RBI reduces policy rate. Will your loan rates also go down?

MUMBAI, Aug. 3 — As expected on August 2, in the third bi-monthly monetary policy statement, the Reserve Bank of India cut the policy rate by 25 basis points (bps) from 6.25% to 6%. One basis point is one-hundredth of a percentage point. A look at what the policy announcement means for your money and what you should do.


The RBI seems to be unhappy with the current benchmark lending rate-marginal cost of funds-based lending rate (MCLR). During the policy announcement, RBI deputy governor Viral Acharya said, “The experience with the MCLR system introduced in April 2016 for improving monetary transmission has not been entirely satisfactory even though it has been an advance over the earlier base rate system.”

The central bank is all set to review this.

This is not the first time that the RBI is considering a review. All floating rate loans taken after April 2016 are linked to MCLR. Prior to MCLR, floating rate loans were linked to the base rate and before that to benchmark prime lending rate. There is a possibility that borrowers will soon see a new benchmark lending rate that will replace MCLR. However, this won’t happen immediately.

But what does a 25 bps cut mean for your existing floating rate loans on MCLR? “From a broader perspective, this 25 bps cut has already been priced in. Because if you look at the way banks have moved their deposit and lending rates, banks in a way have priced in this drop. There may be a marginal movement but I won’t expect any major movement,” said Shanti Ekambaram, president-consumer banking, Kotak Mahindra Bank Ltd. Analysts say that banks are likely to cut lending rates linked to MCLR further. If you are looking to take a home loan, compare rates in the market and also factor in other charges linked to the loans.

Meanwhile, banks have been cutting deposit rates. Recently, SBI cut savings account deposit rate to 3.50% per annum. Banks including ICICI Bank Ltd and Lakshmi Vilas Bank have cut fixed deposit rates.

“Banks have been dropping deposit rates, if you see in the last few months. Liquidity and demand supply will be the major factors that will come into play,” said Ekambaram. You can expect further cuts in fixed deposit rates.


Mutual funds as well as debt funds have been factoring in this rate cut too. People investing now would do well to focus on shortterm funds, according to Lakshmi Iyer, chief investment officer – debt, and head of products, Kotak Mahindra Asset Management Co. Ltd. But don’t expect high returns from liquid funds. “Expecting high returns from duration funds from here on may not be a good idea. Steady returns from income-accrual funds is the way to go,” said Vidya Bala, head of mutual fund research, Fundsindia.com.

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Source : MSN dated 3rd August 2017

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RERA will raise confidence in sector, investments will flow

RERA will raise confidence in sector, investments will flow
RERA is the single biggest reform that will infuse the much needed trust in the real estate sector and bolster the longer term potential on real estate investments.
With the Real Estate (Regulation and Development) Act coming into force across the country from May 1, delays in project deliveries will come down sharply as developers rush to complete previously launched projects.In addition, with the act setting in motion the creation of a Real Estate Regulatory Authority (RERA) in each state by July 31, homebuyers and investors will now have greater confidence in making investments in property, which will improve the overall housing demand in the Delhi NCR markets, especially in the Noida and Gurgaon regions.

Though the act has come into effect from May 1, most states have not been able to implement it immediately and are even now notifying the rules and identifying an authority to act as a regulator in the interim. Realty projects that have not received completion certificates must apply for registration under RERA by July 31.

The act will bring nearly 83,000 registered builders in India under its purview and ensure that the interests of homebuyers are protected.

Developers and promoters say that better regulation and accountability will spur investments from foreign and domestic financial institutions. RERA’s focus on mandating disclosure of projects, including details of the promoter, project, land status, clearances, approvals, etc, and the timely delivery of projects will help increase the credibility of developers as well.

Both homebuyers and developers will be penalized for delays in payment and completion of projects respectively. Further, the act mandates the developers to deposit 70% of the project cost in a separate bank account to cover project development activity alone.

This measure will be substantial in ensuring timely completion of projects and act as a safeguard in the event of any delay, as it would limit diversion of funds for other projects by developers.

