NRIs : Is real estate in India not a good investment right now ?

NRIs continue to look for changes in policies with regards investing in Indian real estate (‘Flexible policies are the need of the hour’). Continuing from a recent post on “NRIs for real estate investment in India – Know the simple Rules”  here is an interesting article with infographic from Economic Times

Investments in property have earned insipid returns in the past few years. Find out why this trend is likely to continue for some time.

If you go by what real estate developers, housing finance companies and property agents say, this is the best time to invest in property. Or is it?

A recent research report by consultancy firm Knight Frank shows that home prices in eight major cities rose very tardily in the past three years.

In some markets, including the National Capital Region (NCR) and Kolkata, property prices have actually come down since 2014. Of course, this is not true for the entire real estate market. While prices have come down in some markets, some cities have witnessed a consistent rise. Within cities too, some pockets have done poorly, while others have flourished.

This is why ET Wealth assumed four different growth rates to see what investors can gain from real estate. We assumed that the buyer would put a downpayment of Rs 10 lakh and take a home loan of Rs 50 lakh (at 8.5%) to buy a property. Another Rs 6 lakh would be spent on legal costs and registration, taking the total cost of property to Rs 66 lakh.

How much will you earn from real estate Returns from property will depend on the expected rise in prices and could vary significantly across locations and cities. Here’s how much buyers would earn if property prices are assumed to rise at four different growth rates.

ET_Real_estate
A picture, worth a thousand words!

Assumptions: Buyer in 30% tax bracket. He earns monthly rent of Rs 10,000, which will rise by Rs 1,000 every year. Buyer also claims Rs 2 lakh deduction for home loan interest. IRR formula used for calculating returns. Home loan EMI is Rs 43,391 for 20 years at 8.5%

We then looked at the situation after three years. If the property prices rose by 3%, the investor would be in Rs 7.86 lakh in the red. Even though he earns rent (Rs 10,000 a month increasing by Rs 1,000 every year) and claims tax deduction (Rs 2 lakh) on the home loan, he pays 8.5% on the loan while the asset grows at 3%.

What would the investor have earned had he chosen to buy gold? Instead of the downpayment and legal costs incurred on buying the property, had he put Rs 16 lakh in gold and bought Rs 43,391 worth of the metal every month (the home loan EMI), his investment would be worth Rs 33.8 lakh in three years, assuming gold prices rose 3% every year.

Our calculation assumes that the buyer starts earning rent and saving tax from day one. If there is a delay in getting possession (not rare in the current situation), the returns would be lower. If property prices rise 6%, the investment would nearly break even in three years. But it would still be far less than Rs 36.2 lakh accumulated by investing Rs 16 lakh lump sum and a monthly investment of Rs 43,391 in a fixed income option that earns 6%.

Similarly, if property prices rose 9-12%, the investor would make money but still have less than what he could have earned from hybrid funds or equity schemes. As things stand, property prices are not likely to move up too much in the next couple of years.

The Knight Frank study does not paint a very rosy picture. The huge number of unsold units (more than 1.8 lakh in the NCR) and the long time taken to sell a property (up to 35 quarters in Faridabad) are worrying signs that point to a dull future. “Property is not likely to move up significantly in the next 2-3 years,” says Gulam Zia, Executive Director, Advisory, Retail & Hospitality, Knight Frank .

Source: Economic Times and India Real Estate study by Knight Frank.


You may also be interested in GaramChai.com Realtor and Return2IndiaSections.

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Want to be part of India’s development? Know more about Joy of Giving!

“Although, the Indian Diaspora is a very heterogeneous group, there is a common factor which binds them- their desire to maintain their connection with their homeland and to contribute to the social and development efforts in India. We are seeking to strengthen and deepen our relationship through IDF-OI.” Smt. Sushma Swaraj, Minister of External Affairs & Chairperson, IDF-OI

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Check out the Government Of India’s India’s development Fund

Only in India: With No Money To Buy An Ox, Distraught MP Farmer Uses His Daughters To Plough Field

Much of the focus of the farmers on the west is to leverage technologies to increase yields. And back in India, it continues to be sustenance agriculture going back centuries.

Check out this video of a Farmer making his daughters plough his fields

A heartbreaking farmer story from the state of Madhya Pradesh (MP) reveals the sad reality of the ongoing crisis of debt-ridden farmers. Financial crisis reduced a farmer in Sehore’s Basantpur Pangri village to use his two daughters, instead of oxen to pull the plough in their fields.

