Urban Youth Prefer to Invest in Real Estate

July 01, 2013

Real estate seems to be the hottest investment instrument for urban youth in India, with a whopping 85 percent of those surveyed inclined to put their money into immoveables on hopes of higher and guaranteed returns.

"Over 85 percent of urban working class prefer to invest in real estate saying it is likely to fetch them guaranteed and higher returns," says a survey conducted by industry body Assocham.

Those surveyed also said they cautiously stay off from investing in gold, stocks and mutual funds as these instruments are found to be riskier, the survey said.

A majority of urban youth surveyed believe that investing in the yellow metal is not as profitable as in real estate since they expect gold prices to fall.

Besides, global slowdown and the weak rupee have started casting a shadow on stocks, as many corporations are rationalising the salary structure of their employees with an emphasis on cost cutting which dampens the spirit of investment in the capital markets.

However, a few respondents still chose to invest in stock markets, gold and mutual funds.

The maximum concentration of real estate investments from urban working class and professionals is seen towards residential properties in emerging Tier-II and Tier-III cities.

These include Jaipur, Bhiwadi, Rishikesh, Haridwar, Nainital, Chandigarh, Dehradun, Sonepat, Panipat, Pune and Nasik, it said.

Most respondents felt that investments in real estate, residential and commercial properties are found to be lucrative and much safer since they are completely insured in contrast to those in gold, stocks and mutual funds.

Over 62 percent respondents, especially professionals, chose real estate properties in Tier-I cities like Mumbai, Delhi, Kolkata, entire Northern Capital Region (NCR), Hyderabad, Bangalore, etc for gaining maximum returns.

However, 78 percent of those working professionals with double-income, who bought a house in a metro city, want to invest in their home town for a second home, the survey added.

GHB defers Ahmedabad housing schemes

July 03, 2013

The wait has got longer for those aspiring for a house at the schemes of Gujarat Housing Board (GHB) in Ahmedabad. Change in usage type, higher cost quoted by bidders for construction and provisions in the new revised Development Plan (DP) have delayed three residential schemes in the city.

GHB had announced the launch of seven residential schemes for lower income group (LIG), middle income group (MIG) and higher income group (HIG) in the four major cities of the state before the assembly elections. It had also floated tenders for the seven projects, three in Ahmedabad, two in Rajkot and one each in Vadodara and Surat. Of these, work has already started for projects at Munjka in Rajkot, Tarsali in Vadodara and Ganeshpura in Surat. However, the schemes planned in Ahmedabad have been stalled.

The bidders had quoted 5% to 17% higher price compared to the ‘already high’ estimated project cost for Hathijan-I, Hathijan-II and ‘transport node’ projects in Ahmedabad. Therefore, fresh tenders would be invited. Moreover, instead of the earlier plan of a 3-BHK residential complex for HIG at the transport node in Naranpura, GHB plans to come up with a residential-cum-commercial scheme at the site.

The location of transport node has potential for commercial-cum-residential project, so why should we waste the opportunity, commented a senior office-bearer of GHB. During the discussion period, a mixed development plan at transport nodes was suggested, but the officials did not pay heed, he said, adding that the Board, therefore, rejected the proposal.

GHB also seeks to benefit from the higher ground coverage offered as per the new General Development Control Regulation (GDCR) of the DP, which proposes to increase ground coverage from 30% to 51%. “We are also exploring options to benefit from the new GDCR to bring down construction cost by reducing the height of the building,” said a senior official of GHB.

Under the circumstances, GHB will have to entirely revise its outline for the three schemes, resulting in a delay in implementation.

While planning the LIG housing scheme in Hathijan, GHB will have to consider the impact of the proposed affordable housing zone in one km area along SP Ring Road. If GHB’s price is too high, people might opt for schemes launched by private developers.