Jaxay Shah, president of Credai National, says: “The present RERA requirements fulfil all the niggling issues that had bogged down the sector earlier.Though the compliance burden is heavy, the act has provided the right impetus on ensuring that all due diligence, which all consumers may require, are fulfilled. This will go a long way in restoring consumer faith in the real estate sector.“ Manoj Gaur, vice-president of Credai, National, and MD of Gaursons Group, says: ith the implementation of “W this act, now all approvals will have to be in place and the agreement signed with buyers includes the interest and the penalty clauses laid down in RERA. Also, the statute now demands that the builder should mention carpet area also specify common areas and the parking areas separately. At the CREDAI level too, the apex body of developers is holding training sessions for developers to educate them on the changes expected in the new business environment.

Prashant Solomon, MD, Chintels Group, said, “With RERA the interest of buyers is going to be protected and expected to reinstate the faith of end users in the market as the fence sitters may begin to consider their options to buy while developers will focus towards being more transparent.“

R K Arora, CMD of Supertech, said: “The provisions under which RERA will function have been framed in a manner to regulate non serious players and create a level playing field for everyone. With the implementation of the act the interest of the end buyers will be safeguarded and it is expected that the fence sitters may begin to consider their options to buy while developers will persuade to exhibit their full cooperation.“

Rakesh Yadav, chairman of Antriksh India, says: “This act is aimed at protecting the interests of consumers, and also seeks to promote fair play in real estate transactions and ensuring timely execution of projects. With this act in place, every state will now have a regulator who will be continuously supervising and monitoring.Moreover, the projects will now be completed on time and developers will have to submit all the layouts, plans and documents with the regulator who will ensure transparency and hence, customers will feel more secure while transacting.“

Avneesh Sood, director of Eros Group, said: “With RERA implementation we are sure to find it encouraging towards building a better image for the realty sector.With the government concerned and showing direct intentions towards the sector, RERA will enhance the sentiments in the sector paving way for growth.Possessions are the hot cakes in the sector today and history of a developer in the near future would be judged on the possessions they have offered.“

Pradeep Aggarwal, chairman of Signature Global, said: “With RERA on board and implemented in full force, each state will have a regulator in place to safeguard the interests of the buyers and promote fair dealings in the sector. The hous ing demand in particular, will catch up momentum which will allow better performance of the sector. But, apart from everything else, the one thing that will infuse buyer sentiments in the sector will be of timely deliveries.“

Deepak Kapoor, president of Credai, Western UP, and director of Gulshan Homz, says: “The buyers of property market in particular had waited long for RERA becoming a reality which guarantees safeguarding of their rights and interests. The amendments are fair and developers have already started working on the lines because these will now pave way for a better demand and supply in the sector.“

Ashwani Prakash, executive director of Paramount Group, said: “The regulatory act has been able to arrest the uncertainty in the real estate sector, vis-a-vis the investors and end users. The mere passage of the bill had given a lot of clarity and made real estate dealings more transparent there by bringing the confidence in the investors and the end users. Once this confidence sets in completely with its proper implementation, the market is bound to grow at a steady pace.“

Gaurav Gupta, general secretary of Credai, Raj Nagar Extension, said: “We hope that it will infuse 300% more confidence in the buyers to buy their dream home. Once the Act becomes fully functional in each state, the teething problems will sure be addressed by the government in a practical manner as the intentions of the government is very clear towards protecting the interests of the buyers rather than to strangulate the sector. “ Dhiraj Jain, director of Mahagun Group, said: “RERA’s prime motive is to curb the irregularities persisting in the real estate sector and protect buyers’ interest. There are strict guidelines in the act against developers who are unable to deliver on time. But we cannot deny the fact that developers today are under severe pain of not getting the obligatory clearances and approvals on time; and if this continues then they’ll be axed for no reason. Thus, the government must ensure the passage of single window clearance, so as to allow the sector to work in a much systematic and organised manner, with full support for RERA as well.“

Source: TOI Property section Dated : 6th May 2017

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सिर्फ 32% भारतीयों के पास खुद का घरः होम फाइनेंसिंग का भविष्य अच्छा