With No Money To Buy An Ox, Distraught MP Farmer Uses His Daughters To Plough Field
Image source : Indiatimes

I do not have enough money to buy or take care of bulls for ploughing. Both my daughters quit their schooling due to financial crisis,” farmer told ANI.

Both daughters Radhika, 14 and Kunti, 11 years quit their education due to lack of money or financial support.  Soon after the video of Barela and his daughters ploughing the field went viral, the district authorities swung into action and instructed the farmer to stop the practice.

District Public Relation Officer (DPRO) Ashish Sharma said that the administration is looking forward into the matter and a proper help would be given to him under governmental schemes.

“The farmer has been instructed not to use children for such activities. Whatever help he can be given under governmental schemes, administration is looking into it,” Sharma told ANI. (source – 

Indian Passport holders aren’t globally welcome?

Indians and Indian passport holders have been traveling overseas in large numbers. An increasing number of them also travel to Europe to tour and explore new lands. As per a recent survey, Indians to spend more on holidays abroad this year:

Travel portal, TripAdvisor, polled more than 44,000 people across 25 countries during the survey conducted between January 16 and February 2. Of these, just over 32,158 were its own customers interviewed online. The others who participated in the survey were a mix of hoteliers and panellist from a market research company.

“Against the optimistic backdrop of the Indian economy, both travellers and hoteliers are expressing clear intentions that paint a positive picture for the Indian travel sector in 2015. Significantly, this optimism looks set to translate into a sharp spike in the number of Indians travelling abroad this year,” said Nikhil Ganju, country manager, TripAdvisor, India.

Of course, travel to foreign lands is fraught with uncertainty. Documentation and visa paperwork is just one factor to consider. However, having the right visas and travel permit is a major issue that Indians face while traveling overseas.

Take the example of the young lady from Mumbai, Khushbu Kaushal, who decided to visit and explore the East European country of Georgia (link) alone. Nothing wrong with that. Single women travelers are increasingly exploring the world alone. However, due to some paperwork issues, Ms. Kaushal was denied entry into Georgia and deported. It is unclear from her detailed facebook post what the issue was but what is appalling is her ordeal.

Kaushal
From Ms. Kaushal’s Facebook

She begins herFacebook post with an appeal to the Georgian Ambassador to India.

Dear Mr. Archil Dzuliashvili (Georgian Ambassador to India) ,

I am a citizen of India, a single woman who earns her honest living working for an advertising agency. This year for my annual break I decided to visit your country Georgia. It rated pretty high for solo woman travellers and the general topography and the history of the country was attractive enough to seal my decision.
My flight for Georgia took off from Mumbai on 29th June at 5am IST and I reached Tbilisi by 5pm Georgia time. I was carrying approved e-visa, letter from my employer stating I was on a holiday and will be joining back after my vacation, my bank statement to prove my financial stability, my hotel bookings to prove my stay in the country is legit and health and travel insurance in case anything happens to me while I am in your country.

….

The post went viral and was picked up my major Indian media outlets. From Indian media :


Many faces of Indian Spirituality

The Week magazine published in India recently published a cover page series on the many faces of ‘Indian’ Spirituality. A brief summary of the interesting articles that covers the entire gamut of modern spirituality and interviews with some Gurus:

India would lead the world spiritually – Swami Suvirananda was chosen as general secretary of Ramakrishna Mission and Belur Math in May. An educationist, Suvirananda worked in Arunachal Pradesh for 17 years, and taught in Ramakrishna Mission schools in Kolkata. Union Minister Kirren Rijiju, Arunachal Pradesh Chief Minister Pema Khandu and Jangipur MP Abhijit Mukherjee were his students. In an interview with THE WEEK, Suvirananda talks about the relevance of the Ramakrishna Mission today.

42-Heartfulness
The Week – Spiritual trance: Heartfulness meditation trainer and renowned DJ Pierre Ravan.

Science of yoga does not demand any kind of belief system or philosophy: Sadhguru  – In spite of all its problems and contradictions, if the world is looking to a rapidly resurgent India today and an India that is about to join the ranks of developed nations, the silent and subtle contribution of the rich spiritual process inherent in the land and its people is undeniable. Though obscured by hundreds of years of foreign occupation and distorted by the aggressors, the relative peace, contentment, and harmony of the Indian people and the society are clearly the fruits of the carefully crafted spiritual process.

