5 money management tips for home loan borrowers – Whenever the central bank hikes the repo rate, the lenders pass on the burden to borrowers in the form of increased interest on housing loans. The rising interest rates scenario in last few months and expectation of further rate hike is expected to impact homebuyers attitude. Whenever the central bank hikes the repo rate, the lenders pass on the burden to borrowers in the form of increased interest on housing loans. After the recent rate hikes by the Reserve Bank of India (RBI), most banks have started increasing their lending rates. Because of this the borrowers having floating rate interest on their loans saw a rise in monthly EMIs. Rajesh K Saraf, MD, Axiom Lambdas Pvt Ltd. said, “An advice that has been reiterated many times to home loan borrowers and still holds relevance amid rising interest rates is to pay back the consolidated loan amount with interest rates in a staggered way and in small chunks.” “It would be a wise call to formulate a strategic monthly plan emphasizing on increasing Equated Monthly Installments (EMIs) against the loans. This is the best way to systematically decrease the psychological burden of loan repayments, which is also known as Financial Discipline in an esoteric language. Financial Discipline means the adoption of a far-sighted and sagacious approach with regard to the management of home loan EMIs,” he added. Saraf further noted “Since interest rates have skyrocketed post-constant repo rate hikes by RBI, home loan borrowers with good financial knowledge can compare the interest rates charged by different banks and select the one which offers the most feasible loan repayment plans. People who are first-timers or are at a nascent stage of the home loan borrowing process can also take the help of consultancies and IPCs to simplify the complex mechanism of home loan plans and help them get the best deal for themselves.

Here’s a Quick Five-Point Guide For Home Loan Borrowers.

1) Loans and their EMIs must be repaid smartly to avoid extra charges and amounts more than your actual borrowings to prevent losses.

2) Pay back the consolidated loan amount with interest rates in a staggered way and in small chunks.

3) Formulate strategic monthly plan emphasising on increasing Equated Monthly Installments (EMIs) against the loans.

4) In case of real estate investments, one must conduct proper research on recent trends and analyse projects on the basis of their location and prices.

5) Home loan borrowers with good financial knowledge can compare the interest rates charged by different banks and select the one which offers the most feasible loan repayment plans.

In order to control rising inflation, the RBI on September 30 has raised short-term lending rate for the third consecutive time by 50 bps to take the repo rate to 5.9 per cent. Since May it has cumulatively increased the key interest rate by 190 basis points. Shubham Sardana, Director, Elater said, “Efficient money management requires sufficient knowledge regarding when and where one should invest their hard-earned money. Instead of investing the maximum chunk at once or at a single avenue, considering investing at multiple places gives better and assured returns.” “Also, loans and their EMIs must be repaid smartly to avoid extra charges and amounts more than your actual borrowings to prevent losses. In case of real estate investments, one must conduct proper research on recent trends and analyze projects on the basis of their location and prices. It is advised to buy properties that are well connected to significant spots with ease of accessibility and all the amenities are within reach. Simultaneously, properties in hotspots have far more promising returns than others,” he added. Also Read | What is EEE in Income Tax? 5 tax free investment options to become correlate

India’s Consumer Price Index (CPI) Based Inflation.

in September rose to five-month high of 7.41 per cent from 7 per cent recorded in the preceding month, with the print remaining well above the upper tolerance level of RBI’s inflation targeting framework for the ninth consecutive month. Salil Kumar, Director – Marketing & Business Management, CRC Group noted, “Recent hikes in the interest rate of home loans as the result of RBI’s guidelines have affected mainly middle-class buyers who wish to invest in real estate. This has increased the weight on their pockets, forcing them to rethink their decisions to buy properties. However, this impact is only for a short span of time, and the sector would soon recover from this temporary hold. This is beneficial for developers as they can curb input costs with this hike, and the overall value of the project remains somewhat similar.” Yash Milani, MD, MiG sun Group added, “Home loan borrowers are at the end of costlier EMIs and increased lending benchmark rates by banks in case of a repo rate hike scenario. The buyers of affordable housing projects are the most affected. The mid-housing segment takes a short-term hit as buyers put their plans to invest in homes on the back burner until the home loan interest rates return to a reasonable level. However, it only affects the market for a short span of time. The RBI’s action is motivated to decrease inflationary pressures, which has cumulatively borne results.”