नई दिल्लीः इंडिया मोर्टगेज गारंटी कॉरपोरेशन (आईएमजीसी) ने गुरुवार को अपने अब तक के पहले होम हंट (घर की खोज) सर्वेक्षण के नतीजे जारी किए. इसमें कहा गया है कि आज की तारीख में सिर्फ 32 फीसदी भारतीयों के पास घर है और इसीलिए आने वाले समय में होम फाइनेंस का भविष्य अच्छा है. होम हंट (घर की खोज) सर्वेक्षण एक वार्षिक रिसर्च सर्वेक्षण है. ये देश में हाउसिंग और हाउसिंग फाइनेंस से जुड़े ट्रेंड्स से संबंधित है. रिसर्च का मकसद भारत में घर खरीदने वालों की सोच, जरुरत और चिन्ता के बारे में अनूठी जानकारी मुहैया कराना है.

यह सर्वेक्षण कैनटर आईएमआरबी के साथ मिलकर देश के 14 शहरों (मेट्रो, मिनी मेट्रो और छोटे शहरों) में किया जाता है. आईएमजीसी होम हंट 1.1 रिसर्च में घर खरीद चुके और खरीदने की योजना बनाने वालें दोनों तरह के लोगों से आंकड़े लिए जाते हैं. आईएमजीसी होम हंट के नतीजे जारी करते हुए नेशनल हाउसिंग बैंक के एमडी और सीईओ श्रीराम कल्याणरमण और इंडिया मोर्टगेज गारंटी कॉरपोरेशन के सीईओ श्री अमिताभ मेहरा मौजूद थे.

सर्वे के मुख्य नतीजों से मिले संकेत

  • आईएमजीसी होम हंट के मुख्य नतीजों से यह खुलासा होता है कि देश में सिर्फ 32 फीसदी लोग खुद के खरीदे घरों में रहते हैं और 56 फीसदी निकट भविष्य में घर खरीदने की योजना नहीं बना रहे हैं.
  • हालांकि इस ट्रेंड में आगे जाकर बदलाव होने की उम्मीद है और इसीलिए हाउसिंग फाइनेंस सेक्टर के लिए बहुत अच्छी कारोबारी संभावनाएं बनती दिख सकती हैं.
  • इस सर्वेक्षण में भाग लेने वालों ने जो प्रमुख मुश्किलें बताईं उनमें लोन के ब्याज की ऊंची दरें (38 फीसदी), बचत न होना और उधार लेने की इच्छा न होना (38 फीसदी), प्रॉपर्टी की भारी कीमत (32 फीसदी) और लोन की पर्याप्त उपलब्धता (32 फीसदी) जैसे कारण शामिल हैं.
  • इससे संकेत मिलता है कि लोगों को जिंदगी की शुरुआत में घर के लिए पैसे उपलब्ध कराने की गंभीर जरूरत है. पहली बार घर खरीदने वाले शुरूआती भुगतान के लिए मुख्य रूप से निजी बचत पर निर्भर करते हैं. इसकी वजह से भी घर खरीदने में देरी होती है.
  • सर्वेक्षण में पता चला है कि ज्यादातर मामलों में किराए पर रहना और घर के शुरूआती भुगतान के लिए निजी बचत पर निर्भर करने से घर खरीदने में देरी होती है.
  • उल्लेखनीय है कि किराए पर घर लेने के मामले मेट्रो शहरों के 29 फीसदी की तुलना में छोटे शहरों में बहुत ज्यादा 37 फीसदी है. मिनी मेट्रो शहरों में तो यह और भी कम 23 फीसदी ही है.

गौरतलब है कि देश के कामकाजी युवाओं में तकरीबन आधे (46 फीसदी) अभिभावकों के साथ रहते हैं. किराए के और अपने घरों में रहने वाले (31 फीसदी) हैं. इससे अभी भी युवाओं की अपने माता-पिता पर आर्थिक निर्भरता का पता चलता है. कर्ज लेने वाले युवाओं के लिए ‘लोन हिस्ट्री न होना’ और ‘जरूरत का पैसा लोन में हासिल करना’ दूसरों की तुलना में बड़ी समस्या है.

