DUBAI’S TAX FREE PROPERTY STATUS LURES INDIAN INVESTORS

Indian investors look to capitalise on the emirate’s secure investment environment, tax-free returns and tightly regulated property market

DUBAI, 8th June 2011: Tax-free returns are enticing an increasing number of Indian investors into Dubai’s property market according to the Middle East’s leading independent real estate company, DAMAC Properties.

Attracted by Dubai’s world-class infrastructure, secure investment environment, tax-free returns and tightly regulated property market, Indian investors are increasingly looking to invest in Dubai’s prime real estate market. With potential capital appreciation and tax-free rental yields ranging from 7- 12%, according to CBRE, premium properties in Dubai offer a safe and lucrative long-term investment.

Niall McLoughlin, Senior Vice President DAMAC Properties said: “At DAMAC Properties, we have witnessed a significant increase in enquiries about our Dubai portfolio from Indian investors looking to capitalise on favourable conditions in a secure market. Indian investors are weighing up the impact of property taxes at home, and deciding that Dubai is a more attractive market for sustainable long term investment.”

Dubai’s property market appeals to Indian investors because there is zero tax on rental returns, and no capital gains tax. This is compared to India which demands tax on rental income as well as capital gains tax of about 20 per cent.

“Tax is a big consideration in any investment decision, but Dubai takes tax out of the equation. It means investors considering purchasing property in Dubai can focus on evaluating rental yields and potential capital gains, without having to think about the possible tax implications of their investment” Mc Loughlin added.

In addition to the tax relief offered by Dubai, Indian investors are increasingly seeking take advantage of a 60 per cent price disparity between the Emirate and the sub-continent. At an average price per square foot of $264 in Dubai, according to Colliers International, property is now 60% cheaper than in central Mumbai, where the price per square foot is $664 according to Jones Lang LaSalle.

Dubai’s property market is also gaining favour with foreign investors due to the implementation of a raft of new regulations, such as the new Strata law, which favours home owners. As these new tougher and more stringent regulations take hold, Indian investors are looking to take advantage of the plethora of investment opportunities that exist within the emirate’s real estate market.
The recent Dubai Real Estate Market Overview by leading real estate services firm, Jones Lang LaSalle supports DAMAC Properties’ findings and suggests that the total value of residential property transactions in Dubai increased by 30% in 2010 over 2009, and the number of actual transactions increased by 20% during the same period. The report also suggested that as prices stabilise in some sectors and lending conditions continue to ease transaction volumes could increase even further during 2011.

“We believe that investors will always be attracted to all of the positive attributes that Dubai has to offer – world-class infrastructure; strategic location; established tourist destinations, proven business centres; a highly skilled expat workforce; and most importantly strong and stable government leadership,” Mc Loughlin concluded.

DAMAC Properties continues to deliver luxury projects across the MENA region, with 28 buildings, comprising 6045 units, delivered to date. Before the end of the year, DAMAC Properties will complete a further 8 buildings comprising 1,329 units. DAMAC Properties will be an enduring fixture in the Dubai landscape, and Dubai itself will continue to be a major draw for Indian investors.

Posted: 10 Jun 2011 12:09 AM PDT

Second Homes as an ideal Investment Option for home buyers

Some things are too good to be true, they say, If possible why not? Why is it too much to ask for to have the cake and eat it too? I am told that you can either be married or be happy! Likewise you can either have a second home or an investment! The later is as true as the former, depends on ones point of view I guess.As business can be mixed with pleasure, buying a second home can make investment sense if certain basic tenets of investing are followed and tailored to suit second homes. The basics of investment tell us that an investment should have the potential to grow in value. This potential comes out of the future prospects of the investment and its ability to change hands by attracting buyers at future prices or future valuations. It must hold the promise of growing in value over a period of time and be liquid enough to be able to convert to cash when one desires to do so. To make this happen a second home property must fit the following criteria;

