A TIMES OF INDIA PRESENTATION

APRIL 7, 2007

HOUSE MATTERS
Do not postpone your plans to buy a house amidst rising interest rates for long, writes Prabhakar Sinha
ill the interest rate hike affect the real estate boom in the country? This is the million dollar question asked by every one today. Even those who have bought a house and those planning to buy in the near future wish to know whether increase in the interest rate will affect the price of the real estate. At the same time, builders are also worried about the impact of interest rate hike on construction activities in the country . With rise in the interest rates, pursuant to the RBI decision to tighten the money market condi-

Slowdown?
Alka Pandey

But, it will affect the end users, as they will have to borrow at high interest rates. In fact, a consultant said, high interest rate is the worst kind of inflation for the home loan borrowers. Interestingly, they are affected by the measures, RBI took to counter the inflation. The interest rate hike, however, will certainly affect the price of real estate in the secondary market. The investors will like to exit by selling their property in the market. According to one estimate, real estate prices have fallen by around 10% following the price rise in NCR. But, even at the lower price, the buyers will have to pay the higher EMI because of rise in the interest rates. In the last three months, rate has gone up by 2 percentage points to 12%. The EMI of Rs 50 lakh loan at 10% the rate at which the loan was

available in December 2006 was Rs 48,251. But now as the interest rates have gone up to 12%, even if the price has fallen to Rs 45 lakh, the borrower will have to pay an EMI of Rs 49,549. That means, he will be paying Rs 1,300 more. Therefore, the end users will still be a looser unless the fall in price is steep. So, what one should do? The only saviour is that the present tight liquidity condition should not continue for loan and the interest rates should fall in the short to medium term. Bankers feel that once, inflation is controlled, RBI will allow the money supply to increase leading to softening up of the interest rates. Therefore, consultants feel that end users should not postpone their plan to buy a house for long. When interest rates would fall, property prices may rise again.

REALTY BYTES
tion, home loan has become costly. It has hit the home loan borrower hard. For the same loan now, he will have to pay higher equated monthly installment (EMI). EMI for a 20year loan of the same amount has gone up by around 48% in the last two and a half years because of rise in the interest rate from 6.5% to 12%. In fact, the EMI of Rs 30 lakh loan for 20 year at 6.5% is the same as Rs 20.31 lakh loan for the same period at 12%. That means, for the same EMI of Rs 22,367, now the home buyer can borrow only Rs 20.31 lakh as against Rs 30 lakh in 2004. If the borrower wants to borrow Rs 30 lakh today at 12%, he will

have to shell out Rs 33,033 per month to service the debt. This has affected his purchasing capacity also. In the last two years, income of

an individual has not gone up by the same amount. The salary, according to a human resource expert, in the last two years has gone up by around 8% per annum in the Alka Pandey country. That means, he simply cannot afford a similar house today even if there was no escalation in the real estate prices. But, the property prices have also gone up by around 50% to 100% in the same period. Therefore, those who could not buy a house in 2004 because of financial constraints, cannot think of doing so in the present market condition unless his income rose sharply during the intervening period. But, in the last two years, despite constant rise in the interest rates, property

prices have been going up. Since November 2004, interest rates went up by 8 times from 6.5-7% to 12%. In 2004 and 2005, interest rates increased one time each by half a percentage point. But in 2006, interest rates increased six times by half a percentage point each. But, property prices kept on rising. A senior consultant said that this was mainly because of proliferation of highly paid new jobs in metropolitan cities and other parts of the country in the last three years. Despite rise in the interest rates, demand for office and commercial space are on the rise. In NCR, no large office space is available. All the office areas that are coming up in the next two years are almost booked. Which means, economic activities are likely to continue and so new jobs will continue to be created. In such situation, a senior consultant said demand for residential houses will also continue to be exist. That means, if economic activities continue, there would not be a slowdown in the construction

industry . However, in the last three months, there has been a steep rise in the interest rates. In 2007, while ICICI Bank increased the rates twice by one percentage point each, other banks and finance companies increased by around half a percentage point each. This, it is feared, will hit the sector hard. But, consultants and developers feel otherwise. A senior consultant said that the growth story of Indian economy is likely to continue. Various research houses have predicted GDP to grow at around 8% in 2007-08, which is very high, said the consultant. This kind of growth would require huge supply of quality real estate in the country . Therefore, builders and developers feel that rise in the interest rate will not affect their business much. CMD of a large real estate group said that as the economy will grow, new buyers will keep coming to buy houses even at increased rates. Builders are least likely to cut prices.

Golden Square Behind Katara Hills, on By-pass road, Bhopal. magnificent entrance gate Beautiful landscaping AA
-

Farm land with advanced amenities 200 ft. wide roads in front of the project Closed Campus AA residential complex & a medical medical college on
42 acres is proposed in front of the project.