यह डाटा इस बात का संकेतक है कि भले ही युवा कम उम्र में कमाने लगे हैं और वे घर के लिए कर्ज की किस्तें चुकाने में सक्षम हैं फिर भी शुरूआती भुगतान, डाउन पेमेंट के लिए पर्याप्त बचत नहीं कर पाते हैं. इस रिसर्च से यह बात भी मालूम होती है कि भारत में लोग घर के लिए शुरूआती पेमेंट अपनी सेविंग से करना चाहते हैं और 62 से 65 फीसदी लोग इसी पर निर्भर करते हैं.


Source: abpnews.abplive.in

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HOUSING FOR ALL – Builders to help buyers get housing subsidy

The Union government has asked banks and financial institutions to join hands with private developers to expedite the disbursal of subsidies under the Pradhan Mantri Awas Yojana to the end users
M Venkaiah Naidu, Union minister of housing and urban poverty alleviation, said houses are being constructed mainly by the private sector, while launching the updated guidelines for the Credit-linked Subsidy Scheme (CLSS) for the economically weaker sections (EWS) and the low-income group (LIG) schemes.Naidu said that on this account, builders should also be roped in to disburse the benefit of the subsidies to eligible customers.

When a buyer approaches a developer to buy a house under any of the three schemes, the developers will help the buyer avail the subsidy, which is equivalent to around Rs 2.40 lakh.

Getamber Anand, president of Credai, said developers are ready and willing to provide all assistance to customers in this endeavour. He said banks and financial institutions are also forthcoming in disbursing the subsidies.

R K Arora, CMD of Supertech, says: “When a buyer comes to a developer to buy a house, the company will take the customer to a bank to avail the subsidy. We will play a proactive role to help buyers in getting the subsidy, as it is in our interest, too, to sell our units. A subsidy will certainly help us in marketing our units better.“

Till date, under the CLSS for the EWS and the LIG segments, an upfront interest subsidy of Rs 421 crore has been disbursed by NHB through 85 institutions, covering over 23,000 beneficiary households across 30 states and Union territories.

The updated guidelines for CLSS for EWS and LIG schemes were launched by Naidu, in which the maximum tenure of the eligible period for subsidy has been increased from 15 years to 20 years, for loans sanctioned on or after January 1, 2017, which has pushed up the maximum subsidy available under the scheme from Rs 2.20 lakh to Rs 2.67 lakh. This will further boost affordability among the vulnerable segments.

Prime Minister Narendra Modi, in his Address to the Nation on New Year’s Eve, announced the launch of a new interest subsidy scheme for the middle-income group (MIG). The scheme envisages extending interest subsidy to two categories of borrowers, namely, MIG I and MIG II.

MIG I households are defined as those with an annual income between Rs 6,00,001 and up to Rs 12,00,000 and MIG II households are defined as those with an annual income between Rs 12,00,001 and up to Rs 18,00,000.

The CLSS for MIG I and MIG II will be implemented, initially for a period of one year, with effect from January 1, 2017. However, Naidu said that it will be reviewed and could be extended further.

As per the terms of the scheme, beneficiary from the MIG would be eligible for an interest subsidy at the rate of 4% and 3% for MIG I and MIG II, respectively, for a maximum loan tenure of 20 years. The creditlinked subsidy is available only for loan amounts of up to Rs 9 lakh and Rs 12 lakh, for MIG I and MIG II, respectively, and additional loans above these limits will be at the nonsubsidized rate.

The interest subsidy will be credited upfront to the home loan account of beneficiaries, reducing the EMIs and improving affordability. The carpet area of houses should be up to 90 sq metres and 110 sq metres for MIG I and MIG II, respectively. The maximum interest subsidy benefit will be approximately Rs 2.35 lakh for MIG I and Rs 2.30 lakh for MIG II. Naidu said that recent developments in the financial sector, which lead to reduction in interest rates, coupled with various fiscal incentives provided by the government would further boost affordability and provide a big opportunity to the housing sector.