The growing affordability for the first time home buyer supported by government’s incentives such as the Pradhan Mantri Awes Yojana (PMAY), is expected to push housing credit growth to 17 percent to 19 percent in the financial year 2019, says ICRA in its latest research update on Housing Finance Companies. As per ICRA estimates, with steady housing credit growth of 16 percent in FY2018, the mortgage penetration (housing credit as a percentage of GDP) touched the double-digit mark of 10 percent as on March 31, 2018 (9.5 percent as on March 31, 2017). ICRA expects mortgage penetration levels to go up by another 300-500 bps over the next five years. At the same time, the overall asset quality indicators for all HFCs remained stable with Gross NPA of 1.1 percent as on March 31, 2018 (1.2 percent as on December 31, 2017 and 0.8 percent as on March 31, 2017). ICRA expects overall gross NPAs for HFCs to remain range-bound between 1.2 percent to 1.5 percent. The retail home loan asset quality of HFCs is likely to be benefitted by the recent cabinet ordinance, to treat home buyers as financial creditors, ICRA said. “HFCs would need to tie-up the incremental funding requirements of around Rs 4 lakh crore for meeting the growth plans as well as replacing the maturing liabilities in FY2019. Going forward, incremental funding from banks especially PSBs will be lower owing to their capital constraints. Though RBI has relaxed the norms for ECBs which will enable HFCs to diversify their funding mix and expand the investor base, the proportion of funds raised through ECB route will be dependent on competitiveness of overall landed cost of these ECBs as compared with the domestic borrowing rates”,

Says Suprema Najjar, Vice President And Sector Head,

Financial Sector Ratings, ICRA. Newer HFCs in affordable housing segment continued to grow at higher than the overall industry growth rate of 39 percent. However, as anticipated by ICRA in its previous reports on the HFC sector, the gross NPA in the sub-segment deteriorated from 3.3 percent as on March 31, 2017 to 4.1 percent as on March 31,2018 driven by greater portfolio seasoning, entity-specific factors in some cases and external events such as demonetization and implementation of Goods and Service Tax (GST) impacting the cash flows of the borrowers. “While growth prospects remain good, given that the borrower profile is more vulnerable to income and external shocks, lenders would have to maintain good origination and lending processes as they expand in this segment,” says Najjar. The ultimate credit losses in the affordable housing segment would be a function of the HFCs’ ability to repossess the properties and timely sell the repossessed assets, which is hitherto largely untested. Though the ticket sizes are small, the process could be more time consuming and the recovery costs could also be high in relation to the loan amount, thereby reducing the final recovery for the lender. As per ICRA’s estimates, gearing levels for HFCs are expected to remain at around 8.5-9 times over the medium term, supported by adequate internal capital generation and comfortable access to capital. The incremental capital requirement is expected to be Rs 7,700-12,000 crore for the next three years. Given the good investor appetite for the sector, ICRA expects the HFCs to maintain adequate capitalization levels going forward as well.

Burgeoning credit growth, particularly in housing and personal loans, indicates steady domestic household demand Pent-up demand and robust consumer sentiment for home ownership in the aftermath of the pandemic underlay strong recovery in the residential housing sector in 2022-23, as per RBI’s latest annual report. In 2022- 23, housing launches improved consistently in terms of completed projects after two years of intermittent shutdowns. “Housing sales picked up in H1 (April-September):2022-23 and recovered in Q4 (January-March) after briefly losing momentum in the third quarter. As launches surpassed sales, unsold inventory increased,” the report said. RBI noted that burgeoning credit growth, especially housing and personal loans, reflects steady domestic household demand. On a year-on-year (y-o-y) basis, non-food bank credit registered a growth of 15.4 per cent in March 2023 compared with 9.7 per cent a year ago. Despite headwinds, corporate investments picked up in recent period: RBI Annual Report Personal loans registered a growth of 20.6 per cent (y-o-y) in March 2023 as compared with 12.6 per cent a year ago, primarily driven by ‘housing loans’. Housing loans registered a growth of 15 per cent (y-o-y) in March 2023 as compared with 12.9 per cent a year ago, primarily driven by ‘housing loans’. RBI said burgeoning credit growth, especially housing and personal loans, reflects steady domestic household demand. The central bank assessed that the outlook for services sector remains positive in 2023-24. Challenges for market borrowings expected to persist, says RBI Annual Report Real estate and construction have witnessed a revival post-pandemic and are expected to perform well in this year also as both demand for and supply of housing remain buoyant, it added. The report said housing inflation remained muted, averaging at 4.3 per cent in 2022-23, reflecting subdued rental demand on account of hybrid work culture.