•The area where a second home is located should show promise of development in the near future
•There should be good development in the second home scheme itself
•The property should be very well maintained in order for it to be able to attract attention of prospective future buyers
•The project should have good amenities and conveniences which can attract the interest of the buyer and make the investment worthwhile. Special emphasis is laid on recreational amenities, health related amenities and lifestyle.
•An attraction like a popular restaurant, spa, picnic spot, resort etc being part of the project is an ideal scenario. These attractions ensure foot falls in the project from outsiders, make businesses in the project viable and ensures that a resale market is created as there will be demand for properties for sure.
•The presence of such attractions also ensures that the second home project is well maintained, kept clean and attractive.
•This ensures that a resale market is created which ensures liquidity which makes the investment very lucrative and dynamic in ones portfolio.
The value addition in typical second home projects is very high, hence an investment made in vary early stages of a second home project can have a phenomenal appreciation by the time the project comes to the end and later on as the attractions start kicking in the appreciation in investment improves many more fold.
Companies like Disha Direct believe in making second homes a lucrative investment option by;
•Choosing destinations that hold promise in the near future.
•Projects that are very well developed.
•Products are reasonably priced at all times to ensure that the investor benefits in the medium to long run.
•Development of attractions like Resort, Club & Spa are popularized, professionally run and attract a lot of foot fall in the project
•This ensures that the project is not dead, always alive and bustling
•Project is well maintained in the interest of the attractions and the surplus from the attractions in addition to the maintenance charges are well spent to further a common goal.
Case in point being Talegaon, here the value of land and constructed property showed a 400% increase in 4 years time (2004-2008). The development at Talegaon ensured that this was possible and Disha Directs foresight which promoted Talegaon as a destination paid off for the investors. Likewise opportunities at Kasara, Wada, Karjat and other such destinations have returned more than 300% returns over the years.
Mr. Sameer Dange an investor at Talegaon regrets that he should have increased his value for investment as the phenomenal returns that he has enjoyed was unbelievable. Likewise Mrs.Shinde an investor in Wada has seen her investment grow from Rs.100/- per sq.ft. of land to Rs.350/- per sq.ft. over 3 years. Both these investors have an opportunity to for resale thus giving them the chance to cash their investments.
So if one is looking for a second home as an investment option , look for names of repute who are developing the project, ensure that the project will be professionally maintained once its completed, an attraction which will draw people to it regularly is a must as it creates liquidity for future sale and lastly the area in which the project is located should hold the promise of development in the near future or should be ideally located for the specific attraction which otherwise cannot be located elsewhere. Second Homes can certainly be looked at as an option to diversify ones investment portfolio.

Posted: 07 Jun 2011 04:54 AM PDT

Downturn in housing finance demand due to high interest rate: NHB

Housing finace demand has been severely damaged due to the mounting interest according to the National Housing Bank (NHB). “Prior to slowdown in global market housing finance has 25percent growth per year for consecutive four years” NHB Chairman and Managing Director R V Verma told in media conclave of the 26th Skoch Summit here.
As per the reports in the current fiscal year 2011 demand for housing loan increased by the 16prcent for Rs. 62K Cr. which directly indicates the downturn. Even though when recovery progress began in the previous year growth rate was 19percent.
According to the sector watcher “if interest will continuously increase in the near future then it will surely damage the housing finance demand.”
RBI raised key interest rates in May this year by 50 basis points to battle high inflation, its ninth rate hike since March, 2010.
Whereas NHB has raised its prime lending rates to 10.5 per cent from 10.25 per cent three months back and has no plans to further hike rates, official said.

Posted: 04 Jun 2011 05:28 AM PDT

Maya Govt announced new land acquisition policy

On this Thursday Mayawati government has introduced a new land acquisition policy to facilitate farmer those land has been acquired for development. According to this policy those farmers have provision to get return back 16% of their land which has been full developed. After the several protest demonstrated over the land acquisition issue by farmers and villagers in the entire state, now BSP government has come up with the new land acquisition policy under this policy state will no longer to acquire directly land for the development of the private sectors.
According to the sources the new announced policy will come into effect on higher priority basis. When asked more about this policy officials said that “farmers won’t benefited under this policy those lands are already under process for land acquisition” several farmers protesting in Bhatta Prasaul in Greater Noida to Allahabad, where power projects are coming up, would continue to be deprived of benefits announced in the new policy. They added that this policy has been divided into three sects such as for private sector i.e. industries, power projects, expressways etc, land acquisition is to be done directly by the private entity and the government would have no role in acquisition except facilitating the process.
Under this policy any private company could directly make contact with the farmers whose 705 land acquired, whereas if 705 landowners are disagree with the compensation package then their project will be reordered. Though farmers have an option to get back their full developed lands 16%. In addition they will get annuity of 23,000 per acre acquired for the next 33 years besides other benefits under the Rehabilitation and Resettlement Policy of 2010.
If farmer is not willing to take the entire 16 percent of the developed land then he has option take part compensation in cash and the remaining as developed land. The developed land farmers get would be free of cost and no stamp duty would be charged. In case the farmer uses the compensation amount to buy agricultural land anywhere in the state within one year of acquisition he would enjoy stamp duty waiver.

Posted: 03 Jun 2011 05:42 AM PDT

Authorities to spend Rs 20,000 crore on Noida projects

Delhi/NCR

The Noida, Greater Noida and Yamuna Expressway authorities on Monday have planned for large scale infrastructure development across Gautam Budh Nagar district. In a joint board meeting, the major focus of the Authorities remained on providing connectivity within the district as well as with Delhi. “In the next four years, Rs 20,000 crore will be spent on the projects,” said Mohinder Singh, chairman of the Authorities.

To begin with, the authorities have approved a major detailed extension of the Metro route connecting almost all of Noida and Greater Noida at a cost of Rs 10,000 crores, covering a total of 86 km. The route is estimated to be ready in the next three years.

Besides extending the existing city centre Metro route connecting Kalindi Kunj and Botanical Garden, a new line from the City Centre station in sector 32 to sector 62, touching NH-24, was also approved. This new 6-km route will be via sector 71 crossing and will provide connectivity to sectors 32, 34, 35, Hoshiarpur, sectors 51, 52, 71, Greater Noida Extension Marg, Sarfabad, sectors 60, 61, 62, 63 and NH 24.