Naidu said that the central government is taking up the issue of reduction in stamp duty, particularly for affordable housing, to ensure uniformity in stamp duty structure. He also said the flow of interest subsidy benefits would not only just go to the bottom of the pyramid, but also to the middle of the pyramid.

Source : TOI dated 25/03/2017

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Affordable homes now under infra roof

Status Will Attract Large Investors
The banking sector has gained despite the government not making any commitments for recapitalising lenders in addition to the Rs 10,000 crore proposed earlier. The absence of capital infusion has been partially made up by tax breaks on bad loans, incentives for home loans and by allowing tradable securities to be issued against bad loans.Banks are expected to gain low-cost deposits due to the push for digitisation. The ban on cash transactions above Rs 3 lakh would help boost bank deposits and bring down cost of funds for lenders.

The biggest break for banks is the grant of infrastructure status to affordable housing loans and widening the definition of affordable homes. HDFC chairman Deepak Parekh said the status would enable large investors, like the Employees Provident Fund Organisation, to invest in housing. Insurance firms are mandated to put a portion of their funds in infrastructure, and home loan companies are allowed to raise funds through external commercial borrowing against their affordable home loan portfolio.

According to India Ratings, public sector banks will require Rs 75,000 crore of capital to grow 8-9% in FY19.As against this, the tax breaks on setting aside funds for bad loans is only marginal and overall will be negative for PSBs. But while public sector banks will face growth constraints, they will find it easier to deal with bad loans. Also, banks can now get a tax break of 8% on the capital that they set aside towards bad loans as against 7.5% earlier.

In his Budget speech, finance minister Arun Jaitley said, “Listing and trading of security receipts issued by a securitisation company or a reconstruction company will be permitted in stock exchanges. This will enhance capital flows into the securitisation industry and will particularly be helpful to deal with bank NPAs.“

Newly licensed payment banks and small finance banks will stand to gain from digitisation. The government proposes to push banks into installing 20 lakh points of sales devices.


Source : TOI dated 2nd feb

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Real Estate Market Would Be Improved Soon

Real Estate Market Would Be Improved Soon.



So Jaypee Greens Wish Town having affordable price in luxurious apartments which are ready to move in.


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HOUSING FOR ALL – Affordable housing, the new big thing

There is a buzz around the affordable housing segment after the Prime Minister announced a slew of rebates on home loans under the Pradhan Mantri Awas Yojana, on December 31
Affordable housing will reap the maximum benefit as a result of the extra cushion provided by the central government’s recent decision to give interest rate rebate on home loans for buyers in this segment.Also, it is a great time ahead for the sector with most banks reducing home loan rates by up to 90 basis points ahead of the Union Budget on February 1. Most homebuyers begin to plan property purchase around this time, as they have more clarity about their finances in the new fiscal year that begins on April 1.

Presently, there is a buzz around the affordable housing segment after the Prime Minister announced a slew of rebates on home loans under the Pradhan Mantri Awas Yojana (PMAY), on December 31.

Under this, the central government would give a 4% subsidy on the interest rate for home loans of up to Rs 9 lakh, and a 3% subsidy on home loans of up to Rs 12 lakh. Taking the cue from the PM’s Address to the Nation, several leading banks have also cut their lending rates. The State Bank of India (SBI) reduced its marginal cost of funds based lending rate (MCLR). It means that if you are planning to get a loan from SBI, the new rates will be 8.65% against the earlier 9.55% per annum.Other banks like PNB, Union Bank of India, IDBI, etc, have also reduced their MCLR for loans to customers.

With HUDA already coming up with its own Haryana Affordable Housing Policy in Gurugram and Uttar Pradesh also set to launch its own version under the Samajwadi Awaas Vikas Yojna, the demand for affordable housing projects has suddenly shot up.

Ever since the “affordable housing“ and “Housing for all“ missions were launched by the Modi government, developers across the country shifted their focus to budget homes.