Mystic catcher of souls – Recently, in a television conversation, filmmaker Karan Johar asked Sadhguru Jaggi Vasudev if there should be a limit to one’s love and emotions. “Love is a certain quality, not quantity,” the Sadhguru replied. “Love is not something that will get over. The more you experience it, the more it is available to you.” This is true of the Isha Yoga Centre, the Sadhguru’s ashram, as well: the more you experience it, the more it is available to you. Located on the foothills of Velliangiri Hills, on the outskirts of Coimbatore, the Isha Yoga Centre has dedicated itself to the well-being of the individual and the world.

Easterly wind bloweth – The nature of spirituality is undergoing a radical shift in the United States, with the temples furthering social change. On March 19 this year, Shaanti Bhavan Mandir in New York became the first Hindu temple to join the National Sanctuary Movement—a coalition of places of worship for sheltering undocumented immigrants. The temple was founded in 2013, by Indo-Caribbeans hailing from Guyana and Trinidad. “A mandir is not just a place we come to pray,” said temple leader Pandit Manoj Jadubans to the devotees. “We can give them shelter, a place where they feel secure.”

Old monk, new companion – The Ramakrishna Mission hopes to take its message of universal brotherhood to the Middle East – On August 14, 1897, three months after establishing the Ramakrishna Mission at Belur near Calcutta, Swami Vivekananda was travelling in a train with freedom fighter Bal Gangadhar Tilak. The disciple of Ramakrishna Paramahamsa had first met Tilak on a Pune-bound train in 1892. The following year, he addressed the Parliament of World Religions in Chicago. After he returned from America, Vivekananda was in touch with Tilak and other freedom fighters. So when they met again, Tilak asked him when and how India would achieve freedom. “India would attain freedom 50 years from now,” said Vivekananda. “But no one would believe how it would come. It would come surprisingly and suddenly.”

Peace in poise – The Sivananda Yoga Centre is a partner of Toronto school board – The Sivananda Yoga Vedanta Centre at 77 Harbord Street in Toronto has been teaching people to “spread peace, health and joy through yoga”. Noahora Sierra, 57, who is from Colombia and has settled in Canada, has been doing yoga asanas five days a week and meditation twice a week since 2012, and it has made a world of difference for her. Doing yoga gives her a positive feeling, said Sierra. She and her daughter are regular visitors at the centre, established in 1962.

Taking a look at our philosophies – A FEW YEARS ago, a relative of mine philosophically said, “At any point in life, there is always someone thinner than you, and someone richer.” I could not resist taking a dig: “I am surprised it took you so long to realise that.” Jokes apart, I have always felt that this ‘Who is thinner/richer/prettier?’ game is quite unproductive. Writer Antoine de Saint-Exupéry sums it up in one line: “Grown-ups love figures.” I think he meant both figures—numbers and the human form. In The Little Prince, he writes: “When you tell [grown-ups] you’ve made a new friend they never ask you any questions about essential matters. They never say to you ‘What does his voice sound like? What games does he love best? Does he collect butterflies?’ Instead they demand, ‘How old is he? How much does he weigh? How much money does his father make?’”

Trikonasana in Trafalgar Square – Religious activities, community service and yoga go hand in hand for Hindus in the UK. Religion in the UK has become an intrinsic part of the Hindu identity, especially in the last few decades. It is perhaps a symbol of their migration pattern after World War II or during the expulsion by Idi Amin. With time, they have established temples of their faith in the UK, as well as many community organisations and umbrella bodies to represent their ideologies. But what was exclusive to the people from that particular faith before, is now available to the wider society—and Britain stands as one of the best examples of a successful multicultural country.

Ministry of Heartful Happiness – Meditation for health and well-being matters to the UAE government- On a warm May morning, as my taxi pulls up at the entrance of an elegant office building in Dubai’s Jumeirah Lake Towers business district, I know I’m at the right place. Small groups of Indians have just arrived and are greeting each other as they enter the building. Instead of rummaging through my handbag to find the address, I simply follow them into the elevator. I’m sure we are all heading to the same place. The elevator stops at the first floor and I follow them out, down a short corridor, and into a large hall. Within minutes, the cacophony of 300 people exchanging pleasantries dies down and everyone is seated with their eyes closed; the lights are switched off and the hall descends into pin-drop silence. This is how members of the Heartfulness Meditation Centre at the Sahaj Marg Spirituality Foundation begin each morning; with an hour-long meditation session.