Company s guarantee for plots & farm land security

Q0

FARM LAND SIZE AVAILABLE: 5000,10000 , 20000 Sq.ft. & above. 555 1111 2222 Sq yd (approx ) & above

S.E.A.C. 110:46, rdalviya Nagar, Bbopel. P.: 0755-6533192 n-mail : seacbpl@rndiltmail.com M. 09300001966, 09329731905, 09303135870, 093295592M. RU New Delhi Mr AP $ingh 66 sheetal apartment sector 14 Rohini P 011 64532568
M. :09813130802, 09999001897.

: 0120-6523105. NoiTh aHtIY4[I 1 AIti Indore :19, Classic Arc, Khajrana Road, in Front otAoaod Bazar. M. :09329559260151 Jabalnur : 09329559258. Owalior : 09329559263 Visitus: www.seac.co. in

Seismic sense
Authorities should take swift action to ensure that adequate earthquake safety norms are adhered to in the existing and upcoming buildings, writes Subhashini Sinha
ustling streets, multistoryed buildings, flyovers dotting the landscape and plush offices have become inalienable part of the trendy lifestyle of people living the metropolis. But have we ever given a thought to what could be the grim reality in Delhi after a few moments of seismic shock. Though Delhi lies in Zone IV of the seismic zoning map of India which is referred to as the earthquake prone region, yet, it seems that in the buzz of city life and pressure to meet the deadlines insensitivity has increased to such an extent that an earthquake of 2.3 magnitude (on the Richter scale) felt on on March 14, 2007 did not concern the high and mighty . Do we really need a catastrophe to wake up from our slumberness? The National Disaster Management Authority (NDMA) do enforces earthquake protection norms and mitigation of risks but all this will be redundant if it is not implemented. The situation could be so frightful, in the wake of a major earthquake, that not a single hospital in the capital will be functional. Large scale construction works which are going on, need to take notice of earthquake resistance measures pertaining to life safety . In fact the need of hour is to create awareness coupled with concrete action plans to be instigated at the grass roots level. Creating awareness among the masses along with training the young minds of school children will definitely go a long way in ensuring our safety . The National Disaster Management Authority (NDMA) can provide seismograph in different schools along with their resource person to train students into reading the information related to seismic waves. Delhi could be divided into zones

SHOCK PROOF
and from each zone and area which have the Metro Rail connectivity, some schools could be selected. A special seismic bulletin report could be telecast along with the daily weather re-

port. One such attempt was initiated by the Wadia Institute of Himalayan Geology, Dehradoon, but the effort needs to taken on a large scale. The government should also make it mandatory for the DDA and other private builders to effectively comply with the earthquake safety norms. Its high time to scrutinise the urban development programmes. The weak geologic structure of Delhi and the pace at which multistoried buildings are coming up needs to looked through the safety angle. In India, the authorities have not yet recognised the various categories of protection. Nor is the populace educated about the various categories of protection which are a) Earthquake Resistance Life Safety (for residential purposes), b) Earthquake Resistance Immediate Occupancy (High Rise Buildings and Hotels) and c) Earthquake Resistance Fully Operational. Earthquake resistance construction are costly by few lakhs but even those who can afford and would desire a higher level of protection are unable to do so due to lack of awareness, but the government should act fast and bring out clear norms so that the residents of the metropolis are not left in dark by the vague and ambiguous terminology of earthquake compliance.
Alka Pandey

HOTTEST PROPE RTIES

From

rnag icbricks corn

.

PO PULAR PROPERTIES
WEST DELHI
aptmt. for sale by Good Home Associate . Location Sector 12, Dwarka. Area 1400 Sq-ft. Contact Person: Mr. Yuvraj 9818541050. Property ID 1238686.
3 BHK residential multi - storey

GURGAON
North Facing,

NOIDA, GREATER NOIDA

A office space for sale by 3 BR flat for sale by Om Sal A commercial Sector 65, Property & Interiors . Location Prime Estates. Location B , Noida. Area 1800 Sq-m. Sector phi , Greater Noida. Block Area 1824 Sq-ft . Contact Person: Contact Person: Mr. Pavan Bir Anand Mr. Sharad Saigal 9899237700. 9811052324 / / 9999009524. Property ID 122804 1. Property ID 1230104.