India bulls Real Estate is a small cap real state company that recorded a market cap of ₹3,595.10 Cr during Tuesday’s closing session. In terms of residential and commercial properties, India bulls Real Estate it was established in 2006 with a focus on building and developing residential, commercial, and SEZ projects in significant Indian metropolises. The stock closed today down 1.50 percent after the company released its Q4 and FY23 earnings. During Q4FY23, the company reported revenue from operations of ₹133 Cr down by 51% YoY from ₹273 Cr in Q4FY22. The company reported loss in EBITDA of ( ₹-330 Cr) during the quarter under review as against ₹12 Cr during the quarter under March 2022. The net loss of India bulls Real Estate widens to ₹376 Cr during the quarter under review as against a net loss of ₹61 Cr during the corresponding quarter of previous fiscal. The company recorded presales of ₹171 Cr during Q4FY23 and ₹958 Cr in FY23. The company reported gross collections of ₹273 Cr during Q4FY23 and ₹1,746 Cr in FY23. India bulls said its gross debt stood at ₹256 Cr compared to ₹1,310 in FY2022, at an average ROI of 12.3% with 0.1x debt to equity. Whereas cash & cash equivalents stood at ₹608 Cr;

And Net Cash Positive of ₹352 Cr Post Debt. Commenting

on near term vision and medium-term strategy, Sachi Shah executive director of India bulls Real Estate said “I’m sure everyone is wondering what next – while this most recent ruling delays us in eventually being part of a much larger group run by a promoter whose sole focus is real estate, in the interim India bulls Real Estate shall be run as an independently managed, professionally run company. Our debt levels are low and there is a 500+ strong team between Mumbai and Gurgaon that continue to manage the business and the projects. The last few years were difficult with Covid and with things in transition, but we have a renewed attention to execution and delivery. Project activity has picked-up in all our sites and there is a dedicated commitment to finishing and handing over sites at the earliest. We are looking to reach resolution on the many pending issues and are moving positively in the right direction towards this. The message is clear – as a company, we need to improve transparency, be more customer centric and pay attention to our quality. There has been a clear effort in our published financial accounts and investor deck to capture cost escalations in the projects and one-time write-off of doubtful receivables. My key focus area is business development and growth as we look to exit our existing near-completed projects with a proper handover to our customers.” Commenting on the upcoming project expansions and plans for next few quarters hold for IBREL, Sachi Shah said “While we continue to enjoy a healthy net surplus number from our ongoing and planned projects, the near-to-medium term results will be subdued due to a combination of no new launches in the recent past as well as Blu, Thane and Sky Forest depleting its inventory. We are looking to add new Mumbai, NCR and Bangalore development projects as we prepare to launch future phases in our existing pipeline in Thane, Wolli, and Alabang in MMR and Sonipat & Gurgaon in NCR. These will have a gross development value in excess of 4,700 Cr. Our team is finalizing plans and design for approvals to take these projects forward. Against the backdrop of strong industry growth, larger branded developers have disproportionately large growth opportunities. We are actively seeking joint venture/joint development or development fee projects that would enable us to benefit from deploying a capital-light model.” The shares of Indiabulls Real Estate closed today on the NSE at ₹65.95 apiece down by 1.49 % from the previous close of ₹66.95.

A child was killed and three were injured when a 100-year-old papal tree uprooted by the storm fell on them in the Jalalpur area of Haridwar district. A powerful thunderstorm accompanied by rain hit various parts of Uttarakhand, uprooting trees and killing at least four people in separate incidents, officials said on Wednesday. Two people, including a child, were killed in Haridwar district while the Pauli and Nainital districts recorded one fatality each in the storm that hit the state late on Tuesday, they said. A child was killed and three were injured when a 100-year-old papal tree uprooted by the storm fell on them in the Jalalpur area of Haridwar district, Senior Superintendent of Police Ajay Singh said. In a separate incident, a pilgrim from Sonipat in Haryana was killed when a tree fell on him in the Chamgadar Tape area near Haridwar’s Hark Ki Pair, Singh said. Besides a large number of trees, electric poles were also uprooted, causing prolonged power outages in many areas of Haridwar, he said. Several hoardings were also blown away. The thunderstorm also uprooted trees and electric poles in the Pauli district. Manjit Singh Aswan was killed and his wife injured when a tree fell on the couple near the Buddha Park in Kotwal, the police said. According to the police, in the Haldane area of Nainital district, Uttarakhand High Court lawyer Tanuj Semwal was killed when a tree fell on his car.