One estimate says that nearly 1.5 lakh units would be ready for delivery by end 2022, in the NCR regions like Gurugram, Bhiwadi, Neemrana, Ghaziabad, and the twin cities of Noida-Greater Noida. This figure would only multiply once the Budget gives more clarity about the policies and concessions to this segment.

The Delhi NCR has the highest demand for this category of property but, with most projects costing over Rs 50 lakh, customers ended up renting a flat for a lifetime. But, things are now changing with developers like Raheja Develop ers, Supertech, Signature Global, Eros Group, Nirala World, Gaursons, Land Crafts, Antriksh India, Mahagun Group, Aditya Builders, SARE Homes, Ashiana Housing, Krish Developers, and Falcon Realty offering the mid-segment homebuyers quality housing projects at much more competitive prices.

These developers say that they would help the Modi government achieve its stated objective of providing “Housing for all“, nearly six crore houses, by 2022. Some of these projects are already nearing completion, while new ones are also being launched.

Gurugram-based Signa ture Global has recently launched affordable housing projects like “The Roselia“ in Sector 95A and “The Serenas“ in Sector 36, South of Gurugram.Pradeep Aggarwal, chairman of Signature Global, said: “Affordable housing has always been in huge demand but there has always been a large vacuum in supply. We have launched several affordable housing projects in the last two years and have just launched two more affordable projects on a cumulative investment of over Rs 500 crore.“

R K Arora, CMD of Supertech, says: “We, have launched `Basera’, a residential project in Sector 79, Gurugram, at a very competitive price. The project offers 1and 2BHK apartments, starting from Rs 12.87 lakh, and the units have been planned with well-designed layouts and optimally-sized living spaces.With the launch of this project, we are redefining affordable living in the Millennium City of Gurugram.“

Avneesh Sood, director of Eros Group, said: “With the recent rate cuts and policy makeover, demand for affordable housing or, rather, the demand in end user market, has increased. In recent times, Greater Noida West has emerged as a much sought-after investment destination where the prices are much more affordable compared to Noida or Delhi. We are already offering Phase 1 of Eros Sampoornam in Greater Noida West for possession; as the project is in the affordable category, response from customers is very encouraging.“

Rakesh Yadav, chairman of Antriksh India, said: “We are inching closer towards fulfilling the Prime Minister’s dream of building six crore affordable housing units for the urban poor by 2022. The reduced lending rate on home loans will create fresh demand and developers across the country would focus on affordable housing projects for some time to come.“

Dhiraj Jain, director of Mahagun Group, says: “The rebate on lending rates on af fordable housing is big news. The lowest rate in the market is 8.60% at present; thus, prospective buyers will basically be borrowing at 4.60% for loans up to Rs 9 lakh and at an effective rate of 5.60% for a home loan of up to Rs 12 lakh. The EMIs for this category have fallen by nearly 40%, which will en hance the demand for housing amongst the buyers of this segment.“

Raheja Developers is developing Kr ishna Housing Scheme, an affordable housing project in the price range of Rs 12 lakh, over 10 acres in Sector 14, South of Gurugram, abutting the Aravali hills and within walking distance of the Mod el Industrial Township of HSIIDC. The group also has plans for a new afford able, plotted project under the Deen Dayal Jan Awas Yojna, an affordable housing project of the Haryana govern ment.

Navin Raheja, CMD of Raheja Group, says: “Affordable housing is the next big thing. The recent announcement by the central government to encourage hous ing for lower-income groups through af fordable housing programmes will rein vigorate the sector. Low-cost housing, which is generally robust, has shown an uptick in the last two years.“

Ashish Agarwal, director of Aditya Builders, said: “Private sector develop ers, with some flexibility in planning, ex ecution and marketing, along with some incentives in taxation, would be of great help in meeting the housing shortage in urban areas. The new scheme for the new middle class in rural areas, which gives an interest subsidy of 3% on loans up to Rs 2 lakh, taken in 2017, for con struction of new houses or extension of old ones is very positive.“

Source TOI dated 21/01/2017


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