fully furnished and newly built-up Guest House for sale with power backup and ample parking, water storage , rain water harvesting, and totally Vaastu compliant by Sarvodaya Realtors. Location Sushant Lok-l , Gurgaon. Area 500 Sq-yrd. Contact Person: A A Commercial Office Space Mr. Hemant Sapra 9818700634. for sale by AVR Associates. Property ID 1278752. Location Janakpuri, Distt. Centre. Area 750 Sq-ft. Plot for sale by Sarvodaya Reaftors. Contact Person: Mr. Facing North East,Accessible From both Rakesh Kapila 9810406328. Na onal Highway 8 and MG . Road. Property ID 1279775. Locetion - OLE City, Phase II , Gt on. Area - 400 Sq-yrd. Contact Pai on: Mr. 3 BHK residential multi-storey Hemant Sapra - 9818700634 . apartment for sale by Rao Property ID 1266874. Estate. Location Palam apartment, 3rd floor, Sector 5, 3 BKH aptmt. with Servant Otr for sale Dwarka . Area 1580 Sq-ft. bySarvoclaya Rea ors. Locatlen ParsContact Person: Mr. Khemender vnath Exotica, Golf Course Road, Yadav 9868887800/ Gurgaon. Area 2810 Sq-ft. Cant. 981 0778600 / / 9911978600 . Person: Mr. Hemant Sapra Property ID 1288347. 9818700634.Property IDi 266806.

3 BHK residential multi-storey apart- 4 BHK residential mult i-sto rey ment for sale by Om Sal Property & apartment for sale by Prime Interiors. Location Sector- P1 (32 & Estates. Location Pearl gateway , Secto r r 44 , Noida. 33) Ekanki En, Greater Noida. towerr Area 1450 Sq-ft. Contact Person: Area 3165 Sq-ft. Contact Mr. Sharad Saigal 9899237700. Person: Mr. Pavan Bir Anand 9811052324 / / 9999009524. Property ID 1230052. 1222761 . Property ID 3 BHK residential multi-storey apartGolf Vista Apart- AGENTS OF THE WEEK Interiors. Location ment, Alpha II , Greater Noida. Area 1660 Sq-ft. Contact Person: Kaira Realtors Mr. Sharad Saigal 9899237700. Conn tact Person:Mi Pankaj Kaira Property ID 1217681. 9818697478. 3 BHK builder floor apartment for Om Sal ProDertles & Interiors sale by Om Sai Property & Interiors . Cont act Persoir Mr. Kailash Location Sector- P1 (32 & 33) 9899237700. Ekanki Ekanki En , Eldeco Green Meadows. kaihan Realtors (P) LhL Area 1665 Sq-ft. Contact Person: Contact Persom Mr. Bobby Mr. Stiarad Saigal 9899237700. Kalhan9818892782. Property ID 1186694.
ment for sale by Om Sal Property &

To know more about these properties

www.maglcb r lcks.com Enter the Property ID. Click Go and find the pro perty matching the ID.
Log on to

PROJ ECTS OF THE WEEK

I. AA U N C I

Ozone Square, Faridabad Heritage Cottages

COTTAGES

zone square

The under-construction Aditya Mega City in Indirapuram will be a se -sufficient , composite residential-cum-shopping compIex Where each flat has been judiciously planned and put to sensible use.A A far cry from the concrete jungle that most people are used to.

Heritage Cottages presents Ozone Square , the refreshing, most fnendly residential complex at Sector 89, Faridabad. In the midst of verdant surrounds, Ozone Square brings premium apartments blended with contemporary lifestyle. Come to nature and own the greens at Ozone Square.
Ozone Square , our

upcoming project is perhaps the best place in NCR closest to Delhi and has unmatched locational privileges like easy access to:

South Delh4 Noida and Greater Noida through proposed Express Highways. Prominent Educational institutions for Engineering, Law and MedicaL Schools like Apeejay, MVN, DPS, DAVand Vidya Sanskar International. Recreational Facilities like Malls, Multiplexes and Gymkhana Clubs. Various excellent amenities and facilities on offer include modern high speed lift with granite facia ,ward robes in all bedrooms , window air-conditioning in all bedrooms, sleek modern elevation and many more. Head office: 139, First Floor , Shopping Complex , Sector 37 , Faridabad . Registered office: R 1 & 2, Junagarh B, New Delhi 110014 , Tel .: 9910700996 ,Website : www.heiitagecottages.co.in , Email: info@heritaaecottaaes .co.in

_ _ _ _ _ _ m u l t i p whic has3 cren

lexes anchor store food courts etc
_ _ _ _

Aditya Mega City is a classic symbol of spacious luxury. In the midst of Nature thats so magnanimous. Where youll wake up to the calls of lovely little birds in the open lawns . The Adit ya Mega City offers the option of two, three and four bedroom apartments to suit the budget requirement of customers. The spacious living rooms are airy and well ventilated. Besides Penthouses for who love openness, there is exclusive and spacious car parking area. Yet another feature is the Penthouses for the rich and deserving . There s no limit to indulgence in the in-house Club, which has a swimming pool, gym, amphitheatre etc. to make the life a real pleasure . Aditya Mega City has the well-planned Aditya City Centre , the in-house mall

Associates Group