Real estate prices are likely to rise after the general elections as a lot of election expenditure will find its way to this sector. SP Sharma, chief economist of the PHD Chambers of Commerce, said past trends from the general elections have shown that the real estate sector witnesses a spurt after the elections. “This is due to the fact that the money and expenses on the elections find their way into the real estate market as investments,” he said. Sharma said it is still hassle-free for people to invest in the real estate segment where they can use the Benaim route also. The general elections see a big inflow of money intended for canvassing and other arrangements. This money is then channelized into the real estate segment which leads to a spurt in the prices of land and property. In fact, the state has already been witnessing a boom in this sector since Uttarakhand was formed in 2000. The property and real estate market in the state has only gone up in recent years and the land prices have skyrocketed in cities like Dehradun, Haldane and Nainital where builders have set up several mega projects. Half a dozen murders have been committed in Dehradun in the past one year over property disputes. They indicate the existence of property related turf wars in the city. Subhash Hismanal of Prateek Builders said that there might be a spurt in the real estate segment after the general elections as lots of money is being pumped there at present. Most of the investments would be made into this sector after the polls, he said.

The Greater Noida Industrial Development Authority (GNIDA) has sold a 23,600-square-meter (sqm) plot in Sector Zeta One for Rs 110 crore, a move that will pave the way for the construction of around 1,100 new flats on this piece of land, officials privy to the development said. They added that the plot was allotted through e-auction for Rs 110 crore, which is nearly Rs 1.5 crore higher than the reserved price. GNIDA Officer on Special Duty (OSD), Soumya Srivastava, said that the bids for plot number GH-128 located in Sector Zeta One opened on Friday. “The reserve price of the 23,600-square-metre plot was Rs 108.5 crore which was allotted to Prius Infra Limited. The allotment letter will be issued soon by the authority to the allotted. The authority will receive about Rs 110 crore in 90 days for the allotment of this plot,” he said. An email sent to Prius Infra Limited for comment on the deal did not yield any response. Srivastava said that the lump sum payment will ensure that there will be no hindrance to the project, which can be completed easily. Around 1,100 flats will be constructed on the plot, he added. People are looking to invest in various categories of properties ̶ industry, data centers, residential projects – in Greater Noida, indicating that the area is turning out to be a favored investment destination. GNIDA’s builder department launched a scheme for 10 builder plots in February this year, and the scheme closed in April 2023. These builder plots, located across eight different sectors, measured between 12,500 sqm and 404,172.36 sqm. The reserve price for these 10 builder plots ranges between Rs 35,000 per sqm and Rs 46,200 per sqm. A GNIDA official said that of these 10 builder plots, bids were received for only plot number GH-128, which thereafter, underwent the e-auction process. The remaining nine plots failed to witness any buyer interest. “We will put the remaining builder plots on sale afresh through new schemes. We are trying to ascertain the reason for the tepid response for the remaining nine plots,” the official said. As per the norms, a minimum of three bids are required against each plot to advance the process to the next stage of e-auction.

However, it is unlikely that sales momentum will be significantly affected solely due to this change, as many developers are already inclined to avoid transactions involving substantial cash components. The Reserve Bank of India’s decision to phase out the Rs 2,000 currency bill could potentially have a moderate impact on high-value property transactions, say experts. However, it is unlikely that sales momentum will be significantly affected solely due to this change, as many developers are already inclined to avoid transactions involving substantial cash components. Land transactions, especially in small towns and peripheral areas of large cities, may witness some uptick, as suggested by a marginal rise in inquiries for the same so far, the experts said. The liquidity scenario for real estate developers has improved a lot owing to a sharp recovery in sales momentum post-Covid-19 pandemic. Many of them are not showing any keenness towards deals involving large cash, especially after the last demonetization, fearing action from authorities,” said a property broker operating in central Mumbai. Following the demonetization in 2016, the cash component in real estate deals has come down across key property markets, and several developers have intimated to their channel partners not to encourage transactions involving large cash dealings.

One of the Biggest Deterrents Has Been The Gap Between The Tates,

which has been narrowing further in many micro-markets, allowing less room to accommodate cash in property deals,” said a Pune-based realtor. The high-denomination currency in circulation is around 10% this time, as compared to the 2016 demonetization when Rs 500 and Rs 1,000 notes, which were banned overnight, formed over 85% of the currency in circulation. The cash circulation is significantly lower and may not see a rush like in 2016. There have been queries for residential assets and land-related transactions, but builders are also cautious, as most have had ED and IT raids said the CEO of a Bengaluru-based broking firm. “In a bid to get rid of cash, some developers themselves are offering to pay in cash to brokers to settle duesThe real estate markets have been thriving for the past two years. While the new residential sales are not seeing a major impact, many clients with pending payments are insisting on paying in cash, said industry insiders. In Gurgaon, Noida, and Delhi, people are trying to use Rs 2,000 currency notes in secondary transactions, as the builder is not accepting too much cash.

Those who had pending payments are trying to pay in advance to get rid of the notes. Before this directive, developers were ready to take cash, but now they are not accepting more than 30% of the balance or pending amount of Rs 2,000 notes,” said a Noida-based realtor.

Tiger Shree

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