Individuals can be transformed through love and compassion: Mata Amritanandamayi – When you talk to the Americans, what is it that they like the most about you? Do they come to know more about India through you? Are they keen on visiting India or, may be, even settling here close to their ‘Amma’? Not just Americans, but all people in general are longing to experience true love. There is an inner thirst to find someone who will lend a compassionate ear, so that they can pour out their heart. I don’t speak any language other than my mother tongue, Malayalam. But through love there is perfect communication, no matter what language we speak.


Viewers of GaramChai.com are aware of the extensive listings of Religion and spirituality in North America including

Parbinder Kaur Shergill – Judge in Canada Supreme Court

Indian-origin Sikh woman first turbaned judge in Canada Supreme Court

Last week, Palbinder Kaur Shergill was appointed to the B.C. Supreme Court in New Westminster, becoming the first turbaned judge in Canada.

She was born in Punjab, India, and immigrated to Canada with her family when she was four years old. She grew up in Williams Lake, B.C.

Image source: huffingtonpost.ca

Ms Shergill’s extended family in Jalandhar, India run a non-profit computer and stitching centre for the poor, reported The Indian Express.

Her appointment was announced along with two other judges by Jody Wilson-Raybould, Minister of Justice and Attorney General of Canada, under the new judicial application process. The new process emphasises transparency, merit, and diversity, and will continue to ensure the appointment of jurists who meet the highest standards of excellence and integrity.

Known as a prominent human rights lawyer in Canada, Shergill was instrumental in helping shape human rights and religious accommodation law in Canada through her pro bono work as General Legal Counsel for the World Sikh Organisation of Canada. “Prior to her appointment to the bench, Justice Palbinder Kaur Shergill practised as a lawyer and mediator with her law firm, Shergill and Company, Trial Lawyers. She has extensive trial and appellate experience and has appeared before courts and tribunals across Canada, including the Supreme Court of Canada. Justice Shergill was appointed Queen’s Counsel in 2012 and is a recipient of the Queen’s Golden Jubilee Medal for Community Service,” said the introduction released by the minister.

In the media:

PM Modi lauds ISRO’s space feats during US trip

Indian Space research commercialization and business venture Modi seems to be telling private Space ventures:  Move over SpaceX . Time to sell ISRO’s capabilities to the west too! 

Space: the final frontier. Made in India or make America Great in Space again…. seems to be the question here.

Modi seems to be selling India’s public-private Space ventures:  Move over SpaceX . Time to sell ISRO’s capabilities to the west too!

ModiTrump

The Times of India has featured PM Modi speaking up ISRO’s capabilities during his recent visit to the US.

With the Indian space agency achieving several milestones in recent months, PM Narendra Modi, during his current visit to the US, lauded Indian Space Research Organisation (Isro) for its rapid advancement in space technology.

While addressing the Indian diaspora in Washington DC on Sunday night, Modi said, “India has earned a big name in space technology. Just two days ago, Isro had launched 31 satellites in one go. A few months ago, we had broken the world record by launching 104 satellites in one go.”

The PM also spoke about Isro’s achievements in launching the country’s heaviest rocket GSLV Mk III on June 5, which made India capable of launching a 4-tonne-class geosynchronous satellite. He said, “We recently launched a rocket whose weight was not counted in kilograms but was compared with the weight of many (200) elephants. Our government’s focus on technology-driven governance, technology-driven society and technology-driven development is showing desired results.”

Space is certainly in Mr. Modi’s agenda. The NASA-ISRO Synthetic Aperture Radar(NISAR) is scheduled to be launched in 2021 but the work has started on it at Pasadena, a suburb of Los Angeles. India has also been forging ahead with a private-public business venture called Team Indus. Team Indus, ISRO aim for January 26, 2018 to plant Tricolour on moon. Team Indus is the only Indian team in this Google-sponsored global effort.

  • NDTV asks “Will NASA-ISRO Mega Satellite Pass Trump Test? Scientists On Tenterhooks?”
  • India.com adds : “Narendra Modi-Donald Trump meeting in US: NASA-ISRO satellite at stake”