator to determine out how much monthly payment you’ll be able to handle comfortably.

A Graphical Representation of Real Estate Growth.

  • Stick to the budget. Do not end up buying a home because a competitor may bid on it. If you purchase a house that is not in your financial limit, you create chaos in all your finances. Don’t be pressurised by outside forces.
  • The best way to find out if you can afford a house is to see if you can secure a down payment of at least 10% on a loan for fifteen years. If it is not possible, then your monthly mortgage will be through the roof.

A Few Options To Consider While Buying A Home

If your heart is set on buying a home this year and you have a budget in mind, yet can’t find the perfect property, then consider these options:

  • Get rid of nice-to-have options. Commit to must-haves and look for properties that include it. For instance, a cheap home in a good neighbourhood makes sense as you can always improve upon it in the coming years. Make sacrifices.
  • Expand your search area to a less popular neighbourhood if the one you want is not within budget. It is smarter to shop in more locales than to stick to one.
  • Save for a year more and then look for a home. Patience and some time can do wonders for your budget!

What Should A First Time Home Buyer Consider?

Image showing a family starring their property's front view.

Image showing a family starring their property's front view.

The Quagmire Of Purchasing A Home For The First Time

The current home market is not forgiving, especially to those who are searching for their first abodes. The slowing economy, the higher mortgage rates, and the lower newer construction have all mingled to create a uniquely tight Gordian knot. In such circumstances, what is a first-time homebuyer got to do?

This article explores some of the steps virgin house buyers can take to ease the process.

Look For Long Term Mortgages For Properties

The first obstacle to purchasing a house is affordability. Few can do it. Thankfully 30-year long fixed-rate mortgages appear as saviours. With as less as 4.42% rate, the monthly payment is shaved down to a number that can be easily achieved by many potential buyers. Therefore, look for such mortgages.

The second step is to look for listings that are slightly above your budget and then haggle of concessions. Currently, the market has shown that 75% of home is being sold for an amount much lower than their list price. This is happening because both buyers and sellers are negotiating more. Simple concessions like repair cost or closing fee when borne by the seller can considerably alter the price for the buyer.

A Hand-holding real estate kit in a construction planning background.

Be Financially Prepared Before Jumping In The Real Estate Market

With 2019 more than halfway through, the market has some good and some bad news for buyers. The level of inventory in the housing market has increased slightly in some areas of the country. But entry-level inventory is dwindling, which means for first time home buyers, it is a prominent setback. Since March, the number of properties gone up for sale with a price of USD 200,000 or below has reduced by 9%.

The lack of supply of affordable homes has given rise to bidding wars. While part and parcel of real estate, for first-time purchasers these battles are often demoralizing. To get over this hurdle try to save as much as possible.

When you are financially prepared, you can take part in the bidding wars and come out as the winner. For people searching for homes in locales with expensive tags and low inventory, this is even more crucial.

Therefore, keep your eyes open, purses tight and bargain as much as you can to get the best deal. With patience, you will soon be the proud owner of a home!

Impact of GST on Real Estate Sector

Image which represents The Impact of Real Estate Industry and GST.

Know How GST Has Made Changes In The Real Estate Sector 

GST is the Goods, and Service Tax levied for most of the businesses of India. It is a kind of service tax. 

The GST rates have been changed recently, and it is up to the real estate developer to choose the old GST rate or new GST rate. The early GST rate had the benefit of the input tax credit, which does not apply to the old GST rate. Anyhow the real estate buyers would not face difficulties with the current GST rates. In this article, we would talk about GST and its effect on the real estate business. 

GST And Real Estate

Image of A Hand Holding The Real Estate Buildings Which Describes The Concept of GST on Real Estate Sector. 

In the past, the GST with the input tax credit benefit was 12 percent for real estate properties. It was 8% for affordable housing. After the revision in the GST tax rates by the Central Government, the GST rates were reduced to about 5% for real estate and 1% for affordable housing. , and this made the real estate developers unhappy. Thus Government offered a choice for the real estate developers to choose either the old GST rate or new GST rate. Read More about the GST on Real estate.

The recent changes made in GST rates would be beneficial to people for whom the input stock is accumulated. The construction projects that have been started before April 1st, 2019 can choose any of the tax rates. But the construction projects that commenced after April 1st, 2019 must follow only the new GST rate. Real estate experts had expected this recent change on the GST rates announced by the central government. The recent change in the GST rates does not affect the prices of homes. The real estate developers cannot increase real estate rates. 