A new loop from sector 71 via sector 121 will then join the Greater Noida route between the City Centre and Bodaki railway station in Greater Noida. This route will be from City Centre along the Greater Noida Expressway, touching Knowledge Park 4 via Pari Chowk and will finally end at Bodaki. The new loop has been added mainly to connect Noida extension that falls near sector 121 with Noida as well as with Greater Noida.

“With the Metro extension, most sectors will be within walking distance from the stations. Connectivity to Greater Noida will also improve tremendously,” Singh said.

To smoothen chaotic traffic, the Noida Authority has approved construction of a 5.8 km elevated road parallel to the Shahdara drain. Starting from sectors 14 and 14 A onto sector 95 and Kalindi Kunj, the stretch costing Rs 525 crores will be of four lanes. This route will provide an alternate route between Kalindi Kunj and Noida, thus easing traffic congestion on the expressway.

In the meeting, the Authorities also approved the draft master plan for Greater Noida. As per the 2031 Master Plan, a total of 5,04,000 hectares will be developed. Of this, 27.6 per cent area will be reserved for residential development, while 24.2 per cent will be developed as green area. The approved master plan includes six expressways, overbridges, flyovers, warehouses and godowns, besides several residential, educational, industrial and commercial hubs.

According to the Authority chairperson, development of these 5,04,000 hectares is crucial as it falls between two major hubs of commercial activity, the eastern freight corridor between Ludhiana and Kolkata and the western freight corridor between Dadri and Mumbai.

Source:- Magicbricks

New Act to regulate rental market

NEW DELHI: The housing ministry has introduced the Modal Residential Tenancy Act, 2011 with the intention of that to renew the ancient rent control legislation that restricts to rentals at some extent, and that affects to landlord in the form of meager amount for properties located in the crucial part of the metro cities.
As state government yet haven’t approved the draft legislation which proposed that once the law in place, in case of tenancies mentioned after notification, the rental will be based on the treaty of landlord and tenant.
According to this act not only the existing ones but also for those where the rent has been already fixed number of years ago, there will be no changes in the rental deed till the 24 months get completed. Only after the completion of the 22nd month proprietor can make changes in the agreement. On the other hand if there is no agreement the landlord has an option to terminate the tenancy. As state government has implemented the obligation that only that state can get facility of this act which is funding under the flagship Rajiv Awas Yojana that has a budgetary allocation of over Rs 800 crore in 2011-12 and comes with other benefits such as interest relief.
As Central government believes that the contemporary legal system has not facilitate to landlords in any form as the current rentals are very low, so they don’t have interest to reinvest in their properties. According to the reports there is lack of housing in the country approx 25 million, so government believes that if rentals are increased then landowners could take interest in realty investment. And it may help to come out of this crisis.
The government is taking inspiration from the Jawaharlal Nehru Urban Renewal Mission that got several states to repeal the Urban Land Ceiling and Regulation Act (ULCRA). Under the scheme, central assistance was contingent upon states repealing the law.
There are several other clauses to keep safe the interest of tenants. As landlord has to be given notice to tenant before increasing rentals. On the other side if revised rent is not affordable to tenant then he has to provid the termination notice.

Posted: 31 May 2011 06:08 AM PDT

Noida-Greater Noida Expressway- Corridor to growth and connectivity

Delhi/NCR

Noida (New Okhla Industrial Development Authority) has evolved as a planned, integrated, industrial hub and is well connected with other parts of Delhi/NCR via roads, highways, expressways and the metro line. The infrastructural developments and high connectivity provided by the 8-lane DND flyover and the Noida- Greater Noida Expressway are major reasons of growth for the Noida real estate.

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The upcoming residential development along the Noida Expressway, covering sectors 93A, 93 B, 119, 128, 129, 134, 137 etc is emerging as a lucrative real estate corridor in Noida. Major developers with residential developments on the Expressway are Jaypee Greens, 3Cs Group, Logix Group, Omaxe Pvt Ltd, Eldeco, Parsvnath Developers, ATS Group, Supertech Ltd, Paramount Group etc.

The residential market in this stretch can be divided into two parts. The first wherein the existing residential sectors viz. sectors 44, 93, 93A, 93B and 119 offer high-end premium segment apartments in a range of INR 4,800–8,500 per sq ft. The second, where construction activity is in full swing, offering affordable and medium projects in the range of INR 3,000–5,000 per sq ft, depending on the area, developer profile, specifications and amenities/facilities offered.

The expansion of resident population along the expressway further generates demand for related commercial office spaces and retail centres, which is presently lacking and is restricted in supply with the authority. According to market survey, Corporates in the domain of IT/ITeS have started scouting for office space in this region and to cater to this opportunity developers such as Supertech, BPTP and 3Cs are coming up with commercial projects.

As per market sources, developments like Export Promotion Zone, Taj International Hub Airport, the Formula 1 Grand Prix race etc will further open doors of all-round progress in this neighbourhood. Also, with the coming up of the Yamuna Expressway easy accessibility towards Aligarh, Mathura and Agra will be provided and it will accelerate overall development of the region.

Source:- Magicbricks