New GST Rates

Recently the GST council met and came up with a transition plan for implementing the new GST rates. This new GST rates announced would be applicable from April 1st, 2019.  Thus it is up to the real estate developer or homeowners constructing building before April 1st, 2019 to choose either the old GST rate or the new GST rate. According to the new standards mentioned, GST would be levied for 5% for real estate properties and 1% for affordable housing properties. A residential house or plot comprising of 90 sqm is called as an affordable housing property. The GST council has also decided that the procurement of materials for construction purposes must be from only registered dealers. The commercial spaces are considered as residential for 15% for calculating the GST. It is, of course, difficult for tier 2 and other smaller cities to meet the 80% procurement criteria from registered dealers. 

It would take some time to know if the new GST rates can create a significant impact on the real estate sector, which is currently facing various challenges. The GST council has decided to make use of the input tax credit on a proportionate basis. There would be a clear segregating of projects that are under construction and new projects so that builders would benefit from the input tax credit. 

Image That Represents the Estimation of GST on buyers payout by 6 per cent - 7 per cent on the overall purchase.

GST Impact

GST would create a significant impact on the real estate sector. Thus it would influence the buyers, real estate developers, and stakeholders. GST would be levied only for houses or building that are under construction. Thus completed real estate projects are not bound to GST reforms. Therefore there would be a decrease in the price of ready to sell properties. This would be beneficial to buyers. Buyers must follow wait and watch approach so that they can understand the effects of GST with property prices. With the new GST regime, the construction cost has been reduced due to the input tax credit. Thus real estate developers, construction engineers, contractors benefit from the GST reforms. The GST rates also have a positive impact on other stakeholders like labor, material suppliers, etc. The effect on stakeholder is based on tax levied on the goods and services used for construction. 

The above inputs offer a clear insight into the GST reforms in the real estate industry.

Benefits Of Hiring A Project Management Consultant For Real Estate & Construction Projects

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Proper execution of a real estate or construction projects is not an easy task. It can only be done by a professional and experienced person. The whole responsibility of a project lies on the shoulders of a Project Management consultant. Project management itself is an art that involves setting all the components needed for the project to work smoothly and that too in sync as explained by https://www.simplilearn.com/project-management-in-real-estate-industry-article.The project manager has to ensure that the work gets completed within the stipulated time and as per the budget restraints of the customer. Here are some of the benefits of hiring a project management consultant for real estate and construction projects:

Selection Process Made Easy!
Even before beginning of the project, the first step is the site selection. Selection of the site is not as easy as it might sound. A suitable site is one of the most crucial factors in real estate or construction work. A project management consultant is well experienced and will know all the minute details to be checked while selecting a site. S/he can also handle the entitlements and zonings related to it. They select the teammates of the project and ensure that only skilled and expert personnel are selected in the team. In short, a project management consultant takes care of all the difficult yet crucial selection processes that are related to the project.

Creates Schedules And Sets The Budget
Setting up a budget and fixed schedules is a task that can be done only by an experienced person. A project management consultant will have the expertise and experience to decide on the schedules and budget limit within which the work should be completed. They help in ensuring that all the needs of the customer are met without burning a hole in the their pocket. Thus, they play a pivotal role in laying the foundation for a successful project.

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Owner’s Representative!
Once the project starts, the project management consultant becomes the owner’s representative. They are always present on the site to ensure that the work takes place smoothly according to the specifications conveyed by the owner. They ensure that the project doesn’t lag behind and each stage of work is completed within the stipulated time.

Proper Execution!
After heading the planning processes and ensuring that the work begins at the right time at the right place, the project management consultant now begins the execution of the tasks. They ensure that all the tasks related to the construction process are properly executed without any errors. They take care of processing of payments and scheduling of contractors. They also manage change orders.

Knowledge And Relevant Experience
The real estate and construction projects need the services of a project management consultant who has the relevant knowledge and experience in the field. They promote teamwork and ensure that the targets are met with a combined effort by all the team workers. They are certified experts with excellent communication and interpersonal skills to manage a whole team of workers involved in the construction process. They are the decision makers who can make tough decisions easily with their professional knowledge and experience.

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